annual report 2008 - beximcobextex.net/ar_2008.pdf · 2 annual report 2008. board and management...

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A N N U A L R E P O R T 2 0 0 8

EACH OF OUR ACTIVITIES MUST BENEFIT AND ADD VALUE TO THE

COMMON WEALTH OF OUR SOCIETY. WE FIRMLY BELIEVE THAT,

IN THE FINAL ANALYSIS WE ARE ACCOUNTABLE TO EACH OF THE

CONSTITUENTS WITH WHOM WE INTERACT; NAMELY: OUR

EMPLOYEES, OUR VALUED CUSTOMERS, OUR SUPPLIERS, OUR

BUSINESS ASSOCIATES, OUR SHAREHOLDERS AND OUR FELLOW

CITIZENS.

MISSION

Table of contents

2 Notice of the Twenty-Fifth Annual General Meeting 3 Board and Management 4 Chairman’s Statement 9 Corporate Governance 10 Report of the Directors 12 Corporate Governance Compliance Report 13 Five Years’ Statistics 14 Value Added Statement 15 Twenty-Fourth Annual General Meeting 17 Report of Auditors to the Shareholders 18 Balance Sheet 19 Profit and Loss Account 20 Statement of Changes in Equity 21 Cash Flow Statement 22 Notes to the Accounts Annexed Proxy Form and Attendance Slip

BEXTEX

1

Notice of the Twenty-fifth Annual General Meeting

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

NOTICE OF THE TWENTY-FIFTH ANNUAL GENERAL MEETING

Notice is hereby given that the TWENTY-FIFTH ANNUAL GENERAL MEETING of the Shareholders of Bextex Limited will be held on Thursday, the 18th June, 2009 at 4.00 p.m. at 1, Shahbag C/A, Dhaka to transact the following business :

AGENDA

A. As Ordinary Businesses:

1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended 31st December, 2008 together with reports of the Auditors and the Directors thereon.

2. To elect Director.3. To declare 10% Stock Dividend out of reserves.4. To appoint Auditors for the year 2009 and to fix their remuneration.5. To transact any other business of the Company with the permission of the Chair.

B. As Extra-Ordinary Business:

1. To consider and approve conversion of loans given by CDC, DEG, Marubeni Corporation and Beximco Group Companies into ordinary shares pursuant to section 155(2) of the Companies Act, 1994, subject to consent of the Securities and Exchange Commission under the Securities and Exchange Commission (Issue of Capital) Rules, 2001.

By order of the Board,

Dated : 13th May, 2009 (MD. ASAD ULLAH, FCS) Company Secretary

NOTES:

(1) The Record Date shall be on 25th May, 2009. The Shareholders whose names will appear in the Share Register of the Company or in the Depository Register on that date will be entitled to attend at the Annual General Meeting.

(2) A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meeting.

(3) Admission to the meeting room will be strictly on production of the attendance slip sent with the Notice as well as verification of signature of Member (s) and/or proxy-holder (s).

2 Annual Report 2008

Board and Management

BOARD OF DIRECTORS

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

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

COMPANY SECRETARY Md. Asad Ullah, FCS

3BEXTEX Limited

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5BEXTEX Limited

Chairman’s Statement

Chairman’s Statement

I take this opportunity to welcome you all on behalf of the Board of Directors to this 25th Annual General Meeting of your company and to present to you the Auditors’ Report which includes the Audited Financial Statements and the Directors Report for the year ended 31st December 2008.

OPERATION

I would like to begin by first recounting a bit of our history. Bextex was formed in 2006 by the merger of Padma Textile Mills Ltd., Beximco Textiles Ltd., Beximco Knitting Ltd. and Beximco Denims Ltd. The strategy behind the merger was to form a company with a stronger balance sheet in order to more easily raise capital in the International market for expansion and to make the operation more efficient, by cost reduction and achieving economies of scale. The sponsors also sold their personal assets and paid off the International financial institutions so that the company could come out of default. Unfortunately after achieving our goal and just as we were about to launch our road show to raise capital the “political tsunami” hit us at the end of 2006.

Then began our period of trial and tribulation of which you are all aware. The last two years has been very difficult for the company. We were subjected to all manners of completely unjustified harassment and repression. However by the grace of Allah and thanks to the tremendous support of different stakeholders: our international customers, our employees and the international institutions who provided us equity and loan funding, and of course you our shareholders, we have managed to come out of this very difficult period hurt but not demolished. Especially I must mention the great spirit of sacrifice shown by our management staff both local and expatriates who we owed at times up to 11 months in arrear salaries. I am however proud that in spite of all our financial difficulties we paid wages to our workers and lower paid employees without fail every month. We have also paid all arrear salaries.

However during this period, while fighting adversity we did not lose sight of the future. We were confident that the undemocratic regime would come to an end and democracy would be restored. So to that end we dedicated our efforts. The sponsors from their own resources loaned

Tk 1,269 million to the company. These funds have been used for fixed investment and acquainting working capital. We have expanded our production capacity from 33 million meters to 46 million meters, we have overhauled all our machineries, we have strengthened our management by hiring more professionals, we are increasing our power generation capacity by 6 MW, we are installing waste heat boilers which will reduce our cost of steam generation as well will reduce pollution, and we are putting new IT systems for better managing the production and other operations. These are some examples of what we are doing. The steps we are taking for increasing our efficiency and profitability are numerous and part of a continuous process.

ON ThE MARkETING SIDE

We have intensified our efforts to sell to our international customers and have achieved significant breakthroughs. Our existing customers such as JC Penney and the Inditex Group (the largest clothing retailer in the world), are increasing their orders and expanding the range of products they buy from us. Our old customer, Philips Van Heusen, the largest shirt company in the world, is returning to us after having left us during last 2 years.


Other old customers are also showing interest to restart working with us. We are also greatly expanding our customer base by adding several new highly successful international retailers to our list of customers. Our order book is full for the next 4 months and every day more orders are pouring in.

ON ThE FINANCIAl SIDE

The company has rescheduled all its loans and debentures with all the Banks who had provided us the loans. In order to do this the company had to deposit substantial amounts as down payment as this was a condition of loan rescheduling. The fund for this was provided by the sponsors who raised the money from their own sources. Thus now the CIB report on the company is clean and has no classified loan in it.

You will also be glad to know that recently the Honorable High Court has quashed the two cases filed by the Anti Corruption Commission which had charged the Directors of taking loans from IFIC bank and Sonali bank by fraudulent means. These cases were filed during the interim government’s tenure and was part of the process of repression against the sponsors. The judgment of the Honorable High Court vindicated our position and cleared the sponsors’ good name.

We are in the final stages of negotiation with the foreign lenders viz. CDC, DEG & Marubeni to convert their loans into equity which when completed will make our balance sheet much stronger and also remove the foreign exchange risk burden from the balance sheet.

With all these efforts and steps taken your company is now in a very healthy position and its performance is improving rapidly. I am confident that the half yearly result due to be announced soon will reflect this.

FuTuRE PlANS

We are planning to increase our woven fabric production capacity to 168 million meter, and at the moment our consultants are preparing the project design. When implemented, which we expect will be by December 2010, we will be the largest fabric producer in the sub-continent.

Our sister concerns are planning to increase their garment manufacturing capacity to 80 million pieces. This would greatly help sales of our fabrics.

In conclusion once our plans are fully implemented, we should be able to significantly increase our turnover.

I thank all of you and other shareholders as well as the present democratic government and its different agencies for the kind support and cooperation given to us.

A S F RahmanChairman

Dated: 30th April 2009Dhaka.

7BEXTEX Limited

CORPORATE GOVERNANCE

BEXTEX Limited is a trend setting pioneer in corporate governance in the country and enjoys reputation as a world class producer of yarn, fabric and apparel that is admired worldwide for their quality and design. A team of highly qualified and experienced and committed professionals under the guidance of top management of the company have achieved admirable measure of success in a short span of time. This has been possible because the company never compromises on quality and settles for nothing but the best.

Transparency and fair business practices coupled with strict quality control regimen have inspired the confidence of internationally reputed buyers like PVH, Perry Ellis, Wal-Mart, JC Penny, Philippine Van Heusen, Zara of Spain Kid Headquarter, to name a few, to enter into business partnership with BEXTEX.

The company, as part of its corporate responsibility, shares its experience with others, especially educational and training institutes like the National Defence College ( NDC ), Ordnance School, Marine Academy which send trainees from time to time to visit the company’s plants, which stand as symbols of the nation’s march towards high-tech industries. BEXTEX also receives students from different institutions as interns and on industrial attachments to enable them to gain first hand knowledge on corporate management practices.

An important hallmark of the company’s policy is talent hunting. It goes for the best talents in the country and outside; and through intensive training programme expands their perspectives and hone their thinking. Training programmes are specially designed to prepare them to take over and confidently discharge management responsibilities. Towards this end, BEXTEX has hired competent professionals from India, China, Pakistan, Sri Lanka, the Philippines, et al.

All the efforts of BEXTEX in hiring best talents, providing best training and ensuring best quality production aim at one goal: put Bangladesh on the global map as the producer of quality goods. The export strategy of the company is not profit motive; it is geared to fostering economic growth of the country.

The company abides by all relevant Health, Safety and Environment Conservation Rules; Fire and Boiler maintenance instructions and all relevant policies of the government, as is evident throughout the

entire Industrial Park where BEXTEX plants are located.

Sufficient Personal Protective Equipment (PPE), Safety Equipment, signs and symbols etc. are made available throughout the plants. Necessary training is also imparted to all the workers on the use of these equipment so that they are able to use them, if required, and meet the health, safety & hygiene requirement properly. Necessary’ plantation, treatment, control measures etc. are also properly ensured as per the guidelines of the World Bank, Department of Environment and other concerned bodies. It also follows the Buyers’ Code of Conduct and satisfactorily meets the buyers’ set standard of compliance. The certification of compliance from internationally reputed companies bear testimony to BEXTEX’s compliance of global standard.

BEXTEX Limited can confidently say that earning admiration from around the globe are the benchmarks of the success of the company. This success has been earned by ensuring the highest level of human resources management and conforming to various compliance issues at the level of international standard. BEXTEX’s Human Resources Team Management is way ahead of others in the industry. Herein lies the strength of the company and explains in no uncertain manner why it has achieved unparalleled success.

The team of Human Resources Department in BEXTEX consisting of highly qualified and vastly experienced personnel having appropriate training at home and abroad, made the department equipped with necessary policies, guidelines, standard operating procedures (SOPs), job descriptions, training materials, code of conducts (COC). Continuous development of human resources is also taking place simultaneously in each and every section of the company.

9BEXTEX Limited

REPORT OF THE DIRECTORSFor the year ended 31 December 2008

The Directors are pleased to present the Audited Financial Statements of the Company for the year ended 31 December 2008, together with the Directors’ and Auditors’ Reports thereon.

PRINCIPAl ACTIVITY

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

WORkING RESulTS

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

(Taka in million) 2008 2007

Net Profit/(loss) after income tax (608.66) (994.07)Profit brought forward (733.05) 261.02Profit available for appropriations (1,341.71) (733.05)The Directors recommended the following appropriation:Proposed Stock Dividend (Bonus Share) for the year 2008 at 10% (188.28) -Profit/(loss) carried forward (1,529.99) (733.05)

DIVIDEND

The Board of Directors have recommended 10% stock Dividend (Bonus share); i.e., 1 (one) bonus share for every 10 (ten) ordinary shares held, fully paid up, for the approval of the shareholders for the year ended 31 December 2008.

DIRECTOR

Mr. Salman F Rahman, Director. retires by rotation as per Articles 126 and 127 of Articles of Association of the Company and being eligible offers himself for re-election.

BOARD MEETING AND ATTENDANCE

During the year, 13 (Thirteen) Board Meetings were held. The attendance record of the Directors is as follows:

Name of Directors Meetings AttendedA S F Rahman 13Salman F Rahman 6M A Qasem 12A B Siddiqur Rahman 13

BOARD AuDIT COMMITTEE

The company has an audit committee, which met twice in 2008, to consider the half-year accounts ended 30th June, 2008 and annual accounts ended 31st December, 2007 and also auditors report on the annual accounts.

CORPORATE & FINANCIAl REPORTING

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

Accordingly, the Directors are pleased to confirm the following :

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

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

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


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

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

(f) There are no significant doubts upon the Company’s ability to continue as a going concern.

(g) The Company has incurred net loss, mainly due to higher raw material costs, higher depreciation and higher expenses-manufacturing, administrative and selling.

(h) The key operating and financial data for the last five years is Annexed.

(i) The pattern of shareholding is as follows:

Name-wise details Shares held

(i) Parent/Subsidiary/Associate Companies and other related parties : Bangladesh Export Import Co. Ltd. 14,138,250 Beximco Holdings Ltd. 5,851,591 Beximco Apparels Ltd. 3,080,811 Beximco Pharmaceuticals Ltd. 3,268,991 New Dacca Industries Ltd. 14,075,447

(ii) Directors, Chief Executive Officer, Company Secretary, Chief Financial

Officer, Head of Internal Audit and their spouses and minor children : Mr. A S F Rahman, Chairman 34,447,725 Mr. Salman F Rahman, Vice Chairman 39,858,958 Chief Executive Officer, spouse and minor children Nil Company Secretary, spouse and minor children Nil Chief Financial Officer, spouse and minor children Nil Head of Internal Audit, spouse and minor children Nil

(iii) Executives Nil

(iv) Shareholders holding ten percent (10%) or more voting interest in the Company Mr. A S F Rahman, Chairman (mentioned in Sl. No. (ii)) 34,447,725 Mr. Salman F Rahman, Vice Chairman (mentioned in Sl. No. (ii)) 39,858,958

CORPORATE GOVERNANCE COMPlIANCE REPORT

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

AuDITORS

The retiring Auditors, M/S M. J. Abedin & Co., Chartered Accountants, National Plaza (6th floor), 109, Bir Uttam C.R. Datta Road, Dhaka-1205, being eligible, offer themselves for re-appointment as Auditors of the Company for the year 2009.

On behalf of the Board,

A S F RahmanChairman

April 30, 2009Dhaka.

11BEXTEX Limited

Corporate Governance Compliance Report

ANNEXURE

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

Condition. Title Compliance status Explanation No (Put (√) in the appropriate column) for non-compliance

Complied Not complied with the condition

1.1 Board’s Size √ To be complied in 20091.2(i) Independent Directors √ To be complied in 20091.2(ii) Independent Directors Appointment √ To be complied in 20091.3 Chairman & Chief Executive √1.4(a) Directors’ Report on financial Statements √1.4(b) Books of Accounts √1.4(c) Accounting Policies √1.4(d) IAS Applicable in Bangladesh √1.4(e) System of Internal Control √1.4(f) Going Concern √1.4(g) Deviation in Operating Results √1.4(h) Key operating and Financial Data √1.4(i) Declaration of Dividend √1.4(j) Number of Board Meetings √1.4(k) Pattern of Shareholdings √

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

3 Audit Committee √3.1(i) Composition of Audit Committee √3.1(ii) Audit Committee Members Appointment √3.1(iii) Terms of service of Audit Committee √3.2(I) Chairman of Audit Committee √3.2(ii) Audit Committee Chairman’s Qualification √3.3.1(I) Reporting to the Board of Directors √3.3.1(ii)(a) Report of Conflicts of Interest √3.3.1(ii)(b) Defect in the Internal Control System √3.3.1(ii)(c) Suspected infringement of Laws √3.3.1(ii)(d) Any other matter √3.3.2 Reporting to the Authorities √3.4 Reporting to the Shareholders √

4.00 (i) Appraisal or Valuation Services √4.00 (ii) Financial information system √4.00 (iii) Book keeping or other services √4.00 (iv) Broker dealer services √4.00 (v) Actuarial services √4.00 (vi) Internal Audit services √4.00 (vii) Any other services √


FIVE YEARS’ STATISTICS

2008 2007 2006 2005 2004

Results of Operations:

* Revenue 4,760,237 4,267,027 5,201,514 2,570,597 2,945,921* Gross Profit 1,670,052 1,245,302 2,030,146 499,931 518,717* Operating Profit 1,409,417 996,034 1,774,503 449,975 478,441* Net Profit/(loss) before tax (608,656) (983,404) (200,709) 156,569 189,273* Net Profit/(loss) after tax (608,656) (994,072) (208,649) 123,599 154,997** Basic Earning per share (3.23) (5.28) (1.11) 2.03 3.19** Cash Dividend Per Share - - - 0.50 0.50Stock Dividend in % 10 - 10 10 25* Cash Generated from/(Used in) Operating Activities (1,134,776) (407,370) 269,201 88,167 (144,457)

Financial Position:

* Total Assets 19,086,298 14,738,938 14,956,940 6,168,193 6,087,239* Fixed Assets - Gross 12,915,855 11,579,984 11,431,174 4,107,057 4,061,812* Fixed Assets - Net 11,805,281 6,805,566 7,293,540 1,661,658 1,880,976* Financial Assets 3,812,236 3,492,995 3,458,925 3,113,777 2,826,215* Reserve and Surplus 1,469,666 46,824 1,248,829 1,230,994 1,255,774* Gross Working Capital 7,230,983 7,881,489 7,572,906 4,496,276 4,196,005* Net Working Capital (675,955) (177,009) 1,611,525 2,793,425 2,585,451* Authorised Capital 3,000,000 3,000,000 3,000,000 1,000,000 1,000,000* Share holders’ Equity 3,552,512 1,929,670 2,960,507 2,076,601 1,979,759* Paid up Capital 1,882,846 1,882,846 1,711,678 608,108 486,486* Total Long Term Debt 7,826,849 4,735,768 6,020,051 2,373,739 2,481,926

key Financial Ratios, Figures and Market Data:

Current Ratio 0.92 : 1 0.98 : 1 1.27:1 2.64:1 2.60:1Debt Equity Ratio 2.33 2.45 2.03 1.14 1.25Return on Investment (3.19%) (6.74%) (1.39%) 2.00% 2.55%** Net Assets Value per Share 59.37 35.48 52.55 73.43 73.62Payout Ratio - - - 73.89% 47.02%** Market value of share (at DSE) 23.90 18.90 22.50 21.90 39.50** Market value of share (at CSE) 23.80 18.75 22.50 22.10 40.40Price Earning Ratio (Based on DSE price) (Times) (7.40) (3.58) (18.44) 10.79 12.38Price Earning Ratio (Based on CSE price) (Times) (7.37) (3.55) (18.44) 10.89 12.66

Others:

Number of shares 188,284,625 188,284,625 171,167,841 60,810,750 48,648,600Number of shareholders 37,216 37,929 36,470 9,147 5,905No. of Employees 5,230 5,181 6,206 2,652 2,720

* Figures in Thousand Taka** Figures in Taka

Note: Statistics for 2004 & 2005 relate to erstwhile Padma Textile Mills Ltd., and accordingly, are not comparable with those of 2006, 2007 & 2008.

13BEXTEX Limited

Value Added Statement

2008 2007

Taka in ‘000 % Taka in ‘000 %

Turnover 4,760,237 4,291,768Brought-in-materials and services (2,902,499) (2,744,301)

1,857,738 100.00 1,547,467 100.00

Govt - as Duties and taxes 21,538 1.16 23,118 1.49Employees - as Salaries, wages and allowances 426,783 22.97 538,982 34.83Lenders - as Financial Charges 1,300,657 70.01 1,342,656 86.76Shareholders - as Dividend - - - - 1,748,977 94.15 1,904,755 123.09

Depreciation and retention 108,760 5.85 (357,289) (23.09)

1,857,738 100.00 1,547,467 100.00


Twenty-Fourth Annual General Meeting

The Twenty-Fourth Annual General Meeting (AGM) of shareholders of Bextex Limited was held on 28th August 2008 at 10:30 am at 1, Shahbagh C/A, Dhaka. A large number of shareholders attended at the AGM.

In absence of Chairman and Vice Chairman of the Board of Directors of the Company, Mr. A B Siddiqur Rahman, Director of the Company presided over the meeting. Mr. O K Chowdhury, Group Director of the Beximco Group was also present in the meeting. Verses from the Holy Quaran along with its translation in Bengali were recited at the very outset of the meeting.

Mr. O K Chowdhury welcomed the shareholders in the AGM. With the permission of the Chair, the meeting began and the shareholders expressed their valued opinion on the audited financial statements of the Company for the year ended 31 December 2007 and also on other affairs.

Mr. O K Chowdhury 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, electing director, appointing auditors and fixing their remuneration by the shareholders, the meeting ended with a vote of thanks to and from the Chair.

15BEXTEX Limited

Financials


TO THE SHAREHOLDERS OF BEXTEX LIMITED AUDITORS’ REPORT

We have audited the accompanying Balance Sheet of the Bextex Limited as of December 31, 2008 and the related Profit and Loss Account, Statement of Changes in Equity and Statement of Cash Flows for the year then ended. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements prepared in accordance with Bangladesh Financial Reporting Standards (BFRSs), give a true and fair view of the state of the company’s affairs as of December 31, 2008 and of the results of its operations and it’s cash flows for the year then ended and comply with the applicable sections of the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

We also report that:

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

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

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

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

National Plaza (6th Floor) M. J. ABEDIN & CO.109, Bir Uttam C.R. Datta Road, Chartered AccountantsDhaka-1205.

Dhaka : April 30, 2009

17BEXTEX Limited

BEXTEX LIMITEDBEXTEX LIMITED

2008 2007 Notes Amount in Taka Amount in Taka

ASSETS Property, Plant and Equipment-Carrying Value 20 11,805,280,797 6,805,566,691Long Term Security Deposits 21 29,191,074 29,191,074Deferred Assets 22 20,843,945 22,690,877

Total Non-Current Assets 11,855,315,816 6,857,448,642

Current Assets 7,230,982,538 7,881,489,387Inventories 23 2,733,063,864 3,688,016,341Trade Debtors 24 3,765,912,622 3,451,582,241Advances, Deposits and Prepayments 25 714,873,842 729,669,717Cash and Cash Equivalents 26 17,132,210 12,221,088Total Assets Tk. 19,086,298,354 14,738,938,029

EQuITY AND lIABIlITIES

Shareholders’ Equity 3,352,511,836 1,929,670,558Issued Share Capital 27 1,882,846,251 1,882,846,251Reserves & Surplus 1,469,665,585 46,824,307

Non-Current liabilities 7,826,848,879 4,750,768,54610% Debentures - Net of Current Maturity (Secured) 28 1,009,534,505 509,055,554Long Term Loans-Net of Current Maturity (Secured) 29 6,802,314,374 4,226,712,992Security Deposit from Distributor 30 15,000,000 15,000,000

Current liabilities 7,906,937,639 8,058,498,925Short Term Loans 31 4,283,771,415 4,102,515,44610% Debentures - Current Maturity (Secured) 32 - 468,550,828Long Term Loans - Current Maturity (Secured) 33 2,029,139,603 2,342,367,124Creditors & Accruals 34 1,594,026,621 1,145,065,527

Total Shareholders’ Equity and liabilities Tk. 19,086,298,354 14,738,938,029

The notes are an integral part of the Financial Statements.

Approved and authorized for issue by the board of directors on April 30, 2009 and signed for and on behalf of the Board.

A S F Rahman Salman F Rahman M A QasemChairman and Vice Chairman DirectorManaging Director

Per our report of even date.

April 30, 2009 M. J. Abedin & Co.Dhaka Chartered Accountants

Balance SheetAt 31 December 2008

Annual Report 200818

BEXTEX LIMITED

For the year ended 31 December 2008Profit and Loss Account 2008 2007 Notes Amount in Taka Amount in Taka

Revenue 35 4,760,237,189 4,267,027,599

Cost of Revenue 36 (3,090,184,887) (3,021,725,477)

Gross Profit 1,670,052,302 1,245,302,122

Operating Expenses (260,635,288) (249,267,456)

Administrative Expenses 39 (240,784,328) (235,257,889)

Distribution (Selling) Costs (19,850,960) (14,009,567)

Profit before Interest, Tax & Depreciation 1,409,417,014 996,034,666

Financial Expenses 40 (1,300,656,669) (1,342,655,622)

Depreciation 20 (717,416,211) (636,784,027)

Profit/(loss) before Tax (608,655,866) (983,404,983)

Income Tax Expenses 41 - (10,667,569)

Profit/(loss) for the year transferred to Statement of Changes in Equity Tk. (608,655,866) (994,072,552)

Earnings Per Share (Par value Tk. 10/-) 42 Tk. (3.23) (5.28)






Annual Report 2008 19

BEXTEX LIMITED

For the year ended 31 December 2008Statement of Changes in Equity

Particulars Share Capital Reserves Revaluation Surplus Retained Total Taka Taka Taka Earnings Taka Taka

At the beginning of the year 1,882,846,251 779,879,705 - (733,055,398) 1,929,670,558

Profit/(Loss) for the year - - - (608,655,866) (608,655,866)

Revaluation surplus -Net - - 2,031,497,144 - 2,031,497,144

At the end of the year Tk. 1,882,846,251 779,879,705 2,031,497,144 (1,341,711,264) 3,352,511,836






Annual Report 200820

BEXTEX LIMITED

For the year ended 31 December 2008CASH FLOWS STATEMENT

2008 2007 Amount in Taka Amount in Taka

Cash Flows from Operating Activities :

Cash Receipts from Customers and Others 3,190,602,600 4,223,133,089

Cash Paid to Suppliers and Employees (3,043,303,205) (3,788,738,872)

Cash Generated from Operations 147,299,395 434,394,217

Interest Paid (1,261,679,027) (766,830,156)

Income Tax Paid & Deducted at Source (20,396,366) (74,934,103)

Net Cash used in Operating Activities (1,134,775,998) (407,370,042)

Cash Flows from Investing Activities :

Acquisition of Property, Plant and Equipment (986,841,760) (39,250,045)

Net Cash used in Investing Activities (986,841,760) (39,250,045)

Cash Flows from Financing Activities :

Increase / (Decrease) in Long Term Borrowings 1,945,272,911 (74,392,816)

Increase in Short Term Borrowings 181,255,969 511,187,488

Net Cash Generated from Financing Activities 2,126,528,880 436,794,672

Increase/ (Decrease) in Cash and Cash Equivalents 4,911,122 (9,825,415)

Cash and Cash Equivalents at Beginning of Year 12,221,088 22,046,503

Cash and Cash Equivalents at End of Year Tk. 17,132,210 12,221,088






21Annual Report 2008

As at and for the year ended 31 December 2008Notes to the Financial StatementsBEXTEX LIMITED

1. Background Information and Principal Activities

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

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

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

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

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

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

2. Accounting Basis

The financial statements have been prepared on the historical Cost basis except for certain fixed assets that were restated at replacement costs, and therefore, do not take into consideration the effect of inflation except that the Lands, Buildings and Plant & Machinery as of 31st December, 2008 are re-stated at current cost.

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

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

3. Compliance with local laws and Regulations

The financial statements have been prepared in compliance with the requirements of the Companies Act 1994, the Securities & Exchange Rules 1987, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and other relevant local laws as applicable.

4. Compliance of Bangladesh Financial Reporting Standards

The financial statements have been prepared in accordance with the applicable Bangladesh Financial Reporting Standards (BFRSs) including Bangladesh Accounting Standards (BASs) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) based on International Financial Reporting Standards (IFRSs) and International Accounting Standards (IASs).

5. Presentation of Financial Statements

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

6. Reporting Period

The financial period of the company covers one calendar year from 1st January to 31st December consistently.

7. Approval of Financial Statements

The financial statements were approved by the Board of Directors on April 30, 2009.

8. Reporting Currency

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

9. Comparative Information

Comparative information has been disclosed in respect of the year 2007. Comparative amounts have been re-classified to conform with the current year’s presentation whenever considered necessary.

10. Risk and uncertainty For use of Estimates and Judgments

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

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of



accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected as required by BAS 8: Accounting Policies, Changes in Accounting Estimates and Errors.

11. Provisions

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

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

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

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

12. Accrued Expenses and Other Payables

Liabilities are recognized for the goods and services received, whether paid or not for those goods and services. Payables are not interest bearing and are stated at their nominal value.

13. Going Concern

The company has adequate resources to continue in operation for the foreseeable future. For this reasons the directors continue to adopt going concern basis in preparing the accounts. The current credit facilities and resources of the company provides sufficient fund to meet the present requirements of its existing business.

14. Financial Instruments

Non-derivative financial instruments comprise accounts and other receivables, cash and cash equivalents, borrowings and other payables and are shown at transaction cost.

15. Impairment

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

16. Statement of Cash Flows

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

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

17. Related Party Disclosures

The company carried out a number of transactions with related parties in the normal course of business and on arms length basis.

The information as required by BAS 24: Related Party Disclosures have been disclosed in a separate notes to the accounts.

18. Events After The Reporting Period

In compliance with the requirements of BAS 10: Events After The Reporting Period, post balance sheet events that provide additional information about the company’s position at the balance sheet date are reflected in the financial statements and events after the balance sheet date that are not adjusting events are disclosed in the notes when material.

19. Significant Accounting Policies

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

19.1 Revenue Recognition

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

19.2 Property, Plant and Equipment

19.2.1 Recognition and Measurement

Property, plant and equipment are capitalized at historical cost except for certain fixed assets that were restated at replacement costs of acquisition and subsequently stated at cost less accumulated depreciation in compliance with the requirements of BAS 16: Property, Plant and Equipment. The historical cost of acquisition of an asset comprises its purchase price and any directly attributable cost of



bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes. However, as a requirement of the Companies Act 1994, exchange loss/gain relating to foreign currency loan has been capitalized to/deducted from cost of relevant fixed assets being procured under the said loan.

19.2.2 Pre-Operating Expenses and Borrowing Costs

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

19.2.3 Subsequent Expenditure

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

19.2.4 Software

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

19.2.5 Disposal of Fixed Assets

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

19.2.6 Depreciation of Fixed Assets

Depreciation is provided to amortize the cost of the assets after commissioning, over the period of there expected useful lives, in accordance with the provision of BAS 16: Property, Plant and Equipment. Depreciation is provided for the period in use of the assets. Depreciation is calculated on the cost of fixed assets in order to write off such amounts over the estimated useful lives of such assets. Depreciation is provided at the following rates on straight-line basis over the periods appropriate to the estimated useful lives of the different types of assets:

Factory Building and Other Construction 5% Plant & Machinery 7% Furniture & Fixtures 20% Transport & Vehicle 20% Equipment 10-20%

19.3 Borrowing Costs

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

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

19.4 Inventories

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

19.5 Accounts Receivable

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

19.6 Advance, Deposits and prepayments

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

Deposits are measured at payment value.

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



19.7 Cash and Cash Equivalents

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

19.8 Income Tax Expense

(a) Current Tax is not provided as there is an estimated taxable loss for the year review.

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

19.9 lease Assets

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

19.10 lease Payment

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

19.11 Employee Benefits

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

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

The company’s employee benefits includes the following:

Defined Contribution Plan

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

19.12 Earnings Per Share (EPS)

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

19.13 Foreign Currency Transactions

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

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

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

2008 2007

1 US Dollar ($) Tk. 69.4500 68.9000 1 EURO (€) Tk. 99.6469 103.0331 1 Japanese Yen (¥) Tk. 00.7953 00.6253 1 Pound Sterling (£) Tk. 102.4665 138.8680

19.14 Proposed Dividend

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



20 Property, Plant and Equipment : Tk.11,805,280,797

The movement in property, plant and equipment is as follows:

Particulars land Building & Other Plant & Equipment Furniture & Transport & Total Construction Machinery Fixtures Vehicles Taka

Cost At 31 December 2007 1,901,585,142 1,878,323,554 7,515,874,162 129,465,113 121,440,243 33,296,116 11,579,984,330 Addition in 2008 100,746,288 877,806,132 5,720,400 2,568,940 - 986,841,760 Exchange loss in 2008 - - 349,029,073 - - - 349,029,073

Cost At 31 December 2008 1,901,585,142 1,979,069,842 8,742,709,367 135,185,513 124,009,183 33,296,116 12,915,855,163

Accumulated Depreciation

At 31 December 2007 - 578,028,101 3,974,293,511 84,232,428 107,185,138 30,678,461 4,774,417,639 Depreciation charge for 2008 - 98,953,492 587,557,620 13,518,552 14,768,893 2,617,654 717,416,211

At 31 December 2008 - 676,981,593 4,561,851,131 97,750,980 121,954,031 33,296,115 5,491,833,850

Carrying Amount at hC At 31 December 2008 Tk. 1,901,585,142 1,302,088,249 4,180,858,236 37,434,533 2,055,152 1 7,424,021,313

Revaluation Surplus 1,986,914,858 841,144,295 1,553,200,331 - - - 4,381,259,484 (See notes below)

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

Cost At 31 December 2007 Tk. 1,901,585,142 1,300,295,453 3,541,580,652 45,232,685 14,255,105 2,617,655 6,805,566,691

S.F. Ahmed & Co, Chartered Accountants and valuer, revalued the Lands, Buildings and Plant & Machineries of the Company as of 31st December 2008, following “ Replacement cost method”. Such re-valuation resulted in a revaluation surplus aggregating TK. 4,381,259,484.

Property, Plant & Equipment at cost includes Tk. 143,703,483 acquired under finance lease, the written down value of which was Tk. 123,364,617 as at 31 December, 2008.

21 long Term Security Deposits : Tk. 29,191,074 2008 2007

This represents the amount deposited with utility providers in respect of : Rural Electrification Board (REB) for Electricity 1,896,983 1,896,983 Dhaka Electric Supply Authority (DESA) for Electricity 1,072,000 1,072,000 Bangladesh Telegraph and Telephone Board (BTTB) for Telephone 675,715 675,715 Titas Gas Transmission & Distribution Co. Ltd. for Gas 25,546,376 25,546,376

Tk. 29,191,074 29,191,074

22 Deferred Assets : Tk. 20,843,945

This consists of : Deferred Loss on Asset Sale and Lease Back 20,843,945 22,690,877

Tk. 20,843,945 22,690,877



23 Inventories : Tk. 2,733,063,864 2008 2007

This consists of :

(a) Raw Material : 738,790,578 1,203,721,933 Cotton (3,654,696 Lbs.) (in 2007: 9,562,360 Lbs.) 233,535,066 467,881,029 Polyester (331,845 Lbs.) (in 2007: 65,181 Lbs.) 15,606,753 2,937,072 Yarn (2,736,308 Kgs.) (in 2007: 10,457,999 Lbs.) 426,462,700 666,168,665 Dyes & Chemical (357,428 Kgs.) (in 2007: 404,480 Kgs.) 63,186,059 66,735,167

(b) Work In Process 1,027,951,758 1,314,256,588 Fiber (1,099,926 Lbs.) (in 2007: 1,285,769 Lbs.) 54,589,320 75,140,337 Yarn (4,023,586 Lbs.) (in 2007: 5,091,808 Lbs.) 382,884,435 489,322,736 Fabric - Knit ( 934,303 Kgs.) (in 2007: 1,128,869 Kgs.) 222,317,493 296,000,798 Fabric (3,766,733 Lm.) (in 2007: 4,616,876 Lm.) 368,160,510 453,792,717

(c) Finished Goods 809,666,972 1,035,130,517 Yarn (4,539,174 Lbs.) (in 2007: 5,569,523 Lbs.) 360,790,520 479,535,926 Woven Fabric (1,905,310 Lm.) (in 2007: 2,448,303 Lm.) 230,466,218 290,393,179 Knit Fabric (156,331 Kgs.) (in 2007: 182,082 Kgs.) 51,917,596 60,769,873 Denim Fabric (1,135,383 Lm.) (in 2007: 1,405,897 Lm.) 166,492,638 204,431,539

(d) Packing Materials 9,444,860 15,542,748

(e) Stores and Spares 147,209,696 119,364,555

Tk. 2,733,063,864 3,688,016,341

24 Trade Debtors : Tk. 3,765,912,622

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

No amount was due by the Directors (including Managing Director), Managing Agent, Managers and other officers of the company and any of them severally or jointly with any other person.

25 Advances, Deposits and Prepayments : Tk. 714,873,842

This consists of : Advances : 228,086,250 266,740,030 Suppliers 164,480,488 184,524,759 Salaries 2,352,200 2,824,536 Mill Petty Expenses 13,242,976 2,357,825 Other suppliers 1,379,055 1,612,475 Expenses 19,536,192 25,594,762 Duty & Clearing Advance 27,095,339 49,825,673 Deposits : 432,518,910 388,401,835 L.C. Margin 280,939,965 300,178,421 Guarantee Margin and Miscellaneous deposits 151,578,945 88,223,414 Prepaid Expenses 54,268,682 74,527,852

Tk. 714,873,842 729,669,717

(a) No amount was due by the Directors (including Managing Director), Managing Agent, Managers and other officers of the company and any of them severally or jointly with any other person.

(b) The advances are good and unsecured.

26 Cash and Cash Equivalents : Tk. 17,132,210 This consists of : (a) Cash in Hand 13,326,311 10,278,850 (b) Cash at Banks: 3,805,899 1,942,238 In Current Accounts 3,407,487 1,582,502 In STD Accounts 398,412 359,736

Tk. 17,132,210 12,221,088



27 Share Capital : Tk. 1,882,846,251 2008 2007

(a) Authorised Capital:

300,000,000 Ordinary Shares of Tk 10 each Tk. 3,000,000,000 3,000,000,000

(b) Issued, Called-up and Paid-up Capital: 108,648,600 Ordinary Shares of Tk 10 each 1,086,486,000 1,086,486,000 35,360,009 Bonus Shares of Tk 10 each 353,600,091 353,600,091 44,276,016 Ordinary Shares of Tk 10 each issued to the shareholders of Beximco Textiles Ltd, Beximco Denims Ltd and Beximco Knitting Ltd. 442,760,160 442,760,160

188,284,625 Ordinary Shares of Tk 10 each Tk. 1,882,846,251 1,882,846,251

(c) Composition of shareholdings

Particulars 2008 2007 No. of Shares % No. of Shares %

Sponsor 74,306,683 39.47 74,306,683 39.47 Public 113,977,942 60.53 113,977,942 60.53

Total 188,284,625 100 188,284,625 100

(d) Distribution Schedule -Disclosures under the listing Regulations of Stock Exchanges

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

2008 2007

Share holdings Range Number of % of Total Number of % of Share Number of % of Total Number of % of Share in number of shares Shareholders Shareholders Shares Capital Shareholders Shareholders Shares Capital

1 to 499 25,877 69.53 3,399,437 1.81 25,203 66.45 3,517,502 1.87 500 to 5,000 9,820 26.39 15,672,603 8.32 11,169 29.45 17,935,271 9.53 5,001 to 10,000 737 1.98 5,521,399 2.93 876 2.31 6,367,379 3.38 10,001 to 20,000 387 1.04 5,479,559 2.91 370 0.98 5,237,569 2.78 20,001 to 30,000 134 0.36 3,349,706 1.78 97 0.26 2,395,515 1.27 30,001 to 40,000 57 0.15 1,975,549 1.05 62 0.16 2,154,454 1.14 40,001 to 50,000 46 0.12 2,102,969 1.12 29 0.08 1,317,792 0.70 50,001 to 100,000 81 0.22 5,953,117 3.16 54 0.14 3,669,695 1.95 100,001 to 1,000,000 65 0.17 16,306,033 8.66 56 0.15 17,946,570 9.53 over 1,000,000 12 0.03 128,524,253 68.26 13 0.03 127,742,878 67.85 Total 37,216 100.00 188,284,625 100.00 37,929 100.00 188,284,625 100.00

(e) Option of unissued Shares

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

(f) Market Price

The shares of the company are listed with in the Dhaka and Chittagong stock exchanges and quoted at Tk. 23.90 (in 2007: Tk. 18.90) per share and Tk. 23.80 (in 2007: Tk. 18.75) per share in the Dhaka and Chittagong Stock Exchanges respectively on 31 December, 2008.

(g) Voting Rights

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

28 10% Debentures-Net of Current Maturity (Secured) : Tk.1,009,534,505

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

The Debentures are secured by first paripassu charge by way of an equitable mortgage on all the fixed assets of the Company alongwith CDC Group plc., DEG, Bangladesh Shilpa Bank and Marubeni Corporation. The Debenture holders will rank senior alongwith CDC Group plc., DEG, BSB and Marubeni Corporation to other creditors on the assets of the Company on liquidation/winding up.



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

29 long Term loans - Net of Current Maturity (Secured) : Tk. 6,802,314,374

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

2008 2007

(a) Secured loans from Banking Companies and other Financial Institutions : Foreign Currency loans: 1,351,944,294 1,644,508,785

CDC Group Plc (GBP 1,142,856) (in 2007: GBP 1,714,284) 117,104,454 238,059,191 DEG, Germany (EURO 1,169,018) (in 2007: EURO 1,753,526) 116,488,980 180,671,261 AFIC (in 2007: USD 667,070) - 46,650,123 Marubeni Corporation (JPY 1,406,200,000) (in 2007: JPY 1,885,700,000) 1,118,350,860 1,179,128,210

local Currency loans : 3,663,401,790 2,063,602,726

Sonali Bank - IBP Loan 789,379,729 383,576,164 Sonali Bank - PAD Block 862,452,120 566,575,575 Sonali Bank - Interest free 63,136,441 84,240,000 Rupali Bank Ltd -Term Loan 1 303,613,942 141,190,000 Rupali Bank Ltd -Term Loan 2 202,033,379 63,000,000 Rupali Bank Ltd- Interest Free Block Loan 112,306,902 134,360,000 Rupali Bank Ltd- PAD Block Loan 665,219,710 315,630,000 Bangladesh Shilpa Bank-Term Loan 91,159,753 91,160,000 Bangladesh Shilpa Bank-Interest Block 17,315,154 13,324,154 Citibank NA - Term Loan PTML 142,574,701 23,734,962 Citibank NA - Term Loan BTL - 44,362,111 IFIC Bank - PAD 114,442,404 - IFIC Bank - Term Loan 228,234,555 73,295,044 Standard Chartered Bank plc-Fixed Loan 45,358,000 59,158,000 The City Bank Ltd-Interest Block - 34,346,716 Janata Bank -CCH Block 8,415,000 12,220,000 Janata Bank -PAD Block 17,760,000 23,430,000

lease Finance : 55,432,032 56,160,223

IIDFC Ltd. 9,565,589 44,178,196 First Lease International Ltd 45,866,443 11,982,027

(b) unsecured loans from Associated undertakings/Related Parties : 1,731,536,258 462,441,258

Bangladesh Export Import Co. Ltd.-Interest bearing 1,321,750,374 10,000,312 Bangladesh Online Ltd.- No interest 150,000,000 Shine pukur ceramic ltd - Interest bearing 259,785,884 Beximco Holdings Ltd. -Interest bearing - 452,440,946

Tk. 6,802,314,374 4,226,712,992

The foreign currency loans are arrived at after crediting of Tk.349,029,073 being increase in liability on conversion of the loan balances in foreign currencies as on 31.12.2008 at the exchange rate ruling on the balance sheet date and the corresponding amount of such loss has been debited to Plant & Machinery in accordance with the provisions of the Companies Act, 1994.

Nature of Security :

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

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



Terms of repayment of foreign currency loans as per repayment schedule:

CDC Group Plc. : In 14 (fourteen) half-yearly installments beginning from 30 November 2004 and ending on 30 November 2011. DEG : In 14 (fourteen) half-yearly installments beginning from 30 October 2004 and ending on 30 April 2011. Marubeni (PTMl): In 16 (sixteen) semi-annual installments beginning from 25 July 2005 and ending on 25 Jan 2013. Marubeni (BTl): In 12 (twelve) semi-annual installments beginning from 24 Aug 2005 and ending on 24 Feb 2011.

Rate of interest

CDC Group Plc. : 3.00% over GBP LIBOR DEG : 3.00% over Euro LIBOR Marubeni : 3.00% over LTPR local bank loans : Varies 10% to 15% Bangladesh Export Import Co. ltd. : 15% p.a. Shinepukur Ceramics ltd. : 15% p.a. Beximco holdings ltd. : 10% p.a.

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

This was received from Bangladesh Yarn Syndicate, the distributor of the company.

31 Short Term loans : Tk. 4,283,771,415 2008 2007

This consists of : (a) Secured Loans from Banks : Standard Chartered Bank-CCH 46,007,040 72,357,721 Standard Chartered Bank-LATR 29,825,432 38,977,080 Standard Chartered Bank-PLC 40,173 1,673,069 Citi Bank NA-Cash Credit 80,788,571 93,478,060 Rupali Bank Ltd.-Overdraft 1,314,971,538 1,334,376,529 Rupali Bank Ltd.-CCP 157,950,634 157,950,632 Sonali Bank -CCH 736,942,125 745,900,625 Sonali Bank -CCP 800,704,500 816,308,786 Sonali Bank -PAD 637,575,998 378,504,930 Sonali Bank -Cash Subsidy 57,431,678 69,936,150 State Bank of India-CCH 122,051,172 103,800,603 Janata Bank-Cash Subsidy 20,064,613 9,955,000 Janata Bank-CCH 279,417,941 279,296,261

Tk. 4,283,771,415 4,102,515,446

32 10% Debentures - Current Maturity (Secured) : Tk. NIl



33 long Term loans - Current Maturity (Secured) : Tk. 2,029,139,603 This represents that portion of long term loans which is repayable within twelve months from the balance sheet date and includes the

following :

2008 2007

Foreign Currency loans : 1,446,900,158 877,122,305

CDC Group Plc (GBP 2,089,958) (in 2007: GBP 1,375,112) 214,150,662 190,959,109 DEG, Germany (EURO 2,098,758) (in 2007: EURO 1,514,250) 209,134,772 156,017,835 AFI C (in 2007: USD 365,248) - 25,165,587 Marubeni Corporation (JPY 1,287,080,000) (in 2007: JPY 807,580,000) 1,023,614,724 504,979,774

local Currency loans : 523,013,216 1,397,593,581

Sonali Bank - IBP Loan - 235,251,000 Sonali Bank - PAD Block - 190,743,641 Sonali Bank - Interest free 46,330,176 29,439,217 Rupali Bank Ltd -Term Loan 1 - 112,061,587 Rupali Bank Ltd -Term Loan 2 - 97,046,939 Rupali Bank Ltd- Interest Free Block Loan 78,650,000 56,596,902 Rupali Bank Ltd- PAD Block Loan - 258,372,844 Bangladesh Shilpa Bank-Term Loan 75,803,232 29,789,753 Bangladesh Shilpa Bank-Interest Block 7,814,573 4,080,000 Citibank NA - Term Loan PTML 61,716,519 47,469,924 Citibank NA - Term Loan BTL - 88,724,224 IFIC Bank - IDBP 6,653,031 9,074,425 IFIC Bank - Term Loan 76,072,504 111,794,626 The City Bank Ltd-Term Loan 145,240,004 99,991,773 Janata Bank -CCH Block 10,242,271 12,428,051 Janata Bank -PAD Block 14,490,906 14,728,675

lease Finance : 59,226,229 67,651,238 IIDFC Ltd. 45,237,238 36,667,522 First Lease International Ltd. 13,988,991 30,983,716

Tk. 2,029,139,603 2,342,367,124

34 Creditors and Accruals : Tk. 1,594,026,621 This is falling due within one year.

35 Revenue : Tk. 4,760,237,189 This is arrived at as follows:

Sale of Yarn (13,417,685 Lbs.) (in 2007: 9,671,491 Lbs.) 1,161,270,242 836,441,061 Sale of Woven Fabric (17,557,735 Lm.) (in 2007: 14,338,515 Lm.) 2,471,112,313 1,994,193,131 Sale of Knit Fabric (1,247,567 kgs.) (in 2007: 1,508,184 Kgs.) 406,080,296 544,289,754 Sale of Denim Fabric (2,264,973 Lm.) (in 2007: 2,520,774 Lm.) 303,160,913 431,561,758 Cash Subsidy 123,555,616 135,674,625 Sale of Waste 112,507,509 231,024,989 Commission work 182,550,300 93,842,281

Tk. 4,760,237,189 4,267,027,59936 Cost of Revenue : Tk. 3,090,184,887 This is arrived at as follows : Material Consumed (Note - 37) 2,383,465,451 2,269,160,950 External Processing cost 11,577,471 37,135,956 Manufacturing Overhead (Note - 38) 642,778,273 839,270,477 Manufacturing costs for the year 3,037,821,195 3,145,567,383 Work in Process Inventory Differential 29,316,890 (68,969,608) Cost of Goods Manufactured 3,067,138,085 3,076,597,775 Finished Goods Inventory Differential 23,046,802 (54,872,298) Cost of Revenue Tk. 3,090,184,887 3,021,725,477



37 Material Consumed : Tk. 2,383,465,451 2008 2007

This is arrived at as follows :

Cotton (22,428,208 Lbs.) (in 2007: 21,297,839 Lbs.) 1,307,115,436 1,084,281,686 Polyester (2,017,874 Lbs.) (in 2007: 3,642,686 Lbs.) 112,979,935 164,001,680 Yarn (3,028,616 Kgs.) (in 2007: 4,430,108 Lbs.) 490,570,152 401,243,517 Imported Gray Fabric (2,465,522 Lm.) (in 2007;2,497,128 Lm.) 153,775,041 159,718,923 Dyes & Chemical (3,669,115 Kgs.) (in 2007: 2,892,209 Kgs.) 319,024,887 459,915,144

Tk. 2,383,465,451 2,269,160,950

38 Manufacturing Overhead : Tk. 642,778,273 This consists of :

Wages & allowances 263,067,267 392,790,400 Power and Gas 229,306,784 256,171,469 Indirect Materials 31,581,998 62,355,040 Insurance premium 4,864,626 4,753,188 Repairs & Maintenance 104,329,452 100,736,669 Medical Expenses & Others 620,916 3,142,055 Travel, Training & Conveyance 380,609 2,621,312 Telephone, Telex & Fax 125,640 1,115,842 Printing & Stationery 822,735 137,639 Miscellaneous overhead 7,678,246 15,446,863

Tk. 642,778,273 839,270,477

39 Administrative Expenses : Tk. 240,784,328 This consists of :

Salary & allowances 163,715,786 146,191,637 Office rent 1,619,196 2,414,974 Traveling and conveyance 19,184,924 17,817,138 Entertainment 2,600,397 3,701,423 Telephone, telex, fax and postage 9,143,942 7,821,991 Vehicle Upkeep & Fuel 25,847,952 31,095,719 Utilities 444,029 431,447 AGM and Secretarial expenses 5,747,338 4,770,883 Auditors’ remuneration (Audit fee) 418,000 418,000 Directors’ Board Meeting fee 3,000 3,000 Insurance premium 818,812 837,025 Repairs & maintenance 2,401,613 2,668,705 Printing, Stationery & Photocopy 1,682,529 4,887,550 Write off Deferred Loss on Asset Sale and Lease Back 1,846,932 1,846,932 Other expenses 5,309,878 10,351,465

Tk. 240,784,328 235,257,889

40 Financial Expenses : Tk. 1,300,656,669 This is made up as follows :

(a) Interest on long term loans 732,803,471 724,325,753 (b) Interest on short term loans 497,810,267 465,108,174 (c) Bank charges, commission & other interest 70,042,931 153,221,695

Tk. 1,300,656,669 1,342,655,622

41 Income Tax Expenses : Tk. NIl Tk. - (10,667,569)

42 Basic Earnings Per Share (EPS) : Tk. (3.23)

(a) Loss after tax (608,655,866) (994,072,552) (b) Weighted average number of shares in issue 188,284,625 188,284,625

Basic EPS (a/b) Tk. (3.23) (5.28)



43 Related Party Disclosures The Company carried out a number of transactions with related parties in the normal course of business and on arm’s length basis.

The nature of transactions and their total value is shown below:

Name of related parties Nature of Value of Receivable/ Transactions Transactions (Payable) in 2008 at year end

Beximco Holdings Ltd. -Interest bearing Long Term Loan Repaid 452,440,946 - Bangladesh Export Import Co. Ltd.-Intt. bearing Long Term Loan 1,311,750,062 (1,321,750,374) Bangladesh Online Ltd.-No Intt. Long Term Loan 150,000,000 (150,000,000) Shinepukur Ceramics Ltd. Intt. Bearing Long Term Loan 259,785,884 (259,785,884)

Nature of Relationship

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

44 Contingent liabilities

There was no contingent liability as on 31 December, 2008.

45 Capital Expenditure Commitment 2008 2007

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

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

46 un-Availed Credit Facility There was no credit facility available to the company under any contract, but not availed of as on 31 December, 2008 other than trade

credit available in the ordinary course of business.

47 Foreign Exchange Earned The Company had “deemed export”, and as such, no foreign exchange was earned against sales. No other foreign exchange was earned

or received by Company during the year 2008.

48 Payment in Foreign Currency

In 2008, the Company remitted foreign currency in respect of the following:

(a) Repayment of loans and interest:

lenders 2008 2007

Foreign Currency Total Foreign Currency Total

Principal Interest in Taka Principal Interest in Taka

CDC Group Plc.: GBP - - - - - - DEG : Euro - - - - - - AFIC : US$ 500,000 - 34,685,000 - - - Marubeni : JPY - 10,550,000 7,069,555 - - -

(b) Payment against Imported Raw Material & Spares: 2008 2007

Foreign Currency In Taka Foreign Currency In Taka

US $ 3,857,719 268,111,468 US $ 5,639,953 386,336,808

(c) No other expenses including royalty, technical expert and professional advisory fee etc. was incurred or paid by the company in foreign currency, during the year 2008.

49 Commission, brokerage or Discount Against Sales

(a) Distribution commission of Tk. 6,335,874 was incurred and paid during the year 2008 to the Bangladesh Yarn Syndicate, the distributor of the Company.

(b) No other commission, brokerage or discount was incurred or paid by the Company against sales during the year 2008.



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

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

Quantity in ‘000 Lbs (40’s equivalent) Installed capacity 28,441 Actual production 22,936

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

Output capacity (Lm.) Installed capacity 40,800,000 Actual production 17,491,069

(c) kNIT FABRIC (Quantity in kgs.) Installed capacity 2,600,000 Actual production 1,260,899

(d) DENIM FABRIC (Capacity in lm.) Installed capacity 4,940,000 Actual production 2,278,305

51 Payments/Perquisites to Directors/Officers

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

2008 2007 Directors Officers Directors Officers

Board Meeting Fees 3,000 - 3,000 - Basic Salary - 61,794,026 - 66,880,828 Provident fund Contribution - 5,682,696 - 6,432,583 House Rent Allowance - 15,769,306 - 26,752,331

Total Tk. 3,000 83,246,028 3,000 100,065,742

(b) No compensation was allowed by the company to the Managing Director of the company.

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

52 Events After The Reporting Period

Subsequent to the balance sheet date, the directors recommended 10% stock dividend (bonus share) subject to shareholders’ approval at the forthcoming annual general meeting.

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

A S F Rahman Salman F Rahman M A Qasem Chairman and Vice Chairman Director Managing Director

April 30, 2009 Dhaka


BEXTEX LIMITEDRegistered Office : 17 Dhanmondi R/A, Road # 2, Dhaka-1205

I/We of being a member

of BEXTEX Limited hereby appoint Mr./Mrs/Miss

of as my Proxy to attend and vote for me on my behalf at

the 25th Annual General Meeting of the Company to be held on Thursday the 18th June, 2009 at 4:00 pm at 1, Shahbagh C/A, Dhaka and at any

adjournment thereof.

As witness my hand this day of June, 2009. Signed by the said in presence of

Revenue

Stamp

(Signature of the Proxy) Tk. 8.00

Date

Signature of the Shareholder(s)

Register BO ID/Folio No.

(Signature of witness) Dated

Note : A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Office of the Company not later than 48 hours before the time appointed for the meeting.

Signature verified

Authorized Signatory

BEXTEX LIMITEDRegistered Office : 17 Dhanmondi R/A, Road # 2, Dhaka-1205

Shareholders’ Attendance Slip

I hereby record my attendance at the 25th Annual General Meeting being held on Thursday the 18th June, 2009 at 1, Shahbagh C/A, Dhaka.

Name of Member/Proxy

Register BO ID/Folio No holding of ordinary Shares of BEXTEX Limited.

Signature of Shareholder(s)

N. B. Please present this slip at the reception desk. Children and non-members will not be allowed at the meeting.

Proxy Form

COMPANY PROFILECorporate Headquarters

17 Dhanmondi R/A, Road No. 2, Dhaka-1205, BangladeshPhone: 8611891-5, 8618220-7, 9677701-5, 7701165

E-mail : [email protected] Web : www.beximco.com

Operational Headquarters Beximco Industrial Park, Sarabo

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

Business LineManufacturing and Marketing of

Yarn, Woven, Knit and Denim Fabrics

Date of Incorporation13 May 1984

Commercial Production1990

Listing StatusPublic Listed Company

Stock Exchange ListingDhaka and Chittagong

Authorized Capital3,000 Million taka

Paid-Up Capital1,882.85 Million Taka

Number of Shareholders37,216

Number of Employees5,230

Number of Spindles Installed119,520

Number of Woven Loom Installed293

Number of Circular Knitt Machine Installed30

Number of Denim Looms Installed56

SHAREHOLDERS’ INFORMATION

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

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

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

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

Legal AdvisersM/S. Huq & Co.

47/1 Purana Paltan, Dhaka-1000

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

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

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

FactoryTatki, Rupganj, Narayanganj (Yarn Plant-1)

Sarabo, Kashimpur, Gazipur (Other Plants)

Day, Date, Time & Venue of AGM Thursday, The 18th June 2009, At 4:00 pm, 1 Shahbag C/A, Dhaka

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annual report 2008 - beximcobextex.net/ar_2008.pdf · 2 annual report 2008. board and management...

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