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METRO SPINNING LIMITEDTHE NAME YOU CAN TRUST FOR BEST QUALITY YARN

ANNUALREPORT2017-2018

ANNUAL REPORT 2017-2018 | 1

Table of Contents

LETTER OF TRANSMITTAL 03

NOTICE OF AGM 04

CORPORATE GOVERNANCE 05

THE BOARD OF DIRECTORS 07

SENIOR EXECUTIVES 10

CORPORATE DIRECTORY 11

CHAIRMAN’S MESSAGE 13

MANAGING DIRECTOR’S MESSAGE 15

DIRECTOR’S REPORT 18-44

BAPLC CERTIFICATE 45

FINANCIAL HIGHLIGHTS 46

AUDIT COMMITTEE REPORT 48-49

AUDITOR’S REPORT TO THE SHAREHOLDERS 52

STATEMENT OF FINANCIAL POSITION 53

STATEMENT OF COMPREHENSIVE INCOME 54

STATEMENT OF CHANGES IN EQUITY 55

STATEMENT OF CASH FLOWS 56

NOTES TO THE FINANCIAL STATEMENTS 57-77

PROXY FORM & ATTENDANCE SLIP 79

2 | ANNUAL REPORT 2017-2018

Corporate Mission Statement

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

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.

F I N A N C I A L M A N A G E M E N T 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.


Transmittal LetterTo

All ShareholdersBangladesh Securities and Exchange CommissionRegistrar of Joint Stock Companies & FirmsDhaka Stock Exchange Limited Chittagong Stock Exchange Limited

Subject: Annual Report for the Year Ended on 30 June, 2018.

Dear Sir/Madam (s),

We are pleased to enclose a copy of the Annual Report together with the Audited Financial Statement including Statement of Financial Positions, Statement of Profit or Loss, Statement of Changes in Equity and Statement of Cash Flow for the Year Ended on 30 June, 2018, along with notes thereon of Metro Spinning Limited for your reference and record.

Yours sincerely,

_________________________MOHD. MOHSIN ADNANCompany Secretary &Executive Director


Notice of the 23rd Annual General MeetingNotice is hereby given that the 23rd Annual General Meeting of the Shareholders of Metro Spinning Limited will be held on Monday, 17 December, 2018 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 Receive, Consider and Adopt the Audited Financial Statements of the Company for the Year Ended on 30 June, 2018 and Report of the Auditor and Director thereon for the said Year.

Agenda- 2: To Declare Dividend.Agenda- 3: To Elect Chairman of the company. Agenda- 4: To Elect Directors.Agenda- 5: To approve appointment of Mr. Iftekhar-Uz-Zaman as Independent DirectorAgenda- 6: To appoint Auditors of the company for the term until the next AGM and to fix their

remuneration. Agenda- 7: To appoint the Compliance Auditor.Agenda- 8: 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

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, 25 November, 2018. 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, 13 December, 2018.

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

5. The Annual Report is available in the company’s web site at www.maksonsgroup.com.bd

Place & Dated: Dhaka –25/10/2018

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Corporate GovernanceCorporate 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. BSEC/CMRRCD/2006-158/207/Admin/80 of 03 June, 2018 issued by Securities & Exchange Commissions is attached as Annexure-C.

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.

Appointment or reappointment of Directors: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.

Independent DirectorThe Company has complied with the notification of the Bangladesh Securities and Exchange Commission with regard to appointment of independent Director to the Board. Metro Spinning Limited has an independent directors namely Haider Ahmed Khan FCA. The company has also appointed another independent Director namely Md. Iftekhar-uz- Zaman to form Audit Committee and NRC as compliance with Corporate Governance Code which is subject to approval at upcoming AGM.


Sub Committee to the BoardThe Board has established different Board Committees to which it has delegated some of its responsibilities which are given below:

Audit CommitteeThe 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), Mr. Mohd. Mohsin Adnan (Executive Director & Company Secretary) and Mr. Younus Bhuiyan (CFO & GM-Finance).

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.

Proposed Nomination and Remuneration Committee (NRC)The Nomination and Remuneration Committee consists of three Directors including one Independent Director. Dr. Iftekhar-uz-Zaman, who is the Chairman of the Nomination and Remuneration Committee. The Committee will act as per the terms and conditions of the Corporate Governance Code of BSEC.

Board Meetings The meetings of the Board of Directors of Metro Spinning Ltd are generally held at the Registered /Corporate Office of the Company. The meetings are held frequently, at least once in a quarter, to discharge its responsibilities and functions as mentioned above. Meeting is scheduled well in advance and the notice of each Board meeting is given, in writing to each director by the Company Secretary. The Board meets for both scheduled meetings and on other occasions to deal with urgent and important matters that require attention. The details of Board Meeting and attendance are given in the Directors’ Report.

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, and7. Aiming to capitalize high on Social-Marketing and Social Welfare activities even more in future. 8. Equal Employment Opportunity providing employer.

Website The Company has an official website linked with the website of the stock exchanges. All financial results are posted on the Investor Relations section of the Company’s website: www.maksonsgroup.com.bd


Mr. Haider Ahmed Khan, FCAChairman & Independent Director

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.

INTRODUCING BOARD OF DIRECTORS


Mr. Mohammad Ali KhokonManaging Director

Mr. Mohammad Ali Khokon is the Managing Director of the company. He has 32 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. Ferdous Kawser MasudDirector

Mr. Mohd. Ferdous Kawser Masud is the Director of the company. He has passed 18 auspicious years in this sector. He gathered knowledge in Modern Methods, Technology, Production and Marketing & Management Techniques of textile industries. He is expert in evaluating the performance of the management in meeting their goals and objectives. He also monitored the reporting of the company’s performance. He added value to the company by providing input and consult that is expert, independent, and external, to more fully protect the interests of the shareholders.

Mohd. Showkot Ali Director

Mr. Mohd. Showkot Ali, Director of the company. He has 27 years of experience in the textile sector of the contry. He has visited many countries and attended seminars, workshops, etc. which helped him gather knowledge in the sector. Mr. Ali have brought outside experience and expertise to the boardroom in a way that keeps companies on track and moving forward. He also provides guidelines to ensure the board and shareholders that the financial controls and systems of risk management are strong and defensible.

Mrs. Laila Ali Director

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.


Senior Executives

Mr. Mohd. Mohsin AdnanExecutive Director & company

Secretary

Mr. Sanjid Hasan AmitDirector (Audit & MIS)

Mr. A.K.M. WahiduzzamanExecutive Director(Estate & Admin)

Mr. Mohd. Aslam ParvezSr. General Manager

(Commerce & Banking)

Ms Zabun NaharGM (Audit & MIS)

Mr. Mohd. Younus BhuiyanChief Financial Officer

Mr. Abdul Jalil Sheikh General Manager (Admin & HR)


CHAIRMANHaider Ahmed Khan, FCA

MANAGING DIRECTORMohammad Ali Khokon

DIRECTORSMohd. Showkot AliMohd. Ferdous Kawser MasudMrs Laila Ali

COMPANY SECRETARYMohd. Mohsin Adnan

SENIOR EXECUTIVESA.K.M. WahiduzzamanMohd. Aslam ParvezAbdul Jalil SheikhMohd. Younus BhuiyanZabun Nahar

REGISTERED OFFICE Plot-11, Paradise Tower, Floor-8, Road-2, Sector-3, Uttara, Dhaka-1230.

CORPORATE & SHARE OFFICEHouse 17, Road 6, Sector-1, Uttara, Dhaka - 1230

LOCATION OF FACTORYKornogoph, Rupganj, Narayanganj Year Of incorporation- 1993

Authorized Capital- TK 100,00,00,000Paid up Capital- TK 60,48,85, 050

LEGAL STATUSPublic Limited Company Listed with Dhaka Stock

Exchange Limited & Chittagong Stock Exchange

Limited.(on March 14, 2002)

Audit CommitteeMr. Haider Ahmed Khan, FCA; Chairman Mrs. Laila Ali; MemberMr. Younus Bhuiyan; MemberMr. Mohd. Mohsin Adnan; Member SecretaryMr. Mohd. Ferdous Kawser Masud; Member

BANKERS & FINANCIAL INSTITUTION SOUTHEAST BANK LTDPrincipal Branch, Dilkusha, Dhaka.MUTUAL TRUST BANK LTD.Principal Branch, Motijheel, DhakaJAMUNA BANK LTD. Dilkusha Branch, Dhaka.BAY LEASING & INVESTMENT LIMITEDMotijheel C/A, Dhaka.

INSURERSPROGATI INSURANCE LTD.ASIA INSURANCE CO. LTD.CONTINENTAL INSURANCE LTD.

AUDITORAHMED ZAKER & CO. CHARTERED ACCOUNTANTSHOUSE-15, ROAD-17, SECTOR-4, UTTARA, DHAKA –1230.

Corporate Governance AuditorM/S. G. Kibria & Co. Chartered Accountants,Sadharan Bima Sadan (5th Floor), 24-25 Dilkusha C/A, Dhaka-1000

BRANDKANGAROO & CROCODILE

CAPACITY34,872 Spindle

Proposed Nomination & Remuneration Committee (NRC)Md. Iftekhar-uz-Zaman, ChairpersonMohd. Showkot Ali, MemberMohd. Ferdous Kawser Masud, MemberNoor Mohammad, Member Secretary

Corporate Directory


Dear Shareholders,Assalamu Alaikum,

I take the pleasure in welcoming you all to the 23rd Annual General Meeting of your company Metro Spinning Limited, on behalf of the members of the Board of Directors. I also present the Annual Report for the Year Ended on 30 June 2018 to you with great pleasure.

As you may be aware, the textile sector specifically, Ready Made Garments (RMG) sector had faced numerous external and internal challenges including compliance standard, new regulations relating to fire & safety and volatile raw materials price which all had direct impact on production cost and overall profitability of the industry. It was our sincere efforts to identify the challenges and act accordingly to overcome the uncertainty and despite all the negative factors we were able to retain our demand in the market by reducing the sale price within the tolerable limit.

The Sales revenue for 2017-18 is Tk. 878,507,490 which is Tk. 59,603,176 higher compared to previous year and earnings per share have also increased than last year. Our customers are our top priority and we are as always prepared to continue delivering our best efforts for maintaining the standard of operational levels. Our continuous effort and dedication has just made it possible to increase the profit of the company.

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.

The Board of Directors of the Company is always making sure that good governance are always practiced in all respects, as it is our prime focus for managing the business effectively and responsibly and in a way which is honest, transparent and compliant.

I would also like to take this opportunity 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, FCA)Chairman

Chairman’s Message


Managing Directors’ Message

Dear Shareholders,Assalamu Alaikum,

Firstly, I would like to thank you for your continued trust in Metro Spinning Limited and cordially welcome you on behalf of the Board of Directors in this 23rd Annual General Meeting of your company. It’s my privilege to place before you Annual Report for the Year Ended 30 June, 2018 along with Auditors & Directors report and overall performance of the company and its prospects for the future.

RMG is so far the major export oriented sector in Bangladesh since a long time. Due to cheap skilled labor and quality readymade garments products, exporting all kinds of garment product all over the world, mainly in Europe, America and Canada. But USA has reportedly hardened its stand against the entry of duty-free textiles from Bangladesh without assigning any clear reason. Now if the USA remains stick to her standing decision of not allowing Bangladeshi textiles free of duty, really hard days lie ahead. The present policy of the Government is to implement policies to resolve the issues with the main importer of Bangladesh. Being the main source of cotton yarn for the RMG, spinning industries are directly related with the prospect of RMG. To cope up the challenges we work in this competitive environment and challenging situations. Metro Spinning Limited is one of the most renowned companies in textile sector of the country. 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.

The development of a textiles market has many challenges. The importance of the impact of globalization is increasing on the Bangladesh economy including industrial growth rate, investment performance, export and import levels, balance of payments situation, small-scale industries and environment. The challenges are being addresses with dynamism and the forced opening up of the economy and gradual removal of barriers. A need for a solution to achieve a given goal can more constructively be regarded as an opportunity. Increase demand for the local yarn and consistent growth rate indicates that MSL has great opportunities to utilize its’ capacity with quality products as desired by local and foreign markets.

In the RMG value chain, spinning sector has always remained crucial to help 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.Despite facing all the challenges, the operation of your company of this year is almost close to previous year. This is due to the 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 Director’s Report; here I will only summarize our business outcome for the Year 2017-2018.


Consolidated Sales amounted to Tk. 87.85 Crore which is higher than last year; consolidated Gross Profit stood at Tk. 13.27 Crore. Net profit after tax has increased compare to previous year which in results increase of earnings per share of the company for the year ended 30th June 2018.

There are many new safety regulations and compliance standards that have introduced for the RMG industry. 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.

Finally, I would like to express my heartfelt gratitude 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.

With best wishes for the time ahead,

Thanking you all,

_________________________(Mohammad Ali Khokon)Managing Director


DIRECTOR’S REPORT


Directors’ ReportFOR THE FINANCIAL YEAR ENDED ON 30 JUNE, 2018

Dear Shareholders, In terms of provisions of section 184 of the Companies Act 1994, (Act No. XVIII of 1994), it is the pleasure of Board of Directors to submit its Report to the Shareholders for the Year Ended 30 June, 2018 in the following paragraph.

(i) Industry outlookMetro Spinning Limited is one of the pioneers in the spinning industry in Bangladesh which was established in 9th May 1993. It is a Public Limited Company, listed with Dhaka Stock Exchange and Chittagong Stock Exchange in the year of March 14, 2002. It has a capacity of 34,872 spindles with state of art machinery, imported from Japan, China, India, Italy, USA, Germany and Taiwan. The company is producing quality yarn for the both export and local market with an annual production capacity of 4.50 million kg. Metro usually produces 20/1 to 80/1 count of 100 % Cotton Yarn, Grey Mélange Yarn and 100% white viscose. Metro is successfully created excellent name and fame for itself both in local and export market for its product and services provided to the customer from its inception till to date. Spinning sub-sector remains crucial to RMG value chain helping to stabilize supply chain, while controlling costs. The products of the spinning sub-sector are cotton yarn, polyester, synthetic yarn, woolen yarn and blended yarn mixed of cotton and polyester of different counts (mostly up to 80 count). Yarns are being used by the weaving sub-sectors like specialized textiles, handlooms and knitting and hosiery. The growth in the export of clothing with the phasing out of MFA in 2005 has led to the setting up of 350 spinning mills and there has been a boost in investment since 2001. 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.

(ii) The segment wise or product wise performance:

Particular UnitYear

2017-2018 2016-2017

Spindle Number 34,872 34,872

Production Capacity (Yarn) KG 4500 M.Ton 4500 M.Ton

Actual Production (Yarn) KG 3,461M.Ton 3,228 M.Ton

Capacity Utilization % 76.91% 71.73%

(iii) Risk and ConcernRisks and concerns including internal and external risk factors, threat to sustainability and negative impact on environment

1. Industry Risk:Textile is the largest industrial sub –sector in Bangladesh. It contributes highest in the country’s total export earnings, gives employment to over four million people meets the second basic need for clothing of the country and contributes around 50% of the industrial value addition. But after phasing out of the, Multi Fiber Agreement (MFA) the global textile trade is now free from quota restriction.


Management PerceptionThe textile industry has successfully coped with the post Multi Fiber Agreement (MFA) competitive situation. The force, which is helping the sector for its strong existence is emergence of backward linkage industry. Backward linkage industries are supporting for minimizing lead- time and cost of production. The company is a first state of backward linkage industry of yarn production that facilitates for better existence.

2. Interest Rate Risks:Interest / Financial charges are paid against any kind of borrowed found. Volatility in money and increased demand for loan presses on interest rate structure to be fixed in high. Raising of interest rate increases the cost of fund for a company, which have borrowed fund, and consequently profit is squeezed.

Management PerceptionThe management of the Company is always aware of interest rate, which is concerned to the cost of fund the company. The Management prefers in procuring of the long- term fund with minimum fixed interest rate and the short term fund with reasonable competitive rate. On the other hand management of the company is emphasizing on equity based financing.

3. Exchange Rate Risk:The Company is export oriented. The products of the company are sold against foreign currency and payments for raw material are also made in foreign currency .If exchange rate is increased against local currency opportunity is created for getting more revenue against sale in local currency. On the hand if exchange rate goes down margin is squeezed in local currency.

Management PerceptionThe exchange rate of the country is traditionally witnessed of upward trends, which markets ample opportunity of export. On the other hand, management perceives revaluation of local currency i.e. down trend of exchange rate will have little impact on profitability of the company.

4. Energy costs may rise:Due to the adverse power situation in the country, production may be hampered and wastage might rise.Management PerceptionThe Company itself sufficient in generating power by its own generators. However, in case of gas shortfall and subsequent rationing if any, then the productivity will be reduced. In that scenario, the overall sector will be affected.

5. Operational risks:Shortage of power supply, labor unrest unavailability or price increase of raw material, natural calamities like flood, cyclone, earth quack etc. May disrupt the production of the Company and can adversely impact the profitability of the Company.

Management PerceptionThe compensation as well the benefit package will restrain the employees to leave their assignment and got for any employee movement for higher benefit packages. The project of the company is situated at a high land where less record of flood. The factory building has strong RCC foundation, RCC floor, pre- fabricated steel structure to withstand wind, storm rain etc. along with good drainage facility. The risks from these factors are also covered through insurance. The Company is also facilitated to keep a rational reserve for any future price escalation of the raw material.

(iv) COGS, Gross/ Net Profit Margin Analysis A discussion on Cost of Goods Sold, Gross Profit Margin and Net Profit Margin is as follows;


Particulars 2017-2018 2016-2017DeviationIncrease/(Decrease)

Cost of Goods sold 745,804,330 719,668,182 26,136,148

Gross Profit Margin 15.11% 12.12% 2.99%

Net profit Margin 1.37% (3.94%) 5.31%

Cost of Goods sold increased due to increase of price of raw materials and increase of utility cost like Gas & fuel. Gross Profit and net profit increased due to turnover increase & Operating expenses decrease than previous year.

(v) Extra-ordinary activities There were no extraordinary activities during the year.

(vi) Related party transactionsThe following statement showing the related party transactions as per IAS-24 along with amount, nature of related party, nature of transactions and basis of transactions:

Particulars Nature of RelationshipOutstanding Balance as on 30 June, 2018

Maksons Spinning Mills ltd. Common Director (186132845)

(vii) Utilization of Proceeds from Public Issue This is not applicable for MSL as no such event of collecting fund from public issues took place during the year which would require adjustment or disclosure in the annual report.

(viii) Financial Result Deterioration after the Public Issue An explanation if the financial results deterioration after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Share Offer, Direct Listing, etc.:Not applicable.

(ix) Variance within the Quarterly Financial Statement and Annual Financial StatementsNo significant variance occurs between Quarterly Financial performances and Annual Financial Statements.

(x) A statement of remuneration paid to the directors including independent directors:The Directors of the company did not taken any kind of remuneration except Board meeting fee during the year.

(xi) Fairness of Financial StatementsThe management confirms that the financial statements i.e. the result of its operations, statement of cash flows and changes in equity of Metro Spinning Limited is prepared and presented fairly.

(xii) Proper Books of AccountsThe management of Metro Spinning Limited states that proper books of accounts have been maintained.

(xiii) Adaptation of Proper Accounting Policies and EstimatesThe management of Metro Spinning Limited confirms that the appropriate accounting policies have been consistently applied in preparation of the financial statements and the accounting estimates are based on reasonable and prudent judgment.


(xiv) IAS/BAS/IFRS/BFRS ApplicationThe management of Metro Spinning Limited confirms that the International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in Bangladesh have been followed in preparation of the financial statements and any departure there from has been adequately disclosed.

(xv) Internal ControlThe management confirms that internal control of Metro Spinning Limited is sound in design and has been effectively implemented and monitored.

(xvi) Minority ShareholdersA statement that minority shareholders have been protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly and have effective means of redress: Not applicable.

(xvii) Going ConcernThe management confirms that there is no significant doubt upon the issuer company’s ability to continue as a going concern.

(xviii) Significant deviation from last year’s operating resultNo significant deviations occurs from the last year operational result.

(xix) Key Operating and Financial Data Value in ‘000’

Financial Position 2017-2018 2016-2017 2015-2016 2014-2015 2013-2014

Authorised CapitalPaid-up-capitalRetained EarningsTurnoverGross ProfitGross Profit in %Net Profit Before Tax Net Profit Before Tax in %Fixed AssetCurrent AssetCurrent LiabilitiesNet Current Assets

1,000,000604,885

5,649878,507132,703

15.11%12,0421.37%

811,2951,162,108941,974220,134

1,000,000604,885-38,726818,904

99,23612.12%

-32,240-0.39%821,851

1,153,1451,086,908

66,237

1,000,000604,885

11,035809,245175,00721.63%

13,1811.63%

806,3931,084,432

964,333120,099

1,000,000604,885

21850774,463196,10325.32%25,7163.32%

818,5701,014,033

886,621127,412

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

Key Financial Ratios

Current Ratio (Times)Quick Ratio (Times)Debt- Equity Ratio (Times)Time interest earned ratio (Times)Inventory Turnover (Times)Assets TurnoverReturn on AssetsReturn on EquityEarning per Share (EPS)Net Operating Cash Flow Per ShareNet Asset Value Per ShareDividend Per Share (DPS)

Book Value Per Share

1.230.710.921.126

1.85842.03%

0.58%1.27%0.090.6915.53

2%Stock

9.4

1.060.6451.073

0.6391.832

40.17%-0.16%

-0.34%-0.64-1.58

15.882%

Cash8.7

1.120.667

0.91 1.141.69

41.26%0.67%1.32%

0.18-0.8316.12

No Dividend

8.1

1.140.5630.80

1.211.52

38.76%1.29%

2.48%0.361.18

16.835%

Cash10.1

1.090.570.821.411.8

44.96%2.86

5.66%0.841.09

18.285%

Bonus Share16.9


Other Information

Total ShareNumber of ShareholdersNumber of Employees

60,488,5057,707

895

60,488,5058,086

825

60,488,5058,813

860

60,488,50510,454

833

7,608,100 11,025

914

(xx) Dividend Since the company has declared dividend so no explanation is required.

(xxi) Interim DividendThe company did not declare any stock dividend or bonus share as interim dividend during the year.

(xxii) Board Meetings and AttendanceThe total number of Board meetings held during the year and attendance by each director:

NAME OF DIRECTOR POSITIONMEETING

HELDMEETING

ATTENDED

MR. MD HAIDER AHMED KHAN, FCA CHAIRMAN 4 4

MOHAMMAD ALI KHOKON MANAGING DIRECTOR 4 4

MOHD. SHOWKOT ALI DIRECTOR 4 4

MOHD. FERDOUS KAWSER MASUD DIRECTOR 4 4

MRS. LAILA ALI DIRECTOR 4 4

MR. MOHD. MOHSIN ADNANEXECUTIVE DIRECTOR & COMPANY SECRETARY

4 4

MR. YOUNUS BHUIYAN CHIEF FINANCIAL OFFICER 4 4

(xxii) Pattern of Shareholding and Name wise detailsA report on the pattern of shareholding disclosing the aggregate numbers of shares (along with name wise details where stated below) held by is given below :

Name of the Shareholders Status Shares held %

(a) Parent/Subsidiary/ Associated companies and other related parties

Nil Nil Nil

(b) Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and their spouses and minor children:

Mr. Haider Ahmed KhanChairman &

Independent DirectorNil Nil

Mr. Mohammad Ali Khokon Managing Director 35,03,657 5.79%

Mr. Mohd. Showkot Ali Director 14,20,164 2.35%

Mr. Ferdous Kawser Masud Director 44,28,291 7.32%

Mrs. Laila Ali Director 42,79,002 7.07%

Mr. Mohd. Amzad Ali Sponsor 5,61,052 0.93%

Mrs. Hurer Nahar Sponsor 5,62,803 0.93%

Dr. Abdul Haque Sponsor 43,832 0.07%

Al-Haj Abdul Ali Sponsor 5,47,625 0.91%

Sub-Total 15,346,426 25.37%

Institutions & General Public 45,142,079 74.63%

Total 60,488,505 100%


Name of the Shareholders Status Shares held %

Mr. Mohd. Younus Bhuiyan Chief Financial Officer Nil Nil

Mr. Mohd. Mohsin Adnan Company Secretary Nil Nil

Ms. Zabun Nahar Head of Internal Audit Nil Nil

(c) Executives Nil Nil Nil

(d) Shareholders holding 10% or more voting interest in the company

Nil Nil Nil

(xxiv) Appointment or reappointment of Directors: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.

Mohd. Showkot Ali, Director:Mr. Mohd. Showkot Ali, Director of the company. He has 27 years of experience in the textile sector of the contry. He has visited many countries and attended seminars, workshops, etc. which helped him gather knowledge in the sector. Mr. Ali have brought outside experience and expertise to the boardroom in a way that keeps companies on track and moving forward.

He also provides guidelines to ensure the board and shareholders that the financial controls and systems of risk management are strong and defensible. He is alsoa nominated Director of Maksons Spinning Mills Ltd.

Mr. Mohd. Ferdous Kawser Masud, Director: Mr. Mohd. Ferdous Kawser Masud is the Director of the company. He has passed 18 auspicious years in this sector. He gathered knowledge in Modern Methods, Technology, Production and Marketing & Management Techniques of textile industries. He is expert in evaluating the performance of the management in meeting their goals and objectives. He also monitored the reporting of the company’s performance.

He has added value to the company by providing input and consult that is expert, independent, and external, to more fully protect the interests of the shareholders. He is also Director of Maksons Spinning Mills Ltd.

(xxv) Management Discussion and Analysis The Management Discussion and Analysis signed by CEO/MD presenting details analysis of the company’s position and operation is attached herewith as Annexure-01.

(xxvi) Declaration by the CEO and the CFODeclaration or certification by the CEO and the CFO to the Board as required under condition No. 3 (3) is disclosed herewith as Annexure-A; and

(xxvii) Report on Compliance of the Corporate Governance CodeThe report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 is disclosed as herewith Annexure=B and Annexure-C.

DividendThe Board of Directors has recommended 2% stock dividend for the year ended 30 June, 2018 to the shareholders whose name shall appear on the register of members on record date.

CONTRIBUTION TO NATIONAL EXCHEQUER During the Financial Year under review the Company has contributed an amount of Tk. 9.21 Million to National Exchequer as Value Added Tax, Custom Duty and Income Tax.


APPOINTMENT OF AUDITORS The Auditors M/S. G. Kibria & Co. Chartered Accountants, Sadharan Bima Sadan (5th Floor) 24-25 Dilkusha C/A, Dhaka-1000 have expressed their willingness to work with us as Statutory Auditor of the company. The Board of Directors has decided to appoint M/S. G. Kibria & Co. Chartered Accountants as Statutory Auditors of the company for the term (2018-2019) until next Annual General Meeting subject to approval of Shareholders.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS,

__________________________(Haider Ahmed Khan, FCA)Chairman


Annexure -01Management’s Discussion and Analysis of the company’s position and operations along with a brief discussion of changes in the financial statements as per condition no 5(XXV) of Corporate Governance Code dated June 03, 2018.

a. The company has prepared and presented its financial statement as per BAS as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB). The following BASs re applicable for the financial statements for the period under review:

Sl. No. Name of the IAS IAS’s No. Comments

1 Presentation of Financial Statements 1 A

2 Inventories 2 A

3 Cash Flow Statements 7 A

4 Accounting policies, Changes in accounting Estimates & Errors 8 A

5 Events after the Reporting Period 10 A

6 Construction Contracts 11 N/A

7 Income Taxes 12 A

8 Property, Plant and Equipment 16 A

9 Leases 17 N/A

10 Revenue 18 A

11 Employees Benefits 19 A

12 Accounting for Government Grants & Disclosure of Government Assistance

20 N/A

13 The Effects of Changes in Foreign Exchange Rates 21 A

14 Borrowing Costs 23 A

15 Related Party Disclosures 24 A

16 Accounting and Reporting by Retirement Benefit Plans 26 N/A

17 Consolidated and Separate Financial Statements 27 N/A

18 Investment in Associates 28 N/A

19 Interest in Joint Ventures 31 N/A

20 Financial Instruments: Presentation 32 A

21 Earning Per Share 33 A

22 Interim Financial Reporting 34 A

23 Impairment of Assets 36 A

24 Provision, Contingent Liabilities and Contingent Assets 37 A

25 Intangible Assets 38 N/A

26 Financial Instruments Recognition &Measurement 39 A

27 Investment Property 40 N/A

28 Agriculture 41 N/A

b. There is no change in accounting policies and estimation for the preparation of financial statement for the year ended June 30, 2018.

c. Comparative analysis of financial performance or results and financial position as well as cash


flows for current financial year with immediate preceding five years explaining reasons are as follows: Reasons

FIVE YEARS FINANCIAL STATISTICSValue in ‘000

Financial Position 2017-2018 2016-2017 2015-2016 2014-2015 2013-2014 Reasons

TurnoverGross ProfitNet Profit Before Tax Fixed AssetCurrent AssetCurrent LiabilitiesNet Current Assets

878,507132,70312,042811,2951,162,108941,974220,134

818,90499,236-32,240821,8511,153,1451,086,90866,237

809,245175,00713,181806,3931,084,432964,333120,099

774,463196,10325,716818,5701,014,033886,621127,412

923,490 244,879 58,772 829,294 1,053,457 958,629 94,828

Current Ratio (Times)Earning per Share (EPS)Net Operating Cash Flow Per ShareNet Asset Value Per Share

1.23 0.09

0.6915.53

1.06-0.64

-1.5815.88

1.120.18

-0.8316.12

1.140.36

1.1816.83

1.090.84

1.0918.28

d. Compare such financial performance or results and financial position as well as cash flows with the peer industry scenario;

Particulars Metro Spinning LtdJune 30, 2018

Delta Spinners LtdJune 30, 2017

Mozaffar Hossain Spinning Mills Ltd

June 30, 2017

Gross Profit 132,703 156,378 244,272

Net Profit before tax 12,042 57,975 177,590

Net profit after tax 5,649 43,716 150,934

Earnings per share 0.09 0.29 1.68

Net Operating cash flow per share

0.69 0.70 1.54

e. The economy of Bangladesh has experienced a stable growth since 1980. Over the past two decades, the country has recorded an annual average growth rate of 6% of GDP and has reduced the poverty rate by half : in 2016, 24,8% of the population was considered under the poverty line, compared to 48,1% in 2000. Growth amounted to 7% in 2017 supported by remittances from nearly 7,5 million Bangladeshi living abroad (USD 12.85 billion in 2017), garment exports, increased wages and low inflation. Continued growth is expected given macroeconomic stability along with credit growth and increased private investment. According to the Bangladesh Bureau of Statistics, per capita income grew from USD 1,532 to USD 1,660 from fiscal year 2017 to 2018 (a 8% growth). The inflation rate is estimated to reach 5.8% in 2018 while the interest rate sits at 6.75%.

In 2017, agriculture benefited from higher agricultural commodity prices and an increase in farmed land and grew by over 4%. However, the sector is expected to stall due to an expected fall in rice production in 2018. Given rising prices of agricultural products, inflation is expected to increase. Despite lower agricultural incomes and higher inflation, household demand is expected to increase, which should lead to a significant rise in imports, reducing trade’s contribution to growth.


The 2017-2018 budget gave priority to the development of education, technology, transport, communication, and defense. Almost 14% of the annual budget (1.93% of GDP) is dedicated to education, although such spending is still below UNICEF recommendations of 20% of annual budget and 6% of GDP. Tax collection improved significantly in 2017 while spending declined, which reduced the fiscal deficit.

Measures are being implemented to strengthen governance and improve risk management in the banking system. Strengthening the financial system, increasing energy production capacity, improving price stability and reducing poverty are among the country’s major challenges. Given the government’s limited financial capability, aid from bilateral and multilateral donors will be crucial to achieving these short- and medium-term objectives. The National Development Plan (NDP) for the 2018 tax year should lead to the implementation of almost 90 new projects in the transport, water supply, and education sectors, as well as several projects that are currently being finalized.

Bangladesh also suffers from other challenges: frequent social strikes, terrorist threats, poor-quality infrastructure, an under-performing financial system, public sector inefficiency, inadequate exploitation of the country’s natural resources, limited availability of capital and population growth (even though it has slowed down considerably in recent years). Moreover, Bangladesh is among the most exposed countries to climate change worldwide. A three-foot rise in sea level would flood almost 20% of Bangladesh and displace more than 30 million people, which led the country to include a carbon tax in its 2017-2018 budget.

Bangladesh remains a poor, overpopulated country. The elimination of poverty is a priority: it represents almost half of budget expenditure. However, significant progress has been made since 1990; life expectancy has risen by 10 years and the infant mortality rate has been halved. Over 15 million illegal Bangladeshi immigrants live in India due to the porous border between both countries. On this note, disputes for Teesta River water distribution continue, with India claiming 55% of the river’s water and Bangladesh trying to negotiate a higher water share since 1983.

f. Risks and concerns issues related to the financial statement, explaining such risk and concerns mitigating plan of the company:

Since the management of the company needs to have working capital loan with variable interest rate, which is highly interest rate fluctuation risk. To cope up with this risk, the Company always preferred to maintain and monitor loan liability wisely.

The project also dependent on imported raw cotton which is also in risk of foreign exchange rate. As far as raw material import is concerned, the company always tried to capitalize exchange rate gain.

g. The management is planning to replace old machinery to increase the volume and quality of the production with different count of cotton yarn as per customer demand.

Mohammad Ali KhokonManaging Director


Annexure –A


Annexure –B


Annexure –CAs per condition No. 1(5) (xxvii)

Status of compliance with the conditions imposed by the Commission’s Notification No. BSEC/ CMRRCD/2006-158/207/Admin/80 dated 3 June 2018 issued under 2CC of the Securities and Exchange Commission Ordinance, 1969

(Report under Condition No.9)

Condition No.

Title Compliance Status Remarks

Complied Not Complied

1 Board of Directors (BOD)

1(1) Size of the Board of DirectorsThe total number of members of a company’s Board of Directors (hereinafter referred to as “Board”) shall not be less than 5 (five) and more than 20 (twenty).

√

1(2) Independent Directors

1(2)(a) At least one-fifth (1/5) of the total number of directors shall be independent directors; any fraction shall be considered to the next integer or whole number for calculating number of independent director(s);

√

1(2)(b) 'Independent directors' means a director

1(2)(b)(i)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;

1(2)(b)(ii) Who is not a sponsor of the company or is not connected with the company’s any sponsor or director or nominated director or shareholder of the company or any of its associates, sister concerns, subsidiaries and parents or holding entities who holds one percent (1%) or more shares of the total paid-up shares of the company on the basis of family relationship and his or her family members also shall not hold above mentioned shares in the company:

√

1(2)(b)(iii) who has not been an executive of the company in immediately preceding 2 (two) financial years;

√

1(2)(b)(iv) Who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary or associated companies;

√

1(2)(b)(v) Who is not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of any stock exchange;

√

1(2)(b)(vi) Who is not a share holder, director excepting independent director or officer of any member or TREC holder of stock exchange or an intermediary of the capital market;

√


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

1(2)(b)(vii) Who is not a partner or an executive or was not a Partner or an executive during the preceding 3 (three) years of the concerned company's statutory audit firm or audit firm engaged in internal audit services or audit firm conducting special audit or professional certifying compliance of this Code;

√

1(2)(b)(viii) Who shall not be an independent director in more than 5 (five) listed companies;

√

1(2)(b)(ix) 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);

√

1(2)(b)(x) Who has not been convicted for a criminal offence involving moral turpitude;

√

1(2)(c) The independent director(s) shall be appointed by the board and approved by the shareholders in the Annual General Meeting (AGM);

√

1(2)(d) The post of independent director(s) cannot remain vacant for more than 90 (ninety) days.

√

1(2)(e) The tenure of office of an independent director shall be for a period of 3 (three) years, which may be extended for 1 (one) tenure only.

√

1(3) Qualification of Independent Director (ID)

1(3)(a) Independent director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial laws, regulatory requirements and corporate laws and can make meaningful contribution to the business.

√

1(3)(b) Independent director shall have following qualifications:

1(3)(b)(i) Business Leader who is or was a promoter or director of an unlisted company having minimum paid-up capital of Tk. 100.00 million or any listed company or a member of any national or international chamber of commerce or business association; or

N/A

1(3)(b)(ii) Corporate Leader who is or was a top level executive not lower than Chief Executive Officer or Managing Direc-tor or Deputy Managing Director or Chief Financial Of-ficer or Head of Finance or Accounts or Company Secre-tary or Head of Internal Audit and Compliance or Head of Legal Service or a candidate with equivalent position of an unlisted company having minimum paid up capital of Tk. 100.00 million or of a listed company; or

√


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

1(3)(b)(iii) Former official of government or statutory or autono-mous or regulatory body in the position not below 5th Grade of the national pay scale, who has at least educa-tional background of bachelor degree in economics or commerce or business or law; or

N/A

1(3)(b)(iv) University Teacher who has educational background in Economics or Commerce or Business Studies or Law; or

N/A

1(3)(b)(v) Professional who is or was an advocate practicing at least in the High Court Division of Bangladesh Supreme Court or a Chartered Accountant or Cost and Manage-ment Accountant or Chartered Financial Analyst or Chartered Certified Accountant or Certified Public Ac-countant or Chartered Management Accountant or Chartered Secretary or equivalent qualification;

N/A

1(3)(c) The independent director shall have at least 10 (ten) years of experiences in any field mentioned in clause (b)

√

1(3)(d) In special cases the above qualifications may be relaxed subject to prior approval of the Commission.

N/A

1(4) Duality of Chairperson of the Board of Directors and Managing Director or Chief Executive Officer:-

1(4)(a) The positions of the Chairperson of the Board and the Managing Director (MD) and/or Chief Executive Officer (CEO) of the company shall be filled by different indi-viduals.

√

1(4)(b) The Managing Director (MD) and/or Chief Executive Officer (CEO) of a listed company shall not hold the same position in another listed company

√ Noted for comply

1(4)(c) The Chairperson of the Board shall be elected from among the non-executive directors of the Company;

√

1(4)(d) The Board shall clearly define respective roles and re-sponsibilities of the Chairperson and the Managing Di-rector and/or Chief Executive Officer;

√

1(4)(e) In the absence of the Chairperson of the Board, the re-maining members may elect one of themselves from non-executive directors as Chairperson for that particular Board’s meeting; the reason of absence of the regular Chairperson shall be duly recorded in the minutes.

N/A

1(5) The Directors’ Report to Shareholders

1(5)(i) Industry outlook and possible future developments in the industry

√

1(5)(ii) Segment-wise or product-wise performance √


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

1(5)(iii) Risks and concerns including internal and external risk factors, threat to sustainability and negative impact on environment, if any;

√

1(5)(iv) Discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin, where applicable;

√

1(5)(v) Discussion on continuity of any extraordinary activities and their implications (gain or loss);

√

1(5)(vi) A detailed discussion on related party transactions along with a statement showing amount, nature of related party, nature of transactions and basis of transactions of all related party transactions;

√

1(5)(vii) A statement of utilization of proceeds raised through public issues, rights issues and/or any other Instruments

N/A

1(5)(viii) An explanation if the financial results deteriorate after the company goes for IPO, RPO, Rights Share Offer, Di-rect Listing, etc.

N/A

1(5)(ix) An explanation on any significant variance that occurs between Quarterly Financial performances and Annual Financial Statements;

√

1(5)(x) A statement of remuneration paid to the directors including independent directors;

√

1(5)(xi) A statement that the financial statements present fairly its state of affairs, the result of its operations, cash flows and changes in equity;

√

1(5)(xii) Proper books of account of the issuer company have been maintained;

√

1(5)(xiii) A statement that 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

√

1(5)(xiv) A statement that International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any depar-ture there from has been adequately disclosed;

√

1(5)(xv) A statement that the system of internal control is sound in design and has been effectively implemented and monitored;

√

1(5)(xvi) A statement that minority shareholders have been pro-tected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indi-rectly and have effective means of redress;

√


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

1(5)(xvii) A statement that there is no significant doubt 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 there of shall be disclosed;

√

1(5)(xviii) An explanation that significant deviations from the last year’s operating results of the issuer company shall be highlighted and the reasons thereof shall be explained;

√

1(5)(xix) A statement where key operating and financial data of at least preceding 5 (five) years shall be summarized

√

1(5)(xx) An explanation on the reasons if the issuer company has not declared dividend (cash or stock) for the year;

N/A

1(5)(xxi) Boards statement to the effect that no bonus share or stock dividend has been or shall be declared as interim dividend;

√

1(5)(xxii) The total number of Board meetings held during the year and attendance by each director;

√

1(5)(xxiii) Pattern of shareholding and name-wise details (disclosing the aggregate number of shares):

1(5)(xxiii)(a) Parent/Subsidiary/Associated Companies and other relat-ed parties (name-wise details);

√

1(5)(xxiii)(b) Directors, Chief Executive Officer (CEO), Company Sec-retary (CS), Chief Financial Officer (CFO), Head of In-ternal Audit and Compliance (HIAC) and their spouses and minor children (name-wise details);

√

1(5)(xxiii)(c) Executives; and √

1(5)(xxiii)(d) Shareholders holding ten percent (10%) or more vot-ing interest in the company (name-wise details);

√

1(5)(xxiv) In case of the appointment/re-appointment of a director, disclose:

1(5)(xxiv)(a) A brief resume of the director √

1(5)(xxiv)(b) Nature of his/her expertise in specific functional areas; √

1(5)(xxiv)(c) Names of companies in which the person also holds the directorship and the membership of committees of the board.

√

1(5)(xxv) Management’s Discussion and Analysis signed by CEO or MD presenting detailed analysis of the company’s position and operations along with a brief discussion of changes in the financial statements, among others, focusing on:

1(5)(xxv)(a) Accounting policies and estimation for preparation of financial statements;

√

1(5)(xxv)(b) Changes in accounting policies and estimation, if any, clearly describing the effect on financial performance or results and financial position as well as cash flows in absolute figure for such changes;

√


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

1(5)(xxv)(c) Comparative analysis (including effects of inflation) of financial performance or results and financial position as well as cash flows for current financial year with imme-diate preceding five years explaining reasons thereof;

√

1(5)(xxv)(d) Compare such financial performance or results and fi-nancial position as well as cash flows with the peer in-dustry scenario;

√

1(5)(xxv)(e) Briefly explain the financial and economic scenario of the country and the globe;

√

1(5)(xxv)(f) Risks and concerns issues related to the financial state-ments, explaining such risk and concerns mitigation plan of the company;

√

1(5)(xxv)(g) future plan or projection or forecast for company’s oper-ation, performance and financial position, with justifica-tion thereof, i.e., actual position shall be explained to the shareholders in the next AGM;

√

1(5)(xxvi) Declaration or certification by the CEO and the CFO to the Board as required under condition No.3(3) shall be disclosed as per Annexure-A;

√

1(5)(xxvii) The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 shall be disclosed as per Annexure-B and Annexure-C.

√

1(6) Meetings of the Board of Directors

The company shall conduct its Board meetings and record the minutes of the meetings as well as keep required books and records in line with the provisions of the relevant Bangladesh Secretarial Standards(BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Code

√

1(7) Code of Conduct for the Chairperson, other Board members and Chief Executive Officer

1(7)(a) The Board shall lay down a code of conduct, based on the recommendation of the Nomination and Remuneration Committee (NRC) at condition No. 6, for the Chairperson of the Board, other board members and Chief Executive Officer of the company;


1(7)(b) The code of conduct as determined by the NRC shall be posted on the website of the company including, among others, prudent conduct and behavior; confidentiality; conflict of interest; compliance with laws, rules and regulations; prohibition of insider trading; relationship with environment, employees, customers and suppliers; and independency.



Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

2 Governance of Board of Directors of Subsidiary Company-

2(a) Provisions relating to the composition of the Board of the holding company shall be made applicable to the composition of the Board of the subsidiary company;

N/A

2(b) At least 1 (one) independent director on the Board of the holding company shall be a director on the Board of the subsidiary company;

N/A

2(c) The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company

N/A

2(d) The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also;

N/A

2(e) The Audit Committee of the holding company shall also review the financial statements, in particular the in-vestments made by the subsidiary company

N/A

3 Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS).-

3(1) Appointment

3(1)(a) The Board shall appoint a Managing Director (MD) or Chief Executive Officer (CEO), a Company Secretary (CS), a Chief Financial Officer (CFO) and a Head of In-ternal Audit and Compliance (HIAC);

√

3(1)(b) The positions of the Managing Director (MD) or Chief Executive Officer (CEO), Company Secretary (CS),Chief Financial Officer (CFO) and Head of Internal Audited Compliance (HIAC) shall be filled by different individuals;


3(1)(c) The MD or CEO,CS,CFO and HIAC of a listed company shall not hold any executive position in any other com-pany at the same time;


3(1)(d) The Board shall clearly define respective roles responsi-bilities and duties of the CFO, the HIAC and the CS;

√

3(1)(e) The MD or CEO, CS, CFO and HIAC shall not be re-moved from their position without approval of the Board as well as immediate dissemination to the Com-mission and stock exchange(s).

√

3(2) Requirement to attend Board of Directors’ Meetings

The MD or CEO, CS, CFO and HIAC of the company shall attend the meetings of the Board:

√

3(3) Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO)


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

3(3)(a) The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year and that to the best of their knowledge and belief:

3(3)(a)(i) these statements do not contain any materially untrue statement or omit any material fact or contain state-ments that might be misleading; and

√

3(3)(a)(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with exist-ing accounting standards and applicable laws;

√

3(3)(b) The MD or CEO and CFO shall also certify that there are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or in violation of the code of conduct for the company’s Board or its members;

√

3(3)(c) The certification of the MD or CEO and CFO shall be disclosed in the Annual Report.

√

4 Board of Directors’ Committee.-

4(i) Audit Committee; √

4(ii) Nomination and Remuneration Committee. √ Noted for comply

5 Audit Committee-

5(1) Responsibility to the Board of Directors.

5(1)(a) The company shall have an Audit Committee as a sub-committee of the Board;

√

5(1)(b) The Audit Committee shall assist the Board 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;

√

5(1)(c) The Audit Committee shall be responsible to the Board; the duties of the Audit Committee shall be clearly set forth in writing.

√

5(2) Constitution of the Audit Committee.

5(2)(a) The Audit Committee shall be composed of at least 3 (three) members;

√

5(2)(b) The Board shall appoint members of the Audit Commit-tee who shall be non-executive directors of the company excepting Chairperson of the Board and shall include at least 1 (one) independent director;

√

5(2)(c) All members of the audit committee should be "finan-cially literate” and at least 1 (one) member shall have accounting or related financial management background and 10 (ten) years of such experience;

√


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

5(2)(d) When the term of service of any Committee member expires or there is any circumstance causing any Com-mittee member to be unable to hold office before expira-tion 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 shall appoint the new Committee member to fill up the vacancy im-mediately or not later than 1 (one) month from the date of vacancy in the Committee to ensure continuity of the performance of work of the Audit Committee;

√

5(2)(e) The company secretary shall act as the secretary of the Audit Committee;

√

5(2)(f) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director.

√

5(3) Chairperson of the Audit Committee

5(3)(a) The Board shall select 1 (one) member of the Audit Committee to be Chairperson of the Audit Committee, who shall be an independent director;

√

5(3)(b) In the absence of the Chairperson of the Audit Commit-tee, the remaining members may elect one of them-selves as Chairperson for that particular meeting, in that case there shall be no problem of constituting a quorum as required under condition No. 5(4)(b) and the reason of absence of the regular Chairperson shall be duly recorded in the minutes.

√

5(3)(c) Chairperson of the Audit Committee shall remain pre-sent in the Annual General Meeting (AGM).

√ Chair-person of the Audit Commit-

tee will be present in the next

AGM.

5(4) Meeting of the Audit Committee

5(4)(a) The Audit Committee shall conduct at least its four meetings in a financial year.

√

5(4)(b) The quorum of the meeting of the Audit Committee shall be constituted in presence of either two members or two-third of the members of the Audit Committee, whichever is higher, where presence of an independent director is a must.

√

5(5) Role of Audit Committee

5(5)(a) oversee the financial reporting process; √


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

5(5)(b) monitor choice of accounting policies and principles; √

5(5)(c) monitor Internal Audit and Compliance process to ensure that it is adequately resourced, including approval of the Internal Audit and Compliance Plan and review of the Internal Audit and Compliance Report;

√

5(5)(d) oversee hiring and performance of external auditors; √

5(5)(e) hold meeting with the external or statutory auditors for review of the annual financial statements before submission to the Board for approval or adoption;

√

5(5)(f) review along with the management, the annual financial state-ments before submission to the Board for approval;

√

5(5)(g) review along with the management, the quarterly and half yearly financial statements before submission to the Board for approval;

√

5(5)(h) review the adequacy of internal audit function; √

5(5)(i) review the Management’s Discussion and Analysis before disclos-ing in the Annual Report;

√

5(5)(j) review statement of all related party transactions submitted by the management;

√

5(5)(k) review Management Letters or Letter of Internal Control weakness issued by statutory auditors;

√

5(5)(l) oversee the determination of audit fees based on scope and magni-tude, level of expertise deployed and time required for effective au-dit and evaluate the performance of external auditors; and

√

5(5)(m) oversee whether the proceeds raised through Initial Public Offering (IPO) or Repeat Public Offering (RPO) or Rights Share Offer have been utilized as per the purposes stated in relevant offer document or prospectus approved by the Commission.

√

5(6) Reporting of the Audit Committee

5(6)(a) Reporting to the Board of Directors

5(6)(a)(i) The Audit Committee shall report on its activities to the Board.

√

5(6)(a)(ii) The Audit Committee shall immediately report to the Board on the following findings, if any:

5(6)(a)(ii)(a) report on conflicts of interests; N/A

5(6)(a)(ii)(b) suspected or presumed fraud or irregularity or material defect identified in the internal audit and compliance process or in the financial statements;

N/A

5(6)(a)(ii)(c) suspected infringement of laws, regulatory compli-ances including securities related laws, rules and regu-lations; and

N/A


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

5(6)(a)(ii)(d) any other matter which the Audit Committee deems necessary shall be disclosed to the Board immediately;

N/A

5(6)(b) Reporting to the AuthoritiesIf the Audit Committee has reported to the Board about anything which has material impact on the financial condition and results of operation and has discussed with the Board and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board for three times or completion of a period of 6 (six) months from the date of first reporting to the Board, whichever is earlier.

No such situation noticed

5(7) Reporting to the Shareholders and General Investors

Report on activities carried out by the Audit Committee, including any report made to the Board under condition No. 5(6)(a)(ii) above during the year, shall be signed by the Chairperson of the Audit Committee and disclosed in the annual report of the issuer company.

√

6 Nomination and Remuneration Committee (NRC).

6(1) Responsibility to the Board of Directors

6(1)(a) The company shall have a Nomination and Remuner-ation Committee (NRC) as a sub-committee of the Board;


The NRC shall assist the Board in formulation of the nomination criteria or policy for determining qualifi-cations, positive attributes, experiences and independ-ence of directors and top level executive as well as a policy for formal process of considering remuneration of directors, top level executive;


6(1)(b) The Terms of Reference (ToR) of the NRC shall be clearly set forth in writing covering the areas stated at the condition No.6(5)(b).


6(2) Constitution of the NRC

6(2)(a) The Committee shall comprise of at least three mem-bers including an independent director;


6(2)(b) All members of the Committee shall be non-executive directors;


6(2)(c) Members of the Committee shall be nominated and appointed by the Board;



Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

6(2)(d) The Board shall have authority to remove and appoint any member of the Committee;


6(2)(e) In case of death, resignation, disqualification, or re-moval of any member of the Committee or in any other cases of vacancies, the board shall fill the va-cancy within 180 (one hundred eighty) days of occur-ring such vacancy in the Committee;


6(2)(f) The Chairperson of the Committee may appoint or co-opt any external expert and/or member(s) of staff to the Committee as advisor who shall be non-voting member, if the Chairperson feels that advice or sug-gestion from such external expert and/or member(s) of staff shall be required or valuable for the Commit-tee;


6(2)(g) The company secretary shall act as the secretary of the Committee;


6(2)(h) The quorum of the NRC meeting shall not constitute without attendance of at least an independent direc-tor;


6(2)(i) No member of the NRC shall receive, either directly or indirectly, any remuneration for any advisory or consultancy role or otherwise, other than Director’s fees or honorarium from the company.


6(3) Chairperson of the NRC

6(3)(a) The Board shall select 1 (one) member of the NRC to be Chairperson of the Committee, who shall be an independent director;


6(3)(b) In the absence of the Chairperson of the NRC, the remaining members may elect one of themselves as Chairperson for that particular meeting, the reason of absence of the regular Chairperson shall be duly rec-orded in the minutes;


6(3)(c) The Chairperson of the NRC shall attend the annual general meeting (AGM) to answer the queries of the shareholders.


6(4) Meeting of the NRC

6(4)(a) The NRC shall conduct at least one meeting in a financial year;


6(4)(b) The Chairperson of the NRC may convene any emer-gency meeting upon request by any member of the NRC;



Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

6(4)(c) The quorum of the meeting of the NRC shall be con-stituted in presence of either two members or two third of the members of the Committee, whichever is higher, where presence of an independent director is must as required under condition No. 6(2)(h);


6(4)(d) The proceedings of each meeting of the NRC shall duly be recorded in the minutes and such minutes shall be confirmed in the next meeting of the NRC


6(5) Role of the NRC

6(5)(a) NRC shall be independent and responsible or accounta-ble to the Board and to the shareholders;


6(5)(b) NRC shall oversee, among others, the following matters and make report with recommendation to the Board:


6(5)(b)(i) formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend a policy to the Board, relating to the remu-neration of the directors, top level executive, considering the following:


6(5)(b)(i)(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate suitable directors to run the company successfully;


6(5)(b)(i)(b) the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and


6(5)(b)(i)(c) remuneration to directors, top level executive involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;


6(5)(b)(ii) devising a policy on Board’s diversity taking into con-sideration age, gender, experience, ethnicity, educational background and nationality;


Noted for comply

6(5)(b)(iii) identifying persons who are qualified to become direc-tors and who may be appointed in top level executive position in accordance with the criteria laid down, and recommend their appointment and removal to the Board;


6(5)(b)(iv) formulating the criteria for evaluation of performance of independent directors and the Board;



Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

6(5)(b)(v) identifying the company’s needs for employees at differ-ent levels and determine their selection, transfer or re-placement and promotion criteria; and


6(5)(b)(vi) developing, recommending and reviewing annually the company’s human resources and training policies;


6(5)(c) The company shall disclose the nomination and remu-neration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report.


7 External or Statutory Auditors

7(1) The issuer company shall not engage its external or statutory auditors to perform the following services of the company, namely:-

7(1)(i) appraisal or valuation services or fairness opinions; √

7(1)(ii) financial information systems design and implementa-tion;

√

7(1)(iii) book-keeping or other services related to the accounting records or financial statements;

√

7(1)(iv) broker-dealer services; √

7(1)(v) actuarial services; √

7(1)(vi) internal audit services or special audit services; √

7(1)(vii) any service that the Audit Committee determines; √

7(1)(viii) audit or certification services on compliance of corporate governance as required under condition No.9(1);and

√

7(1)(ix) any other service that creates conflict of interest. √

7(2) No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that com-pany; his or her family members also shall not hold any shares in the said company:

√

7(3) Representative of external or statutory auditors shall re-main present in the Shareholders’ Meeting (Annual General Meeting or Extraordinary General Meeting) to answer the queries of the shareholders.

√

8 Maintaining a website by the Company.

8(1) The company shall have an official website linked with the website of the stock exchange.

√

8(2) The company shall keep the website functional from the date of listing.

√

8(3) The company shall make available the detailed disclo-sures on its website as required under the listing regula-tions of the concerned stock exchange(s).

√


Condition No.

Title

Compliance Status

RemarksComplied

Not Complied

9 Reporting and Compliance of Corporate Governance.-

9(1) The company shall obtain a certificate from a practicing Professional Accountant or Secretary (Chartered Ac-countant or Cost and Management Accountant or Char-tered Secretary) other than its statutory auditors or audit firm on yearly basis regarding compliance of conditions of Corporate Governance Code of the Commission and shall such certificate shall be disclosed in the Annual Report.

√

9(2) The professional who will provide the certificate on compliance of this Corporate Governance Code shall be appointed by the shareholders in the annual general meeting.

√ Appoint-ment will be con-firmed in the next AGM

9(3) The directors of the company shall state, in accordance with the Annexure-C attached, in the directors! report whether the company has complied with these condi-tions or not.

√


FINANCIAL HIGHLIGHTS

FINANCIAL RESULT AND APPROPRIATION

The presentation herewith of the comparative financial results of the Year under review (2017-2018) and the immediate Past Year (2016-2017) is provided below for you. Also recommendations have been placed before you for appropriation of the Profits generated during the Year under review:

PARTICULARS Figure in ‘000’ Tk.

2017-18 2016-17

Net Profit before Providing Income tax 12,042 (32,240)

Add: Revaluation Adjustments 3,130 3,295.45

Add: Profit brought Forward from Previous Year 15,854 51,285

Profit available for Appropriation 31,026 22,340

Recommended for Appropriation

Less: Transfer to Tax Provision (6,393) (6,485)

Less: Dividend (12,097)

Less Prior adjustment of deferred tax

Un-appropriated Profit Carried Forward 12,535 15,854

VALUE ADDED STATEMENT

Value in ‘000

PARTICULARS2017-18

(In BDT Tk.)In %

2016-17(In BDT Tk.)

In %

SOURCE OF FUND

1 Net Turnover 879,907 821,095

2 Less: Brought in Materials & Services 652,785 640,298

VALUE ADDED TOTAL 227,122 100.00 180,797 100.00

APPLIED IN THE FOLLOWING WAY

EMPLOYEES

1 Salaries, Wages, Gratuity & Other Benefits 93,918 41.35% 86,857 48.05%

GOVERNMENT

2 Duties & Taxes 9,188 4.05% 8,740 4.83%

PROVIDER OF CAPITAL

3 Dividend 12,097 5.33% -

RETAINED BY THE COMPANY

4 Depreciation & Retention 22,380 9.85% (10,264) (5.68%)

LENDERS

5 Financial Charges 89,539 39.42% 95,464 52.80%

VALUE ADDED TOTAL 227,122 100% 180,797 100%


SALES & PROFITABILITY OVER 5YEARSPARTICULARS 2017-18 2016-17 2015-16 2014-15 2013-14

Sales 878,507 818,904 809,245 774,463 923,490

Gross Profit 132,703 99,236 175,007 196,103 244,879

Net Profit 5,649 -38,726 11,035 21,850 48,594

Net Profit

Gross Profit

Sales

-200,000 0 200,000 400,000 600,000 800,000 1,000,000

2013-14

2014-15

2015-16

2016-17

2017-18

Production (Lbs)

Sales (Lbs)

2013-14 2014-15 2015-16 2016-17 2017-18

78007600740072007000680066006400620060005800

SALES & PRODUCTION IN TERMS OF QUANTITY OVER 5 YEARSPATICULARS 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

Production (Lbs.) 7,067 7075 6,605 7,117 7,632

Sales (Lbs.) 6,666 6472 7,398 7,284 7,208

EARNING PER SHARE (EPS)PATICULARS 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

Earnings Per Share 0.84 0.36 0.18 -0.64 0.09

1

0.8

0.6

0.4

0.2

0

-0.2

-0.4

-0.6

-0.8

0.81

0.36 0.18

-0.61

0.09

2013-14 2014-15 2015-16 2016-17 2017-18


AUDIT COMMITTEE REPORTFor the financial year 2017-2018

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 COMMITTEE

The Audit Committee of the Company comprises of the following:

NAME DESIGNATION POSITION IN THE COMMITTEE

MR. HAIDER AHMED KHAN, FCA Independent Director Chairman

MR. MOHD. FERDOUS KAWSER MASUD

Director Member

MRS. LAILA ALI Director Member

MR. YOUNUS BHUIYAN Chief Financial Officer Member

MR. MOHD. MOHSIN ADNAN Executive Director & Company Secretary

Member Secretary

Terms of Reference (TOR) of the Audit Committee

• The Board defined Terms of Reference (TOR) for the Audit Committee. Activities of the Committee are performed as per the said TOR.

• The Committee submits its report directly to the Board of Directors.

Meetings of the Audit Committee

NAME OF MEMBERMeeting Date and Attendance

28/09/17 05/11/17 18/01/18 16/04/18

MR. MOHD. FERDOUS KAWSER MASUD √ √ √ √

MR. HAIDER AHMED KHAN, FCA √ √ √ √

MRS. MRS. LAILA ALI √ √ √ √

MR. MOHD. MOHSIN ADNAN √ √ √ √

MR. YOUNUS BHUIYAN √ √ √ √

Minutes of the audit committee are properly recorded.

Activities carried out during the yearIn order to discharge the duties and responsibilities of the Audit Committee, the Committee-

• Reviewed the financial statements of the first quarter, second quarter, third quarter and the year ended 30 June, 2018 and subsequently recommended to the Board for consideration and approval.

• Reviewed the work of the Internal Audit Department and made suggestions for improvement.• Recognized the observations of the Internal Audit Department regarding internal control and


suggestions made to improve operational systems and procedures and their implementation.• Reviewed the integrity of the financial statements of the Company to ensure that these reflect a

true and fair view of the Company’s state of affairs for the year ended 30 June, 2018.• Ensured, while reviewing the financial statements, that proper disclosure required under

International Accounting Standards as adopted in Bangladesh have been made and also complied with the Companies Act and various other rules and regulations applicable to textile industries.

• discussed with the statutory auditors about the nature and scope of audit as well as had post-audit discussions to address areas of concern;

• approved the internal audit plan and gave direction to the Internal Auditor where appropriate for carrying out in depth audit to ensure that the Company or its assets are not exposed to undue risk;

• reviewed the management report submitted by the statutory auditors and suggested corrective measures and fixed time frame for their implementation; and

• Reviewed the performance of External Auditors during the last term and recommended them for re-appointment.

• reviewed the Internal Control System and Financial Statements

Reporting• Pursuant to Condition no. 6 (ii) the Corporate Governance Code issued by BSEC, the Committee

reports that it did not find any conflict of interest or any fraud, irregularity, material defect in the Internal Control System. There are no infringement of laws, rules and regulations also.

• The Committee is of the view that risk management associated with the business of the Company is adequately controlled.

On behalf of the Audit Committee,

(MR. HAIDER AHMED KHAN, FCA)Chairman, Audit Committee


MINUTES OF THE 22nd AGMThe 22nd Annual General Meeting (AGM) of shareholders of Metro Spinning Limited was held on December 21, 2017 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 of 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 2017 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 (2% Cash), electing directors, appointing auditors and fixing their remuneration by the shareholders, the meeting ended with a vote of thanks to and from the Chair.

(MR. HAIDER AHMED KHAN, FCA)Chairman


AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS


Auditors’ Report to the Shareholders of

Metro Spinning Limited

We have audited the accompanying Financial Statements of METRO SPINNING LIMITED as at June 30, 2018 which comprises of Financial Position as at June 30, 2018, Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash- Flow for year ended on that date along with significant accounting policies and other explanatory notes thereon.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these Financial Statements in accordance with International Financial Reporting Standards (IFRS), 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.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing, 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 the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor 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.

OpinionIn our opinion, based on our audit, the Financial Statements give a true and fair view of the Financial Position of METRO SPINNING LIMITED, as at June 30, 2018 and of its Financial Performance for the year then ended in accordance with International Financial Reporting Standard and comply with Companies Act, 1994 and other applicable Rules and Regulations.

Report on Other Legal and Regulatory RequirementsWe also report that,

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

b. In our opinion, proper books of accounts as required by law have been kept by the METRO SPINNING LIMITED, so far as it appeared from our examination of those books.

c. The Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows dealt with by the report are in agreement with the books of accounts maintaining by the Management.

d. The expenditure was incurred for the purpose of the company’s business.

Place: Dhaka Ahmed Zaker & Co.Date: October 25, 2018 Chartered Accountants


METRO SPINNING LIMITEDStatement of Financial Position

As at June 30, 2018

Particulars Notes Amount in Taka

30.06.2018 30.06.2017

Assets

Non-Current Assets 919,887,606 945,660,133

Property, Plant & Equipment 4.00 811,295,409 821,851,528

Investments in Share 5.00 108,592,197 123,808,605

Current Assets 1,162,108,876 1,153,145,880

Inventories 6.00 493,266,058 452,282,342

Trade and Others Receivable 7.00 486,691,748 499,025,059

Advance, Deposit & Prepayment 8.00 180,628,702 196,475,763

Cash and Cash Equivalents 9.00 1,522,368 5,362,717

Total Assets 2,081,996,483 2,098,806,013

Shareholders’ Equity and Liabilities

Shareholders’ Equity 939,102,794 960,767,766

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

Reserve & Surplus 11.00 334,217,744 355,882,716

Non-Current Liabilities 200,919,349 51,130,075

Long Term Loan 12.00 149,894,400 -

Deferred Tax Liability 13.00 51,024,949 51,130,075

Current Liabilities 941,974,340 1,086,908,174

Trade and other payables 14.00 29,771,041 13,870,099

Liability for WPPF 15.00 2,648,082 2,045,938

Current Portion of Long Term Loan 16.00 88,823,874 -

Short Term Loan from Bank & others 17.00 770,466,252 1,030,664,239

Provision for Tax 18.00 5,555,286 4,394,811

Liabilities for Expenses 19.00 44,709,805 35,933,087

Total Equity and Liabilities 2,081,996,483 2,098,806,013

Net Assets Value (NAV) per share 27.00 15.53 15.88

The annexed notes (1-36) form an integral part of these financial statements.

Chief Financial Officer Company Secretary Director Managing Director

Place: Dhaka Date: October 25, 2018

Ahmed Zaker & Co Chartered Accountants


METRO SPINNING LIMITED Statement of Comprehensive Income

For the year ended June 30, 2018


30.06.2018 30.06.2017

Sales (Net off VAT) 20.00 878,507,490 818,904,314

Less: Cost of Goods Sold 21.00 745,804,330 719,668,182

Gross Profit 132,703,160 99,236,132

Less : Operating Expenses 31,920,510 38,202,973

Administrative Expenses 22.00 21,751,696 29,495,662

Selling & Distribution Expenses 23.00 10,168,814 8,707,311

Operating Profit before financial expenses & WPPF

100,782,650 61,033,159

Less: Financial Expenses 24.00 89,539,045 95,464,925

Operating Profit/(Loss) before WPPF 11,243,605 (34,431,766)

Add: Non-operating income 25.00 1,401,410 2,191,372

Profit before WPPF 12,645,015 (32,240,393)

Less: Contribution for WPPF 602,144 -

Profit before Tax 12,042,871 (32,240,393)

Provision for Taxation 6,393,733 6,485,664

Provision for current tax 6,498,859 6,162,287

Provision Deferred Tax (105,126) 323,377

Net Profit after Tax for the year 5,649,138 (38,726,058)

Other Comprehensive Income (15,216,409) 35,944,254

Gain/(Loss) on Marketable Securities (Unrealized) (15,216,409) 35,944,254

Total Comprehensive Income/Loss for the year (9,567,271) (2,781,805)

Basic Earning per Share (EPS) 26.00 0.09 (0.64)






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METRO SPINNING LIMITED Statement of Cash FlowsFor the year ended June 30, 2018


30.06.2018 30.06.2017

A CASH FLOWS FROM OPERATING ACTIVITIES

Cash Received from Turnover and Others 890,851,263 797,970,253

Payment for Cost and Expenses (753,937,066) (792,875,651)

Income Tax Paid (5,338,384) (6,372,165)

Interest Paid (89,539,045) (95,464,925)

Net cash inflow /(outflow) from Operating Activities 42,036,768 (96,742,488)

B CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of Fixed Assets (20,422,991) (44,231,314)

Sale of Assets 2,150,147 1,480,000

Net cash inflow /(outflow) from Investing Activities (18,272,844) (42,751,314)

C CASH FLOWS FROM FINANCING ACTIVITIES

Dividend Paid (7,515,506) -

Short Term Loan from Bank & others (21,479,714) 137,175,903

Net cash inflow /(outflow) from Financing Activities (28,995,220) 137,175,903

D Net increase/(Decrese) in cash & cash equivalents (A+B+C)

(5,231,296) (2,317,898)

E Gain/(Loss) on Foreign Currency Fluctuation 1,390,947 1,012,508

F Cash and cash equivalents at the beginning 5,362,717 6,668,106

Cash and cash equivalents at the end (D+E+F) 1,522,368 5,362,717

Cash and cash equivalents as on 30 June 2018

Cash In Hand 226,808 346,151

Cash at Bank 1,295,560 5,016,566

1,522,368 5,362,717

Net Operating Cash Flows Per Share (NOCFPS) 28.00 0.69 (1.60)






METRO SPINNING LIMITEDNotes to the accounts for the year ended June 30, 2018

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 the status of the company was converted into Public Limited Company on 2 June 1994 by a Special Resolution. The Company went on (IPO) in the year 2001.As of July 28, 2018 the registered office of the Company is located at Plot-11, Paradise Tower, Floor-08, Road-02, Sector-03, Uttara, Dhaka. Previously, the registered office was 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. The shares of the company have been trading in both the stock exchanges from14March 2002.

1.01 Nature of Business The principal activities of the Company are manufacturing of knit yarn and selling to the export

oriented Knit Garments industry against back to back letter of credit and receiving foreign currency on deferred payment basis.

1.02 Business with Associates 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 International Financial Reporting Standards (IFRSs)include International Accounting Standards (IAS) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB).

2.02 Regulatory Compliances As required, the company has complied the rules and regulations of the following Acts and Rules:

The Companies Act 1994 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 The Bangladesh Labor Law 2006.2.03 Components of the Financial Statements

According to the International Accounting Standards (IAS)-1“Presentation of Financial Statements”, the complete set of financial statements includes the following components:i. Statement of financial position as at 30 June 2018;ii. Statement of comprehensive income for theyearended 30 June 2018;iii. Statement of changes in equity for the year ended 30 June 2018;iv. Statement of cash flows for the year ended 30 June 2018; andv. Notes Comprising Significant Accounting Policies and others Explanatory Informationfor the

year ended 30 June 2018.


2.04 Measurementbasis used in preparing the Financial Statements The financial statements have been prepared on historical cost basis and as such do not take into

consideration of 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 and rounded off to the nearest Taka.

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

financial statements ofthe company.

2.07 Use of Estimates and Judgments The financial statements were prepared in conformity with the requirements of relevant provisions

of IAS/IFRS, Judgments of the management, 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.

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: 15 Liability for (WPPF) Note: 18 Provision for Tax2.08 Reporting Period

The financial period of the companies covers one year from 1 July 2017 to 30 June 2018 and is followed consistently.

2.09 Statement of Cash Flows Statement of cash flows is prepared in accordance with “IAS 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:


Sl. No. Name of the IAS IAS’s No. Comments

1 Presentation of Financial Statements 1 A

2 Inventories 2 A

3 Cash Flow Statements 7 A

4 Accounting policies, Changes in accounting Estimates & Errors

8 A

5 Events after the Reporting Period 10 A

6 Construction Contracts 11 N/A

7 Income Taxes 12 A

8 Property, Plant and Equipment 16 A

9 Leases 17 N/A

10 Revenue 18 A

11 Employees Benefits 19 A

12 Accounting for Government Grants & Disclosure of Government Assistance

20 N/A

13 The Effects of Changes in Foreign Exchange Rates 21 A

14 Borrowing Costs 23 A

15 Related Party Disclosures 24 A

16 Accounting and Reporting by Retirement Benefit Plans 26 N/A

17 Consolidated and Separate Financial Statements 27 N/A

18 Investment in Associates 28 N/A

19 Interest in Joint Ventures 31 N/A

20 Financial Instruments: Presentation 32 A

21 Earning Per Share 33 A

22 Interim Financial Reporting 34 A

23 Impairment of Assets 36 A

24 Provision, Contingent Liabilities and Contingent Assets 37 A

25 Intangible Assets 38 N/A

26 Financial Instruments Recognition &Measurement 39 A

27 Investment Property 40 N/A

28 Agriculture 41 N/A

Sl. No. Name of the IFRS IFRS No. Comments

1 Adoption of International Financial Reporting Standards 1 N/A

2 Share based payment 2 N/A

3 Business Combinations 3 N/A

4 Insurance Contracts 4 N/A

5 Non-Current Assets held for sale and discontinued operations

5 N/A

6 Exploration for and evaluation of mineral resources 6 N/A

7 Financial Instruments: Disclosures 7 N/A

8 Operating Segments 8 N/A

9 Financial Instruments 9 A

10 Consolidated Financial Statements 10 N/A


11 Joint Arrangements 11 N/A

12 Disclosure of Interests in Other Entities 12 N/A

13 Fair Value Measurement 13 A

d. The financial statements are in compliance with the International Financial Reporting Standards (IFRSs) which are issued by the International Accounting Standards Board (IASB).

2.11 Standards, amendments or interpretations which became effective during the year Standards, amendments or interpretations which are effective during the year did not have any

material effect on the financial statements of the Company.

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 Recognition of Property, Plant & Equipment Property, plant & Equipment are accounted for according to IAS 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.

3.02 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 eliminated from the assets and accumulated depreciation:

Category Rate

Land and Land Development 0.00%

Building & Other 5.00%

Plant & Machinery 6.66%

Furniture & Fixture 15.00%

Office Equipment 10.00%

Motor Vehicle 20.00%

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.

3.03 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 IAS 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. The average rate of cost of goods sold per Lbs stood at Tk.103.32 but the closing stock of yarn was valued at Tk.107.37 per Lbs. The rate is higher because the closing stock represents higher count of yarn. Physical counting of inventory was carried out by inventory team, consisting of auditor &management staff.

3.04 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.

3.05 Leased assets The Company took lease loan for purchase of Plant & Machinery from Bay Leasingwhich was earlier

shown as operating lease. These loans are going to expire during the year and as such no change was made in the earlier treatment as operating lease.

3.06 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 IAS-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.

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

at the transaction dates according to IAS 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.

3.08 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 IAS 23: Borrowing Costs.

3.09 Financial Instruments Non-derivative financial instruments comprise trade receivables, trade payables,cash and cash

equivalents and share capital.

3.10 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.

3.11 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


3.12 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.

3.13 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.

3.14 Taxation 3.14.1 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. 2018.

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

the International Accounting Standard -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.

3.15 Provisions As per “IAS 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.

3.16 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 “IAS 37: Provisions, Contingent Liabilities and Contingent Assets”.

3.17 Earning Per Share (EPS) The company calculates Earning PerShare (EPS) in accordance with IAS 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 – 26 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.


3.18 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.

3.19 Worker’s Profit Participation Funds The company contributed 5.00% of net profit before charging the amount to the aforementioned

fund in accordance with the requirement of section 234 of labor Act. 2006.

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

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

3.21 Event after Statement of Financial Position Date In compliance with the requirements of “IAS-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 notesof financial statements when arise.

3.22 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.

3.23 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 IAS-24: Related Party Disclosures has been disclosed in a separate note33 to the accounts.

3.24 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.

3.25 General .i. Figures in these notes and in the annexed financial statements have been rounded off to the

nearest Taka.ii. These notes from an integral part of the annexed financial statements and accordingly are to

be read in conjunction therewith.


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Amount in Taka

30.06.2018 30.06.2017

4.00 Property, Plant & Equipments: Tk. 811,295,409

This is made up as follows:

(A) At Cost

Opening Balance as at 30.06.17 1,258,529,268 1,215,620,501

Add: Addition during the year 20,422,991 44,231,314

Less : Disposal during the period 6,419,226 1,322,547

Closing Balance as at 30.06.18 1,272,533,033 1,258,529,268

(B) Accumulated Depreciation

Opening Balance as at 30.06.17 436,677,740 409,227,329

Add:Charged during the pediod 28,828,963 28,462,238

Less : Disposal during the period 4,269,079 1,011,827

Closing Balance as at 30.06.18 461,237,624 436,677,740

Written Down Value June 30, 2018 (A-B) 811,295,409 821,851,528

**Details have been presented in Schedule-A.

5.00 Investments in Share: Tk. 108,592,197


Maksons Pharmaceutical limited 400,000 400,000

Maksons Spinning Mills limited 108,192,197 123,408,605

Total 108,592,197 123,808,605

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 1,25,80,488 number of shares in Maksons Spinning Mills Limited after receiving bonus shares. Which Market Value is Tk 1,081,92,197 as on 30.06.2018.

6.00 Inventories : Tk.493,266,058


Raw Cotton (Note: 6.01) 316,343,603 320,525,137

Work in Process (Note: 6.02) 4,846,159 5,026,100

Finished Goods (Note: 6.03) 161,007,780 118,295,191

Store & Spares 9,625,953 7,502,968

Oil & Lubricant 23,894 60,094

Packing Material 1,299,439 727,923

Construction Materials 119,230 144,929

Total 493,266,058 452,282,342


Amount in Taka

30.06.2018 30.06.2017

6.01 Raw Cotton: Tk. 316,343,603


Cotton 316,343,603 320,525,137

Total 316,343,603 320,525,137

6.02 Work in Process: Tk. 4,846,159


Blow Room 345,349 485,511

Carding 70,619 -

Drawing 101,353 114,676

Simplex 1,495,412 1,640,030

Ring 1,966,829 2,157,479

Cone Winding 866,597 628,404

Total 4,846,159 5,026,100

6.03 Finished Goods: Tk. 161,007,780


Yarn (Various Count) 161,007,780 118,295,191

Total 161,007,780 118,295,191

7.00 Trade Others Receivable : Tk.486,691,748


Trade Debtor-Secured 499,025,059 478,081,413

Add. Increased during the year 878,507,490 818,904,315

Less:Realised During the year (890,840,801) (797,960,669)

Total 486,691,748 499,025,059

Ageing Schedule of Trade Receivable:

Due within 06 Months 311,985,370 359,554,444

Due Over 06 Months 174,706,378 139,470,615

Total 486,691,748 499,025,059

8.00 Advance, Deposit & Prepayment: Tk.180,628,702


Advance (Note: 8.01) 174,871,819 189,865,568

Deposit (Note: 8.02) 4,256,883 4,256,883

Prepayment (Note: 8.03) 1,500,000 2,353,312

Total 180,628,702 196,475,763


Amount in Taka

30.06.2018 30.06.2017

8.01 Advance : Tk.174,871,819


Advance to Parties 30,014,098 113,386,914

Advance against Lease 3,469,598 3,469,598

Advance Income Tax & VAT 3,862,606 3,004,418

Raw Cotton in Transit 124,846,016 60,447,969

Claim of Short Weight 9,794,341 8,546,546

Assets in Transit 2,885,160 1,010,124

Total 174,871,819 189,865,568

8.02 Deposit :Tk. 4,256,883


Titas Gas 1,575,442 1,575,442

Other Deposit 2,681,441 2,681,441

Total 4,256,883 4,256,883

8.03 Prepayment :Tk. 1,500,000


Prepaid Office rent 1,500,000 1,500,000

Prepaid insurance - 853,312

Total 1,500,000 2,353,312

9.00 Cash and Cash Equivalents :Tk. 1,522,368


Cash in hand 226,808 346,151

Cash at Bank (Note: 9.01) 1,295,560 5,016,566

Total 1,522,368 5,362,717

9.01 Cash at Bank : Tk.1,295,560


Current Account (Note-9.01.1) 1,146,381 4,862,169

Short Term Deposit (Note-9.01.2) 149,179 154,397

Total 1,295,560 5,016,566


Amount in Taka

30.06.2018 30.06.2017

9.01.1 Current Account: Tk. 1,146,381


Sonali Bank -Local Office 69,732 69,732

City Bank ltd-Nikunja branch 28,967 58,143

Mutual Trust Bank Ltd -Principal Br. 60,656 26,746

Dutch Bangla Bank Ltd -Uttara Br. 188,958 1,740,148

Islami Bank Bangladesh LTd. -Local Office 714 1,864

Jamuna Bank Ltd-Uttara Br. 21,013 7,677

Southeast Bank LTd -Principal Br. 4,880 54,812

Southeast Bank LTd -Uttara Br. 277,994 81,994

Southeast Bank Ltd -Company Secretary 22,558 23,534

Southeast Bank DAD A/C-Principal 205,177 309,662

City Bank -Foreign exchange Br. 168,218 171,440

Exim Bank LTd-Motijheel Br. 109 454

NRB global-uttara Brance 11,304 937,954

NRB Bank(Uttara Branch) 12,872 1,320,100

One Bank LTd.-Motijheel Br. 493 498

Jamuna Bank Ltd -Dilkusha Br. 48,867 41,552

Bank Asia-Banani Branch 9,160 -

Social Islami Bank -Uttara Branch 14,709 15,859

1,146,381 4,862,169

9.01.2 Short Term Deposit: Tk. 149,179


Dhaka Bank Ltd -Local Office - 2

Dhaka Bank LTd -Local Office 3,738 4,256

HSBC Bank LTd -Dhaka Br. 15,274 15,274

Mutual Trust Bank LTd -Principal Br. - 2

Southeast Bank Ltd -Principal Br 20,597 45,180

Southeast Bank Ltd -Uttara Br 69,068 68,688

Southeast Bank Ltd -Principal Br 21,192 -

First Security Bank -Dilkusha Branch 2,997 4,015

Exim Bank LTd -Motijheel Br. 16,313 16,980

149,179 154,397


Amount in Taka

30.06.2018 30.06.2017

10.00 Share Capital: Tk. 604,885,050

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 604,885,050 604,885,050

Paid up Share Capital of Tk. 604,885,050 is arrived at as follows:

Sponsors' Contribution 15,346,477 Ordinary Shares @ Tk 10/- each

153,464,770 158,563,090

Public Issued of 45,142,028 Ordinary Shares @ Tk 10/- each 451,420,280 446,321,960

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 holding No. of shareholders

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

in number of shares 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17

Below 500 2,259 2,331 29.31 28.83 358,275 598,105 0.59 1.00

500 to 5,000 3,952 4,390 51.28 54.29 7,070,325 9,068,436 11.69 15.00

5001 to 10,000 649 651 8.42 8.05 4,813,767 4,812,284 7.96 8.00

10,001 to 20,000 451 391 5.85 4.84 6,638,168 5,987,308 10.97 10.00

20,001 to 30,000 128 107 1.66 1.32 3,173,582 3,277,446 5.25 5.00

30,001 to 40,000 82 61 1.06 0.75 2,853,663 1,546,421 4.72 3.13

40,001 to 50,000 42 34 0.54 0.42 1,940,137 1,315,114 3.21 1.62

50,001 to 100,000 88 71 1.14 0.88 6,178,862 4,221,954 10.21 7.00

100,001 to 1,000,000 51 41 0.66 0.51 12,641,815 9,912,464 20.90 16.00

1,000,001 and above 5 9 0.06 0.11 14,819,811 19,748,973 24.50 33.00

Total 7,707 8,086 100.00 100.00 60,488,505 60,488,505 100.00 100.00

Market PriceThe Company was listed in the Dhaka and Chittagong Stock Exchanges, on 14/03/2002 each share was quoted at tk 9.4 (on 30-06-2018) in the Dhaka Stock Exchange Ltd and Tk 9.30 ( on 30-06-2018) in the Chittagong Stock Exchange Ltd.

Summarized List of Shareholders as on 30-06-2018

Category Total Shareholder Total Shareholding Percentage (%)

Sponsors 8 15,346,477 25.37

Financial Institutions 138 5,207,676 8.61

General Public 7,561 39,934,352 66.02

7,707 60,488,505 100.00


Amount in Taka

30.06.2018 30.06.2017

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: Tk. 334,217,744


Revaluation reserve 289,989,750 293,120,040

Retained Earnings 12,535,798 15,854,071

Share Premium 103,500,000 103,500,000

Loss on Marketable Securities (Unrealized) (71,807,804) (56,591,395)

Total 334,217,744 355,882,716

12.00 Long Term Loan: Tk. 149,894,400

Southeast Bank Ltd. 149,894,400 -

Total 149,894,400 -

The above loan has been rescheduled into long term loan by Southeast Bank Limited which is repayable within April,2021.

13.00 Deferred Tax Liabilities: Tk. 51,024,949


Opening balance 51,130,075 50,806,698

Addition during the year (105,126) 323,377

Total 51,024,949 51,130,075

WDV as per Financial statements Base 457,084,936 466,030,055

WDV as per Tax Base 116,918,608 125,162,889

Difference 340,166,327 340,867,166

Tax @ 15% on Difference 51,024,949 51,130,075

14.00 Trade and other payables: Tk. 29,771,041

For Trading Suppliers 29,771,041 13,870,099

Total 29,771,041 13,870,099

15.00 Liability for (WPPF): Tk.2,648,082

Opening Balance 2,045,938 3,345,938

Add: Contributin made during the year (Note:15.01) 602,144 -

Less: Paid this year - (1,300,000)

Closing balance 2,648,082 2,045,938

Contribution for Workers Profit 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.

15.01 Contribution to WPPF during the year: Tk. 602,144

Net Profit after charging the Contribution 12,645,015 -

WPPF Percentage 5%

Total 602,144 -


Amount in Taka

30.06.2018 30.06.2017

16.00 Current Portion of Long Term Loan: Tk. 88,823,874

Southeast Bank Ltd. 88,823,874 -

Total 88,823,874 -

17.00 Short Term Loan from Bank and Other: Tk. 770,466,252

Short Term Loan from Bank: (Note:17.01) 584,333,407 836,193,471

Loan From Maksons Spinning Mills Ltd.(N:17.02) 186,132,845 194,470,768

Total 770,466,252 1,030,664,239

17.01 Short Term Loan from Bank: Tk. 584,333,407

Jamuna Bank OD A/c-134000403 41,239,727 41,320,407

Southeast Bank Ltd. OD A/C-73300000358 84,770,139 81,957,056

PAD 32,536,550 -

Loan on Export 108,948,975 117,777,282

Jamuna Bank Term Loan 29,305,504 60,887,256

Southeast Bank Ltd.-EDF 184,979,195 133,642,531

Jamuna Bank Ltd- LTR 101,941,483 105,349,460

Southeast Bank Ltd.-LTR 611,834 6,696,669

Southeast Bank Term Loan - 281,835,424

Mutual trust Term Loan - 6,727,386

Total 584,333,407 836,193,471

17.02 Loan From Maksons Spinning Mills Ltd 186,132,845 194,470,768

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.

18.00 Provision for Tax: Tk.5,555,286


Opening Balance 4,394,811 4,604,689

Add : Provision made for the year 6,498,859 6,162,287

Less: Tax Paid/Adjustment during the year (5,338,384) (6,372,165)

Total 5,555,286 4,394,811


Amount in Taka

30.06.2018 30.06.2017

19.00 Liabilities for Expenses: Tk. 44,709,805


Liabilities for Audit Fees 172,500 172,500

Welfare Fund 1,323,302 1,166,403

Provision for Expenses 10,195,143 11,892,982

Salary & Wages 6,623,681 3,983,895

Others Parties 9,560,875 5,499,587

Dividend Payable 10,860,943 7,910,761

Unclaimed Dividends 938,256 938,256

Liability for vat/Tax Deduction 5,035,105 4,368,703

Total 44,709,805 35,933,087

20.00 Sales: Tk. 878,507,490


Sale of Cotton Yarn (Local) 435,747,430 410,575,609

Less: Value Added Tax (VAT) 2,795,000 2,255,000

432,952,430 408,320,609

Add: Export Sales 445,555,060 410,583,705

Total 878,507,490 818,904,314

21.00 Cost of Goods Sold: Tk.745,804,330

Particulars Quantity (Lbs) Amount in Taka Amount in Taka

Opening Work in Process 56,386 5,026,099 7,658,290

Raw Material Consumed (Note-21.01) 8,549,890 592,011,375 527,749,629

8,606,276 597,037,474 535,407,919

Less: Recovery during the year 915,826 - -

7,690,450 597,037,474 535,407,919

Less: Invisible during the year 6,869 - -

Material available for Consumption 7,683,580 597,037,474 535,407,919

Less: Closing Work in Process 51,700 4,846,159 5,026,100

Production during the year 7,631,880 592,191,315 530,381,819

Add: Direct Expenses (Note-21.02) - 60,462,229 53,887,525

Add: Manufacturing Overhead (Note-21.03) - 135,863,375 118,941,004

Cost of Production 7,631,880 788,516,919 703,210,348

Opening Finished Goods 1,076,104 118,295,191 134,753,025

Finished Goods available for Sale 8,707,984 906,812,110 837,963,373

Less: Closing Finished Goods 1,499,624 161,007,780 118,295,191

Total 7,208,360 745,804,330 719,668,182


Amount in Taka

30.06.2018 30.06.2017

21.01 Raw Material Consumed: Tk. 592,011,375

Quantity(Lbs) Amount in Taka Amount in Taka

Opening Stock of Raw Cotton 4,368,697 320,525,137 289,610,499

Add: Purchase of Raw Cotton 8,181,430 587,829,841 558,664,267

Raw Cotton Consumption for available 12,550,127 908,354,978 848,274,766

Less: Closing Stock of Raw Cotton (4,000,237) (316,343,603) (320,525,137)

Total Raw Material Consumed 8,549,890 592,011,375 527,749,629

21.02 Direct Expenses : Tk. 60,462,229

Direct Labour/Wages 54,161,035 48,651,350

Overtime (Workers) 3,022,427 2,146,976

Bonus (Workers) 3,278,767 3,089,199

Total 60,462,229 53,887,525

21.03 Manufacturing Overhead : Tk. 135,863,375

Factory Salary & Allowances 18,765,078 18,471,935

Factory Bonus 1,379,599 1,350,340

Overtime 490,342 453,580

Entertainment (Factory) 376,003 308,195

Fuel For Vehicle 710,740 714,563

Gas for Vehicle 377,105 -

Gas Bill 35,159,730 30,514,242

Insurance Premium 3,083,377 2,334,103

Worker Group Insurance - 28,480

Land Revenue 151,600 172,061

Lease Installement 13,242,247 13,386,976

Loading Unloading 749,322 572,352

Carrying charge 31,000 19,650

Office Expense (Factory) 66,471 79,062

Other Expenses - 56,173

Power & Fuel 12,732,241 6,545,287

Printing & Stationery 251,386 133,860

Repair & Maintenance (building) 2,716,576 1,368,710

Repairs & Maintenance (Gas Generator) 2,850,105 1,986,736

Repairs & Maintenance (Machinery) 1,522,409 1,019,320

Sanitation 14,547 35,170

Store & Spare 12,186,566 9,887,473

Uniform 25,030 26,035

Vehicle Running & Maintenance 418,743 1,350,424

Fire Fighting & Safety Expenses 102,451 33,267

Medical Expenses 57,555 17,383

Traveling & Conveyance 219,320 218,538

Depreciation (Schedule-A) 28,183,832 27,857,089

135,863,375 118,941,004


Amount in Taka

30.06.2018 30.06.2017

22.00 Administrative Expenses: Tk. 21,751,696


Salary & wages 12,220,704 19,733,870

Festival Bonus 1,091,022 2,254,421

Printing & Stationery 92,208 106,816

Traveling & Conveyance 338,710 171,085

Documentation 314,803 175,786

Telephone & Fax 177,620 412,574

Board Meeting fees & Expense 280,000 290,000

Vehicle maintenance 381,743 809,215

Office Expense 1,767,889 572,991

Entertainment Expense 394,401 326,887

Fees & professionals 20,000 -

Share Department Expense 90,000 150,391

Internal Audit Committee Fees 66,900 69,000

AGM Expense 873,350 831,032

Medical Expense 4,800 -

Subscription to BTMA - 54,872

Postage & Telegram 11,175 410

Credit Rating Expense - 74,502

CDBL Expense 106,000 106,000

Membership Fee 166,856 -

Courier Expense 114,418 96,971

Stock Exchange Fee 604,886 604,886

Rates & Taxes 12,670 -

License & Renewal 464,030 135,353

Fuel for Vehicles 453,876 499,439

Gas For Vehicle 306,047 442,319

Audit Fees 172,500 172,500

Sanitation 32,270 19,095

Miscellaneous Expense 180,234 160,518

Utility Expense 162,583 217,635

ICT Expenses 169,350 286,995

Legal Expenses 35,520 114,950

Deprecation (Schedule-A) 645,131 605,149

Total 21,751,696 29,495,662


Amount in Taka

30.06.2018 30.06.2017

23.00 Selling & Distribution Expenses: Tk.10,168,814


Packing Materials 9,477,489 8,578,508

Advertisement 691,325 128,803

Total 10,168,814 8,707,311

24.00 Financial Expenses: Tk. 89,539,045


Interest on Bank & Other 88,672,080 94,222,331

Bank Charges and Commission 866,965 1,242,594

Total 89,539,045 95,464,925

25.00 Non-Operating Income: Tk. 1,401,410


Interest received on Bank A/C 10,463 9,584

Currency Fluctuation Gain/Loss 1,390,947 1,012,508

Profit/loss on sale of Assets - 1,169,280

Total 1,401,410 2,191,372

26.00 Basic Earning Per Share (EPS):

The computation of EPS is given below:

(a) Earning attributable to the ordinary shareholders

(Net Profit after WPPF)

5,649,138 (38,726,058)

(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)

0.09 (0.64)

(d) Basic EPS (After Considering Unrealized Gain/Loss on

Marketable Securities)

(0.16) (0.05)

27.00 Net Assets Value (NAV) Per Share:

Total Assets 2,081,996,483 2,098,806,013

Total Liabilities 1,142,893,689 1,138,038,249

A. Net Assets 939,102,794 960,767,764

B. Total Number of Shares outstanding 60,488,505 60,488,505

Net Assets Value (NAV) per share (A/B) 15.53 15.88

28.00 Net Operating Cash Flow Per Share (NOCFPS):

A. Net Operating Cash Flow (Numerator) 42,036,768 (96,742,488)

B. No. of Shares Outstanding 60,488,505 60,488,505

Net Operating Cash Flow Per Shares (A/B) 0.69 (1.60)


29.00 Disclouser As per Requirement BSEC/CMRRCD/2006-15/134/1.5(XVII)Significant deviation from the Last Year’s Operatilng Results

Particulars 30.06.2018 30.06.2017 Deviation Reason

EPS 0.09 (0.64) 0.73 Deviation has been made due to turnover increase & Operating expenses decrease than previous year.

COFPS 0.69 (1.60) 2.29 COFPS increase due to increase of collection from turnover

30.00 Value of Export

Particulars Quantity (LBS) "In foreign Currency $" In BDT

Export 3,647,947 5,578,280 445,555,060

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

Particulars Installed Capacity Utilization during the periods

Annual Production of Yarn in KG

4,500,000 3,461,752

32.00 Employee Position as per Schedule XI, Para II, Note 5 of Para 3

Particulars Officer & Staff Worker Total Employee

Factory Head Office

Below 5999 33 - 402 435

Above 5999 123 14 323 460

156 14 725 895

33.00 Payment to Directors as per requirement of Schedule XI, Part II Para 4The Directors of the company has not taken any kind of remuneration except board meeting fee during the year.

34.00 Disclosure on Related party Transaction as per IAS-24 ‘’Related Party Disclosure’’

Particulars Nature of Relationship

Outstanding Balance as on 30 June, 2018

Maksons Spinning Mills ltd. Common Directors (186,132,845)

35.00 Proposed DividendThe Board of Directors proposed 2% Stock Dividend on per share of Taka 10 each fully paid up for approval of the shareholders at the Annual General Meeting (AGM) for the year ended 30 June 2018.

The said proposed dividend is not recognaised as a liability at the balance sheet date in accordance with the para 11 of IAS-10 “ Event after the Balance Sheet date”

IAS-1 “ Presentation of Financial Statement” also requires that the dividend proposed after the balance sheet date but before the Financial Statement are authorised for issue be disclose either on the face of the balance sheet as a separate component of equity or in the notes to the Financial Statements.

36.00 Approval of the Financial StatementsThese financial statements were authorised for issue in accordance with a resolution of the company’s Board of Directors on October 25, 2018.

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

PROXY FORMThe Managing DirectorMetro Spinning Limited,Holding#17, Road#6, Sector#1, Uttara Model Town, Uttara, Dhaka-1230.

Register Folio/BO No. ________________No. of Shares held ____________________

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 23rd Annual General Meeting of the Company to be held on Monday, 17 December, 2018 and any adjournment thereof or at any ballot to be taken in consequence thereof.

Signed this ____________________________day of ______________________________2018.

Revenue Stamp TK 20

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: House#17, Road#6, Sector#1, Uttara Model Town, Dhaka-1230

SHAREHOLDERS ATTENDANCE SLIP

I hereby record my attendance at the 23rd ANNUAL GENERAL MEETING of the Company being held on Monday, 17 December, 2018 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) 09.30 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)

CORPORATE & SHARE OFFICEHouse # 17, Road # 06, Sector # 01Uttara, Dhaka-1230Tel: 8933 612, 8933739, 8933740Fax:88-02-893365E-mail: [email protected]

REGISTERED OFFICEPlot-11, Paradise Tower, Floor-8, Road-2, Sector-3, Uttara, Dhaka-1230.

annual report 2017-2018€¦ · dhaka stock exchange limited chittagong stock exchange limited...

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