Information Memorandum For the Initial Public Offering of

Cotton Mills Limited

Issue Manager Prime Finance & Investment Limited 63, Dilkusha C/A (3rd Floor), Dhaka-1000, Phone: 9563883, Fax: 9563692

E-mail: info@primefinance.net, Website: www.primefinance.net

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A Short Look…………………………………….

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The Project of Keya Cotton Mills Limited

The project has envisage with a green environment

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State of the Art technology

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State of the Art technology

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Research and Development

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General Information

The Information Memorandum has been prepared by Prime Finance & Investment Limited from information supplied by Keya Cotton Mills Limited (the Company) and also several discussions with the Chairman, Managing Director, Directors and related Executives of the Company which is publicly available. The Board of Directors of Keya Cotton Mills Limited hereby confirms that to the best of their knowledge and belief the information contained herein is true and correct in all material respects and that there are no other material facts, the omission of which, would make any statement herein misleading.

No person is authorized to give any information or to make any representation not contained in this Prospectus and if given or made, any such information or representation must not be relied upon as having been authorized by Keya Cotton Mills Limited (the Company) or the Prime Finance & Investment Limited (Issue Manager).

The Issue, as contemplated in this document, is made in Bangladesh and is subject to the exclusive jurisdiction of the Courts of Bangladesh. Forwarding this Prospectus to any person residing outside Bangladesh in no way implies that the issue is made in accordance with the laws of that country or is subject to the jurisdiction of the laws of that country.

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Vision To be the leading cotton yarn producer & exporter in the country Mission To be a leading business group in fashion industry by offering best price & quality services within 2015 Objective and Strategy Our objective is to maintain the most demanding standard & produce high quality finest product to exceed customers need & expectation.

Corporate directory

Address Head Office & Factory Keya Cotton Mills Limited Jarun, Konabari, Gazipur Bangladesh Tel: 9297779 , E-mail: Kgroup@keya-bd.com Website: www.khalequegroup.com Liaison office Keya Cotton Mills Limited Apt.# 6/13,.Priyo Prangon Tower House # 19, Road # 17 Kemal Ataturk Avenue Banani, Dhaka Tel: 8831032

Auditors Huda Vasi Chowdhury & Co Chartered Accountant BTMC Building (Level-8) 7-9, Kawran Bazar C/A Dhaka-1215

Legal Advisor Mr. Nitai Ray Chowdhury Road # 2, House #10, Dhanmondi, Dhaka Tel: 8614515

Tax Consultant Mr. K.M. Hasan FCA K.M. Hasan & Co. Chartered Accountant

Issue Manager Prime Finance & Investment Limited 63, Dilkusha C.A., (3rd Floor) Dhaka-1000 Tel: 9563883

Company Secretary

Mr. Syed Noorul Alam Executive Director (Finance) & Company Secretary Tel: 9297779

Key Banker s National Bank Limited Southeast Bank Limited

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Table of Contents

Item Page No.

Information related to Public Offer 10 Summary on Offer 11 Use of Proceeds 12 Company Information 14 Keya Cotton Mills Limited- an Overview 15 The Group 15 Capital Structure 16 Other information 16 Board of Directors & Shareholders 18 Directors and Officers 19 Short Bio Data of Directors 19 Directors Involvement with other Organization 20 Family relationship 20 Involvement of Directors & officers in certain legal proceedings 21 Ownership of the companies securities 21 Management 24 Financial performance 26 Plan of Operation & Discussion of Financial Condition 27 Description of Property 29 Revaluation of Asset 29 Tangible Asset per Share 30 Industry Overview and Risk 32 General Information 36 Lock in of Sponsor share 37 Refund of Subscription money 39 Availability of Securities 39 Description of Securities outstanding or being offered 40 Market for the Securities being offered 40 Rules and Regulation 42 Determination of indicative price 45 Audited accounts 48 SWOT Analysis 69

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Information related to Public Offer

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Summary on Offer

Sl. No. Particulars

1 Public Offer

50,000,000

2 FV

10.00

3 EIIs quota

10,000,000

4 Single EIIs quota for BID (10% of EIIs quota)

1,000,000 5 Indicative Price - 6 Indicative Price at 20% upper band - 7 Indicative price at 20% lower band -

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Use of proceeds

Purpose of Public Issue: As per decision of Board of Directors meeting held on 3rd May 2010 the IPO proceeds of Keya Cotton Mills Limited would be utilized for the following purpose:

a. “ Management of Keya Cotton Mills Limited will take necessary steps to utilize the net proceeds of public offer for investment in the second unit of Keya Cotton Mills Limited’’

b. Management of Keya Cotton Mills Limited will take necessary steps For repayment of Bank Loan as outstanding with Banks and Financial Institute.

Proceed of IPO will be utilized as follows: Sl No Particulars Tk. in Million 01

Investment in the second unit of Keya Cotton Mills Limited

1,500.00

02 For repayment of Bank Loan 1,528.12 03 For Working Capital and IPO Expenses 1,971.88 Total 5,000.00 Details as describe below:

a) Description of the Second Unit

The proposal envisages setting up of a Textile Spinning Unit with 39,600 spindles and 720 rotor head at Jarun, Konabari, Gazipur. The project will be equipped with modern and sophisticated machinery from world best manufacturers in order to produce high quality Cotton yarns. After implementation of the project, it will create job opportunities for 801 persons. The project is expected to go into production within 12 months from the date of opening of 1st Letter of Credit for Imported Machinery. The total fixed cost of the project has been estimated at Tk. 1,809.00 million.

b) Estimated project cost

Estimated project cost (Unit II of Keya Cotton Mills Limited) Taka in million

Land 201.00 Building and civil works 256.00 Plant and machinery including duty freight etc. 1,285.00 Others (including working capital) 67.00

Total 1,809.00 Means of Finance Taka in million From initial public offering (IPO) 1500.00 From the Directors 200.00 From Bank 109.00

Total 1,809.00 Borowings, Equity support from Banks, Financial Institutes and Others (yet to be arranged)

Total 1,809.00

Mentionable here that the Board of Directors of Keya Cotton Mills Limited in its meeting held on 28th June 2010 decided to establish a second unit for producing raw cotton in which net proceeds of IPO will be invested. Keya Cotton Mills Limited will invest Tk. 1500 million of Initial Public Offering for implementing unit II. The Second Unit of keya Cotton Mills Limited is expected to commence operation by January 2012. The tentative implementation schedule of the project is presented below:

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Implementation Schedule of Second Unit of Keya Cotton Mills Limited Particulars Approximate date for

completion of project Projected date of commercial operation*

Land development completion Completed

January 2012 Opening of L/Cs April 2011 Completion of civil works April 2011 Machinery at site July 2011 Erection and Installation October 2011 Trial run October 2011 Commercial Operation November 2011 * Subject to fund availability from IPO

Sd/- (Md. Abdul Khaleque Pathan)

Director & CEO of Keya Cotton Mills Limited

Sd/- (Md. Mahbub Alam)

Chief Finance officer of Keya Cotton Mills Limited

B. The proceeds of IPO will be used for repayment of long-term liabilities (Bank loan) and Short term liabilities and

working capital financing as mentioned below: I) Schedule of Bank Loan to be repayment

Name of lender Nature of Loan Outstanding Balance

as on September 30, 2010 National Bank Limited Long term Tk 794.99 million (Long term)

National Bank Limited Short term Tk 173.71 million

Southeast Bank Limited Short term Tk 311.40 million

Dutch bangle Bank Limited Short term Tk 95.59 million

Bank Asia Limited Short term Tk. 75.38 million

Agrani Bank Limited Short term Tk 68.11 million

Prime Finance & Investment Limited Lease Finance Tk 7.13 million

Phoenix Finance & Investment Limited

Lease Finace Tk 2.81 million

Total Tk. 1528.12 million

I) Schedule of Working Capital to be finance Sl. No.

Particulars Amount Tk in million

01 Working Capital and IPO expenses 1,971.88 Total 5,000.00 million

Sd/- (Md. Abdul Khaleque Pathan)

Director & CEO of Keya Cotton Mills Limited

Sd/- (Md. Mahbub Alam)

Chief Finance officer of Keya Cotton Mills Limited

(C) There are no other contract for which Proceeds of IPO will be utilized

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Company Information

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Keya Cotton Mills Limited- An Overview

Company at a glance Keya Cotton Mills Ltd. a Public Limited Company was incorporated in the year 2004 and started commercial production in the year 2006. Initially the project has established with 37,200 spindles having 23 MT per day production capacity. Currently the project has production capacity of 30 MT per day. The project has been setup with latest modern machinery imported from Japan, Switzerland, Taiwan and India. Factory has facilitated with own power generator and also with cogeneration chiller for controlling exact humidity and temperature. Around 762 persons work in this industry. The industry has equipped with modern and sophisticated machinery imported from world renowned manufacturers with the view to produce high quality Cotton Yarns.

Date of Incorporation : 15th June 2004 Date of Commencement of Business : 15th June 2004 Year of Commercial Production : 2006

The Group Keya Group of Industries is a renowned business Group in the country. The Group has been in the eye of media with its various products with brand name “Keya” for the last decade. At present the Group has been managing 10 active large and small companies including two public limited companies namely, Keya Cosmetics Ltd. and keya Detergent Ltd. The Group started its journey under the leadership of Mr. Abdul Khaleque Pathan with his brickfield project Khaleque & Co. Ltd. The group subsequently expanded its activities in the area of soap chemicals, spinning, knit composite, garments and advertisement firm. Within 17 years of operation the group has became one of the renowned business conglomerates in the country.

The Group is financed by Sonali Bank Ltd., Standard Bank Ltd., Southeast Bank Ltd., Bank Asia, Eastern Bank Ltd., Prime Bank Ltd., Dhaka Bank Ltd., and United Commercial Bank Ltd. The Group enjoys franchise value in the market and among the shareholders.

Group Profile Sl. No.

Company Activity Annual Production Capacity

Manpower Sales Million Tk.

(as on 30.06.2010) 01 Keya Cosmetic Ltd. Production of

Cosmetics 235 million pcs/Year 370 1,177.93

02 Keya Detergent Ltd. Production of detergent powder

24,960 MT/Year 107 442.79

03 Keya Soap Chemicals Ltd. Production of Raw Soap noodles

37,440 MT/Year 102 759.09

04 Khaleque Knitting & Garments Ltd.

Knit Garments 6,960 MT/Year 3,255 240.87

05 Keya Knit Composite Ltd. Composite Knit

Garments 13,920 MT/Year 6,510 4,225.82

06 Keya Spinning Mills Ltd. Production of Raw Cotton

6,960 MT/Year 589 1,383.59

07 Keya Cotton Mills Ltd. Production of

Raw Cotton 8,925 MT/Year 569 1,367 .32

08 Keya Yarn Mills Limited Production of Raw Yarn

9,800 MT/Year 652 1,465.56

09 Khaleque & Co. (Pvt.) Limited

Brick Field 20 Lac/Year 11 8.623 (as on 30.06.2009)

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As on 30th June 2010 (Figure in Million TK.)

Name of the Companies Assets Liabilities Equity Net Income Khaleque Knitting & Garments Industries (Pvt.) Ltd 4,539.91 2,043.75 2,496.16 65.46

Keya Cosmetics Ltd 1,101.90 419.60 682.30 174.99

Keya Spinning Mills Ltd. 5,647.92 4,838.49 809.43 95.25

Keya Detergent Ltd. 544.38 160.81 383.57 55.47

Keya Cotton Mills Ltd. 2983.75 1727.67 1256.08 297.05

Keya Soap Chemicals Ltd. 1,591.43 1,015.64 575.79 25.72

Keya Knit Composite Ltd. 5,561.32 4,085.86 1,475.45 511.50

Keya Yarn Mills Ltd. 3,367.70 3,113.03 254.67 162.64

Capital structure The capital structure of Keya Cotton Mills Limited before and after IPO will be as under:

A. Financial structure prior to Initial Public Offering (IPO) (Amount in Taka)

Issued & fully paid up capital as on 30 September 2010 Tk. 66,00,00,000.00

Total Capital Structure as per Scheduel X (RJSC Certified) Tk. 66,00,00,000.00

The face value of ordinary shares has been reduced from Tk. 100 to Tk. 10 each by the decision of an EGM held on September 13, 2008.

Nature of business The principal activities and operations of the Company are manufacturing & selling cotton yarn.

Principal product and services The project has been set up to produce 100% cotton yarn.

Market for the product The Company produces only cotton yarn which is mainly consumed by in house readymade garments manufacturers

Number of employees (as on 30 September 2010) The total number of employees as on 30/09/2010 is 569. All are full-time employee.

Names of the customer who purchase 10% or more of the Company’s products/service

Sl No Name of the Customer 01 Keya Knit Composite Ltd., Jarun, Konabari, Gazipur.

Material patents, trademarks, licenses or royalty agreements The Company has no material patents, trademarks, license or royalty agreement.

Associate, subsidiary/related holding company The Company has no holding/subsidiary company. Considering voting right of 20% or more in another company there are only two companies namely Keya Spinning mills Limited and Khaleque Knitting & Garments Ind. (Pvt.) Ltd are the associate company of Keya Cotton Mills Limited as per Para 4 of BAS 28.

Considering the common directorship, the company has following sister companies:

Sl. No. Name of the Company 01 Keya Cosmetics Ltd. 02 Keya Detergent Ltd. 03 Keya Soap Chemicals Ltd. 04 Keya Knit Composite Ltd. 05 Keya Yarn Mills Ltd. 06 Khaleque & Co. (Pvt.) Ltd. 07 Khaleque Knitting & Garments Ind. (Pvt.) Ltd 08 Keya Spinning Mills Ltd. 09 Keya Sweaters Limited

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Distribution of Products/Services The Company conducts the business operations under the supervision of Board of Directors and highly skilled management. The Company operates its business through the Head Office at Jarun, Konabari, Gazipur and Liaison office at Apt. # 6/13,. Priyo Prangon Tower, House # 19, Road # 17, Kemal Ataturk Avenue, Banani, Dhaka. The Company collects raw materials from foreign suppliers. After processing the raw materials in the production process the final product is distributed that to the buyer at due timely.

Sources and availability of raw materials and the names of the principal suppliers The raw material of the Company is raw cotton, which is fully procured from abroad. The names of main suppliers are mentioned below:

Sl No Name of the Supplier Address 01 Dunavant S.A., Switzerland World Trade Center-10 Route De L’aeroport-

1215, Geneva 15- Switzerland 02 Cargill Cotton Ltd., USA 7101 Goodlettt Farms Parkway Cordova ,

TIN 38016, USA 03 Olam International Ltd., Singapore 9, Temasek Boulevard#11-02 Suntec tower

Two, Singapore-038989 04 Allenbergcotton co. P.O. Box 3254, Cordova, TN 38088-3254,

Goodlet Farms parkway, Cordova TN 38016 05 Louis Dreyfus Comodities Swiss S.A. 29, route de I’Aeroport , PO Box 236,

1215, Geneva 15- Switzerland

Sources of, requirement for, power gas and water:

The breakdown of utilities used by Keya Cotton Mills Limited is given below: Particulars Source and Requirements

Power

Power requirement of Keya Cotton Mills Ltd is 3.2 MW/day, which is met up from own gas generator. Yet for smooth operation during time of emergency and maintenance of the project power connection from REB has been arranged as stand by.

Water Keya Cotton Mills Limited requires 6 lac liter/ hour of water per hour which is met by its own deep-tube well.

GAS Keya Cotton Mills Limited requires about 850 m3/hour of gas per annum. Titas Gas Transmission & Distribution Co. Ltd. (TGTDCL) supplies required gas for the project.

Future contractual liabilities The company has no plan to enter into any contractual liabilities within next one year other than the normal course of business

Future capital expenditure The company has no plan for future capital expenditure except investment in Keya Spinning Mills Limited, which already described in the implementation schedule under use of proceeds of the company.

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Board of Directors & Shareholders

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Directors and officers Information regarding directorship

Sl. No. Name Age Experience Position

01 Mrs. Feruza Begum 47 yrs 23 yrs Chairman

02 Mr. Abdul Khaleque Pathan 52 yrs 28 yrs Director and CEO

03 Mrs. Khaleda Pervin 31 yrs 11 yrs Director

04 Mr. Masum Pathan 29 yrs 8 yrs Director

Short bio-data of the Directors Mrs. Feruza Begum Chairman

Mrs. Feruza Begum, wife of Mr. Abdul Khaleque Pathan was born on 10th August 1964. She is the Co-founder of Keya Groupof Industries and Directors of the Board of Keya Group. She comes from a respectable Muslim family. She is kind hearted, religious, foreseeing, and patience woman. She is the inspiration of Mr. Pathan and affectionate to her three worthy children two of them are now directors of Keya Groupof Ind. Her active contribution in planning and decision making process brings the group in today’s position. Mrs. Feruza Begum involves with various charitable organizations engaged in developing social hack neck. Mrs. Khaleda Pervin Director

Mrs. Khaleda Pervin, daughter of Mr. Abdul Khaleque Pathan & Mrs. Feruza Begum was born in 1980. She is an MBA. Educational qualification & hereditary blood influenced to join in Keya Groupof Indus. as a Director. She has implemented modern views & concepts to improve human resources throughout the group. She is very industrious. She always deploying her all out efforts in enriching company’s status by doing more business. She is very cordial towards the employee. Severally she visited abroad. Beyond Keya Groupof Ind., she is the Chairman of MP Sweaters Ltd. a 100% export oriented Sweater manufacturer. Mrs. Khaleda Pervin works as a Director (Accounts) of Keya Groupof Industries.

Mr. Masum Pathan Director

Mr. Masum Pathan, Son of Mr. Abdul Khaleque Pathan & Mrs. Feruza Begum was born on 12th February 1982. He is proactive, gentle, brilliant, enthusiastic, industries & sincere in nature. He is cordial to the employee. Very often he traveled abroad to attend seminar, workshop & meet with the buyer. He also works as brand ambassador of Keya Groupof Industries. Mr. Abdul Khaleque Pathan Director & CEO Mr. Abdul Khaleque Pathan, founder of Keya Groupof Industries was born on 14th May 1959 at Jarun, Konabari, Gazipur district. He is a man of hard working, brilliant, foreseeing, leadership, gentle, creative and enthusiastic. From his young age, he was very much interested and fond love of doing business. In 1986 he stepped in to the business as an entrepreneur by establishing a brick manufacturing company named Khaleque & Co. Shortly he had been proved successful and spread business in the area of Garments & toiletries. Presently Keya Groupof Industries comprises eight companies under the direct supervision of Mr. Abdul Khaleque Pathan. The core strength of this group is strong financial profitability & quality production.

Mr. Pathan never compromise with the product quality and always adopt modern technology, method, procedure which helps in emerging local & foreign markets.

Mr. Abdul Khaleque Pathan attends many workshops, seminar, trade fair within the country and abroad organized by ministry of commerce, federation of chambers, trade development association etc.

He has traveled many countries in the world like India, Singapore, Japan, Thailand, Saudi Arabia, UAE, Philippines, Malaysia, Hong Kong, China, USA , UK and so many.

Mr. Abdul Khaleque Pathan was awarded as Commercially Important Person (CIP) for the year 1998 and 1999 for outstanding performance done through Khaleque Knitting & Garments Ind. (Pvt.) Ltd., Khaleque Knitting & Garments Ind. (Pvt.) Ltd. also achieved “Export Trophy” in the year 1996 and 1997.

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Directors’ involvement in other organization(s)

Sl. No.

Name of Director Name of the Organizations Status

01 Mrs Feruza Begum • Keya Detergent Limited • keya Spinning Mills Limited • Keya Cosmetics Limited • Keya Soap Chemicals Limited • Keya Knit Composit Limited • Khaleque & Co. (Pvt.) Limited • Khaleque Knitting & Garments Inds Limited • Keya yarn Mills Limited • Keya Sweaters Limited

• Director • Chairman • Do • Do • Do • Do • Do • Do • Do

02 Mr. Abdul Khaleque Pathan • Keya Detergent Limited • keya Spinning Mills Limited • Keya Cosmetics Limited • Keya Soap Chemicals Limited • Keya Knit Composit Limited • Khaleque & Co. (Pvt.) Limited • Khaleque Knitting & Garments Inds (Pvt.) Limited • Keya Yarn Mills Limited • Keya Sweaters Limited

• Chairman • Managing Director • Do • Do • Do • Do • Do • Do • Do

03 Mrs. Khaleda Pervin • Keya Detergent Limited • keya Spinning Mills Limited • Keya Cosmetics Limited • Keya Soap Chemicals Limited • Keya Knit Composit Limited • Khaleque & Co. (Pvt.) Limited • Khaleque Knitting & Garments Inds (Pvt.) Limited • Keya Yarn Mills Limited • M. P. Sweaters Limited • Keya Sweaters Limited

• Managing Director • Director • Do • Do • Do • Do • Do • Do • Chairman • Do

04 Mr. Masum Pathan • Keya Detergent Limited • keya Spinning Mills Limited • Keya Cosmetics Limited • Keya Soap Chemicals Limited • Keya Knit Composit Limited • Khaleque & Co. (Pvt.) Limited • Khaleque Knitting & Garments Inds (Pvt.) Limited • Keya Yarn Mills Limited • Keya Sweaters Limited

• Director • Do • Do • Do • Do • Do • Do • Do • Do

Family relationship between the Directors and Officers There is no family relationship between the Directors and Officers except Mr. Abdul khaleque Pathan, Director of the Company also holds Chief Executive Officer position in the company.

Family relationship among the Directors

Name of Directors/Officer Position Relationship Mr. Abdul Khaleque Pathan Director & CEO Husband of Mrs. Feruza Begum, Father of Mrs. Khaleda Pervin &

Mr. Masum Pathan Mrs. Feruza Begum Chairman Wife of Mr. Abdul Khaleque Pathan, Mother of Mrs. Khaleda Pervin

& Mr. Masum Pathan Mrs. Khaleda Pervin Director Daughter of Mr. Abdul Khaleque Pathan & Mrs. Feruza Begum,

Sister of Mr. Masum Pathan Mr. Masum Pathan Director Son of Mr. Abdul Khaleque Pathan & Mrs. Feruza Begum, Brother of

Mrs. Khaleda Pervin

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Involvement of Directors and Officers in Certain Legal Proceedings No director or officer of the Company was involved in any of the following types of legal proceedings in the last ten years:

(a) Any bankruptcy petition filed by or against any company of which any officer or director of the issuer company filing the prospectus was a director, officer or partner at the time of the bankruptcy.

(b) Any conviction of director, officer in a criminal proceeding or any criminal proceeding pending against him.

(c) Any order, judgment or decree of any court of competent jurisdiction against any director, officer permanently or temporarily enjoining, barring, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities.

(d) Any order of the Securities and Exchange Commission, or other regulatory authority or foreign financial regulatory authority, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities.

Ownership of the Company’s Security

Shareholding structure as on 21.10.2010 (as per last Schedule X)

A. Shareholding Above 5% of the Directors

Sl. No.

Name of Shareholder Status Address No. of Shares hold % of holdings

01 Mr. Abdul Khaleque Patahn Director & CEO Jarun, Konabari,

Gazipur 25,730,120 38.99%

Total 25,730,120 38.99%

B. Shareholding Below 5% of the Directors

Sl. No.

Name of Shareholder Status Address No. of Shares hold

% of holdings

01 Mrs. Feruza Begum Director Jarun, Konabari, Gazipur 20,000 0.03%

02 Mrs. Khaleda Pervin Director Jarun, Konabari, Gazipur 79,960 0.12%

03 Mr. Masum Pathan Director Jarun, Konabari, Gazipur 79,960 0.12%

Total 1,809,200 0.27%

\\ C. Shareholding Above 5% of Subscriber to the Memorandum and/or General Shareholder

Sl. No.

Name of Shareholder Status Address No. of Shares hold

% of holdings

01 Keya Cosmetics Limited General Shareholder

Jarun, Konabari, Gazipur 6,300,810 9.55%

02 Khaleque knitting & Garments Industries (Pvt.) Ltd.

Subscriber to the Memorandum

Jarun, Konabari, Gazipur 1,330,2267 20.15%

03 Keya Spinning Mills Limited Subscriber to the Memorandum

Jarun, Konabari, Gazipur 14,346,963 21.74%

Total 33,950,040 51.44%

C. Shareholding below 5% of Subscriber to the memorandum and/or General Shareholder Sl. No.

Name of Shareholder Status Address No. of Shares hold

% of holdings

01 Khaleque & Co (Pvt. ) Ltd Subscriber to the Memorandum Jarun, Konabari, Gazipur 79,960 0.12%

Total 79,960 0.12%

E. Shareholding below 5% of General Shareholder F.

Sl. No..

Name of Investor (s) Status Address No. of Shares % of holdings

1 Tajul Islam Shareholder Jarun, Konabari, Gazipur 1,500,000 2.27%

2 M A Kashem Shareholder 34, Kamel Ataturk Avenue, Awal Center, (17th Floor) Banani, Dhaka

1,500,000 2.27%

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3 Nazmul Ahsan Farid Shareholder Adalatpara Tangail

250,000 0.38%

4 Nayma Mehrin Shareholder Asiana, 726/A (1st Floor) Satmosjid Road, Dhanmondi, Dhaka

250,000 0.38%

5 Md. Shariful Islam Shareholder Bhuyian Mansion, Room-9, (3rd Floor), 6 Motijheel Dhaka-1000

200,000 0.30%

6 Sarder Munsef Hossain Shareholder 89/60 RK Mission Road, Gopibag Dhaka-1203

150,000 0.23%

7 Kamrun Nahar Shareholder Sena Kalyan Bhaban, Suit 1706/B (17th Floor) 195, Motijheel C/A, Dhaka-1000

140,000 0.21%

8 Shaarat Fasion Wear Ltd. Shareholder Jarun , KonaBari, Gazipur 120,000 0.18%

9 Mominul Islam Sangram Shareholder House-30, Road-9A, Dhanmondi, Dhaka

110,000 0.17%

10 One Multipurpose Co-operative Society Ltd. Shareholder 313, East Kazipara, Mirpur Dhaka

100,000 0.15%

11 Rezaul Ahmed Shareholder 1/6 A Khilgaon, Shipahibag, Main Road, Dhaka-1219

100,000 0.15%

12 Major Syed Golam Wadud (Rtd.) Shareholder 797, Ibrahimpur, Kafrul, Dhaka-1206

100,000 0.15%

13 Md. Zainul Shareholder Sena Kalyan Bhaban, Suit 1706/B (17th Floor) 195, Motijheel C/A, Dhaka-1000

100,000 0.15%

14 Zillur Rahman Shareholder House# 20 Road# 13/A Flat# A-5, Dhanmondi, R/A Dhaka

100,000 0.15%

15 Mrs. Razia Rashid Shareholder C/O Syed Golam Mostafa, 797 Ibrahimpur, Kafrul, Dhaka-1206

100,000 0.15%

16 Md. Mustafizur Rahman Shareholder House# 45, Road# 25, Gulshan

100,000 0.15%

17 Chowdhury Ashik Mahmud Bin Harun Shareholder Apt# A3, Building no. 6, Road No. 2, Chairmanbari, Banani, Dhaka

100,000 0.15%

18 Garments Export Village Ltd. Shareholder Maa Tower, KBM Road Tongi I/A, Tongi, Gazipur

100,000 0.15%

19 Mustafizur Rahman Shareholder A-7, 1/4 Block-C, Lalmatia, Dhaka-1207

100,000 0.15%

20 Afsar Uz Zaman Shareholder 29 Billatina, Road-1Nasirabad, Ctg.

100,000 0.15%

21 Mohammod Ruhul Amin Shareholder 330/E East Nakhalpara, Tejgaon, Dhaka-1208

70,000 0.11%

22 Mrs. Roseline Talukder Shareholder House# 50, Road# 1, Sector-9, UttaraModel Town, Dhaka

70,000 0.11%

23 Md. Kamal Uddin Shareholder House# 346/1/A (2nd Floor) West Rampura, Dhaka

60,000 0.09%

24 Ms Tansin Keya Shareholder 59,960 0.09%

25 Masbahul Islam Shareholder 217/2 North Shahjahanpur Dhaka

50,000 0.08%

26 Md. Ahsanul Kabir Shareholder EO, TDM, FCMD, Sonali Bank Ltd. HO, Dhaka

50,000 0.08%

27 Umma Kulsum Shareholder B-31216 Khilgaon R/A Taltola, Dhaka-1219

50,000 0.08%

28 Monowara Sultana Shareholder B-7/E-3, Officers Quarter, Ideal Zone, Motijheel, Dhaka-1000

50,000 0.08%

29 Md. Motahar Rahman Shareholder 438, Nort Shahjahanpur, Dhaka-1217

40,000 0.06%

30 Md. Sazzadur Rahman Shareholder 16/C Volatank Road, Jessore

30,000 0.05%

31 Sk. Ashrafur Rahman Shareholder 38, West, Banrandi Road, Kadamtal, Jessore

30,000 0.05%

32 Farida Zaman Irin Shareholder House# 719, West Nakhalpara, Dhaka

20,000 0.03%

33 Husne Ara Hussain Shareholder Enayatpuri ® Tower, 17 Bir Uttom K M Sha (Green Road) Dhaka

20,000 0.03%

34 Quazi Arham Uddin Shareholder One Bank Ltd. Br, Monuara Mansion, Dhohar, Dhaka

15,000 0.02%

35 Md. Abu Sayeed Shareholder 14, Chamilibag, Flat-4B Shantinaga Dhaka-1217

15,000 0.02%

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36 Md. Mahmud Hasan Shareholder 45, New Eskaton Dhaka

15,000 0.02%

37 Sheikh Hossain Zilu Shareholder Vill-Surgoan, Bardhanpara, Nawabgonj

10,000 0.015%

38 Ferdausi Begum Shareholder Korobi-9, Azimpur Judges Quarter, Dhaka

10,000 0.015%

39 Abdul Rashid Shareholder Vill- Harishkul, PO-Nawabganj, PS-Nawabganj, Dhaka

10,000 0.015%

40 Munmun Sultana Shareholder 9 Sukrabad, Dhaka-1207

10,000 0.015%

41 Bishnu Pada Paul Shareholder SNM Securities Ltd. 9/E Motijheel C/A DSE Anex Building Room-732, Dhaka

10,000 0.015%

42 Md. Tajul Islam Shareholder 88, Arambag, (5th Floor) Dhaka 10,000 0.015%

43 Muhammad Asiful Haque Shareholder 1215 Block B, Motalib Plaza, 8 Paribag, Dhaka

10,000 0.015%

44 Abdullah Al Mamun Shareholder 70 SK Mojib Road Amena Plaza (2nd Floor) Agrabad Chitagonj

10,000 0.015%

45 Badrun Nesa Khanam Shareholder 272/8 Baten Nagar, 1st Colony, Lalkuti, Mirpur-1, Dhaka-1218

10,000 0.015%

46 Mala Rani Paul Shareholder C/O SNM Securities Ltd. 9/E Motijheel C/A, DSE Annex Building,Room-732, Dhaka

5,000 0.0075%

Total 6,058,960 9.30%

Grand Total (A+B+C+D+E) 66,000,000 100%

(*As per Schedule X certified by Register of Joint Stock Companies and Firms (RJSC) as on 21/11/2010)

24

Management

25

Description of other Senior Executives and Officers

Name Designation Date of Joining in The Company

Educational Qualification

Name(s) of organization(s) where worked during the last five years

Mr. Abdul Khaleque Pathan Director & CEO 15.06.2004 S.S.C Keya Cotton Mills Limited

Mr. Syed Noorul Alam Executive Director (Finance) & Company Secretary

15.06.2004 M. Com. Keya Cotton Mills Limited

Mr. Mahbub Alam Chief Finance Officer 2.05.2010 ACA STS Group Bashundhara Group Keya Cotton Mills lImited

Mr. Shafiqul Alam Sr. General Manager (Factory)

15.06.2004 B.Sc.in Textile Engineering

Keya Cotton Mills limited

Mr. Rezaul Haque Deputy Manager (Store)

15.06.2004 M.Com Keya Cotton Mills limited

Family relationship between the Directors and Officers There is no family relationship between the Directors and Officers.

26

Financial Performance

27

Plan of operation and discussion of financial condition

Internal and external sources of cash

Internal Sources of Cash (as per audited accounts) Particulars 30-09-2010 30-06-2010 30-06-2009 30-06-2008Share Capital 660,000,000 600,000,000 247,000,000 247,000,000Share Money Deposit - - 205,000,000 -Share premium 58,200,000 - - -Tax Holiday Reserve 174,375,049 174,375,049 124,358,563 106,673,778Proposed Stock Dividend - - 148,000,000 -Retained Earnings 428,843,513 343,289,130 64,861,622 160,005,791Revaluation reserve 138,418,403 138,418,403 - -Total 1,459,836,965 1,256,082,5 789,220,186 513,679,569

External Sources of Cash (as per audited accounts) Particulars 30-09-2010 30-06-2010 30-06-2009 30-06-2008Long term Loan /Term Loan 669,508,545 676,403,865 444,164,154 604,034,004Short term Loan 731,321,199 844,455,079 652,001,221 455,430,048Current Portion of Long term Loan 128,294,407 99,024,770 - -Lease Liability - - 143,854,865 175,125,625Accepted Liability - - - 101,405,145Total 1,529,124,151 1,619,883,7 1,240,020,2 1,335,994,82 Causes for material changes from period to period The Company's income, Cost of Goods Sold, other operating Expense and net income are change over the 2008 to 2010 due to demand volatility in the global market and increase completion in the local market. The following Table shows the year to year financial performance of the Company.

[as per audited accounts] Particular Sept. 2010 June 2010 June 2009 June 2008 Taka Taka TakaTurnover 376,362,632 1,367,320,735 1,017,981,403 1,409,963,522Cost of Goods Sold 271,001,634 (988,821,370) (786,726,094) (1,121,168,971)Gross Profit 105,360,998 378,499,365 231,255,309 288,794, 551Less Operating and Financial Expenses 42,706,481 (190,851,109) (160,646,056) (159,772,126)Total Operating Profit/(Loss) 62,654,517 187,648,256 70,609,253 129,022, 425Add non operating Income 50,489,408 197,883,106 3,666,846 32,500Net Profit before WPPF 113,143,926 385,531,362 74,276,099 129,054,925Provision for WPPF 2,983,548 (10,717,818) (3,536,957) (6,145,473)Net Profit before Tax 110,160,377 374,813,544 70,739,142 122,909,452Provision for Income Tax 16,524,056 (77,763,633) (198,525) (4,875)Provision for deferred Tax 8,081,937Provision for tax Holiday Reserve - (50,016,486) (17,684,785) (49,163,781)Net Profit for the year 85,554,383 247,033,425 52,855,831 73,740,796 Financial lease commitment The following machines have been procured from the Phoenix Finance and Investment Limited (Formerly Phoenix Leasing Co Ltd.), Union Capital Limited and LankaBangla Finance Limited on financial lease commitment basis: Sl. No.

Name of Machine Quantity Lease taken From

01 Machinery Ring Frame 01 unit Phoenix Finance and Investment Limited (Formerly Phoenix Leasing Co Ltd.)

02 Machinery Ring Frame 01 unit Union Capital Ltd. 03 Machinery Ring Frame 01 unit LankaBangla Finance Ltd.

Details of financial lease is as follows (as per audited accounts as on 30 September 2010)

Sl. No.

Name of Leasing Company

Rate of Interest

Sanction Date

Expiry Date

Installment amount (Tk.)

Total Installment (Monthly basis)

Total Lease Amount (Tk.)

Outstanding Amount (Tk.)

Remarks

01 Phoenix Leasing Co. Ltd.

18.00% 15-Feb-07 17-Feb-12

1,411,954 60 84,717,240 Nil Fully paid

02 Union Capital Ltd.

17.50% Jan-07 31-Dec-11

1,919,850 60 80,000,000 Nil Fully paid

03 LankaBangla Finance Ltd.

17.50% 25-Apr-08 25-Mar-13

1,250,910 60 50,000,000 Nil Fully Paid

28

Transactions with holding /subsidiary company or associate company and the Issuer

The issuer has no holding/subsidiary company. So no transaction was arise in this respect during the year 2009-2010. Considering voting right of 20% or more in another company there are only two companies namely Keya Spinning mills Limited and Khaleque Knitting & Garments Ind. Ltd. are the associate company of Keya Cotton Mills Limited as per Para 4 of BAS 28. The shareholding Structure in two companies is given below: Sl No Name of the Company Shareholding Percentage 01 Keya Spinning Mills Limited 21.74%02 Khaleque Knitting & Garments Ind. Ltd. 20.15% Besides this, there exist common directorship in some companies which considered as related party such as: Sl No Name of the Company Shareholding Percentage by keya

Cotton Mills Limited in the Company 01 Keya Knit Composit Limited 31.37% 02 Keya Cosmetics Limited NA 03 Keya Detergent Limited NA 04 Keya Soap Chemicals Limited NA 05 Khaleque & Co (Pvt.) Ltd. NA 06 Keya Sweaters Limited NA 07 Keya Yearn Mills Limited 5.73% 08 Khaleque Knitting & Garments Ind. Ltd. 10.46% The transaction has been made during the accounting period with above companies as follows: Particulars Nature of

relationship Nature of Transaction

Transaction amount during the year

Rate of Interest

Date of Loan

Date of Maturity of Loan

Issuer Status

Khaleque Knitting & Garments Inds. (Pvt.) Ltd.

Associate Company & Common Directorship

Yarn Importer through BTB L/C (Yarn sales )

na

NA NA NA na

Keya Spinning Mills Limited

Associate Company & Common Directorship

Emergency Raw Cotton Loan (Loan given/taken)

na

NA na na na

Keya Knit Composite Ltd.

Common Directorship

Yarn Importer through BTB L/C (Yarn sales )

277,426,952

NA NA NA Debtor

Keya Cosmetics Limited

Common Directorship

NA NA NA NA NA NA

Keya Detergent Limited

Common Directorship

NA NA NA NA NA NA

Keya Soap Chemicals Limited

Common Directorship

NA NA NA NA NA NA

Khaleque & Co (Pvt.) Ltd.

Common Directorship

NA NA NA NA NA NA

Keya Sweaters Limited

Common Directorship

NA NA NA NA NA NA

29

Keya Yearn Mills Limited

Shareholder & Common Directorship

NA NA NA NA NA NA

Khaleque Knitting & Garments Ind. Ltd.

Shareholder & Common Directorship

NA NA NA NA NA NA

Description of property The Company has setup its factory at Jarun, Konabari, Gazipur and has also setup a liaison office at Apt.# 6/13,.Priyo Prangon Tower, House # 19, Road # 17, Kemal Ataturk Avenue, Banani, Dhaka. The Company possesses the following fixed assets:

(As per audited accounts) As on 30.09.2010 As on 30.06.2010 As on 30.06.2009

Sl. No Name of the Assets Amount in Tk. Amount in Tk. Amount in Tk.

01 Land & Land Development 228,112,498 228,112,498 89,596,345

02 Building & Other C i

112,787,170 140,517,441 139,826,941

03 Plant & Machinery 927,058,772 1,296,958,637 1,296,958,637

04 Office Equipment 275,645 411,002 360,702

05 Furniture & fixture 41,456 61,729 61,729

06 Elct. & Gas Line Installation 10,151,796 15,956,211 15,956,211

07 Sundry Assets 1,204,184 1,884,097 1,884,097

08 Vehicle 6,215,354 14,776,614 14,776,614

Total 1,285,846,875 1,698,678,229 1,559,421,276

1. The plant and other property as shown above are located at Jarun, Konabari, Gazipur and are purchased in brand new condition. 2. The properties of the company have been owned by the company through own financing and lease & loan financing. 3. The entire property is owned by the company. The Company avail bank loan against mortgage of property from the National

Bank Limited in order to repay lease liability of different NBFIs which was taken earlier. The entire project of Keya Cotton Mills Limited are registered mortgaged to National Bank Limited, Gulshan Branch, Dhaka an amount of Tk. 75.85 crore.

4. The company acquired plant and machinery by lease financing but subsequently the company repay the lease liability. Currently the company has no lease liability against any property in this respect.

Revaluation of Assets The company revalued its fixed assets (land) for the 1st time in the year 2010 as per Board Resolution dated on 3rd May 2010 Reserve is created by the sum of revaluation surplus and transferred the equal amount to the equity as per the provision of BAS-16. Name of the Valuer Company : Asian Surveyors Limited Name of the Valuer : K.C. AICH The particulars about the valuation team is presented below: Sl No Name of the Valuation team member Qualification 01 Mr. K.C. AICH Science Gradute 02 Mr. Jotirmoy Bhattacharjee Civil Engineering 03 Mr. M. Alauddin Mechanical Engineering

from UK 04 Mr. Fatullahil Azim Chowdhury Masters Degree

Some of mentionable Valuation works completed by Asian Surveyors Limited Sl No Name of the Company for which

revaluation of Assets was done 01 James Finley 02 ACI Ltd 03 Sonargaon Hotel 04 Square Pharmaceuticals 05 Ashuganj Thermo Power Station 06 Jamuna Fertiliser Factory Limited 07 Zia Fertiliser Factory Limited 08 Palash Urea Fertiliser Factory Reasons for valuation To ascertain current value of the land valuation was conducted by the company.

30

Auditors Disclosure regarding revaluation of fixed asset The first revaluation of the company was made on 22 June 2010 by the Asian surveyor Limited . The report was signed by the Mr. K.C. AICH, Executive Director of Asian Surveyor Limited.The valuation has been made for reflection of actual value of asset. The revalued amount was incorporated in the accounts as on 30 June 2010. The summary of revaluation is shown below: Particulars of Asset Book Value as on

30.06.2009 Addition during the year

Revaluation Surplus as on 30.06.2010

Revalued Book Value as on30.06.2010

Land 89,596,345 97,750 138,418,403 228,112,498 Summary of Valuation Report

Sl. No.

Particulars of Assets Asset Value before revaluation (Amount in Tk.)

Asset Value After revaluation (Amount in Tk.)

A. Land 89,694,095 228,112,498

Tangible Assets per Share of Keya Cotton Mills Limited as on 30 September 2010

Particulars Amount in (Tk.)

Share Capital 660,000,000

Reserve and Surplus (including revaluation reserve) 741,636,965 Share Premium 58,200,000

Total shareholder’s equity 1,459,836,965

No. of Paid-up ordinary shares as on 30th September 2010 66,000,000

Net Tangible Assets per Ordinary Share (considering re-valuation reserve) 22.12 (1,459,836,965/ 66,000,000)

Net Tangible Assets per Ordinary Share (without re-valuation reserve) 20.02 (1,459,836,965-138,418,403)/66,000,000

Face Value of Share 10.00

A Special report regarding any allotment of shares to the Directors and Subscribers to the Memorandum of Association and Articles of Association for any consideration otherwise

than for cash

Paid up capital structure of Keya Cotton Mills Limited stands as on 30 June 2010: A) Considering Cash:

Paid-up capital as on

existing New allotment Total paid up (No of Share)

Face value Amount in Tk.

15-06-2004

100,000 nil 100000 100/- 10,000,000

23-06-2008 100,000 2,370,000 2,470,000 100/- 2,470,00,000 02-03-2010 24,700,000 20,500,000 45,200,000 10/-* 452,000,000

*The Board of Directors in its meeting held on 13th September 2008 decided to denominated face value of share from existing Tk. 100 to Tk. 10 per share. Subsequently the shareholders of the company in the EGM held on 13 September 2008 unanimously approved the change in face value of share.

31

B) Otherwise than Cash

Paid-up capital as on

existing New allotment Total paid up (No of Share)

Face value Amount in Tk.

21-11-2010* 45,200,000 14,800,000 (Bonus Share)

66,000,000 10/- 660,000,000

• *As per Schedule X

The Paid Up Capital of the Company as on 30th June 2010 stands at Tk. 600,000,000, i.e., 60,000,000 nos. ordinary share @ Tk. 10 per share. The Board of Directors in its meeting held on 5th June, 2010 decided to raise paid up capital through capital raising by issuing 6,000,000 shares of Keya Cotton Mills Limited. Subsequently the company applied to Securities and Exchange Commission (SEC) on 15 June 2010 for capital raising. Upon getting Consent from the Securities and Exchange Commission (SEC) vide their letter no SEC/IPO/CPLC-161/2008/50 Date: June 27, 2010 the share money by way capital raising of Tk. 120,000,000 (i.e.,6,000,000 ordinary shares of Tk. 20 each including premium of Tk.10 per share) fully collected and deposited the same in the Southeast Bank Limited & National Bank Ltd. All the related returns filed to The Registrar of Joint Stock Companies and Firms and certified copy withdrawn respectively. The paid up capital of the Company thus stands at Tk.660,000,000, i.e 66,000,000 nos. of Ordinary share @ Tk. 10 per share.

VAT, income tax, customs duty or other tax liability

VAT The project of The Company is 100% export oriented. Government of Bangladesh has declared that there is no VAT on 100% export oriented project

Income Tax The company has enjoyed Tax holiday for 4 (four) years from the date of 1st February 2006, which already expired on 31st January 2010. Therefore, Tax holiday reserve has been made for 7 month at the rate of 25% in respect of business income/Operating Income and Provision for income tax has been charged on 37.5% on total income. Tax Status of the Company are as follows:

Income Year Assessment Year Status Remarks 2005-06 2006-07 The Company is enjoying Tax Holiday

for the period of 4 years* No Tax demand

2006-07 2007-08 Do Do 2007-08 2008-09 Do Do 2008-09 2009-10 Do Do 2009-10 2010-11 Up to 31.01.2010 Tax holiday.

After that provision for Income Tax Tk. 77,763,633 has been made for last 5 months including deferred Tax of Tk. 63,983,255

No return submitted for the assessment year 2010-11

Custom duty or other liabilities There are no dues outstanding on account of custom duty.

32

Industry Overview and Risk

33

Industry overview

Textile sector of Bangladesh is playing a very important role in the economic development of the country by earning huge foreign exchange which is next to wage earners remittance. Besides creation of employment opportunities and supporting government policy of poverty alleviation, textile sector has become the accelerator of economic growth. Over more than a decade, the sector experienced significant development and export earnings of textile and clothing increased considerably. The knitwear sector’s export earnings stood at $ 6.4 billion while woven’s was $6.1 billion during the last year. Keeping the momentum, Bangladesh has already become one of the major suppliers of clothing in EU market. The sector also has remarkable contribution to GDP (around 10%) as around 77% of the export earnings come from this sector. At this moment 100% demand for raw materials for knit RMG are being met by local sources side by side it fulfills the requirements for domestic fabric and yarn. Since after liberation, the number of spinning mills gradually increased over the years. The country has 1350 textile mills with cumulative investment of TK. 400 billion which is the biggest industrial sector. Spindle capacity increased to 7.2 million having yarn production capacity of 1600 million kg. Loom capacity also increased to 5000 million having fabric production capacity of 1600 million meters. Considerable size of backward linkage industry has been established for which knit sub sector also achieved phenomenal growth. The achievement so far made was possible due to permitting textile machinery at zero duty/tax and other incentives. However, due to significant involvement of capital machineries, the sector, on an average, is highly leveraged having 70% borrowing in the capital structure. Bangladesh also emerged as a significant supplier of Denim cloths and Home textile products to the European market. This has become possible due to availability of local raw materials-particularly cotton yarn which are being produced mainly from waste cotton. In spite of that Denim fabric manufacturers are experiencing problems due to no specific rate of wastage for denim fabric, high duty/tax of spare parts of denim machines, delay in obtaining utilization permission (UP), delay in realizing money from exported fabrics etc. The demand for clothing continues to be in increasing trend due to increased population. However, the production of yarn and cloths are not being increased in line with demand resulting to considerable demand-supply gap. However, due to irregular gas supply, textile production started reducing which resulted to maximum 50% production loss. The problem started since March 2009 and nowadays has reached to worst situation in Dhaka, Chittagong, Gazipur, Savar and Narayangonj zones. At the time of recovering from the impact of global recession, the gas crisis has been a big menace for the sector which can even cause the loss of the international market. Despite the fact, we have ample scope to consolidate the sector to explore maximum benefit out of it for which fair deal by the government in terms of infrastructure, utilities, policies, financial support and necessary market protection from illegal entry of textile raw materials and finished good is required.

Risk factors & Management perceptions about the risks

The Company is operating in a field involving a great deal of external/internal risk factors and the management of Keya Cotton Mills Limited perceives the risk factors which are as follows simultaneously: -

Interest rate risks Interest rate risk arise due to fluctuation of interest rate in money market. Volatility in money market and increased demand for loan presses on interest rate structure to be fixed in high. Rising of interest rate increases the cost of fund for a company, which have borrowed fund, and consequently profit is squeezed. Management perception Although the company has availed loan facilities from financial institutions, management of the Company is expectant that interest rate fluctuation will not deeply affect profitability of the company. On the other hand, the company is going to raise fund from capital market for repayment of loan, which will further reduce their interest rate risk exposure.

Exchange rate risks Devaluation of local currency against major international currencies affects business performance of import based companies or companies borrowed in foreign currency adversely. Management perception Import of the machinery/raw materials may be affected by the local currency devaluation.

Industry risks The company is operating in a highly competitive industry. Textile is the largest industrial sub-sector in Bangladesh. It contributes highest in the country’s total export earnings, gives employment to over four million people, meets the second basic need for clothing of the country and contributes around 50% of the industrial value addition. But after phasing out of the MFA, the global textile trade is now free from quota restriction. The phasing out of MFA has created a tough competitive environment, where Bangladesh is now competing the countries like China, India, Pakistan, Indonesia, Thailand, Vietnam etc. countries that is very strong in production of textile goods. All sectors of the textile industry face many of the same challenges. These problems include lack of power, obsolete technology, low capacity utilization, lack of machinery maintenance, a workforce that is not adequately trained, problems with labor unrest and militancy, political unrest causing disruption such as hartals, and a lack of working capital.

34

Management perception The textile industry in Bangladesh has grown in an unplanned manner and a critical demand-supply gap has arisen for both yarn and fabric. The crisis will naturally deepen unless appropriate backward linkages, the incorporation of the fundamental steps in the textile industry all through to the RMG industry, can be built to meet the rapidly approaching challenges in the global textile market. As the population is growing and the standard of living is increasing in Bangladesh, the demand for textiles is increasing rapidly. This presents an urgent need to dramatically increase capacities in spinning, weaving, knitting, dyeing, printing and finishing sub-sectors. This will require the adoption of the most modern and appropriate technology to ensure quality products at competitive prices. In recent years, there has been a great deal of private initiative regarding investment in the backward linkage industries, taking advantage of the low cost of labor and power in the country and high local demand. The private sector investment in this sector, further boosted by government's various incentives, is likely to take the backward linkage industries to a better position where they can provide the necessary competitiveness to the entire textile industry to survive successfully in the free world market.

Market and technology related risks

(i) Market related risks

Serving as a backward linkage, the spinning industry depends heavily on export-oriented knitting and weaving industries. Any fall in demand of the latter in the export market will naturally cause shrinking of the market for spinning industry. Management perception The country enjoys Most Favored Nation status and has signed bilateral trade and investment treaties with 16 countries in North America, Asia and Europe. Investors can also take advantage of the generalized-system of preference (GSP) which allows duty-free access to the European Markets. Since 1990, the Government has embarked on a highly successful macroeconomic, stabilization program with balance of payments much improved, foreign exchange reserves and export earnings increased.

(ii) Technology related Risk: Technology always plays vital role for existence of any industrial concern. Innovation of new and cost effective technology may obsolescence existence technology, which may cause negative impact. Management perception The project is equipped with world’s modern and latest machinery and technology and to cope with the pace in harmony with modern textile world the Company is continuing modernization program of its machinery.

Potential or existing government regulations: The Company operates under companies act, taxation policy adopted by NBR, Security and Exchange Commission (SEC)’s rules and rules adopted by other regulatory organizations. Any abrupt changes of the policies formed by those bodies will impact the business of the Company adversely. Management perception Unless any adverse policies are taken, which may materially affect the industry as a whole; the business of the Company will not be affected. Government emphasizes on the growth of Yarn Industry to boost up the export of RMG. Yet the promoters and the sponsors have endeavor to convince the policy makers for adopting favorable terms & conditions, which will eventually help the yarn manufacturers of Bangladesh to compete with the low cost locations in the global arena.

Potential changes in global or national policies The performance of the company may be affected by the political and economical instability both in Bangladesh and worldwide. Any instance of political turmoil and disturbance in the country may adversely affect the economy in general. Management perception The company can prosper in a situation of political stability and a congenial business environment. Political turmoil and the disturbance are bad for the economy and so also for us.

Operational Risk Difficulty in raw material import, increase of raw material price, strikes or other disruption within production premise may hinder regular flow of operational activities. Competitive condition in the Business The textile industry in Bangladesh has grown in an unplanned manner and a critical demand-supply gap has arisen for both yarn and fabric. The crisis will naturally deepen unless appropriate backward linkages, the incorporation of the fundamental steps in the textile industry all through to the RMG industry, can be built to meet the rapidly approaching challenges in the global textile market. As the population is growing and the standard of living is increasing in Bangladesh, the demand for textiles is increasing rapidly. This presents an urgent need to dramatically increase capacities in spinning, weaving, knitting, and dyeing, printing, and finishing sub-sectors. This will require the adoption of the most modern and appropriate technology to ensure quality products at competitive prices.

All sectors of the textile industry face many of the same challenges. These problems include lack of power, obsolete technology, low capacity utilization, lack of machinery maintenance, a workforce that is not adequately trained, problems with labor unrest and militancy, political unrest causing disruption such as hartals, and a lack of working capital.

35

The textile industry in Bangladesh is growing rapidly from last two decades. Number of companies are operating in our country which creates intense competition in the industry. The major market competitors of the textile industry are as follows:

Sl. No.

Name of the Company

01 Metro Spinning Ltd. 02 Arif Knit Spin Ltd. 03 Amber Cotton Mills Ltd. 04 Hanif Spinning Mills Ltd. 05 MSA Spinning Mills Ltd. 06 Square Spinning Mills Ltd. 07 Shamsudding Spinning Mills Ltd. 08 Shameem Spinning Mills Ltd. 09 R. K. Spinning Mills Ltd. 10 Gulshan Spinning Mills Ltd. 11 Malek Spinning Mills Limited 12 Maksons Spinning Mills Limited

36

General Information

37

Lock-in on Sponsors’ Shares

All issued shares of the issuer at the time of according consent to public offering shall be subject to a lock-in period of three years from the date of issuance of prospectus or commercial operation, whichever comes later.

Provided that the persons, other than Directors and those who hold 5% or more, who have subscribed to the shares of the Company within immediately preceding two years of according consent, shall be subject to a lock-in period of one year from the date of issuance of prospectus or commercial operation, whichever comes later.

G. Shareholding Above 5% of the Directors- Lock In period 03 years

Sl. No.

Name of Shareholder Status No. of Shares hold

Amount Taka

% of holdings

Last Allotment date

Date of Issuance of Prospectus

Period of Lock In from the Date of Issuance of Prospectus

01 Mr. Abdul Khaleque Patahn Director & CEO

25,730,120 257301200 38.99% 2/03/2010 03 years

Total 25,730,120 257301200 38.99%

H. Shareholding below 5% of the Directors- Lock in period 03 years

Sl. No.

Name of Shareholder Status No. of Shares

hold

Amount Taka

% of holding

s

Last Allotment date

Date of Issuance of Prospectus

Period of Lock In from the Date of Issuance of Prospectus

01 Mrs. Feruza Begum Director 20,000 200,000 0.03% 2/03/2010 03 years 02 Mrs. Khaleda Pervin Director 79,960 799,600 0.12% 2/03/2010 03 years 03 Mr. Masum Pathan Director 79,960 799,600 0.12% 2/03/2010 03 years Total 179,920 1,799,200 0.27%

I. Shareholding Above 5% of Subscriber to the Memorandum and/or General Shareholder- Lock in period 03 years

Sl. No.

Name of Shareholder Status No. of Shares

hold

Amount Taka

% of holding

s

Last Allotment date

Date of Issuance of Prospectus

Period of Lock In from the Date of Issuance of Prospectus

06 Keya Cosmetics Limited General Shareholder 6,300,810 63,008,100 9.55% 2/03/2010 03 years

07 Khaleque knitting & Garments Industries (Pvt.) Ltd.

Subscriber to the

Memorandum 1,330,2267 133,022,670 20.15%

2/03/2010 03 years

08 Keya Spinning Mills Limited Subscriber to

the Memorandum

14,346,963 143,469,630 21.74% 2/03/2010 03 years

33,950,040 339,500,400 51.44%

J. Shareholding below 5% of Subscriber to the memorandum and/or General Shareholder- Lock In 03 year

(Subscription of Share beyond 02 years of Issuance of Prospectus)

Sl. No.

Name of Shareholder Status No. of Shares hold

Amount Taka

% of holdings

Last Allotment date

Date of Issuance of Prospectus

Period of Lock In from the Date of Issuance of Prospectus

01 Khaleque & Co (Pvt. ) Ltd

Subscriber to the

Memorandum

79,960 799,600 0.12% 2/03/2010 03 years

Total 79,960 799,600 0.12%

38

K. Shareholding below 5% of General Shareholder- Lock In 01 year

(Subscription of Share within 02 years of Issuance of Prospectus)

Sl. Name of Investor (s) No. of Shares Amount % of holdings

Last Allotment date

Date of Issuance of Prospectus

Period of Lock In from the Date of

Issuance of Prospectus

1 Tajul Islam 1,500,000 1,500,00,00 2.27% 26/08/2010 01 year

2 M A Kashem 1,500,000 1,500,00,00 2.27% 26/08/2010 01 year

3 Nazmul Ahsan Farid 250,000 250,00,00 0.38% 26/08/2010 01 year

4 Nayma Mehrin 250,000 250,00,00 0.38% 26/08/2010 01 year

5 Md. Shariful Islam 200,000 200,00,00 0.30% 26/08/2010 01 year

6 Sarder Munsef Hossain 150,000 150,00,00 0.23% 26/08/2010 01 year

7 Kamrun Nahar 140,000 140,00,00 0.21% 26/08/2010 01 year

8 Shaarat Fasion Wear Ltd. 120,000 120,00,00 0.18% 26/08/2010 01 year

9 Mominul Islam Sangram 110,000 110,00,00 0.17% 26/08/2010 01 year

10 One Multipurpose Co-operative Society Ltd. 100,000 100,00,00 0.15% 26/08/2010 01 year

11 Rezaul Ahmed 100,000 100,00,00 0.15% 26/08/2010 01 year

12 Major Syed Golam Wadud (Rtd.) 100,000 100,00,00 0.15% 26/08/2010 01 year

13 Md. Zainul 100,000 100,00,00 0.15% 26/08/2010 01 year

14 Zillur Rahman 100,000 100,00,00 0.15% 26/08/2010 01 year

15 Mrs. Razia Rashid 100,000 100,00,00 0.15% 26/08/2010 01 year

16 Md. Mustafizur Rahman 100,000 100,00,00 0.15% 26/08/2010 01 year

17 Chowdhury Ashik Mahmud Bin Harun 100,000 100,00,00 0.15% 26/08/2010 01 year

18 Garments Export Village Ltd. 100,000 100,00,00 0.15% 26/08/2010 01 year

19 Mustafizur Rahman 100,000 100,00,00 0.15% 26/08/2010 01 year

20 Afsar Uz Zaman 100,000 100,00,00 0.15% 26/08/2010 01 year

21 Mohammod Ruhul Amin 70,000 70,00,00 0.11% 26/08/2010 01 year

22 Mrs. Roseline Talukder 70,000 70,00,00 0.11% 26/08/2010 01 year

23 Md. Kamal Uddin 60,000 60,00,00 0.09% 26/08/2010 01 year

24 Ms Tansin Keya 59,960 59,96,00 0.09% na 01 year

25 Masbahul Islam 50,000 50,00,00 0.08% 26/08/2010 01 year

26 Md. Ahsanul Kabir 50,000 50,00,00 0.08% 26/08/2010 01 year

27 Umma Kulsum 50,000 50,00,00 0.08% 26/08/2010 01 year

28 Monowara Sultana 50,000 50,00,00 0.08% 26/08/2010 01 year

29 Md. Motahar Rahman 40,000 40,00,00 0.06% 26/08/2010 01 year

30 Md. Sazzadur Rahman 30,000 30,00,00 0.05% 26/08/2010 01 year

31 Sk. Ashrafur Rahman 30,000 30,00,00 0.05% 26/08/2010 01 year

32 Farida Zaman Irin 20,000 20,00,00 0.03% 26/08/2010 01 year

33 Husne Ara Hussain 20,000 20,00,00 0.03% 26/08/2010 01 year

34 Quazi Arham Uddin 15,000 15,00,00 0.02% 26/08/2010 01 year

35 Md. Abu Sayeed 15,000 15,00,00 0.02% 26/08/2010 01 year

36 Md. Mahmud Hasan 15,000 15,00,00 0.02% 26/08/2010 01 year

37 Sheikh Hossain Zilu 10,000 10,00,00 0.015% 26/08/2010 01 year

38 Ferdausi Begum 10,000 10,00,00 0.015% 26/08/2010 01 year

39 Abdul Rashid 10,000 10,00,00 0.015% 26/08/2010 01 year

40 Munmun Sultana 10,000 10,00,00 0.015% 26/08/2010 01 year

41 Bishnu Pada Paul 10,000 10,00,00 0.015% 26/08/2010 01 year

42 Md. Tajul Islam 10,000 10,00,00 0.015% 26/08/2010 01 year

43 Muhammad Asiful Haque 10,000 10,00,00 0.015% 26/08/2010 01 year

44 Abdullah Al Mamun 10,000 10,00,00 0.015% 26/08/2010 01 year

45 Badrun Nesa Khanam 10,000 10,00,00 0.015% 26/08/2010 01 year

46 Mala Rani Paul 5,000 5,00,00 0.0075% 26/08/2010 01 year

Total 6,058,960 60,589,600 9.30%

Grand Total (A+B+C+D+E) 66,000,000 660,000,000 100%

39

Refund of Subscription Money

As per SEC Notification Dated February 9, 2010, the issuer shall refund application money to the unsuccessful applicant of the public offer by any of the following manner based on the option given by the applicant in the application form;-

a) Through banking channel for onward deposit of the refund money into the applicant’s bank account as provided in the respective application form for subscription; or

b) Through issuance of refund warrant in the name and address of the applicant as provided in the respective application form for subscription: Provided that, in case of deposit into the applicant’s bank account, the applicant will bear the applicable service charge, if any, of the applicant’s banker, and the issuer shall simultaneously issue a letter of intimation to the applicant containing, among others, the date and amount remitted with details of the bank through and to which bank such remittance has been effected.

Subsrciption by and refund to Non-Resident Bangladeshi (NRB)

1. A Non-Resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a Bank payable at Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, supported by foreign currency encashment certificate issued by the concern Bank, for the value of Securities applied for through crossed Bank cheque marking “Account Payee only”.

2. The value of Securities applied for by such person may be paid in Taka or US Dollar, UK Pound Sterling or Euro at the rate of exchange mentioned in the securities application form.

3. Refund against over subscription shall be made in the currency in which the value of securities was paid for by the applicant

through Account Payee bank cheque payable at Dhaka with bank account number, Bank’s name and Branch as indicated in the securities application form. If the applicant’s bank accounts as mentioned in their IPO Application Forms are maintained with the Bankers to the Issue and other bank as mentioned above, refund amount of those applicants will be directly credited into the respective bank accounts as mentioned in their IPO Application forms.

Availability of securities Offer 1. Shares

Particulars No. of shares Amount in Tk.A. 20% of IPO of Ordinary Shares of Tk (*) each including a premium of Tk (*) per share

shall be reserved for Eligible Institutional Investors through Book Building Method 10,000,000 (*)

B. 10% of IPO i.e. 5,000,000 Ordinary Shares of Tk (*) each including a premium of Tk (*) per share shall be reserved for Non Resident Bangladeshis.

5,000,000 (*)

C. 10% of IPO i.e. 5,000,000 Ordinary Shares of Tk (*) each including a premium of Tk (*) per share shall be reserved for Mutual Funds and Collective Investment Schemes registered with the Commission.

5,000,000 (*)

D. The remaining 60% of IPO i.e. 30,000,000 Ordinary Shares of Tk (*) each including a premium of Tk (*) per share shall be opened for subscription by the General Public.

30,000,000 (*)

Total 50,000,000 (*)

2. All shares as stated in clause 1.A, 1.B, 1.C and 1.D shall be offered for subscription and subsequent allotment by the Issuer, subject to any restriction, which may be imposed, from time to time, by the Securities and Exchange Commission.

3. Under the clause 1.A the institutional investors will be allotted securities on a prorate basis at the weighted average price of the bid that would clear the total number of securities being offered to the institutional investors.

4. The securities offered to the investors under clause 1.B, 1.C and 1.D will be at the cut off price determined during the book building process.

5. In case of over-subscription under any of the categories mentioned in 1.B, 1.C and 1.D the Issue Manager shall conduct an open lottery of all the applications received under each category separately in accordance with the letter of consent issued by the Securities and Exchange Commission.

6. In case of under-subscription under any of the 10% categories mentioned in 1.B and 1.C, the un-subscribed portion shall be added to the general public category and, if after such addition, there is over-subscription in the general public category, the issuer and the issue manager shall jointly conduct and open lottery of all the applicants added together.

7. In case of under-subscription of the public offering, the un-subscribed portion of securities shall be taken up by the underwriter(s).

8. The lottery as stated in clause (5) and (6) shall be conducted in presence of representatives form the Issuer, the Stock Exchanges, and the applicants, if there be any.

40

Application for subscription

1. Application for shares may be made for a minimum lot for 100 ordinary shares to the value of Tk. (*) and should be made on the Company’s printed application forms. Application form and prospectus may be obtained from the registered office of the Company, members of Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. or from the Bankers to the Issue. In case adequate forms are not available, applicants may use photocopied/cyclostyled/hand written/typed copies of the forms. Applications must not be for less than 100 shares. Any application not meeting this criterion will not be considered for allotment purpose.

2. Joint application form for more than two persons will not be accepted. In the case of joint application each party must sign the application form.

3. Application must be in full name of individuals or limited companies or trusts or societies and not in the name of firms, minors or persons of unsound mind. Applications from insurance, financial and market intermediary companies must be accompanied by Memorandum and Articles of Association.

4. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person which is applicable for both Non-resident Bangladeshi (NRB) as well as other than Non-Resident Bangladeshi Applicants. In case an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, whole or part of application money may be forfeited by the Commission.

5. Bangladeshi nationals (including Non-Resident Bangladeshi (NRB) nationals working abroad) and Foreign nationals shall be entitled to apply for shares.

6. Payment for subscription by investors other than Non-Resident Bangladeshi (NRB) may be made to the said branches/office of the Banks mentioned below in Cash/Cheque/Pay Order/Bank Draft. The Cheque/Pay Order/Bank Draft shall be made payable to the Bank to which it is sent and be marked “Keya Cotton Mills Limited” and shall bear the crossing “A/C Payee Only” and must be drawn on a Bank in the same town of the Bank to which application form is deposited.

7. All completed application forms together with remittances for the full amount payable on application shall be lodged by investors other than Non-Resident Bangladeshis (NRB) with any of the Branches of the Bankers to the Issue.

Description of Securities outstanding or Being Offered Dividend, voting, pre-emption rights

The share capital of the Company is divided into Ordinary Shares, carrying equal rights to vote and eligible to receive dividend in terms of the relevant provisions of the Companies Act 1994 and the Articles of Association of the Company. All shareholders shall have the usual voting right in person or by proxy in connection with, among others, election of Directors & Auditors and other usual agenda of General Meeting–Ordinary or Extra Ordinary. On a show of hand, every shareholder present in person and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present in person or by Attorney or proxy shall have one vote for every share held by him or her.

In case of any additional issue of shares for raising further capital the existing shareholders shall be entitled to Right Issue of shares of in terms of the guidelines issued by the SEC from time to time. Conversion and liquidation rights If the Company at any time issues convertible preference shares or debentures with the consent of SEC or /and other regulatory authority, such holders of security shall be entitled to convert such securities into ordinary shares if it is so determined by the company

In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to a firm, an infant or person of unsound mind.

Dividend policy

• There is no limitation to pay dividend to common or preferred stock holders because of provisions in debt instruments or otherwise.

• The profits of the Company shall be divisible among the members in proportion to the shares held by them respectively.

41

• Subject to above the Company in the General Meeting may declare a dividend to be paid to the members according to their respective rights and interests in the profits and may fix the time for payment.

• No larger dividend shall be declared than is recommended by the Directors but the Company in the General Meeting may declare a smaller dividend. No dividend shall be payable except out of the profits of the year or any other undistributed profits and no dividend shall carry interest as against the Company. The declaration of the Directors as to the amount of net profits of the Company shall (subject to the certificate of the auditors) be conclusive.

• The Directors may from time to time pay to the members such interim dividends as in their judgments the position of the Company justifies.

• A transfer of shares shall pass to the transferee the right to any dividend declared but not paid thereon before the registration of the transfer.

Other rights of Shareholders

In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for registering transfer of shares. No transfer shall be made to a minor or person of unsound mind.

The Directors shall present the financial statements as required under the law & International Accounting Standard. Financial statements will be prepared in accordance with the International Accounting Standards consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as par law and International Accounting Standard to the shareholders regarding the financial and operational position of the company.

The shareholders shall have the right to receive all periodical statement and reports, audited as well as un audited, published by the company from time to time.

In case of any declaration of stock dividend by issue of bonus shares, all shareholders shall be entitled to it, in proportion to their shareholdings, on the date of book closure for the purpose.

The Shareholders holding minimum of 10% shares of paid-up capital of the company shall have the right to requisition Extra-ordinary General Meeting of the Company as provided for in section 84 of the Companies Act 1994. Market for the securities being offered The issuer shall apply to all the Stock Exchanges in Bangladesh within seven (7) working days from the date of consent accorded by the Commission to issue prospectus. The issuer will apply at:

Dhaka Stock Exchange Limited (DSE) 9/F, Motijheel C/A, Dhaka-1000.

And

Chittagong Stock Exchange Limited (CSE). CSE Building, 1080 Sheikh Mujib Road, Chittagong.

Declaration about Listing of Shares with Stock Exchanges None of the Stock Exchanges, if for any reason, grant listing within 75 days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within fifteen days from the date of refusal for listing by the stock exchange, or from the date of expiry of the said 75(seventy five) days, as the case may be. In case of non-refund of the subscription money within the aforesaid fifteen days, the company directors, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) per month above the Company rate, to the subscribers concerned. The Issue Managers, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within seven (7) days of expiry of the aforesaid fifteen (15) days time period allowed for refund of the subscription money.

Trading and settlement regulation of the stock exchanges shall apply in respect of trading and settlement of the shares of the Company.

42

Rules and Regulation

43

Book Building Method

Book building method Book Building is a process used by companies raising capital through Public Offerings to aid price and demand

discovery. It is a mechanism where, during the period for which the book for the offer is open, the bids are collected

from institutional investors at various prices, which are within the price band approved by the Securities and Exchange

Commission. The process is directed towards only eligible institutional investors. The bidding is handled through a

uniform and integrated automated system of the stock exchanges, or any other organization as decided by the

Commission, especially developed for book building method. The offer price for initial public offering is cut-off price, the

lowest price offered by the bidders at which the total issue is exhausted.

The steps including book building method are as under:

a) Issuer shall invite for indicative price offer from the eligible institutional investors through proper disclosure,

presentation, document, seminar, road show, etc.;

b) Issuer in association with issue manger and eligible institutional investors shall quote an indicative price in the

prospectus and submit the same to the Commission with copy to the stock exchanges;

(c) Such indicative price range shall be determined as per price indications obtained from at least five eligible

institutional investors covering at least three different categories of such investors;

(d) Rationale for the indicative price must be included in the prospectus i.e. the issuer is required to disclose in

detail about the qualitative and quantitative factors justifying the indicative price;

(e) The indicative price shall be the basis for formal price building with an upward and downward band of 20%

(twenty percent) of indicative price within which eligible institutional investors shall bid for the allocated

amount of security;

(f) Eligible institutional investors bidding shall commence after getting consent from the Commission for this

purpose;

(g) If institutional quota is not cleared at 20% (twenty percent) below indicative price, the issue will be

considered cancelled unless the floor price is further lowered within the face value of security:

Provided that, the issuer’s chance to lower the price shall not be more than once;

(h) Prospectus will have to be posted on the Websites of the Commission, stock exchanges, issue manager and

issuer at least two weeks prior to the start of the bidding to facilitate investors to know about the company

and all aspect of offering;

(i) No institutional investor shall be allowed to quote for more than 10% (ten percent) of the total security

offered for sale, subject to maximum of 5 (five) bids;

(j) Institutional bidding period will be 3 to 5 (three to five) working days which may be changed with the

approval of the Commission;

(k) The bidding will be handled through a uniform and integrated automated system of the stock exchanges, or

any other organization as decided by the Commission, especially developed for book building method;

(l) The volume and value of bid at different prices will be displayed on the monitor of the said system without

identifying the bidder;

(m) The institutional bidders will be allotted security on pro-rata basis at the weighted average price of the bids

that would clear the total number of securities being issued to them;

(n) Institutional bidders shall deposit their bid with 20% (twenty percent) of the amount of bid in advance to the

designated bank account and the rest amount to settle the dues against security to be issued to them shall be

deposited within 5 (five) working days prior to the date of opening subscription for general investors;

44

(o) In case of failure to deposit remaining amount that is required to be paid by institutional bidders for full

settlement of the security to be issued in their favor, 50% (fifty percent) of bid money deposited by them

shall be forfeited by the Commission. The securities earmarked for the bidder who defaulted in making

payment shall be added to the general investor quota.

(p) General investors, which include mutual funds and NRBs, shall buy at the cut-off price;

(q) There shall be a time gap of 25 (twenty five) working days or as may be determined by the Commission

between closure of bidding by eligible institutional investors and subscription opening for general investors;

(r) Subscription for general investors shall remain open for the period as specified by the Commission;

(s) General investors shall place their application through banker to the issue; and

(t) All application money shall be kept in a separate escrow account opened with a designated bank with prior

intimation to the Commission. Issuer will not be allowed to utilize such money until all the process of issue is

completed and Commission’s consent to this effect is obtained.

Amendment in the Public Issue Rules 2006 vide the to the Securities and Exchange Commission Notification no SEC/CMRRCD/2008/186/57/Admin/--------- date August 01, 2010 states that

“(a) The issuer/issue manager shall issue invitation to the eligible institutional investors, both in writing and through publication in at least 5 (five) widely circulated national dailies, giving at least 10 (ten) working days time, to the road show/presentation/seminar indicating time and venue of such event. The invitation letter shall accompany an information document containing all relevant information covering the proposed issue of the issuer. The eligible institutional investors shall submit indicative price to the issuer/issue manager, signed jointly by the Chief Executive Officer (CEO) and the Financial Analyst, highlighting the factors taken into consideration in support of the indicative price, within the next 3(three) working days of the said road show/presentation/seminar; (b) The issuer, in consultation with the issue manager, shall quote its own indicative price in the prospectus based on the indicative prices so obtained from the eligible institutional investors: Provided that the quote of the indicative price in the prospectus shall not exceed the arithmetic mean of the price offers so obtained from the eligible institutional investors; (c) The prospectus shall simultaneously be submitted to the Commission and the stock exchanges along with the due diligence statements issued by all concerned; (d) If any issue fails to get indicative prices from at least 15 (fifteen) eligible institutional investors covering at least 3 (three) categories, including at least 5 (five) registered merchant bankers, the whole process shall be cancelled, which may be repeated with prior permission of the Commission;”.

Price discovery for determining indicative price. The price discovery process for determining indicative price of security will involve the following institutional investors registered with or approved by the Commission in this regard:-

(a) Merchant bankers excepting the issue manager concerned to the proposed issue

(b) Foreign institutional investors registered with or approved by the Commission

(c) Recognized pension funds and provident funds

(d) Bank and non-bank financial institutions under regulatory control of Bangladesh Bank;

(e) Insurance companies regulated under Insurance Act, 1938 (Act No. IV of 1938)

(f) Institutional venture capital and institutional investors registered with or approved by the Commission

(g) Stock Dealer registered with the Commission and

(h) Any other artificial juridical person permitted by the Commission for this purpose.

45

Determination of Indicative price

46

Determination of Indicative price

face value of Tk. 10 each).

I) Net Assets Value (NAV) The Net Assets Value (NAV) is based on historical accounting book value of company’s net assets. This is determined on the basis of the figures appearing in the audited balance sheet as at 30th September, 2010 as follows: 1. 2.

Property Plant and Equipment Current Assets

1,998,093,887 1,129,408,780

Total Assets (A) 3,127,502,667 1. 2.

Current Liabilities Non Current Liabilities

926,091,964 741,573,737

Total Liabilities (B) 1,667,665,701 Net Assets Value (A-B) 1,459,836,966 Numbers of Outstanding Shares 66,000,000 Net Assets Value Per Share (Taka) 22.12

II) Earning Based Value per share: The company’s operational performance and financial results reflect its growth, financial strength, earning and prospects that help investors in making informed investment decision. The operational and financial results are summarized as follows:

Financial Year (As on 30th June )

Turn Over (Tk.)

Net Profit After Tax (Tk.)

No. of Share EPS Tk. 10 Basis

2006-07 161,869,452 54,898,019 10,00,000 5.50 2007-08 1,409,963,522 73,740,796 24,700,000 3.00 2008-09 1,012,033,841 84,249,914 24,700,000 4.13 2009-10 1,367,320,735 247,033,425 60,000,000 6.41

July to Sept.* 2010

1,505,450,528 342,217,532 66,000,000 5.49

Average

1,091,327,616 160,427,937 4.91

• *Annualize Figure

The weighted average net profit after tax for the last 5 (five) years 2005-06 To 2009-10 stands at Tk 160.43 million and the weighted average EPS stands at Tk. 4.91. Market P/E as on 30 September 2010 =26.29 Sectoral P/E (Textile Sector) as on 30 September 2010=55.89 Earning based Value per share based on Market P/E as on 30 September 2010=4.91X26.29 =129.08 Earning based Value per share based on Sectoral P/E as on 30 September 2010=4.91X55.89 =274.42 Earning based Value per share based at current EPS on Market PE as on 30 September 2010=5.49X26.29 =144.33

The offering price of ordinary shares of the Keya Cotton Mills Limited is Tk. 60 each (including premium of Tk. 50 per share for

47

If we consider the share price on the basis of DSE overall price earning multiple of 26.29, the earning based value of shares of the Company at average EPS of 4.91 stands at Tk. 129.08, and the earning based value of shares of the Company at current EPS of 5.49 stands at Tk. 144.33.

III) Average market price of similar stocks: Average Market Price Sl. No. Company Name Last 1 year average price

1 Al-Haj Textile 81.44 2 BEXTEX Limited 84.34 3 CMC Kamal 36.59 4 H.R.Textile 34.81 5 Maksons Spinning Mills 93.57 6 Prime Textile 46.35 7 Rahim Textile 147.70 8 Saiham Textile 43.47 9 Sonagaon Textile 46.05 10 Square Textile 132.23

Average 74.66

From the above it is clear that market price of prospective similar companies of textile sector is on average Tk 74.66.

Determination of offering price under different methods Amount (Taka) 1. Net asset Value (NAV) per share current cost basis 22.12 2. Net Asset Value per share-Historical cost basis 20.02 3. Earning Based Value per Share based on average EPS on market PE as

on 30th September 2010 129.08

4. Earning based value per share based on current EPS as per audited accounts on market PE as on 30th September 2010

144.33

5. Average Market Price of similar shares 74.66 Average 78.04

From the above calculation the fair value of share under different method stands at Tk 78.04. After following conservative approach we considered expected price of Keya Cotton Mills Limited Tk 60 per share including Tk 50 premium per share.

48

Audited Accounts as on 30th September 2010

49

AUDITORS’ REPORT

TO THE SHAREHOLDERS OF

KEYA COTTON MILLS LIMITED

We have audited the accompanying financial statements of KEYA COTTON MILLS LIMITED, whichcomprises the Statement of Financial Position as at 30 September, 2010 and the related statement ofcomprehensive income and statement of cash flows for the year then ended, and a summary of significantaccounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewith Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Securities and ExchangesRules 1987 and other applicable laws and regulations. This responsibility includes: designing, implementing, andmaintaining internal control relevant to the preparation and fair presentation of financial statements that are freefrom material misstatement, whether due to fraud or error; selecting and applying appropriate accountingpolicies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby management, as well as evaluating the overall presentation of the financial statements.

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

Opinion:

In our opinion, the Financial Statements prepared in accordance with Bangladesh Financial Reporting Standards,give a true and fair view of the state of the company’s affairs as at 30 September 2010 and of the results of itsoperations and its cash flows for the period then ended and comply with the Companies Act 1994, the Securitiesand Exchanges Rules 1987 and other applicable laws and regulations.

Further to our opinion in the above paragraph, we state that:

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

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

(iii) the company’s Statement of Financial Position ,Statement of Comprehensive Income and its Statementof Cash Flows dealt with by the report are in agreement with the books of account and returns;

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

Sd/-

Dhaka, Chartered Accountants

50

30-Sep-10 30-Jun-10ASSETS Notes Taka Taka

Non-Current Assets 1,998,093,887 1,967,285,556

3 1,266,532,975 1,285,846,874 Pre-Production Expenses 4 2,570,244 2,937,422 Investment 5 728,990,668 678,501,260

Current Assets 1,129,408,780 1,016,462,065 Inventories 6 272,832,775 195,131,536 Current Account with Sister Concerns 7 51,868,804 31,933,076 Accounts Receivable (Annexure-I) 720,809,861 643,414,169 Investment in listed Companies Shares 8 17,887,063 4,254,884 Advance, Deposit & Prepayments 9 50,611,510 130,227,176 Cash and Cash Equivalents 10 15,398,767 11,501,224 TOTAL ASSETS 3,127,502,667 2,983,747,621

EQUITY AND LIABILITIES

Shareholders' Equity 1,459,836,965 1,256,082,582 Share Capital (Paid-up) 11 660,000,000 600,000,000 Share Premium (Net of Tax) 12 58,200,000 - Tax Holiday Reserve 13 174,375,049 174,375,049 Revaluation Reserve 14 138,418,403 138,418,403 Retained Earnings 15 428,843,513 343,289,130

Non-Current Liabilities 741,573,737 740,387,120 Long Term Loan 16 669,508,545 676,403,865 Deferred Tax Liability 17 72,065,192 63,983,255

Current Liabilities 926,091,964 987,277,919 Trade and Other Payables 18 8,598,206 8,904,665 Worker's Profit Participation Fund (WPPF) 19 15,469,844 12,486,296 Short Term Loan from Bank 20 731,321,199 844,455,079 Current Portion of Long Term Loan 21 128,294,407 99,024,770 Security Deposit 6,928 6,928 Liabilities for Expenses 22 42,401,379 22,400,181 TOTAL EQUITY AND LIABILITIES 3,127,502,667 2,983,747,621

Net Assets Value Per Share (NAV) 22.12 20.93

Sd/- Sd/- Sd/-Chairman Managing Director Company Secretary

Sd/-Dhaka Chartered Accountants

Auditors' Report to the shareholdersSee annexed report to date

These financial statements should be read in conjunction with the annexed notes

KEYA COTTON MILLS LIMITEDSTATEMENT OF FINANCIAL POSITION

as at 30th September, 2010

Property, Plant & Equipment net of accumulated depreciation

51

1 July' 2010 to

30 Sep' 2010

1 July' 2009 to 30

Sep' 2009Notes Taka Taka

Sales 23 376,362,632 312,217,645

Less : Cost of Goods Sold 24 271,001,634 227,499,233 Gross Profit 105,360,998 84,718,412

Less : Operating Expenses 2,622,682 1,833,910 Selling & Administrative Expenses 25 2,622,682 1,833,910

102,738,316 82,884,502 Less: Financial Expenses 26 40,083,799 40,513,332 Operating Profit 62,654,517 42,371,170 Add: Non-operating income 27 50,489,408 40,114,294 Net Profit before WPPF 113,143,925 82,485,464 Less:Provision for WPPF 2,983,548 2,017,675 Net Profit before Income Tax 110,160,377 80,467,789 Provision for Tax Current Tax 28 16,524,056 - Deferred Tax 29 8,081,937 - Profit available for Appropriation 85,554,383 80,467,789 Provision for Tax Holiday Reserve - 16,948,468

85,554,383 63,519,321

- -

85,554,383 63,519,321

Basic Earning per Share (EPS) (2009:Restated) 30 1.37 3.26

Sd/- Sd/- Sd/-Chairman Managing Director Company Secretary

Sd/-Dhaka Chartered Accountants

KEYA COTTON MILLS LIMITEDSTATEMENT OF COMPREHENSIVE INCOME

for the period from 1July to 30 September, 2010

Operating Profit

Auditors' Report to the shareholdersSee annexed report to date

Profit for the period

Other Comprehensive Income Total Comprehensive Income Transferredto Statement of Changes in Equity

These financial statements should be read in conjunction with the annexed notes

52

1 July' 2010 to 30 Sep' 2010

1 July' 2009 to 30 Sep' 2009

Taka TakaCASH FLOW FROM OPERATING ACTIVITIES:Cash Received from Turnover and Others 315,543,863 241,879,348 Payment for Cost and Expenses (347,939,917) (209,399,232) Receipts/(Payments) in Advance, Deposits and Prepayments 79,615,666 5,714,659 Interest Paid (37,108,800) (36,613,332) Tax Paid (1,800,000) - Net Cash Generated from Operating Activities 8,310,812 1,581,443

CASH FLOW FROM INVESTING ACTIVITIES:Investment in Shares of Listed Company (13,632,179) (65,552,071) Acquisition of Fixed Assets (85,800) - Net Cash used in Investing Activities (13,717,979) (65,552,071)

CASH FLOW FROM FINANCING ACTIVITIES:

Short Term Loan from Bank (113,133,880) 128,462,983 Increase/(decrease) in Share Capital 60,000,000 - Long Term Loan 22,374,317 (26,295,022) Short Term Loan from Sister Concern (19,935,728) (11,608,081) Share Premium 60,000,000 - Net Cash Generated from Financing Activities 9,304,710 90,559,880

Net Cash Inflow 3,897,543 26,589,252 Opening Cash & Bank Balances 11,501,224 1,197,122 Closing Cash & Bank Balances 15,398,767 27,786,374

0.13 0.06

Sd/- Sd/- Sd/-Chairman Managing Director Company Secretary

KEYA COTTON MILLS LIMITEDSTATEMENT OF CASH FLOWS

for the period from 1 July to 30 September, 2010

Operating Cash Flow Per Share

53

Share Share Tax Holiday Revaluation Retained Capital Premium Reserve Surplus Earnings

Balance as on 01-07-2010 600,000,000 - - 174,375,049 138,418,403 343,289,130 1,256,082,582

Total Comprehensive Income for the year - - - - - 85,554,383 85,554,383

Share Capital 60,000,000 - - - - - 60,000,000

Share Premium - 58,200,000 - - - - 58,200,000

Tax Holiday Reserve - - - - - - -

Balance as on 30 -09-2010 660,000,000 58,200,000 - 174,375,049 138,418,403 428,843,513 1,459,836,965

Share Share Tax Holiday Revaluation Retained Capital Premium Reserve Surplus Earnings

Balance as on 01-07-2009 247,000,000 - 205,000,000 124,358,563 - 244,255,706 820,614,269

Total Comprehensive Income for the year - - - - - 63,519,321 63,519,321

Share capital - - - - - - -

Capitalization of Profit - - - - - - -

Tax holiday reserve - - - 16,948,468 - - 16,948,468

Balance as on 30 -09-2009 247,000,000 - 205,000,000 141,307,031 - 307,775,027 901,082,058

Sd/- Sd/-Chairman

Total

For the period from 1 July to 30 September, 2009

Managing Director Company Secretary

Particulars

KEYA COTTON MILLS LIMITEDSTATEMENT OF CHANGES IN EQUITY

For the period from 1 July to 30 September, 2010

TotalShare money Deposit

Particulars Share money Deposit

54

3 Property Plant & Equipment

Land & Land Development 228,112,498 - - 228,112,498 - - - - 228,112,498 228,112,498 Building & Other Construction 140,517,441 53,500 - 140,570,941 5 27,730,271 1,410,508 29,140,779 111,430,162 112,787,170 Plant & Machinery* 1,296,958,637 6,000 - 1,296,964,637 7.5 369,899,865 17,382,464 387,282,330 909,682,307 927,058,772 Furniture & Fixture 61,729 - - 61,729 10 20,273 1,036 21,309 40,420 41,456 Office Equipment 411,002 2,300 - 413,302 15 135,357 10,423 145,780 267,522 275,645 Motor Vehicle 14,776,614 - - 14,776,614 20 8,561,260 310,768 8,872,028 5,904,586 6,215,354 Electrical & Gas Installation 15,956,211 - - 15,956,211 10 5,804,415 253,795 6,058,210 9,898,001 10,151,796 Sundry Assets 1,884,097 24,000 - 1,908,097 10 679,913 30,705 710,618 1,197,479 1,204,184 Total 1,698,678,229 85,800 - 1,698,764,029 412,831,355 19,399,699 432,231,054 1,266,532,975 1,285,846,875

Total as at 30 June' 2010 1,559,421,276 838,550 138,418,403 1,698,678,229 328,859,397 83,971,958 412,831,355 1,285,846,874 1,230,561,879

Depreciation charged for the year has been allocated as follows:

Particulars Amount (Tk.)

Factory Overhead (Note -24.2) 19,011,705 Administrative & Selling Expenses (Note -25) 387,994

19,399,699

* Total Plant and machinary is Tk. 1,296,958,637 of which amounting to Tk. 18,53,06,509 is under Finance Lease.

Particulars

Cost

Charged during the

period

As on 01-07-2010

As on 01-07-2010

Addition during the

period

As on 30-09-2010

Revaluation Gain

Depreciation

Rate %

Figures in Taka

As on 30-09-2010

Written Down Value

As on 30-09-2010

As on 30-06-2010

55

KEYA COTTON MILLS LIMITED

Notes to the Financial Statements For the period from 1 July to 30 September 2010

Legal Status and Nature of the Company Domicile, Legal Form and Country of Incorporation:

Keya Cotton Mills Limited (the “Company”) was incorporated in Bangladesh on 15 June, 2004 vide registration no. 531333428 with the Registrar of Joint Stock Companies and firms as a Public Limited Company under Companies Act, 1994.

Registered Office and Principal Place of Business: The Company’s registered office and the factory are located at Jarun, Konabari, Gazipur sadar, Gazipur.

Principal Activities and Nature of Operation:

Its principal activities and operations are production and sale (deemed export) of cotton yarn. Basis of Preparation

2.1 Statement of Compliance

These financial statements have been prepared and the disclosures of information made in accordance with the requirements of the Companies Act 1994, The Securities and Exchange Rules 1987, the listing Regulations of Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) and International Accounting Standards (IAS) as adopted by the Institute of Chartered Accountant of Bangladesh (ICAB), as Bangladesh Accounting Standard (BAS). The balance sheet and income statement have been prepared according to BAS-34 (“Interim Financial Reporting”) based on accrual basis following going concern assumption under Generally Accepted Accounting Principles and practices in Bangladesh.

2.2 Basis of Measurement

The financial statements are prepared under the historical cost convention, except land, which is measured at valuation basis.

2.3 Significant accounting policies

The specific Accounting Policies selected and applied by the company’s management for significant transactions and events that have a material effect within the framework of BAS-1 “Presentation of Financial Statements” in preparation and presentation of financial statements. The accounting policies set out below has been applied consistently to all periods presented in these financial statements.

2.4 Revenue recognition

In compliance with the requirements of BAS 18 “Revenue”, revenue is recognized only when the products are invoiced and dispatched to the customers;

2.5 Investment in Associates

In compliance with requirements of BAS-28 “Investment in Associates” Under the equity method, the investment in an associate is initially recorded at cost. Subsequently, the carrying amount of the investment is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the date of acquisition. The investor’s share of the profit or loss of the investee is recognized in the investor’s profit or loss.

2.6 Property, plant and equipment 2.6.1 Recognition and measurement

Property, Plant and Equipment are stated at their cost (except Land & Land Development) less accumulated depreciation in accordance with BAS 16 “Property, Plant and Equipment”. Cost represents cost of acquisition or construction and include purchase price and other directly attributable cost of bringing the asset to working conditions for its intended use but do not include any capitalized borrowing cost. Revaluation of Land & Land Development has done on June 22, 2010 and no depreciation is charged on Land & Land Development. Expenditure on repairs and maintenance of property, Plant & Equipment is treated as expense when incurred. Subsequent expenditure on property, Plant and Equipment is only recognized when the expenditure improves the condition of the asset beyond its originally assessed standard of performance.

Name of Company Total No. of Shares

Total Investment (in Tk.)

Percentage of Investment (%)

Keya Knit Composite Ltd. 8,15,500 8,15,50,000 31.37

56

2.6.2 Deprecation of fixed assets

Depreciation has been charged on addition from the date of acquisition date and no depreciation is provided on retirement/disposal of assets. Depreciation was computed using diminishing balance method. The costs an accumulated depreciation of depreciable assets retired or otherwise disposed of are eliminated from the assets and accumulated depreciation.

The annual depreciation rates applicable to the principal categories are: Building & other Construction 5% Plant & Machinery 7.5% Furniture & Fittings 10% Office equipment 15% Motor vehicles 20% Electrical & Gas Installation 10% Sundry Assets 10%

Depreciation has been charged to Statement of Comprehensive Income. 2.6.3 Revaluation of Fixed Assets

Basis of revaluation Valuation of land has been done on 22 June 2010 by an independent valuer (M/S.Asian Surveyors Ltd.) taking the location, size, industrial importance and the facilities available in and around into account. A local enquiry about the value of such land normally being purchased and sold in the locality has also been conducted. The revaluation report has approved by the directors’ in the Board Meeting held on 28 June’ 2010.

2.7 Borrowing costs

Interest on loan is treated in line with the requirement of BAS 23 “Borrowing Cost”. Interest on loan for ongoing projects is shown under project in progress as interest during construction (IDC) and project to date IDC is capitalized after completion of the project. Interest on loan for completed project is charged in the statement of comprehensive income as expenses in the period in which it is expired.

2.8 Measurement of lease payments

Lease payments made under finance leases (excluding cost for services such as insurance and maintenance) are recognized as expense in the statement of comprehensive income on a straight-line basis and the reduction of the outstanding liabilities as per the requirements of BAS 17- “Leases”

2.9 Valuation of inventories

Inventories comprise Raw Materials, Finished Yarn, Waste Cotton, Stores & Spares, Stores-in-transit and Work in process. They are stated at the lower of cost and net realizable value in accordance with BAS 2 - “Inventories” after making due allowance for any obsolete or slow moving item. The costs of inventories are assigned by using weighted average cost formula. Net realizable value of work in Process is determined after deducting the estimated cost of completion and estimated costs necessary to make the sale from estimated selling price.

2.10 Taxation

Tax Holiday Period & Reserve

The company enjoyed tax holiday period for 4 (four) years with effect from 1 February 2006 to 31 January 2010 (vide letter ref No-11 (11) ANU -1/2006) dated 02/05/2006. So, no Tax Holiday Reserve is required to maintain for the Reporting Period.

Current tax

Income tax is calculated and provision is made in accordance with the provisions of Income Tax Ordinance & Rules -1984. The corporate tax rate for Textile Sector is 15%. Current Tax provision has been made for Reporting Period (July to September ‘2010).

Deferred Tax Deferred tax is recognized using the balance sheet method. Deferred tax arises due to temporary difference deductible or taxable for the event or transactions recognized in the income statement

2.11 Provision

In accordance with the guidelines as prescribed by BAS 37 – ‘Provisions’ were recognized when all the following criteria are met:

When the Company has a present obligation as a result of past event; When it is probable that an outflow of resources embodying economic benefits will be required to settle the

obligation; and

57

Reliable estimates can be made of the amount of the obligation.

2.12 Employee’s Benefit Obligations Workers’ Profit Participation Fund (WPPF)

Provision for Workers’ Profit Participation Fund has been made @ 5% of net profit after charging the contribution and such contribution provided as per provision of Labour Law -2006 and payable as defined in the said law.

2.13 Contingent Assets & Capital Expenditure Commitment of the Company.

Contingent assets are current or possible asset, arising from past events and whose existence is due to the occurrence or non-occurrence of one more uncertain future event, which are not within the control of the company. But there is no Contingent Assets & Capital expenditure commitment of the company for the period ended on 30 September ’2010.

2.14 Foreign Currency Translation

Transactions denominated in foreign currencies are translated in to Bangladesh Taka and recorded at rates of exchange ruling on the date of transaction in accordance with BAS 21 - “The Effects of Changes in Foreign Currency Rates”. Foreign currency monetary assets and liabilities at the balance sheet date are translated at the rates prevailing on that date. Exchange differences at the balance sheet date are charged /credited to the Statement of Comprehensive Income, to the extent that this treatment does not contradict with the schedule XI of Companies Act 1994. This schedule required all exchanges gains and losses arising from foreign currency borrowings, taken to finance acquisition on construction of fixed assets, to be credited / charged to the cost/value of such assets.

2.15 Accounts Receivable

These are carried at original invoice amount. This is considered good and collectible, and therefore, no amount was written off as bad debt and no debt was considered doubtful to provide for.

2.16 Cash and cash equivalents

According to BAS 7 - “Statement of Cash Flows”, cash comprises cash in hand and bank deposits and, cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. BAS 1 - “Presentation of Financial Statements” provides that Cash and Cash Equivalents are not restricted in use. Considering the provisions of BAS 7 and BAS 1 cash in hand and bank balances have been considered as cash and cash equivalents.

2.17 Statement of cash flows

Statement of Cash Flows is prepared principally in accordance with BAS 7 “Statement of Cash Flows” and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules 1987 and considering the provision of Paragraph 19 of BAS 7 which provides that “Enterprise are Encouraged to Report Cash Flow From Operating Activities Using the Direct Method”.

2.18 Earnings Per Shares (EPS)

The Company calculates Earnings Per Shares (EPS) in accordance with BAS 33 “Earnings per Shares” which has been shown on the face of the Statement of Comprehensive Income.

2.19 Internal Control: The following steps have been taken for implementation of an effective internal control Procedure of the company:

A strong internal control and compliance division has been formed with a view to establish a well-designed system of internal control.

Regular review of internal audit with view to implement the suggestion of internal auditors in respect of internal control technique.

To establish an effective management system that includes planning, organization and supervising culture in the factory as well as at Head Office.

58

30-Sep-10 30-Jun-10Taka Taka

4 Pre Production ExpensesOpening 2,937,422 4,406,134 Less: Adjustment During the period 367,178 1,468,712

2,570,244 2,937,422

5 InvestmentLong Term Investment Shares ( Note: 5.1) 5,100,000 5,100,000 Long Term Investment in Associated Company (Note: 5.2) 323,890,668 273,401,260 Investment in Share Money (KYML) 400,000,000 400,000,000

728,990,668 678,501,260

5.1 Long Term Investment in SharesName of Company No. of ShareKeya Yarn Mills Ltd. 50,000 5,000,000 5,000,000 Khaleque Knitting & Garments Ind. 17,401 100,000 100,000 Total 5,100,000 5,100,000

5.2 Long Term Investment in Associated CompanyName of Company Nos.of Share

Keya Knit Composite Ltd. 815,500 81,550,000 81,550,000 Add: Share of Profit (Cumulative) 242,340,668 191,851,260 Total 323,890,668 273,401,260

6 InventoriesRaw Cotton & Packing Materials 110,952,416 32,709,836 Work-in-Process 16,759,890 16,394,690 Finished Goods 134,120,222 134,964,009 Stores & Spare Parts 11,000,248 11,063,001 Total 272,832,775 195,131,536

7Keya Knit Composite Limited 109,478,669 109,478,669 Khaleque Knitting & Garments Ind. Limited (16,215,528) (16,215,528) Khaleque & Company (Pvt.) Limited 497,543 497,543 Keya Spinning Mills Limited (10,928,732) (20,928,732) Keya Yarn Mills Limited (30,963,148) (40,898,876) Total 51,868,804 31,933,076

8 Investment in Listed Companies SharesKeya Cosmetics Ltd. 100,000 4,202,156 4,202,156 Bank Asia Ltd. 267 52,429 52,429 Dutch Bangla Bank Ltd. 1 123 123 Exim Bank Ltd. 1 9 9 Mutual Trust Bank Ltd. 1 126 126 Lanka-Bangla Finance Ltd. 1 41 41 DESCO 500 1,533,349 - Grameen Phone Limited 30,000 7,218,095 - International Leasing & FinancialServices Ltd. 1,500 3,124,861 - Prime Islami Life Ins. Co. Ltd 500 1,755,874 - Total 17,887,063 4,254,884

Total Market Value of Listed Companies Shares as on 30.09.2010 is Tk. 2,70,25,545. So, no provision has been made against these shares.

The quantity (those are possible to describe) and value of the above items are narrated in Annexure - II

Current Account with sister concerns

Management has decided to write off Preproduction expenses within next five years from the year of 2007-08.

59

30-Sep-10 30-Jun-10Taka Taka

9 Advance, Deposit & Prepayment:Advance Advance for Land 5,607,554 21,350,087 Advance income tax 857,616 474,509 Advance against Purchase 865,047 963,165 Union Capital Limited - 301,310 Materials in transit 777,291 64,147,510 Software Supply 1,680,000 1,680,000

9,787,508 88,916,581 Deposit Titas Gas 2,799,800 2,799,800 Margin Deposit in Bank 37,464,242 37,950,835

40,264,042 40,750,635 Pre-paymentsMargin for Bank Guarantee 559,960 559,960

Total 50,611,510 130,227,176

10 Cash and Cash EquivalentsCash in Hand 7,690 47,949 Cash at Bank:Current A/C A/c No.

UCBL-Motijheel Branch 11088104 3,946 3,946 Bank Asia Ltd.-Dilkusha Branch 833007161 1,126,614 7,980,225 Bank Asia Ltd.-Scotia Branch 733003484 3,350 3,350 Dutch Bangla Bank Ltd.-Gulshan Br. 116110000003203 10,001,908 765,208 Dutch Bangla Bank Ltd.-Gulshan Br. 111270078 44,076 44,076 Shahjalal Bank Ltd.-Dhaka Main Br. 11100007562 55,517 34,684 One Bank-Principal Branch 23088002 92,385 92,385 Agrani Bank-Ramna Branch 99070 151,343 151,343 Sonali Bank Ltd.-BBA Branch 33019856 267,690 361,339 HSBC - Ancor Tower Branch 77011 149 149 Standard Bank- Gulshan Branch 10024 2,544 2,543 Southeast Bank- Gulshan Branch 12601 3,609,822 1,535,364 National Bank- Gulshan Branch 9875 5,134 119,726 Krishi Bank- Kawran Bazar Branch 1696 21,313 352,151 Pubali Bank Ltd.-Principal Branch 35807 5,286 6,786

15,391,077 11,453,275

Total 15,398,767 11,501,224

11 Share CapitalAuthorized Capital25,00,00,000 Ordinary shares of Tk. 10/- each 2,500,000,000 2,500,000,000

2,500,000,000 2,500,000,000

Issued, Subscribed, and Paid-up Capital of Tk.10 eachShare Holding Position:Mr. Abdul Khaleque Pathan 257,301,200 4,797,560 Mrs. Feroza Begum 210,000 799,600 Mrs. Khaleda Pervin 799,600 799,600 Mr. Masum Pathan 799,600 799,600 Ms.Tansin Keya 589,600 - Khaleque & Co. Ltd. 799,600 799,600 Keya Spinning Mills Ltd. 58,988,660 178,469,630 Khaleque Knitting & Garments Inds. (Pvt) Ltd. 217,503,640 350,526,310 Keya Cosmetics Ltd. 63,008,100 63,008,100 Other forty five (45) Shareholders 60,000,000 - Total 660,000,000 600,000,000

60

30-Sep-10 30-Jun-10Taka Taka

12 Share Premium Account 60,000,000 -

Less: Tax Paid ( @3%) 1,800,000 - Total 58,200,000 -

13 Tax Holiday ReserveOpening 174,375,049 124,358,563 Add: Provided during the year - 50,016,486 Total 174,375,049 174,375,049

14 Revaluation ReserveOpening Balance 138,418,403 -

Revalued value of Land - 228,112,498 Less: Acquisition cost - 89,694,095

- 138,418,403 Total 138,418,403 138,418,403

15 Retained EarningsOpening 343,289,130 244,255,705 Add: Profit During the Period 85,554,383 247,033,425

428,843,513 491,289,130 Less: Capitalization of Profit - 148,000,000 Total 428,843,513 343,289,130

16 Long Term LoanTerm Loan ( Note-16.1) 669,508,545 676,403,865 Total 669,508,545 676,403,865

16.1

The above Share Premium is collected from issuance of 60,00,000 nos. Ordinary Shares @ Tk. 10 each and Income Tax @ 3% has been paid on it as per Income Tax rules.

Details of Share holding position including percentage of holding is shown in Annexure -III

The above loan received on January'2010 from National Bank Limited, Gulshan Branch. Rate of interest is 13%

and repayable by 20 equal quarterly installments of Tk.54,735,000/= each within 5 years. Main Security against

this loan is Mortgage of 481 decimal land with factory shed and building (present and future).

Collected from Share Issue (60,00,000 nos.shares @Tk.10 each)

During the period Paid up Capital increased by Tk. 60,000,000/= due to allotment of new shares at a price of Tk.20 each (including premium Tk.10 each) as per decision of the Board Meeting held on June 5, 2010 and getting approval from the regulatory authority.

During the period no revaluation of Fixed Assets has been done. As a result no revaluation reserve has createdthis period.

Addition during the period

The company has completed tax holiday tenure of five years at 31, January '2010. That is why, no reserve has been maintained against this tenure.

61

30-Sep-10 30-Jun-10

Taka Taka

17 Deferred Tax LiabilityFixed Assets (Based on Financial Statements) 1,266,532,975 1,285,846,874 Less: Fixed Assets (Based on Tax Rules) 786,098,359 859,291,842 Taxable Temporary Difference 480,434,616 426,555,032

Deferred Tax Liability (15% on Taxable Temporary Difference) 72,065,192 63,983,255 72,065,192 63,983,255

18 Trade and other payables

Adrita Enterprise 158,816 158,816 Kishan Trading Corporation 1,800 1,800 Eastern Steel Mills Limited 1,116 1,116 A.H. Enterprise 27,331 40,998 Sail International Limited - 100,200 Ananta Paper Cone Industries 839,694 859,819 STY Poly Pack Industries Ltd. 174,000 229,100 Sara Enterprise - 500,000 J.N. Paper Products 135,650 135,650 R.M.Trade Line Industries (Pvt.) Limited 236,450 233,625 Deshbandhu Polymer Limited 264,400 234,000 Rizwan Transport Agency Ltd 710,427 710,427 Silver Liner Agency 187,459 187,459 MR Enterprise 15,414 414 Phoenix Insurance Co. Limited 3,467,321 3,662,909 Bdjobs.Com - 5,880 Bhai Bhai Enterprise 14,382 14,382 Cargo Control Bangladesh Ltd. 229,245 229,245 K.M. Alam & Co. 5,000 5,000 Model Offset Printing Press 6,320 3,820 Zam Zam Filling Station - 36,608 Hassan Enterprise 1,988 1,988 Genera Automation Limited 3,000 3,000 Quality Servey Limited 75,659 75,659 Bangla Trac Limited 1,472,750 1,472,750 Executive Motors Limited 157,984 - C & F Bill Payable 412,000 -

Total 8,598,206 8,904,665

19 Worker's Profit Participation Fund (WPPF)Opening balance 12,486,296 1,768,478 Add: Provided during the year 2,983,548 10,717,818

15,469,844 12,486,296 Less: Payment during the period - - Total 15,469,844 12,486,296

Provision for Workers Profit Participation Fund has been made @ 5% of net profit after charging thecontribution but before tax of the company and is payable to workers as per provision defined in the LabourLaw 2006.

62

30-Sep-10 30-Jun-10

Taka Taka

20 Short Term Loan from BankSoutheast Bank Ltd. 311,398,887 39,465,600 Sonali Bank Ltd. - 135,947,728 Dutch-Bangla Bank Limited 95,589,115 98,330,930 Standard Bank Ltd. - 34,374,910 Bank Asia Ltd 75,380,000 14,446,958 Nationl Bank Ltd. 173,708,661 260,374,168 Agrani Bank Ltd. 68,109,518 65,919,526 Krishi Bank Ltd, Kawran Bazar Branch - 194,091,850 Prime Finance & Investment Ltd. 7,135,018 1,502,839 Eastern Bank Limited - 570 Total 731,321,199 844,455,079 Note: Southeast Bank Ltd.- LTR

National Bank Ltd.- LTR

21 Current Portion of Long TermTerm Loan ( NBL) 125,483,474 93,025,982 Lease Liability 2,810,933 5,998,788

128,294,407 99,024,770

22 Liabilities for ExpensesAudit Fee 150,000 150,000 Provision for Income Tax (Note- 22.1) 29,921,329 13,397,273 Salary & Wages 3,126,978 3,513,713 Utility Charges (Gas bill) 4,026,139 3,137,261 Provision for Interest 5,176,933 2,201,934 Total 42,401,379 22,400,181

22.1 Provision for Income TaxOpening balance 13,397,273 - Add: Provision during the period 16,524,056 13,780,378

29,921,329 13,780,378 Less: Payment during the period - 383,105 Total 29,921,329 13,397,273

The Short term loan were sanctioned by the Southeast Bank Limited (Gulshan Branch) for 180 days with arevolving limit of Taka. 360,000,000 and is usually renewed on annual basis .The interest rate is subject tochange from time to time. Such loan is secured against project finance security.

The loan against trust receipt (LTR) were sanctioned by National Bank Limited (Gulshan Branch) with a limit ofTk. 80 Crore for validity of one year and renewed on annual basis. The interest rate is 13% p.a.

63

30-Sep-10 30-Sep-09

Taka Taka23 Sales

Export 376,362,632 312,217,645 Total 376,362,632 312,217,645

24 Cost of Goods SoldRaw Material Consumed (Note-24.1) 247,166,570 382,887,364 Factory Overhead (Note-24.2) 39,933,399 38,607,553 Manufacturing Cost 287,099,970 421,494,917 Add: Opening Work in Process 16,394,690 1,994,983 Cost of goods available for Use 303,494,660 423,489,900 Less: Closing Work in Process 16,759,890 4,678,714 Less: Wastage Sales 16,576,923 16,399,996 Cost of Production 270,157,847 402,411,190 Add: Opening Finished Goods 134,964,009 118,928,915 Finished Goods available for Sale 405,121,856 521,340,105 Less: Closing Finished Goods 134,120,222 293,840,872 Total 271,001,634 227,499,233

24.1 Raw Materials ConsumedOpening Stock of Raw Materials 43,772,837 191,847,589 Add: Purchase of Raw Materials 325,346,397 192,441,939 Consumption 369,119,234 384,289,528 Less: Closing Stock of Raw Materials 121,952,664 1,402,164 Raw Materials Consumed 247,166,570 382,887,364

24.2 Factory OverheadFactory Wages, Salary & Allowances 10,502,601 10,259,587 Factory Overtime 146,559 111,783 Power & Fuel 141,760 589,840 Labour Charges - 44,343 Entertainment 90,920 65,040 Printing & Stationery 67,486 52,521 Conveyance 368 4,713 Rent, Rates & Taxes 22,200 22,200 Carriage Inward - 35,448 Repairs & Maintenance 2,812,676 1,853,447 Medical Expenses 1,583 500 Utility Charges (Gas bill) 7,135,541 5,005,308 Depreciation 19,011,705 20,562,823 Total 39,933,399 38,607,553

All the sales of the company are 100% exported and those are made against back to back L/C. During theperiod of July to September 2010, total export were US$ 55,34,745.Those sales are converted in to BDT time totime at the date of transaction rate.

64

30-Sep-10 30-Sep-09

Taka Taka25 Administrative Expenses

Salary & Allowances 225,852 353,526 Business Development 7,900 20,700 Printing & Stationery 272 1,600 Conveyance 5,400 6,027 Telephone & Fax 10,500 5,000 Directors' Remuneration 550,000 508,800 Entertainment - 63,450 Fees & Professionals 872,320 79,280 Plantation & Gardening 195,266 - Training Expenses - 7,000 Documentation - 1,700 Preproduction Expenses written off 367,178 367,178 Deprecation 387,994 419,649 Total 2,622,682 1,833,910

26 Financial ExpensesInterest on Bank & Other Financial Interest 38,845,388 39,235,141 Bank Charges and Commission 1,183,120 1,211,085 Exchange Fluctuation 55,291 67,106 Total 40,083,799 40,513,332

27 Non operating incomeShare of Profit from Associated Company (KKCL) 50,489,408 40,114,294 Total 50,489,408 40,114,294

28 Calculation of Current Tax 15% Tax on Taxable Income 16,524,056 13,397,273 20% Tax on Dividend - 383,105

16,524,056 13,780,378

29 Calculation of Deferred Tax Fixed Assets (Based on Financial Statements) 1,266,532,975 1,285,846,874 Less: Fixed Assets (Based on Tax Rules) 786,098,359 859,291,842 Taxable Temporary Difference 480,434,616 426,555,032

Deferred Tax Liability arisen 8,081,937 63,983,255 8,081,937 63,983,255

During the period Tk. 5,38,79,584/= (Tk.48,04,34,616 -Tk.42,65,55,032) has arisen as Taxable TemporaryDifference and Deferred Tax calculated on @ 15%

65

30-Sep-10 30-Sep-09

Taka Taka30 Earning Per Share (EPS):

Basic Earning Per Share The computation of EPS is given below:(a) Earning attributable to the ordinary 85,554,383 80,467,789 shareholders (Net Profit after provision for tax)

(b) Weighted average number of ordinaryshares outstanding during the period 62,282,609 24,700,000

(c) Basic EPS(After Provision for Tax) 1.37 3.26(d) Restated EPS 2.04 3.26

Earning per share (EPS) for the previous year have been restated as per BAS 33: "Earnings per share" becausesubsequent period 14,800,000 nos. shares were issued as stock dividend.

66

31 Disclosure as per requirement of schedule XI,Part - II of Companies Act. 1994

A. Employee position as per schedule XI , Part II, note 5 of Para 3 ( as on 30 September 2010)

Head Office-

4 4

B. Payment to Directors (as remuneration) as per requirement of schedule XI, Part II, Para 4

Position

Director & CEO

DirectorTotal

C. Plant Capacity and Capacity Utilization as per requirement of schedule XI, Part II, Para 7Details of Capacity has given below:

D. Disclosure as per requirement of schedule XI, Part II, Para 8Value of Raw Materials, Spare Parts and Packing Materials.

Import Total PurchaseTotal Qty. comsumed

318,198,000 318,198,000 19,03,127 kg2,589,372 3,423,177 -

- 487,200 2640 kg- 679,200 24750 pcs- 2,466,825 906830 pcs

- 91,995 - 320,787,372 325,346,397 -

Value of Export:

32 Disclosure on Related Party Transaction as per IAS-24 "Related Party Disclosure"

Types of Transaction

Yarn Export through BTB

L/C

33 Details of Lease Agreement:

Sl. Product Name

Finance Amount Lease Term

Monthly Rental

Rental PaidFuture

Payment

1Machinery Ring Frame 55,306,509 60 1,411,954 78,718,452 2,810,933

2Capital

Machinery 80,000,000 60 1,919,850 115,492,310 -

3

Machinery Roving Frame

50,000,000 60 1,250,910 75,054,600 -

34 Disclosure as per requirement of schedule XI, Part - I ( A. Horizontal Form) of Companies Act. 1994Accounts Receivable

41

Packing Materials:

5) Consideration in connection with retirement from office - Nil.

g. Pensions, etc.- 1) Pensions - Nil 2) Gratuities - Nil 3) Payment from Provident Fund - Nil

833,805 Stores & Spare Parts

Above 3000Total 569 524 41

Salary Range Officer & StaffFactory

- Below 3000

Mr. Masum Pathan

Name of Directors

350,000

200,000

1 July 2010 to 30 September 2010

Mr. Abdul Khaleqe Pathan

Worker Total Employee

13 511

13 556

3,485,930

247,166,570

382,800 569,250

2,134,923

93,299

Particulars

Raw Cotton

Local Purchase

-

Consumption

240,500,368

The above Directors of the company did not take any benefit from the company other than the remuneration anda. Expense reimbursed to the managing agent -Nil

b. Commission or other remuneration payable separately to a managing agent or his associate -Nil

550,000

1634 MT2231 MTAnnual Production of Yarn in MT

Actual Production (1 July 2010 to 30 September ' 2010)

Installed Capacity (Annual)

d. The money value of the contracts for the sale or purchase of goods and materials or supply of services, entered into bythe company with the managing agent or his associate during the financial year.

e. Any other perquisites or benefit in cash or in kind stating - Nil

f. Other allowances and commission including guarntee commission - Nil.

Particulars

c. Commission received or receivable by the managing agent or his associate as selling or buying agent of other concernsin respect of contracts entered into such concerns with the company - Nil.

4) Compensation for loss of office - Nil

HD Poly BagSynthetic BagPaper Cone

679,200 2,466,825

487,200

Sticker, Jute Twine etc. 91,995

In BDT376,362,632 Export 5,534,745

Particulars In Foreign Currency (US$)

4,559,025 Total

Transaction with related parties are priced on arm's length basis and are in the ordinary course of business.

Particulars Nature of relationship

Amount in Taka

Keya Knit Composite Ltd.

Outstanding Balance

277,426,952 148,349,011 Associated Company

Lease From

Phoenix Finance

Union Capital

9,860,000

Lanka Bangla

639,974,861 70,975,000

Customer Name

F.In regard to sundry debtors the following particulars' shall be given separately:-

( I ) Debt considered good in respect of which the company is fully secured :

(II) Debt considered good for which the company hold no security other than the debtors personal security

There is no such debt in this respect as on 30 September '2010.

The company does not make any provision for doubtful debts as on 30 September '2010, because of the fact thatsales/export are being made on 100% confirmed L/C basis with fixed maturity dates.

(IV) Debt due by directors or other officers of the companyThere is no such debt in this respect as on 30 September 2010.

(V) Debt due by Common ManagementThere are an amount of Tk.5,18,68,804/= has been due form sister company under common management as on 30September' 2010.

(VI) The maximum amount due by directors or other officers of the company

(III) Debt considered doubtful or bad

There is no such debt in this respect as on 30 September' 2010.

The above disclosures are included in 'Annexure - 1' of the accounts.

One Composite Limited

The debtores occurred in the ordinary course of business are considered good and secured against confiremed L/C.Thedetails of Accounts Receivable are given below:

720,809,861 Total

Amoount (BDT)Keya Knit Composite LimitedIslam Knit Designs Limited

67

35 Approval of the financial statements:

36 General

36.1 Comparative amounts

36.2 Presentation currency

37 Attendance Status of Directors into the Board Meeting:

Attended

3

333

38

39

Sd/- Sd/- Sd/-Chairman

Total 317,525,185

Contingent LiabilitiesThere is a contingent liability of Bank Guarantee amounted Tk 55,99,600 (Taka fifty five lacninety nine thousand and six hundred only) issued in favour of ‘Titas Gas Transmissionand Distribution Company Ltd’ from Southeast Bank Limited, Gulshan Branch.

3

Mr.Masum Pathan Director 3Mrs.Khaleda Pervin 3DirectorMr.Abdul Khaleque Pathan Director & CEO

Mrs.Feruza Begum 3ChairmanName of the Directors' Position

These financial statements were authorized for issue in accordance with a resolution of thecompany's Board of Directors on November 04' 2010.

Company SecretaryManaging Director

Wherever considered necessary previous year's figures have been restated, in order toconform to current year's presentation.

The annexed financial statements are presented in Bangladeshi currency (Taka), which havebeen rounded off to the nearest Taka.

During the period ended September 30' 2010, eleven Board Meetings were held. Theattendance status of all the meetings is as follows:

Meeting Held

Payments in Foreign Currencies:During the under review, following payments were made in foreing currencies:

Name of the item TakaRaw CottonStores & Spare Parts

314,974,654 2,550,531

68

Annexure-I

Sl No. Name of the Imorter L/C No. L/C Date L/C Value

(US $ ) L/C Value

(Tk.)

01 Keya Knit Composite Limited 134310040581 19.04.10 49,300 3,352,400 02 Keya Knit Composite Limited 134310040582 19.04.10 49,300 3,352,400 03 Keya Knit Composite Limited 134310040583 19.04.10 49,300 3,352,400 04 Keya Knit Composite Limited 134310040584 19.04.10 49,300 3,352,400 05 Keya Knit Composite Limited 134310040585 19.04.10 170,000 11,560,000 06 Keya Knit Composite Limited 134310040524 05.04.10 165,000 11,220,000 07 Keya Knit Composite Limited 134310040525 05.04.10 148,500 10,098,000 08 Keya Knit Composite Limited 134310040526 05.04.10 82,500 5,610,000 09 Keya Knit Composite Limited 134310040527 05.04.10 59,400 4,039,200 10 Keya Knit Composite Limited 134310040528 05.04.10 160,000 10,880,000 11 Keya Knit Composite Limited 134310040529 05.04.10 144,000 9,792,000 12 Keya Knit Composite Limited 134310040530 05.04.10 80,000 5,440,000 13 Keya Knit Composite Limited 134310040531 05.04.10 64,000 4,352,000 14 Keya Knit Composite Limited 020110040493 22.06.10 117,000 7,956,000 15 Keya Knit Composite Limited 020110040494 22.06.10 175,500 11,934,000 16 Keya Knit Composite Limited 020110040495 22.06.10 175,500 11,934,000 17 Keya Knit Composite Limited 020110040496 22.06.10 175,500 11,934,000 18 Keya Knit Composite Limited 020110040497 22.06.10 78,000 5,304,000 19 Keya Knit Composite Limited 020110040520 28.06.10 62,400 4,243,200 20 Keya Knit Composite Limited 020110040521 28.06.10 46,800 3,182,400 21 Keya Knit Composite Limited 020110040522 28.06.10 195,000 13,260,000 22 Keya Knit Composite Limited 020110040523 28.06.10 48,750 3,315,000 23 Keya Knit Composite Limited 020110040524 28.06.10 78,000 5,304,000 24 Keya Knit Composite Limited 020110040525 28.06.10 195,000 13,260,000 25 Keya Knit Composite Limited 020110040526 28.06.10 195,000 13,260,000 26 Keya Knit Composite Limited 020110040527 28.06.10 50,700 3,447,600 27 Keya Knit Composite Limited 020110040556 11.07.10 195,000 13,260,000 28 Keya Knit Composite Limited 020110040557 11.07.10 70,200 4,773,600 29 Keya Knit Composite Limited 020110040558 11.07.10 49,140 3,341,520 30 Keya Knit Composite Limited 020110040564 15.07.10 148,000 10,064,000 31 Keya Knit Composite Limited 020110040565 15.07.10 148,000 10,064,000 32 Keya Knit Composite Limited 020110040566 15.07.10 148,000 10,064,000 33 Keya Knit Composite Limited 020110040567 15.07.10 148,000 10,064,000 34 Keya Knit Composite Limited 020110040642 11.08.10 108,000 7,344,000 35 Keya Knit Composite Limited 020110040643 11.08.10 108,000 7,344,000 36 Keya Knit Composite Limited 020110040644 11.08.10 108,000 7,344,000 37 Keya Knit Composite Limited 020110040645 11.08.10 108,000 7,344,000 38 Keya Knit Composite Limited 020110040646 11.08.10 55,440 3,769,920 39 Keya Knit Composite Limited 020110040647 11.08.10 55,440 3,769,920 40 Keya Knit Composite Limited 020110040648 11.08.10 55,440 3,769,920 41 Keya Knit Composite Limited 100310042000 29.08.10 107,300 7,296,400 42 Keya Knit Composite Limited 100310042001 29.08.10 107,300 7,296,400 43 Keya Knit Composite Limited 100310042002 29.08.10 107,300 7,296,400 44 Keya Knit Composite Limited 100310042003 29.08.10 107,300 7,296,400 45 Keya Knit Composite Limited 100310042004 29.08.10 107,300 7,296,400 46 Keya Knit Composite Limited 100310042005 29.08.10 107,300 7,296,400 47 Keya Knit Composite Limited 100310042006 29.08.10 107,300 7,296,400 48 Keya Knit Composite Limited 100310042007 29.08.10 35,150 2,390,200 49 Keya Knit Composite Limited 100310042008 29.08.10 35,150 2,390,200 50 Keya Knit Composite Limited 100310042009 29.08.10 35,150 2,390,200 51 Keya Knit Composite Limited 100310041776 03.08.10 142,000 9,656,000 52 Keya Knit Composite Limited 100310041777 03.08.10 21,655 1,472,541 53 Keya Knit Composite Limited 100310041778 03.08.10 142,000 9,656,000 54 Keya Knit Composite Limited 100310041779 03.08.10 39,050 2,655,400 55 Keya Knit Composite Limited 134310041119 02.08.10 108,000 7,344,000 56 Keya Knit Composite Limited 134310041120 02.08.10 108,000 7,344,000 57 Keya Knit Composite Limited 134310041121 02.08.10 108,000 7,344,000 58 Keya Knit Composite Limited 134310041122 02.08.10 108,000 7,344,000 59 Keya Knit Composite Limited 134310041123 02.08.10 108,000 7,344,000 60 Keya Knit Composite Limited 134310041124 02.08.10 108,000 7,344,000 61 Keya Knit Composite Limited 134310041125 02.08.10 108,000 7,344,000 62 Keya Knit Composite Limited 134310041126 02.08.10 42,840 2,913,120 63 Keya Knit Composite Limited 134310041127 02.08.10 42,840 2,913,120 64 Keya Knit Composite Limited 134310041128 02.08.10 42,840 2,913,120 65 Keya Knit Composite Limited 20110040585 25.07.10 111,000 7,548,000 66 Keya Knit Composite Limited 20110040586 25.07.10 111,000 7,548,000 67 Keya Knit Composite Limited 20110040587 25.07.10 111,000 7,548,000 68 Keya Knit Composite Limited 20110040588 25.07.10 40,700 2,767,600 69 Keya Knit Composite Limited 20110040589 25.07.10 37,000 2,516,000 70 Keya Knit Composite Limited 20110040590 25.07.10 37,000 2,516,000 71 Keya Knit Composite Limited 100310042168 19.09.10 171,000 11,628,000 72 Keya Knit Composite Limited 100310042169 19.09.10 171,000 11,628,000 73 Keya Knit Composite Limited 100310042170 19.09.10 171,000 11,628,000 74 Keya Knit Composite Limited 100310042171 19.09.10 171,000 11,628,000

Total 515,840,181 2) Islam Knit Designs Limited

01 Islam Knit Designs Limited 796100404444 19.04.10 27,750 1,887,000 02 Islam Knit Designs Limited 796100404106 08.04.10 108,000 7,344,000 03 Islam Knit Designs Limited 796100404189 11.04.10 365,000 24,820,000 04 Islam Knit Designs Limited 796100407189 11.04.10 185,000 12,580,000 05 Islam Knit Designs Limited 796100410581 25.08.10 39,500 2,686,000 06 Islam Knit Designs Limited 796100410893 31.08.10 118,500 8,058,000 07 Islam Knit Designs Limited 796100410898 31.08.10 160,000 10,880,000 08 Islam Knit Designs Limited 796100410859 31.08.10 40,000 2,720,000

Total 70,975,000 3) One Composite Limited

01 One Composite Limited 013210041352 24.08.10 37,000 2,516,000 02 One Composite Limited 013210041573 27.09.10 108,000 7,344,000

Total 9,860,000 596,675,181

01 Keya Knit Composite Limited 134310040473 29.03.10 118,000 8,024,000 02 Keya Knit Composite Limited 134310040474 29.03.10 118,000 8,024,000 03 Keya Knit Composite Limited 134310040475 29.03.10 118,000 8,024,000 04 Keya Knit Composite Limited 134310040476 29.03.10 73,750 5,015,000 05 Keya Knit Composite Limited 134310040477 29.03.10 112,000 7,616,000 06 Keya Knit Composite Limited 134310040478 29.03.10 112,000 7,616,000 07 Keya Knit Composite Limited 134310040479 29.03.10 112,000 7,616,000 08 Keya Knit Composite Limited 134310040480 29.03.10 103,360 7,028,480 09 Keya Knit Composite Limited 134310040481 29.03.10 120,000 8,160,000 10 Keya Knit Composite Limited 134310040482 29.03.10 120,000 8,160,000 11 Keya Knit Composite Limited 134310040483 29.03.10 120,000 8,160,000 12 Keya Knit Composite Limited 134310040484 29.03.10 120,000 8,160,000 13 Keya Knit Composite Limited 134310040485 29.03.10 106,800 7,262,400 14 Keya Knit Composite Limited 134310040486 29.03.10 95,200 6,473,600 15 Keya Knit Composite Limited 134310040487 29.03.10 95,200 6,473,600 16 Keya Knit Composite Limited 134310040488 29.03.10 90,600 6,160,800 17 Keya Knit Composite Limited 134310040489 29.03.10 90,600 6,160,800

124,134,680

124,134,680

720,809,861 Grand Total (A + B)

A. Total Dues below Six (6) month

B. Dues above Six (6) Month

1) Keya Knit Composite Limited

B. Total dues above six (6) month

Accounts Receivable As on 30 September, 2010

A. Dues below Six (6) Month

1) Keya Knit Composite Limited

69

SWOT Analysis of Keya Cotton Mills Limited

70

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