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06Annual

Report

BEXTEXL I M I T E D

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MissionEach of our activities must benefit and add value to the common wealth of our society. We firmly believe that,

in the final analysis we are accountable to each of the constituents with whom we interact; namely: our

employees, our valued customers, our business associates, our fellow citizens and our Shareholders.

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Table of Contents

Notice of the Twenty-third Annual General Meeting 2Board and Management 3

Chairman's Statement 4

Human Resource 8

Corporate Governance 10

Report of the Directors 12Five Years Statistics 15

Value Added Statement 16

Twenty-second Annual General Meeting 17

Report of Auditors To the Shareholders 19

Balance Sheet 20Profit and Loss Account 21

Statement of Changes in Equity 22

Cash Flow Statement 23

Notes to the Financial Statements 24Proxy Form and Attendance Slip Annexed

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B E X T E X L i m i t e d [ f o r m e r l y p a d m a t e x t i l e m i l l s l t d . ]

2

Notice of the annual general meeting

BEXTEX LIMITED17, DHANMONDI R.A, ROAD NO. 2, DHAKA-1205

NOTICE OF THE TWENTY-THIRD ANNUAL GENERAL MEETING

Notice is hereby given that the TWENTY-THIRD ANNUAL GENERAL MEETING of the Shareholders of Bextex Limited willbe held on Saturday, the 8th September, 2007 at 10.30 a.m. at 1, Shahbag C/A, Dhaka to transact the following business :

AGENDA

1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended 31st December, 2006together with reports of the Auditors and the Directors thereon.

2. To elect Director.3. To declare 10% Stock Dividend.4. To appoint Auditors for the year 2007 and to fix their remuneration.5. To transact any other business of the Company with the permission of the Chair.

By order of the Board,

Sd/-Dated : 28th June, 2007 ( MD. ASAD ULLAH, FCS )

Company Secretary

NOTES:

(1) The Record Date shall be on 1st August 2007. The Shareholders whose names will appear in the Share

Register of the Company or in the Depository Register on that date will be entitled to attend at the AnnualGeneral Meeting and to receive the dividend.

(2) A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote inhis/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Office of the Companynot later than 48 hours before the time fixed for the meeting.

(3) Admission to the meeting room will be strictly on production of the attendance slip sent with the Noticeas well as verification of signature of Member(s) and/or proxy-holder(s).

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Board and Management

BOARD OF DIRECTORS

A S F Rahman Chairman and Managing DirectorSalman F Rahman Vice-ChairmanM A Qasem DirectorA B Siddiqur Rahman Director

MANAGEMENT COMMITTEE

Syed Naved Hussain Group Director and Chief Executive OfficerAhmed Shahryar Rahman Director of Support ServicesSardar Ahmed Khan Chief Operating Officer

COMPANY SECRETARY Md. Asad Ullah, FCS

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6

C H A I R M A N ' S S T A T E M E N T

Itake this opportunity to welcome you all on behalf of theBoard of Directors to this 23rd Annual General Meeting ofyour company and to present to you the Auditors Report

which includes the Audited Financial Statements and the

Directors Report for the year ended 31st December 2006.Successful Integration of Beximco Textiles Limited (BTL),Beximco Denims Limited (BDL) & Beximco Knitting Limited(BKL) with Padma Textile Mills Limited (later on re-named asBEXTEX Limited).

Last year, you gave your valuable mandate towards ourstrategic decision to integrate BTL, BDL & BKL with PadmaTextile Mills Limited. This unique case in the textile industryof Bangladesh was a great challenge for us. We take pride tosay that with your active support and co-operation,management has met this challenge with smooth and ease.Merger of the four companies have effectively reinforced ourbusiness base, helped enhanced operational efficiency andsynergy.

Operations

Your company's strong forward linkage support and excellentcustomer relationship helped us to keep our sales volume at asatisfactory level. During the year, your company earned arevenue of Tk. 5,20.15 million. Despite adverse pressure afterphasing out of Multi-Fiber Agreement (MFA) during2005 & political unrest especially in the last quarterduring 2006 which is well known to you, all the netoperational results were negative in 2006, in spite ofbest efforts.

Prior to MFA phase-out, it was apprehended thatlifting of textile and apparel quotas from 2005 would

be a labour and trade disaster for countries likeBangladesh who are not a cotton producing country.But proving all the perceived fear false, Bangladeshhas remained a prime source for apparel exports bothto US and Europe as well as Canada. Your company'smanagement, in anticipation of all possible odds inthe global arena, was quick to develop strategies andlay greater emphasis on innovation in fabric andgarments and aggressive marketing.

Marketing

The amalgamation of our core textile units into BEXTEX hasbeen well received by our customers. This immensely helpedkeep our strong customer focus with our prime drivers as

"Speed" and "Innovation".

We had yet another wonderful year in terms of businessgrowth with all our leading customers as Phillips Van Heusen,JC Penney, Zara, H&M etc. We are now the single largestsupplier to Zara, largest dress shirt supplier to PVH, and ratedas one of three "A" category shirt supplier to JC Penney in theWorld. Our client portfolio is further strengthened with theaddition of a host of new customers as Springfield,Mothercare, Lindex, C&A etc. While our share in the existingUS, European and Canadian market grows, we are alsolooking at new market as Japan.

To keep pace with the fast changing fashion scenario, wecontinue to strengthen our design and R&D activities which

enabled us to offer the customers differentiated, innovativeand value added products. Our spinning became more flexibleand diversified with the addition of compactor, Caipo slubattachment and being the only company in Bangladesh tosuccessfully do colored melange yarn. Our space dyed,mercerized knits, flat finish and brushed denim, 100% cottonwrinkle-free fabric as well as fully fused wrinkle-free garmentsfetched huge orders while "voile" and soluble sulphur

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continues to sweep the European and US markets respectively.This year we participated in Texworld both in Paris and NewYork and our Spring/Summer and Autumn/Winter collectionwas highly appreciated by the existing customers as well asattracted new customers.

With our aggressive marketing, strong design and productdevelopment activities, consolidation of operations etc. webecame an indispensable resource to our valued customersand thereby enhanced our visibility in the global fashionmarket.

Human Resources

Your company has always recognised the importance ofhuman resources development and makes considerableinvestment for acquisition, development and retention oftalented and dynamic professionals. Through its programs fortraining, allocation of responsibilities & authority,performance appraisal, job enlargement & enrichment,

Bextex provides an environment, which is conducive toindividual growth and motivates employees to put in theirbest effort for achieving organisational goals.

Environment

Your company is very committed to preserve a healthy andpollution-free environment. It has a very efficient wastecollection and disposal system. In order to reduce airpollution by exhaust of gas from engine-generators, itmaintains a costly plant that uses the exhaust gas to generatesteam for chilling unit. Above measures not only help keep thewater & air free from pollution but also help save cost ofwater treatment & air conditioning. Your company uses onlyAZO-free dyes and is dedicated to ensure a healthy and eco-friendly environment.

Future Plans

Bextex - as a part of Beximco Textiles Division has takennecessary steps to face the challenges considering thecompetition after elimination of quotas restriction trade

between World Trade Organisation (WTO) membersespecially from China, India, Taiwan and South Korea.BEXTEX sensed this threat and set its strategy accordingly.Over the year, it has positioned itself as a one-stop shop for anarray of fabric & garment meeting the quality and deliveryrequirements of the world's most renowned brands andretailers. To day the strength of BEXIMCO textile division liesin its state-of-the-art integrated facility from yarn to apparel,low cost operation due to cheap labour, above all the nameBEXIMCO, which evokes a very good image of the productsat any world-class brand/retailer. Your company has alsogiven same focus on domestic users besides its internationalcustomers.

Dividend

Despite loss incurred by the company in 2006, the Board ofDirectors propose 10% stock dividend (1 bonus share foreach 10 shares held) for the year ended 31st December 2006

out of past profits for your approval.

Conclusion

I would like to take this opportunity to show my appreciationand sincere gratitude to the valued shareholders, governmentagencies, employees, banks, financial institutions, suppliersand to our customers for their unforgettable co-operation.Infact, you are the real strength to overcome the challenges inour way. I am confident, that with your understanding andsupport we will continue to build on our capabilities forsustained high performance in future. Again I offer myheartiest thanks to all shareholders for their support duringthe year.

A S F RahmanChairman

Dated: 28 June 2007Dhaka.

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the resource above anything else

BEXTEX Limited, a unit of Beximco Textiles Division, thecountry's largest body of managing the vertically integratedproduction facilities from yarn to garment has a uniquecombination of technical and generalist talents as their resourceabove all.

Since the inception, Beximco Group became the pioneer of headhunting for all of their fields and successfully accumulated the besttalents from within the country as well as from abroad and couldmake an excellent environment to flourish their qualities andcapabilities by utilizing their capacities in the process ofmanufacturing, maintenance and of course in the management inbroad. The human resources engaged in Beximco Group aregetting the best value of their potentials and never look anywhereother than significantly contributing their highest efforts for thecontinuous development of the company.

The ideal management of human resources in BEXTEX ensurednurturing of the potentials of these talents through working in anenvironment having the state of the art production facilities and

getting the satisfaction of job and reward. On the other hand thecompany, employer of the highest number of professionalincluding the MBAs, CAs, CMAs, experts having the doctors ofphilosophy (PhDs) has the proud to be the largest employer of thecountry and has the strength of making things simply possiblewhich is always being difficult for the competitors and 'impossible'to the others.

BEXTEX, a company of continuously maintaining the bestemployee-management communication & relationship abiding bythe internationally recognized and certified standard of compliancehas ensured not only recruiting the best manpower but also has therecord of retaining them through whom the company brought thesheer success of achievements in the world of textiles andgarments. The story of success, achievements and the glory of thecompany as well as the division or the Group as a whole is nothingbut the participation of it's human resources and of course,conforming of all the compliance issues starting from the level ofA to Z i.e. from accumulating the resources, processing theproduction up-to the feeding of products into the market.

The team of Human Resources and Compliance department inBEXTEX consisting of highly qualified and vastly experiencedpersonnel having appropriate training from both home and abroadmade the department absolutely equipped with all necessary

policies, guidelines, Standard Operating Procedures (SOPs), JobDescriptions, training materials, Code of Conducts (CoCs) that thecontinuous development of human resources is also taking placesimultaneously throughout each and every section of the company.

The company, as invests for recruiting and retaining the qualifiedhuman resources, similarly spends a considerable amount ofmoney and efforts after developing the skill levels and efficienciesof the human resources by arranging regular training courses andprograms for the employees. A separate training section is alsoworking with necessary logistics and accommodation forproviding necessary training for both the workers and officers,which has already earned an envious reputation among thecompetitors and made us a different among others in regard to themethods and techniques of developing the human resources whichcontributes in achieving the market share and leadership in theindustry.

The tangible and intangible benefits and facilities provided to theemployees of BEXTEX including the working conditions, physical

infrastructures, accommodations and dormitories, arrangementsfor leisure and amusements etc. in the Beximco Industrial Parkmade the company a completely different type of employer

H u m a n R e s o u r c e

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acknowledging which the employees are also devoting their wholehearted and sincere efforts for each and every step of theproduction starting from sorting of cotton up to the shipping of theRMGs.

The transparency of management and the broad and openaccessibility of employees enable both the parties to maintain aharmonious relationship and to reciprocally remain besides andmake them feel a part of the team for the improvements ofproduction in quality and quantity for the ultimate development ofthe company as well as the division which also increases theaptness of the employee in their work.

The Human Resources Department of BEXTEX disseminates theachievements, recognitions, events & happenings within thecompany through publishing of Textalk, a monthly newsletter ofthe company. The Textalk ensures the communications between allconcerned including the buyers community that has tremendouslybeen acknowledged as the Spokesperson of the company.

Compliance and Social Commitments

Being the largest company and the largest employer of the country,BEXTEX Limited always performs the social responsibilities andmaintains the conformity of compliance issues at each and everylevel of production and management which starts from therecruitment of worker where the relevant clauses of the law andILO conventions are properly followed and ends up with theshipping of the finished goods through Customs-Trade PartnershipAgainst Terrorism (C-TPAT).

Considering the social responsibilities of the company, theinnovation of new products, services and ideas for which thecompany is earning a huge reputation and stepping towards theglobalization in terms of products, markets, efficiencies etc. should

be counted at first. BEXTEX is the company, which is always beingin the front row of market penetration through their innovationsand product development, which further brings the benefit for thewhole industry of the country through increasing the flow of

orders for the country. Beximco always believes that the

contribution in the field of national economy through making

employment opportunities, providing jobs, facilities and ensuring a

standard of living for the workforces and of course, enhancing the

business in the country are the prime social responsibilities they areperforming. Being the largest employer of the country, Beximco is

directly contributing in the national skill development of the

workers.

BEXTEX is patronizing both the technical and non-technical

educational institutions of the country allowing the Internship and

Industrial attachment of their students. BEXTEX allows a number

of national and international educational institutes as well as the

institutes like National Defense College, Ordnance School, Marine

Academy and some other institutes to visit the Plants, study the

management practices and enrich the knowledge of their

students/officers.

The company ensures abiding by all the relevant instructions for

Health, Safety and Environment Conservation Rules, policies, Fire

and Boiler maintenance instructions and all relevant requisites of

the country throughout the entire Industrial Park as each and

individual units are abiding by the said rules. Sufficient Personal

Protective Equipments (PPEs), Safety Equipments, signs and

symbols etc. are made available throughout the plants as well as

necessary training has also been provided to all the workers on the

use of these equipments so that they are also aware on the issues

and capable of using the items, if required and maintain the

Health, Safety & Hygiene properly.

Necessary plantation, treatment, control measures etc. are also

properly ensured as per the guidelines of the World Bank,

Department of Environment and also of other concerned bodies.Abiding by the appropriate policies and procedures of health safety

and environment are also ensuring the conformity of the Buyers

Code of Conduct and makes all the leading buyers satisfied on

their set standard of compliance. The certification of compliance

from the buyers like PVH, Perry Ellis, Wal-Mart, JC Penny,

Haddad etc. are the recognition of BEXTEX in making the

company compliant of global standard.

In conclusion, BEXTEX Limited can firmly say that the continuous

achievement of market share and earning the reputation from

around the globe are the benchmarks of the success of the

company. This success has been earned, besides others, obviously

by ensuring the highest level of human resources management and

conforming to various compliance issues at a level of internationalstandard. We do believe in what our competitors are saying behind

us that the Human Resources and Compliance Management of

BEXTEX is unparallel and not to be compared with any other

organization in the industry. We know this was said by the

competitors as because this was expressed by each and every

individual employees and by the buyers, partners, agencies and by

all others concerning BEXTEX Limited. This recognition and

satisfaction among all of us are the strength of the Human

Resources and Compliance of the company.

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The maintenance of effective corporate governance remains akey priority of the Board of BEXTEX Limited. Recognizingthe importance of it, the board and other senior managementremained committed to high standards of corporategovernance. To exercise clarity about directors'responsibilities towards the shareholders, corporategovernance must be dynamic and remain focused to thebusiness objectives of the Company and create a culture ofopenness and accountability. Keeping this in mind, clearstructure and accountabilities supported by well understoodpolicies and procedures to guide the activities of Company'smanagement, both in its day-today business and in the areasassociated with internal control have been instituted.

INTERNAL FINANCIAL CONTROL

The directors are responsible for the Company's system ofinternal financial control. Although no system of internalcontrol can provide absolute assurance against materialmisstatement and loss, the Company's system is designed toprovide the directors with reasonable assurance thatproblems are timely identified and dealt with appropriately.Key procedures to provide effective internal financial controlcan be described in following heads:

Management structure - The Company is operating througha well defined management structure headed by chiefexecutive officer (CEO) under whom there are executive

directors, general managers for various departments andaccording to hierarchy, various senior and mid levelmanagement staffs. The CEO and the executive directors,general managers meet at regular intervals represented alsoby finance, marketing and personnel heads.

Budgeting- There are comprehensive management reportingdisciplines which involve the preparation of annual budgetsby all operating departments. Executive management reviewsthe budgets and actual results are reported against the budgetand revised forecasts are prepared at regular intervals.

Asset management - The Company has sound assetmanagement policy, which reasonably assures thesafeguarding of assets against unauthorized use ordisposition. The Company also follows proper records andpolicy regarding capital expenditures.

Functional reporting - In pursuance with keeping thereliability of financial information used within the businessor for publication, the management has identified some keyareas which are subject to monthly reporting to the chairmanof the board. These include monthly treasury operations andfinancial statements. Other areas are also given emphasis byreviewing on a quarterly basis. These include information forstrategy, environmental and insurance matters.

STATEMENT OF DIRECTORS' RESPONSIBILITIES FORPREPARATION AND PRESENTATION OF THEFINANCIAL STATEMENTS

The following statement is made with a view to distinguishingfor shareholders the respective responsibilities of the directorsand the auditors in relation to the financial statements. TheCompanies Act, 1994 requires the directors to preparefinancial statements for each financial year which give a trueand fair view of the state of affairs of the company as at the endof the financial year and of the profit for the year to that date.In preparing those financial statements, the directors:

select suitable accounting policies and then apply them ina consistent manner;

make reasonable and prudent judgments and estimateswhere necessary;

state whether all applicable accounting standards havebeen followed, subject to any material departuresdisclosed and explained in the notes to the financialstatements;

take such steps as are reasonably open to them tosafeguard the assets of the Company and to prevent anddetect fraud and other irregularities;

ensure that the Company keeps accounting records whichdisclose with reasonable accuracy the financial position

of the Company;

ensure that the financial statements comply withdisclosure requirements of the Companies Act, 1994 andthe Securities and Exchange Rules, 1987; and

prepare the financial statements on a going concern basisunless it is inappropriate to presume that the Companywill continue in business.

BOARD COMMITTEES

The board - The board is responsible to the shareholders forthe strategic development of the company, the managementof the Company's assets in a way that maximizesperformance and the control of the operation of the business.

The board of directors is responsible for approving Companypolicy and is responsible to shareholders for the Company'sfinancial and operational performance. Responsibility for thedevelopment and implementation of Company policy andstrategy, day-to-day operational issues is delegated by theboard to the management of the Company.

Board structure and procedure - The membership of theboard during the year end as on 31-12-2006 stood at fourdirectors. All directors are equally accountable as per law to

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the shareholders for the proper conduct of the business.

The Company's board currently comprises the Chairman,Vice-Chairman and other two directors. The Vice-Chairmanand other two directors are nominated by Bangladesh Export

Import Company Limited. The name of the directors appearson page 3. The quorum for the board is at least threedirectors present in person.

GOING CONCERN

After making enquires, the directors, at the time of approvingthe financial statements, have determined that there isreasonable expectation that the Company have adequateresources to continue operation for the foreseeable future.For this reason, the directors have adopted the going concernbasis in preparing the financial statements.

RIGHTS AND RELATIONS WITH SHAREHOLDERS

Control rights of shareholders - At annual general meeting,

shareholders have rights of participation. They have the rightto ask questions on and request from information from theboard regarding item on the agenda to the extent necessary tomake an informed judgment of the Company's' affairs.

Relations with shareholders - The annual general meeting areused as an important opportunity for communication withboth institutional and general shareholders. In addition, theCompany maintains relations with its shareholders throughthe corporate affairs secretarial department.

The following information can be addressed through thesecretarial department :

Dividend payment enquires;

Dividend mandate instruction; Loss of share certificate/dividend warrants;

Notification of change of address; and

Transfer of shares.

The board believes that it is important to respond adequatelyto all the queries of both institutional and generalshareholders. At the AGM, the shareholders are offered anopportunity to raise with the board any specific question theyhave concerning the Company. In addition, meetings are alsoheld between individual directors and institutionalshareholders at various times during the year.

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The Directors are pleased to present the Audited FinancialStatements of the Company for the year ended 31 December 2006,together with the Directors' and Auditors' Reports thereon.

PRINCIPAL ACTIVITY

The principal activity of the Company in the period underreview was that of production and sale of high qualityyarns, woven, denim and knit fabrics.

WORKING RESULTS

The working result of the Company for the year underreview are as follows

2006(Taka in million)

Net Profit after income tax (208.65)

Profit brought forward 732.05Stock Dividend for 2005 (60.81)Cash Dividend for 2005 (30.41)

Profit available for appropriations 432.19

The Directors recommended thefollowing Appropriation:

Proposed Stock Dividend (Bonus Share)for the year 2006 at 10% (171.17)

Profit carried forward 261.02

DIVIDEND

The Board of Directors have recommended 10% StockDividend (Bonus Share ); i.e., 1 (one) bonus share for 10(ten) ordinary shares held, fully paid up, for the approval ofthe shareholders for the year ended 31 december 2006.

DIRECTORS

A B Siddiqur Rahman, Director, being the nominee ofBangladesh Export Import Co. Ltd.retires by rotation as per

Articles 126 and 127 of Articles of Association of theCompany and being eligible offers himself for re-election.

BOARD MEETING AND ATTENDANCE

During the year, 4 (four) Board Meetings were held. Theattendance record of the Directors is as follows

Name of Directors Meetings AttendedA S F Rahman 4Salman F Rahman 4M A Qasem 4A B Siddiqur Rahman 4

BOARD AUDIT COMMITTEE

There was no Audit Committee till 31 December 2006. TheCompany however constituted the Committee in 2007 withMr. Salman F. Rahman as Chairman and Messrs M A

Qasem and Mr AB Siddiqur Rahman as Members.

CORPORATE & FINANCIAL REPORTING

The Company has complied with all the requirements ofCorporate Governance as required by the Securities andExchange Commission.Accordingly the Directors are pleased to confirm thefollowing :

(a) The financial statements together with the notesthereon have been drawn up in conformity with theCompanies Act, 1994 and Securities and ExchangeRules, 1987. These statements present fairly theCompany's state of affairs, the result of its operations,cash flow and changes in equity.

(b) Proper books of accounts of the Company have beenmaintained.

(c) Appropriate Accounting Policies have beenconsistently applied in preparation of the financialstatements and that the accounting estimates are basedon reasonable and prudent judgement.

(d) The International Accounting Standards, as applicablein Bangladesh, have been followed in preparation ofthe financial statements,

(e) The systems of internal control are sound and havebeen effectively implemented and monitored.

(f) There are no significant doubts upon the Company'sability to continue as a going concern.(g) The Company has incurred net loss, mainly due to higher

raw material costs, higher depreciation and higherexpenses-manufacturing, administrative and selling.

(h) The key operating and financial data for the last fiveyears is Annexed.

(i) The Company propose 10% stock dividend (bonusshare) subject to approval of the shareholders.

for the year ended 31 December 2006

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(j) The pattern of shareholding is as follows :

Name-wise details Shares held(i) Parent/Subsidiary/Associate Companies

and other related parties :

Bangladesh Export Import Co, Ltd. 12,852,955Beximco Holdings Ltd. 5,319,629Beximco Apparels Ltd. 2,800,738Beximco Pharmaceuticals Ltd. 3,582,538New Dacca Industries Ltd. 12,795,861

(ii) Directors, Chief Executive Officer,Company Secretary, Chief FinancialOfficer, Head of Internal Audit andtheir spouses and minor children :

Mr. A S F Rahman, Chairman 31,316,114Mr. Salman F Rahman, Vice Chairman 36,235,417

Chief Executive Officer, spouse and minor children NilCompany Secretary, spouse and minor children NilChief Financial Officer, spouse and minor children NilHead of Internal Audit, spouse and minor children Nil

(iii) Executives Nil

(iv) Shareholders holding ten percent (10%) or morevoting interest in the Company

Mr. A S F Rahman, Chairman (mentioned in Sl. No. (ii) 31,316,114Mr. Salman F Rahman, Vice Chairman (mentioned in Sl. No. (ii) 36,235,417

CORPORATE GOVERNANCE COMPLIANCE REPORT

In accordance with the requirement of the Securities andExchange Commission, "Corporate GovernanceCompliance Report" is also Annexed.

AUDITORS

The retiring Auditors, M/S M. J. Abedin & Co., CharteredAccountants, National Plaza (6th floor), 1/G, Free SchoolStreet, Sonargoan Road, Dhaka-1205, being eligible, offerthemselves for re-appointment as Auditors of the Companyfor the year 2007.

On behalf of the Board,

A S F RahmanChairman

June 28, 2006Dhaka

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Corporate Governance Compliance Status Report

Status of compliance with the conditions imposed by the Commission's Notification No.SEC/CMRRCD/2006/158/Admin/02-08 dated 20th February 2006 issued under section 2CC of the Securities

and Exchange Ordinance, 1969. (Report under Condition No.5.00)

Condition Title Compliance status ExplanationNo. (Put in the appropriate column) for non-compliance

Complied Not compliedwith the condition

1.1 Boards Size To be increased in 20071.2(I) Independent Directors To be appointed in 20071.2(II) Independent Directors Appointment 1.3 Chairman & Chief Executive 1.4(a) Directors Report on financial Statements 1.4(b) Books of Accounts 1.4(c) Accounting Policies 1.4(d) IAS Applicable in Bangladesh 1.4(e) System of Internal Control 1.4(f) Going Concern 1.4(g) Deviation in Operating Results 1.4(h) Key operating and Financial Data 1.4(i) Declaration of Dividend 1.4(j) Number of Board Meetings 1.4(k) Pattern of Shareholdings 2.1 CFO, HIA & CS Appointment 2.2 Board Meeting Attendance 3 Audit Committee 3.1(i) Composition of Audit Committee

3.1(ii) Audit Committee Members Appointment

3.1(iii) Terms of service of Audit Committee 3.2(I) Chairman of Audit Committee 3.2(ii) Audit Committee Chairman's Qualification 3.3.1(I) Reporting to the Board of Directors 3.3.1(ii)(a) Report of Conflicts of Interest 3.3.1(ii)(b) Defect in the Internal Control System 3.3.1(ii)(c) Suspected infringement of Laws 3.3.1(ii)(d) Any other matter 3.3.2 Reporting to the Authorities 3.4 Reporting to the Shareholders 4.00 (I) Appraisal or Valuation Services 4.00 (ii) Financial information system

4.00 (iii) Book keeping or other services 4.00 (iv) Broker dealer services 4.00 (v) Actuarial services 4.00 (vi) Internal Audit services 4.00 (vii) Any other services

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F i v e y e a r s S t a t i s t i c s

2006 2005 2004 2003 2002

Results of Operations:

* Revenue 5,201,514 2,570,597 2,945,921 2,930,421 2,847,712* Gross Profit 2,030,146 499,931 518,717 512,836 549,886* Operating Profit 1,774,503 449,975 478,441 456,855 494,427* Net Profit/(loss) before tax (200,709) 156,569 189,273 103,494 150,605* Net Profit/(loss) after tax (208,649) 123,599 154,997 78,427 121,925** Basic Earning per share (1.22) 2.03 3.19 1.69 2.63** Cash Dividend Per Share - 0.50 0.50 1.00 0.50Stock dividend Per Share in % 10 10 25 5 10

* Cash Inflow from Operating Activities 269,201 88,167 (144,457) (22,484) 153,149

Financial Position:

* Total Assets 14,956,940 6,168,193 6,087,239 5,144,576 4,881,843* Fixed Assets - Gross 11,431,174 4,107,057 4,061,812 3,886,559 3,711,972* Fixed Assets - Net 7,293,540 1,661,658 1,880,976 1,965,201 2,049,669* Financial Assets 3,458,925 3,113,777 2,826,215 2,029,095 1,775,891* Reserve and Surplus 1,248,829 1,230,994 1,255,774 1,174,908 1,159,661* Gross Working Capital 7,572,906 4,496,276 4,196,005 3,169,116 2,822,681* Net Working Capital 1,611,525 2,793,425 2,585,451 1,168,297 893,037* Authorised Capital 3,000,000 1,000,000 1,000,000 1,000,000 1,000,000* Shareholders' Equity 2,960,507 2,076,601 1,979,759 1,875,728 1,818,361* Paid up Capital 1,711,678 608,108 486,486 463,320 421,200* Total Long Term Debt 6,020,051 2,373,739 2,481,926 1,533,399 1,396,624

Key Financial Ratios, Figures and Market Data:

Current Ratio 1.27:1 2.64:1 2.60:1 1.58:1 1.46:1Debt Equity Ratio 2.03 1.14 1.25 - -Return on Investment (1.39%) 2.00% 2.55% 1.52% 2.50%** Net Assets Value per Share 52.55 101.43 73.62 111.04 115.90Payout Ratio - 73.89% 47.02% 118.34% 57.03%** Market value of share (at DSE) 22.50 21.90 39.50 14.79 17.52** Market value of share (at CSE) 22.50 22.10 40.40 14.88 17.50Price Earning Ratio (based on DSE price) (Times) (18.44) 10.79 12.38 8.75 6.66Price Earning Ratio (based on CSE price) (Times) (18.44) 10.89 12.66 8.80 6.65

Other:

Number of shares 171,167,841 60,810,750 48,648,600 46,332,000 42,120,000

Number of shareholders 36,470 9,147 5,905 5,209 5,003Capacity Utilization 91.93% 95.83% 96.83% 96.90% 96.85%

* Figures in Thousand Taka** Figures in Taka

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Va l u e A d d e d S t a t e m e n t

Taka in '000 %

Turnover 5,201,514Brought-in-materials and services (2,875,776)

2,325,738 100.00

Government - as duties and taxes 29,646 1.27Employees - as salaries, wages and allowances 529,529 22.77Lenders - as Financial Charges 1,355,894 58.30Shareholders - as Dividend 171,167 7.36

2,086,236 89.70

Depreciation and retention 239,502 10.30

2,325,738 100.00

Government - as duties and taxes

Shareholders - as Dividend 7.36 % 10.30 %

58.30 %

1.27 %

22.77 %

Depreciation and retention

Lenders - as Financial Charges

Employees - as salaries, wages and allowances

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Twenty-sec ond Annual Ge neral Meetin g

The Twenty-second Annual General Meeting (AGM) of shareholders of Padma Textile Mills Limited (later on re-namedBEXTEX Limited) was held on 22nd July 2006 at 3.30 pm at 1, Shahbagh C/A, Dhaka. A large number of shareholdersattended the AGM.

Mr. A S F Rahman, Chairman of the Board of Directors of the Company, presided over the meeting. Mr. Salman F Rahman,Mr. M A Qasem and Mr. A B Siddiqur Rahman were also present in the meeting. Verses from the Holy Quaran along withits translation in Bengali were recited at the very outset of the meeting.

The Vice Chairman welcomed the shareholders in the AGM. With the permission of the Chair, the meeting began and theshareholders expressed their valued opinion on the audited financial statements of the Company for the year ended 31December 2005 and also on other affairs.

Mr. Salman F Rahman, Vice Chairman of the Company replied to the queries and explained various comments ofdistinguished shareholders. He also gave hints of future activities of the Company.

After approving the audited financial statements, declaring dividend (cash dividend @5% and stock dividend 10%), electingdirector, appointing auditors and fixing their remuneration by the shareholders, the meeting ended with a vote of thanks toand from the Chair.

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F i n a n c i a l s

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We have audited the accompanying Balance Sheet of the Bextex Limited as of December 31, 2006 and the related Profit andLoss Account, Statement of Changes in Equity and Statement of Cash Flows for the year then ended. These financialstatements are the responsibility of the company's management. Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financialstatements. 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 ofour opinion.

In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS), give a trueand fair view of the state of the company's affairs as of December 31, 2006 and of the results of its operations and its cashflows for the year then ended and comply with the applicable sections of the Companies Act 1994, the Securities andExchange Rules 1987 and other applicable laws and regulations.

We also report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary forthe 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 fromour examination of those books;

(c) the company's balance sheet and profit and loss account dealt with by the report are in agreement with the books ofaccount; and

(d) the expenditure incurred was for the purposes of the company's business.

National Plaza (6th Floor) M. J. ABEDIN & CO.1/G, Free School Street Chartered AccountantsSonargaon Road, Dhaka-1205.

Dhaka : June 28, 2007

to the shareholders of bextex limited

(formerly known as padma textile mills limited)

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Notes Amount in Taka

ASSETSProperty, Plant and Equipment-Carrying Value 20 7,293,540,678

Cost 11,431,174,290Accumulated Depreciation (4,137,633,612)

Long Term Security Deposits 21 29,191,074Deferred Assets 22 61,302,391

Total Non-Current Assets 7,384,034,143

Current Assets 7,572,906,611Inventories 23 3,414,768,025

Trade Debtors 24 3,407,687,731Advances, Deposits and Prepayments 25 728,404,352Cash and Cash Equivalents 26 22,046,503

Total Assets Tk. 14,956,940,754

EQUITY AND LIABILITIESShareholders' Equity 2,960,507,692Issued Share Capital 27 1,711,678,410Reserves & Surplus 1,248,829,282

Non-Current Liabilities 6,035,051,70510% Debentures - Net of Current Maturity (Secured) 28 663,065,600Long Term Loans-Net of Current Maturity (Secured) 29 5,356,986,105Security Deposit from Distributor 30 15,000,000

Current Liabilities 5,961,381,357Short Term Loans 31 3,591,327,95810% Debentures - Current Maturity (Secured) 32 322,572,418Long Term Loans - Current Maturity (Secured) 33 1,168,895,196Creditors & Accruals 34 878,585,785

Total Shareholders' Equity and Liabilities Tk. 14,956,940,754

The notes are an integral part of the Financial Statements.

Approved and authorized for issue by the board of directors on June 28, 2007 and signed for and on behalf of the Board.

A B Siddiqur Rahman M A Qasem Md. Mushaddeque AliDirector Director Deputy General Manager (F&A)

Per our report of even date.

June 28, 2007 M. J. Abedin & Co.Dhaka. Chartered Accountants

At 31 December 2006

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Notes Amount in Taka

Revenue 35 5,201,514,097

Cost of Revenue 36 (3,171,367,367)

Gross Profit 2,030,146,730

Operating Expenses (255,642,988)Administrative Expenses 39 (238,514,958)Distribution (Selling) Costs (17,128,030)

Operating Profit 1,774,503,742

Financial Expenses 40 (1,355,894,166)

Depreciation 20 (619,319,135)

Net Profit/(Loss) before Tax (200,709,559)

Income Tax Expenses 41 (7,939,725)

Net Profit/(Loss) for the year transferred toStatement of Changes in Equity Tk. (208,649,284)

Earnings Per Share (Par value Tk.10/-) 42 Tk. (1.22)






For the year ended 31 December 2006

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Amount in Taka

Particulars Notes Share Capital Reserves Retained TotalEarnings

At the beginning of the year 43 608,107,500 1,521,288,430 732,050,404 2,861,446,334Further Issue of Shares 600,000,000 450,000,000 - 1,050,000,000Net Profit/(Loss) - - (208,649,284) (208,649,284)Prior Year's adjustments 44 - (711,883,983) - (711,883,983)Issue of Bonus Shares 60,810,750 - (60,810,750) -Cash Dividend - - (30,405,375) (30,405,375)Issue of Shares in exchange for

the shares of the amalgamatedcompanies 442,760,160 (442,760,160) - -

At the end of the year 1,711,678,410 816,644,287 432,184,995 2,960,507,692



A B Siddiqur Rahman M A Qasem Md. Mushaddeque Ali

Director Director Deputy General Manager (F&A)




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Amount in Taka

Cash Flows from Operating Activities :Cash Receipts from Customers and Others 4,887,688,455Cash Paid to Suppliers and Employees (3,703,613,507)Cash Generated from Operations 1,184,074,948

Interest Paid (906,788,267)Income Tax Paid & Deducted at Source (8,084,912)Net cash Generated from Operating Activities 269,201,769

Cash Flows from Investing Activities :Acquisition of Property, Plant and Equipment (205,811,905)

Long Term Security Deposit (46,064)Net cash Used in Investing Activities (205,857,969)

Cash Flows from Financing Activities :Issuance of Shares to Sponsors 1,050,000,000Increase/(Decrease) in Long Term Borrowings (1,273,417,109)Increase/(Decrease) in Short Term Borrowing 118,194,147Dividend Payments (30,405,375)Net cash Generated/(Used) in Financing Activities (135,628,337)

Increase/(Decrease) in Cash and Cash Equivalents (72,284,537)Cash and Cash Equivalents at Beginning of Year 94,331,040Cash and Cash Equivalents at End of Year 22,046,503


Approved and authorized for issue by the board of directors on June 28, 2007 and signed for and on behalf ofthe Board.





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1. Reporting EntityBextex Limited (formerly known as Padma Textile Mills Limited) was incorporated in Bangladesh in 1984 underthe Companies Act, 1913 as a Public Limited Company. It commenced its manufacturing operation in 1990. Thecompany became a listed company in 1992.

The name of the company has been changed during the year 2006.

The shares of the Company are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh.

During the year 2006, the company took over, under a Scheme of Amalgamation, erstwhile Beximco Textiles Ltd.,Beximco Knitting Ltd. and Beximco Denims Ltd., the three listed companies of the Beximco Group engaged inmanufacturing and marketing of high quality woven, knit and denim fabric that are consumed by the exportoriented garments industries of Bangladesh.

The registered office of the company is located at House No. 17, Road No. 2, Dhanmondi R/A, Dhaka. The

industrial units are located at Tatki of Narayanganj and Beximco Industrial Park in Sarabo of Gazipur.

It is engaged in manufacturing and marketing of yarn that are consumed by weaving mills of Bangladesh includingits own weaving mills producing and marketing of high quality fabric, that are eventually consumed by the exportoriented garments industries of Bangladesh including the garments factories of Beximco Group.

2. Basis of Measurement of Elements of Financial Statements

The financial statements have been prepared on the Historical Cost basis except for certain fixed assets that wererestated at replacement costs, and therefore, do not take into consideration the effect of inflation.

Accordingly, historical cost is employed to determine the monetary amounts at which the elements of the financialstatements are to be recognized and carried in the balance sheet and income statement.

Under the Historical Cost, assets are recorded at the amount of cash or cash equivalents paid or the fair value of

the consideration given to acquire them at the time of their acquisition. Liabilities are recorded at the amount ofproceeds received in exchange for the obligation, or in some circumstances (for example, income taxes), at theamounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business.

3. Statement of Compliance with Local Laws

The financial statements have been prepared in compliance with the requirements of the Companies Act 1994, theSecurities & Exchange Rules 1987, the Listing Regulations of Dhaka and Chittagong Stock Exchanges and otherrelevant local laws as applicable.

4. Statement of Compliance of Bangladesh Accounting Standards

The financial statements have been prepared in accordance with the applicable Bangladesh Accounting Standards(BASs) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) based on International Accounting

Standards (IASs) and International Financial Reporting Standards (IFRSs).

5. Structure, Content and Presentation of Financial Statements

Being the general purpose financial statements, the presentation of these financial statements is in accordance withthe guidelines provided by BAS 1: Presentation of Financial Statements.

6. Reporting Period

The financial period of the company covers one calendar year from 1st January to 31st December consistently.


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7. Approval of Financial Statements

The financial statements were approved by the Board of Directors on 28 June 2007.

8. Functional and Presentational (Reporting) Currency

The financial statements are prepared and presented in Bangladesh Currency (Taka), which is the company'sfunctional currency. All financial information presented have been rounded off to the nearest Taka except whereindicated otherwise.

9. Comparative Information

No comparative information has been disclosed in respect of the year 2005, as such information, afteramalgamation of the aforesaid three companies, is not comparable with the current year's financial statements.

10. Risk and Uncertainty For Use of Estimates and Judgments

The preparation of financial statements in conformity with Bangladesh Accounting Standards requires managementto make judgments, estimates and assumptions that affect the application of accounting policies and the reported

amounts of assets, liabilities, income and expenses, and disclosure requirements for contingent assets and liabilitiesduring and at the date of the financial statements.

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoingbasis. Revisions of accounting estimates are recognized in the period in which the estimate is revised and in anyfuture periods affected as required by BAS 8: Accounting Policies, Changes in Accounting Estimates and Errors.

11. Provisions

In accordance with the guidelines as prescribed by BAS 37: Provisions, Contingent Liabilities and Contingent Assets,provisions are recognized in the following situations:

a. when the company has an obligation (legal or constructive) as a result of past events;

b. when it is probable that an outflow of resources embodying economic benefits will be required to settle theobligation; and

c. reliable estimate can be made of the amount of the obligation.

12. Accrued Expenses and Other Payables

Liabilities are recognized for the goods and services received, whether paid or not for those goods and services.Payables are not interest bearing and are stated at their nominal value.

13. Going Concern

The company has adequate resources to continue in operation for the foreseeable future. For this reasons thedirectors continue to adopt going concern basis in preparing the accounts. The current credit facilities and resourcesof the company provides sufficient fund to meet the present requirements of its existing business.

14. Financial InstrumentsNon-derivative financial instruments comprise accounts and other receivables, cash and cash equivalents,borrowings and other payables and are shown at transaction cost.

15. Impairment

In accordance with the provisions of BAS 36: Impairment of Assets, the carrying amount of non-financial assets,other than inventories are reviewed at each reporting date to determine whether there is any indication ofimpairment. If any such indication exists, then the asset's recoverable amount is estimated and impairment lossesare recognized in profit and loss account. No such indication of impairment has been raised till to date.

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16. Cash Flow Statements

The Cash Flow Statement has been prepared in accordance with the requirements of BAS 7: Cash Flow Statements.

The cash generating from operating activities has been reported using the Direct Method as prescribed by the

Securities and Exchange Rules 1987 and as the benchmark treatment of BAS 7 whereby major classes of gross cashreceipts and gross cash payment from operating activities are disclosed.

17. Transactions with Related Parties

The company carried out a number of transactions with related parties in the normal course of business and onarm's length basis.

The information as required by BAS 24: Related Party Disclosures have been disclosed in a separate note to the accounts.

18. Events after the balance sheet date

In compliance with the requirements of BAS 10: Events After the Balance Sheet Date, post balance sheet events thatprovide additional information about the company's position at the balance sheet date are reflected in the financialstatements and events after the balance sheet date that are not adjusting events are disclosed in the notes when material.

19. Accounting policies For Significant Items

The accounting policies in respect of material items of financial statements have been set out below:

19.1 Revenue Recognition Policy

In compliance with the requirements of BAS 18: Revenue, revenue from receipts from customers against sales isrecognized when products are dispatched to customers, that is, when the significant risk and rewards of ownershiphave been transferred to the buyer, recovery of the consideration is probable, the associated costs and possiblereturn of goods can be estimated reliably, and there is no continuing management involvement with the goods.

19.2 Property, Plant and Equipment

19.2.1 Recognition and MeasurementProperty, plant and equipment are capitalized at historical cost except for certain fixed assets that were restated atreplacement costs of acquisition and subsequently stated at cost less accumulated depreciation in compliance withthe requirements of BAS 16: Property, Plant and Equipment. The historical cost of acquisition of an asset comprisesits purchase price and any directly attributable cost of bringing the assets to its working condition for its intendeduse inclusive of inward freight, duties and non-refundable taxes. However, as a requirement of the Companies Act1994, exchange loss/gain relating to foreign currency loan has been capitalized to/deducted from cost of relevantfixed assets being procured under the said loan.

19.2.2 Pre-Operating Expenses and Borrowing Costs

In respect of major projects involving construction, related pre-operational expenses form part of the value of assetscapitalized. Expenses capitalized also include applicable borrowing cost considering the requirement of BAS 23:

Borrowing costs.

19.2.3 Subsequent Expenditure

The company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacingpart of such an item when the cost is incurred, it is probable that the future economic benefits embodied with theitem will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after theassets have been put into operation, such as repair and maintenance is normally charged off as revenue expenditurein the period in which it is incurred. In situation where it can be clearly demonstrated that the expenditure hasresulted in an increase in the future economic benefit expected to be obtained from the use of fixed assets, the

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expenditure is capitalized as an additional cost of the assets. All other costs are recognized to the profit and lossaccount as expenses if incurred. All up-gradation/enhancement are generally charged off as revenue expenditureunless they bring similar significant additional benefits.

19.2.4 SoftwareSoftwares are generally charged off as revenue expenditure. Purchased software that is integral to the functionalityof the related equipment is capitalized as part of that equipment.

19.2.5 Disposal of Fixed Assets

On Disposal of Fixed Assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposalis reflected in the income statement, which is determined with reference to the net book value of the assets and netsales proceeds.

19.2.6 Depreciation of Fixed Assets

Depreciation is provided to amortize the cost of the assets after commissioning, over the period of their expecteduseful lives, in accordance with the provision of BAS 16: Property, Plant and Equipment. Depreciation is provided

for the period in use of the assets. Depreciation is calculated on the cost of fixed assets in order to write off suchamounts over the estimated useful lives of such assets. Depreciation is provided at the following rates on straight-line basis over the periods appropriate to the estimated useful lives of the different types of assets:

Factory Building and Other Construction 5%Plant & Machinery 7%Furniture & Fixtures 20%Transport & Vehicle 20%Equipment 10% - 20%

19.3 Borrowing Costs

This has been dealt with the requirement of BAS 23: Borrowing Costs.

Borrowing costs relating to projects in commercial operation are recognized as expenses in the year in which theyare incurred. In respect of projects that have not yet commenced commercial production, borrowing costs aredebited to capital work in progress.

19.4 Inventories

Inventories are carried at the lower of cost and net realizable value as prescribed by BAS 2: Inventories. Cost isdetermined on weighted average cost basis. The cost of inventories comprises of expenditure incurred in the normalcourse of business in bringing the inventories to their present location and condition. Net realizable value is basedon estimated selling price less any further costs expected to be incurred to make the sale.

19.5 Accounts Receivables

Accounts Receivables are recognized at cost which is fair value of the consideration given for them.

19.6 Advances, Deposits and prepayments

Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions,adjustments or charges to other account heads.

Deposits are measured at payment value.

Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges toprofit and loss account.

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19.7 Cash and Cash Equivalents

Cash and Cash Equivalents are carried in the balance sheet at cost and includes cash in hand and with banks oncurrent and deposit accounts, which are held and available for use by the company without any restriction. Thereis insignificant risk of change in value of the same.

19.8 Income Tax Expense

Income Tax Expense comprises current and deferred tax. Income tax expense is recognized in profit and lossaccount and accounted for in accordance with the requirements of BAS 12: Income Tax.

19.9 Lease Assets

In compliance with the BAS 17: Leases, cost of assets acquired under finance lease along with related obligation hasbeen accounted for as assets and liabilities respectively of the company, and the interest element has been chargedas expenses.

19.10 Lease Payment

Lease payments made under finance leases are apportioned between the finance expenses and the reduction of theoutstanding liability.

19.11 Employee Benefits

The company has accounted for and disclosed of employee benefits in compliance with the provisions of BAS 19:Employee Benefits.

The costs of employee benefits are charged off as revenue expenditure in the period to which the contributions relate.

The company's employee benefits includes the following:

Defined Contribution Plan

This represents recognized contributory provident fund for all its permanent employees. Assets of provident fundare held in a separate trustee administered fund as per the relevant rules and are funded by contributions from both

the employees and the company at pre-determined rates.

19.12 Earnings Per Share (EPS)

This has been calculated in compliance with the requirements of BAS 33: Earnings Per Share by dividing the basicearnings by the weighted average number of ordinary shares outstanding during the year.

19.13 Foreign Currency Transactions

The financial records of the company are maintained and the financial statements are stated in Bangladeshi Taka.Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date.

The monetary assets and liabilities, if any, denominated in foreign currencies at the balance sheet date are translatedat the applicable rates of exchanges ruling at that date. Exchange differences are charged off as revenue expenditurein compliance with the provisions of BAS 21: The Effects of Changes in Foreign Exchange Rates. However, as a

requirement of the Companies Act 1994, exchange loss/gain relating to foreign currency loan has been capitalizedto/deducted from cost of relevant fixed assets being procured under the said loan.

The rates of relevant foreign exchanges at year end are:2006 2005

1 US Dollar $ = Tk. 69.6000 68.15001 EURO ( ) = Tk. 92.6794 81.63691 Japanese Yen () = Tk. 00.5982 00.58501 Pound Sterling () = Tk. 137.7454 117.9540

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20. Property, plant and equipment: Tk. 7,293,540,678

The movement in property, plant and equipment is as follows:

Particulars Land Building & Other Plant & Equipment Furniture & Transport & Capital Work TotalConstruction Machinery Fixtures Vehicles In Progress Taka

Cost At 31 December 2005 1,901,000,000 1,781,989,919 7,090,427,216 105,338,771 118,071,799 30,061,735 151,188,024 11,178,077,464

Addition in 2006 285,208 2,568,261 50,000,000 4,190,600 134,332 3,234,381 145,399,123 205,811,905Exchange loss/(gain) in 2006 - - 156,405,979 - - - - 156,405,979Transfer from Capital W I P - 89,511,197 59,656,238 - 2,957,132 - (152,124,567) -Disposal on Asset Sale and Lease Back (109,121,058) (109,121,058)

At 31 December 2006 1,901,285,208 1,874,069,377 7,247,368,375 109,529,371 121,163,263 33,296,116 144,462,580 11,431,174,290

Accumulated DepreciationAt 31 December 2005 - 390,408,454 2,973,602,850 66,010,192 95,106,475 25,922,823 - 3,551,050,794

Adjustment for disposal (32,736,317) (32,736,317)Depreciation charge for 2006 - 93,703,469 5 07,315,786 9 ,223,083 6,382,022 2,694,775 - 619,319,135

At 31 December 2006 - 484,111,923 3,448,182,319 75,233,275 101,488,497 28,617,598 - 4,137,633,612

Carrying AmountAt 31 December 2006 Tk. 1,901,285,208 1,389,957,454 3,799,186,056 34,296,096 19,674,766 4,678,518 144,462,580 7,293,540,678

Property, plant & equipment at cost includes Tk. 140,728,197 acquired under finance lease, the written down valueof which was Tk.137,228,197 as at 31 December 2006.

21. Long Term Security Deposits : Tk. 29,191,074

This represents the amount deposited with utility providers in respect of :

Rural Electrification Board (REB) for Electricity 1,896,983

Dhaka Electric Supply Authority (DESA) for Electricity 1,072,000

Bangladesh Telegraph and Telephone Board (BTTB) for Telephone 675,715

Titas Gas Transmission & Distribution Co. Ltd. for Gas 25,546,376

Tk. 29,191,074

22. Deferred Assets : Tk. 61,302,391

This consists of :

Deferred Tax 36,764,582Deferred Loss on Asset Sale and Lease Back 24,537,809

Tk. 61,302,391

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23. Inventories : Tk.3,414,768,025

This consists of :

(a) Raw Material 1,095,732,666

Cotton (7,723,125 Lbs.) 330,935,922Polyester (143,765 Lbs.) 5,520,592Yarn (10,491,143 Lbs.) 667,273,259Dyes & Chemical 92,002,893

(b) Work In Process 1,245,286,980Fiber (584,390 Lbs.) 31,884,311Yarn (5,434,362 Lbs.) 488,060,368Fabric - Knit (1,115,511 Kgs.) 289,877,548Fabric (4,494,739 Lbs.) 435,464,753

(c) Finished Goods 980,258,219Yarn (6,009,283 Lbs.) 469,665,357Woven Fabric (2,278,631 Lm) 266,823,304

Knit Fabric (173,913 Kgs.) 57,703,979Denim Fabric (1,304,998 Lm) 186,065,579

(d) Packing Materials 6,123,250

(e) Stores and Spares 87,366,910

Tk. 3,414,768,025

24. Trade Debtors : Tk. 3,407,687,731

This is considered good, and is falling due within one year.

No amount was due by the Directors (including Managing Director), Managing Agent, Managers and other officersof the company and any of them severally or jointly with any other person.

25. Advances, Deposits And Prepayments : Tk. 728,404,352This consists of :

Advances :Suppliers 188,249,418Salaries 2,317,917Mill Petty Expenses 1,912,322Other suppliers 1,569,452Expenses 21,748,748Duty & Clearing Advance 54,006,134

269,803,991Deposits :

L.C. Margin 298,724,710Guarantee Margin and Miscellaneous deposits 94,371,659

393,096,369Prepaid Expenses 65,503,992

Tk. 728,404,352

(a) No amount was due by the Directors (including Managing Director), Managing Agent, Managers andother officers of the company and any of them severally or jointly with any other person.

(b) The advances are good and unsecured.

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26. Cash And Cash Equivalents : Tk. 22,046,503

This consists of :

(a) Cash in Hand 2,513,030

(b) Cash at Bank: 19,533,473In Current Account 18,694,347In STD Account 839,126

Tk. 22,046,503

27. Share Capital Tk. 1,711,678,410

(a) Authorised Capital:*300,000,000 Ordinary Shares of Tk 10 each Tk. 3,000,000,000

(b) Issued, Called-up and Paid-up Capital:108,648,600 Ordinary Shares of Tk 10 each 1,086,486,00018,243,225 Bonus Shares of Tk 10 each 182,432,250** 44,276,016 Ordinary Shares of Tk 10 each issued to

the shareholders of Beximco Textiles Ltd,Beximco Denims Ltd and Beximco Knitting Ltd 442,760,160171,167,841 Ordinary Shares of Tk 10 each Tk. 1,711,678,410

* The Company increased its authorised capital fromTk 100,00,00,000 to Tk 300,00,00,000 in the Extra-OrdinaryGeneral Meeting of its Shareholders held on 22 July 2006.

** The shares of Beximco Textiles Ltd, Beximco Denims Ltdand Beximco Knitting Ltd have actually been exchanged forthose of Bextex Ltd. on the Record Date, i.e., 20 September 2006.

(c) Composition of shareholdingsNo. of Shares %

Sponsor 67,551,531 39.47Public 103,616,310 60.53

171,167,841 100.00

(d) Distribution Schedule - Disclosures Under the Listing Regulations of Stock Exchanges

The distribution schedule showing the number of shareholders and their Share holdings in percentage has beendisclosed below as a requirement of the "Listing Regulations of Dhaka and Chittagong Stock Exchanges":

Share holdings Range Number of % of total Number of % of in number of Shares shareholders shareholders Shares Share Capital

1 to 499 28,268 77.51 3,776,546 2.21500 to 5,000 7,104 19.48 11,344,152 6.635,001 to 10,000 562 1.54 4,119,643 2.41

10,001 to 20,000 280 0.77 3,964,026 2.3220,001 to 30,000 89 0.24 2,196,373 1.2830,001 to 40,000 33 0.09 1,153,385 0.6740,001 to 50,000 27 0.07 1,231,928 0.7250,001 to 100,000 52 0.14 3,635,128 2.12100,001 to 1,000,000 42 0.12 13,127,274 7.67over 1,000,000 13 0.04 126,619,386 73.97

Total 36,470 100 171,167,841 100

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(e) Option of Unissued Shares

There is no option regarding authorised capital not yet issued but can be used to increase the issued,subscribed and paid-up capital through the issuance of new shares.

(f) Market Price

The shares of the company are listed with in the Dhaka and Chittagong stock exchanges and quoted atTk. 22.50 per share in both stock exchanges on 31 December, 2006.

(g) Voting Rights

The rights and privileges of the shareholders are stated in the Bye-laws (Articles of Association) of the Company.

28. 10% Debentures-net of current maturity (Secured) : Tk. 663,065,600

This is redeemable after twelve months from the date of balance sheet.

The Debentures are secured by first paripassu charge by way of an equitable mortgage on all the fixed assets of theCompany along with CDC Group plc., DEG, AFIC, Bangladesh Shilpa Bank and Marubeni Corporation. TheDebenture holders will rank senior along with CDC Group plc., DEG, AFIC, BSB and Marubeni Corporation toother creditors on the assets of the Company on liquidation / winding up.

On 10.07.2005, a meeting was held between the Company, the institutional debentureholders and the InvestmentCorporation of Bangladesh, the trustee of debentures, in which decision was taken to amend the earlierreschedulement of the redemption of debentures of institutional debentureholders subject to fulfillment of certaincondition effect of which has been given.

29. Long Term Loans - Net of Current Maturity (Secured) : Tk. 5,356,986,105

This represents that portion of long term loans which is repayable after twelve months from the balance sheet date.

(a) Secured Loans from Banking Companies and other Financial Institutions :

Foreign Currency Loans: 2,044,971,015CDC Group Plc (GBP 2,412,224) 332,272,814DEG, Germany (EURO 2,455,857) 227,607,345

AFIC (USD 916,116) 63,761,674Marubeni Corporation (JPY 2,376,010,000) 1,421,329,182

Local Currency Loans : 2,720,596,265Sonali Bank - IBP Loan 461,456,164Sonali Bank - PAD Block 665,615,575Sonali Bank - Interest free 101,090,000Rupali Bank Ltd -Term Loan 1 169,440,000Rupali Bank Ltd -Term Loan 2 89,490,000Rupali Bank Ltd- Interest Free Block Loan 162,640,000Rupali Bank Ltd- PAD Block Loan 430,410,000Bangladesh Shilpa Bank-Term Loan 101,290,000Bangladesh Shilpa Bank-Interest Block 15,364,154Citibank NA - Term Loan PTML 47,469,923Citibank NA - Term Loan BTL 88,724,223

IFIC Bank - IDBP 4,904,582IFIC Bank - Term Loan 168,527,560Standard Chartered Bank plc-Fixed Loan 91,458,000The City Bank Ltd-Term Loan 39,209,368The City Bank Ltd-Interest Block 34,346,716Janata Bank -CCH Block 17,550,000Janata Bank -PAD Block 31,610,000

Lease Finance : 128,977,567IIDFC Ltd. 85,008,294First Lease International Ltd 43,969,273

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(b) Unsecured Loans from Associated Undertakings/Related Parties : 462,441,258Bangladesh Export Import Co. Ltd.- Interest bearing 10,000,312Beximco Holdings Ltd.- Interest bearing 452,440,946

Tk. 5,356,986,105

The foreign currency loans are arrived at after crediting of Tk.156,405,979 being increase in liability on conversionof the loan balances in foreign currencies as on 31.12.2006 at the exchange rate ruling on the balance sheet dateand the corresponding amount of such loss has been debited to Plant & Machinery in accordance with theprovisions of the Companies Act 1994.

Nature of Security :

Pursuant to supplemental Lenders' Paripassu Security Sharing Agreement between the Company and the Lenders,the loans are secured by :(i) first paripassu equitable mortgage of immovable property of present and future; and(ii) first paripassu charge by way of hypothecation on all other assets of the company both present and future

Terms of Repayment :

Terms of repayment of foreign currency loans as per repayment schedule

CDC Group Plc. : In 14 (fourteen) half-yearly installments beginning from 30 November 2004 and ending on 30 November 2011.DEG : In 14 (fourteen) half-yearly installments beginning from 30 October 2004 and ending on 30 October 2011.

AFIC : In 12 (twelve) half-yearly installments beginning from 15 July 2005 and ending on 15 July 2011.

Marubeni : In 28 (twenty eight) semi-annual installments beginning from 25 July 2005 and ending on 25 July 2013.

Rate of interestCDC Group Plc. : 3.00% over GBP LIBORDEG : 3.00% over Euro LIBORAFIC : 3.00% over US$ LIBORMarubeni : 3.00% over LTPRLocal bank loans : Varies 10% to 15%Bangladesh Export Import Co. Ltd. : 15% p.a.

30. Security Deposit From Distributor : Tk. 15,000,000

This was received from Bangladesh Yarn Syndicate, the distributor of the company.

31. Short Term Loans : Tk. 3,591,327,958

This consists of :

Secured Loans from Banks :Standard Chartered Bank-CCH 51,128,473Standard Chartered Bank-LATR 48,410,424Standard Chartered Bank-PLC 2,204,523Citi Bank NA-Cash Credit 84,514,475Rupali Bank Ltd.-Overdraft 1,170,523,360Rupali Bank Ltd.-CCP 139,423,071

Sonali Bank -CCH 662,789,917Sonali Bank -CCP 716,765,209Sonali Bank -PAD 189,515,466Sonali Bank -Cash Subsidy 97,104,602Bank Asia Ltd.-Cash Subsidy 10,768,900State Bank of India-CCH 119,089,053Janata Bank-Cash Subsidy 19,900,000Janata Bank-CCH 279,190,485

Tk. 3,591,327,958

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32. 10% Debentures - current maturity (Secured) : Tk. 322,572,418

This is redeemable after twelve months from the date of balance sheet.

33. Long Term Loans - Current Maturity (Secured) : Tk. 1,168,895,196

This represents that portion of long term loans which is repayable within twelve months from the balance sheet dateand includes the following:

Foreign Currency Loans : 367,100,080

CDC Group Plc (GBP 677,172) 93,277,329DEG, Germany (EURO 811,919) 75,248,178AFIC (USD 126,202) 8,783,659Marubeni Corporation (JPY 2,376,010,000) 189,790,914

Local Currency Loans : 797,592,106Sonali Bank - IBP Loan 157,371,000Sonali Bank - PAD Block 91,703,641Sonali Bank - Interest free 21,054,217

Rupali Bank Ltd -Term Loan 1 83,811,587Rupali Bank Ltd -Term Loan 2 70,556,939Rupali Bank Ltd- Interest Free Block Loan 28,316,902Rupali Bank Ltd- PAD Block Loan 143,592,844Bangladesh Shilpa Bank-Term Loan 19,659,753Bangladesh Shilpa Bank-Interest Block 2,040,000Citibank NA - Term Loan PTML 23,734,962Citibank NA - Term Loan BTL 44,362,112IFIC Bank - IDBP 6,548,468IFIC Bank - Term Loan 23,808,129The City Bank Ltd-Term Loan 60,782,405Janata Bank -CCH Block 9,102,039Janata Bank -PAD Block 11,147,108

First Lease International Ltd 4,203,010

Tk. 1,168,895,196

34. Creditors and Accruals : Tk. 878,585,785

This is falling due within one year.

35. Revenue : Tk.5,201,514,097

This is arrived at as follows:

Sale of Yarn (11,546,059 Lbs.) 918,422,049Sale of Woven Fabric (20,536,048 Lm.) 2,658,342,432Sale of Knit Fabric (2,153,762 kgs.) 718,494,893

Sale of Denim Fabric (3,891,952 Lm.) 615,289,344Cash Subsidy 151,957,680Sale of Waste (9,047,844 Lbs.) 108,845,559Commission work 30,162,140

Tk. 5,201,514,097

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36. Cost of Revenue : Tk. 3,171,367,367

This is arrived at as follows :

Material Consumed (Note - 37) 2,373,392,553External Processing cost 27,548,756

Manufacturing Overhead (Note - 38) 849,387,531Manufacturing costs for the year 3,250,328,840Work in Process Inventory Differential 13,256,322Coat of Goods Manufactured 3,263,585,162Finished Goods Inventory Differential (92,217,795)

Cost of Revenue Tk. 3,171,367,367

37. Material Consumed : Tk.2,373,392,553

This is arrived at as follows :

Cotton (34,864,560 Lbs.) 1,515,714,292Polyester (4,147,030 Lbs.) 157,604,097Yarn (3,967,284 Lbs.) 250,335,623

Dyes & Chemicals 449,738,541Tk. 2,373,392,553

38. Manufacturing Overhead : Tk. 849,387,531

This consists of :

Wages, salaries & allowances 376,908,179Power and Gas 270,237,900Indirect Materials 59,725,743Insurance premium 9,748,411Repairs & Maintenance 111,270,831Medical Expenses & Others 2,145,930Travel, Training & Conveyance 2,080,511Telephone, Telex & Fax 1,505,613

Printing & Stationery 2,364,446Miscellaneous overhead 13,399,967

Tk. 849,387,53139. Administrative Expenses : Tk. 238,514,958

This consists of :

Salary & allowances 152,621,202Traveling and conveyance 15,014,674Entertainment 3,707,496Telephone, telex, fax and postage 10,261,297Vehicle Upkeep & Fuel 24,474,670Utilities 2,240,242AGM and Secretarial expenses 6,777,654Auditors' remuneration (Audit fee) 418,000

Directors' Board Meeting fee 3,000Insurance premium 109,121Repairs & Maintenance 2,676,028Printing, Stationery & Photocopy 3,546,669Legal & Professional fee 1,865,569Consultancy fee 2,278,568Write off Deferred Loss on Asset Sale and Lease Back 1,846,932Other expenses 10,673,836

Tk. 238,514,958

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40. Financial Expenses : Tk. 1,355,894,166

This is made up as follows :

(a) Interest on long term loans 643,672,839

(b) Interest on short term loan 469,557,088(c) Bank charges & commission 242,664,239

Tk. 1,355,894,16641. Income Tax Expenses Tk.(7,939,725)

Current Tax @ 0.25% on total Revenue (13,003,786)Short provision of Income Tax for prior years (31,700,522)Deferred Tax 36,764,582

Tk. (7,939,725)42. Basic Earnings Per Share(EPS) Tk. (1.22)

(a) Net loss after tax (208,649,284)(b) Weighted average number of shares in issue 171,167,841(c) Basic EPS (a/b) Tk. (1.22)

43. Balance at the beginning of the year of Reserves

These include surplus on amalgamation at Tk 784,844,633, being the excess of assets over liabilities as of 1 January2006 o

Documents

AR_BEXTEX_06