miracle industries limited

ANNUALREPORT 2015

MIRACLE INDUSTRIES LIMITED

Vision

Perform as a reliable producer to

support both local and international

market through developing efficient

human resources exploiting state of the

art technologies to ensure total

industrial packaging solutions.

Mission

Innovate creative industrial packaging

solutions with continuous research &

development leading to unique quality

products and services which have a

global preference.

Finished Goods Sewing

Printing

Tape Plant

Weaving Lamination & Film Cutting

Objectives & Principles

To keep customer satisfaction and

continuously develop performance and

improve product quality to be

competitive with the environmental,

industrial, food regulations and global

compliances.

1


CONTENTSTransmittal Letter

Corporate Directory

Notice of the 21st Annual General Meeting

Company Profile

Photographs of Board of Directors, Senior Officers and Honourable Shareholders present in the 20th AGM

Comparative Growth Statement

Report of the Board of Directors to the shareholders

Audit Committee Report (Annexure-1)

Declaration of Managing Director and Chief Financial Officer (Annexure-2)

Certificate on Compliance of Corporate Governance

Compliance status Report of Corporate Governance (Annexure-3)

Value Added Statement

Auditors’ Report to the Shareholders

Statement of Financial Position

Statement of Comprehensive Income

Statement of Cash Flows

Statement of Changes in Equity

Fixed Assets Schedule

Notes to the Financial Statements

Fixed Assets Revaluation Report

Proxy Form

Attendance Slip

2

4

5

3

9-19

8

21

20

23-30

32-33

22

31

35

37

39-53

71

34

36

38

71

54-70

6-7

2


Transmittal Letter

To

All ShareholdersBangladesh Securities and Exchange Commission

Registrar of Joint Stock Companies & Firms

Dhaka Stock Exchange Ltd.

Chittagong Stock Exchange Ltd.

Sub: Annual Report for the year ended on 30 June 2015

Dear Sir(s),

We are pleased to enclose a copy of the Annual Report together with the Auditors’ Report and

Audited Financial Statements of Miracle Industries Limited including Statement of Financial Position

as at 30 June 2015, Statement of Comprehensive Income, Statement of Cash Flows and Statement

of Changes in Equity for the year ended on 30 June 2015 along with notes thereon for your reference

and record.

Yours sincerely,

Sd/-(Mohammed Salim Raza , ACMA)Deputy General Manager &Company Secretary (Current Charge)

Dated: 29 November 2015

3


BOARD OF DIRECTORS:

CHAIRMAN:MR. MOHAMMAD IQBALChairman, BCICRepresentative Director From Group ‘A’ Shareholders

MANAGING DIRECTOR:MR. RAFIQUL MURSHEDDirector from Group "B" Shareholders

DIRECTOR:MR. GOLAM SHAHID AZAD Managing DirectorTSP Complex Ltd., North Patenga, ChittagongRepresentative DirectorFrom Group "A" Shareholders

DIRECTOR:MR. HASNATH AHMED CHOUDHURY Managing DirectorChhatak Cement Company Ltd., SunamganjRepresentative DirectorFrom Group "A" Shareholders

DIRECTOR:MR. MD. WAHIDUZZAMAN CHOWDHURYFrom Group "B" Shareholders

MANAGEMENT COMMITTEE:

MR. RAFIQUL MURSHEDManaging Director

MR. MD. AMIRUL ISLAMChief Financial Officer (CC)

MR. MOHAMMED SALIM RAZA , ACMA

Deputy General Manager

AUDIT COMMITTEE:

PROFESSOR DR. TASLIMA MONSOORCHAIRMAN

MRS. LATIFA BINTE LUTFAR , PhD

MEMBER

MR. MD. WAHIDUZZAMAN CHOWDHURYMEMBER

COMPANY SECRETARY (CC):MR. MOHAMMED SALIM RAZA , ACMA

DIRECTOR:MRS. HASHMAT RABBANI From Group "B" Shareholders

DIRECTOR:A) MRS. FARIDA BINTE LUTFAR , PhD

From Group "B" Shareholders (Representative Director from Pavarton Securities Ltd.)

DIRECTOR:B) MRS. LATIFA BINTE LUTFAR , PhD

From Group "B" Shareholders (Representative Director from Pavarton Securities Ltd.)

DIRECTOR:

MR. ASADUR RAHMAN MIRZAFrom Group "B" Shareholders

DIRECTOR:

MR. NURUL ISLAM KHANFrom Group "C" Shareholders (General Public)

DIRECTOR-INDEPENDENT:

A) PROFESSOR DR. TASLIMA MONSOOR B) Mr. MD. SHAMIMUL ISLAMC) Mr. SSM SADRUL HUDA

AUDITORS:

M/S. SHAFIQ BASAK & CO. Chartered Accountants, House-42 (1st Floor) Road-1, Block -A, Niketan, Gulshan-1,Dhaka-1212, Bangladesh

BANKERS: 1) HABIB BANK LTD.Gulshan Banch, 7 Gulshan Avenue, Gulshan-1, Dhaka-1212, Bangladesh

2) JANATA BANK LTD.Foreign Exchange Corporate Branch, 57 Purana Paltan, Dhaka-1000, Bangladesh3) AGRANI BANK LTD.Gulshan Branch, Dhaka, Bangladesh

LEGAL ADVISORM/S. LAW VALLEYSaiham Sky View Tower, Suite No. 11A (11th floor) 45, Bijoy Nagar, Dhaka-1000, Bangladesh

CORPORATE DIRECTORY

4


NOTICE OF THE 21st ANNUAL GENERAL MEETINGNotice is hereby given that the 21st (Twenty first) Annual General Meeting of Miracle Industries Limited will be held at the Registered Office & Factory of Miracle Industries Limited, Gilarchala, Gila Beraid (1 No. C&B Bazar, Master Bari) Sreepur, Gazipur on Saturday, 19 December 2015 at 2.30 pm to transact the following business:

Item No. 21/01/2015 : To receive, consider and adopt the Auditors’ Report and Audited Financial Statements including Statement of Financial Position as at 30 June 2015, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity for the year ended on 30 June 2015 together with the Report of the Board of Directors and the Auditors thereon.

Item No. 21/02/2015 : To declare dividend for the year ended on 30 June 2015.

Item No. 21/03/2015 : To elect Directors as per Articles of Association of the Company and the relevant provisions of Companies Act, 1994.

Item No. 21/04/2015 : To appoint Auditors for the year 2015-2016 and to fix-up their remuneration.

Item No. 21/05/2015 : To appoint Managing Director for a further term of 5 (five) years.

Item No. 21/06/2015 : Miscellaneuous.

By order of the Board of Directors

Sd/- (Mohammed Salim Raza, ACMA) Deputy General Manager & Company Secretary (CC)Dated: 29 November 2015 Notes:1. A shareholder entitled to attend and vote at the General Meeting, may appoint a proxy to attend

and vote in his/her stead. Such proxy form duly stamped and signed must be deposited at the Company's Corporate Office (Share Dept.) not later than 48 (Forty eight) hours before the time fixed for the meeting.

2. Admission to the meeting will be strictly on presentation of attendance slip sent/attached with the proxy form.

3. Members are requested to update their change of addresses (if any).

MIRACLE INDUSTRIES LIMITEDRegistered Office: Gilarchala, Gila Beraid (1 No. C&B Bazar, Master Bari), Sreepur, GazipurCorporate Office: 113/B, (3rd Floor)Tejgaon I/A, Dhaka-1208, Bangladesh

Members also note that no gift/gift coupon/food box/benefit in cash or in kind shall be distributed/paid at the AGM as per BSEC directives.

5


Registered Office & Factory : Gilarchala, Gila Beraid, Sreepur, GazipurCorporate Office : 113/B, (3rd Floor) Tejgaon Industrial Area Dhaka-1208, Bangladesh Phone: 8870731, 8870732, 8870733, 8870734

Fax: (880-2) 8870735 E-mail: [email protected] Web site: www.miraclebd.com

Share Office : 113/B, (3rd Floor) Tejgaon Industrial Area, Dhaka-1208, Bangladesh

Year of Incorporation : 1993

Joint Venture Agreement with BCIC : 1995

Shareholders Agreement with BCIC, TSP Complex Ltd. and Chhatak Cement Co. Ltd. : 1998

Commercial Production : 01 January 1997

Business Line : Manufacturer of different types of Multi-layer Sack, Kraft Paper, Laminated, Sandwiched, PP Woven bag, liner, Jute Laminated Sacks and FIBC Bags for bagging Cement, Fertilizer, Salt, Feeds, Sugar, Food Grains, Chemicals & Others and also Tarpaulin.

ISO 9001-2000 Certification : June, 2004

Listing with DSE & CSE : April, 2000

Installed Capacity : Unit – I : 13 Million pcs of bag per annum Unit – II : 23 Million pcs of bag per annum

Income Tax Particulars : Unit – I : Period of 5 year Tax Holiday ended on 31 December 2001 Unit – II : Period of 5 year Tax Holiday ended on 31 October 2006

Number of Employees :

Officers : 41

Staff : 45

Permanent Workers : 495

COMPANY PROFILE

6


Member of the Board of Directors

Mr. Mohammad IqbalChairman

Mr. Rafiqul MurshedManaging Director

Mr. Golam Shahid AzadDirector

Mr. Hasnath Ahmed ChoudhuryDirector

Mr. Asadur Rahman Mirza Director

Mr. Md. Wahiduzzaman ChowdhuryDirector

Mrs.Hashmat RabbaniDirector

Mrs. Farida Binte Lutfar, PhDDirector

Mrs. Latifa Binte Lutfar, PhDDirector

Mr. Nurul Islam KhanDirector

Professor Dr. Taslima MonsoorIndependent Director

Mr. Md. Shamimul IslamIndependent Director

Mr. SSM Sadrul HudaIndependent Director

7


Photographs of the 20th Annual General Meetingheld on 20 December 2014

Board of Directors and Senior Executives in the Dias

Honorable Shareholders Present

8


COMPARATIVE GROWTH STATEMENT

Particulars 2015 2014 2013 2012 2011

FINANCIAL INFORMATION:

Authorised Capital 500.00 500.00 500.00 500.00 500.00

Paid up Capital 253.58 241.51 230.01 219.05 208.62

Turnover 663.90 459.07 419.15 492.38 558.34

Gross Profit 115.16 77.87 70.83 75.76 80.75

Net Profit /(loss)before WPPF & Tax 26.90 8.60 2.90 5.29 6.91

Net Profit/(loss) before Tax 25.62 8.17 2.75 5.03 6.58

Net Profit/(loss) after Tax 42.63 5.83 2.20 3.37 4.55

Total Assets 1,925.03 1,035.45 1,016.10 908.21 704.02

Shareholders’ Equity 1,226.21 353.89 348.06 342.79 339.43

Face Value per Share (Tk.) 10.00 10.00 10.00 10.00 10.00

Dividend per Share (Cash) - - - - -

Bonus share (No. of share per 100 shares) 7 5 5 5 5

Percentage of Dividend (%) 7 5 5 5 5

Return on Equity (%) 3.48 1.67 0.63 0.98 1.34

Shareholders’ Equity per share (Tk.) 48.36 13.96 13.73 13.51 13.39

Earnings Per Share (EPS) (Tk.) (restated: 2011-14) 1.68 0.23 0.09 0.13 0.18

Market Price per Share (Tk.) 15.70 17.90 12.00 14.00 32.65

Market Price per Share (Tk.) (restated) 15.70 17.05 10.88 12.09 26.86

Price-Earnings ratio (Times) 9.35 74.13 120.88 93.03 149.23

Number of shareholders 5,612 6,250 5,191 4,882 4,381

HUMAN RESOURCES INFORMATION:

Number of employees

Officers 41 37 37 38 41

Staff 45 43 39 43 59

Workers:

Permanent 435 629 562 588 413

Casual (In average) 60 - - 20 27

Figures in Million Taka(Year ending on 30th June)

663.90

459.07 419.15

492.38

558.34

0

100

200

300

400

500

600

700

2015 2014 2013 2012 2011

Turnover

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

2015 2014 2013 2012 2011

1,226.21

353.89 348.06 342.79 339.43

Shareholder’s EquityGヴﾗゲゲ Pヴﾗgデ

NB: Figures of previous years (2011-2014) have been re-stated wherever necessary on the basis of present paid-up capital.

9


BISMILLAHIR RAHMAN-IR-RAHIM

HONOURABLE SHAREHOLDERS, LADIES AND GENTLEMEN,

ASSALAM-U-ALAIKUM,

On behalf of the Board of Directors, it is an immense pleasure for me to welcome you all to the 21st Annual General Meeting (AGM) of the Shareholders of Miracle Industries Limited and to present before you the Directors’ Report and Audited Financial Statements together with the Auditors’ Report for the year ended on 30 June 2015 along with significant accounting policies and other explanatory notes, wherein a brief description of the Company’s performance, future prospects and various aspects of market.

THE ECONOMIC SCENARIO During the financial year under report, the world economy as a whole was passing through significant recession and turbulent business environment. Bangladesh economy, as a part of the global economy, is not an exception. The export and import business of the country was heavily disrupted due to political turmoil in early 2015. It is good to inform that among all hurdle of economic development, Bangladesh has been able to rise to the level of lower middle income country. The export sector has contributed significantly in the above achievement.

BUSINESS PERFORMANCE

PRODUCTION

During the year 2014-2015 actual production of various types of bags of Unit-I was 87.22 lac pcs (7.42 lac pcs WPP bags, 10.07 lac pcs FIBC bags equivalent to 79.80 lac pcs WPP bags) as against 54.51 lac pcs (4.11 lac pcs WPP bags, 6.36 lac pcs FIBC bags equivalent to 50.40 lac pcs WPP bags) in the previous year 2013-2014. During the year 2014-2015 actual production of WPP bags of Unit-II was 59.47 lac pcs as against 57.01 lac pcs of WPP bags produced in the corresponding previous year 2013-2014.

SALES

Export Sales:

During the year under review, the company exported 8.53 lac pcs WPP bags and 8.01 lac pcs FIBC bags (equivalent to 63.48 lac pcs WPP bags) respectively compared to 3.15 lac pcs WPP bags and 6.66 lac pcs FIBC bags (equivalent to 52.78 lac pcs WPP bags) exported during the corresponding previous year 2013-2014.

Total volume of exports during the year 2014-2015 was Tk. 486.63 million compared to export of Tk. 304.79 million in the previous year 2013-2014. Total value of export sales increased by Tk. 181.84 million in comparison to that of previous year.

REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERSFOR THE YEAR ENDED ON 30 JUNE 2015

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Local Sales:

During the year 2014-2015, a total of 53.51 lac pcs of WPP Urea fertilizer bags with inner liner were sold to KAFCO and BCIC Fertilizer Enterprises as against 48.35 lac pcs of WPP fertilizer bags with inner liner sold in the previous year 2013-2014.

During the year 2014-2015 a total of 55.17 lac pcs WPP bags (including supply of bags to KAFCO and BCIC Fertilizer Enterprises with inner liner) were sold in the local market compared to 56.11 lac pcs WPP bags sold in the previous year 2013-2014. During the year 2014-2015 total volume of local sales was Tk. 177.27 million compared to Tk. 154.28 million sold in the previous year 2013-2014 and the volume of local sale increased by Tk. 22.99 million in comparison to that of previous year.

Overall sales turnover (both local and exports) was Tk. 663.90 million during the year 2014-2015 compared to Tk. 459.07 million in the previous year 2013-2014. So, total sales increased by Tk. 204.83 million in comparison to that of the previous year.

FINANCIAL PERFORMANCE

The company earned Gross Profit of Tk 115.16 million during the year 2014-2015 compared to Tk. 77.87 million in the previous year 2013-2014. During the year the Company earned a Net Profit of Tk. 42.63 million after providing Income Tax compared to Net profit of Tk. 5.83 million in the previous year. The details of the financial performance of the company stand as follows:

Figures in Taka

BOARD OF DIRECTORS

The Board of Directors provides policy, strategic support and direction based on the philosophy of the company. The Board consists of Sponsors/Successors, Institutional sponsors, Public sharehold-ers and Independent Directors. The Board of Directors consists of 10 (ten) shareholder Directors and 03 (three) Independent Directors with varied educational background and experience which provides an enriched character in decision making process. The Board is re-constituted every year in each Annual General Meeting when one-third of the members retires and normally seeks re-election. During the year the Board organized 5 (five) meetings. The attendance was as follows:

PARTICULARS

2014-2015

2013-2014

Increase/

(Decrease)in %

Turnover 663,903,412 459,068,444 44.62

Gross Profit / (loss) 115,159,718 77,867,682 47.89

Net Profit/(loss) before WPPF & Income Tax 26,901,324 8,602,075 200.48

Net Profit /(Loss) before Income Tax 25,620,308 8,171,971 200.48

Deferred Tax Income (application of BAS-12) 20,846,851 - -

Net Profit/(Loss) after Tax 42,633,943 5,830,805 631.31

Gross Profit to Turnover (%) 17.35 16.96 -

Net Profit/(Loss) to Turnover (%) 6.42 1.27 -

Earnings Per Share (EPS) 1.68 0.23 -

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The Directors who could not attend the meetings were granted leave under section 108 (f) of the Companies Act 1994.

AUDIT COMMITTEE

The Audit Committee consists of 3 (three) Directors of the Board headed by an Independent Director. The members of the committee are as follows:

Professor Dr. Taslima Monsoor Independent Director - Chairman

Mrs. Latifa Binte Lutfar, PhD Director - Member

Mr. Md. Wahiduzzaman Chowdhury Director - Member

Mr. Mohammed Salim Raza, ACMA, Company Secretary (CC) is the Secretary of the Committee.

Mr. Rafiqul Murshed, Managing Director of the Company attended the meeting as an invitee. Other invitees to the meeting were the Chief Financial Officer and the relevant heads of departments who attended the meeting as and when required by the Committee.

The Report of the Audit Committee is enclosed as Annexure-1.

NOMINATION/ELECTION OF DIRECTORS

As per section 91 of the Companies Act 1994, one-third of the Directors of the company retire in the Annual General Meeting. Accordingly, the following Directors of the company will retire in this 21st Annual General Meeting according to their longest duration in the Board.

Sl. no.

Name of Directors Position Attendance

1 Mr. Munsur Ali Sikder, ndc, Chairman, BCIC Chairman (7.2.13 - 9.10.14) 1

2 Mr. Mohammad Iqbal, Chairman, BCIC Chairman (9.10.14- 30.6.15) 4

3 Mr. Rafiqul Murshed Managing Director 5

4 Mr. Golam Shahid Azad Director 5

5 Mr. Hasnath Ahmed Choudhury Director 5

6 Mrs. Hashmat Rabbani Director 5

7 Mrs. Latifa Binte Lutfar, PhD Director 5

8 Mrs. Farida Binte Lutfar, PhD Director 5

9 Mr. Md. Wahiduzzaman Chowdhury Director 4

10 Mr. Asadur Rahman Mirza Director 2

11 Mr. Nurul Islam Khan Director 5

12 Prof. Dr. Taslima Monsoor Independent Director 2

13 Mr. Md. Shamimul Islam Independent Director 3

14 Mr. SSM Sadrul Huda Independent Director 2

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Director of Group ‘A’ Shareholders:

Mr. Hasnath Ahmed Choudhury, Managing Director of Chhatak Cement Company Limited (CCCL) and representing CCCL as a Director of Miracle Industries Ltd. Company Board. Since Mr. Hasnath Ahmed Choudhury is eligible for re-appointment, Bangladesh Chemical Industries Corporation (BCIC) has given their consent for his re-appointment as representative Director of BCIC in the Company Board.

Directors from Group ‘B’ Shareholders:

1. Mrs. Hashmat Rabbani, Director

2. Mrs. Farida Binte Lutfar, PhD, Director

The above retiring Directors are eligible and offered themselves for re-appointment.

Resignation & Appointment of Director

One sponsor Director of Miracle Industries Ltd from Group-B shareholders, Mr. Asadur Rahman Mirza submitted his resignation to the Board of Directors on 17 October 2015 due to his illness. The Board accepted his resignation at its 135th meeting held on 21 October 2015 and appointed Mr. Samsur Rahman, another sponsor shareholder and past sponsor Director of the company who expressed his willingness to act as a Director of the company on 19 October 2015, in the same Board meeting. It is required to be placed before the Honourable Shareholders in 21st Annual General Meeting.

RE-APPOINTMENT OF MANAGING DIRECTOR

The tenure of Managing Director, Mr. Rafiqul Murshed, will expire on 29 April 2016.

Section 110 (1) of Company Act 1994 states that “No company shall, after the commencement of this Act, appoint or employ any individual as its Managing Director for a term exceeding five years at a time.” Sub section (2) of Section 110 of Company Act 1994 states that, "Any individual holding, at the commencement of this Act, the office of the Managing Director in a company shall, unless his term expires earlier, be deemed to have vacated his office immediately on the expiry of five years from the commencement of this Act". Sub section (3) of Section 110 of Company Act 1994 further states that, “Nothing contained in sub-section (1) shall be deemed to prohibit the re-employment or the extension of the term of office of any person as Managing Director for a further period not exceeding five years on each occasion. Provided that no such re-appointment, re-employment or extension of term of office shall be made without the consent of the company in general meeting.”

On the basis of the provision of Companies Act 1994, the Board of Directors proposes for his re-appointment for a further term of 5 (five) years with effect from 30 April 2016 which is required to be placed before the honourable shareholders in the 21st AGM for approval.

DIRECTORS’ REMUNERATION

Other than the Managing Director all other Directors are Non-executive Directors including Independent Directors and as such they are not drawing any remuneration or any other facility from the company except the meeting attendance fees. The Managing Director has been drawing remuneration as shown in the financial statement.

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CORPORATE AND FINANCIAL REPORTING

The Board of Directors is pleased to confirm that:

a) The financial statements together with notes thereon have been prepared in conformity with the Companies Act 1994, Securities & Exchange Commission Rules 1987 and other applicable laws & regulations. These statements present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

b) Proper books of account of the Company have been maintained.

c) Appropriate accounting policies have been consistently applied in preparation of the financial statements and the accounting estimates are based on reasonable and prudent judgment.

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

e) The system of internal control is sound in design and has been effectively implemented and monitored.

f) There are no significant doubts about the company’s ability to continue as a going concern.

g) There are no significant deviations from the operating result of the last year.

The Directors also report that the Managing Director and Chief Financial Officer have certified to the Board that they have reviewed the Financial Statements for the year ended on 30 June 2015 and to the best of their knowledge and belief:

a) The Financial Statements present a true and fair view of the affairs of the company and are in compliance with the existing accounting standards and applicable laws;

b) There is no statement which is materially untrue or misleading and there is no omission of facts in such statements;

c) No transaction has been entered into by the company which is fraudulent illegal or in violation of the company’s code of conduct.

REPORT OF THE MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER

The Managing Director and the Chief Financial Officer have performed their duties as per the Rules, responsibilities and duties as prescribed by the board. The Report is placed as Annexure-2 .

SUMMARY OF THE KEY OPERATING AND FINANCIAL DATA OF LAST FIVE YEARS

The Directors are pleased to furnish the summary of the current year’s key financial data along with the same for the last four years as follows:

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PATTERN OF SHAREHOLDING

Pattern of shareholding as per clause 1.5(xxi) of the BSEC Notification no.: SEC/MRRCD/ 2006-158/134/ Admin/44 dated 7 August 2012 is shown below:

For the years end ed on 30 June

Particulars 2014 -2015

2013 -2014

2012-2013

2011-2012

2010-2011

Total Assets 1,925.03 1,035 .45 1,016 .10 908 .21 704 .02

Fixed Assets (net) 1,216.65 314 .60 334 .46 326 .54 257 .08

Reserve and Surplus 972.63 112 .39 118 .10 123 .74 130 .80

Working Capital 38.01 76.52 58.97 66.79 81.57

Authorized Capital 500.00 500.00 500.00 500.00 500.00

Shareholders’ Equity 1,226.21 353 .90 348 .06 342 .79 339 .43

Paid up Capital 253 .58 241 .51 230 .01 219 .05 208 .62

Long Term Loan 29.23 39.48 48.27 54.06 -

Sl. no.

Shareholding pattern Shareholding

as on

30.06.2015

Percentage (%) of holding

as on 30. 06.2015

Shareholdingas on

30.06.2014

1 Organizations under BCIC (Group-A)

5,071,613 20 4,830,109

a) Bangladesh Chemical Industries Corpora tion

1,338,621 5.28 1,274,878

b) TSP Complex Ltd 2,241,340 8.84 2,134,610

c) Chhatak Cement Company Ltd 1,491,652 5.88 1,420,621

2 Private Sponsors (Group-B) 7,607,418 30 7,245,162

3 Public (Group-C) 12,679,086 50 12,075,317

a) General Public 11,253,960 44.38 10,718,054

b) Institutions 1,425,126 5.62 1,357,263

4 Independent Directors - - -

a) Prof. Dr. Taslima Monsoor - - -

b) Mr. Md. Shamimul Islam - - -

c) Mr. SSM Sadrul Huda - - -

5 Employees - - -

Total 25,358,117 100 24,150,588

Figures in Taka (Million)

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CORPORATE GOVERNANCE COMPLIANCE REPORT

Being a Corporate entity and also a Public listed company, Miracle Industries Ltd complies with all Rules & Regulations of Corporate Governance Guidelines. Pursuant to the clause 7(ii) of the BSEC Notification no.: SEC/MRRCD/2006-158/134/Admin/44 dated 7 August 2012, we are pleased to enclose herewith the report of the Corporate Governance Compliance Auditors as Annexure-3.

REVALUATION OF ASSETS

The Miracle Industries Ltd was established in 1993. A significant portion of the assets were purchased long time before and reported in the financial statement at cost. It appears that after elapse of so many years and increase in the price of those assets in the market, the value of the assets at cost as reported in the financial statements did not represent the true financial picture of the company. In view of the above, the analysis of the company being made by many stakeholders including banks and financial institutions, did not represent the true position of the company with present net worth. Under the above backdrop, the Board of Directors of the company decided to revalue its fixed assets and subsequently appointed M/s. Ahmad & Akhtar, Chartered Accountants as valuer of the company’s fixed assets in its 134th Board of Directors meeting and also decided to incorporate it in the Annual Accounts ended on 30 June 2015. As per the Revaluation Report, the market value of the assets is Tk. 1,211,261,196 against the book value of Tk. 314,142,819 and thus Tk. 897,118,377 has been accounted for as Revaluation Reserve in the annual accounts.

BUSINESS RISK PERCEPTION

Political Risk:The country as a whole has been passing through an unforeseen socio-political situation, which may tell upon business operation and growth. The export oriented industries may suffer in case of

1,338,6211,425,126

BCIC

TSPCL

CCCL

PRIVATE SPONSORS

GENERAL PUBLIC

INSTITUTIONS

11,253,960

2,241,340

1,491,652

7,607,41830%

Pattern of Shareholding

5.62%

5.28%

5.88%

8.84

%

44.38%

16


such situation along with other industries. This is mainly an export oriented company and therefore any unfavourable political environment may have adverse impact on its operation.

Going Concern Risk:

Miracle industries Limited has been operating as a sustainable organization since 1997. The sponsors having substantial stake in the company always decide upon operational and financial issues from the perspective of being a going concern. Having its own land and building along with infrastructure, installations, producing an essential commodity of packaging, the management does not see any risk of continuance of the company as a corporate citizen and as a going concern.

Operational Risk:

Operational Risk arises from internal management, system failure, maintenance of product quality, etc. The company over a period of time has developed human resources, systems and procedures equipped with production facilities with modern Technology. With the above the company is now operating as a quality product supplier with high franchise value in the international and local market. It has developed a pool of human resources who are capable to undertake even complex products required by the international market. Therefore, the management does not see any significant operational risk.

Foreign Exchange Fluctuation Risk:

The Company is in Export business and the export is in foreign currency. In addition, most of the important raw materials are imported in foreign currency. Therefore, the business has foreign currency risk to some extent. But during the last few years Bangladesh currency has been maintaining a stable parity with important currencies. Besides, any decline in rates of export to a great extent is offset by import since we are mostly dealing with the same currency. As such the management does not see any substantial exchange fluctuation risk.

Market Risk:

The export is volatile till today. Since the export market of the company covers a good number of countries covering Europe, most of the countries are still in recession, hence the market situation may create potential risk for the company. But our products are considered to be an essential item as a support product to other products needing bulk transportation, the risk is minimized to a great extent. In addition, globally the labour cost is in increasing trend and Bangladesh, being still a low labour cost market, we will continue to be in advantageous position.

Interest Rate Risk:

Interest rate of the Banks and Financial Institutions are quite high at present. The company management has been trying to use low cost funding as much as possible although the company is dependent on bank finance to a great extent. However, the rate of interest is now in decreasing trend and management expects that the risk will be decreasing in the coming months.

Technological Risk:

Technology develops continuously. New competitors can enter into the market with high tech machinery and equipment. To keep in pace with the global technological changes Miracle Industries Ltd is always concerned and aware and accordingly take steps for continuous up gradation of its technologies, machinery, processes and technical know-how.

17


Compliance Risk:

Compliance risk is now coming up very sharply in the manufacturing sector. This is more acute in the export sector as well as on the listed companies. In the export market, the buyers are more concerned about the compliances of various code of ethics and conducts covering a wide range of activities and actions. As a good corporate entity Miracle has been complying with all rules and regulations. However, many new compliance requirements are coming up and the management is to remain always vigilant to remain compliant all the time.

APPOINTMENT OF AUDITOR

M/s. Sarwar Salamat & Co., Chartered Accountants, was reappointed as Statutory Auditor for the year 2014-2015 of the Company in its 20th Annual General Meeting and their remuneration was fixed at Tk. 75,000/- (Taka seventy five thousand) only. As per Section 210 of Companies Act 1994, M/s. Sarwar Salamat & Co, Chartered Accountants was supposed to retire after completing the audit of the accounts for the year ended on 30 June 2015 of the Company. But, M/s. Sarwar Salamat & Co., Chartered Accountants had submitted their resignation to the Board of Directors of the Company as Statutory Auditor on 10 March 2015 as one of his partner Mr. Sarwar Mahmood, FCA left the firm and subsequently the Audit firm lost its status of BSEC entitled Audit Company as partnership firm.

Thereafter, under Section 210 (7 & 8) of the Companies Act 1994, to fill up the casual vacancy as Statutory Auditor of the Company, quotations from 3 (three) Chartered Accountants Firms, namely- M/s. Shafiq Basak & Co., M/s. Hussain Farhad & Co. and M/s. Shiraz Khan Basak & Co., have been received and placed before the Audit Committee for recommendation.

The Audit Committee recommended appointing of M/s. Shafiq Basak & Co., Chartered Accountants as Statutory Auditors of the Company for the year ending on the 30 June 2015 in place of M/s. Sarwar Salamat & Co., Chartered Accountants. Therefore, the Board of Directors of the Company, in its 133rd Board Meeting, accorded approval to appoint M/s. Shafiq Basak & Co as Statutory Auditor to fill up the casual vacancy, which is required to place before the Shareholders of Miracle Industries Limited at its 21st Annual General Meeting (AGM) for post facto approval of the above appointment.

As per approval of the Board of Directors of the Company M/s. Shafiq Basak & Co., Chartered Accountants completed audit of the Accounts of the Company for the year ended on 30 June 2015.

As per section 210 of the Companies Act 1994, M/s. Shafiq Basak & Co., Chartered Accountants is going to retire in 21st Annual General Meeting. As being eligible for re-appointment, M/s. Shafiq Basak & Co., Chartered Accountants offered themselves for re-appointment as Statutory Auditor of the Company for the year 2015-2016. Accordingly, the matter is placed in the 21st Annual General Meeting for consideration of the honourable Shareholders for reappointment of M/s. Shafiq Basak & Co., Chartered Accountants as Statutory Auditors and to fix-up their remuneration.

RECOMMENDATION OF DIVIDEND

The profitability of the company remained more or less in the same trend. However, in view of the introduction of the Deferred Tax System of income tax (the difference on depreciation calculation of assets arising from the time difference of tax rate and actual rate) and its accounting adjustment, the profitability has increased this year. Of course the above adjustment does not have any bearing in the cash flow. Under the above backdrop, although the real profitability in the year together with the cash flow do not support cash dividend payment this year, still in the meeting of the Board of Directors held on 21 October 2015, the Board recommended a stock dividend of 7% based on the financials of the company.

18


PROFIT APPROPRIATION

Amount (Taka) Amount (Taka)

(a) Un-appropriated Profit from previous Year 31,455,975

(b) Add:

(i) Net Profit after tax for the year 42,633,943

(ii) Transferred from Tax Holiday reserve 76,574,964

(c) Total fund available for appropriation 150,664,882

(d) Appropriation proposed:

(i) Stock Dividend for 2013-2014@5% 12,075,290

(ii) Deferred Tax Liability as on 30 June 2014 67,280,538 79,355,828

(e) Net unappropriated profit (c-d) 71,309,054

HEALTH, SAFETY & ENVIORNMENT

Our goal is to work in conformity with environmental, industrial, food regulations and global compliances and to keep customer satisfaction and continuously develop performance and product quality. To achieve this goal, we are committed to working cooperatively on the priorities and actions identified in the Health, Safety and Environment (HSE) Strategic Plan of Miracle Industries Limited (MIL) – SAVE You, SAVE Me, SAVE MIL. By regularly reviewing our achievements against the HSE Strategy goals, we will continually improve our safety performance.

We acknowledge many stakeholders who make significant contributions to improving HSE within our operations and we invite them to contribute to the Strategy– these contributions will be taken into account in its future development.

MIL has HSE Strategy and Management Standards with the following expectations for all people of MIL:

l Compliance with MIL SAFE guards and Environmental Stewardship initiatives;

l Never letting the effects of drugs or alcohol put ourselves or others at risk;

l Implementing the MIL Authority to Stop Work process when unsafe behaviours or conditions are identified;

l Accepting personal accountability, rewarding desirable behaviour and discouraging undesirable behaviours – Safety means Awareness, Responsibility and Teamwork;

l Respecting our clients’ expectation to reduce risk and compliance.

LOOKING AHEAD

The export oriented unit of the Company (Unit-1) was set up in 1996. Thereafter, second unit of the Company (Unit-2) was set up in the year 2001 to meet local demand of WPP bags. Due to long continuous production and use, wear and tear took place in the looms as well as in other machinery & equipment resulting decline in production capacity. One Tape plant with capacity of 1.5 MT per day out of the two Tape plants of Unit-1 went out of order.

In order to restore and increase the production capacity, improve the quality of the products and reduce the cost, a few machinery were imported and civil construction was done under BMRE Scheme for the export oriented unit in Year 2013.

19


For implementation of the BMRE project an approximate sum of Tk.155.90 million was estimated. Our Banker M/s. Habib Bank Ltd. provided only Tk. 54.00 million as a long term loan which could meet only a part of the requirement of BMRE scheme. Some important machinery and equipment involving Tk. 76.10 million were imported and Tk. 26.90 million was spent for civil construction and others. The sponsor Directors so far arranged a loan of Tk. 49.00 million to finance the balance amount for import of machinery and complete civil and other works to create environment for production of FIBC food grade bags. The installation of machinery and civil construction were completed in April 2013. Trial production after BMRE started by June 2013.

At present the company is getting huge orders and lots of inquiries from Brazil, Europe, North America and other countries for the jumbo bags which are required to be produced in 8 shuttle or 10 shuttle looms. But at present, Miracle Industries Ltd has only 4 and 6 shuttle looms in its production house, some of which are old and may have to be discarded. Considering the present diversity of the products in International Market and potentiality to open new horizon of export market, management of Miracle Industries Limited felt it necessary to expand the production facilities of the company through importing up to date and new generation machinery.

The Board of the Company accorded approval on importing machinery for expansion of Unit-1 of Miracle Industries Limited by utilising the credit facility amounting to Tk. 43.51 million sanctioned by Habib Bank Limited. Steps have already been taken by the management for importing machinery to expand the Unit-1 of Miracle Industries Limited within the shortest possible time.

The management has put best efforts to explore the global market and expected response has already been received from foreign buyers. Meanwhile more orders of FIBC/WPP bags have been received from the existing market and some new markets have opened up. It is expected that export may boost up to 350MT per month.

MANAGEMENT APPRECIATION

I, on behalf of the Board of Directors, would like to offer our heartfelt thanks to all the valued shareholders whose unswerving trust in management has always been an inspiration to the Board of Directors. The Board of Directors humbly expressed their gratitude and acknowledge with deep appreciation for the cooperation and unflinching support it has received from various business partners, customers, agencies, Habib Bank Ltd., Janata Bank Ltd., Stock Exchanges, Board of Investment, Bangladesh Securities & Exchange Commission, CDBL, BCIC and its Enterprises, service providers, suppliers, creditors, financial institutions, Insurance Companies, other Govt. and related agencies.

I would also like to recall with appreciation the dedicated services and commitment of all workers, staff and officers of the Company for the overall development of Miracle Industries Limited.

CONCLUSIONS

I, once again congratulate you all for your kind attendance in this Annual General Meeting for making it a success. May, I pray to the Almighty Allah for continued progress and prosperity of the Company and happiness for you all.

Allah Hafez. On behalf of the Board of Directors Sd/- (Mohammad Iqbal)Dated, Dhaka Chairman, BCIC &05 November 2015 Chairman, Miracle Industries Ltd. Company Board

20


Annexure-1

AUDIT COMMITTEE REPORT TO THE SHAREHOLDERS For the Year 2014-2015

The Audit Committee consists of the following members:

Professor Dr. Taslima Monsoor, Independent Director - ChairmanMrs. Latifa Binte Lutfar, PhD, Director - MemberMr. Md. Wahiduzzaman Chowdhury, Director - Member

The scope of Audit Committee was defined as under:

(a) Review and recommend to the Board to approve the financial statements prepared for statutory purpose;

(b) Report to the Board of Directors on internal audit findings from time to time considering the significance of the issues;

(c) Carry on a supervision role to safeguard the systems of governance and independence of statutory auditors; and

(d) Review and consider the internal report and statutory auditors’ observations on internal control.

Activities carried out during the year 2014-2015

The Committee has overseen and reviewed the integrity of the financial reporting process of the Company namely quarterly, half yearly and annual financial statements and recommended to the Company Board for consideration. The Committee also reviewed, approved and monitored the procedure and task of the internal audit, financial report preparation and the external audit reports. The Committee found adequate arrangement to present a true and fair view of the activities and the financial status of the company for the year 2014-2015 and did not find any material deviation, discrepancies or any adverse finding/observation in the areas of reporting.

Sd/-(Professor Dr. Taslima Monsoor)Chairman Audit Committee

Dated, Dhaka 21 October 2015

21


Annexure-2

DECLARATION OF MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER

For the Year 2014-2015

To

The Board of DirectorsMiracle Industries Limited

Dear Sirs,

In compliance with the condition no. 6 imposed by the Bangladesh Securities and Exchange Commission notification No SEC/CMRCD/2006-158/134/Admn/44 dated 7 August 2012 issued under Section 2CC of the Securities and Exchange Ordinance 1969, we do hereby certify to the Board that -

1) We have reviewed the Financial Statements for the year ended on 30 June 2015 of Miracle Industries Limited and to the best of our knowledge and belief:

a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and

b) These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws.

2) There are, to the best of knowledge and belief, no transaction entered into by the company during the year which are fraudulent, illegal or in violation of the company’s code of conduct.

Yours Sincerely,

Sd/- Sd/-Chief Financial Officer Managing Director

Dated, Dhaka 21 October 2015

22


CERTIFICATE ON COMPLIANCE OF CONDITIONSOF CORPORATE GOVERNANCE GUIDELINES

FOR THE YEAR ENDED ON 30 JUNE 2015

TO THE SHAREHOLDERS OF MIRACLE INDUSTRIES LIMITED

We have examined the compliances of Corporate Governance Guidelines as required under clause 7(i) of the Bangladesh Securities & Exchange Commission (BSEC) notification SEC/ CMRRCD/ 2006-158/134/ADMIN/44 dated 7 August 2012 and SEC/CMRRCD/2006-158/ 147/Admin/48 dated 21 July 2013 by Miracle Industries Limited for the year ended on 30 June 2015.

The compliance of conditions in the aforesaid notification and reporting the status of compliance is the responsibility of the Management of the Company. Our responsibility is to certify whether the company is in compliance with the said conditions of corporate governance based on our examina-tion. For the purpose of issuing this certificate our examination was limited to the procedures as adopted by the Management of the Company for ensuring compliance to the conditions of Corporate Governance Guidelines and implementation status thereof.

To the best of our information and according to the explanations given to us, we certify that, Miracle Industries Limited has complied with conditions of corporate governance guidelines as stipulated in the above mentioned notification issued by Bangladesh Securities & Exchange Commission (BSEC) under section 2CC of the Securities & Exchange Ordinance 1969 for the year ended on 30 June 2015.

Anjan Kumer Roy, FCADated, Dhaka Partner,28 October 2015 ARUN & ANJAN Chartered Accountants

Head Office

Shah Ali Tower (13th floor), 33 Kawran Bazar, Dhaka-1215

Cell: +88 015-34001109, 018-19936291, 017-64484444

E-mail: [email protected], Web: www.arunanjan.com.bd

23


Annexure-3

Statement of Status of Compliance of Corporate Governance Guidelines

Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Com-mission's Notification no. SEC/CMRRCD/ 2006-158/ 134/Admin/44 dated 7th August 2012; issued under section 2CC of the Securities & Exchange Ordinance 1969.

Condition No.

Title

Compliance Status (Put √ in the appropriate

column ) Remarks

Complied Non

Complied

1 Board of Directors (BoD)

1.1 Board's Size (number of board members-Minimum-5 and maximum 20).

√

1.2 Independent Directors:

1.2 (i) At least one fifth (1/5) of the tota l number of Directors shall be Independent directors.

√

1.2 (ii) Independent Director means a director

1.2 (ii) (a) Who either does not hold any share in the company or holds less than one percent (1%) share of the total paid-up shares of the company.

√

1.2 (ii) (b)

Who is not a sponsor of the company and is not connected with the company's any sponsor or director or shareholder who holds one percent (1%) or more shares of the total paid-up shares of the company on the basis of the family relationship. His/her family members also should not hold above mentioned shares in the company.

√

1.2 (ii) (c) Who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies.

√

1.2 (ii) (d) Who is not a member, director or officer of any stock exchange.

√

1.2 (ii) (e) Who is not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market.

√

1.2 (ii) (f) Who i s not a partner or executive or was not a partner or an executive during the preceding 3 (three) years of the company's statutory audit firm.

√

1.2 (ii) (g) Who shall not be an independent director in more than 3 (three) listed companies.

√

1.2 (ii) (h) Who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a Bank or Non-bank Financial Institution (NBFI).

√

1.2 (ii) (i) Who has not been convicted for a criminal offence involving moral turpitude.

√

Condition No.

Title


column) Remarks

Complied Non

Complied

1.2 (iii) Independent Director(s) shall be appointed by the Board of Directors and approved by the shareholders in the Annual General Meeting (AGM).

√

1.2 (iv) The post of Independent Director(s) can not remain vacant for more than 90 (ninety) days.

√

1.2 (v) The Board shall lay down a Code of Conduct for all Board members and annual compliance of the Code to be recorded.

√

1.2 (vi) The tenure of office of an Independent Director shall be for a period of 3 (three) years, which may be extended for 1 (one) term only.

√

1.3 (i)

Independent Director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business.

√

1.3 (ii)

Independent Director should be a Business Leader/Corporate Leader/ Bureaucrat/ University Teacher with Economics or Business Studies or Law background / Professionals Chartered Accountants, Cost & Managements Accountants, Chartered Secretaries.

The independent director must have at least 12 (twelve) years of corporate management/professional experiences.

√

1.3 (iii) In special cases the above qualifications may be relaxed subject to prior approval of Commission.

Not applicable

1.4

The Chairman of the Board and Chief Executive Officer (CEO) shall be different individuals. The Chairman shall be elected from among the directors. The board of directors shall clearly define their respective roles and responsibilities of the Chairman and the CEO.

√

1.5 The Director's Report to the shareholders:

1.5 (i) Industry outlook and possible futu re developments in the industry.

√

1.5 (ii) Segment-wise or product-wise performance. √

Qualification of Independent Director:1.3

24


25


Condition No.

Title


column) Remarks

Complied Non

Complied

1.5 (iii) Risk and concerns √

1.5 (iv) A discussion on cost of goods sold, Gross profit margin and net profit margin.

√

1.5 (v) Discussion on Continuity of any extraordinary gain or loss.

Not applicable

1.5 (vi) Basis for Related party transaction- a statement of all related party transactions should be disclosed in the annual report.

√

1.5 (vi i) Utilization of proceeds from public issue, right issue and/or through any other instruments.

Not applicable

1.5 (viii)

An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer (RO),Direct Listing etc.

Not applicable

1.5 (ix)

If significant variance occurs between Quarterly Financial performance and Annual Financial Statements, the management shall explain about the variance.

Not ap plicable

1.5 (x) Remuneration of Directors including Independent Directors.

√

1.5 (xi) The financial statements present fairly its state of affairs, the results of its operation, cash flows and changes in equity.

√

1.5 (xi i) Proper books of account have been maintained. √

1.5 (xiii) Adaption of appropriate accounting policies & estimates.

√

1.5 (xiv) IAS/BAS/IFRS/BFRS, as applicable in Bangladesh, have been followed and adequate disclosure for any departure.

√

1.5 (xv) The system of Internal Control is sound in design and has been effectively implemented and monitored.

√

1.5 (xvi) Going Concern (Ability to continue as going concern).

√

1.5 (xvii) Highlights and explain significant deviations from the last years operating results.

√

1.5 (xviii) Key operating and financial data of at least preceding 5 (five) years shall be summarized.

√

26


Condition No.

Title


column) Remarks

Complied Non

Complied

1.5 (xix) Reason for non declaration of Dividend. Not Applica ble

1.5 (xx) The number of Board meetings held during the year and attendance by each director shall be disclosed.

√

1.5 (xxi) Pattern of shareholding and name wise details (disclosin g aggregate number of shares):

1.5 (xxi)(a) Parent/Subsidiary/Associate companies and other related parties.

Not Applicable

1.5 (xxi)(b)

Directors, Chief Executive Officer (CEO) , Chief Financial Officer (CFO), Company Secretary, Head of Internal Audit and their spouses and minor children (name wise details).

√

1.5 (xxi)(c) Top five executives other than mentioned in condition no 1.5 (xxi) (b).

√

1.5 (xxi)(d) Shareholders holding of 10% or more voting interest in the company (name wise details).

√

1.5 (xxii) In case of the appointment/re-appointment of a director, disclose:

1.5 (xxii)(a) A brief resume of the director. √

1.5 (xxii)(b) Nature of his/her specific functional areas. √

1.5 (xxii)(c) Name of companies in which the person also holds the directorship and membership of committees of the Board.

√

2 Chief Financial Officer (CFO), Head of Internal Aud it & Company Secretary:

2.1 Appointment of Chief Financial Officer (CFO),Head of Internal Audit & Company Secretary and defining their respective roles, responsibilities and duties.

√

2.2 The Chief Financial Officer & Company Secretary shall attend the meetings of the Board of Directors

√

3 Audit Committee:

3(i) The company shall have an Audit Committee as a subcommittee of the Board of Directors.

√

27


Condition No.

Title


column) Remarks

Complied Non

Complied

3(ii)

The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business.

√

3(iii) The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing.

√

3.1 Constitution of the Audit Committee:

3.1(i) The Audit Committee shall be composed of at least 3 (three) members.

√

3.1(ii)

The Board of Directors shall appoint members of the Audit Committee who shall be directors of the company and shall include at least 1 (one) independent Director.

√

3.1(iii)

All members of Audit Committee should be "Financially Literate" and at least 1 (one) member shall have accounting or related financial management experience.

√

3.1(iv)

Expiration of the term of service of audit Committee members making the number lower than 3 (three) and fill up the vacancy(ies) by the Board not later than 1 (one) month from the date of vacancy(ies).

√

3.1(v) The Company Secretary shall act as the Secretary of the Audit Committee.

√

3.1(vi) The quorum of Audit Committee meeting shall not constitute without at least 1 (one) Independent Director.

√

3.2 Chairman of the Audit Committee:

3.2(i) The Board of Directors shall select 1 (one) member of the Audit Committee, who shall be an Independent Director.

√

3.2(ii) Chairman of the Audit Committee shall remain present in the Annual General Meeting (AGM).

√

3.3 Role of Audit Committee:

3.3 (i) Oversee the financial reporting process √

3.3(ii) Monitor choice of accounting policies and principles √

3.3(iii) Monitor Internal Control Risk Management Process √

3.3(iv) Monitor hiring and performance of external auditors √

28


Condition No.

Title


column) Remarks

Complied Non

Complied

3.3(v) Review along with the management, the annual financial statements before submission to the Board for approval.

√

3.3(vi) Review along with the management, the quarterly and half-yearly financial statements before submission to the Board for approval.

√

3.3(vii) Review the adequacy of internal audit function √

3.3(viii) Review statement of significant related party transactions submitted by the management.

√

3.3(ix) Review Management letter/letters of internal control weakness issued by the statutory auditors.

√

3.3(x)

When money is raised through Initial Public offering (IPO)/Repeat Public Offering (RPO)/Right Issue, the Company shall disclose to the Audit Committee about the uses/applications of funds by major category (capital expenditure, sales and marketing expenses, working capital etc) on a quarterly basis, as a part of their quarterly declaration of financial results.

Not applicable

3.4 Reporting of The Audit Committee to The Board of Directors :

3.4.1(i) The Audit Committee shall report on its activities to the Board of Directors.

√

3.4.1(ii) The Audit Committee shall immediately report to the Board of Directors on findings, if any:

√

3.4.1(ii) (a) Report on conflict of interests No such event found

3.4.1(ii) (b)

Suspected or presumed fraud or irregularity or material defect in the internal control system.

No such event found

3.4.1(ii) (c)

Suspected infringement of laws including securities related laws, rules and regulations.

No such event found

3.4 .1(ii) (d)

Any other matters which shall be disclosed to the Board of Directors immediately.

No such event found

3.4.2 Reporting of anything having material financial impact to the Commission.

√

3.5 Reporting to the Shareholders and General investors. √

4 External/Statutory Auditors:

4(i) Non-engagement in appraisal or valuation services or fairness options.

√

29


Condition No.

Title


column) Remarks

Complied Non

Complied

4(ii) Non-engagement in designing and implementation of Financial Information System.

√

4(iii) Non-engagement in Book-keeping or other services related to the accounting records or financial statements.

√

4(iv) Non-engagement in Broker/Dealer services. Not Applicable

4(v) Non-engagement in Actuarial Services. √

4(vi) Non-engagement in Internal Audit services. √

4(vii) Non-engagements in any other services that the Audit Committee determines.

√

4(viii) No partner or employees of the external audit firms shall posses any share of the company during the tenure of their assignment.

√

4(ix) Audit/Certification services on compliance of corporate governance as required under clause (i) of condition no.-7.

√

5 Subsidiary Company:

5(i)

Provision relating to the Composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company.

Not Applicable

5(ii) At least 1 (one) Independent Director on the Board of the holding company shall be a Director on the Board of Director of the subsidiary company.

Not Applicable

5(iii) The minutes of the Board meeting of the Subsidiary Company shall be placed for review at the following Board meeting of the Holding Company.

Not Applicable

5(iv) The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also.

Not Applicable

5(v) The Audit Committee of the holding company shall also review the financial statements, in particular the Investments made by the subsidiary company.

Not Applicable

30


Condition No.

Title


column) Remarks

Complied Non

Complied

6 Duties of Chief Executive Officer (CEO) and Chief Fi nancial Officer (CFO):

The CEO and CFO shall certify to the Board that:

6(i) They have reviewed financial statements for the year and that to the best of their knowledge and belief.

√

6(i)(a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.

√

6(i)(b)

These statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards and applicable laws.

√

6(ii)

There are to the best of knowledge and belief no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company's code of conduct.

√

7 Reporting and Compliance of Corporate Governance:

7(i)

The company shall obtain a Certificate from a practicing Professional Accountant/Secretary (Chartered Accountant/Cost Management Accountant/Chartered Secretary) regarding compliance of on Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.

√

7(ii) The directors of the company shall state, in the Directors' Report whether the company has complied with these conditions.

√

31


VALUE ADDED STATEMENT:

Particulars 2014-2015 2013-2014

Amount (Taka) % Amount (Taka) %

Source of Funds:

Turnover & Other Income (Gross) 690,494,107 482,210,184

Less: Payment against Materials and Services 537,806,808 353,881,899

Value Added 152,687,299 100 128,328,285 100

Applications:

National Exchequer 26,608,777 17.43 25,578,257 19.36

Salaries and Benefits to Employees 81,262,294 53.22 64,624,167 50.36

Interest to Lenders 42,575,132 27.88 32,295,056 25.17

Shareholders Dividend 12,075,209 7.91 11,500,280 8.96

Retained by the Company (9,834,113) (6.44) (5,669,475) (4.41)

Total 152,687,299 100 128,328,285 100

Graphical presentation of Value added statement

Year 2014-2015 Year 2013-2014

32,295,056

7.91%

27.88%

53.22%

81,262,294

8.96%

- 4.4

1%

25.17%

50.36%

19.36%17.43%

- 6.4

4%

32


SHAFIQ BASAK & CO.

kwdK emvK GÛ †KvsChittagong Office:National House (1st Floor)109, Agrabad Commercial Area,Chittagong-4100, Bangladesh.Phone : 88-31-711561Fax : 88-31-723680E-mail : [email protected]

Dhaka Office:House-42 (1st Floor)Road-1, Block-A,Niketan, Gulsha-1Dhaka-1212Phone: 88-02-9859602E-mail: [email protected]

Dhaka Office:Shatabdi Centre (6th Floor)292, Inner Circular Road,Fkirapool, Motijheel, Dhaka.Phone : 88-02-7192098Tel/Fax : 88-02-7194870E-mail : [email protected]

Partners:Md. Shafiqul Islam, FCASampad Kumar Basak, FCAMd. Enayet Ullah, FCASarwar Mahmood, FCA

CHARTERED ACCOUNTANTS

AUDITORS’ REPORTTo the Shareholders of Miracle Industries Limited

Introduction

We have audited the accompanying Financial Statements of Miracle Industries Limited (the Company), which comprise the Statement of Financial Position as at 30 June 2015, and the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these Financial Statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act, 1994 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error.

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 (BSAs), Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Financial Statements.

We believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Financial Statements present fairly, in all material respects, the financial position of Miracle Industries Limited as at 30 June 2015 and its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.

33


SHAFIQ BASAK & CO.

kwdK emvK GÛ †Kvs


Emphasis of Matters

Without qualifying our opinion, we draw attention to the Management conclusion about Note 3-5 & and 7-8.

Subject to the above, we report that:

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

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

c) the statement of financial position and statement of comprehensive income of the company dealt with by the report are in agreement with the books of accounts and returns.

d) the expenditure incurred and payments make were for the purpose of the company's business for the year.

Place: Dhaka SHAFIQ BASAK & CO.27 October 2015 Chartered Accountants

34

MIRACLE INDUSTRIES LIMITEDSHAFIQ BASAK & CO.


MIRACLE INDUSTRIES LIMITED113/B, TEJGAON INDUSTRIAL AREA, DHAKA

STATEMENT OF FINANCIAL POSITIONAS AT 30TH JUNE 2015

UNIT-1 UNIT-2 30-06-2015 30-06-2014I. SOURCES OF FUNDA. SHARE HOLDERS' FUND: 912,532,342 313,676,425 1,226,208,767 353,890,575

Share Capital 2 253,581,170 - 253,581,170 241,505,880 Tax Holiday Reserve 3 - - - 76,574,964 Capital Reserve 4,200,166 - 4,200,166 4,353,756 Revaluation Reserve 4 666,438,345 230,680,032 897,118,377 - Retained Earnings 5 (11,687,339) 82,996,393 71,309,054 31,455,975

B. LONG TERM LIABILITIES: 29,225,348 - 29,225,348 39,474,686 Long Term Loan (HBL): Secured 6 29,225,348 - 29,225,348 39,474,686 TOTAL SOURCES OF FUND (A+B) 941,757,690 313,676,425 1,255,434,115 393,365,261

II. APPLICATION OF FUNDA. NON-CURRENT ASSETS: 845,580,934 371,840,640 1,217,421,574 316,850,900

Property, Plant & Equipment 7 845,580,934 371,068,806 1,216,649,740 314,595,066 Other Non-Current Assets : - 771,834 771,834 2,255,834 Investment in Share 8 - 771,834 771,834 771,834 Loan processing Fee (HBL) 9 - - - 1,484,000

B. CURRENT ASSETS: 330,280,078 408,003,105 707,605,749 718,594,425 Inventories 10 125,023,475 144,249,353 269,272,828 361,424,728 Advance Income Tax 11 11,551,549 200,166,377 211,717,926 203,852,891 Advance, Deposits & Prepayment 12 30,941,737 9,280,543 40,222,280 26,833,850 Account Receivables 13 132,079,149 44,809,331 176,888,480 122,396,086 Current A/C with Unit-02 30,677,434 - - - Cash & Bank Balance 14 6,734 9,497,501 9,504,235 4,086,870

C. CURRENT LIABILITIES: 234,103,323 466,167,320 669,593,208 642,080,064 Creditors for Goods 15 5,039,574 28,572,704 33,612,278 32,300,433 Creditors for Expenses 16 16,563,441 17,683,235 34,246,676 36,511,397 Creditors for Other Finance 17 7,363,476 4,021,789 11,385,265 9,909,323 Workers Profit Participation Fund 18 2,446,853 1,729,529 4,176,382 2,741,777 Provision for Income Tax 19 35,671,593 61,457,596 97,129,189 46,862,285 Unclaimed Dividend 20 - 2,439,356 2,439,356 2,439,356 Current A/C with Unit-01 - 30,677,434 - - Short Term Bank Loan 21 65,273,516 47,791,542 113,065,058 153,763,499 Others Short Term Loan 22 101,744,870 271,794,135 373,539,005 357,551,994

D. WORKING CAPITAL: (B-C) 96,176,754 (58,164,215) 38,012,541 76,514,361 TOTAL APPLICATION OF FUND (A+D) 941,757,690 313,676,425 1,255,434,115 393,365,261

Net Assets value per share (2014:Restated) 48.36 13.96

____________________ _____________________ ________________________Chief Financial Officer Director Managing Director

Signed in terms of our separate report of even date annexed.

Place: Dhaka Shafiq Basak & Co.Dated: 27 October, 2015 Chartered Accountants

PARTICULAR NOTEAmount as on 30-06-2015 Consolidated as on

The annexed notes form an integral part of the financial statements. The financial statements were authorized for

issue by the Board of Directors on 21-10-2015 and signed on its behalf by:

35




CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30TH JUNE 2015

UNIT-1 UNIT-2 30-06-2015 30-06-2014A. Turnover 23 486,632,112 177,271,300 663,903,412 459,068,444 B. Cost of Goods Sold 24 404,010,753 144,732,941 548,743,694 381,200,762 C. GROSS PROFIT (A-B) 82,621,359 32,538,359 115,159,718 77,867,682

D. Administrative & General Expenses 25 16,639,241 9,271,008 25,910,249 22,839,741 E. Selling & Distribution Expenses 26 16,996,477 2,776,536 19,773,013 14,130,810 F. TOTAL ADMIN. & GEN. EXP (D+E) 33,635,718 12,047,544 45,683,262 36,970,551

G. OPERATING PROFIT (C-F) 48,985,641 20,490,815 69,476,456 40,897,131

H. Financial Expenses 27 27,382,010 15,193,122 42,575,132 32,295,056 I. PROFIT BEFORE WPPF (G-H) 21,603,631 5,297,693 26,901,324 8,602,075

J. Less: Provision for WPPF 1,028,744 252,271 1,281,015 430,104

L. NET PROFIT BEFORE TAX (I-J+K) 20,574,887 5,045,422 25,620,308 8,171,971

M. Less: Provision for Income Tax 19Current tax expense 2,571,861 1,261,355 3,833,216 2,341,166

Deferred tax (income)/expense (7,998,176) (12,848,676) (20,846,851) -

N. NET PROFIT AFTER TAX (L-M) 26,001,201 16,632,742 42,633,943 5,830,805

Net Profit After Tax 42,633,943 5,830,805 Number of Share 25,358,117 25,358,117 Basic Earning Per Share (2014:restated) 1.68 0.23




NOTEPARTICULAR



Amount as on 30-06-2015 Consolidated as on

36




STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30TH JUNE 2015

30-06-2015 30-06-2014

A CASH FLOW FROM OPERATING ACTIVITIES:

Collection from Sales 609,411,020 472,413,837

Payment for Costs & Expenses (493,876,337) (429,591,612)

Payment of Income Tax (7,865,035) (10,452,482)

Payment of WPPF - -

Financial Expenses (41,091,132) (31,659,056)

Net cash from operating activities 66,578,516 710,687

B CASH FLOW FROM INVESTING ACTIVITIES:Acquisition of Property, Plant & Equipment (26,200,383) (933,398)

Net cash used in investing activities (26,200,383) (933,398)

C CASH FLOW FROM FINANCING ACTIVITIES:

Short Term Bank Loan Increase/(Decrease) (40,698,441) (49,152,338)

Long Term Loan Bank (10,249,338) (8,792,447)

Other Short Term Loan 15,987,011 62,083,835

Net cash used in financing activities (34,960,768) 4,139,050

D TOTAL CASH OUT FLOW (B+C) (61,161,151) 3,205,652

E NET INCREASE IN CASH OR CASH EQUIVALENTS (A+D) 5,417,365 3,916,339

F CASH & CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 4,086,870 170,531

G CASH & CASH EQUIVALENTS AT THE END OF THE YEAR (E+F) 9,504,235 4,086,870

Net Operating Cash Flow per share (2014:restated) 2.63 0.03

____________________ _____________________ ________________________

Chief Financial Officer Director Managing Director





PARTICULARSConsolidated as on

37




STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30TH JUNE 2015

Balance at 01-07-2013 230,005,600 76,574,964 4,353,756 - 37,125,450 348,059,770

Issue of share capital (Stock Dividend) 11,500,280 (11,500,280) -

Profit after tax for the year - - - - 5,830,805 5,830,805

241,505,880 76,574,964 4,353,756 - 31,455,975 353,890,575

- - - - (67,280,538) (67,280,538)

- - (153,590) - - (153,590)

241,505,880 76,574,964 4,200,166 - (35,824,563) 286,456,447

12,075,290 - - - (12,075,290) -

- - - 897,118,377 - 897,118,377

- (76,574,964) - - 76,574,964 -

Net Profit for the year after tax - - - 42,633,943 42,633,943

Balance at 30-06-2015 253,581,170 - 4,200,166 897,118,377 71,309,054 1,226,208,767




WPPF provision

Retained Earnings

Tax Holiday Reserve

Capital Reserve

Revaluation Reserve

PARTICULARS

The annexed notes form an integral part of the financial statements. The financial statements were authorized for issue by the

Board of Directors on 21-10-2015 and signed on its behalf by:

Total

Adjusted opening balance

Balance at 30-06-2014

Share Capital

Prior year adjustment for:

Transferred to/(from) Tax Holiday Reserve

Revaluation reserve during the year

Issue of share capital (Stock Dividend)

Deferred tax liability

38



ANNEXURE-A

ANNEXURE-B


FIXED ASSETS SCHEDULE AS ON 30 JUNE 2015

UNIT-1

UNIT-2

Rate W. D. V.

Name of Assets As on Addition/ Total at % As on Charged Total at as on

01-07-2014 (Disposal) 30-06-2015 01-07-2014 this year 30-06-2015 30-06-2015

Land & Land Development 2,026,522 - - 2,026,522 437,486,505 439,513,027 - - - - 439,513,027

Building & Other Construction 55,425,846 11,265,073 - 66,690,919 180,422,260 247,113,179 5% 19,713,530 2,348,869 - 22,062,399 225,050,780

Machinery & Equipments 196,255,979 6,557,050 - 202,813,029 37,664,957 240,477,986 6.50% 75,599,923 8,268,852 - 83,868,775 156,609,211

Gene., Sub-Station & Other Elect. Equip. 13,089,464 8,264,174 - 21,353,638 10,864,623 32,218,261 10% 10,062,263 1,129,138 - 11,191,401 21,026,861

Furniture, Fixture & Office Equipment 4,931,040 19,900 - 4,950,940 - 4,950,940 10% 3,468,145 148,280 - 3,616,425 1,334,516

Vehicles 2,611,836 88,070 - 2,699,906 - 2,699,906 20% 2,261,830 87,615 - 2,349,445 350,461

Computer Hardware & Software 1,598,199 6,116 - 1,604,315 - 1,604,315 20% 1,008,216 119,220 - 1,127,436 476,879

CCTV &DVR(Fact) 1,905,000 - - 1,905,000 - 1,905,000 20% 381,000 304,800 685,800 1,219,200

Total 2014-2015 277,843,886 26,200,383 - 304,044,269 666,438,345 970,482,614 112,494,907 12,406,773 - 124,901,680 845,580,934

Total 2013-2014 277,009,053 834,833 - 277,843,886 - - 101,174,841 11,320,066 - 112,449,907 165,348,979

ALLOCATION OF DEPRECIATION:

Manufacturing Cost 11,746,859

Administrative & General Expenses 659,915

12,406,773

Adjustme

nt

Revaluation value

as on 30-06-2015

Total value after

revaluation

C O S T

Addition during

the year

D E P R E C I A T I O N

Rate W. D. V.

As on Addition/ Total at % As on Charged Total at as on

01-07-2014 (Disposal) 30-06-2015 01-07-2014 this year 30-06-2015 30-06-2015

Land & Land Development 8,277,271 8,277,271 107,109,702 115,386,973 0% - - - - 115,386,973

Building & Other Construction 56,896,405 56,896,405 60,152,696 117,049,101 5% 24,015,226 1,644,059 - 25,659,285 91,389,816

Machinery & Equipments 230,917,346 230,917,346 63,417,634 294,334,980 6.50% 125,177,354 6,873,099 - 132,050,453 162,284,527

Furniture, Fixture & Office Equipment 2,875,117 2,875,117 - 2,875,117 10% 1,581,372 129,375 - 1,710,747 1,164,371

Computer Hardware & Software 985,355 985,355 - 985,355 20% 524,501 92,171 - 616,672 368,683

Office Renovation 1,061,074 1,061,074 - 1,061,074 20% 468,029 118,609 - 586,638 474,436

Total 2014-2015 301,012,568 - - 301,012,568 230,680,032 531,692,600 151,766,482 8,857,312 - 160,623,794 371,068,806

Total 2013-2014 30,091,403 98,565 301,012,568 142,287,453 9,409,028 151,766,482 149,246,087

ALLOCATION OF DEPRECIATION:

Manufacturing Cost 8,646,533

Administrative & General Expenses 210,779 8,857,312

Revaluation value

as on 30-06-2015

C O S T

Adjustme

nt

Total value after

revaluation as on

Addition during

the year

D E P R E C I A T I O N

Name of Assets

----

39


1.0 SIGNIFICANT MATERIAL INFORMATION AND ACCOUNTING POLICIES RELATED WITH THE FINANCIAL STATEMENTS:

(a) Legal form of the Enterprise: MIRACLE INDUSTRIES LIMITED was incorporated on December 30, 1993 in Bangladesh as

a Public Limited Company under the Companies Act, 1913 as Joint Venture with BCIC and commenced commercial operation of its Unit-1 on 01-01-1997. The Company went for public issue of share in January, 2000 and its share were listed with Stock Exchanges in Bangladesh and started trading its share from 12th April, 2000. To cover up the local demand company established a plant named Unit-2 in the year 2001.

(b) Accounting Convention Basis: These account have been prepared under the Historical Cost Convention in accordance with

International Financial Reporting Standards (IFRS) as adopted in Bangladesh.

(c) Fixed Assets: These are stated at historical cost less accumulated depreciation.

(d) Depreciation: The rates which the assets are depreciated per annum depend on the nature and estimated

useful life of each assets are as follows:

Name of Assets Rate %

Factory Building & Other Construction 5.00%

Machinery & Equipment 6.50%

Furniture, Fixture & Other Equipment 10.00%

Generator & Electric Equipments 10.00%

Motor Vehicles 20.00%

Computer, Hardware & Software 20.00%

No Depreciation has been charged on Land & Land Development.

Depreciation has been charged on all fixed assets on the basis of reducing balance method at rates as per previous year. Depreciation on additions has been charged for full year irrespective of the date of addition as per BAS 16.

(e) Inventories: Inventories are valued at lower of average cost and net realizable value. The cost of raw

materials and store & spares Inventories are assigned by using weighted average formula and the finished goods inventories comprise all cost of purchase, cost of conversion and other cost incurred to bring the inventories to existing form. The basis is as per previous year.

(f) Taxation: The company qualifies as a "Publicly Traded Company". The effective rate of taxation was 25%

considering 50% exemption as export oriented company of its Unit-1.

SHAFIQ BASAK & CO.CHARTERED ACCOUNTANTS


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30TH JUNE 2015

FORMING AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

40


(g) Revenue Recognition: Sales are recognized at the time of delivery from store.

(h) Cash Flow Statement: Statement of cash flow is prepared principally in accordance with BAS 7 "Cash Flow

Statements" and the cash flow from operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 1987.

(i) Earning Per Share (EPS): The company calculates Earning Per Share (EPS) in accordance with the International

Financial Reporting Standards"Earning Per Share" (BAS 33) as adopted in Bangladesh. Basis of Earning Per Share is calculated by dividing the earnings attributable to ordinary shareholders by the number of ordinary shares outstanding during the year under review.

(j) Board of Directors:

During the year under audit there were 13 (Thirteen) Directors. The composition of the Board of Directors is as Under:

Group "A" (BCIC and its enterprise) 3

Group "B" (Private Sponsors) 6

Group "C" (General Public Including Independent Directors) 4

13 (k) Executive and Officials: In the payroll, there were 41 officers, 45 staff and 495 workers at the close of the year.

(l) Foreign Currency: Foreign Currency has been converted into taka at the rate ruling on the transaction dates.

(m) Components of the Financial Statements:

According to the Bangladesh Accounting Standards (BAS 1) "Presentation of Financial Statements" to complete set of Financial Statements includes the following components.

Statement of Financial Position as at 30th June, 2015 Statement of Comprehensive Income for the year ended 30th June, 2015 Cash Flow Statement for the year ended 30th June, 2015 Statement of Changes in Equity for the year ended 30th June, 2015 Accounting Policies & Explanatory Notes.

(n) Compliance with Local Laws: The Financial Statements have been prepared in compliance with requirements of the

Companies Act 1994, the Securities and Exchange Rules, 1987 and other relevant local laws and rules.

(o) Compliance with International Financial Reporting Standards (IFRS) & Internation Accounting Standards (IAS):

The Financial Statements have been prepared in compliance with requirements of IFRS and IAS as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) and applicable in Bangladesh.

(p) Reporting Period: The financial period of the company covers financial year from 1st July to 30th June

consistently.

SHAFIQ BASAK & CO.CHARTERED ACCOUNTANTS

41


CHARTERED ACCOUNTANTS2.0 SHARE CAPITAL:

This is made up as follows:

Consolidated as on30-06-2015 30-06-2014

(a) Authorized Share Capital(50,000,000 Shares of Tk. 10.00 each) 500,000,000 500,000,000

Issued, Subscribed & Paid up Capital(17,000,000 Shares of Tk. 10.00 each) 170,000,000 170,000,000

Bonus Shares (8,358,117 Shares of Tk. 10.00 each) 83,581,170 71,505,880

253,581,170 241,505,880 (b) Percentage of Share Holdings:

Category of Share Percentage 30-06-2015 30-06-2014Group "A" (BCIC and its enterprise) 20% 5,071,623 4,830,118 Group "B" (Private Sponsors) 30% 7,607,435 7,245,176 Group "C" (General Public Including ForeignParticipants & Institutional Investors) 50% 12,679,059 12,075,294

100% 25,358,117 24,150,588 (c) Classification of Shareholders by Holding:

Range of Holdings in Nos. of Nos. of Holding (%) as onNumbers of Shares Share Holders Shares 30-06-2015 30-06-20141 to 500 shares 3,105 326,264 1.29 2.12 501 to 5,000 shares 2,041 3,304,659 13.03 13.85 5,001 to 10,000 shares 239 1,828,280 7.21 6.43 10,001 to 20,000 shares 124 1,767,519 6.97 6.00 20,001 to 30,000 shares 36 879,829 3.47 2.45 30,001 to 40,000 shares 27 907,718 3.58 2.18 40,001 to 50,000 shares 12 550,790 2.17 1.16 50,001 to 100,000 shares 12 812,305 3.20 1.57 100,001 to 500,000 shares 5 1,160,881 4.58 9.86 Over 500,000 shares 11 13,819,872 54.50 54.38

5,612 25,358,117 100 100

3.0 TAX HOLIDAY RESERVE:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Balance as on 01-07- 2014 27,000,370 49,574,594 76,574,964 76,574,964 Add: During the year - - - -

27,000,370 49,574,594 76,574,964 76,574,964 Less: Transferred to Retain earnings 27,000,370 49,574,594 76,574,964 - Closing balance - - - 76,574,964

Particulars

The distribution schedule showing the number of shareholders and their share holdings in percentage has beendisclosed below as per requirement of the Regulation 37(3) of Dhaka Stock Exchange & Chittagong StockExchange.

Consolidated as onAmount as on 30-06-2015

Tax holiday reserve of Taka 76,574,964 has been transferred/adjusted with retained income as per decision ofthe board of directors of the company (ref. note 5).

Particulars

42



4.0 REVALUATION RESERVE:

UNIT-1 UNIT-2 30-06-2015 30-06-2014

Land and Land development 437,486,505 107,109,702 544,596,207 - Building and Other Construction 180,422,260 60,152,696 240,574,956 - Plant and Machinery 37,664,957 63,417,634 101,082,591 - Generator & Sub-station 10,864,623 - 10,864,623 - Total 666,438,345 230,680,032 897,118,377 -

5.0 RETAINED EARNINGS:

Opening Balance (26,542,252) 57,998,227 31,455,975 37,125,450 Deferred tax liability (26,071,369) (41,209,169) (67,280,538) - Adjusted Opening balance (52,613,621) 16,789,058 (35,824,563) 37,125,450 Issue of share capital (Stock Dividend) (12,075,290) - (12,075,290) (11,500,280) Transferred to/(from) Tax Holiday Reserve 27,000,370 49,574,594 76,574,964 - Net Profit for the year after tax 26,001,201 16,632,741 42,633,943 5,830,805 Closing Balance (11,687,339) 82,996,393 71,309,054 31,455,975

6.0 LONG TERM LIABILITIES (HBL):

Balance as on 01-07- 2014 39,474,686 - 39,474,686 48,267,133 Less Adjustment During the year 10,249,338 - 10,249,338 8,792,447 Balance as on 30-06- 2015 29,225,348 - 29,225,348 39,474,686

7.0 PROPERTY, PLANT & EQUIPMENT:

Balance as on 01-07-2014 165,348,979 149,246,086 314,595,065 334,460,761 Add: Addition During the Year 26,200,383 - 26,200,383 933,398

191,549,362 149,246,086 340,795,448 335,394,159 Less: Disposal During the Year - - - -

191,549,362 149,246,086 340,795,448 335,394,159 Less: Depreciation During the Year 12,406,773 8,857,312 21,264,085 20,799,094 Add: Revaluation surplus 666,438,345 230,680,032 897,118,377 -

845,580,934 371,068,806 1,216,649,740 314,595,065

Revaluation surplus arised on revaluation of assets of the company carried out by Ahmed & Akhter, CharteredAccountants. Necessary debit i.e. the increased value of assets have been debited to Property, Plant &Equipments.

Particulars Amount as on 30-06-2015 Consolidated as on

The details of fixed assets and allocation of depreciation has been shown in Annexure-A & B of the enclosedfinancial statement.

This represents the revaluation surplus arised on revaluation of above asset of the company carried out byAhmed & Akhter, Chartered Accountants. Necessary debit i.e. the increased value of assets have been debitedto Property, Plant & Equipments stated in note no. 7.

This loan is secured by mortgage of Land & Factory Building of the company, hypothecation of stocks, bookdebts and personal guarantee of the directors.

As no Deferred Tax (Liability)/Asset was calculated in earlier years, during the year such liability was calculatedand adjusted the balance of liability upto 2014 with retained earnings.

43



8.0 INVESTMENT IN SHARE:

UNIT-1 UNIT-2 30-06-2015 30-06-2014

Balance as on 30-06-2015 - 771,834 771,834 771,834

9.0 LOAN PROCESSING FEES (HBL):

Balance as on 01-07- 2014 1,484,000 1,484,000 2,120,000 Add: during the year - -

- 1,484,000 1,484,000 2,120,000 Less Adjustment During the year 1,484,000 1,484,000 636,000 Balance as on 30-06- 2015 - - - 1,484,000

10.0 INVENTORIES:

Stock of Raw Materials 75,383,918 103,686,176 179,070,094 316,137,776 Printing & Bailing Materials 1,949,838 2,440,640 4,390,478 6,889,424 Stores & Spares 9,351,696 7,306,888 16,658,584 8,455,602 Fuel & Lubricant 1,498,512 1,011,588 2,510,100 3,646,660 Work-in-Process 24,681,030 12,714,000 37,395,030 8,282,662 Stock of Finished Goods 12,158,481 17,090,061 29,248,542 18,012,603

125,023,475 144,249,353 269,272,828 361,424,728

ii) Quantity reconciliation of products were done properly.

11.0 ADVANCE INCOME TAX:

Balance as on 01-07- 2014 10,329,971 193,522,920 203,852,891 203,852,891 Add: during the year 1,221,578 6,643,457 7,865,035 -

11,551,549 200,166,377 211,717,926 203,852,891 Less Adjustment During the year - - - - Balance as on 30-06- 2015 11,551,549 200,166,377 211,717,926 203,852,891

III) The valuation of closing inventory has been made on the basis of lower of cost and net realizable value asper BAS-2.

Amount as on 30-06-2015 Particulars

Consolidated as on

This is the balance of investment which is due from National Power Company Limited and remain unrealised fora long time. The project was abandoned & the company got refund a portion of the invested amount leaving theabove balance unrealised.

This is considered doubtful of recovery but no provision has been made in the account.

i) The company has conducted a test physical verification of above inventories as on 30-06-2015

44



12.0 ADVANCE, DEPOSITS & PRE-PAYMENTS:

UNIT-1 UNIT-2 30-06-2015 30-06-2014

(a) Advance: Advance for Expenses (Others) 1,968,021 2,217,668 4,185,689 3,904,028 Advance for Expenses (Staff) 609,367 96,700 706,067 1,097,479 Sub Total (a) 2,577,388 2,314,368 4,891,756 5,001,507

(b) Deposit: Security Deposit with REB, Titas, PDB 1,048,500 4,305,270 5,353,770 5,240,970 BG Margin(CUFL,JFCL,KAFCO,SFP,UFFL) - 958,759 958,759 904,989 L/C Margin-RM,Spares 9,710,791 327,616 10,038,407 5,423,646 Deposit for CDBL - 310,314 310,314 - VAT Refund Claim A/C - 691,101 691,101 691,101 Sub Total (b) 10,759,291 6,593,060 17,352,351 12,260,706

(c) Pre-Payment: Prepaid Insurance (Fire) 519,750 217,350 737,100 1,682,838 Prepaid Insurance (Marine) - - - 352,689 Prepaid Expense - L/C 17,085,308 - 17,085,308 6,405,708

Prepaid VAT - 77,583 77,583 593,783 VAT Current A/C (Deposit) - 78,183 78,183 536,619 Sub Total (c) 17,605,058 373,116 17,978,174 9,571,637

Total (a+b+c) 30,941,737 9,280,544 40,222,280 26,833,850

i) Security Deposits are made to fulfill the requirements of PDB, Titas Gas, T&T and Others.

13.0 ACCOUNTS RECEIVABLE:

Accounts Receivable (Note-13.1) 131,678,347 18,288,032 149,966,378 103,852,084 Sundry Receivable (Note-13.2) 400,802 26,521,300 26,922,102 18,544,002

132,079,149 44,809,332 176,888,480 122,396,086

b) No amount was due by the associated undertakings.

Particulars Consolidated as onAmount as on 30-06-2015

ii) L/C Margin has been deposited with Habib Bank Ltd. Gulshan Branch against raw material import.Subsequently, all the amounts have been adjusted.

a) Receivables are considered good in respect of which the company holds no security other than the debtorspersonal security.

c) No amount was due by the directors (including Managing director), managing agents, managers and otherofficers of the company and any of them severally or jointly with any other person.

45



13.1 ACCOUNTS RECEIVABLE:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Codefine S.A. 29,712,929 - 29,712,929 40,528,825 Global Materials Handling products 11,534,052 - 11,534,052 10,164,252 Bulks Bags 16,379,386 - 16,379,386 - Pioner krence 24,621,955 - 24,621,955 - Conitex 6,515,400 - 6,515,400 - Smartlift 15,562,429 - 15,562,429 - Mini bulk 3,173,040 - 3,173,040 - Cement Company - 7,041,385 7,041,385 7,041,385 Chemical Company - 502,854 502,854 502,854 Others - 7,312,057 7,312,057 7,312,057 Fertilizer - 100 100 100 Feed & Poultry - 485,202 485,202 485,202 Padma Textile Mills - 169,986 169,986 169,986 Rice - - - 7,412,125 R/M Trading - 2,472,173 2,472,173 2,472,173 Tea Company - - - 180,794 Textile - - - 1,011,271 Square Textile Ltd. - 304,275 304,275 304,275 Winza products 24,179,157 - 24,179,157 26,266,784

131,678,347 18,288,032 149,966,378 103,852,084

13.2 SUNDRY RECEIVABLE:

Duty Draw Back Refund Claim - 26,473,836 26,473,836 18,095,736 Duty VAT Refund Claim 389,331 - 389,331 389,331 Shamsur Rahman - 18,725 18,725 18,725 Habib Bank Ltd(SD) - 28,739 28,739 28,739 Codifine (Fedex) 11,471 - 11,471 11,471

400,802 26,521,300 26,922,102 18,544,002

14.0 CASH IN HAND & BANK BALANCES:

Cash in Hand - 9,421,178 9,421,178 3,944,353 Cash at Bank:Janata Bank Ltd. STD A/C 36000319 6,734 - 6,734 6,734 Agrani Bank CD 2577 - 4,425 4,425 4,425 Janata Bank STD Ltd. A/C 36000302 - 66,899 66,899 126,359 DMCBL CD 219 - 5,000 5,000 5,000

6,734 9,497,501 9,504,235 4,086,870

Cash in hand was physically verified & certified by the management. Bank balances have been duly reconciledand confirmed by respective banks.


46



15.0 CREDITORS FOR GOODS:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Aster Polymer Color Ltd 1,855,000 - 1,855,000 - Baba Shahjalal Eng. Works - 8,812 8,812 8,812 BM Enterprise 267,775 267,775 264,823 Chandi Enterprise - 150,000 150,000 405,000 Confident Auto - 6,270 6,270 6,270 Change Poly & Packing - 272,000 272,000 272,000 Emon fire fighting Equipments 17,800 17,800 17,800 Filco Engineers 50,000 - 50,000 50,000 Habib Enterprise 927,500 927,500 681,550 Helal Enterprise 113,000 - 113,000 148,000 H.S Enterprise 160,641 - 160,641 27,827 Ideal Fiber Ind Ltd - 220,000 220,000 220,000 International Trading - - 1,071,400 Khan brothers - 14,185,930 14,185,930 14,185,930 Mono feed - - - 117,860 Moon Enterprise - 37,500 37,500 37,500 N. corporation - 411,885 411,885 411,885 Nahar Commercial Agency 127,050 481,707 608,757 686,757 R.S.N Enterprise - - - 79,099 Naksha Impressions Ltd 23,800 - 23,800 - Sapco General Trading bd Ltd - 113,000 113,000 3,000 Shanta mim Enterprise - - - 14,012 S.S. Trade Link 1,300,500 1,071,600 2,372,100 1,809,200 Supper Thai Plastic 132,168 - 132,168 103,368 Supreme Industries 67,725 - 67,725 67,725 Techno Economy Ltd. - 11,596,200 11,596,200 11,596,200 Popular Flexo Graphics 14,415 - 14,415 14,415

5,039,574 28,572,704 33,612,278 32,300,433 This is against credit purchase of raw materials, accessories & services from local vendors.

16.0 CREDITORS FOR EXPENSES: Aramax 799,286 - 799,286 349,124 Appllo Line Shipping Service 198,436 - 198,436 445,483 Creditors for Expenses (Misc) 367,453 2,835,350 3,202,803 4,750,791 Credit Rating Information &services Ltd 46,000 46,000 92,000 - Consultant’s remuneration 3,277,605 3,277,605 6,555,210 6,225,210 Director honorarium 240,000 240,000 480,000 - DHL Courier service 71,695 - 71,695 221,694 TNT Express 22,630 22,630 45,260 - Electricity Bill (Factory) 9,031 - 9,031 18,919 Fortune Advertisement - 16,876 16,876 46,876 Gas bill (factory) 505,714 505,714 1,011,427 2,276,700 Hussain Farhad & Co 172,500 172,500 345,000 345,000 Interest on Loan Payable 473,124 7,885,916 8,359,040 4,728,400 Khorsed Refrigerator service - 2,500 2,500 2,500 Maruf Builders - 194,500 194,500 323,100 Mayer Doa enterprise 364,500 364,500 Mayer Doa flower Mills - 52,500 52,500 12,380 Mercantile Insurance Co. Ltd. - 217,350 217,350 - N. corporation (civil) 4,237,403 4,237,403 4,237,403 Office Rent 601,965 601,965 1,203,930 1,203,930 Podder & Associates - 4,961 4,961 4,961 Subarna Trade Associate 273,311 - 273,311 273,311 Shafiq Basak & Co. 43,125 43,125 86,250 69,000 Shamsur Rahman (C&F) 52,458 114,293 166,751 166,751 VAT Payable - 226,043 226,043 216,718 Source VAT Payable 1,002,662 97,594 1,100,256 1,100,256 Wages, Salary & allowance payable 4,124,742 761,314 4,886,056 9,492,891 Radiant Freight Service 44,301 - 44,301 -

16,563,441 17,683,235 34,246,676 36,511,397


47



17.0 CREDITORS FOR OTHER FINANCE:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Advance against Fixed asset Sales 1,321,300 1,321,300 1,321,300 Others - 114,724 114,724 86,075 Capital Gain Tax payable - 341,310 341,310 341,310 Fractional Share Sales - 143,122 143,122 103,951 Income tax payable 851,100 345,347 1,196,447 1,029,520 Khana Kaba 6,492,376 - 6,492,376 6,492,376 Refund Warrant 20,000 - 20,000 20,000 Source VAT payable - 1,056,145 1,056,145 8,834 Unpaid Salary & Wages - 699,841 699,841 505,957

7,363,476 4,021,789 11,385,265 9,909,323

18.0 WORKERS PROFIT PARTICIPATION FUND:

Balance as on 01-07-2014 1,290,629 1,451,148 2,741,777 2,311,673 Add: Prior year adjustment of WPPF provision 127,480 26,110 153,590 - Add: Transferred during the year 1,028,744 252,271 1,281,015 430,104

2,446,853 1,729,529 4,176,382 2,741,777 Less: Paid during the year - - - - Balance as on 30-06-2015 2,446,853 1,729,529 4,176,382 2,741,777

19.0 PROVISION FOR INCOME TAX:

Current tax provision (note-19.1) 17,598,400 33,097,102 50,695,502 46,862,285 Deferred tax provision (note-19.2) 18,073,193 28,360,493 46,433,687 -

35,671,593 61,457,596 97,129,189 46,862,285

19.1 CURRENT TAX PROVISION:

Opening balance as on 1 July 15,026,539 31,835,747 46,862,286 44,521,120 Add: During the period 2,571,861 1,261,355 3,833,216 2,341,165

17,598,400 33,097,102 50,695,502 46,862,285 Less: Paid during the period - - - -

17,598,400 33,097,102 50,695,502 46,862,285

19.2 DEFERRED TAX PROVISION:

Carrying amount of fixed assets 179,142,589 140,388,774 319,531,363 314,595,066 Tax base value of fixed assets 34,557,034 26,946,797 61,503,831 47,875,325 Taxable temporary difference 144,585,555 113,441,977 258,027,532 266,719,741 Provision for WPP Fund - - - - Deductible temporary difference - - - -

Taxable/(Deductible) temporary difference 144,585,555 113,441,977 258,027,532 266,719,741 Tax rate 12.5% 25% - - Deferred tax liability as at 30 June 18,073,193 28,360,493 46,433,687 67,280,538 Deferred tax liabilities upto previous year 26,071,369 41,209,169 67,280,538 - Deferred tax (income)/expenses for the year (7,998,176) (12,848,676) (20,846,851) 67,280,538

This represents 5% provision on net profit before tax for Workers Profit Participation Fund which is yet to bedistributed. However, till to the date of this report, Tk. 1,694,249 has been paid to the related employees.


48



20.0 UNCLAIMED DIVIDEND:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Balance as on 01-07-2014 - 2,439,356 2,439,356 2,439,356 Add: Transfer from Dividend Payable - - - -

- 2,439,356 2,439,356 2,439,356 Less: Paid during the year - - - -

- 2,439,356 2,439,356 2,439,356

21.0 SHORT TERM BANK LOAN:

Export Bill Discounted - - - 2,765,079 Habib Bank Ltd. (LTR Liability) 64,143,263 - 64,143,263 101,473,591 Janata Bank Ltd. (CD A/C 7655) 162,802 - 162,802 270,581 Janata Bank Ltd. (CD A/C 9783) - 4,285,796 4,285,796 3,742,446 Habib Bank Ltd. (CD A/C 1146) - 42,941,340 42,941,340 43,098,494 Habib Bank Ltd. (CD A/C 1822) - 16,504 16,504 590,765 Habib Bank Ltd. (SND A/C 1322) 967,450 - 967,450 1,274,641 Dhaka Mercantile Co-operative Bank Ltd. (DMCBL) - 547,902 547,902 547,902

65,273,516 47,791,542 113,065,058 153,763,499

22.0 OTHER SHORT TERM LOAN:

Techno Economy Ltd 25,300,000 66,409,231 91,709,231 91,709,231 Rafiqul Murshed (MD) - 23,511,340 23,511,340 23,511,340 Mr. Wahiduzzaman Chowdhury (Director) 4,300,000 13,037,789 17,337,789 15,918,340 Mr. Asadur Rahman Mirza (Director) 7,555,000 5,250,000 12,805,000 12,805,000 N. Corporation 41,071,949 10,038,966 51,110,915 47,562,302 Jahangir Alam (Nanto) 15,167,911 - 15,167,911 13,578,134 Hasmat Rabbani - 10,000,000 10,000,000 10,000,000 Latifa Binte Lutfor - 1,024,800 1,024,800 1,024,800 Mirza Arif - 12,500,000 12,500,000 12,500,000 Nurul Islam Khan 10,000,000 10,000,000 10,000,000 Tahmina Zaman - 6,000,000 6,000,000 6,000,000 Business Trade Syndicate 8,350,010 87,488,173 95,838,183 89,754,847 Pavarton Securities Ltd - 26,533,836 26,533,836 23,188,000

101,744,870 271,794,135 373,539,005 357,551,994

23.0 TURNOVER:

Local Sales - 177,271,300 177,271,300 154,278,267 Export 486,632,112 - 486,632,112 304,790,177 Excess Sales - - - -

486,632,112 177,271,300 663,903,412 459,068,444

Above facility has been enjoyed against working capital sanctioned by Habib Bank Ltd., Gulshan Branch, Dhaka and secured by hypothecation of stock & stores and collateral security of freehold land.

The company has exported the FIBC & PP woven bags to Netherlands, Canada & Switzerland during the financial year and also sold locally. The breakup of above turnover is given below:

Particulars

This represents dividend warrant issued but yet to be collected by the recipients.

Amount as on 30-06-2015 Consolidated as on

49



24.0 COST OF GOODS SOLD:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Work in Process (Opening) 5,785,402 2,497,260 8,282,662 2,245,955 Raw Material Consumed (Note-24.1) 338,899,980 122,739,413 461,639,393 304,972,414 Printing & Billing Material Cons. (Note-24.2) 13,591,708 2,418,459 16,010,167 8,658,114

358,277,090 127,655,132 485,932,222 315,876,483 Less: Work-in-Process (Closing) 24,681,030 12,714,000 37,395,030 8,282,662 Total Consumption 333,596,060 114,941,132 448,537,192 307,593,821 Wages & Salary ( Note- 24.3) 50,834,885 17,611,572 68,446,457 53,272,032 Manufacturing Overhead (Note-24.4 ) 29,611,479 15,708,166 45,319,646 34,175,707 Cost of Production 414,042,424 148,260,870 562,303,295 395,041,560 Finished Goods (Opening) 3,832,481 14,180,122 18,012,603 5,783,690 Finished Goods Available 417,874,905 162,440,992 580,315,898 400,825,250 Less: Finished Goods (Closing) 12,158,481 17,090,061 29,248,542 18,012,603 Cost of Goods sold 405,716,424 145,350,931 551,067,355 382,812,647 Sample Expenses 1,705,671 617,990 2,323,661 1,611,885 Total Cost of Goods Sold 404,010,753 144,732,941 548,743,694 381,200,762

24.1 RAW MATERIAL CONSUMED :

Opening Stock 165,383,918 148,508,142 313,892,060 305,251,901 : Add: Purchase 248,899,980 84,049,831 332,949,811 313,612,573

Add: Transfer from Raw Material (Trading) - 2,245,716 2,245,716 - 414,283,898 234,803,689 649,087,587 618,864,474

Less : Closing Stock 75,383,918 103,686,176 179,070,094 313,892,060 338,899,980 131,117,513 470,017,493 304,972,414

Less : Duty Draw Back Refund - 8,378,100 8,378,100 - 338,899,980 122,739,413 461,639,393 304,972,414

RAW-MATERIALS CONSUMED (TRADING)

Opening stock 2,245,716 2,245,716 2,245,716 Add: Purchase - -

- 2,245,716 2,245,716 2,245,716 Less: Transferred to Raw material (MFG) 2,245,716 2,245,716 Less : Closing Stock - - 2,245,716

- - - -

Total Raw Materials Consumed: (a +b) 338,899,980 122,739,413 461,639,393 304,972,414

24.2 PRINTING & BAILING MATERIALS CONSUMED:

Opening stock 3,090,826 3,798,599 6,889,425 3,878,894 Add: Purchase 12,450,720 1,060,500 13,511,220 11,668,644

15,541,546 4,859,099 20,400,645 15,547,538 Less : Closing Stock 1,949,838 2,440,640 4,390,478 6,889,424

13,591,708 2,418,459 16,010,167 8,658,114

Consolidated as on Particulars

Amount as on 30-06-2015

50



24.3 WAGES & SALARY:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Salary & Allowances 5,101,024 2,186,153 7,287,177 6,949,410 Wages 43,835,478 14,611,826 58,447,304 45,378,539 Bonus 1,898,383 813,593 2,711,976 944,083

50,834,885 17,611,572 68,446,457 53,272,032

24.4 MANUFACTURING OVERHEAD:

Carriage Inward 220,465 81,542 302,007 404,055 Cleaning & Washing 75,216 27,819 103,035 900 Depreciation 11,746,859 8,646,533 20,393,392 19,774,867 Electric Bill 358,471 - 358,471 - Entertainment 163,805 60,585 224,390 414,936 Fire Extinguisher Expenses - - - 9,830 Fire Insurance Premium 242,190 217,350 459,540 519,750 Fork lift Fuel Exp 13,608 5,033 18,641 5,100 Fuel, Oil & Lubricant (Note-24.4.1) 5,027,690 1,568,417 6,596,107 3,098,889 Eid Festival Exp 40,084 14,826 54,910 - Gardening Expenses 306 - 306 270 Gas Bill 2,983,126 2,983,126 5,966,252 5,371,011 Gas Bill (Domestic) 46,681 46,681 93,362 108,039 Guest House Expenses 129,425 129,425 258,850 303,287 Iftar Expenses 96,802 35,803 132,605 91,070 Loading Unloading (inward) 198,719 - 198,719 113,025 Repair & Maintenance Expenses(Machinery) 1,118,139 479,203 1,597,342 1,137,184 Repair & Maintenance (Fact) 341,332 146,285 487,617 - Medical Expense 34,601 34,601 69,202 88,812 News paper &magazine 4,700 - 4,700 2,740 Rates & Taxes 4,866 4,866 9,732 84,000 House Rent (Worker) 40,500 - 40,500 - Stationery Charges 55,628 20,575 76,203 28,040 Store Handling Charges 167,714 62,031 229,746 147,704 Stores & Spares Consumed (Note-24.4.2) 6,267,168 1,057,145 7,324,313 2,241,814 Telephone & Fax Exp 50,326 18,614 68,940 10,049 Tiffin Expenses 43,596 16,125 59,721 16,561 Traveling & Conveyance 61,808 22,860 84,668 138,273 Uniform & Liveries 77,654 28,721 106,375 - Foreign Salary - - - 65,500

29,611,479 15,708,166 45,319,646 34,175,707

24.4.1 FUEL, OIL & LUBRICANTS:

Opening stock 2,087,155 1,559,505 3,646,660 2,501,862 Add: Purchase 4,439,047 1,020,500 5,459,547 4,243,687


5,027,690 1,568,417 6,596,107 3,098,889


51



24.4.2 STORES AND SPARES CONSUMED:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Opening stock 3,099,860 5,355,742 8,455,602 5,670,122 Add: Purchase 12,519,004 3,008,291 15,527,295 5,027,295


6,267,168 1,057,145 7,324,313 2,241,814

25.0 ADMINISTRATIVE & GENERAL EXPENSES:

Advertisement 81,169 34,787 115,955 144,318 AGM Expenses 443,843 443,843 887,686 752,312 Audit Fees 43,125 43,125 86,250 69,000 Board Meeting Expenses 90,614 90,614 181,228 173,828 Board Meeting Fees 145,000 145,000 290,000 177,000 Bonus 461,204 461,204 922,407 780,662 Business Promotion Expenses 872,947 872,947 1,745,894 - Car Maintenance 672,084 672,084 1,344,167 1,264,489 Catering Expenses 135,067 135,067 270,134 240,599 CDBL Expense 54,669 54,669 109,338 123,245 Computer Operating & Maintenance 114,226 114,226 228,451 222,840 Consultant remuneration 990,000 990,000 1,980,000 2,345,222 Depreciation 659,915 210,779 870,694 1,024,227 Directors' honorarium 240,000 240,000 480,000 480,000 Donation & Contribution 500,000 634 500,634 9,500 Electricity Charges 268,447 - 268,447 249,308 Entertainment 636,930 625,187 1,262,117 2,787,195 Form & Fees 23,450 1,000 24,450 37,920 Miscellaneous Expenses 162,171 59,981 222,152 33,990 Incentive & Festival Expenses 33,600 21,170 54,770 - Legal & Professional Fees 523,119 523,119 1,046,238 582,903 Listing fee (DSE & CSE) 95,188 95,188 190,376 177,501 Mail & Postage 23,481 8,685 32,166 26,862 Repair & Maintenance Charges 299,210 299,210 598,420 119,188 Renewals Fees & Charges 171,415 - 171,415 188,101 Mortgage Reg. Expenses - - - 8,000 Newspaper & Magazines 4,708 4,708 9,416 7,165 Overtime admin 26,100 26,100 52,200 33,000 Office Maintenance 29,027 29,027 58,054 57,463 Office Rent 160,692 160,692 321,384 321,384 Phone, Fax & Telex 152,531 152,531 305,062 489,869 Salary & Allowances 7,557,729 2,519,243 10,076,972 8,865,794 Stationary & Photocopy Charges 164,471 60,832 225,303 180,791 Statutory Stamp (Bond & Others) 29,575 - 29,575 45,920 Training Expenses 3,000 3,000 6,000 - Traveling & Conveyance 283,734 104,943 388,677 501,876 Traveling & Conveyance (foreign) 419,388 419,388 193,087 VAT on board Meetings Expenses 20,400 20,400 40,800 26,550 Water Bill 47,015 47,015 94,029 98,633

16,639,241 9,271,008 25,910,249 22,839,741


52



26.0 SELLING & DISTRIBUTION EXPENSES:

UNIT-1 UNIT-2 30-06-2015 30-06-2014Advertisement (Marketing) - 10,000 10,000 15,000 Bonus (Marketing) 89,659 89,659 179,318 210,862 Carriage Outward 2,184,116 936,050 3,120,165 2,874,302 C&F Export Expenses 1,357,747 - 1,357,747 712,640 Entertainment 1,254,431 537,613 1,792,044 55,925 EPB Expenses 20,400 - 20,400 17,700 Haulage Charges 1,040,818 - 1,040,818 636,021 Loading & Unloading outward 168,632 9,818 178,450 98,860 Marine Insurance (export) 120,626 - 120,626 196,809 Ocean Freight Expenses 3,539,821 - 3,539,821 4,386,905 Salary & allowance (Marketing) 1,382,758 460,919 1,843,677 2,056,237 Sales Promotion Expenses 507,666 - 507,666 398,635 Sample Expenses 1,787,913 700,232 2,488,145 1,707,366 Tender Document Expenses - 21,000 21,000 21,500 Traveling & Conveyance 166,740 11,245 177,985 79,935 Mail & Postage 3,370,151 - 3,370,151 662,114 NBR Permission Charge 5,000 - 5,000 -

16,996,477 2,776,536 19,773,013 14,130,810

27.0 FINANCIAL EXPENSES:

Interest on PAD Loan - - - 148,510 Interest on CC Loan(CD-1146) HBL - 5,827,816 5,827,816 6,099,756 Interest on PSL 3,345,836 - 3,345,836 88,073 Interest on FBP 1,198,319 - 1,198,319 1,000,376 Interest on LTR Loan 13,779,281 16,505 13,795,786 6,526,517 Interest on Long Term Loan 2,106,894 - 2,106,894 2,365,134 Loan Processing Charge - 1,484,000 1,484,000 636,000 Bank Charges 461,433 286,075 747,508 1,003,130 Excise Duty 1,350 7,000 8,350 11,350 Interest on BTSL Loan 1,520,836 4,562,500 6,083,336 6,083,336 Interest on Loan(J. Nantu) - 1,589,777 1,589,777 1,589,778 Interest on Loan(MD) 1,419,449 - 1,419,449 1,419,449 Interest on Loan(N. Corp.) 3,548,613 - 3,548,613 3,548,613 Interest on Loan(W.Chowd.) - 1,419,449 1,419,449 1,419,449 Interest on deferred L/C Loan - - - 355,585

27,382,010 15,193,122 42,575,132 32,295,056

28.0 BASIC EARNING PER SHARE (EPS):

The Computation of EPS is given below:

Amount (Tk.)30-06-2015 30-06-2014

Earnings Attributable to the Ordinary Shares during the year 42,633,943 5,830,805 Number of Ordinary Shares as on 30-06-2015 25,358,117 25,358,117 EPS After Income Tax (2014:restated) 1.68 0.23


Particulars

53



29.0 NET ASSETS VALUE (NAV):

The Computation of NAV is given below:

Amount (Tk.)30-06-2015 30-06-2014

Net Assets 1,226,208,767 353,890,575 Number of Ordinary Shares as on 30-06-2015 25,358,117 25,358,117 Net Assets Value per Share (2014:restated ) 48.36 13.96

30.0 NET OPERATING CASH FLOW PER SHARE:

The Computation of Net Operating Cash Flow Per Share is given below:

Cash flows from operating activities as per Statement of cash flows 66,578,515 710,687 Number of Ordinary Shares as on 30-06-2015 25,358,117 25,358,117 Net Operating Cash Flow Per Share (2014:restated ) 2.63 0.03

31.0

Salary & Allowance (Including Bonus) 13,022,374 11,913,555 Board Meeting Attendance Fees 290,000 177,000 Honorarium of Directors 480,000 480,000

13,792,374 12,570,555

i) The rate at which Director have drawn Board Meeting attendance fees was Tk. 3,000 for two meetings and Tk. 5,000 for three meetings.

ii)

iii) There was no Bank Guarantee issued by the company on behalf of their Directors.

32.0 CONTINGENT LIABILITY:

33.0 EVENTS AFTER THE REPORTING PERIOD:

34.0 GENERAL:

i) Figures of the current year have been rounded off to the nearest Taka.ii) Previous year's figures have been re-arranged where ever considered necessary to conform this year's

presentation.iii) There was no brokerage/commission paid against sales during the financial year.iv) There was no claim against the company not acknowledged as debt on 30th June, 2015.v)

vi) Other than the above, there was no expenses incurred in foreign currency on account of Royalty, Technical Experts, Professional and Advisory Fee, Interest, Brokerage and Commission etc.

vii) No transaction was made with the associated companies during the year.

No amount of money was spent by the company for compensation to any member of the Board for specialservices rendered.

There may arise some liability for the tax assessments pending for pending Income Tax assessments. Liabilityfor interest payable on WPPF may arise at the time of payment.

The Board Directors in its meeting held on 21-10-2015, recommended 7% stock dividend for the shareholderswhose name will be appeared in the shareholders register at the record date which is subject to approval at theforthcoming Annual General Meeting. The proposed dividend is not recognized as a liability at the Balance Sheetdate in accordance with BAS 10 "Events after the Financial Statement date".

There was no credit facilities available to the company under any contract nor availed of as on 30th June, 2015

Particulars

During the financial year aggregate amount paid/provided in respect of "Director" & "Officers" of the company as defined in the Securities & Exchange Rules 1987 are disclosed below:

54


VALUERS’ REPORT

We have conducted the revaluation of Land, Building and Plant & Machinery of MIRACLE INDUSTRIES LIMITED as on 30 June 2015 and attach herewith the Detailed Revaluation Report.

BASIS OF VALUATION

We have conducted the revaluation of Land, Building and Plant & Machinery in accordance with International Valuation Standards (IVS) and Bangladesh Securities and Exchange Commission (BSEC) guidelines. Those standards and guidelines require that we plan and perform the revaluation to obtain reasonable assurance about whether the revaluations are free of material misstatement. The assignment includes Identifying, Listing, Verifying and Revaluation of Land, Building and Plant & Machinery based on documents/ evidence provided by the management.

OPINION

We confirm that we have maintained the Fundamental Principles of Ethical Conduct i.e. Integrity, Objectivity, Competence, Confidentiality and Professional Behavior regarding the revaluation of Land, Building and Plant & Machinery and taken all possible steps to avoid or mitigate possible threats to compliance of these principles;

In our opinion, revaluation of Land, Building and Plant & Machinery conducted based on the guidelines issued by Bangladesh Securities and Exchange Commission (BSEC) and International Valuation Standards (IVS), give a true and fair view of the revaluation as of 30th June, 2015.

We also report that:

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

(b) in our opinion, proper fixed assets register as required by law has been maintained by the management.

Date: October 12, 2015 AHMAD & AKHTAR Dhaka Chartered Accountants

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EXECUTIVE SUMMARY

1. We have conducted the revaluation of Land, Building and Plant & Machinery of MIRACLE INDUSTRIES LIMITED based on the guidelines issued by the BSEC dated August 18, 2013, International Valuation Standards (IVS), Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). We have maintained the Fundamental Principles of Ethical Conduct i.e. Integrity, Objectivity, Competence, Confidentiality and Professional Behavior regarding the revaluation.

2. Scope of Works in respect of our assignment at MIRACLE INDUSTRIES LIMITED included, inter alia, the following:

- Identification of Land, Building and Plant & Machinery; - Physical Verification; and - Revaluation. 3. The Valuation Team comprised Valuers, Chartered Accountants and eminent Engineers having

considerable experience and exposure, together with Survey Team having wide experience in Identification and Survey of various Assets.

4. The Assets were identified through verification of documents, records and other sources and procedures to the extent possible by a Survey team and revaluation has been done as per the guidelines and norms prescribed in Bangladesh Securities and Exchange Commission Guidelines ref. no. SEC/CMRRCD/2009-193/150/Admin/ dated August 18, 2013, together with relevant Accounting Standards and other guidelines issued by the Institute of Chartered Accountants of Bangladesh.

5. Listing of Land, Building and Plant & Machinery is the most important part in this type of assignments which could be extremely challenging in present case without active coordination and participation by MIRACLE INDUSTRIES LIMITED and without availability of necessary documents and records. However, the best efforts of our team and continuous support from management of MIRACLE INDUSTRIES LIMITED enabled us to compile the list of Land, Building and Plant & Machinery.

6. The total fair value (current market value) of Land, Building and Plant & Machinery as on 30 June 2015 aggregates to Bangladesh Taka 1,211,261,196. Therefore Tk. 897,118,377 revaluation surplus arises as detailed below:

Value as atParticulars Book Value as 30 June 2015 Revaluation on 30 June 2015 after Revaluation Surplus

Freehold land & Land Development 10,303,793 554,900,000 544,596,207

Building & Other Construction 75,865,641 316,440,597 240,574,956

Plant & Machinery 227,973,385 339,920,599 111,947,214

Total 314,142,819 1,211,261,196 897,118,377

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CHAPTER - 1.00: INTRODUCTION

MIRACLE INDUSTRIES LIMITED was incorporated on December 30, 1993 in Bangladesh as a Public Limited Company under the Companies Act, 1913 as Joint Venture with BCIC and com-menced commercial operation of its Unit-1 on 01.01.1997. The Company went for public issue of share in January, 2000 and its share were listed with Stock Exchanges in Bangladesh and started trading its share from 12th April, 2000. To cover up the local demand company established a plant named Unit-2 in the year 2001. The authorized share capital of the company is Taka 500,000,000 divided into 50,000,000 shares of Tk. 10 each and paid up capital is Tk. 241,505,880 including bonus shares of Tk. 71,505,880.

CHAPTER - 2.00: GUIDELINE FOLLOWED BY US

For the purpose of identification and revaluation of fixed assets we have considered the following where applicable:

i. Bangladesh Securities and Exchange Commission guideline issued by Bangladesh Securities and Exchange Commission (ref. no. SEC/CMRRCD/ 2009-193/150/Admin/ dated August 18, 2013);

ii. Accounting Standards (where applicable) issued by the Institute of Chartered Accountants of Bangladesh;

iii. Upward revaluation of the following assets are not allowed by BSEC (ref. no. SEC/ CMRRCD/2009-193/150/Admin/ dated August 18, 2013):

i. Leasehold lands and buildings on such lands having no transferring rights, total lease period below 99 years and remaining lease period below 10 years;

ii. Plants and machineries acquired in second hand condition, acquired in brand new condition but having remaining economic life of less than 50% of its total useful life, as estimated at acquisi-tion;

iii. Tin-shed buildings, buildings having remaining economic life of less than 50% of its total useful life, as estimated at construction;

iv. Vehicles, furniture & fittings, office equipments, loose tools and intangible assets.

CHAPTER - 3.00: INFORMATION AND SOURCES

Based on the audited financial statements for the financial year 2013-2014 and subsequent unau-dited financial statement for the financial year 2014-2015, we have conducted identification and revaluation of various types and categories of Land, Building and Plant & Machinery for the purpose of incorporation in the Opening Balance Sheet as on 01 July 2015. The classification of Land, Build-ing and Plant & Machinery are as follows:

i. Freehold Land & Land Development;ii. Building & Other Construction; and iii. Plant & Machinery

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It will be appreciated that the availability of relevant records and information regarding ownership are absolutely essential for identification and physical verification of all these categories of fixed assets. Accordingly, we have applied our sincerest efforts to retrieve relevant information and records. The following records/details have been made available to us that were relevant for identification of fixed assets:

• Books of Accounts for the financial year 2014-2015;

• Land, Building and Plant & Machinery Registers Maintained;

• List of Land and title deeds;

• List of Buildings ; and

• Layout Plan of Buildings.

The above are signed by official of MIRACLE INDUSTRIES LIMITED and documentary evidence available to ensure their ownership rests with those documents. However, in our process we have assumed that the above assets are owned by the MIRACLE INDUSTRIES LIMITED and have moved ahead with the process of physical verification and revaluation where applicable. We also collected information from audited financial statements and audit reports of previous several years which were issued as unqualified audit reports by the statutory auditors.

CHAPTER - 4.00: APPROACH AND METHODOLOGY The methodology we have adopted for revaluation of Land, Building and Plant & Machinery has involved two steps. The first step was adopted for physical verification of the assets. The second step was for ascertainment of current realizable values, at which the assets should appear in the Balance Sheet as at 30 June, 2015.

In respect of Building the current market price of new such assets has been estimated. Then we estimated total useful life and remaining period of useful life of each asset. The proportionate value for the remaining period of useful life, calculated from current market price, has been taken as pres-ent realizable value as on 30 June 2015.

In respect of Plant & Machinery, the years for which these assets will remain in use in future have been taken into consideration while carrying out the revaluation.

We have revalued immovable assets mainly land and buildings.

The assignment requires identification, physical verification, determination of Ownership and Revaluation of Land, Building and Plant & Machinery. The whole process is dependent upon the availability of necessary details in this regard. Our thrust was primarily on obtaining and /or retrieving such details from various sources.

On the basis of details /data available, we first segregated relevant and irrelevant details and docu-mented the relevant details suitably to facilitate and enable physical verification. The value of assets, based on such available information and observations during physical survey, has been brought into the Books of Accounts.

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We understand that Land, Building and Plant & Machinery Valuation is Accounting Valuation (and not Market based Valuation) to arrive at a reasonable value (which will be treated as a True & Fair Value and not a True & correct value).

CHAPTER- 5.00: RESULT OF REVALUATION

1. Physical Verification of Assets

We have made physical verification of Land, Building and Plant & Machinery of the company and ascertained the conditions of the relevant assets as far as were practicable. For the purpose of re-valuation, we have considered only those assets, which were found existent in physical verification.

2. Freehold Land & Land Development

Owner of the land : MIRACLE INDUSTRIES LIMITED

Location of the land : Area of Land : 277.45 Decimal

Mouza : Keoa

District : Gazipur

The land is bounded on four sides as under:-

North : Two storied building of Bangladesh Master Pack Ltd

South : Five storied under construction building of Meghna Group

East : Dhaka-Mymensingh Highway

West : Two storied building of Techno Economy Ltd.

Taking all the related factors into consideration, we are of the opinion that on average, present value of the land, as it is now, would be Tk 20,00,000 per decimal and it has been taken based on average buying and selling price of previous one year in the locality.

The revalued amount of the land stands at Tk. 554,900,000 and is exhibited in Schedule- A/1. Therefore, the summarized account of the land as on 30 June 2015 stands as follows:

Description Land Area (decimal )

Book value as on 30

June 2015 (Tk.)

Current value as on 30 June 2015

as per revaluation (Tk.)

Revaluation Surplus (Tk.)

Freehold Land & Land

Development 277.45 10,303,793 554,900,000 544,596,207

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3. Building & Other Construction

Total floor area of the buildings is 146,857 Sft. This is built with burnt brick walls with R.C.C. roof. These were built in the years 1997-2015. The buildings constructed on Freehold land has been revalued Considering the present cost of construction materials, labor cost etc as well as quality of finishing work, fixtures and fittings used etc. Depreciation for the number of years the buildings have been used has been deducted from the current value to arrive at fair value. Summary of the revaluation is as follows:

4. Plant & Machinery

In assessing the value of Plant & Machinery we have taken into consideration the devaluation of Bangladesh currency, inflation over the years, increase of price in international market, current value in local market etc and further useful life of each of this machineries. We have taken into consideration the reasonable depreciation for the normal wear and tear as well as operational condition of the individual machine.

The revalued amount stands at Tk. 339,920,599 and is exhibited in Schedule-A/3. The sum-marized account of Plant & Machinery on 30 June 2015 is as follows:

CHAPTER - 6.00: LIMITATION IN PREPARATION OF REVALUATION REPORT

i. In cases where details of Land, Building and Plant & Machinery have been made available, they were authenticated by the appropriate authority and proper documentary evidence have been made available.

Description

30 June 2015 (Tk.)

Current value

as on

30 June 2015 (Tk.)

Revaluation

Surplus (Tk.)

Building & Other

Construction

75,865,641

316,440,597

240,574,956

Description

Written down

value as on 30

June 201 5 (Tk.)

Current value as

on 30 June 2015

(Tk.)

Revaluation

Surplus (Tk.)

Plant &

Machinery

227,973,385

339,920,599

111,947,214

Book valueas on

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ii. In the absence of availability of information/record in various cases, alternative procedure were adapted for listing of fixed assets to the extent possible till date and arrived at a reasonable value to be included in the balance sheet as on 30 June 2015. Such revaluation figure, including opening balance sheet as on 01 July 2015, will vary substantially in case where required details are made available subsequently. In such cases, these will be adjusted through appropriate adjustment entries in the Accounts of financial year 2014-2015, as applicable and within the tenure of our assignment period.

iii. Even after our sincerest effort, there might have been left out Assets. Some relevant third party information on ownership of some important assets (like Land) of MIRACLE INDUSTRIES LIMITED may be important. However, even after repeated enquiry, no such details could be provided by MIRACLE INDUSTRIES LIMITED.

CHAPTER - 7.00: DISCLAIMER

i. This report on revaluation of Land, Building and Plant & Machinery has been prepared by the Ahmad & Akhtar, Chartered Accountants, as appointed valuer. This is the first effort towards identifying, listing out and valuing the Land, Building and Plant & Machinery for MIRACLE INDUSTRIES LIMITED. The valuer relied upon the details documents / evidence (signed) provided by management of the MIRACLE INDUSTRIES LIMITED. The quantum of assets does not amount to any confirmation from the valuer and is subject to vetting by competent authority.

ii. All the figures and comments in specific or general terms made in relating to this report are based on documents, information and explanations provided by the management of MIRACLE INDUSTRIES LIMITED at various levels during the course of engagement of team of Ahmad & Akhtar, Chartered Accountants. Verification of the correctness, origin, comprehensiveness or veracity of comments or explanations in so far as they relate to this report is not the responsibility of the valuer team.

iii. Although the valuer team has made every effort to obtain information comprehensively for every department of the MIRACLE INDUSTRIES LIMITED and has also widely circulated the Team’s requirements in this regard. It is possible that some relevant information or document has not become available to the team. It therefore specifically stands that these documents are based upon and restricted to the set of documents, information, comments and explanations provided by MIRACLE INDUSTRIES LIMITED and therefore any such documents, information, comments and explanations not provided to the valuer team is excluded (except where alternative procedure could be adopted) and the Team has no responsibility whatsoever in regard to the possible present or future effects of such documents, comments information and explanations on present document.

iv. The valuer team is not responsible for any legal or other liability that may arise in any way at any point of time from these documents or any interpretation whatsoever that may be put on the whole or part of it. Likewise the valuer team is not responsible for any legal consequences arising out of non-compliance by the management of MIRACLE INDUSTRIES LIMITED of any of its statutory or other governmental obligations that may become apparent now or any time in the future, in whatsoever manner and in whatsoever ways.

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Appendix-A

COMPLIANCE STATUS OF GUIDELINES ISSUED BY THE BSEC

A. General Requirements:

Sl. Conditions Compliance/ Remarks

1 The decision of valuation and appointment of the valuer shall be taken by the board of directors of the company concerned. The board decision should clearly mention. Among others, the purpose of valuation and the asset classes to be revalued.

Management Responsibility

2 The valuer shall submit the valuation report to the board along with all workings and documents and the board shall decide next course of action. If the board decides for financial reporting of the valuation, it shall instruct the management of the company to do so mentioning the reporting period.


3 The valuer shall provide a report and fairness opinion duly signed by its chief executive which shall form integral part of the valuation report. In their report, the International Valuation Standards (IVS) and that they have maintained the Fundamental Principles of Ethical Conduct namely Integrity, Objectivity, Competence, Confidentiality and Professional Behavior regarding the valuation.

Complied

4 The revalued amounts of assets and liabilities shall be included in the financial statements in accordance with the applicable provisions of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). The valuation report shall be presented as annexure of the financial statements of the period in which the valuation has been made.


5 After preparation of the financial statements, the management shall handover the same to the auditors along with all workings and documents provided by the valuer.


6 The auditor shall examine all relevant documents and furnish their opinion in the auditors’ report regarding whether the valuation report has been prepared and treated in accordance with Bang ladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) and other applicable laws, rules, regulations and guidelines or not. They shall also certify whether proper accounting treatments, including provisions, tax and other liabilities, have been made in the financial statements to consider the valuation or not.

Auditor Responsibility

7 The management of the company concerned shall extend all co-operations to the valuer and the auditors regarding the valuation and auditing. The valuer shall also cooperate the auditors for clarification of the valuation.

Management /Valuer /Auditor

Responsibility

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Sl. Conditions Compliance/ Remarks

8 Time-lag between two valuations for the same class of assets shall not be less than three years; provided that no upward revaluation of an asset shall be made within two years of its acquisition

Complied

9 Upward revaluation of the following assets are not allowed: i. Leasehold lands and buildings on such lands having no

transferring rights, total lease period below 99 years and remaining lease period below 10 years;

ii. Plants and machineries acquired in second hand condition, acquired in brand new condition but having remaining economic life of less than 50% of its total useful life, as estimated at acquisition;


iv. Vehicles, furniture & fittings, office equipments, loose tools and intangible assets;

Complied

10 No dividend shall be issued out of any revaluat ion surplus Complied

11 The valuer shall be a partnership firm or a company registered with the Registrar of Joint Stock Companies and Firms

Complied

12 The valuer shall be independent from the company, its directors, auditors and other stakeholders

Complied

B. Disclosure Requirements:

Sl. Conditions Compliance 1 Identification of the valuer and confirmation of competence;

A statement confirming the competence of the valuer shall be included. If the valuer has obtained assistance from others in relation to any aspect of the engagement, the nature of such assistance and the extent of reliance shall be recorded in the report. Names, qualifications and experiences of all the persons involved in the valuation process have to be disclosed;

Complied

2 Identification of the client and any other intended users: The party commissioning the valuation shall be identified together with any other parties whom it is intended may rely on the valuation;

Complied

3 Nature of instructions and the purpose of the valuatio n: Details of instructions received from the client regarding the job should be stated along with the purpose of the valuation

Complied

4 Identification of the asset or liability to be revalued: Where a valuation is required of assets that are held in con junction with other complementary or related assets it shall be clearly defined whether it is the group or portfolio that is to be valued or the individual assets. If the latter, it is also important to establish whether each asset is assumed to be valued as part of the whole group or portfolio, as an individual item but assuming that the other assets are available or not available;

Complied

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Sl. Conditions Compliance 5 Basis of value:

The definition and source of the basis of value used should be cited. A basis of value is a statement of the fundamental measurement assumptions of a valuation, which does not contradict with the applicable Accounting Standard;

Complied

6 Valuation date: The valuation date is the date on which the estimate of value applies. This may be different from the date of the valuation report or the date on which investigations are to be undertaken or completed. These dates should be clearly mentioned in the report;

Complied

7 Extent of investigation : The extent of the valuers’ investigations undertaken, including the limitations on those investigations set out in the scope of work shall be recorded in the report;

Complied

8 Nature and source of the information relied upon: The nature and source of any information used in the valuation process should be recorded;

Complied

9 Assumptions and any special assumptions: Different valuation assumptions may be appropriate depending on the classification of the asset or liability. The assumptions those are applicable to each class of asset shall be included;

Complied

10 Valuer’s Report and Fairness Opinion: The valuer shall provide a report and fairness opinion duly signed by its chief executive which shall form integral part of the valuation report. In their report, the valuer shall confirm that the valuation has been undertaken in accordance with the International Valuation Standards (IVS) and that they have verified that the ownership, possession and use of the assets are due to the company. Where a statement is made that a valuation has been undertaken in accordance with these standards, it is implicit that all relevant individual standards are complied with. If a departure is necessary to comply with any legislative or regulatory requirements, this should be clearly explained; The valuer shall also confirm that they have maintained the Fundamental Principles of Ethical Conduct namely Integrity, Objectivity, Competence, Confidentiality and Professional Behavior regarding the valuation and have taken all possible steps to avoid or mitigate possible threats to compliance of these principles;

Complied

11 Valuation approach and methodology: To understand the valuation figure in context, the report shall make reference to the approach or approaches adopted, methodology used for the valuation and the key reasons for the conclusions reached;

Complied

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C. Ethical Principles for the Valuer:

Sl. Conditions Compliance 12 Valuation Sheet:

The valuation sheet shall contain, among others, the acquisition date, cost, written down value, amount and basis of the valuation and the applicable currency. The valuer shall also allocate, where applicable, an age and “remaining useful life” to each asset valued for recording purposes considering expected use of the asset, expected physical wear and tear, technical or commercial obsolescence, legal or similar limits on the use of the asset and any other factors that will affect the useful life of the asset;

Complied

13 Date of the valuation report: The date on which the report is issued should be included. This may be different from the valuation date;

Complied

Sl. Conditions Compliance 1 The valuer shall be straightforward and honest in all professional and

business relationships. They shall not be associated with any statement or information that are materially false or misleading or made recklessly or omits or obscures information required to be included and such omission or obscurity would be misleading;

Complied

2 The valuer shall not compromise their professional or business judgment because of biasness, conflict of interest or undue influence of others and should not be perceived as supporting the views of any interested party, including the company;

Complied

3 The valuer shall take all steps necessary to avoid threats to their independence. In particular, they shall not accept an assignment where the company, or any other stakeholder in the transaction, seeks to unreasonably limit the investigations to be undertaken or to direct or otherwise influence the methods adopted or the conclusions reached;

Complied

4 The valuer shall not accept an assignment, if there is any existing or proposed relationships, they or their firm or organization have that may impair, or create the appearance of impairing, their independence and evaluate the extent of that impairment. Such as, relationships with the company, its directors, management, controlling shareholders, auditors, other stakeholders or any relationship that creates, or may reasonably be perceived as creating, the valuer with an interest in the outcome of a contemplated transaction;

Complied

5 The valuer shall not be engaged in any act that could give rise to the perception that the valuer is taking instruction from the company or other interested parties on the approach, valuation methods to be used or the conclusions to be reached;

Complied

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Sl. Conditions Compliance

6 The valuer shall maintain professional knowledge and skill at the level

required to ensure that clients receive competent professional service and

shall act diligently in accordance with applicable technical and professional standards when providing professional service ;

Complied

7 The valuer shall refrain from disclosing outside the firm or employing organization confidential information acquired as a result of professional

and business relationships without proper and specific authority or unless there is a legal or p rofessional right or duty to disclose. They shall not use

confidential information acquired as a result of professional and business relationships to their personal advantage or the advantage of any third party;

Complied

8 The valuer shall comply with rel evant laws and regulations and avoid any

action that the professional valuer knows may discredit the profession. They shall be honest and truthful and not make exaggerated claims for the services they offer, the qualifications they posses, the experiences they have gained;

Complied

9 The valuer shall not accept data and analysis from the company or other interested parties without critical review.

Complied

10 The valuer shall not enter into an agreement where the fee or the fee amount is dependent upon outcome of the report.

Complied

11 The valuer shall not change their report following a factual review of a

draft by the company for a reason other than a change in the facts on which it was based

Complied

12 If an assignment requires the exercise of judgment of the valuer, that judgment must be applied properly and shall not be used to overstate or

understate the valuation result. The proper exercise of judgment should always have regard to the stated objectives of the standards applicable to

the valuation

Complied

13 The valuer shall have appropriate technical skills, experience and knowledge of the subject of the valuation, the market and the purpose of valuation. If requires, the valuer shall seek assistance from specialists in certain aspects of the overall assignment, providing this is disclosed in the

valuation report

Complied

14 When a valuer identifies a potential threat to their ability to comply with the Fundamental Principles, they shall decline or discontinue the assignment.

Complied

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BANGLADESH SECURITIES AND EXCHANGE COMMISSIONJIBON BIMA TOWER (14, 15, 16 & 20 FLOOR), 10 DILKUSHA C/A, DHAKA-1000, BANGLADESH

Appendix-B

GUIDELINES FOR VALUATION OF FIXED ASSETS ISSUED BY BSECNOTIFICATIONAugust 18, 2013

No. SEC/CMRRCD/2009-193/150/Admin/----- : Whereas, the Bangladesh Securities and Exchange Commission deems it fit that the consent already accorded by the Commission, or to be accorded by it in future, to the issue of capital in Bangladesh, or to the public offer of securities for sale, should be subject to certain further conditions in the interest of investors and the capital market;

Now, therefore, in exercise of the power conferred by section 2CC of the Securities and Exchange Ordinance, 1969 (XVII of 1969), the Bangladesh Securities and Exchange Commission hereby imposes the following guidelines for revaluation of assets to the consent already Accorded by it, or to be accorded by it in future, to the issue of capital in Bangladesh, or to the public offer of securities for sale:

A. General Requirements:

2. The decision of valuation and appointment of the valuer shall be taken by the board of directors of the company concerned. The board decision should clearly mention. among others, the purpose of valuation and the asset classes to be revalued;

3. The valuer shall submit the valuation report to the board along with all workings and documents and the board shall decide next course of action. If the board decides for financial reporting of the valuation, it shall instruct the management of the company to do so mentioning the reporting period;

4. The valuer shall provide a report and fairness opinion duly signed by its chief executive which shall form integral part of the valuation report. In their report, the International Valuation Standards (IVS) and that they have maintained the Fundamental Principles of Ethical Conduct namely Integrity, Objectivity, Competence, Confidentiality and Professional Behavior regarding the valuation;

5. The revalued amounts of assets and liabilities shall be included in the financial statements in accordance with the applicable provisions of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). The valuation report shall be presented as annexure of the financial statements of the period in which the valuation has been made:

6. After preparation of the financial statements, the management shall handover the same to the auditors along with all workings and documents provided by the valuer;

7. The auditor shall examine all relevant documents and furnish their opinion in the auditors’ report regarding whether the valuation report has been prepared and treated in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) and other applicable laws, rules, regulations and guidelines or not. They shall also certify whether proper accounting treatments, including provisions, tax and other liabilities, have been made in the financial statements to consider the valuation or not;

67


8. The management of the company concerned shall extend all co-operations to the valuer and the auditors regarding the valuation and auditing. The valuer shall also cooperate the auditors for clarification of the valuation;

9. Time-lag between two valuations for the same class of assets shall not be less than three years; provided that no upward revaluation of an asset shall be made within two years of its acquisition;

10. Upward revaluation of the following assets are not allowed:

i. Leasehold lands and buildings on such lands having no transferring rights, total lease period below 99 years and remaining lease period below 10 years;

ii. Plants and machineries acquired in second in second hand condition, acquired in brand new condition but having remaining economic life of less than 50% of its total useful life, as estimated at acquisition;


iv. Vehicles, furniture & fittings, office equipments, loose tools and intangible assets;

11. No dividend shall be issued out of any revaluation surplus;

12. The valuer shall be a partnership firm or a company registered with the Registrar of Joint Stock Companies and Firms;

13. The valuer shall be independent from the company, its directors, auditors and other stakeholders;

B. Disclosure Requirements:

The valuation report shall be prepared in a manner so that it can communicate the information necessary for proper understanding of the valuation. A valuation report shall not be ambiguous or misleading and shall provide the intended reader with a clear understanding of the valuation.

To provide comparability, relevance and credibility, the valation report shall set out a clear and accurate description of the scope of the assignment, its purpose and intended use, confirmation of the basis of value used and disclosure of any assumptions, special assumptions or limiting conditions that directly affect the valuation.

Among others, the following information shall be disclosed in a valuation report:

1. Identification of the valuer and confirmation of competence; A statement confirming the competence of the valuer shall be included. If the valuer has obtained

assistance from others in relation to any aspect of the engagement, the nature of such assistance and the extent of reliance shall be recorded in the report. Names, qualifications and experiences of all the persons involved in the valuation process have to be disclosed;

2. Identification of the client and any other intended users: The party commissioning the valuation shall be identified together with any other parties whom it

is intended may rely on the valuation;

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3. Nature of instructions and the purpose of the valuation: Details of instructions received from the client regarding the job shall be stated along with the

purpose of the valuation;

4. Identification of the asset or liability to be revalued: Where a valuation is required of assets that are held in conjunction with other complementary or

related assets it shall be clearly defined whether it is the group or portfolio that is to be valued or the individual assets. If the latter, it is also important to establish whether each asset is assumed to be valued as part of the whole group or portfolio, as an individual item but assuming that the other assets are available or not available;

5. Basis of value: The definition and source of the basis of value used should be cited. A basis of value is a state-

ment of the fundamental measurement assumptions of a valuation, which does not contradict with the applicable Accounting Standard;

6. Valuation date: The valuation date is the date on which the estimate of value applies. This may be different from

the date of the valuation report or the date on which investigations are to be undertaken or com-pleted. These dates should be clearly mentioned in the report;

7. Extent of investigation: The extent of the valuers’ investigations undertaken, including the limitations on those investiga-

tions set out in the scope of work shall be recorded in the report;

8. Nature and source of the information relied upon: The nature and source of any information used in the valuation process should’ he recorded;

9. Assumptions and any special assumptions: Different valuation assumptions may be appropriate depending on the classification of the asset

or liability. The assumptions those are applicable to each class of asset shall be included;

10. Valuer’s Report and Fairness Opinion: The valuer shall provide a report and fairness opinion duty signed by its chief executive which

shall form integral part of the valuation report. In their report, the valuer shall confirm that the valu-ation has been undertaken in accordance with the International Valuation Standards (IVS) and that they have verified that the ownership, possession and use of the assets are due to the com-pany. Where a statement is made that a valuation has been undertaken in accordance with these standards, it is implicit that all relevant individual standards are complied with. If a departure is necessary to comply with any legislative or regulatory requirements, this should be clearly explained.

The valuer shall also confirm that they have maintained the Fundamental Principles of Ethical Conduct namely Integrity, Objectivity, Competence, Confidentiality and Professional Behavior regarding the valuation and have taken all possible steps to avoid or mitigate possible threats to compliance of these principles;

11. Valuation approach and methodology: To understand the valuation figure in context, the report shall make reference to the approach or

approaches adopted, methodology used for the valuation and the key reasons for the conclusions reached;

69


12. Valuation Sheet: The valuation sheet shall contain, among others, the acquisition date, cost, written down value,

amount and basis of the valuation and the applicable currency. The valuer shall also allocate, where applicable, an age and “remaining useful life” to each asset valued for recording purposes considering expected use of the asset, expected physical wear and tear, technical or commercial obsolescence, legal or similar limits on the use of the asset and any other factors that will affect the useful life of the asset;

13. Date of the valuation report: The date on which the report is issued should be included. This may be different from the valuai-

ton date.

C. Ethical Principles for the Valuer:

The valuer shall maintain five Fundamental Principles of Ethical Conduct namely Integrity. Objec-tivity, Competence, Confidentiality, and Professional Behavior and shall adhere to the following to avoid or mitigate possible threats to compliance of these principles:

1. The valuer shall be straightforward and honest in all professional and business relationships. They shall not be associated with any statement or information that are materially false or misleading or made recklessly or omits or obscures information required to be included and such omission or obscurity would be misleading;

2. The valuer shall not compromise their professional or business judgment because of biasness, conflict of interest or undue influence of others and should not be perceived as supporting the views of any interested party, including the company;

3. The valuer shall take all steps necessary to avoid threats to their independence. In particular, they shall not accept an assignment where the company, or any other stakeholder in the transaction, seeks to unreasonably limit the investigations to be undertaken or to direct or otherwise influence the methods adopted or the conclusions reached;

4. The valuer shall not accept an assignment, if there is any existing or proposed relationships, they or their firm or organization have that may impair, or create the appearance of impairing, their independence and evaluate the extent of that impairment. Such as, relationships with the com-pany, its directors, management, controlling shareholders, auditors, other stakeholders or any relationship that creates, or may reasonably be perceived as creating, the valuer with an interest in the outcome of a contemplated transaction:

5. The valuer shall not be engaged in any act that could give rise to the perception that the valuer is taking instruction from the company or other interested parties on the approach, valuation meth-ods to be used or the conclusions to be reached;

6. The valuer shall maintain professional knowledge and skill at the level required to ensure that clients receives competent professional service and shall act diligently in accordance with appli-cable technical and professional standards when providing professional service;

7. The valuer shall refrain from disclosing outside the firm or employing organization confidential information acquired as a result of professional and business relationships without proper and specific authority or unless there is a legal or professional right or duty to disclose. They shall not use confidential information acquired as a result of professional and business relationships to their personal advantage or the advantage of any third party;

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9. The valuer shall comply with relevant laws and regulations and avoid any action that the profes-sional valuer knows may discredit the profession. They shall be honest and truthful and not make exaggerated claims for the services they offer, the qualifications they posses, the experiences they have gained;

10. The valuer shall not accept data and analysis from the company or other interested parties without critical review;

11. The valuer shall not enter into an agreement where the fee or the fee amount is dependent upon outcome of the report;

12. The valuer shall not change their report following a factual review of a draft by the company for a reason other than a change in the facts on which it was based;

13. If an assignment requires the exercise of judgment of the valuer, that judgment must be applied properly and shall not be used to overstate or understate the valation result. The proper exercise of judgment should always have regard to the stated objectives of the standards applicable to the valuation;

14. The valuer shall have appropriate technical skills, experience and knowledge of the subject of the valuation, the market and the purpose of valuation. If requires, the valuer shall seek assistance from specialists in certain aspects of the overall assignment, providing this is disclosed in the valuation report;

15. When a valuer identifies a potential threat to their ability to comply with the Fundamental Prin-ciples, they shall decline or discontinue the assignment.

This shall have immediate effect.

By order of the Bangladesh Securities and Exchange Commission

Prof. Dr. M. Khairul HossainChairman

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MIRACLE INDUSTRIES LIMITED113/B (3rd floor), Tejgaon I/A, Dhaka-1208, Bangladesh

PROXY FORM

I/We....................................................................... of..................................................... being a member of

MIRACLE INDUSTRIES LIMITED hereby appoint Mr./Mrs./Ms. ................................................................

................................... of……………………………………………… who is also a member of MIRACLE

INDUSTRIES LIMITED as my/our proxy to attend and vote for me/us and on my/our behalf at the 21st

ANNUAL GENERAL MEETING of the Company to be held on Saturday 19 December, 2015 at 2.30 pm at

Registered office: Gilarchala, Gila Beraid (1 No. C&B Bazar, Master Bari), Sreepur, Gazipur and at any

adjournment thereof.

As witness my/our hand this ..................... day of ................. December 2015.

…………………………....… ………………..............…….........……………..(Signature of Proxy) (Signature of the Shareholders)Folio/BOID No. .............…. Register Folio/BOID No.: ………….......……...Dated: ……….....…………. Dated:……………………..……….......

………………………………….(Signature of the Witness)

NOTE: A member entitled to attend and vote at the General meeting may appoint another member of the Company as a proxy to attend and vote in his/her stead. The proxy form duly stamped and signed, must be deposited at the Company’s Corporate Office (Share Department) not later than 48 hours before the time fixed for the meeting. In default, forms of proxy will not be treated as valid.

Signature Verified

……………………….. Authorised Signatory

I hereby record my attendance at the 21st ANNUAL GENERAL MEETING being held on Saturday, 19 December 2015 at the Registered Office: Gilarchala, Gila Beraid (1 No. C&B Bazar, Master Bari), Sreepur, Gazipur.

Name of Member/Proxy…………………………………

Register Folio/BOID No………………………….....….. … … … … … … … … … Signature

NOTE: Please note that AGM can only be attended by the honourable Shareholders or properly constituted proxy. Therefore, any friend or children accompanying with honourable shareholders or proxy cannot be allowed into the meeting.

Please present this Slip at the reception Desk.

REVENUE

STAMP

(TK. 20.00)

MIRACLE INDUSTRIES LIMITED113/B (3rd floor), Tejgaon I/A, Dhaka-1208, Bangladesh

ATTENDANCE SLIP

MIRACLE INDUSTRIES LIMITED113/B, (3rd Floor), Tejgaon Industrial Area, Dhaka-1208, Bangladesh.

Tel: +88-02-8870731-34, Fax: +88-02-8870735URL: www.miraclebd.com

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