Annual Report 2012-13

Annual Report
2012-2013
Desh Garments Limited

Table of Contents
1. Letter of Transmittal 3
2. Notice to Shareholders for AGM 4
3. Corporate Governance 5-6
4. Management Apparatus 7
5. Corporate History 8
6. Corporate Operational REsults 8
7. Directors’ Report to shareholders 9-16
8. Auditors’ Report 17
9. Financial Statements:
a) Statement of Financial Position as at 30 June 2013 18
b) Statement of comprehensive income 19
c) Statement OF Cash FlowS 20
d) Statement of Changes in Equity 21
10. Notes to the Accounts 22-40
11. Schedule of Fixed Assets 41-42
12. Proxy Form 43-44

LETTER OF TRANSMITTAL
To
All Shareholders
Bangladesh Securities and Exchange Commission
Registrar of Joint Stock Companies & Firms
Dhaka Stock Exchange Ltd.
Sub : Annual Report for the year ended on 30th June, 2013.
Dear Sir(s),
We are pleased to enclose a copy of the Annual Report together with the Audited Accounts including
Statement of Financial Position as at June 30, 2013, Statement of Comprehensive Income,
Statement of Cash Flows, Statement of Changes in Equity for the year ended on 30 June, 2013,
along with notes thereon and all related consolidated Financial Statements for your kind information,
records and necessary advice.
Yours faithfully,
Sd/-
Habibur Rahman
Company Secretary
Dated : 17th November, 2013
3
Notice of the Thirtysixth Annual General Meeting
Notice is hereby given that the Thirtysixth Annual General Meeting of the Shareholders of Desh
Garments Limited will be held on Wednesday the 18th December, 2013 at 12.30 p.m. in the
Auditorium of Muktijuddha Shmritee Milonayaton, Institution of Diploma Engineers Bangladesh,
160/A, Kakrail, V.I.P. Road, Dhaka-1000 to transact the following business :
01. To receive, consider and adopt the Audited Accounts of the Company for the year ended on
30th June, 2013 together with Report of the Directors and Auditors thereon.
02. To declare dividend.
03. Re-appointment of Managing Director for next 5(five) years.
04. To approve the appointment of Mr. Chitta Ranjan Mazumder, FCA, earlier appointed by the
Board of Directors.
05. To elect Directors.
06. To appoint auditors for the year 2013-2014 and to fix their remuneration.
By order of the Board
Dated : Dhaka Sd/-

28 October 2013 (Habibur Rahman)
Company Secretary
Notes:
The Record Date is 13 November, 2013.
Members of the company whose names appear in the register of members upto record date to be
entitled to dividend for the year 2012-2013 to be approved by the Shareholders in the Annual
General Meeting.
Any member of the company entitled to attend and vote at the above meeting may appoint a Proxy
to attend and vote on his/her behalf. The Proxy Form duly affixing Revenue Stamp of Tk. 20.00 must
be submitted at the Registered Office (Share Department) of the company not later than 48 hours
before the time appointed for the meeting.
Admittance to the meeting venue will be on production of the attendance slip. Shareholders are
requested not to be accompanied by child or guest.
The Shareholders are requested to notify change of address, if any.
Written queries, if any, expected to be replied at the Annual General Meeting on the Audited
Accounts for the year ended 30th June 2013 should reach the Head Office (Share Department) of
the company at least 7 (seven) days before the meeting for convenience and appropriate explanation.
4
CORPORATE GOVERNANCE
The Company follows the guidelines No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07/08/2012

issued by the Bangladesh Securities and Exchange Commission (BSEC). The company’s internal
control and reporting procedures are adequate and effective. Corporate Governance involves
decision making process for any corporate body as a going concern for the benefit of all concerned,
present and future. The involvement of the entrepreneur in all these areas invokes decision making
governance on a continuous basis. These aspects of governance are shared by the Board of
Directors, Executive Management, operational participants, workers and others in fulfillment of the
common goals that converge in increasing the benefits of all stakeholders.
The organisms through which the corporate governance functions are carried out as under:
a) Constitution:
Board of Directors, the top management echelon, consisting of the founding entrepreneurs/
successors and Independent Directors, provides the policy and strategic support and direction
for the entire range of the corporate activities. The Board of Directors now consist of five
members including two Independent Directors. However, the present Board of Directors
consists persons with varied education and experience which provides a balancing character
in decision making process. The Board is reconstituted every year at each Annual General
Meeting with one-third of the members retiring by rotation.
b) Role & Responsibilities:

The main role of the Board of Directors, which is the highest level of authority, is to provide
general superintendence, oversee the operations and control the affairs of the company
through appropriate delegation of authority and accountability processes via the lines of
command. The Board of Directors, in fulfillment of its responsibility hold periodic meetings, at
least once a quarter and provide appropriate decisions / directions to the executive
management. The Board of Directors also remains responsible for ensuring overall hazard free
and friendly working environment in the factory and offices.
c) Relationship with shareholders & public:

The shareholders as owners, are to be provided with material information on the company’s
operation, half-yearly and annually, the latter at the Annual General Meeting. They are also
provided with routine services by the Company Secretary. The Board is, however, responsible
to the public for publication of any Price Sensitive Information as per Bangladesh Securities
And Exchange Commission regulation. A Company Secretary is in-charge for all these
responsibilities.
5
d) Audit Committee of Board:

The Board of Directors has constituted an Audit Committee of the Board consisting of three
Directors. The Audit Committee is headed by the Independent Director, Mr. Ranjit Chakraborty,
MBA and a Senior Banker of the country and vastly experienced in company matter. Other
members are Mrs. Rokeya Quader, Director and Miss Vidiya Amrit Khan, Director. The Audit
Committee would carry out its responsibilities as per the provisions of law and submits its report
to the Board of Directors from time to time. The Audit Committee also co-ordinates with the
internal and external auditors as and when required. The Audit Committee also ensures
compliance of requirements of Bangladesh Securities And Exchange Commission and other
agencies.
e) Executive Management:
The executive management is led by the Managing Director (CEO) who is appointed by the
Board of Directors for a term of five years (renewable) with the approval of shareholders in the
Annual General Meeting. The Managing Director is supported by professional, well educated,
trained and experienced team consisting of Executive Directors, General Managers and host
of Senior Executives in the hierarchy of Management.
f) Independent Director:
We are pleased to inform you that Mr. Chitta Ranjan Mazumder, FCA, who is a knowledgeable
person with integrity and capable to insure compliance with financial, regulatory and corporate
laws and can make meaningful contributions to the conduct of the business of the company
and also safeguard the interest of the shareholders, has been appointed as Independent
Director of the company with effect from 18-08-2013. With this appointment the number of
Directors of Desh Garments Limited is now 5 Directors, which is the requirement of Board’s
Size as per Bangladesh Securities & Exchange Commission Notification No. SEC/
CMRRCD/2006-158/134/Admin/44 dated 7th August, 2012 stand fully complied with.
6
MANAGEMENT APPARATUS:
A. Board of Directors: Auditors:
Mrs. Rokeya Quader - Chairman M/s. Shafiq Basak & Co.
Mr. Omar Quader Khan - Managing Director Chartered Accountants
Miss Vidiya Amrit Khan - Director Shatabdi Centre (6th Floor)
Mr. Ranjit Chakraborty - Independent Director 292, Inner Circular Road,
Mr. Chitta Ranjan Mazumder - Independent Director Fakirapool, Dhaka-1000.
Banker:
National Bank Limited
B. Audit Committee: Legal Advisors:

Mr. Ranjit Chakraborty - Chairman Barrister Rafique Ul Huq
Mrs. Rokeya Quader - Member M/s. Huq & Company
Miss Vidiya Amrit Khan - Member 47/1, Purana Paltan, Dhaka.
C. Management Committee: Insurance:

Mr. Omar Quader Khan - Chairman M/s. Desh General Insurance Co.Ltd.
Miss Vidiya Amrit Khan - Member Jiban Bima Bhaban (5th Floor),
Mr. Habibur Rahman - Member 10, Dilkusha C/A., Dhaka-1000.
D. Senior Corporate Officials: Listing:

Mr. Habibur Rahman - Company Secretary Dhaka Stock Exchange Ltd.
Mr. Nazmul Huda Mullick - Chief Financial Officer
Mr. A.Z.M. Ahsanullah - Head of Internal Audit
REGISTERED OFFICE FACTORY

Desh Garments Limited 53/A, Kalurghat Industrial Area
Awal Centre (7th Floor) Chittagong.
34, Kemal Ataturk Avenue, Road No.17
Banani C/A., Dhaka-1213.
Tel : 9822019, 9822314
7
CORPORATE HISTORY
1. Date of Incorporation : 27/12/1977

2. Year of Commencement of Business : 1977
3. Date of IPO : 19/06/1989
4. Date of listing with DSE : 24/09/1989
5. Authorised Capital : TK.100,000,000
6. Paid up Capital : TK.33,700,000
7. Number of Shareholders : 2,281
8. Number of total Employees : 1,710
9. Main product : Woven Shirts
10. Main Export Market (countries) : USA, Canada, EU
CORPORATE OPERATIONAL RESULTS
2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

PARTICULARS
(Taka) (Taka) (Taka) (Taka) (Taka)
Total Turnover 258,210,120 241,522,863 258,981,091 255,246,569 143,338,743
Gross Profit 18,162,373 15,096,359 16,161,478 15,467,533 13,497,361
Net Profit (AT) 2,962,873 2,414,396 1,048,039 762,615 595,816
Earning per share (Tk.) 0.88 0.72 3.11 2.26 1.77
Dividend Rate (%) 7% 7% 7% 5% 4%
Total Assets 177,322,104 155,197,304 122,307,243 128,794,766 123,087,323
Total Liabilities (136,247,133) (114,726,206) (83,261,021) (89,807,063) (84,155,435)
Net Asset Value 41,074,971 40,471,098 39,046,222 38,987,703 38,931,888
N.A.V. Per share 12.19 12.00 115.86 115.69 115.52
8
Directors’ Report to Shareholders for the year ended on 30th June, 2013
Bismillahir Rahmanir Rahim
Dear Shareholders,
Assalamu Alaikum,
I am pleased to welcome you to the 36th Annual General Meeting of the company being held at this pleasent afternoon, at
the Auditorium of Muktijuddha Shmritee Milonayaton, Institution of Diploma Engineers Bangladesh, Kakrail, Dhaka. In terms
of section 184 of the Companies Act, 1994 and Rule 12 (and the schedule thereunder) of the Bangladesh Securities and
Exchange Rules 1987, I am pleased to present, on behalf of the Board of Directors, the Report of the Directors on the
activities of the company together with the Auditors’ Report thereon for the year ended on 30th June, 2013 for your kind
consideration and approval.
OPERATIONS:
At the outset, I am pleased to inform you that eminent Chartered Accountant of the country, Mr. Chitta Ranjan Mazumder,
FCA, has been appointed as second Independent Director of the company. We are sure the company will be greatly
benefitted from his knowledge & experience.
We have completed another year of operations successfully maintaining almost the equivalent level of previous year. In the
last Directors’ Report of 2011-12 we informed you of our purchase of machineries worth of Tk.2.22 crore to augment our
production capacity. Although our machines were in place in time, but unfortunately, we were faced with shortage of orders
during second half of the year mainly due to external factors beyond our control. The frequent Hartal situation and accidents
in some factories causing death of workers made the Buyers hesitant to place large orders. In this situation preventing of
downtrend was considered as success, which we could successfully accomplish raising our export earning to Tk.25.82
crore, 7% increase over previous year.
During this year, we have taken several steps towards improvement of management efficiency. Mr. Mohammad Nurul Islam,
a veteran managerial person in the garment industry having proven track record of successfully managing as General
Manager, large garments factories like Zyta Apparels Ltd. (Annual production capacity of 2.3 million pcs. doing orders of
buyers like GAP & H&M etc.), Deminach Ltd. (Annual capacity 4.32 lac pcs. in 18 lines) joined us as Head of Chittagong
Operations in July 2013.
In the marketing side, our Director Ms. Vidiya Amrit Khan is directly supervising the total work of order procurement and
overseeing the production and delivery on whole time basis.
In the financial sector, we are continuously taking suggestions and advises from our two Independent Directors, as and
when required, specially during preparation of Budget & Financial Plans and also during periodical evaluation of
performances. With the above improvement in the management structure, we have already achieved average production
per month from 93,855 pcs./month during 2012-13 to 1,05,880 pcs./month during July-September 2013, registering an
increase of 13%. The upward trend is expected to be maintained in future.
Besides improving the management structure as above, we have also planned to make complete 10 Lines fully operative
from March 2014. It may be mentioned here that although we had required machineries for additional two lines, we did not
make it operative due to uncertain order situation and continued with eight lines. However, now we have decided to make
full ten lines operative from March 2014. Financial projections during 2014, made on basis of planned operation as above,
is projected to attain satisfactory improvement which we expect to further improve in subsequent years.
FINANCIAL RESULTS :
Due to control of costs and expenses despite reduced FOB, we have been able to achieve export target and earned a net
profit. A summarized comparative results for the years 2011-2012 and 2012-2013 are given below:
2012-13 (Taka) 2011-12(Taka)

Turnover (Exports) 258,210,120 241,522,863
Gross Profit 18,162,373 15,096,359
Operating Profit 1,857,378 1,057,560
Profit from operations 1,857,378 1,057,560
Add: Dividend received from CDBL 1,713,543 1,599,305
Net Profit after tax 2,962,873 2,414,396
Earning Per Share (EPS) 0.88 0.72
Net Assets Value (NAV) 12.19 12.00
Face Value of share (Tk.) 10.00 10.00
Operating Cash Flow Per Share 2.30 7.57
9
Board Meeting and Attendance:
During the year under review (2012-13) 9 Board Meetings were held. The attendance record of the Directors is as follows:
Name of Directors Position Meetings held Attended

Mrs. Rokeya Quader Chairman 9 9
Mr. Omar Quader Khan Managing Director 9 9
Miss Vidiya Amrit Khan Director 9 8
Mr. Ranjit Chakraborty Independent Director 9 7
Mr. Chitta Ranjan Mazumder, FCA Independent Director 9 Appointed w.e.f.
18.08.2013
The Directors who could not attend the meetings were granted leave of absence.
Shareholding
The Pattern of shareholding as on 30.06.2013 are as follows:
Sl. No. Name-wise details No. of Percentage Remarks
Shareholding
Parent/Subsidiary/Associate Company
i) Directors, Company Secretary, Chief
Financial Officer, Head of Internal Audit and
their spouses and minor children:
Directors:
Mrs. Rokeya Quader 274,120 8.13
Mr. Omar Quader Khan 1,172,900 34.80
Chief Executive Officer (CEO)
Miss Vidiya Amrit Khan 506,830 15.03
Mr. Ranjit Chakraborty Independent Director
Company Secretary (CS) 300 -
Chief Financial Officer (CFO) - -
Head of Internal Audit (HIA) - -
ii) Executives (Top five salaried persons
other than CEO, CS, CFO, HIA)
1. Mrs. Jolly Hassan - -
2. Mr. Alauddin Ahamed - -
3. Mr. Imam Hossain - -
4. Mr. Modasser Ahmed - -
5. Mr. Bikas Datta - -
Shareholders holding 10% or more voting right
1. Mr. Omar Quader Khan 1,172,900 34.80

2. Miss Vidiya Amrit Khan 506,830 15.03
The Directors also report that:
The financial statement of the company present true and fair view of the company’s state of affairs, result of its
operations, cash flows and changes in equity.
10
Proper books of accounts as required by law have been maintained. Appropriate accounting policies
have been followed in formulating the financial statements and accounting estimates were reasonable
and prudent. The financial statements were prepared in accordance with International Accounting
Standard (IAS) as applicable in Bangladesh. The internal control system is sound in design and
effectively implemented and monitored. There are no significant doubts upon the company’s ability
to continue as a going concern.
Dividend:
The net profit after tax earned during the financial year under report is Tk. 2,962,873/= which is
meagre to set off the accumulated losses of previous years. The Directors, however, recommended
Tk. 0.70 dividend per share of Tk.10/= each, total of which comes to Tk. 2,359,000/= from the profit
of the current financial year payable to all shareholders of the company.
Managing Director’s Remuneration:
The Managing Director and other Directors have not drawn any remuneration during the year under
report.
Retirement of Director by Rotation:
Mrs. Rokeya Quader is due to retire by rotation as per Article 122 of the Articles of Association of
the Company and being eligible she seeks re-election as per Article 124.
Appointment of Auditors:
M/s. Shafiq Basak & Co., Chartered Accountants, retire at this Annual General Meeting. The retiring
auditors have expressed their willingness to continue. Auditors are required to be appointed at this
Annual General Meeting and fix their remuneration.
Management Appreciation:
We take this opportunity to thank all our shareholders, well wishers, banks and business associates
for their sincere co-operation and understanding.
We also thank the workers, staff and officers of the company for their sincere work.
The status of compliance required to be presented by the company in pursuance to Notification
No.SEC/CMRRCD/2006-158/134/Admin/44 of August 07, 2012 issued by the Bangladesh
Securities And Exchange Commission is given in Annex.-02 and Audit Committee Report for the
year 2012-13 is also enclosed vide Annex.-03.
Thanking you,
Sd/-
Rokeya Quader
Chairman
Dated : 28/10/2013
11
aNNEXURE-01
Rahman Mostafa Alam & Co.

Chartered Accountants
I N PA C T
INTERNATIONAL
A F F I L I A T E
Certificate on compliance of conditions of corporate governance guidelines to

the shareholders of
We have examined the compliance of conditions of corporate governance guidelines of the

Bangladesh Securities and Exchange Commission (BSEC) by Desh Garments Limited for
the year ended on June 30, 2013 as stipulated in clause 7(i) of the BSEC notification no.
SEC/CMRRECD/2006-158/134/Admin/44 dated August 07, 2012.
The compliance of conditions of corporate governance guidelines as stated in the aforesaid

notification and reporting of the status of compliance is the responsibility of the management of
Desh Garments Limited. Our examination for the purpose of issuing this certificate was limited to the
checking of procedure and implementation thereof, adopted by Desh Garments Limited for ensuring
the compliance of conditions of corporate governance and correct reporting of compliance status on
the attached statement on the basis of evidence gathered and representation received.
To the best of our information and according to the explanations given to us, we certify that, as
reported on the attached status of compliance statement, Desh Garments Limited has complied
with conditions of corporate governance stipulated in the above mentioned BSEC notification dated
August 07, 2012.
Dated: Dhaka
October 28, 2013 Rahman Mostafa Alam & Co.
Dhaka Office : Paramount Heights (7th Floor, D2), 65/2/1 Box Culvert Road, Purana Paltan, Dhaka 1000. Phone : 9553449, Fax : 9551128, E-mail : [email protected]
Chittagong Office : Taher Chamber (2nd Floor), 10 Agrabad C/A, Chittagong, Bangladesh. Phone : 725314, E-mail : [email protected]
12
aNNEXURE-02
Status of compliance with the conditions imposed by the Securities and Exchange Commission’s notification No.SEC/
CMRRCD/2006-158/134/Admin/44 : dated August 07, 2012.
Condition Title Compliance Status

No. Complied Not Complied Remarks (if any)
1.1 Board’s Size : The number of the Board members
shall not be less than 5 (five) and more than 20 √
(Twenty)
1.2 Independent Director:
1.2 (i) One fifth (1/5) of the total number of directors. √
1.2 (ii) a) Does not hold any share or holds less than 1%
√
shares of the total paid-up shares
1.2 (ii) b) Not connected with any sponsor/director/
shareholder who holds 1% or more shares of the √
total paid-up shares on the basis of family
relationship.
1.2 (ii) c) Does not have any other relationship, whether
pecuniary or otherwise, with the company or its √
subsidiary/associated companies
1.2 (ii) d) Not a member, director or officer of any stock √
exchange
1.2 (ii) e) Not a shareholder, director or officer of any
member of stock exchange or an intermediary √
of the capital market
1.2 (ii) f) Not a partner or an executive or was not a partner
or an executive during the preceding 3 (three) √
years of any statutory audit firm.
1.2 (ii) g) Not be an independent director in more than 3 √
(three) listed companies;
1.2 (ii) h) Not been convicted by a court of competent
jurisdiction as a defaulter in payment of any loan √
to a bank or a NBFI
1.2 (ii) i) Not been convicted for a criminal offence involving √
moral turpitude
1.2 (iii) Nominated by the Board of Directors and approved √
by the shareholders in the AGM
1.2 (iv) Not remain vacant for more than 90 (ninety) days. √
1.2 (v) Board shall lay down a code of conduct of all
Board members and annual compliance of the √
code to be recorded
1.2 (vi) 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 Qualification of Independent Director (ID):
1.3 (i) Knowledge of Independent Directors √
1.3 (ii) Background of Independent Directors √
1.3 (iii) Special cases for qualifications No such incident
1.4 Individual Chairman of the Board and CEO √
1.5 The Directors’ Report to Shareholders:
1.5 (i) Industry outlook and possible future developments √
in the industry
13
1.5 (ii) Segment-wise or product-wise performance √

1.5 (iii) Risks and concerns √
1.5 (iv) Discussion on Cost of Goods sold, Gross Profit √
Margin and Net Profit Margin
1.5 (v) Discussion on continuity of any Extra-Ordinary √
gain or loss
1.5 (vi) Basis for related party transactions √
1.5 (vii) Utilization of proceeds from public issues, rights √
issues and / or through any others
1.5 (viii) Explanation if the financial results deteriorate after No such incident
the company goes for IPO, RPO, Rights Offer and happened
Direct Listing.
1.5 (ix) Explanation about significant variance occurs No such incident
between Quarterly Financial Performance and happened
Annual Financial Statements
1.5 (x) Remuneration to Directors including Independent
Directors √
1.5 (xi) Fairness of Financial Statement √
1.5 (xii) Maintenance of proper books of accounts √
1.5 (xiii) Adoption of appropriate accounting policies and estimates √
1.5 (xiv) Followed IAS, BAS, IFRS and BFRS in preparation
of financial statements √
1.5 (xv) Soundness of internal control system √
1.5 (xvi) Ability to continue as a going concern √
1.5 (xvii) Significant deviations from the last year’s √
1.5 (xviii) Key operating and financial data of at least
preceding 5 (five) years √
1.5 (xix) Reasons for not declared dividend Not applicable
1.5 (xx) Number of board meetings held during the year and
attendance √
1.5 (xxi) Pattern of Shareholding:
1.5(xxi) a) Parent/Subsidiary/Associated Companies and other
related parties √
1.5(xxi) b) Directors, CEO, CS, CFO, HIA and their spouses and
minor children √
1.5(xxi) c) Executives √
1.5(xxi) d) 10% or more voting interest √
1.5(xxii) Appointment/re-appointment of director:
1.5(xxii) a) Resume of the director √
1.5(xxii) b) Expertise in specific functional areas √
1.5(xxii) c) Holding of directorship and membership of committees
of the board other than this company. √
2.1 Appointment of CFO, HIA and CS: √
2.2 Attendance of CFO and the CS at the meeting of the
Board of Directors √
3. Audit Committee :
3 (i) Constitutions of Audit Committee √
3 (ii) Assistance of the Audit Committee to Board of Directors √
3 (iii) Responsibility of the Audit Committee √
3.1 Constitution of the Audit Committee:
3.1 (i) As least 3 (three) members √
3.1 (ii) Appointment of members of the Audit Committee √
3.1 (iii) Qualification of Audit Committee members √
3.1 (iv) Term of Service of Audit Committee members √
3.1 (v) Secretary of the Audit Committee √
14
3.1 (vi) Quorum of the Audit Committee √

3.2 Chairman of the Audit Committee:
3.2 (i) Board of Directors shall select the Chairman. √
3.2 (ii) Chairman of the audit committee shall remain present Will be complied
in the 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) Oversee hiring and performance of external auditors √
3.3 (v) Review the annual financial statements before submission
to the board for approval √
3.3 (vi) Review 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 √
3.3 (ix) Review Management Letters/ Letter of Internal Control
weakness issued by statutory auditors √
3.3 (x) Disclosure about the uses/ applications of funds raised by
IPO/RPO/Right issue √
3.4 Reporting of the Audit Committee:
3.4.1 Reporting to the Board of Directors:
3.4.1 (i) Activities of Audit Committee √
3.4.1(ii) a) Conflicts of interests No such incident
3.4.1(ii) b) Material defect in the internal control system No such incident
3.4.1(ii) c) Infringement of laws, rules and regulations No such incident
3.4.1(ii) d) Any other matter No such incident
3.4.2 Reporting to the Authorities √
3.5 Reporting to the Shareholders and General Investors √
4. Engagement of External/Statutory Auditors:
4 (i) Appraisal or valuation services or fairness opinions √
4 (ii) Financial information systems design and implementation √
4 (iii) Book-keeping √
4 (iv) Broker-dealer services √
4 (v) Actuarial services √
4 (vi) Internal Audit Services √
4 (vii) Services that the Audit Committee Determines √
4 (viii) Audit firms shall not hold any share of the company they audit √
5. Subsidiary Company:
5 (i) Composition of the Board of Directors Not applicable
5 (ii) At least 1 (one) Independent Director to the subsidiary Not applicable
company
5 (iii) Submission of Minutes to the holding company Not applicable
5 (iv) Review of Minutes by the holding company Not applicable
5 (v) Review of Financial Statement by the holding company Not applicable
6. Duties of Chief Executive Officer and Chief Financial Officer:
6 (i) a) Reviewed the materially untrue of the financial statement √
6 (i) b) Reviewed about compliance of the accounting standard √
6 (ii) Reviewed about fraudulent, illegal or violation of the company’s
code of conduct √
7. Reporting and Compliance of Corporate Governance:
7 (i) Obtain certificate about compliance of conditions of
Corporate Governance Guidelines √
7 (ii) Annexure attached in the Directors’ Report √
15
Annexure-03
Audit Committee Report

For the year 2012-13
The Audit Committee consists of the following members:

Mr. Ranjit Chakraborty Chairman
Mrs. Rokeya Quader Member
Miss Vidiya Amrit Khan 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 system 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:
Four meetings of the Audit Committee were held during the year 2012-2013, first one in November
2012, second one in January 2013, third one in April 2013 and last one in October 2013. In the first
three meetings, un-audited quarterly Statement of Comprehensive Income and Statement of
Financial Position were discussed and examined in details. In the last meeting held on 28 October
2013, the audited Accounts for the year 2012-2013 was discussed and examined in details.
Through holding of meetings as above, the Committee reviewed and discussed the internal control
and audit systems, justifications and correctness of the expenditures incurred and income earned.
The Committee found adequate arrangement to present a true and fair view of the activities and the
financial status of the Company and didn’t find any material deviation, discrepancies or any adverse
finding/observation in the areas of reporting.
Sd/-
Ranjit Chakraborty
Chairman
Audit Committee
Dated : October 28, 2013
16
AUDITOR’S REPORT TO THE SHAREHOLDERS

We have audited the annexed Statement of Financial Position of DESH GARMENTS LIMITED, as of
June 30, 2013 and its Statement of Comprehensive Income, Statement of Cash Flows and Statement
of Changes in Equity for the year ended as on that date together with the accompanying Notes
thereto.
Respective Responsibilities of the Management and the Auditors:

The preparation of this Financial Statement is the responsibility of the company’s management. Our
responsibility is to express an independent opinion on this Financial Statement based on our audit.
Scope:
We conducted our audit in accordance with BSA. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
Opinion:
In our opinion, the Financial Statement, prepared in accordance with Bangladesh Accounting Standard
(BAS) give a true and fair view of the state of the company’s affairs as of June 30, 2013 and of the
results of its operations and its cash flows for the year then ended and comply with the Companies
Act,1994.
We also report that:

(i) We have obtained all the information, explanations and documents which to the best of our
knowledge and belief were necessary for the purpose of our audit and made due verification
thereof.
(ii) The Company management has followed relevant provision of law and rules in managing the affairs
of the Company and that proper books of account, records and other statutory books have been
properly maintained.
(iii) The Statement of Financial Position and Statement of Comprehensive Income, Statement of
Changes in Equity are in agreement with the said books of account maintained by the Company
and examined by us while the Cash Flow Statement conforms with the presentation laid out in the
Bangladesh Financial Reporting Standard (BFRS); and
(iv) The expenditure incurred and payments made were for the purpose of the Company’s business
for the year.
Sd/-
Dated : Dhaka
(SHAFIQ BASAK & CO.)
The October 28, 2013.
17
Statement of Financial Position as at 30 June 2013

(UNIT NOS. 1 & 2)
Fig. in Tk. Fig. in Tk.
NET ASSETS NOTES 30 June ’13 30 June ’12

SOURCES OF FUND :
Shareholders' equity 41,074,971 40,471,098
Share capital 39 33,700,000 33,700,000
Tax Holiday Reserve 40 7,272,808 7,272,808
General Reserve 41 1,477,579 1,477,579
Capital Reserve 42 51,620,221 51,620,221
Retain Earnings (52,995,637) (53,599,510)
Total Taka: 41,074,971 40,471,098

APPLICATION OF FUNDS :
Non-Current Assets 99,034,518 102,419,464
Tangible Fixed Assets, Net of accumulated depreciation 20 98,926,843 102,284,870
Preliminary Expenses 21 107,675 134,594

Current Assets 78,287,586 52,777,840
Inventories 22 15,979,546 5,009,193
Sundry Debtors 23 - 3,912,794
Investment in Shares 24 5,711,810 5,711,810
Loans, Advances and Deposits 25 10,666,890 6,160,987
Income Tax Deduction at Source 26 10,222,069 7,814,731
Cash and Bank Balances 27 35,707,271 24,168,325

Current Liabilities and Provisions (136,247,133) (114,726,206)
Loans and Overdraft 28 (37,135,525) (31,304,533)
Liabilities for Goods 29 (67,245,856) (52,780,649)
Accrued Expenses 30 (19,095,200) (20,236,973)
Creditors 31 (3,367,023) (2,889,604)
Unclaimed Dividend 32 (237,960) (237,960)
Dividend Payable 33 (4,935,885) (4,935,885)
Employees' Provident Fund 34 (208,367) (208,367)
Provision for Income Tax 35 (1,662,317) (1,142,715)
Proposed Dividend 36 (2,359,000) (989,520)
Net Current Assets (57,959,547) (61,948,366)
Total Taka: 41,074,971 40,471,098
The accounting policies and other notes form an integral part of the Financial Statements.
The Financial Statements were authorised for issue by the Board of Directors on 28.10.2013 and signed on its behalf by :
Sd/- Sd/- Sd/-

Rokeya Quader Omar Quader Khan Habibur Rahman
Chairman Managing Director Company Secretary
AUDITORS’ REPORT TO THE SHAREHOLDERS :

This is the Statement of Financial Position referred to in our report of even date :
Shatabdi Centre (6th Floor) Sd/-

292, Inner Circular Road,
Fakirapool, Motijheel, Dhaka-1000 (SHAFIQ BASAK & CO.)
Dated : 28 October, 2013 Chartered Accountants
18
Statement of comprehensive income

FOR THE YEAR ENDED 30 JUNE 2013
(UNIT NOS. 1 & 2) Fig. in Tk. Fig. in Tk.
Particulars : NOTES 30 June ’13 30 June ’12

TURNOVER 43 258,210,120 241,522,863

COST OF GOODS SOLD 44 240,047,747 226,426,504
GROSS PROFIT 18,162,373 15,096,359
OPERATING EXPENSES :
Administrative, Selling & Financial Expenses 47 16,304,995 14,038,799
OPERATING PROFIT 1,857,378 1,057,560
Contribution to W. P. & Welfare Fund 88,447 50,360
1,768,932 1,007,200
Add: Cash Dividend 1,713,543 456,945
Stock Dividend - 1,142,360
NET PROFIT BEFORE TAX 3,482,475 2,606,505
Less: Income Tax Provision 519,602 192,109
NET PROFIT AFTER TAX 2,962,873 2,414,396
Paid/Proposed Dividend
Dividend @ 7% to all shareholders 2,359,000 989,520
603,873 1,424,876
Profit upto last year 11,959,861 10,534,985
12,563,734 11,959,861
Exceptional loss due to 29 April 1991 devastating cyclone (65,559,371) (65,559,371)
Profit/(Loss) Carried Forward (52,995,637) (53,599,510)
Earnings Per Share (EPS) – Basic 48 0.88 0.72

The Financial Statements were authorised for issue by the Board of Directors on 28.10.2013 and signed on its behalf by:
Sd/- Sd/- Sd/-


This is the Statement of Comprehensive Income referred to in our report of even date :
Shatabdi Centre (6th Floor)

Fakirapool, Motijheel, Dhaka-1000
Dated : 28 October, 2013 Sd/-
19
STATEMENT of CASH FLOWS

Fig. in Tk. Fig. in Tk.

Particulars 30 June ’13 30 June ’12
Cash Flows from Operating Activities

Collections from Turnover & Others 263,836,457 244,308,443
Payment for Cost & Expenses (253,686,765) (217,091,957)
Tax paid (2,407,338) (1,690,842))
7,742,354 25,525,644

Cash Flows from Investing Activities
Tangible Fixed Asset Acquired (1,044,880) (22,155,919)

Cash Flows from Financing Activities
Received of Bank Loan and Others 6,380,992 10,556,606
Other Loan Repaid/ Received (550,000) 550,000
Dividend paid (989,520) (989,520)
4,841,472 10,117,086

Increase/(Decrease) in Cash and Cash Equivalents 11,538,946 13,486,811
Cash and Cash Equivalents at Opening 24,168,325 10,681,514

Cash and Cash Equivalents at Closing TK. 35,707,271 24,168,325
The Financial Statements were authorised for issue by the Board of Directors on 28-10-2013 and signed on its
behalf by:
Sd/- Sd/- Sd/-


This is the Statement of Cash Flows referred to in our report of even date :

Fakirapool, Motijheel, Dhaka-1000 Sd/-
Dated : 28 October, 2013 (SHAFIQ BASAK & CO.)
20
Statement of Changes in Equity

Particulars Share Tax General Capital Retained Total
Capital Holiday Reserve Reserve Earnings Amount (TK.)
Reserve
At 01 July 2012 33,700,000 7,272,808 1,477,579 51,620,221 (53,599,510) 40,471,098
Net Profit for 2012-13 - - - - 2,962,873 2,962,873
Proposed Dividend
2012-13 - - - - (2,359,000) (2,359,000)
At 30 June 2013 33,700,000 7,272,808 1,477,579 51,620,221 (52,995,637) 41,074,971
The Notes 1 to 50 form an integral part of these financial statements.

The Financial Statements were authorized for issue by the Board of Directors on 28.10.2013 and signed on its behalf by :

Particulars Share Tax General Capital Retained Total
Capital Holiday Reserve Reserve Earnings Amount (TK.)
Reserve
At 01 July 2011 33,700,000 7,272,808 1,477,579 51,620,221 (55,024,386) 39,046,222
Net Profit for 2011-12 - - - - 2,414,396 2,414,396
Proposed Dividend
2011-12 - - - - (989,520) (989,520)
At 30 June 2012 33,700,000 7,272,808 1,477,579 51,620,221 (53,599,510) 40,471,098
Sd/- Sd/- Sd/-


This is the Statement of Changes in Equity referred to in our report of even date :

Fakirapool, Motijheel, Dhaka-1000
Dated : 28 October, 2013 Sd/-
21
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013
FORMING AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
A. Compliance with the requirements of notification of the Securities and

Exchange Commission dated 04.06.2008 under reference # SEC/
CMMRPC/2008-181/53/Adm/03/28.
1. Notes to the financial statements marked from C-1 to C-18 outline the policies are
unambiguous with respect to the reporting frame work on which the accounting policies are
based.
2. The accounting policies on all material areas have been stated clearly in the notes marked
from C-1 to C-18.
3. The accounting standards that underpin the policies adopted by the company can be found
in the following places of the notes to the financial statements:
SL. No. Applicable Accounting Standards Note reference

01. IAS/BAS – 1 04.00
02. IAS/BAS – 2 06.00
03. IAS/BAS – 7 07.00 & 08.00
04. IAS/BAS – 12 10.01
05. IAS/BAS – 16 05.00
06. IAS/BAS – 18 11.00
07. IAS/BAS – 21 12.00
08. IAS/BAS – 33 13.00 & 48.00
09. IAS/BAS – 36 14.00
4. The financial statements are in compliance with the Bangladesh Financial Reporting
Standards (BFRS) which are adapted from the International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board (IASB).
AND
5. The Standards and reporting framework used in the financial statements do not differ from
IFRS (BFRS) issued by IASB.
22
B. Legal status and nature of the company – Disclosure under IAS 1 as adopted
by The Institute of Chartered Accountants of Bangladesh as BAS 1
“Presentation of Financial Statements”

Domicile, Legal Form and Country of Incorporation
Desh Garments Limited (hereinafter referred to as “The Company”) was incorporated in

Bangladesh as a public company limited by shares on 27.12.1977. The Company owns two
100% export oriented industrial Units. Unit No. 01 has an installed capacity of 216,000 dozs
in single shift. During the year under review the production in Unit No. 01 could not be
restored after extensive damage of machinery and equipment in April, 1991 by the
devastating cyclone, hence no export was made from Unit No. 01 production. Unit No. 02
has a production capacity of 128,000 dozs is double shift against which it has, during the
year, utilized 68.07% Shortfall in utilisation of production capacity was due to non-availability
of sufficient export orders.
Address of Registered Office and Principal Place of Business
The principal place of business is the registered office at 34, Kemal Ataturk Avenue, Banani
C/A, Dhaka-1213, Bangladesh and the factories are located at Kalurghat, Chittagong.
Principal Activities And Nature of Operations
The company owns and operates industrial plants for manufacturing of ready made
garments and sales thereof.
Number of Employees
On the payroll of the Company, there were 46 officers 49 Staff and 1,615 permanent / badly
/ contractual workers.
Taka
i) 1,710 Staff/Officers/Employees drew yearly salary & allowances
of Tk. 36,000 or more. 68,860,827

ii) - Staff/ Officers/Technicians and many other casual workers
drew yearly salary/wages & allowances less than Tk. 36,000 -
1,710 68,860,827
23
C. Significant Accounting Policies-Disclosures.
1.00 Compliance with International Accounting Standards (IASs):

The Financial Statements have been prepared in compliance with requirements of IASs as
adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) and applicable in
Bangladesh.
2.00 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.
3.00 Measurement Bases used in preparing the Financial Statements:
The elements of financial statements have been measured on “Historical Cost” basis, which
is one of the most commonly adopted base as provided in “the frame-work for the
preparation and presentation of financial statements” issued by the International Accounting
Standards Committee (IASC).
4.00 Components of the Financial Statements:
According to the International Accounting Standard (IAS) 1 as adopted by ICAB as BAS 1

“Presentation of Financial Statements”, the complete set of Financial Statements includes
the following components:
(i) Statement of Financial Position as at 30 June 2013.

(ii) Statement of Comprehensive Income for the year ended 30 June 2013.
(iii) Statements of Changes in Equity for the year ended 30 June 2013.
(iv) Statement of Cash Flows for the year ended 30 June 2013.
(v) Accounting policies and explanatory notes.
5.00 Specific accounting policies selected and applied for significant transactions and
events:
Recognition of Property, Plant and Equipment and Depreciation.
Property, Plant and Equipment are stated at their cost less accumulated depreciation in
accordance with IAS 16 as adopted by ICAB as BAS 16 "Property, Plant and Equipment”.
Cost represents cost of acquisition or construction and capitalization of pre-production
expenditure including interest during construction periods. No depreciation is charged on
land and land development. Depreciation has been charged on additions from the date of
when the related assets are ready for use. Depreciation on all other fixed assets is computed
using the diminishing balance method in amounts sufficient to write off depreciable assets
over their estimated useful economic lives. Expenditure of maintenance and repairs are
expensed; major replacements, renewals and betterments are capitalized.
24
The depreciation rates applicable to the principal categories are :
Factory Building and other Construction .................................................................. 20 %

Plant and Machinery ................................................................................................. 15 %
Office Equipment....................................................................................................... 15 %
Furniture and Fixtures .............................................................................................. 10 %
Transport and Vehicles ............................................................................................. 20 %
Other Assets ............................................................................................................ 5% to 20%
6.00 Inventories:
Inventories comprise raw materials; work in process and finished goods. They are stated at
the lower of cost and net realizable value on consistent basis in accordance with IAS 2 as
adopted by ICAB as BAS 2 “Inventories”. Net realizable value is based on estimated selling
price less any further costs expected to be incurred for completion and disposal.
7.00 Cash and Cash Equivalents:

According to IAS 7 as adopted by ICAB as BAS 7 “Statement of Cash Flows”, cash
comprises cash in hand and demand deposit and, cash equivalents are short term, highly
liquid investments that are readily convertible to known amount of cash and which are
subject to an insignificant risk of changes in value. IAS 1 “Presentation of Financial
Statements” also provides that cash and cash equivalents are those which have no
restriction in use considering the provision of IAS 7 and IAS 1. Cash in hand and bank
balances have been considered as cash and cash equivalents.
8.00 Statement of Cash Flows:

Statement of Cash Flows is prepared principally in accordance with IAS 7 as adopted by
ICAB as BAS 7 “Statement of Cash Flows” and the cash flow from the operating activities
have been presented under direct method as prescribed by the Securities and Exchange
Rules, 1987 and considering the provision of paragraph 19 of IAS 7 which provides that
“enterprises are encouraged to report cash flow from operating activities using the direct
method”.
9.00 Accounting Convention and Basis:

These accounts are prepared under historical cost convention, except for re-valuation of
fixed assets taken into account in 1995-96, on an accrual basis assuming that the Company
will continue as a going concern for the foreseeable future.
10.00 Taxation:
Taxation is provided in accordance with fiscal regulations applicable. The company is
publicly traded company as per the Income Tax Ordinance, 1984. The company qualifies for
being treated as a "Publicly Traded Company". The company is 100% export oriented
garments industry for which the rate of tax at 10% has been applied for profit on Garments
business and 20% for Dividend Income while making provision for income tax.
25
10.01 Discloser under BAS -12:

Deferred Tax Liability is not recovered to be computed in case of this Garments Industry
because the amount of tax deducted / collected at source from export bills is treated as the
final tax liability under the Income Tax Ordinance from the financial year 2005-06, irrespective
of the operational results. During the financial year 2012-13 the total amount of tax deducted
/collected at source is Tk. 24,07,338.
11.00 Revenue Recognition:

The revenue during the year represents revenue arising from C.M. received and sales of
readymade garment items which are recognized when deliveries are made, against the sales
order received from the respective customer and after satisfying all the conditions for
revenue recognition as provided in IAS 18 “Revenue Recognition”
12.00 Foreign Currency Translation:

Transactions denominated in foreign currencies are translated into Bangladesh Taka and
recorded at rates of exchange ruling on the date of transaction in accordance with IAS 21
as adopted by ICAB as BAS 21 “The Effects of Changes in Foreign Currency Rates”.
13.00 Earning Per Share (EPS):

The company calculates Earnings Per Share (EPS) in accordance with IAS 33 as adopted
by ICAB as BAS 33 “Earnings Per Share” which has been shown on the face of Statement
of Comprehensive Income and the computation of EPS is stated in Note-48.
Basic Earnings
This represents earnings for the year attributable to ordinary shareholders. As there was no
preference dividend, minority interest or extra ordinary items, the net profit for the year has
been considered as fully attributable to the ordinary shareholders.
Basic Earnings Per Share

This has been calculated by dividing the basic earnings by the weighted average of number
of ordinary shares outstanding during the year.
Diluted Earnings Per Share

No diluted EPS is required to be calculated for the year, as there was no scope for dilution
during the year under review.
14.00 Assets of the Company:

As all assets of the company shown in the financial statement that are within the scope of
BAS-36 are in physical existence and valued at no more than their recoverable amount
following International Accounting Standards adopted in Bangladesh, disclosures with
regard to “Impairment of Assets” as per BAS-36 have not been considered necessary.
15.00 Tax Holiday:

Tax holiday period of “Unit No. 01” and “Unit No. 02” have expired. Consolidated Statement of
Comprehensive Income and Statement of Financial Position have been prepared in conformity
with the Securities & Exchange Rule, 1987.
26
16.00 Risk and uncertainties for use of estimates in preparation of financial statements:
The preparation of financial statements in conformity with the International Accounting
Standards requires management to make estimates and assumption that affects the report,
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and revenue and expenses during the period reported. Actual
results could differ from those estimates. Estimates are used for accounting of certain terms
such as long term contracts, provision for doubtful accounts, depreciation and amortization,
employees’ benefit plans, taxes reserves and contingencies.
17.00 Sundry Debtors:

There are no Debtors at the end of the year.
18.00 Additional Information:
18.01 Responsibility for preparation and presentation of Financial Statements:

The Board of Directors is responsible for the preparation and presentation of Financial
Statements under Section 183 of the Companies Act, 1994 and as per the provision of "the
framework for the preparation and presentation of financial statements” issued by the
International Accounting Standards Committee (IASC).
18.02 Reporting Period:

Financial Statements of the company cover one financial year from 01 July 2012 to 30 June
2013.
18.03 Comparative Information:

Comparative information have been disclosed in respect of the financial year 2011-2012 for
all numerical information in the financial statements and also the narrative and descriptive
information when it is relevant for understanding of the current year’s financial statements.
Figures of the financial year 2011-2012 have been rearranged whenever considered
necessary to ensure comparability with the current year.
18.04 Turnover:
Turnover comprises export sales of the company.
18.05 Commission:
No commission has been paid to sales agents during the year under audit.
18.06 Brokerage or Discount:

The company did not pay any brokerage or discount other than the conventional trade
discount against sales.
27
18.07 Due by the Directors:

Nothing was due by Directors (including Managing Director), Managers, and other officers of
the Company or by associated undertakings and any of them severally or jointly with any
other persons rather, interest free loan of Tk. 1,32,46,778 has been taken from Managing
Director to meet up day to day expenses of the company.
18.08 Miscellaneous Expenses:

Miscellaneous Expenses does not exceeding 1% of total revenue.
18.09 Audit Fee:

As per decision taken in the 35th Annual General Meeting of the company held on 27-12-
2012 the auditors’ remuneration of Tk. 80,000 has been provided in the accounts which is
the sum to be paid to auditors as their fixed remuneration for 2012-2013. During the year
nothing has been paid to the auditors for any other services rendered.
18.10 Board Meeting & Members:

There were 4 members in the Board of Directors of the Company and 9 Board Meetings
were held in the year under review.
18.11 Acknowledgement of Claims:

There was no claim against the company not acknowledged as debt as on 30 June 2013.
18.12 Credit Facility not availed of:

There was no general credit facilities other than those are stated in “Note-28.00” were
available to the company under any contract to be availed of at the Statement of Financial
Position date.
18.13 Transactions with Related Parties / Associated Undertakings:

There were no transactions with related parties during the year ended 30 June 2013.
18.14 Going Concern:

There is no significant doubt upon the company’s ability to continue as going concern.
18.15 Trade Creditors and other Current Liabilities:

Liabilities are recognized for amounts to be paid in the future for goods and services
received, whether or not billed by the supplier.
18.16 Reporting Currency and level of precision:

The figures in the financial statements represent Bangladesh currency (Taka), which have
been rounded off to the nearest Taka.
19.00 RATIO AND LIQUIDITY:
19.01 Gross Profit:

The gross profit earned during the year is 7.03 % as against the gross profit earning of
6.25% with C. M. Receipts during the preceding year.
28
19.02 Liquidity :
30 June 2013 30 June 2012
Liquid Assets 62,308,040 47,768,647
Net Liquid Assets (74,170,093) (66,957,559)
Other Current Assets 15,979,546 5,009,193
Net Current Assets (58,190,547) (61,948,366)

19.03 Current Ratio :
30 June 2013 30 June 2012
Current Assets 78,287,586 52,777,840
Ratio 0.57 : 1.00 0.46 : 1.00
Standard Ratio 2.00 : 1.00 2.00 : 1.00
19.04 Operating Ratio :

30 June 2013 30 June 2012
Turnover 258,210,120 241,522,863
Cost of Goods Sold 240,047,747 226,426,504
Add : Administrative, Selling & Financial Exp. 16,304,995 14,038,799
256,352,742 240,465,303
Ratio 99.28:100.00 99.56:100.00

19.05 Others :
30 June 2013 30 June 2012
Net Assets Value (NAV) 12.19 12.00
Operating Cash Flow per Share 2.3 7.57
29
20.00 Tangible Fixed Assets : Tk. 98,926,843
The figures have been arrived at as under:

30 June 2013 30 June 2012
At Cost 01 July 2012
Unit No. 01 80,846,002 80,846,002
Unit No. 02 65,963,311 43,807,392
146,809,313 124,653,394
Addition during the year
Unit No. 01 - -
Unit No. 02 1,044,880 22,155,919
1,044,880 22,155,919
Total 147,854,193 146,809,313

Less : Accumulated depreciation
Unit No. 01 7,347,899 7,352,318
Unit No. 02 41,579,451 37,172,125
48,927,350 44,524,443
Written down value 98,926,843 102,284,870
Details have been shown in Annexure 'A-1 & A-2'
21.00 Preliminary Expenses : Tk. 107,675

30 June 2013 30 June 2012

Preliminary Expenses ( as per last account) 134,594 134,594
Less: Written off 20% on cost 26,919 -
107,675 134,594
22.00 Inventories : Tk. 15,979,546

The detailed break up of the amount is as follows:
a) FABRICS
Sl. Name Unit Quantity Value in Taka
1 M/s. Kohl’s Tony Hawk Yards 93,037 11,164,440
2 N.Y Sourching Yards 8,978 1,077,360
Total 102,015 12,241,800
b) ACCESSORIES Assorted 1,234,091

c) FINISHED GOODS 2,503,655
Total (a + b + c) 15,979,546
30
23.00 Sundry Debtors:

30 June 2013 30 June 2012
Balance as on 30th June 2013 - 3,912,794
- 3,912,794
24.00 Investment In share: Tk. 5,711,810
30 June 2013 30 June 2012

Opening Balance 5,711,810 4,416,700
Add: Investment during the Year - 152,750
Stock Dividend - 1,142,360
5,711,810 5,711,810
25.00 Loans, Advances and Deposit (considered good): Tk. 10,666,890
These represent as follows :

30 June 2013 30 June 2012
Advance against purchase 10,367,133 5,861,230
Security Deposits 299,757 299,757
10,666,890 6,160,987
These do not include any advance paid either to subsidiary companies or to associated
companies /sister concern.
25.01 Security Deposits: Tk. 299,757

The amount of security deposits is comprised of the following:

30 June 2013 30 June 2012
Deposit with T & T Board 51,152 51,152
Deposit with GPO Franking Machine 1,755 1,755
Deposit with BGSL (For gas) 126,850 126,850
Deposit with PDB (For electricity) 120,000 120,000
299,757 299,757
31
26.00 Income Tax Deducted at Source : Tk. 10,222,069

The break up of the amount is as under :
30 June 2013 30 June 2012
Balance as per last account 7,814,731 6,123,889
Add : During the year 2,407,338 1,690,842
10,222,069 7,814,731
This balance represents income tax deducted at source by bank as per section - 53(BB) of
the Income Tax Ordinance 1984. Income Tax liability might to be adjusted against that
advance but no adjustment has not yet been made.
27.00 Cash and Bank Balances : Tk. 35,707,271

30 June 2013 30 June 2012
Cash in hand 27.01 916,251 758,401
Cash at Banks 27.02 34,791,020 23,409,924
35,707,271 24,168,325
27.01 Cash in Hand : Tk. 916,251

The amount comprises of the following :
30 June 2013 30 June 2012
At Head Office 830,714 682,650
At Factory 85,537 75,751
916,251 758,401
27.02 Cash at Banks : Tk. 34,791,020
30 June 2013 30 June 2012
Agrani Bank, Dhaka 49,135 49,135
Eastern Bank Ltd., Dhaka 8,180 8,180
National Bank Ltd., Dhaka 3,770 2,404
National Bank Ltd., Chittagong 540 674
Sonali Bank, Dhaka 1,799 1,799
Sonali Bank, Kalurghat, Chittagong 8,652 8,652
Sonali Bank, Kalurghat, Chittagong 1,000 1,000
National Bank Ltd., MOB A/C 34,179,693 22,834,498
Standard Chartered Bank, Chittagong 33,838 55,295
Mercantile Bank Ltd., Dhaka 504,413 448,287
34,791,020 23,409,924
32
28.00 Loans and Overdraft : Tk. 37,135,525
30 June 2013 30 June 2012

Bank Loans and Overdraft: 28.01 23,888,747 17,507,755
Directors Loan ( Unsecured) 28.02 13,246,778 13,796,778
37,135,525 31,304,533
28.01 Bank Loans and Overdraft : Tk. 23,888,747
The Figure consists of as follows:

30 June 2013 30 June 2012
P/C (Packing credit) (NBL) 8,773,954 7,857,694
Loan General (NBL) 6,949,362 9,650,061
Loan General (NBL) 8,165,431 -
23,888,747 17,507,755
Packing Credit from National Bank Limited (NBL) is secured by hypothecation of stocks and
export bill.

There were no general nature or credit facilities available to the company under any contract
which was not availed of at the date of Statement of Financial Position.
28.02 Directors Loan ( Unsecured) : Tk. 13,246,778

30 June 2013 30 June 2012
13,246,778 13,796,778
13,246,778 13,796,778
This loan has been taken from Managing Director of the company, which is non-interest
bearing, for meet up day to day expenses.
29.00 Liabilities for Goods : Tk. 67,245,856

This represents import bills payable to foreign / local suppliers against different letter of
credits at the close of the business on 30 June, 2013. The details are as follows :
Sl. No. Name of Party Amount in Taka

1 M/S Samwon Trading 67,245,856
Total Amount : 67,245,856
33
30.00 Accrued Expenses : Tk. 19,095,200
This is made up as follows:

30 June 2013 30 June 2012
Audit fee 80,000 80,000
Salary, wages and others 18,546,864 19,688,637
Income Tax payable 468,336 468,336
Tk. 19,095,200 20,236,973
31.00 Creditors : Tk. 3,367,023
This is made up as follows:

30 June 2013 30 June 2012
Workers profit participation & W. F. F 31.01 2,628,107 2,539,660
Sundry Creditors 738,916 349,944
Tk. 3,367,023 2,889,604
31.01 Worker’s Profit Participation & Welfare Fund : Tk. 2,628,107
The break up of the amount is as follows :

30 June 2013 30 June 2012
Balance as per last year 2,539,660 2,489,300
Contribution during the year 88,447 50,360
Tk. 2,628,107 2,539,660
32.00 Unclaimed Dividend : Tk. 237,960

30 June 2013 30 June 2012
For June 30, 1996 118,660 118,660
For June 30, 1997 119,300 119,300
Tk. 237,960 237,960
33.00 Dividend Payable : Tk. 4,935,885
This consists of the following :

30 June 2013 30 June 2012
a) Dividend declared long before and payable
to directors as per last account 2,837,980 2,837,980
Dividend declared in 1997 1,980,400 1,980,400
Dividend payable for 2004 & 2005 117,505 117,505
Tk. 4,935,885 4,935,885
34
* Directors decided not to withdraw the dividend due to them till improvement of financial
position of the company, so that normal business activities remain un-disturbed with required
cash flow.
34.00 EMPLOYEES’ PROVIDENT FUND : TK. 208,367

This has been brought forward from previous account.
35.00 PROVISION FOR INCOME TAX : TK. 1,662,317

30 June 2013 30 June 2012
2000-2001 85,502 85,502
2003-2004 127,002 127,002
2004-2005 84,427 84,427
2005-2006 204,346 204,346
2006-2007 86,585 86,585
2007-2008 95,358 95,358
2008-2009 66,202 66,202
2009-2010 84,735 84,735
2010-2011 116,449 116,449
2011-2012 192,109 192,109
2012-2013 519,602 ---
1,662,317 1,142,715

36.00 PROPOSED DIVIDEND : TK. 2,359,000
The Board of Directors recommended @ 7% Dividend to all Shareholders for the financial
year 2012-13.
37.00 AUTHORISED CAPITAL : TK. 100,000,000

The company has an Authorized Capital of Tk. 100,000,000 divided into 10,000,000
ordinary shares of Tk. 10 each.
38.00 SHAREHOLDERS’ EQUITY : TK. 40,843,971

It represents the share capital, tax holiday reserve, general reserve, capital reserve and
retains earnings.
35
39.00 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL : TK. 33,700,000
a) It represents the paid up capital of the company consisting of 3,370,000 ordinary

shares of Tk. 10 each issued for cash and fully paid up.
b) Composition of Shareholders
Particulars 2013 2012
No. of Value of % No. of Value of %
Shares shares Shares shares
1. Directors & Sponsors 1,956,400 19,564,000 58.05 1,956,400 19,564,000 58.05
2. Other companies /institutions 228,600 2,286,000 6.79 284,500 2,845,000 8.44
3. General shareholders 1,185,000 11,850,000 35.16 1,129,100 11,291,000 33.51
Total 3,370,000 33,700,000 100.00 3,370,000 33,700,000 100.00
39.01 The percentage of shareholding by different categories of shareholders are as

follows:
NO. OF HOLDERS HOLDINGS TOTAL HOLDING %

2,019 Less than 500 shares 7.91
211 501 - 5,000 ” 11.56
19 5,001 - 10,000 ” 4.17
23 10,001 - 20,000 ” 10.14
3 20,001 - 30,000 ” 2.49
1 30,001 - 40,000 ” 1.05
1 40,001 - 50,000 ” 1.26
- 50,001 - 1,00,000 ” -
4 Over - 1,00,000 ” 61.42
2,281 100.00
40.00 TAX HOLIDAY RESERVE : TK. 7,272,808
It represents accumulated Special Reserve U/S 45 of Income Tax Ordinance 1984 as follows:
30 June, 2013 30 June, 2012

Unit No. 01 2,248,331 2,248,331
Unit No. 02 5,024,477 5,024,477
Tk. 7,272,808 7,272,808
36
41.00 GENERAL RESERVE : TK. 1,477,579

This is as per last account.
42.00 CAPITAL RESERVE : TK. 51,620,221
This is the carry forward balance emanating through revaluation of fixed assets taken into
account in 1996-97.
43.00 TURNOVER/EXPORT PROCEEDS : TK. 258,210,120
Turnover comprises of export sales for the year ended 30 June 2013.
44.00 Cost of Goods Sold : Tk. 240,047,747
Particulars Note 30 June, 2013 30 June, 2012

Materials consumed 45 163,039,776 163,721,285
Factory overheads 46 75,540,539 58,541,491
Depreciation 3,067,432 3,528,468
241,647,747 225,791,244
Add : Opening Stock of Finished Goods 903,655 1,538,915
242,551,402 227,330,159
Less : Closing Stock of Finished Goods 2,503,655 903,655
Total Tk. 240,047,747 226,426,504
45.00 Raw Materials Consumed : Tk. 163,039,776
Particulars 30 June, 2013 30 June, 2012

Opening Stock 4,105,538 3,803,441
Add : Purchases 172,410,129 164,023,382
176,515,667 167,826,823
Less: Closing Stock 13,475,891 4,105,538
Total Tk. 163,039,776 163,721,285
37
46.00 Factory Overheads : Tk. 75,540,539

The break-up of the amount is as follows:
Sl No Particulars 30 June 2013 30 June 2012

1 Salary & Allowances 8,191,776 6,546,184
2 Wages 53,882,066 39,632,869
3 Carriage Inward 28,730 108,640
4 Labor Charge 144,936 42,636
5 Conveyance 135,760 71,035
6 Entertainment 1,296 1,544
7 C & F Expenses 3,544,810 3,847,319
8 Repairs and Maintenance 1,279,050 1,404,422
9 Electricity, Gas & Generator Fuel 5,858,259 5,358,366
10 Photocopy, Printing & Stationery 448,292 326,043
11 Telephone Bill, Mobile & Internet 72,368 46,986
12 Miscellaneous Expenses 46,547 38,465
13 Postage, Stamp & Courier 171,868 91,071
14 Medical & Workers Welfare 1,446,113 774,370
15 Wasa Bill 112,898 72,901
16 Newspapers & Journals 3,180 3,210
17 Rest House Expenses 81,315 81,119
18 Fees & Forms 48,275 43,311
19 New Year Expenses 43,000 51,000
Total Tk. 75,540,539 58,541,491
38
47.00 Administrative, Selling and Financial Expenses : Tk. 16,304,995
The break-up of the amount is as follows:
Sl No Particulars 30 June 2013 30 June 2012

1 Salary of Management & Non-management 6,786,985 6,137,377
2 Electricity & Wasa 315,402 250,354
3 Printing, Stationery & Photocopy 68,992 54,257
4 Repairs & Maintenance Vehicles and Others 503,362 203,959
5 Postage, Stamps and Courier 96,527 88,557
6 Audit Fees 80,000 80,000
7 Travelling & Conveyance 265,250 205,715
8 Advertisement 8,783 3,306
9 AGM Expenses 581,636 574,310
10 Carriage Expenses 1,230,900 1,123,972
11 Bank Interest and Charges and Commission 3,207,991 2,384,995
12 Legal Consultancy & Professional Fee 5,000 4,000
13 Entertainment 1,809 8,704
14 Fuel for Vehicles 91,718 81,922
15 Forwarding Expenses 555,458 431,020
16 Fees & Forms 93,835 63,618
17 Insurance Premium 469,856 20,414
18 Donation & Subscription 4,267 6,404
19 Miscellaneous Expenses 5,805 7,600
20 BGMEA Fee 12,000 12,000
21 Telephone, Telex, Fax, Mobile & Internet 132,992 121,454
22 Rest House Rent 196,000 168,000
23 Land Development Tax 200,000 400,000
24 Depreciation 1,363,508 1,606,861
25 Preliminary Expenses written off 26,919 -
Total Tk. 16,304,995 14,038,799
39
48.00 BASIC EARNINGS PER SHARE (EPS) :
The computation of EPS is given below :

30 June 2013 30 June 2012
a) Earnings attributable to the Ordinary Shareholders 2,962,873 2,414,396
b) Weighted average of number of Ordinary Shares
Outstanding during the year 3,370,000 3,370,000
EPS Basic 0.88 0.72
49.00 THERE WAS NO CONTINGENT LIABILITY AS ON 30-06-2013.
50.00 THERE WAS NO CLAIM AGAINST THE COMPANY WHICH IS TO BE

ACKNOWLEDGED AS DEBT AS ON 30-06-2013.
Sd/- Sd/- Sd/-

Dhaka-1000.
Dated : 28 October, 2013
40
Schedule of Fixed Assets as on 30 June 2013.
Unit - 01 Annexure - "A-1"

Cost Depreciation Written down
Particulars Balance as at Addition Total as on Value for Balance as on Charged Total as on value as on
01 July 2012 during the 30 June Depreciation Rate 01 July during 30 June 30 June
year 2013 Charge 2012 the Year 2013 2013
Land and Land Development 30,484,000 - 30,484,000 - - - - - 30,484,000
Factory Building 40,226,400 - 40,226,400 16,389 20% 561,750 3,278 565,028 39,661,372
Plant & Machinery 3,022,500 - 3,022,500 28,966 15% 2,988,393 3,345 2,992,738 29,762
Electrical Installation 2,997,436 - 2,997,436 30,797 15% 378,548 4,620 383,168 2,614,268
Office Equipment 1,077,499 - 1,077,499 16,551 15% 1,058,027 2,483 1,060,510 16,989
41
Furniture & Fixture 1,001,858 - 1,001,858 45,083 10% 951,766 4,508 956,274 45,584
Motor vehicle 622,176 - 622,176 2,350 20% 619,238 470 619,708 2,468
Road, Bridge and Fencing 1,273,700 - 1,273,700 18,322 20% 628,004 3,664 631,668 642,032
Electrical Appliances 125,487 - 125,487 1,410 15% 123,828 212 124,040 1,447
Crockeries and Cutleries 14,946 - 14,946 173 20% 14,730 35 14,765 181
Total Taka 80,846,002 - 80,846,002 160,041 7,324,285 23,614 7,347,899 73,498,104
Depreciation has been charged to : Taka

Production 16,530
Administration 7,084
Sd/-
Tk. 23,614
Schedule of Fixed Assets as on 30 June 2013.
Unit - 02 Annexure - "A-2"
Cost Depreciation Written down
Particulars Balance as on Addition Total as on Rate Balance as on Charged During Total as on value as on
01 July 2012 during the year 30 June 2013 01 July 2012 the Year 30 June 2013 30 June 2013
Factory Building 987,127 - 987,127 20% 962,540 4,917 967,457 19,670
Plant & Machinery 47,985,938 962,200 48,948,138 15% 28,662,603 2,970,665 31,633,268 17,314,870
Electrical Installation 694,316 - 694,316 15% 594,489 14,974 609,463 84,853
Office Equipment 669,660 - 669,660 15% 487,695 27,295 514,990 154,670
Furniture & Fixture 2,122,991 15,000 2,137,991 10% 806,638 132,385 939,023 1,198,968
Motor Vehicle 2,590,000 - 2,590,000 20% 1,790,028 159,994 1,950,022 639,978
42
Crockeries and Cutleries 1,666 - 1,666 20% 1,624 8 1,632 34
Boiler and Water Softener 443,297 - 443,297 15% 411,493 4,771 416,264 27,033
Generator 7,412,522 - 7,412,522 15% 1,215,771 929,513 2,145,284 5,267,238
Tools and Equipment 34,561 - 34,561 10% 25,979 858 26,837 7,724
Fire Extinguisher 181,803 67,680 249,483 15% 87,315 19,249 106,564 142,919
Computer & Computer 1,779,430 - 1,779,430 20% 1,343,823 87,121 1,430,944 348,486
Software
Power Substation 1,060,000 - 1,060,000 20% 782,127 55,575 837,702 222,298
Total Taka : 65,963,311 1,044,880 67,008,191 37,172,125 4,407,326 41,579,451 25,428,740
Depreciation has been charged to : Taka
Production 3,050,902 Sd/-
Administration 1,356,424 (SHAFIQ BASAK & CO.)
Tk. 4,407,326
The Directors
Proxy Form
I/We, ……………………………………………………………………………………………………………………
of ………………………………………………………………………………………………………………………
being a member of Desh Garments Limited hereby appoint
Mr./Mrs. …………………………………………………………………………………………………………………
of ………………………………………………………………………………………………………………………
as my/our proxy to attend and vote for me/us on my/our behalf at the 36th Annual General Meeting of the
Company to be held on the 18th December, 2013 at 12.30 p.m. or at any adjournment thereof. As witness
my/our hand this ...................... day of December, 2013 signed by the said in presence of Mr./Mrs.
…………………………………………………………………………………………………………………………
of ……………………………………………………………………………………………………………………… .
(Signature of the Proxy) (Signature of the Shareholder) Revenue

Dated ............................ Folio/B.O. No. Stamp of
Dated ...................................... Tk. 20.00
(Signature of witness & date)
Note : 1. A member entitled to attend and vote at the 36th Annual General Meeting may appoint a proxy
to attend and vote in his/her stead.
2. The proxy form, duly stamped, must be deposited at the Registered Office of the Company not
later than 48 hours before the time appointed for the meeting.
Signature verified

Attendance Slip
(Please complete this slip and hand over at the entrance of the Hall)
I hereby record my attendance at the 36th Annual General Meeting held on the 18th December, 2013 at 12.30
a.m. in Dhaka.
Name of the Member/Proxy …………………………………………………………………………………………

Folio/B.O. No. …………………………………………………………………………………………………………
Signature
(Shareholder/Proxy)
43
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44

Annual Report 2012-13

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Annual Report

Desh Garments Limited

2. Notice to Shareholders for AGM 4

3. Corporate Governance 5-6

6. Corporate Operational REsults 8

7. Directors’ Report to shareholders 9-16

a) Statement of Financial Position as at 30 June 2013 18

b) Statement of comprehensive income 19

c) Statement OF Cash FlowS 20

d) Statement of Changes in Equity 21

10. Notes to the Accounts 22-40

11. Schedule of Fixed Assets 41-42

12. Proxy Form 43-44

Dated : 17th November, 2013

Notice of the Thirtysixth Annual General Meeting

By order of the Board

Dated : Dhaka Sd/-

The Record Date is 13 November, 2013.

The Shareholders are requested to notify change of address, if any.

The Company follows the guidelines No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07/08/2012

b) Role & Responsibilities:

c) Relationship with shareholders & public:

d) Audit Committee of Board:

B. Audit Committee: Legal Advisors:

C. Management Committee: Insurance:

D. Senior Corporate Officials: Listing:

REGISTERED OFFICE FACTORY

1. Date of Incorporation : 27/12/1977

CORPORATE OPERATIONAL RESULTS

2012-2013 2011-2012 2010-2011 2009-2010 2008-2009

Gross Profit 18,162,373 15,096,359 16,161,478 15,467,533 13,497,361

Net Profit (AT) 2,962,873 2,414,396 1,048,039 762,615 595,816

Earning per share (Tk.) 0.88 0.72 3.11 2.26 1.77

Dividend Rate (%) 7% 7% 7% 5% 4%

Total Assets 177,322,104 155,197,304 122,307,243 128,794,766 123,087,323

Total Liabilities (136,247,133) (114,726,206) (83,261,021) (89,807,063) (84,155,435)

Net Asset Value 41,074,971 40,471,098 39,046,222 38,987,703 38,931,888

N.A.V. Per share 12.19 12.00 115.86 115.69 115.52

2012-13 (Taka) 2011-12(Taka)

Board Meeting and Attendance:

Name of Directors Position Meetings held Attended

Shareholders holding 10% or more voting right

1. Mr. Omar Quader Khan 1,172,900 34.80

The Directors also report that:

Rahman Mostafa Alam & Co.

Certificate on compliance of conditions of corporate governance guidelines to

Desh Garments Limited

We have examined the compliance of conditions of corporate governance guidelines of the

The compliance of conditions of corporate governance guidelines as stated in the aforesaid

Condition Title Compliance Status

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

3.1 (vi) Quorum of the Audit Committee √

Audit Committee Report

The Audit Committee consists of the following members:

The scope of Audit Committee was defined as under:

Activities carried out during the year:

Dated : October 28, 2013

AUDITOR’S REPORT TO THE SHAREHOLDERS

Respective Responsibilities of the Management and the Auditors: