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Information Memorandum

For the Initial Public Offering of


Cotton Mills Limited



Issue Manager
Prime Finance & Investment Limited
63, Dilkusha C/A (3
rd
Floor), Dhaka-1000, Phone: 9563883, Fax: 9563692
E-mail: info@primefinance.net, Website: www.primefinance.net

2











A Short Look.















3

The Project of Keya Cotton Mills Limited



The project has envisage with a green
environment

4



State of the Art technology

5



State of the Art technology


6



Research and Development

7


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 & I nvestment 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.
8

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
J arun, 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., (3
rd
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

9
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

10







Information related to Public Offer


11



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 -

12

Use of proceeds
Purpose of Public I ssue:

As per decision of Board of Directors meeting held on 3
rd
May 2010 the I PO 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 I PO 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 J arun, 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 1
st
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 I I 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 28
th
J une 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 J anuary 2012. The tentative
implementation schedule of the project is presented below:

13

I mplementation 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

J anuary 2012
Opening of L/Cs April 2011
Completion of civil works April 2011
Machinery at site J uly 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

14














Company Information









15

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
J apan, 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 J une 2004

Date of Commencement of Business : 15th J une 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)



16
As on 30th J une 2010 (Figure in Million TK.)
Name of the Companies Assets Liabilities Equity Net Income
Khaleque Knitting & Garments I ndustries
(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 (I PO) (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 (RJ SC 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 Companys products/ service

Sl No Name of the Customer
01 Keya Knit Composite Ltd., J arun, 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

17
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 J arun, 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 Laeroport-
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 IAeroport , 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.

18















Board of Directors
& Shareholders





19
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 10
th
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 todays 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 companys 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 12
th
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 14
th
May 1959 at J arun, 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, J apan, 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.

20

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

21

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 Companys 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
J arun, 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
J arun, Konabari, Gazipur
20,000 0.03%
02
Mrs. Khaleda Pervin Director
J arun, Konabari, Gazipur
79,960 0.12%
03
Mr. Masum Pathan Director
J arun, 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
J arun, Konabari, Gazipur
6,300,810 9.55%
02
Khaleque knitting & Garments Industries
(Pvt.) Ltd.
Subscriber to the
Memorandum
J arun, Konabari, Gazipur
1,330,2267 20.15%
03
Keya Spinning Mills Limited
Subscriber to the
Memorandum
J arun, 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
J arun, 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 J arun, 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%
22
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 (17
th
Floor)
195, Motijheel C/A, Dhaka-1000

140,000 0.21%
8 Shaarat Fasion Wear Ltd. Shareholder J arun , 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 (17
th
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, J essore

30,000 0.05%
31 Sk. Ashrafur Rahman Shareholder 38, West, Banrandi Road, Kadamtal, J essore

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%
23
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 J udges 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 J oint Stock Companies and Firms (RJ SC) as on 21/11/2010)

24










Management













25



Description of other Senior Executives and Officers

Name Designation Date of J oining
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
I nternal and external sources of cash
Internal Sources of Cash (as per audited accounts)
Particulars 30-09-2010 30-06-2010 30-06-2009 30-06-2008
Share Capital 660,000,000 600,000,000 247,000,000 247,000,000
Share Money Deposit - - 205,000,000 -
Share premium 58,200,000 - - -
Tax Holiday Reserve 174,375,049 174,375,049 124,358,563 106,673,778
Proposed Stock Dividend - - 148,000,000 -
Retained Earnings 428,843,513 343,289,130 64,861,622 160,005,791
Revaluation 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 30-06-2008
Long term Loan /Term Loan 669,508,545 676,403,865 444,164,154 604,034,004
Short term Loan 731,321,199 844,455,079 652,001,221 455,430,048
Current Portion of Long term Loan 128,294,407 99,024,770 - -
Lease Liability - - 143,854,865 175,125,625
Accepted Liability - - - 101,405,145
Total 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 J une 2010 J une 2009 J une 2008
Taka Taka Taka
Turnover 376,362,632 1,367,320,735 1,017,981,403 1,409,963,522
Cost 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, 551
Less
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, 425
Add non operating Income 50,489,408 197,883,106 3,666,846 32,500
Net Profit before WPPF 113,143,926 385,531,362 74,276,099 129,054,925
Provision for WPPF 2,983,548 (10,717,818) (3,536,957) (6,145,473)
Net Profit before Tax 110,160,377 374,813,544 70,739,142 122,909,452
Provision for Income Tax 16,524,056 (77,763,633) (198,525) (4,875)
Provision for deferred Tax 8,081,937
Provision 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% J an-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
Transactio
n
Transaction
amount during
the year
Rate of
I nterest
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 J arun, 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 J arun, 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 1
st
time in the year 2010 as per Board Resolution dated on 3
rd
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. J otirmoy 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 J ames Finley
02 ACI Ltd
03 Sonargaon Hotel
04 Square Pharmaceuticals
05 Ashuganj Thermo Power Station
06 J amuna 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 J une 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 J une 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 shareholders equity 1,459,836,965

No. of Paid-up ordinary shares as on 30
th
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 J une 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 13
th
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 30
th
J une 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 5
th
J une, 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 J une 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: J une 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 J oint 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 1
st
February 2006, which already expired on 31
st

J anuary 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:


I ncome 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

I ndustry 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 sectors export earnings stood at $ 6.4 billion while wovens 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. I n 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 countrys 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. I nnovation of new and cost effective technology may
obsolescence existence technology, which may cause negative impact.

Management perception
The project is equipped with worlds 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 I ndustry 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
Issuan
ce of
Prospe
ctus
Period of Lock I n
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
Prospect
us
Period of Lock I n
from the Date of
I ssuance 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
Issuan
ce of
Prospe
ctus
Period of Lock I n
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
Share
s hold
Amount
Taka
% of
holdings
Last
Allotment
date
Date
of
Issua
nce of
Prosp
ectus
Period of Lock I n from
the Date of Issuance
of Prospectus
01
Khaleque & Co (Pvt. ) Ltd
Subscriber to
the
Memorandu
m
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 applicants 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 applicants bank account, the applicant
will bear the applicable service charge, if any, of the applicants 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, Banks name and Branch as indicated in
the securities application form. If the applicants 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 Companys 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. J oint 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 MeetingOrdinary 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 I ssue 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 & I nternational 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 I ssue 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 issuers 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 Commissions 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 I ndicative 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 companys net assets. This is determined on the
basis of the figures appearing in the audited balance sheet as at 30
th
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 companys 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 30
th
J une )

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
J uly 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.


II I) 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 30
th
September 2010
129.08
4. Earning based value per share based on current EPS as per audited
accounts on market PE as on 30
th
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
30
th
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, which
comprises the Statement of Financial Position as at 30 September, 2010 and the related statement of
comprehensive income and statement of cash flows for the year then ended, and a summary of significant
accounting policies and other explanatory notes.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Securities and Exchanges
Rules 1987 and other applicable laws and regulations. This responsibility includes: designing, implementing, and
maintaining internal control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion:

In our opinion, the Financial Statements prepared in accordance with Bangladesh Financial Reporting Standards,
give a true and fair view of the state of the companys affairs as at 30 September 2010 and of the results of its
operations and its cash flows for the period then ended and comply with the Companies Act 1994, the Securities
and 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 belief
were necessary for the purpose of our audit and made due verification thereof;
(ii) in our opinion, proper books of account as required by law have been kept by KEYA COTTON
MILLS LIMITED so far as it appeared from our examination of those books;
(iii) the companys Statement of Financial Position ,Statement of Comprehensive Income and its Statement
of 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 companys business.
Sd/-
Dhaka, Chartered Accountants
50
30-Sep-10 30-Jun-10
ASSETS 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 shareholders
See annexed report to date
These financial statements should be read in conjunction with the annexed notes
KEYA COTTON MILLS LIMITED
STATEMENT 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' 2009
Notes 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 LIMITED
STATEMENT OF COMPREHENSIVE INCOME
for the period from 1July to 30 September, 2010
Operating Profit
Auditors' Report to the shareholders
See annexed report to date
Profit for the period
Other Comprehensive Income
Total Comprehensive Income Transferred
to 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 Taka
CASH 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 LIMITED
STATEMENT 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 LIMITED
STATEMENT OF CHANGES IN EQUITY
For the period from 1 July to 30 September, 2010
Total
Share 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 LI MI TED
Notes to the Financial Statements
For the period from 1 J uly 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 J une, 2004 vide registration no. 531333428
with the Registrar of J oint Stock Companies and firms as a Public Limited Company under Companies Act, 1994.
Registered Office and Principal Place of Business:

The Companys registered office and the factory are located at J arun, 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 companys 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 investors share of the
profit or loss of the investee after the date of acquisition. The investors share of the profit or loss of the investee is
recognized in the investors 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 J une 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 I nvestment
(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 I nstallation 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 J une 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 J une 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 J anuary 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 (J uly 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 Employees 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-10
Taka Taka
4 Pre Production Expenses
Opening 2,937,422 4,406,134
Less: Adjustment During the period 367,178 1,468,712
2,570,244 2,937,422
5 Investment
Long 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 Shares
Name of Company No. of Share
Keya 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 Company
Name 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 Inventories
Raw 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
7
Keya 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 Shares
Keya 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 & Financial
Services 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-10
Taka 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-payments
Margin for Bank Guarantee 559,960 559,960
Total 50,611,510 130,227,176
10 Cash and Cash Equivalents
Cash 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 Capital
Authorized Capital
25,00,00,000 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 each
Share 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-10
Taka Taka
12 Share Premium Account
60,000,000 -
Less: Tax Paid ( @3%) 1,800,000 -
Total 58,200,000 -
13 Tax Holiday Reserve
Opening 174,375,049 124,358,563
Add: Provided during the year - 50,016,486
Total 174,375,049 174,375,049
14 Revaluation Reserve
Opening 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 Earnings
Opening 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 Loan
Term 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 created
this 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 Liability
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 (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 the
contribution but before tax of the company and is payable to workers as per provision defined in the Labour
Law 2006.

62

30-Sep-10 30-Jun-10
Taka Taka
20 Short Term Loan from Bank
Southeast 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 Term
Term 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 Expenses
Audit 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 Tax
Opening 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 a
revolving limit of Taka. 360,000,000 and is usually renewed on annual basis .The interest rate is subject to
change from time to time. Such loan is secured against project finance security.
The loan against trust receipt (LTR) were sanctioned by National Bank Limited (Gulshan Branch) with a limit of
Tk. 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 Taka
23 Sales
Export 376,362,632 312,217,645
Total 376,362,632 312,217,645
24 Cost of Goods Sold
Raw 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 Consumed
Opening 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 Overhead
Factory 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 the
period of July to September 2010, total export were US$ 55,34,745.Those sales are converted in to BDT time to
time at the date of transaction rate.

64

30-Sep-10 30-Sep-09
Taka Taka
25 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 Expenses
Interest 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 income
Share 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 Temporary
Difference and Deferred Tax calculated on @ 15%

65

30-Sep-10 30-Sep-09
Taka Taka
30 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 ordinary
shares 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" because
subsequent 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
Director
Total
C. Plant Capacity and Capacity Utilization as per requirement of schedule XI, Part II, Para 7
Details of Capacity has given below:
D. Disclosure as per requirement of schedule XI, Part II, Para 8
Value of Raw Materials, Spare Parts and Packing Materials.
Import Total Purchase
Total Qty.
comsumed
318,198,000 318,198,000 19,03,127 kg
2,589,372 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 Paid
Future
Payment
1
Machinery
Ring Frame 55,306,509 60 1,411,954 78,718,452 2,810,933
2
Capital
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. 1994
Accounts 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 3000
Total 569 524 41
Salary Range
Officer & Staff
Factory
- 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 and
a. 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 MT 2231 MT Annual 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 by
the 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 concerns
in respect of contracts entered into such concerns with the company - Nil.
4) Compensation for loss of office - Nil
HD Poly Bag
Synthetic Bag
Paper Cone
679,200
2,466,825
487,200
Sticker, Jute Twine
etc. 91,995
In BDT
376,362,632 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 that
sales/export are being made on 100% confirmed L/C basis with fixed maturity dates.
(IV) Debt due by directors or other officers of the company
There is no such debt in this respect as on 30 September 2010.
(V) Debt due by Common Management
There are an amount of Tk.5,18,68,804/= has been due form sister company under common management as on 30
September' 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.The
details of Accounts Receivable are given below:
720,809,861 Total
Amoount (BDT)
Keya Knit Composite Limited
Islam 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
3
3
3
38
39
Sd/- Sd/- Sd/-
Chairman
Total 317,525,185
Contingent Liabilities
There is a contingent liability of Bank Guarantee amounted Tk 55,99,600 (Taka fifty five lac
ninety nine thousand and six hundred only) issued in favour of Titas Gas Transmission
and Distribution Company Ltd from Southeast Bank Limited, Gulshan Branch.
3
Mr.Masum Pathan Director 3
Mrs.Khaleda Pervin 3 Director
Mr.Abdul Khaleque Pathan Director & CEO
Mrs.Feruza Begum 3 Chairman
Name of the Directors' Position
These financial statements were authorized for issue in accordance with a resolution of the
company's Board of Directors on November 04' 2010.
Company Secretary Managing Director
Wherever considered necessary previous year's figures have been restated, in order to
conform to current year's presentation.
The annexed financial statements are presented in Bangladeshi currency (Taka), which have
been rounded off to the nearest Taka.
During the period ended September 30' 2010, eleven Board Meetings were held. The
attendance 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 Taka
Raw Cotton
Stores & 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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