Hrtex 2011 Annual

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1. Confirmation of the minutes of the 26thAnnual General Meeting of the Shareho

28th March 2011.

2. To receive, consider and adopt the Directors Report and the Audited Financial

for the year ended 30 thSeptember 2011 together with the Auditors report there

3. To declare dividend for the year ended 30thSeptember 2011 as recommended

of Directors.

4. To elect Directors in place of retiring Directors.

5. To appoint auditors for the year 2012 and to fix their remuneration.

6. To transact any other business on the company with the permission of the Cha

By Order

Date: 31/01/2012 Md. W

Compa

Notice of the 27th Annual General Mee

Notice is hereby given that the 27 thAnnual General Meeting of the Shareholders Mills Limited will be held on Thursday the 29th March 2012, at Trust Milonayaton, 5

Road, Dhaka Cantonment, Dhaka-1206 at 10:30 a.m., to transact the following busi

Agenda

a. Shareholders whose names appeared in CDS/Companys Register on the Record date of 13th Febr

eligible to attend the meeting and will be entitled for dividend for the year ended 30the Septemb

b. Member entitled to attend and vote at the annual general meeting may appoint a Proxy to atthis/her behalf. The proxy form must be affixed with requisite revenue stamp and must be s

Corporate Office of the company not less than 48 hours before the time fixed for the annual gene

c. For smooth conduct of the meeting, members having queries on the audited accounts or on theare requested to submit the same to the office of the company at least 3 days ahead of the meetin

Notes

MISSION

Be a caring company through enriching customer experiences

by providing innovative solutions & process excellence.

VISION

Be an industry thought leader.

AnAnnual Report 2011

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General Financial

1. Year of Incorporation 1984 1. Authorised Capital 500 Million

2 . C on ve rted i nto P ub li c L td . Co . 1 99 5 2 . P ai d u p C ap ital 2 20 M il li on

3. Initial Public Offering of Share 1996

4. Enlistment with DSE and CSE 1997

Five Years Statistics

OPERATIONAL HIGHLIGHTS

H.R. Textile Mills Limited

Particulars

For the years ended 30 September

2011 2010 2009 2008 2007

Operations Results

Turnover (Tk.in thousand) 1,787,093 1,192,399 1,256,238 1,140,247 772,196

Gross Profit (Tk.in thousand) 261,344 178,398 184,664 169,007 110,002

Operating Profit (Tk.in thousand) 70,651 38,137 30,685 27,710 23,534

Net Profit before tax (Tk.in thousand) 67,635 36,578 29,498 26,671 22,704

Net Profit after tax (Tk.in thousand) 57,489 31,091 25,074 22,670 19,298

Basic Earning per share of Tk.100 (Tk.) 26.13 15.55 12.54 11.34 9.65

Cash Dividend per share of (Tk.100) - 5.00 10.00 8.50 8.50

Stock Dividend (15 shares for each 100 shares) 15 10 - - -

Cash Inflows from Operating Activities (Tk.in thousand) 141,676 49,972 107,110 45,883 91,121

Financial Details

Total Assets (Tk.in thousand) 1,154,709 1,102,704 1,039,677 937,435 855,364

Fixed Assets - Net 432,858 474,645 471,067 432,958 434,004

Reserve and Surplus (Tk.in thousand) 106,334 50,412 51,706 49,024 45,864

Working Capital (Tk.in thousand) 6,270 (12,534) (36,529) (11,257) (11,993)

Authorised Capital (Tk.in thousand) 500,000 500,000 500,000 500,000 500,000

Shareholders' Equity (Tk.in thousand) 326,334 270,412 251,706 249,024 245,864

Paid up Capital (Tk.in thousand) 220,000 200,000 200,000 200,000 200,000

Long Term Loan (Tk.in thousand) 110,736 193,918 184,667 186,375 199,677

Key Financial Ratios,Figures and Market Data

Current Ratio 1.01 0.98 0.94 0.98 0.97

Return on Investment (%) 4.98 2.82 2.41 2.42% 2.26%

Net Assets Value per share (Tk.100) 148.33 135 126 125 123

Market value of share (at DSE) Tk. 39.91 Closing value per share of Tk.10

Market value of share (at CSE) Tk. 39.62 Closing value per share of Tk.10

Price Earning Ratio (Based on DSE price) (Times) 3.76 The Financial Express on 13th February 2012

Price Earning Ratio (Based on CSE price) (Times) 3.79 The Financial Express on 13th February 2012

Other

Number of shares - Paid-up (Figures in thousand) 2200 2,000 2,000 2,000 2,000

Number of shareholders 13,246 13,111 14,094 14,565 14,812

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Shareholding Patter

General Public

40.13%

Institutions9.87%

Annual Report 2011

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26.13

9.65

11.34

12.54

15.55

2007 2008 2009 2010 2011

Earning

PerSha

reofTk

.100

Annual Report 2011

8


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7/20

Financial Results and Profit Appropriations

The financial performance of the company was satisfactory. D uring the year the company has fetched a

turnover of Tk 1,787.09 million compared to Tk 1,192.40 million in the previous year registering a growth of

49.87 %. As against the above turnover the company earned net profit of Tk. 57.49 million which was 85%

higher than the previous year. The net earning per share of the company stood at Tk 26.13 against previous

years figure of Tk. 15.55. The summarized financial result of the company after considering subsequently

declared 15% Bonus share is as follows:

Particulars Amount in Taka (million)

2011 2010

Net Profit Before Tax 67.64 36.58 Less: Provision for Income Tax (10.15) (5.49)

Net Profit After Tax 57.49 31.09

Add: Profit brought forward from previous year 6.30 5.21

Profit Available for Appropriation 63.79 36.30

Recommended for Appropriations: Proposed Dividend (Cash) - (10.00) Proposed Dividend (Bonus Share) (33.00) (20.00)

Un-appropriated Profit carried forward 30.79 6.30

Dividend

Based on the above operational results, the Board of

Directors of the company has recommended stock

dividend @ 15% (Bonus Share) against @ 10% (Bonus

Share) and 5% (Cash) per share of Tk. 100 each in the

last year. The entire amount of the profit will be

utilized to improve the working capital position of

the company.

Shareholding Pattern

The shareholding of the sponsors remained at 50%

without any change whatsoever. Out of the balance

shares, the institutions with ICB Unit Fund are

holding 9.87%, which was 23.97% in the previous

year. The shareholding of the general public has

increased to 40.13% compared to 26.03% in the

previous year, on the date of year closing. The above

change was mainly due to sale of shares by Financial

Institutional shareholders and ICB Unit Fund from

the market. The shareholding pattern has been

shown at page 32 of this report.

Election of Directors

Pursuant to Article 102, 103 and 104 of the company,

Professor Dr. Muhammad Abdul Moyeen, Ms.

Sumbal Azwad Momen, Directors of the company

will retire, and being eligible, offer themselves for

re-election.

Appointment of Auditors

The existing Auditor M/s. Rahman Mostafa Alam &

Co, Chartered Accountants has been carrying out

the audit of the company for the last two years. They

are now retiring and being eligible for

re-appointment have shown their interest to

continue as auditors of the company. On the

recommendation of the Board Audit Committee, the

Directors of the Company is proposing their

appointment and fixing remuneration at the Annual

General Meeting.

Future Programs

H.R. Textile Mills Limited is being

group of professionals with good b

and experience. The manag

endeavors to keep the business operformance although. It has the

better with the existing facilities t

utilization of its advantages and b

resources with technological advan

that the company is in right track

operation.

Conclusion

The Board of Directors of the com

opportunity to express its since

appreciation to its valued shareho

and Exchange Commission, Dhaka

Chittagong Stock Exchange, Govern

Banks, Insurance, Financial Institutio

Suppliers and Auditors for their csupport. We offer our heartfelt g

valued international buyers and loca

that have significant contribution

partners.

In conclusion, the Board offers its s

the professionals whom managem

the most valuable asset and hope

continue to keep the spirit of tea

coming years for the smooth

company.

For and on behalf of the Board of Di

Mohammad Abdul MomenChairman

Dated: January 31, 2012

Board Meetings

The Board held 6 (six) meetings in the year 2011.

Directors including the Independent Directors

attended most of the meetings. Leave of absence

was allowed to the Directors who could not attendsome meetings for personal reasons. The Board.

dealt with the business policies, business forecasts

in addition to resolving operational issues. The

Board also dealt with negotiating the issues related

to availing financial assistance from banks and

leasing companies, review of the cost reduction

programs, expansion of facilities, review of the

buyers compliance related issues etc. The above

assisted the company to keep the business in its

growth rate in even a period of turmoil and business

depression.

Board Audit Committee

The Audit Committee of the company held 2 (two)

meetings during the year under report. All the

committee members attended the above meetings.

The meetings reviewed the draft financial

statements, financial position of the company, and

report of the Auditors and the operational results of

the company from time to time.

Annual Report 2011

12


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Professor (Dr.) Muhammad Abdul Moyeen Chairman B.Com (Hons). M.Com, a

Professor (Dr.) A.H.M. Habibur Rahman Member B.Com (Hons). M. Com a

Professor Mohammad Abdul Momen Member B.Com (Hons). M.Com, M

Board Meetings

The Board held 6 (six) meetings in the year 2011. Directors including the Independenattended most of the meetings. Leave of absence was allowed to the Directors who could

some meetings for personal reasons. The Board. dealt with the business policies, busine

in addition to resolving operational issues. The Board also dealt with negotiating the issue

availing financial assistance from banks and leasing companies, review of the cost

programs, expansion of facilities, review of the buyers compliance related issues etc.

assisted the company to keep the business in its growth rate in even a period of turmoil an

depression.

Board Audit Committee

The Audit Committee of the company held 2 (two) meetings during the year under rep

committee members attended the above meetings. The meetings reviewed the dra

statements, financial position of the company, and report of the Auditors and the operati

of the company from time to time.

Corporate Governance Compliance Report

Shares held by Executives (top five salarized employees other than the D

Chief Executive Officer, Company Secretary, Chief FInancial Officer,

Internal Audit):

Name of Executives No. of shares

Mr. Ziaul Haque 1000

Mr. Kamal Ahmed 1000

In accordance with the requirement of the Securities and Exchange Commission,

Governance Compliance Report is annexed.

Name Designation Q ualifications

Annexure-1

Additional Statements by the Board of Directors as per notification of the Securi-

ties and Exchange Commission, dated 20th February 2006

a) That the financial statements prepared by the management of the company present fairly its

state of affairs, the result of its operations, cash flows and changes in equity.

b) That, proper books of account of the company have been maintained.

c) That, ppropriate accounting policies have been consistently applied in preparation of the finan-

cial statements and that the accounting estimates are based on reasonable and prudent

judgment.d) That, the International Accounting Standards, as applicable in Bangladesh, have been followed in

preparation of the financial statements and any departure there-from has been adequately

disclosed.

e) That, the system of internal control is sound in design and has been effectively implemented and

monitored.

f) That, there are no significant doubts upon the company's ability to continue as a going concern.

g) That, there is no significant deviations from last year in operating results of the company.

h) Summary of key operating and financial data of preceding three years. Current year's key financial

data along with the same for preceding three years are furnished below:

Financial Details

Particulars

Amount in Taka for the years ended 30th September

2011 2010 2009 2008 2007

Total Assets (Tk. In 000) 1,154,709 1,102,703 1,039,677 937,435 855,364

Fixed Assets Net 432,858 474,645 471,067 432,958 434,004

Reserve and Surplus (Tk. In 000) 106,334 50,412 51,706 49,024 45,864

Working Capital (Tk. In 000) 6,270 (12,534) (36,529) (11,257) (11,993)

Authorised Capital (Tk. In 000) 500,000 500,000 500,000 500,000 500,000

Shareholders' Equity (Tk. In 000) 326,334 270,412 251,706 249,024 245,864

Paid up Capital (Tk. In 000) 220,000 200,000 200,000 200,000 200,000

Long Term Loan (Tk. In 000) 110,736 193,918 184,667 186,375 199,677

Number of shares held by Directors, Chief Executive Officer, Company Secretary, Chief Financial

Officer, Head of Internal Audit and their spouses and minor children (name wise details):

No. of shares

Name Position Self Spouse Minor

Children

Mr. Mohammad Abdul Moyeed Managing Director 3,636,750 13,750 Nil

Professor (Dr.) Muhammad Abdul Moyeen Director 3,636,740 13,750 Nil

Professor Mohammad Abdul Momen Director 3,636,740 13,750 Nil Professor (Dr.) A.H.M. Habibur Rahman Independent Director Nil 770 Nil

Ms. Ruhey Rawa Director 75,900 Nil Nil

Ms. Sumbal Azwad Momen Director 75,900 Nil Nil

Ms. Sana Kayenat Moyeen Director 75,900 Nil Nil

Mr. Md. Wali Ullah Company Secretary Nil Nil Nil

Shareholders holding ten percent (5%) or more votes interest in the (name wise details):

Name No. of shares

Mr. Mohammad Abdul Moyeed 3,636,750

Professor (Dr.) Muhammad Abdul Moyeen 3,636,740

ProfessorMohammad Abdul Momen 3,636,740

M/s. ICB Unit Fund (Demated) 1,569,730

Annual Report 2011

14


9/20

We have audited the accompanying financial statements of H.R. Textile Mills Limited which compriseSheet as at September 30,2011 and the related Profit and loss Account, Cash Flow Statement and Changes in Equity for the year then ended and a summary of significant accounting polices and otheinformation.

Managements responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements inwith Bangladesh Financial Reporting Standards (BFRS) and the Companies Act, 1994 and for such intermanagement determines is necessary to enable the preparation of financial statements that are free fmisstatements, whether due to fraud or error.

AuditorsResponsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducin accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we complrequirements and plan and perform the audit to obtain reasonable assurance about whether statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures istatements. The procedures selected depend on the auditorsjudgment, including the assessment omaterial misstatements of the financial statements, whether due to fraud or error. In making those riskwe consider internal control relevant to the entitys preparation and fair presentation of the financial order to design audit procedures that are appropriate in the circumstance, but not for the purpose of opinion on the effectiveness of the companys internal control. An audit also includes evaluating the appof accounting policies used and the reasonableness of accounting estimates made by managemeevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis opinion.

Opinion

In our opinion, the financial statements present fairly, in all materials respects, the financial position oMills Limited as at September 30,2011 and its Profit & Loss Accounts and its cash flows for the year thaccordance with Bangladesh International Accounting Standards and comply with the applicable seCompanies Act, 1994; the Securities and Exchange Rules, 1987 and other applicable laws and regulatio

We also report that

(a) We have obtained all the information and explanations which to the best of our knowledge annecessary 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 afrom our examination of those books;

(c) The balance sheet and profit and loss account dealt with by the report are in agreement withaccount and returns; and

(d) The expenditure incurred was for the purposes of the Companys business.

Rahman MChartereDated: Dhaka, January 31, 2012

Rahman Mostafa Alam & CoChartered Accountants

AuditorsReport to the Shareholders of H.R. Textile Mills Limited

As per SEC notification No. SEC/CMRRCD/2006-158/Admin/02-08 dated 20th February 2006 from the

Securities and Exchange Commission,the Directors state compliance with the conditions as follows:

Status of compliance with 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 Compliance status (Putin Explanation forNo. Particulars the appropriate column) non-compliance

Complied Non-complied with the condition

1.1 Size of Board of Directors 1.2(i) Independent Director

1.2 (ii) Independent Directors Appointment

1.3 Chairman and Chief Executive 1.4 (a) Directors Report on Financial Statements

1.4 (b) Books of Accounts 1.4 (c) Accounting Policies

1.4 (d) International Accounting Standards Applicable in Bangladesh

1.4 (e) The system of internal control

1.4 (f) Going Concern 1.4 (g) Deviations 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 Appointment of CFO,Head of Internal Audit and Company Secretary 2.2 CFO and Company Secretary to attend Board meetings

3.00 Audit Committee

3.1 (i) Audit Committee to have at least three members

3.1 (ii) Board to appoint Directors as members of Audit Committeewith at least one Independent Director 3.1 (iii) Board to immediately fill up vacancy in Audit Committee

3.2 (i) Board to select one member of Audit Committee as Chairman 3.2 (ii) Chairman of Audit Committee should have a professional

qualification or experience

3.3 Reporting by the Audit Committee 3.3.1 (i) Reporting to the Board of Directors

3.3.1(ii) (a) Report on conflicts of interests

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 which should be disclosed

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 by external/statutory auditors.

4.00 (v) Actuarial services by external/statutory auditors

4.00 (vi) Internal audit services

4.00 (vii) Any other service

For and on behalf of the Board of Directors

Managing Director

Dated: 31st January 2012

Annual Report 2011

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CAPITAL EMPLOYED INNotes

2011 2010NON-CURRENT ASSETS: Taka Taka

Property,Plant and Equipment 2 432,858,322 474,645,751

Deferred Lease Interest 3 7,057,828 11,335,809

Total Non-Current Assets 439,916,150 485,981,560

CURRENT ASSETS:

Stocks and Stores 4 78,500,199 110,913,971

Trade Debtors 5 523,184,050 400,180,750

Export Incentive Receivables 6 59,838,659 66,469,765

Advances,Deposits and Prepayments 7 19,126,751 20,134,977Cash and Bank Balances 8 34,143,387 19,023,012

Total Current Assets 714,793,046 616,722,475

LESS CURRENT LIABILITIES :

Bank Overdrafts - Secured 9 7,090,498 35,922,247

Liability against Trust Receipts 10 33,840,471 28,340,497

Creditors 11 468,824,439 381,461,933

Accrued Expenses 12 18,553,737 17,013,128

Provision for Taxation 13 9,242,918 3,976,380

Bills Receivable Discounted 14 128,535,450 113,424,000

Workers' Participation/Welfare Funds 15 17,364,243 12,568,533

Dues to Associated Company 16 25,071,000 26,550,125

Proposed Dividend 17 - 10,000,000

708,522,756 629,256,843

WORKING CAPITAL 6,270,290 (12,534,368)

NET ASSETS 446,186,440 473,447,192

FINANCED BY:

SHAREHOLDERS' EQUITY :Share Capital 18 220,000,000 200,000,000Bonus Share - 20,000,000General Reserve 19 6,956,752 6,956,752Tax Holiday Reserve 20 22,378,988 22,378,988Dividend Equalisation Reserve 21 10,000,000 10,000,000Capital Reserve 22 3,209,049 4,777,020Unappropriated Profit 63,789,810 6,300,056

TOTAL SHAREHOLDERS' EQUITY 326,334,5 99 270,412, 816

LONG-TERM LIABILITIES:Long-term Loans - Secured 23 110,736,415 193,918,950Provision for Gratuity 24 9,115,426 9,115,426

119,851,841 203,034,376

446,186,440 473,447,192

Net Assets value per share of Tk.100 148.33 135.21

Balance SheetAs on 30 September 2011

M.A. Moyeed Dr. M.A. Moyeen M.A. Momen Md. Wali Ullah

Managing Director Director Director Company Secretary

Profit & Loss AccountFor the year ended 30 September 2011

Notes

2011 Item Taka

Sales 25 1,787,093,874 Export Incentive 26 27,365,691

Turnover 1,814,459,565

Less:C ost of Goods Sold 27 1,553,115,036

Gross Profit 261,344,529

Less:Administrative and General Expenses 28 190,693,174 Operating Profit 70,651,355

Add:Other Income 29 365,400

Profit before Contribution to Workers' Participation/Welfare Funds 71,016,755 Less:Contribution to Workers' Participation/Welfare Funds 15 3,381,750

Net Profit before Tax 67,635,005

Less:Provision for Income-tax 30 10,145,251

Net Profit 57,489,754

Unappropriat ed Profit brought forward 6,300,056

Profit available for appropriati ons 63,789,810

Less:Appropriation:Proposed Dividend (Cash) 17 - Proposed Dividend (Bonus Share) 17 -

Unappropriat ed Profit carried forward 63,789,810

Earning per share (EPS) of Tk.100 26.13

Earning per share (EPS) of Tk.100 (Restated) 26.13

Rahman Mostafa Alam & Co

Chartered Accountants

The annexed notes 1 to 36 form an integral part of these financial statements.

Signed in terms of our separate report of even date.

Dated:DhakaJanuary 31,2012

M.A. Moyeed Dr. M.A. Moyeen M.A. Momen M

Managing Director Director Director Co

Rahman Mostafa Alam & C





Annual Report 2011

18


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12/20

Item Notes

2011 2010 Taka Taka

Turnover and other income 25,26 & 29 1,814,824,965 1,241,415,345

Finished Stock differential 27.1 2,115,352 276,189

Output 1,816,940,317 1,241,691,534Less:Bought-in goods and services (1,485,404,056) (975,582,528)

Value added 331,536,261 266,109,006

Value distributed :

To Employees in the form of salaries,wages and allowances 27.1 & 28.1 186,646,536 123,856,220

To Government in the form of income-tax 30 10,145,251 5,486,733

To Shareholders in the form of dividend 17 - 30,000,000

To Lenders in the form of interest 28.4 57,635,631 51,736,244

For replacement of fixed assets as depreciation 2.3 50,710,575 49,011,888

For future growth as retained profit 26,398,268 6,017,921

331,536,261 266,109,006

For the year ended 30 September 2011Value Added Statement

Notes - General

Status and Activities:

This is a public limited company incorporated in Bangladesh under the Companies Act, 1913 on 3 Dunder the entrepreneurship of the Pride Group. The other shareholders are the general public andinstitutions. The shares of the Company are listed with both the Dhaka and Chittagong StocBangladesh.The address of the registered office is B-87, Malibag Chowdhury Para,Dhaka and the mill4, Karnapara, Savar,Dhaka. The Company owns textile mills and its principal activities are knitting,pfinishing of textile products and making garments.

Components of the Financial Statements:

(i) Balance Sheet as on 30 September 2011;

(ii) Profit and Loss Account for the year ended 30 September 2011;

(iii) Cash Flows Statement for the year ended 30 September 2011;

(iv) Statements of Changes in ShareholdersEquity for the year ended 30 September 2011;

(v) Value Added Statement for the year ended 30 September 2011;and

(vi) Notes to the Financial Statements for the year ended 30 September 2011.

Reporting Period:

The financial period of the Company covers an accounting year from 1 October to 30 September next

Reporting Currency:

The figures in the financial statements represent Bangladesh Taka currency, which have been rounnearest Taka,except where indicated otherwise.

Comparative Information:

Comparative information have been disclosed in respect of the year 2010 for all numerical infofinancial statements and also the narrative and descriptive information when it is relevant to an undthe current year's financial statements. Figures of the previous year have been re-classified whenenecessary to ensure comparability with the current period.

Statement of compliance with local laws:

The financial statements have been prepared in compliance with requirements of the CompaSecurities and Exchange Rules,1987 and other relevant laws as applicable.The cash flows from operacomputed by the direct method as prescribed by the Securities and Exchange Rules,1987.

Statement of compliance with International Accounting Standard (IAS) and Internatioal FinanStandards (IFRSs):

The financial statements complied with the requirements of the International Accounting StandInternational Financial Reporting Standard (IFRSs) as is sued by the International Accounting Standarand as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB).

Statement of Measurement Basis:

The financial statements have been prepared using the Historical Cost basis, except for the earliecertain non-current assets.

Accrual basis of Accounting:

The financial statements have been prepared, except for cash flows information, under the aaccounting.

Notes to the Financial Statements

Forming an Integral Part of the Financial Statements

For the year ended 30 September 2011

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

1.

M.A. Moyeed Dr. M.A. Moyeen M.A. Momen Md. Wali Ullah







Annual Report 2011

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Revenue Recognition:

Sales are recognized at the time of delivery from godown.

Fixed Assets and Depreciation:

No Depreciation is charged on land and land development.Depreciation is charged on all other fixed assets onstraight line method. Depreciation on revaluation surplusis charged to Capital Reserve.The rates at whichassets are depreciated depend on the nature and estimated useful life of each ass et,and are given as below:

Item Rate

Factory Building 2.50%

Plant and Machinery 7.00%

Factory Shed 7.50%

Electric,Gas, Water,Steam and Telephone Installation, Furniture & Fixture,Office Equipment,Factory Equipment and Tools & Apparatus 10.00%

Motor Vehicles 15.00%

Net carrying amounts (written down value) is arrived at after deduction of accumulated depreciation fromgross carrying amounts (cost).

The gross carrying amounts (cost) represents cost of acquisition or construction and capitalization ofpre-production expenditure including interest during construction period and lease payments.

Leased plant and machinery has been capitalized at "Principal amount" thereof and proportionate interestthereof has been charged to interest expenses interms of ISA 17 - "Lease" as adopted in Bangladesh.

Stocks:

Stocks are valued at lower of weighted average cost and net realizable value.Cost of work in process includesmaterial and proportionate conversion cost.Finished goods includes material and conversion cost.

Provision for Income Tax:

Provision for current income-tax has been made during the year under review in respect of net profit at therate of 15%.Provision for deferred tax has been made at 15% on th e timing difference relating to depreciationin terms of IAS 12 Income Taxesas adopted in Bangladesh.

Transaction in foreign currencies:

Foreign currencies are converted into Bangladesh Taka at the exchange rate ruling on the date oftransaction.

Statement of Specific Accounting Policies Applied:(j)

(i)

(ii)

(iii)

(iv)

(v)

vi) Translation of closing balances in foreign currencies:

These are converted into Bangladesh Taka at the exchange rate ruling on the date of Balance Sheet as follows

2011 2010

Receivables Payables Receivables Pa

1 US Dollar Tk. 73.03 Tk. 73.48 Tk.68.58 Tk

vii) Cash and cash equivalents:

Cash in hand and cash at bank have been considered as the cash and cash equivalents for the preparation of statements,which were held and available for use by the Company without any restriction and there was inof changes in value of these current assets.

viii) Earnings Per Share (EPS):

The Company calculates Earnings Per Share (EPS) in accordance with the International Accounting Sta"Earning Per Share" as adopted in Bangladesh.

ix) Retrial Benefits (Gratuity):

No further provision for retrial benefits (gratuity) has been made as no such provision is required under tLabour Law.

Annual Report 2011

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13.3 The break-up of provision for deferred tax is as follows: 2011 Taka

Opening balance 4,015,296 Provision for deferred tax for the year-Note 30 (1,435,885) Closing balance 2,579,411

14 Bills Receivable Discounted

Opening balance 113,424,000 Add:Discounted during the year 496,024,243 609,448,243

Less:Collected during the year 480,912,793

Closing balance 128,535,450

15. Workers' Participation/Welfare Funds

Opening balance 12,568,533 Add:Contributions for the year 3,381,750 Add:Interest during the year 1,413,960 Closing balance 17,364,243

16. Dues to Associated Company

The company in normal course of business carried out a number of transactions with other enwithin the definition of related party contained in Bangladesh Accounting Standard -24:"RDisclosures".Total Balance sheet exposer with the related parties as at 30 September 2011 is as

Name of the related party Relationship Nature of Transaction 2011

Taka

Fashion Knit Garments Ltd. Common Director Sale of Finished Fabrics 25,071,000

17. Proposed Dividend

17.1 Proposed dividend for the year (Cash) - Proposed dividend for the year (Bonus Share) - -

17.2 Event after Balance Sheet date

The Board of Directors of the Company in its meeting held on January 31, 2012 (2010: 31 recommended dividend at 15% bonus share (2010: 5% cash and 10% bonus share) for all sharecompany subject to their approval in their AGM.

18. Share Capital 2011 18.1 Authorized: Taka

5,000,000 Ordinary Shares of Tk.100 each 500,000,000

18.2 Issued,Subscribed and Paid-up: 2,200,000 Ordinary Shares of Tk.100 each fully paid-up 220,000,000

1,400,000 Ordinary Shares of Tk.100 each fully paid-up in cash 140,000,000 600,000 Ordinary Shares of Tk.100 each issued as fully paid-up bonus shares 60,000,000 200,000 Ordinary Shares of Tk.100 each issued as fully paid-up bonus shares 20,000,000

2,200,000 220,000,000

9. Bank Overdraft 2011 2010 Taka Taka

Trust Bank Ltd,SKB Branch - 15,433,147 AB Bank Ltd,Motijheel Branch 7,090,498 20,489,100 7,090,498 35,922,247

10. Loan against Trust Receipts

AB Bank Ltd,Motijheel Branch 5,652,287 17,047,894 Trust Bank Ltd,SKB Branch 28,188,184 11,292,603 33,840,471 28,340,497

11. Creditors 2011 2010 US$ Taka US$ Taka

For Import Purchases 5,862,152 430,750,928 4,647,728 322,319,928

For Local Purchases 10,463,600 33,117,688 For Buying House Commission 463,022 1,853,005 For Dividend Payable 26,710,757 23,634,029 For Staff Income Tax 64,663 165,814 For Refund Warrant 371,469 371,469 468,824,439 381,461,933

These are unsecured but creditors for import purchases are against back to back L/cs.

12. Accrued Expenses 2011 2010 Taka Taka Gas Expenses (Factory) 6,880,764 7,393,651 Telephone 26,334 33,334 Salaries,Wages and Allowances 10,184,931 8,460,275 Other Expenses 301,708 90,868

Legal Fee 60,000 60,000 Auditors' Fee 100,000 75,000 AGM Expense 1,000,000 900,000 18,553,737 17,013,128

13.Provision for Taxation13.1 The break-up is as follows:

Provision for current tax- Note 13.2 6,663,507 (38,916) Provision for deferred tax-Note 13.3 2,579,411 4,015,296

9,242,918 3,976,380

13.2 The break-up of provision for current tax is as follows:

Opening balance (38,916) (128,813) Provision for current Income-tax for the year- Note-30 11,581,136 5,478,522 11,542,220 5,349,709 Less:Paid during the year (4,878,713) (5,388,625) Closing balance 6,663,507 (38,916)

Annual Report 2011

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20. Tax Holiday Reserve 2011 Taka

Opening & Closing balance 22,378,988 22,378,988

21. Dividend Equalisation Reserve

Opening & Closing balance 10,000,000

10,000,000

22. Capital Reserve

22.1 Capital reserve represents re-valuation surplus arising out of revaluation of certain tangible fixedcompany as of 30 September 1995 by a professional valuer, following the replacement cosdepreciation adjusted there against.

22.2 The movement is as follows: 2011 Taka Revaluation surplus 52,227,962 Accumulated Depreciation charged (42,512,787) Adjustment of revaluation surplus on Discarded Machines (6,506,126) Closing balance 3,209,049

23.Long Term Loans

23.1 The break-up is as follows:

Lease Finance Liabilities - Note 23.2 38,466,770 Long Term Loans- Note 23.3 72,269,645

110,736,415

23.2 The break-up of lease finance liabilities is as follows:

2011 2010 Principal Interest Total Principal InteresInternational Leasing and Financial Services Ltd. 31,408,942 7,057,828 38,466,770 65,165,603 9,652,6

Pri me Fina nce a nd Investment Ltd. - - - 8 ,081,6 98 1,683,1 31,408,942 7,057,828 38,466,770 73,247,301 11,335,8

23.3 The movement of loans is as follows: 2011 Taka

16% Loan - Note 23.4 43,845,930 16% Loan - Note 23.5 28,423,715 72,269,645

18.3 The category-wise analysis of shareholdings is as below:

2011 2010

Classes of Holdings No.of Shares % No.of Shares %

Sponsors 11,00,000 50.00 1,000,000 50.00 Financials Institutions 25,638 1.17 41,318 2.07 ICB 1105 0.05 58,341 2.92 ICB Investors A/c 22,914 1.04 26,072 1.30 ICB Mutual Fund 7,768 0.35 50,900 2.54

ICB Unit Fund 159,723 7.26 302,730 15.14 General Public 882,852 40.13 520,639 26.03 Total 2,200,000 100.00 2,000,000 100.00

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 disclosedbelow as a requirement o f the Listing Regulations of Dhaka and Chittagong Stock Exchanges.

2011 2010

Share holdings range in number of shares No.of No.of Holdings No.of No.of Holdings

Shareholders Shares (%) Shareholders Shares (%)

0000000001 - 0000000049 7,540 77,076 3.50 8,517 86,641 4.330000000050 - 0000000050 5,230 261,500 11.89 3,443 172,150 8.610000000051 - 0000000200 331 32,270 1.47 790 91,185 4.560000000201 - 0000000500 32 10,155 0.46 183 67,481 3.380000000501 - 0000001000 47 43,762 1.99 77 60,750 3.040000001001 - 0000005000 37 130,718 5.94 79 171,662 8.580000005001 - 0000010000 17 156,326 7.11 13 88,413 4.420000010001 - 0000025000 6 141,728 6.44 4 50,749 2.54

0000025001 - 0000050000 2 95,720 4.35 - - -0000050001 and above 4 1,250,745 56.85 5 1,210,969 60.54Total 13,246 2,200,000 100.00 13,111 2,000,000 100.00

18.4 Option on unissued shares:There is no option regarding authorized capital not yet issued but can be used to increase the issued,subscribedand paid up capital through the issuance of new shares.

19. General Reserve 2011 2010 Taka Taka

Opening and Closing Balance 6,956,752 6,956,752 6,956,752 6,956,752

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23.4 The movement of loans is as follows: 2011 2010 Taka Taka

Opening balance 65,745,645 58,388,324 Loan taken - 28,500,000 Loan re-paid (21,899,715) (21,142,679) Closing balance 43,845,930 65,745,645

The loan has been taken from AB Bank Ltd, Motijheel Branch for import of Plant and machinery.The loan carries interest at16% and is repayable in 36 monthly installments,startin g from 20 March 2008.The loan is secured by hypothecation ofstock and machinery,equipment and book debts.

23.5 The movement of loans is as follows: 2011 2010 Taka Taka

Opening balance 43,590,195 61,925,148 Loan re-paid (15,166,480) (18,334,953) Closing balance 28,423,715 43,590,195

The loan has been taken from Trust Bank Ltd,Motijheel Branch for import of Plant and machinery.The loan carries interest at16% and is repayable in 43 monthly installments, starting from 17 October 2008. The loan is secured by hypothecation ofstock,machinery, equipment and book debts.

24. Provision for Gratuity 2011 2010 Taka Taka

Opening and Closing balance 9,115,426 9,115,426

25. Sales 2011 2010

Item Quantity Amount Amount Quantity Amount Amount

(In Kg.) (US$/EURO) (In Taka) (In Kg.) (In US$/EURO) (In Taka) Export sales: Knit fabrics 1,967,235 Kgs $14,547,122 1,062,376,322 1,861,450 kgs $11,672,020 800,467,114

Garments 4,003,705 pcs $9,923,560 724,717,552 1,874,880 pcs $4,647,556 318,729,365

Garments - - - 430,608 pcs 847,752 73,203,350 Total 24,470,682 1,787,093,874 1,192,399,829

2011 2010

26. Export Incentives Taka Taka

Cash Incentive 27,365,691 48,650,116

27,365,691 48,650,116

27. Cost of Goods Sold 201127.1 The break-up is as follows: Taka

Materials Consumed -Note-27.2 1,187,940,092

Salary,Wages and Allowances -Note27.3 142,435,076

Tiffin & Entertainment expenses 935,141

Depreciation - Note2.3 47,039,108

Stores and Spares Consumed 13,789,893

Factory Conveyance 977,439

Power and Gas 51,088,118

Vehicle expenses 4,717,595

Repairs and Maintenance 33,567,502

Packing & Loading expenses 4,536,149

Import Landing,Clearing and Insurance 4,530,302

Factory Stationery expenses 3,447,473

Carriage Inward & Outward 4,382,036

Knitting,Sewing & Processing charge 48,580,271

Factory Insurance 2,093,291

Sewing Machine Rental 4,521,445

Miscellaneous 676,935

Total Manufacturing Costs for the year 1,555,257,866

Add:Opening Work in Process 16,627,058

Total Manufacturing Costs 1,571,884,924

Less:Closing Work in Process 16,654,536

Cost of Goods Manufactured 1,555,230,388

Add:Opening Finished Goods 18,570,341

Cost of Goods available for use 1,573,800,729

Less:Closing Finished Goods 20,685,693

Cost of Goods Sold 1,553,115,036

27.2 Materials Consumed

2011 2

Quantity (Kg) Taka Quantity (Kg)

Yarn 3,246,532 876,563,605 2,245,507 Dyes 158,176 129,704,022 100,251 Chemicals 448,281 128,656,762 316,477 Accessories - 53,015,703 - Total Materials Consumption 3,852,989 1,187,940,092 2,662,235

Annual Report 2011

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29. Others Income

Rental income

30. Provision for taxation

Current Tax expense

Deferred Tax expense

31. Remuneration/Payments to Di

31.1 The aggregate amount paid/pro

Securities and Exchange Rules,19

Particulars

Remuneration

Basic salary

House Rent AllowanceOther benefits and perquisites

31.2 No compensation was allowed by

2010

Taka No. of Employee Taka

63,796,583 336 39,579,250

78,638,493 1,276 50,677,109

142,435,076 1,612 90,256,359

2011 2010

Taka Taka

2,600,000 650,00044,211,460 33,599,861

2,671,254 1,629,4363,671,467 3,095,4852,921,280 1,955,1811,946,147 1,056,730

60,000 60,000100,000 75,000

1,923,327 1,282,461

2,091,050 1,411,0703,575,999 1,845,4023,918,657 2,515,8255,265,363 2,655,9096,305,247 4,188,7651 169 795 964 375

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33. The analysis of consumption of materials and spares as to origin is as below

2011 2010

Taka % Taka %

Imported 915,728,132 77.09 666,359,630 83.58

Local 272,211,959 22.91 130,865,902 16.42

1,187,940,092 100.00 797,225,532 100.00

34. The capacity and actual production of the company are as follows

Item

Actual Percentage (%)

Capacity Production of achievement

Finished Garments (Lac Pcs.) 28 24 (2010:23.05) 82 (2010:84.32%)

Knit Fabrics ( MTs.) 1,980 1,856 (2010:1,861) 93.98 (2010:92.47%)

35. The Company's transaction with the related parties are as follows

2011 2010 Related Party Nature of Transaction Taka Taka

Fashion Knit Garments Ltd Export Sale 994,506,787 763,268,002

Fashion Knit Garments Ltd Current Dues 25,071,000 26,550,125

36. General36.1 There was no sum for which the company was contingently liable as on 30 September 2011 and 2010.

36.2 There was no claim,except an aggregate amount of Tk. 28,221,280 (2010:26,225,153) claimed by the Tax Authoritybut appealed against by the company,not acknowledged as debt as on 30 September 2011 and 2010. Such claim,being contingent liability,needs not be provided for.

36.3 There was no credit facilities available to the company,except trade credits and back to back L/c facilities,during theyears ended 30 September 2011 and 2010.

36.4 There was no foreign shareholder of the company as on 30 September 2011 and 2010 and no dividend was remittedto any foreign shareholders during the years ended 30 September 2011 and 2010.

36.5 There was no capital expenditure contracted but not incurred or provided for at 30 September 2011 and 2010.

36.6 There was no capital expenditure authorised by the Board but not contracted for at 30 September 2011 and 2010.

H.R. Textile Mills LimitedGreen Deluxe (2nd Floor), House # 67/D

Road # 11, Block # E, Banani, Dhaka-1213

PROXY FORM

I/We....................................................................................of.......................................................................................

......................................................................................... being a shareholder of H.R. Textile Mills Limited

Mr./Mrs/Miss.................................................................................................... of ....................................................

........................................................................................................................................................................................

as my proxy to attend and vote for me on my behalf at the 27th Annual General Meeting of

be held on 29th March 2012 and at any adjournment thereof.

As witness my hands this ................... day of March 2012

Signature of Proxy ..........................................................................

Signature of Shareholder...............................................................

Registered Folio / BO No. ..............................................................

ATTENDANCE SLIP

Mr./Mrs. .............................................................................................. Folio / BO No. ...........................................

I hereby record my presence at the 27th Annual General Meeting of H.R. Textile M

29th March 2012.

...............................

Signatur

Note: Shareholders attending the meeting in person or by proxy are requested to complete the at

hand it over at the registration counter of the meeting hall. Valued shareholders may kindly note thamembers is restricted.M.A. Moyeed Dr. M.A. Moyeen M.A. Momen Md. Wali Ullah







Annual Report 2011

38

Documents

Hrtex 2011 Annual