Keya Cosmetics 2011 Annual Report 6a1o4s

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Cosmetics Ltd.

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Our Mission Care you in befitting manner with Our Continuous Improved Products That feels you better.

Our Objectives

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"No compromise with Quality" is our key objective We are ionate to serve high quality Cosmetics & Toiletries, Detergent Powders, Glycerin products and Soap Noodles (Sodium Salt of Palmitic Acid), the major Raw Materials of Beauty and Laundry Soap within an affordable price. We are committed to serve our best towards the stakeholders. :

94eyU, Cometic Ltd.

Annual Report 2010-11

Distributing success, Our key /

Satisfying customers, Our primary

focus initiative

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Cosmetics Ltd.



Annual Report 2010-11

Table of Contents

Page

Letter of Transmittal Notice of the 1 5th Annual General Meeting [ Corporate Milestones Corporate Directory [Information of Share Products Overview Welcome Message from the Chairman

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[ [[ ckuk q kcm tt Picture Gallery - Few Events of 1 4th AGM r Graphical Presentation of the Financial Hjgjjghts •

Performance at a Glance Performance Indicators [ Corporate Social Responsibility [ Directors' Report to the Shareholders Doing What Right Environmental Role Sustainabil ity/CorporateSocialResponsibility EmploymentandNature HealthandSocialneeds - Sport and Culture [ Employment Practices Procurement and Distribution Front View of Factory & Few Snaps on Production Process [_Compliance Report [ Report of the Audit Committee - Financial Statements: Auditors' Report Statement of Financial Position Statement of Comprehensive Income of Cash Flows Statement _of_Changes _in_Equity Notes to the Financial Statements Schedule of Fixed Assets Proxy Form

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9çeya Comtics lid.

Annual Report 2010-11

Letter of Transmittal September 15,2011 The All Shareholders Securities & Exchange Commission Registrar of t Stock Companies & Firms Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. Subject: Annual Report for the year ended June 30,2011. Dear Sir(s) We are pleased to enclose a copy of the Annual Report together with the Audited Statement of Financial Position including Statement of Comprehensive Income, Statement of Cash Flows, Statement of Changes in Equity for the year ended June 30,2011 along with notes thereon for your record. Yours sincerely

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Annual Report 2010-11

Notice of the 15th Annual General Meeting Notice is hereby given that the 15th Annual General Meeting of Keya Cosmetics Limited will be held on Friday, 30th September, 2011 at 11:00 a.m. at the Factory Premises of Keya Knit Composite Ltd. at Jarun, Konabari, Gazipur to transact the following business:

General Agenda: 1. To receive, consider and adopt the Statement of Comprehensive Income of the Company for the year ended 30 June, 2011 and the Statement of Financial Position as at that date together with the reports of the Directors and the Auditors thereon; 2. To declare Dividend for the year ended 30 June, 2011 as recommended by the Board of Directors; 3. To elect Directors; 4. To appoint Auditors of the Company for the term until the next Annual General Meeting and to fix their remuneration; 5. Totransaction any other business with the permission of the Chair;

Special Agenda: 6. To Increase of Authorized Share Capital of the Company; 7. To Split of Market Lot of Share of the Company. By Order of the Board of Directors

Syed Noorul Alam Executive Director (Finance) & Company Secretary

Dated: 2lst August, 2011

Notes:

• The Board of Directors recommended for payment of 21% Stock Dividend on existing 61,152,474 ordinary share holdings of the general public and sponsors group. • The Board of Directors declared right shares @ 100% (i.e. 01 right share for 01 existing share) of Tk.10.00 each at an issue ( price Tk.30.00 per share (including a of Tk.20.00 each) subject to the approval of shareholders in the AGM and regulatory authority and another record date for entitlement of the proposed right shares to be notified later after obtaining approval from SEC. • The Record Date of the company is 8th September, 2011. Trading of the company's shares in the stock exchanges will remain suspend on the Record Date. , whose names will appear at the close of business on the Record Date, will be eligible to entitle Dividend, attend the 15th Annual General Meeting and vote thereat; • Any member of the company entitled to attend and vote at the Annual General Meeting may appoint any person as his/her Proxy or Attorney to attend and vote on his/her behalf. A Member being a corporation or company may appoint its representative duly appointed and authorized to attend and vote on its behalf.The proxy form or power of attorney or letter of authority as the case may be duly signed and revenue stamp oflk.1 0.00 must be submitted at the ed Office of the Company at least 48 hours before the time fixed for the meeting; • ission to the meeting place will be strictly on production of the attendance slip sent with the Notice; • If any shareholder failed to receive Annual Report 2010-11 of the Company which has sent through courier is advised to collect the same from Share Division situated at Navana Tower, (14th Floor), 45 South Gulshan Avenue, Gulshan-1, Dhaka1212 within 25th September, 2011. No claim for Annual Report or attendance slip will be entertained at the time of Annual General Meeting.

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Annual Report 2010-11

Corporate Milestones: Incorporated as a Private Ltd. Company in the year Commercial Production started in the year Converted into Public Ltd. Company in the year Initial Public Offering (IPO)



1996 1997 1999 2001

Stock Exchange Listing: Dhaka Stock Exchange Limited



2001

Chittagong Stock Exchange Ltd.

2001

.

Present Status

Public Limited Company

Authorized Capital in Taka

Tk.700,000,000.00

Paid-up Capital in Taka

Tk.6 11,524,740.00

Number of Shares

61,152,474 (as on 30.06.2011)

Number of Shareholders

12,407 (as on record date)

Business Lines

Manufacturing and Selling Cosmetics & Toiletries Products.

Turnover (net) in Taka

2,409.78 million

Export Outlets

India, Bhutan, Saudi Arabia, Nepal & Kuwait.

Head Office & Factory

Jarun, Konabari, Gazipur. Ph: +880-2-9297779, 9297766, 9297029 Fax: + 880-2-9297778 Website : www.keyagroupbd.com E-mail: [email protected]

Liaison Office

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Comtic Ltd.

Navana Tower, 45, South Gulshan Avenue, (I 41h Floor), Gulshan-1, Dhaka-1212. Ph: +880-2-9896973, 9899537, 9899326 Fax: +880-2-8831032 E-mail: keyacosmeticskeya-bd.com

Annual Report 2010-11

Corporate Directory Board of Directors Chairman Mr. Abdul Khaleque Pathan Managing Director Mrs. Khaleda Pervin Directors Mrs. Feruza Beg urn Mr. Masum Pathan Alhaj Md. Akkas All Pathan (Rep.of Keya Knit Composite Ltd.) Independent Director Mr. M.Anwarul Ghani Executive Director (Finance) & Company Secretary Syed Noorul Alam Deputy General Manager (A&F) & Deputy Company Secretary Mohammed Mofizul Islam Audit Committee Mrs. Khaleda Pervin Mr. Masum Pathan Mr. M. Anwarul Ghani Mohammed Mofizul Islam Executive Committee Alhaj Md.Akkas All Pathan Syed Noorul Alam Mr. Md. Anamul Haque Mr. Md. Homaun Kabir Mr. ABM Golam Mostafa Munshi Management Committee Mr. Md. Anamul Haque Mrs. Shahrina Nasri Mr. Md. Faizuddin Mr. Md. Homaun Kabir Mr.ABM Golam Mostafa Munshi Mr. Parimal Kumar Pramanik Mr. Kazimuddin Mr. Mohammed Mofizul Islam

Auditor G. Kibria & Co. Chartered ants Legal Advisor Mr. Nitai Ray Chowdhury Tax Advisor Mr. Debasis Roy Chowdhury Chowdhury & Associates Barrister-at-Law, Advocate Bangladesh Supreme Court Corporate Affairs & Share Management Syed Nurool Alam Mohammed Mofizul Islam Md. Noor Hossain Md. Robiul Awal

Cumtic Ltd.

Annual Report 2010-11

Information of Share 1.

Name of the Company

Keya Cosmetics Limited.

2.

Total No. of Securities

61,152,474 ordinary shares

3.

No. of Securities held by Sponsors

20,531,123 shares (33.57%)

4.

No. of Securities held by General Public

40,621,351 shares (66.43%)

5.

Face Value of Share

Tk.1 0.00

6.

Market Lot

500 nos.

7.

Listing Date

September 16,2001.

8.

Listing with

Dhaka Stock Exchange Ltd.& Chittagong Stock Exchange Ltd.

9.

Trading ID

KEYACOSMET

10. BOISIN

BD0477KECOS5

11. Share Category

'A

12. Business Segment

Pharmaceuticals & Chemicals

13. Earnings Per Share

Tk.4.39 (30.06.2011-Amalgamated)

14. Net Asset Value Per Share

Tk. 25.04 (30.06,2011 - Amalgamated)

15. Net Operating Cash Flow Per Share

Tk.2.50 (30.06.2011)

16. Share Price as on 30.06,2011

DSE - 1k. 87.00 per share CSE —Tk.86.70 per share

17. Range of Share Price (1 st July 2010 to 30 June 2011) 18. Share Liaison Office

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Cometicg lid.

Highest - Tk. 168.00 per share Lowest - Tk. 64.00 per share Navana Tower, 45, South Gulshan Avenue, (14th Floor), Gulshan-1, Dhaka-1 212. Ph: +880-2-9896973,9899537,9899326 Fax: +880-2-8831032 E-mail: [email protected]

I

Annual Report 2010-11

Products Overview Keya Cosmetics Ltd., a reputed name in the cosmetics & toiletries products manufacturing & selling sector in the country. We started our business in the year 1996 as a Private Ltd. Company and soon grew into prominence by the virtue of our distinguished quality products and customer friendly approaches. Keeping all our efforts concentrated upon product development, quality control and standardization, we nurture a philosophy of continuous improvement at our unit. All our products are derived though rigorous research and each of them is incorporated with globally recognized quality norms.That's why clients from all over the world rely upon as a brand synonymous to trust, reliability and innovative products. Products overview are presenting below:

Existing Products: 1.Keya Super Beauty Soap: Weight Size

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2.Life Guard Soap:

Color Ingredients

Export Country Weight Size Color Ingredients

Export Country

125 gm, 100 gm, 75 gm, 50gm, 35gm & 25gm Pink, White, Green, Lemon Sodium Palmitate, Sodium Palm Kernelate or Cocoate, Cocola Butter, Aqua, Perfume, EDTA, HEDP, Glycerin, Colour & C.l 77891 India, Bhutan & Kingdom of Saudi Arabia 100gm Red Sodium Palmitate, Sodium Palm Kernelate or Cocoate, Aqua, Perfume, EDTA, HEDP,Glycerin,TCC,C.l 77891, C.l 11680&C.1 26100 India & Bhutan

3.Keya Glycerin Laundry Soap: Weight Size Color Ingredients Export Country

130 gm Green & Yellow Sodium Palmitate, Sodium Palm, Kernelate or Cocoate, Perfume, Glycerin & Colour Bhutan

4.Keya Power Ball Soap: Weight Size Color Ingredients Export Country

130 gm White Sodium Palmitate, Sodium Palm Kernelate or Cocoate, Perfume, Glycerin Bhutan

9çeya Cametics Ltd.

Annual Report 2010-11

5.Keya Prickly Heat Powder: Weight Size Color Ingredients

: 100gm : White : Purified Talc, Calcium Carbonate, Magnesium Carbonate, Menthol, Perfume, Boric Acid & Irgasan DP-300

6. Keya Ice Magic Body Cooler Powder: Weight Size Color Ingredients CE MAG

7. Keya Natural Care Shampoo

Weight Size Color Ingredients

100gm White Perfumed Talc, Magnesium Carbonate, Menthol, Perfume & Boric Acid

: 100 ml, 35 ml & 7 ml : Black : SLES, Cocamide DEA, Dimethicone Emulsion, D-panthenol, Tetra sodum EDTA, Sun Flower Exract, Amla Extract, Color, Perfume & Aqua

8. Keya Dandruff Control Shampoo

Weight Size Color Ingredients

: 100ml&5m1 : Sky Blue : SLES, Cocarnide DEA, Dimethicone Emulsion, D-panthenol, Tetra sodum EDTA, Zinc pyrithione, Color, Perfume & Aqua

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Annual Report 2010-11

9.Keya Active Tooth Paste: .

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200 gm, lOOgm&45gm Weight Size : White Color Ingredients : PPT Calcium Carbonate, Sorbitol, SMEP, Synthetic Silica, Sodium Saccharine, SLS, Triclosan, Flavour & Aqua

10.Keya Super Saloon Lather Shaving Cream:

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Weight Size Color Ingredients

100 gm

: White : Stearic Acid, Coconut Oil, Glycerine, Potassium Hydroxide, Perfume & Empicol

11.Keya Lather Shaving Cream: Weight Size Color Ingredients

: 50 gm : White : Stearic acid, Coconut Oil, Glycerin, Boric Acid, Potassium hydroxide, Perfume & Empicol

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12.Keya 777 Laundry Soap : 130 gm Weight Size : Red Color Ingredients : Sodium Palmitate, Sodium Palm Kernelate or Cocoate, Perfume & Glycerin Colour

13.Keya Refined Coconut Oil: Weight Size Color Ingredients

: 400 ml, 200 ml, 100 ml &45m1 : Natural : Pure Coconut Oil

Weight Size Color Ingredients

: 50m1&15m1 : White

14.Keya Petroleum Jelly: • _.; •1• ..,

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Liquid Paraffin, White Petroleum Jelly & Perfume

9Seya Cometic Ltd.

Annual Report 2010-11

15.Keya Lip-gel: Weight Size Color Ingredients

: 10gm&6gm : Pink : Liquid Paraffin, White Petroleum Jelly & Perfume

16.Keya Glycerin:

Weight Size Color Ingredients

125gm&60gm Natural : Refined Glycerine

Weight Size Color Ingredients

: Orange Yellow Colour : White Petroleum Jelly,

17. Keya Pomade: 50 ml Colour, Liquid Paraffin & Perfume

Keya Lemon Detergent Powder:

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Weight : 30gm,200gm,500gm&1000gm. Ingredients : Sodium LAS, Sodium Carbonate, Calcium Carbonate, Perfume & Colour. Export Country: India.

LEMON DETERGENT POWDER

Keya White Plus Detergent Powder: Weight : 450gm,180gm&22gm. Ingredients : Sodium LAS, Sodium Carbonate, Geolite, Tinapol CBS-X, SCMC, Colored Bentonite, Perfume, Aqua. Export Country: India.

Cometic g Ltd.

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Annual Report 2010-11

Keya Super Excel Detergent Powder: Weight : 20 gm & 500 gm. Ingredients : Sodium LAS, Non-Ionic Matter, Sodium Carbonate (light), Sodium Sulphate Anhydrous, Zeolite, CMC, Sodium Tripoli, Phosphate, Sodium Silicate (Powder), Optical Brightening Agent, Enzyme, Tetrabenzotetrazaporphoine derivative Perfume. Keya Super Jet Detergent Powder: Weight : 20gm,50gm,225gm,450gm & 1000gm. Ingredients : Sodium LAS, Non-Ionic Matter, Sodium Carbonate (light), Sodium Sulphate Anhydrous, Zeolite, CMC, Sodium Tripoli, Phosphate, Sodium Silicate (Powder), Optical Brightening Agent & Perfume.

Keya Soap Noodles (Sodium Salt of Palmitic Acid) Weight : 25 kg pack Speification : TFM 78% (mim),TFM 74% (mim),TFM 70% (mim),TFM 68% (mim) &TFM 66% (mim). White Color : Ingredients : Palm oil/palm stearine, Palm Kernel Oil/Palm Kernel Olien, Caustic Soda, Sodium Chloride, EDTA, HEDP, Tinapal CBS - X. 3. Products under Development: • Tooth Paste (Gel). After Shave Gel Dish Wash Bar

Fairness Cream. Tooth Powder.

4. Future plan: We are hopeful to introduce few more cosmetics/toiletries items in our products lineup and those are as under: Toilet Cleaner Body Lotion. Color Cosmetics. Mouth Wash, After Shave Lotion.

Baby Lotion. Liquid Soap Mosquito Coil. Liquid Blue. Hair Remover

I 9'eya., Comticc Ltd.

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Annual Report 2010-11

Welcome Message from the Chairman

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Dear Shareholders, I take this opportunity to welcome you all on behalf of the Board of Directors to this 15th Annual General Meeting of your company and place before you the Audited Financial Statements and Auditor Reports thereon for the year ended 30th June 2011.

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In 2010 we decided to Amalgamate Keya Detergent Limited and Keya Soap Chemicals Limited with Keya Cosmetics Limited. Aftermath the proposed Amalgamation Scheme unanimously approved by shareholders in the 14th Annual General Meeting concluded on 25th December, 2010. As per Valuation report, conducted by M/S S. F. Ahmed & Co., Chartered ants each ordinary share of the Keya Cosmetics Limited is Tk.40.174, the Keya Detergent Limited is Tk.34.432, the Keya Soap Chemicals Limited is Tk.22.602 against their face value of Tk.1 0.00 each. As a result, exchange ratio comes of 1.16694 (one point one six six nine four) ordinary of Keya Detergent Limited and 1.77749 (one point seven seven seven four nine) ordinary share of Keya Soap Chemicals Limited for 1 (one) ordinary share of Keya Cosmetics Limited. The said Amalgamation Scheme finally approved by the Honourable High Court Division of Bangladesh Supreme Court on 27.04.2011 and subsequently the Securities and Exchange Commission consented capital raising proposal on requirement of Amalgamation from previous paid-up capital 1k. 288,000,000/- to paid-up capital Tk. 611,524,740/-. This is to mentioned here that for acquiring of 100% stake of Keya Detergent Limited and Keya Soap Chemicals Limited, the Company has to issued 14,966,151 shares and 17,440,323 shares respectively with face value of Tk.1 0.00 each.

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The Keya Cosmetics Limited was established in 1996 by effort present sponsors ahead of materializing objectives of producing and marketing of cosmetics and toiletries products. This company has originated the brand "KEYA" and it is Flagship Company of our Group.

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Annual Report 2010-11

The Strategy behind this decision was to form a Company with a stronger State of Financial Position in order to more easily raising of capital and above all achieving Profit Growth. Noticeable count that we were also successful in direct listing by amalgamation of our 100% owned Keys Soap Chemicals Limited. This has contributed towards strengthening the Statement of Financial Position and improving the Net Assets and earning per share of the Company. The Amalgamations Financial benefits reflected based on the financial statements for the year ended 30th June, 2011

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(Compared with Amalgamation Scheme- Financial Year 2009-10)

1, After amalgamation Actual Sales was Tk.2,073,070,445 during the financial year 2009-10 (mentioned at page - 03 in the amalgamation scheme) but actual achieved in sales volume of Tk.2,409,785,749 i.e. sales volume has increased by Tk.336,71 5,304 or 16.24% 2. Earning per share achieved Tk.4.39 which is more than Tk,1.26 in compared to previous year increase-40.26% 3. Targeted Earning per Share wasTk.4,21 and achieved Tk. 4.39 which is more 1k 0.18 increase-4.28% 4.Contribuion to National Exchequer as Income Tax Tk.86,531 ,21 7 which is more than Tk.32,265,472 increase-59,46%.

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5.Contribution to National Exchequer as Duty/VAT Tk.407,728,379 which is more than Tk.306,744,556 increase-32.92%.

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6.Financial Position Increased after Amalgamation: a).Total Asset 3.19% b).Total Revenues 18.39% c).Net Profits 19.81% d).Net Asset Value 11.94% e).Net Asset Value per Share 31.17% The most desired Amalgamation has completed inline with thinking of core benefits and this year operating results have proved that a shining prosperous future of Keya Cosmetics Limited is due expectation.

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Social Commitment

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In Keya, we believe in our responsibilities towards the society we operate in. All our activities are therefore directed to the well being of the society in general. As part of the social commitment, the company provided monitory assistance to the organizations to the social height and our sponsored popular magazine program "Eattadi" which is being telecasted through Bangladesh Television and through which financial help are being rewarded to real poor and helpless people selected from all over Bangladesh.

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Acknowledgement I take this opportunity to express my sincere thanks to our customers, bankers, suppliers, government agencies, regulatory bodies and everyone with whom the company interacted in conducting its business. We are grateful to you the shareholders for extending at all times, your available and cooperation to bring the company to the level it has reached today. The success we have achieved so far was only possible because of the collective efforts of all concerned. Once again, I convey my heartiest thanks to all our stakeholders and look forward to their continued and cooperation in future.

Abdul Khaleque Pathan Chairman

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Annual Report 2010-11

Picture Gallery Few Events of 14th AGM

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Annual Report 2010-11

Financial Presentation of the Financial Highlights Results of operations Particulars Operating Income Income before tax Income tax Net Income

Comparison made Pre-Amalgamation of Keya Cosmetics Ltd. (Taka in million except ratios and per share data) Projected 2010 -11 (as per Scheme of Amalgamation page-3)

2010 -11 (as per Audited) 353261,377 354,910,540 86531,217 268,379323

375,498,726 357617,835 98344,905 259,272,930

2009 -10 y adding 3 companies data mentioned in Scheme of Amalgamation)

190,495,291 275,759,259 54,265745 224,002,363 )

Ordinary Shares Information Particulars Earning Per Share Dividend Book value per share Ordinary shares outstanding (in million)

2010 -11 (as per Audited)

Projected 2010-11 (as per Scheme of Amalgamation)

2009 -10 (as per Scheme of Amalgamation)

4.39 21% 25.04

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3.13 12% 19.09

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71.66

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Financial ratios (in percentage) Particulars! Year Gross Profit Ratio (%) Operating Profit Ratio (%) Net Profit Ratio (%) Earnings Per Share (1k.) Book Value Per Share (Tk.) Dividend Payout Ratio (%) Debt Equity Ratio (Time) Debt to Total Assets Ratio (Time) Interest converge ratio (Time) Return on capital employed (%) Return on shareholder's Equity (%) Return oh total assets (%) Expenses: Particulars Cost of Goods Sold Ratio Operating Expenses Ratio Inventory Turnover Ratio Materials consume to Cost of Goods Sold Ratio Cosmetics Ltd.

2010-11 (as per Audited) 24.94% 14.66% 11.14% 4.39 25.04 32.07% 0.05 0.05 3.71 16.73% 17.53% 16.73%

2010-11 (as per Audited) 75.06% 10.28% 2.24 91.69%

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Projected 2010-11 (as per Scheme of Amalgamation

2009-10 (as per Scheme of Amalgamation

27.82% 17.09% 11.80% 4.21 23.40 59.34% 0.10 0.09 4.37 16.33% 18.00% 16.33%

20.40% 9.19% 10.81% 3.13 19.09 38.42% 0.14 0.12 , 2.62 14.43% 16.37% 14.43%

Projected 2010-11 (as per Scheme of Amalgamation 72.18% 10.73%

2009-10 (as per Scheme of Amalgamation 79.59% 11.21% 98.29%

Annual Report 2010-11

Performance at a Glance

Operating Revenue Increased in 2010-11

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18.39% From 18.39% in 2009-10 (as per Scheme of Amalgamation)

Comparison made Pre-Amalgamation of Keya Cosmetics Ltd.

Operating Expense Increased in 2010-11

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6.59% From 6.59% in 2009-10 (as per Scheme of Amalgamation)

Profit before tax Increased in 2010-11

4.

28.70% From 28.70% in 2009-10 (as per Scheme of Amalgamation)

Total Assets Increased in 2010-11

4.

3.19% From 3.19% in 2009-10 (as per Scheme of Amalgamation)

Net asset value per share Increased in 2010-11

4

31.17% From 31.17% in 2009-10 (as per Scheme of Amalgamation)

Net profit after tax Increased in 201 0-1 1

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19.81% From 19.81% in 2009-10 (as per Scheme of Amalgamation)

Total Investments Increased in 201 0-1 1

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35.94% From 35.94% in 2009-10 (as per Scheme of Amalgamation)

Shareholders equity Increased in 2010-11

4.

11.94% From 11.94% in 2009-10 (as per Scheme of Amalgamation)

Camctic Ltd.

I



Annual Report 2010-11

Performance Indicators



(Comparison made as per Scheme of Amalgamation)

Cost of Goods Sold

Net Turnover 1850

2500 2409.78

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2010-11

p 2010-10

Net Income

Gross Profit 7000 6000 5000 4000

6009.35 4229.47

c 3000 1000 0

2700 2600 2500 L E 2400 -2

2200 IIWIIIII

2009-10 (actual)

2010-11

2000

2010-11

2009-10 (actual)

Earnings per Share

Operating Income

5

1904.95,

4

0 1 I2

3

IIIIIIIII1

3532.61

2

I .0

1çyL Cogmtic g lid.

I

2009-10 (actual)

2010-11

2009-10 (actual)

Annual Report 2010-11

Corporate Social Responsibility Corporate Governance, Corporate Governance is the interaction of the management, shareholders and board of directors to help ensure that all investors both shareholders and creditors are protected against managers acting solely in their own best interest. The pursuit of achieving the highest standards of Corporate Governance is an ongoing process of the Company. The Company's primary objective is to create and adhere to a corporate culture of fairness, ability, transparency and ethical practices that are corner stone of long term values of an all round performing organisation. Beyond merely complying with mandatory requirements, the Board of Directors, management and employees, are committed to preserving trust and interest of all stakeholders including the society at large.

4

Keya Cosmetics Limited is committed to good Corporate Governance practices. The Company's philosophy is to achieve business excellence and optimize long term shareholders' value on a sustained basis by ethical business conduct. The company is committed to transparency in all its dealings and places strong emphasis on business ethics. Looking after the welfare of multiple stakeholders is a fundamental shared value of the Company Board of Directors, management and employees. This value system translates into institutionalizing structures and procedures that enhance the efficacy of the Board and inculcates a culture of transparency, ability and integrity across the Company. Company initiative towards this end include - driving professionalism of the Board, create fair and transparent process and reporting systems and go beyond mandated Corporate Governance Code requirements of Securities and Exchange Commission. Foundation of Integrity & Control: Keya Cosmetics Ltd. has a strong history of operating with integrity throughout the Company at all levels, both internally and externally. Our actions and the actions of all our employees are governed by our Purpose, Values and Principles. Our commitment to operate responsibly is reflected in the steps we have in place to ensure rigorous financial discipline and Corporate Governance. • We have an active and highly experienced Board of Directors, with who understand their role in providingstrong corporate governance. Our Audit Committee exclusively guided by Independent Directors, with appropriate financial skills to provide good oversight. The Audit Committee also meets regularly in private session with Company's independent auditors, G. Kibria & Co. • We maintain strong internal controls. Our rigorous business process controls include an ongoing program of audit, self-assessment, and internal and external audits to ensure compliance with all relevant regulations and standards. Size, Composition and Functioning of the Board: The Board of Directors is the highest level of authority in the Organizational structure in Keya Cosmetics Limited. The Board is responsible for the overall direction and is ultimately able to the shareholders for the activities, strategies and performance of the Company. The hip of the board during the year end as on 30-06-2011 stood at 06 (six) directors. All directors are equally able as per law to the shareholders for the proper conduct of the business.The Company's board currently comprising of Mr. Abdul Khaleque Pathan, Chairman, Mrs. Khaleda Pervin, Managing Director and other four directors. The quorum for the board is at least three directors present in person.

Comtic Ltd.

Annual Report 2010-11

The prime concern of the Board is to ensure that the overall activities of the business are conducted responsibilities and with focus on long-term value creation. The board meets as and when required to transact matters placed before then that requires Boards approval and or direction. Board reviews the overall activities of the business and where necessary strategic guidelines are given for onward implementation. Executive Committee: Next to the Board there is four Executive Committee for close monitoring of business performance and to provide operational guidance. The scope of work of the committee includes but not limited to review of business performance, approval of budget, evaluation and recommendations of the Executive Committee provide significant input to enable the Board to take well-informed decisions. Management Committee: The responsibility to implement Board and Executive Committee meetings decisions and supervisions of day-today business affairs of the company lies with the management committee.They are also responsible for achieving the business plan. The committee consists of functional heads of different operation/business segments and is headed by General Manager (s). Audit Committee: An audit committee has been constituted with four for ensuring good governance practices. The audit committee of the Board held four meetings during the year and examined the coverage of internal and external audit. Internal Control: Keya Cosmetics Ltd. employs sound system of internal control including internal financial control to ensure compliance of its activities with the desired objectives. Over the year we have successfully implemented a welldesigned corporate management structure with clearly defined responsibility, delegation of authority and proper ability. Keya Cosmetics Ltd. has an appropriate organizational structure manned with qualifies professionals for properly carrying our planning, executing, controlling and monitoring functions of each of the business subunits. The company has a specially assigned team to carry out financial audits of different segments of the business. The General Manager who reports to the Chairman heads the team. After corporate review of the report necessary corrective actions are taken. Shareholder Relations: The company has about 12,150 nos. shareholders as on June 30, 2011. The directors place high importance on maintaining good relationships with the shareholders and ensure to keep them informed of significant company developments. The company formally reports twice a year summarized half , yearly report and detailed annual report. Annual General Meeting is an important opportunity to meet and communicate with shareholders. Every shareholder or his/her duly authorized representative has the right to attend such meeting. It provides the forum for discussion of the business its future prospects and other matters of interest and concern to the shareholders. In addition, the company has a full fledged corporate affairs secretarial department who addresses different issues like dividend payment enquiries, share transfer, loss of share certificate/dividend warrants, maintain liaison with Central Depository Bangladesh Limited etc.

9ya Comtics lid.



Annual Report 2010-11

Directors' Report to the Shareholders

4

Dear Fellow Shareholders, The Directors have the pleasure in presenting their Annual Report together with the audited financial statements of the company for the year ended June 30,201 1.The Board of Director approved these on August 21,2011, The Directors Report has been prepared in compliance with section 184 of the companies Act, 1994, SEC's notification dated February 20, 2006, the Listing Regulations of Dhaka Stock Exchange and Chittagong Stock Exchange and other applicable rules and regulations. In addition, the Directors explained and disclosed certain issues, which they deemed relevant and important to ensure transparency and good governance practice. Operational Performance yeilded through Prudent Managment Deceisions The Board of Directors feels proud to have excellent operational performance marked during the financial year 2010-11. Financial health of the company is now founded at more stronger position. Major financial indicators growth are well noticed. Turnover increased by Tk. 336,715,304 Net Profit after Tax increased by Tk.44,376,960 Cost of Goods Sold decreased by 5.69%, Earning Per Share increased by Tk 1.26 or 40.26%, NAV increased by Tk 5.95 or 31.17% compared to 2009-10 scheme of amalgamation (page 03 or 04). Lease Liabilities are Obsoleted, In our view, the company is in the highway of financial track loaded by package of financial growth. A.Decrease of Net Assets and decrease of long term liabilities and significant increase of Retained earnings & other reserve are shown as per Statement of Financial Position June 30,2011 I 2010.11 Particulars (as per Audit Report) - Net Current Assets 230,563,393 Long Term Liabilities ofBank_72,769,227 Retained Earnings & Other 895,779,414 Reserve(THR) I

Increase!

2009-10 (Actual) (as stated in Scheme of Amalgamation page-4)

(Decrease) in %

270,383,002 184,839,835 627,400,089

(4.73) (60.64) 42.78

B.Financial performance as per Statement of Comprehensive Income for year ended June 30,2011 Particulars

I

2010-11 (as per Audit Report)

2009-10 (Actual) (as stated in Scheme of Amalgamation page-03)

Increase! (Decrease) in %

CostofGoodsSoldRatio 75.06% 79.59% (5.69) GrossProfitRatio 24.94% 20.40% 22.25 OperatingExpensesRatio 10.28% 11.21% (8.30) IncomeTax(million) 86.53 54.26 59.47 FinancialExpenses(million) 130.20 117.29 11.01 Earningpershare 4.39 3.13 40.26 Market Shares After effective implementation of marketing strategy, the volume of Gross Turnover increased by 18.39%. Sales Revenue (1k.) Local Sale Export Sale Gross Turnover

2010-11 Increase! 2009-10 (Actual) (asperAudited) (AsperSchemeof Amalgamationpage-03) _( Decrease)in% 2,643,962,376 2,242,205,893 17.92 137,609,108 173,551,752 26.12 2,817,514,128 2,378,815,001 18.39

c

}ç

ia, Comtics Ltd.

I.



Annual Report 2010-11

Cost of Goods Sold: Since we completed with a increased Stock of Goods, Materials & Store by Tk. 94,494,637 or 12.50% compared to the 2009-10 actual stated in scheme of amalgamation (page 04), Moreover, cost of good sold decreased by 5.69% in compare to last year. (as per Audited) Net Turnover Cost of Goods Sold

Increase!

2009-10 (Actual)

2010-11

Particulars

( Decrease) in % 16.24 5.69

(As per Scheme of Amalgamation page-03) ) 2,073,070,445 1,650,122,629

2,409,785,749 1,808,850,555

Deviation in operating results from last year Net income of the company has increased byTk 44.38 million this year in compared to 2009-10 (actual) stated in the Scheme of Amalgamation (page 03). It is the result of increased net turnover by Tk 336.71 million from 2009-10 (actual) sales.

Appropriation of Profit Taking into the profit available for distribution after complying with the regulatory requirements, the Board recommended Stock Dividend of 21% on existing 61,152,474 ordinary shares of Tk.10.00 each for the year ended 30th June 2011 for approval of shareholders in the 15th Annual General Meeting. Before recommending the dividend for the year 2009-10, the Board proposed the following appropriations (amount in Taka):

Appropriations Transfer from Income statement Proposed Stock Dividend (21%)

- 268,379,323.00 - 128,420,200.00

Dividend With due hopes and aspiration shareholders as well as up-holding the image of the company, the management has already tried to pay dividend satisfactory level within the limit of operating income.

Financial Year 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03

Comtic Ltd.

Dividend in (%) 21.00 15.00 15.00 30.00 30.00 20.50 50.00 16.00 16.00

Mode of Dividend Stock Cash Cash Cash Cash Cash

Stock Cash Cash (for public shareholders)



Annual Report 2010-11

Effective Dividend Declaration Keeping in mind long term financial benefits of shareholders, the management of the company has declared 21% Stock Dividend. As a regular performing company general shareholders have the expectation to have "Stock Dividend" and such "Stock Dividend" relates to continuous and sustainable growth of operating positive result of the Company. Followed by the achieving of package of financial growth during the year the management is pleased to declare 21% stock dividend both for sponsors and general shareholders. Declaration of Right Shares Implementation of more effective financial strategy, the management of the Company has taken decision to pay off total Bank Loan (Long Term and Working Capital) amounting to Tk.102.26 (approx.) crore which incurred huge financial cost and arrange adequate working capital for smooth running of the business and BMRE of the existing Projects. For seeing noticeable growth and followed by completion Amalgamation the management is found the opportunity to declared 100% (i.e. 01 right share for 01 existing share) of Tk.1 0.00 each at an issue price Tk.30.00 per share (including a of Tk.20.00 each). For raising of capital for fulfillments of the mentioned required purpose. Right Shares Offer: Financial Year

I

Riqht Share in

(i.e. 01 right share for 01 existing share) of 2010-11 100% (1:1) Tk.10.00 each at an issue price Tk.30.00 per share (including a of Tk.20.00 each) subject to the approval of shareholders in the AGM and SEC. 2005-06

1

20% (1:5)

1 (i.e. 01 right share for 05 existing share)

Contribution to National Exchequer Keya Cosmetics Ltd. has contributed total of Tk.86,531,21 7.00 as income tax and Tk,407,728,379.00 as Duty/VAT to National Exchequer in the year 2010-2011. Needful information about sister concern where KCL has financial involvement. To secure investment of shareholder's and other interested group, the management of the company invested Tk.605.23 million (in the form of paid up-capital and share money deposit) to the following profitable sister concern of the Keya Group and other details are mentioned in the note 04 of the audited s few of them are mentioned below: Name of Sister Concern Keya Spinning Mills Ltd. Keya Cotton Mills Ltd. Keya Sweaters Ltd.

Investment by KCL (Tk.in million) 83.80 63.01 5.00

Nature of Business Produce & Marketing Cotton Yarn Produce & Marketing Cotton Yarn Produce of 100% export sweater & garments

Besides, Keya Cosmetics Ltd. holds 456,945 shares © Tk. 10.00 each of CDBL. Addition of Assets An advance amounting to Tk.120.00 million made against Land Purchase and Tk.27.53 million expended for additional Land and Land Development, Office Equipment, Furniture Fixture, Vehicle and Other Assets and which have added with the company's existing assets.The amount was investment from retained earnings. Fairness of the s As per Companies Act 1994, it is the responsibility of the Directors to prepare financial statements for each year to be presented before the shareholders in the general meeting. The financial statements and other financial information included in this report fairly present in all material respects, the financial conditions, results of operations, cash flow and changes in equity of company as of and for the year ended June 30,2011.

9ççya. Co--meties Ltd. r



Annual Report 2010-11

In House Shareholding Pattern Shareholding Pattern as on June 30,2011

Particulars Investment in Associated Companies: Keya Spinning Mills Ltd. Keya Cotton Mills Ltd. Keya Sweaters Ltd.

Other related parties: Mr. Abdul KhalequePathan Mrs. Khaleda Pervin Mrs. Feruza Begum Mr. Masum Pathan Alhaj Md. Akkas Al i Pathan Mr. M. Anwarul Ghani Executive Director (Finance) & Company Secretary his spouse & minor children Head of Internal Audit and his spouse & minor children

Nos. of Shareholding

Percentage

Remarks

8,380,000 9.32.23 55 6,300,810 50.00 50,000 11,070,296 18.10 415,479 0.68 223,407 E O.37 392,856 0.22 135,921 Non shareholding independent Director -

-

-

-

- - - -

-

Executive : (top five salaried other than ECO,CFO,HIA) Mr. Md. Homaun Kabir Mr. ABM Golam Mustafa Munshi Mrs. Soniya Ferdousi Ankhi Mr. Parimal Kumar Pramanik Mr. Shaheenur Rahman Substantial Shareholdings SEC's notification dated 20 February 2006 requires a listed company to disclose in the directors report, the list of shareholders holding ten percent or more voting interest in the company.We are providing below the shareholding status of all sponsors shareholders as on June 30,2011. SIX 01 02 03 04 05 06 07

08

Name of Sponsor Shareholders Abdul Khaleque Pathan Mrs. Feruza Begum Mrs. Khaleda Parvin Mr. Masum Pathan Khaleque & Co. (Pvt.) Ltd Keya Knit Composite Ltd. Keya Yarn Mill Ltd. Keya Sweaters Ltd.

Cumetic Ltd.

No. of Shares

11,070,296 223,407 415,479 392,856 7,656,45,849 711 675,109 51,416 20,531,123

Percentage (%) 18.10

0.37 0.68 0.64 0.07 12.52 1.10 0.08 33.57



Annual Report 2010-11

Statement of Directors Responsibilities for preparation and presentation of the financial Statements The following statement is made to distinguish the responsibilities of the directors and auditors in relation to the preparation of financial statements the Companies Act 1994 requires the directors to prepare financial statements for each financial year. In preparing those financial statements directors are required: To select suitable ing policies and apply those policies consistently. To make reasonable and prudent judgment and estimates where necessary. e To statement whether all applicable ing standards have been followed subject to any material departure disclosed and explicable in the notes to the financial statements. To take such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

4

To ensure that the company keeps ing records which disclose with reasonable accuracy the financial position of the company and which enable them to ensure that the financial statements comply with the requirements of the Companies Act 1994 and Securities & Exchange Rules 1987 and to prepare the financial statements on going concern basis unless it is inappropriate to presume that the company will continue in business. Going Concern: Directors are convinced after making appropriate enquiries at the time of approving the financial statements that company has adequate resources to carry out its operational existence for the foreseeable future. It is therefore appropriate to adopt going concern basis in preparing the financial statements. Board Size & Independent Director: In compliance with the Securities and Exchange Commission Notification dated February 20,2006 the Board of Directors of the company comprising 06 (six) including one independent director.

Range of Shareholding: The distribution schedule of shareholdings as on 30 June 2011 was as under: Shareholding Range Less then 500 to 5000 500 5001 to 10000 10001 to 20000 20001 to 30000 30001 to 40000 40001 to 50000 50001 to 100000 100001 to 1000000 Over 1000000 Total

No. of holder 6,531 4,727 383 268 76 41 28 42 48 6 12,150

2010-2011 No. of Number of shares holder 1,552,170 2.54 4,952 8,256,275 13.50 3,062 4.36 319 2,666,590 149 3,618,018 5.92 1,845,330 3.02 61 2.39 21 1,459,981 2.20 11 1,345,265 2,894,670 4.73 37 14,096,883 23.05 28 38.29 3 23,417,292 61,152,474 100.00 8,643

2009-2010 Number of shares 1,056,008 5,531,620 2,276,829 2,232,861 1,080,100 841,100 553,600 21790,200 6,903,950 5,533,732 28,800,000

% 3.67 19.21 7.91 7.75 3.75 2.92 1.92 9.69 23.97 19.21 100.00

}Sya. Cosmetics Ltd.

Annual Report 2010-11

Board of Directors Meeting During the year ended June 30, 2011, eleven Board meetings were held. The attendance in the Board of Directors meetings by each Director is shown below: Name of the Director Mrs. Feruza Begum Mr. Abdul Khaleque Pathan Mrs. Khaleda Pervin Mr. Masum Pathan Alhaj Md. Akkas Ali Pathan

No. of Meeting held 8 8 8 8 18



Attendance 17 18 18

is 05

(Rep. Of Kcya Knit Composite Ltd.)

Mr. M Anwarul Ghani

18

13

Directors to Retire and Re-appoint As per Section 91(2) of the Companies Act 1994 and Article 48 of the Articles of Association of the Company, Mr. Abdul Khaleque Pathan, Director shall retire in the 15th Annual General Meeting and being eligible offered himself for re-appointment as per Articles 48 of the Articles of Association of the Company. Corporate Governance: We always believe in the importance of good governance and adherence to the highest standards of ethical conduct as key to business success. We strive to maintain full compliance with the Laws, rules, and regulations that govern our business. Appointment of Auditors: As per Securities & Exchange Rules 1987, without prior consent from SEC no Auditors shall be appointed for more than three consecutive years. The Board of Directors of the Company in its Board Meeting dated July 31,2011 recommended present external Auditors MIS. G. Kibria & Co., Chartered ants of Sadharan Bima Sadan (5th Floor) 24-25, Dilkusha C/A, Dhaka-1000 whose period of appointment will be expired on 15th Annual General Meeting of the company. However he expressed his intention to continue audit works of the company for the financial year 2011-12 subject to consent accorded from Securities & Exchange Commission and on the basis of the proposal of the Board Audit Committee, the Board recommended to the shareholders to re-appoint the existing auditor for the year 2011-12 at a remuneration of Tk.1 00,000/- (Taka One Lac). On behalf of the Board of Directors

Abdul Khaleque Pathan Chairman

}'y'T. Co-smetics lid.

Annual Report 2010-11

Doing What Right Keya Cosmetics Limited's reputation is earned by our conduct: what we say, what we do the products we make, the services we provide and the way we act and treat others. As conscientious citizens and employees, we want to do what is right. Like every other company, we always believe to improve. Environmental Role The company maintains a high standard of pollution free environment as applicable Government Law. Sustainability/Corporate Social Responsibility Keya Cosmetics Limited is dedicated to sustainability and corporate social responsibility. We clearly state this principle as one of the corporate values binding on all our employees. We generate sales and profits while behaving in a socially responsible manner in all our activities and along the entire value chain.We are convinced that effective ' environmental protection together with social and societal responsibility is in the long-term view, essential to our entrepreneurial success. For decades, finding the right balance between economic, ecological and social aims has been a major priority at Keya Cosmetics Limited.We have aligned our research and development work to constantly improving our brands and technologies and their ability to make towards the people more befitting.The needs of a constantly growing world population and the availability of water, energy and other resources are issues that are going to become ever more important for humanity in general, as well as exerting a direct influence on our business development through energy and raw material price increases. Our brands, technologies and services are the prime contributions made by our company to the wealth and wellbeing of society. Moreover, through their contribution to sustainable development, they also enable our customers and consumers to experience for them how we combine leading brand quality with respect for people and the environment. Our common focus and credible engagement within the marketplace strengthen our brands as well as the reputation of our company. Indeed, Keya Cosmetics Limited as a whole embodies commitment to sustainability and corporate social responsibility. KCL's social commitment is focused by taking part in social activities on the areas of Education and Research, Environment and Nature Health and Social Needs and Sports and Culture. Like every year in 2010-11 KCL once again underscored its role as a good corporate citizen with a range of social activities focused on the above area. Health Compensation and Social Needs In 2010-11, KCL provided various forms of medical aided program towards the poor people for medical treatment Tk.224,089.00. As well as compensate death of two workers of the Company Tk. 144,000.00 The company also took part in the donation to Elders Welfare Association for Tk. 120,000.00. Education Sports and Culture In this area the company has contributed Tk.450,000.00 to the different organization. Employment Practices The company is production and marketing based. In the way of consistent progress, the all out effort of the employees in all respect are very important, It is our policy to give due attention to the benefits and safety of the employees. Initially major portion of the marketing personals were fresh and un-skilled. Training programs and continuing professional education for employees is the part of the company's philosophy. In accordance with the past practice your company has maintained its focus on human resource capital and particularly their satisfaction by continuing to improve working conditions. We encourage employees to participate in the training process the company offers from time to time. And accordingly in the time concern employees became highly skilled professional and are taking handsome remuneration within their role of honor.

Cugmetic Ltd.

Annual Report 2010-11

Procurement and Distribution Presently we are producing 17 products and for producing these products 100 nos. basic raw materials are needed to procure. Among which 41 items are procured from the renowned local supplier and rest 49 items are procured through import mainly from England, Finland, , Switzerland, Spain, Singapore, China, India, Sri-Lanka, etc.

Front View of Factory

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ii Cosmetics Ltd.

Annual Report 2010-11

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Annual Report 2010-11

Compliance Report as on June 30, 2011 As per the Securities and Exchange Commission (SEC) Notification dated 20th February, 2006 on comply or explain basis the Board of Directors have taken appropriate steps to comply with the conditions and complied with all the conditions. Status report on June 30,2011 in compliance with those conditions is given below in prescribed format: SJY Compliance Status Complied Not complied

Compliance Status Board of Directors:

1.2

1.4

Board's Size The of the Board should not be less than 5(five) and more than 2o(t wen ty) Appointment of Independent Director by elected Director (At least one tenth of total number of Board of Director) Chairman of the Board and Chief Executive Officer be different person with different roles & responsibility. Directors Report to include declaration on:

Complied

Complied I

Complied

Complied I) Fairness of Financial Statement II) Maintenance of Proper Books of Complied III) Consistent application of ing polices Complied in preparation of Financial Statement Complied IV) Observance of Bangladesh Standards (BAS) Complied V) Soundness & efficiency of internal control VI) Ability to continue as going concern VII)Significant deviations in operating results from last year VIII)Presentation of key operating data _________ for at least three years Declaration of Dividend X) Number of Board meeting held during the year and attendance by each Director XI) Shareholding pattern

Cometic Ltd.

Complied Complied Complied ______ Complied _____ Complied

Complied.

Explanation for non-compliance

Annual Report 2010-11

Compliance Status Complied Not complied

Compliance Status 2.0

Appointment of CEO, Company Secretary, Head of Internal Audit etc.

2.1

Appointment & defining responsibilities

2.2 3.0

Attendance in the Board Meeting Formation of Audit Committee & its reporting

I

Complied Complied

U) Inclusion of independent Director in the audit committee

Complied

lU) Fill the casual vacancy in the Audit Committee

Not Applicable

Chairman of the Board Audit Committee

II) Qualification & Experience of the Chairman

0

Complied

I) Number of in the audit committee

3.2 11)

3.3. 1

I

Explanation for non-compliance

- _____

Complied _Complied

I) Reporting by Audit Committee on its activities to the Board

Complied

II) Report to the Board by the Audit Committee on Conflict of interest

No such matters to report on

3.3.2

Report by Audit Committee on the qualified point to the SEC

No such matter to report on There was not such event.

3.4

Report to the shareholders in the event of findings of certain occurrences under condition 3.3.1 (II) above

4.0

Statutory Auditors not to engage in: I) Appraisal or valuation service

Complied

II) Financial information systems desicin and imnImnti-inn

Complied

Ill) Bookkeeping or other services related to financial statements

Complied

IV) Broker-dealer service

Complied

V) Actuarial services

Complied

VI) Internal Audit Services

Complied

VII)Any other services that the Audit Committee determines.

Complied

Carmeties Ltd.

Annual Report 2010-11

Audit Committee Report for the year ended 30th June, 2011 Audit Committee of the Board Audit Committee of the Board is constrituted comprising four member including independent Dircetor in its Board meeting deted July 03, 2011 to provide independent overview of the company's Financial Operational Report, internal controls system. Ideally the Audit Committee should: Have sufficient expertise in financial, ing, auditing and legal matters to be able to adequately oversee and evaluate the control, risk management, compliance system and the quality of financial disclosures to shareholders and other. Oversee the internal audit and control function; the internal audit staff should report directly and routinely to this committee of the board and when necessary, report any concerns regarding the quality of controls or compliance issues. Have sufficient resources to be able to properly fulfill their responsibilities. Have full access to and the cooperation of management. Have authority to investigate fully any matters within its purview. Have the authority for the hiring of auditors, including the setting of contractual provisions, review of the costeffectiveness of the audit, approving of non-audit services provided by the auditor, and assessing the auditor's independence. Meet with auditors independently of management or other company interest parties periodically but at least once annually. ' Have the full authority to review the audit and financial statements, question auditors regarding audit findings, including the review of the system of internal controls and to determine the quality and transparency of financial reproting choices Following is the constrituted Audit Committee of the Board: Status in the Company Status in the Committee ame S1 No Chairman Managing Dircetor Mrs.Khaleda Pervin 1 Member ln.Dircetor Mr. M. Anwarul Ghani 2 Member Dircetor 3fMasum Pathan Member Mohammed Mofizul IsiamEDy. General Manager

L±H

Role and Resposibilities of Audit Committee: Following are the detail roles and resposibilities of Audit Committee: Internal Control: • Evaluate whether management is adhering to the appropriate compliance culture by communicating the importance of internal control and risk management to ensure that all employees have clear understanding of their respective roles and responsibilities. • Review the arrangements made by the management for developing and maintaining and mantaining a suitable Management Information System (MIS). • Consider Whether internal control strategies recommended by internal and external auditors have been implemented timely by the management as regards to the report relating to fraud forgery, deficiency in internal

91;

,4ra, Cosmetics Ltd.

Annual Report 2010-11

I

control or other similar issues detected by internal and external auditors and inspectors of the regulators and inform the board on a regular basis. To review the financial reporting process, the system of internal control and approach to manage risks, the audit process, and the Company processes for monitoring compliance with laws and regulations and its own code of business conduct. Internal Audit: ' Review the activities and organizational structure of the internal audit function and ensure that no unjustified restrictions or limitations are made. Review the efficiency and effectiveness of internal audit function. • Review that findings and recommendations made by the Internal Auditors for removing the irregularities, if any, detected are duly acted upon by the management in running the affairs of the Company. External Audit: Review the performance of auditing and their audit and management reports by the external auditors. Reviw that findings and recommendations made by the external auditors for removing the irregularities, if any, detected are duly acted upon by the management in running the affairs of the Company. IP Make recommendations to the Board regarding the appointment of the external auditors. Meeting: The Audit Committee holds meetings at least once in every three months to scrutinize matters as assigned by the Board of Directors.The Audit Committee held 4 (Four) Meetings in 2011 as per following dates: 1st meeting held on 01 October, 2011 2nd meeting held on 31 December, 2011 3rd meeting held on 29 March, 2012 4th meeting held on 30 June, 2012 Reporting: The Audit Committee has the responsibility to report its performance to the Board of Directors. Each member of the audit committee is well conversant with the responsibilities and the committee has formed according to the Notification of Securities & Exchange Commission. The Company Secretary acts secretarity of the Audit Committee. The committee is recommending to the board the re-appointment of G. Kibria & Co., Chartered ants as statutory auditors of the company, to carry out audit of the s of the company for the financial year 2010-11.

Sd! Chairman Audit Committee

Cometic lid.

Annual Report 2010-11

Auditor's Report & Financial Statments

1EIIIIi

Annual Report 2010-11

AUDITORS REPORT We have audited the accompanying Statement of Financial Position of KEYA COSMETICS LIMITED as of June 30, 2011 and the related Statement of Comprehensive Income, Statement of Cash Flows, Statement of Changes in Equity for the year then ended.The preparation of these financial statements is the responsibility of Management. Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis, evidence ing the amounts and disclosures in the financial statements. An audit also includes assessing the ing 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. In our opinion, the financial statements prepared in accordance with Bangladesh ing Standards (BAS), subject to notes to the s give a true and fair view of the state of the Company's affairs as of June 30, 2011 and of the results of its operations for the year then ended and comply with the Companies Act, 1994 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 for the purpose of our audit and made due verification thereof; b). In our opinion, proper books of as required by law have been kept by the Company's so far as it appeared from our examination of those books; c). The Company's Statement of Financial Position and Statement of Comprehensive Income, Statement of Cash Flows, Statement of Changes in Equity dealt with by the report are in agreement with the books of s and returns.

G :'^Y^ G. KIBRIA & CO. Place: Dhaka

Chartered ants

Date: 21 August, 2011

9çeya., Comotie Ltd.

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Annual Report 2010-11

91;6Y1(%

Cumtics Ltd.

STATEMENT OF FINANCIAL POSITION AS on 3Oth June, 2011

iIZI

CUL!i ARS PAR TII [.uJ

Assets:

Non Current Assets Property, Plant and Equipment Deferred Expenses Investments



Current Assets Stock of Goods, Materials & Stores Material In Transit Loans, Advances & Deposits Trade Debtors Other Receivables Cash & Bank Balance

1,373,509,988 766,630,166 1,654,651 605,225,171

03 03.2 04

1,476,950,336

775,1 78,506 32,622,699 279,145,695 380,378,450 60,397 9,564,589

05 06 07 08 09 10

Total Assets Equity and Liabilities:

2,850,460,324

Shareholders Equity: Share Capital-Paid Up Share Tax Holiday Reserve Retained Earnings Non Current Liabilities Liability to Bank

14

1,531,304,154 611,524,740 24,000,000 45,744,731 850,034,683 72,769,227 72,769,227

15 16 17 18 19 20

1,246,386,943 949,778,472 96,336,816 12,287,052 166,106,484 4,132,591 17,745,527

11 12 13

Current Liabilities Bank Loans & Overdraft Sundry Creditor Outstanding Liabilities Provision for Income Tax Unclaimed Dividend Workers Profit Participation& Welfare Fund

2,850,460,324 25.04

Total Equity & Liabilities 27 NET ASSET VALUE PER SHARE Accompanying notes form the integral part of the financial statement.

6D Abdul Khaleque Pathan Chairman

V^

Khaleda Pervin Managing Director

Syed Noorul Alam Company Secretary As per report annexed.

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Dated: Dhaka 21 August, 2011

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G.KIBRIA&CO. Chartered ants

Cometic Ltd.

I

Annual Report 2010-11

9K,geya Cosmeties Ltd. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

Net Turnover Gross Turnover

Figures in Taka

7

P1

2,817,14,128

VAT & S/Duty

(407,728,379)

Less:Cost of Goods Sold

22

1,808,8 5 0, 55 5

Gross Profit Less: Operating Expenses:

600,935,194 247,673,817

Selling, Distribution & .Exp. Financial Expenses

23

117,475,818

24

130,197,999

Operating Income Non Operating Income

4 1.

353,261,377

25

19,394,691

NET INCOME BEFORE WPPF

^656,O68

Allocation for WPPF

17,745,527

NET INCOME BEFORE TAX Provision for Income tax

354,910,540



18

86,531,217

NET INCOME FOR THE YEAR ENDED

2632

(Transfer to the Statement of changes in Equity)

EARNINGS PER SHARE

I



4.39

26

Accompanying notes form the integral part of the financial statement.

Abdul Khaleque Pathan Chairman



%i^s-

Khaleda Pervin Managing Director

Syed Noorul Alam Company Secretary As per report annexed.

Dated: Dhaka 21 August, 2011

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G. KIBRIA & CO. Chartered ants

:.... Comtics Ltd.

Annual Report 2010-11

Co1rIwtic lid. STATEMENTS OF CASH FLOWS FORTHE YEAR ENDED 30 JUNE 2011

Cash Flow From Operating Activities: Receipts: Cash Received from Sales Revenue Cash Received from Other Income Total Cash Receipts Payments: Payment for Purchase of Raw Materials & Expenses Total Payments

2,332,955,456 38,487,885 2,371,443,341 2,218,686,646 2,218,686,646 152,756,695

Net Cash(Used)/Provided from Operating Activities Cash Flows From Investing Activities: Investment Fixed Assets acquisition

(160,004,588) (24,735,106)

Net Cash (used)/provided in Investing Activities Cash Flows From Financing Activities: Dividend Paid Payment to Short term Loan Payment of Long-term Liability

(184,739,694)

Net Cash (used)/provided in Financing Activities

37,601,475

(81,927,009) 231,599,092 (112,070,608) 5,618,476 3,946,112

Net Increase/(decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at beginning of the period

9,564,588

Cash and Cash Equivalents at the ending of third quarter Note 28.0

Net Operating Cash Flow Per Share

Abdul Khaleque Pathan Chairman



9'§^^



2.50



A^,d__/

Khaleda Pervin Managing Director

Syed Noorul Alam Company Secretary As per report annexed.

Dated: Dhaka 21 August, 2011 (

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G. KIBRIA & CO. r3 Chartered ants

Co s metics td.

Annual Report 2010-11

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Comotics Ltd.

STATEMENT OF CHANGES IN EQUITY FORTHE YEAR ENDED 30 JUNE 2011

Figures in Taka RE ITAL

SHARE

Balance as on 01.07.2010 288,000,000 Issue of Share Capital against amalgamation 323,524,740 Net Profit for the Period Dividend Paid

24,000,000

Balance as on 30.06.2011

24,000,000

Abdul Khaleque Pathan Chairman

611,524,740

¶

TAX

RESERVE

45,744,731

SHARE

RETAINED EARNINGS

EQUITY

667,714,960

1,025,459,691 323,524,740 268,379,323 (86,059,600)

268,379,323 (86,059,600)

%5^5-

Khaleda Pervin Managing Director

45,744,731

850,034,683

1,531,304,154

A^,e/ Syed Noorul Alam Company Secretary As per report annexed.

Dated: Dhaka 21 August, 2011

G. KIBRIA & Co. Chartered ants

S

9çeya. Co-smetics Ltd.

Annual Report 2010-11

Cosmetics Ltd. 9ççya Notes to the Financial Statements For the year ended June 30,2011 1.00 LEGAL STATUS AND NATURE OF THE COMPANY: a). Legal form of the company: Keya Cosmetics Limited was incorporated in Bangladesh as a private limited company by shares on 14th July 1996 with The Registrar of t Stock Companies & Firms, Dhaka, Bangladesh under the Companies Act 1994. On 7th May 1999 the board of directors ed a special resolution for conversion of its structure from private limited company to public limited company and the said conversion was approved by the Registrar of the t Stock Companies and Firms on 20.06.1999. The company is listed both in Dhaka and Chittaong Stock Exchange of Bangladesh. b). Background information and Principal Activities of the Company: Keya Cosmetics Limited is engaged in production of several kinds and size of soap, saving cream, toothpaste, coconut oil and other cosmetics items since its incorporation. During the year 2010-2011, the Company took over, under a Scheme of Amalgamation, erstwhile Keya Detergent Limited, another publicly listed Company (producing several kinds and size of detergent powder) and Keya Soap Chemicals Limited, a private limited Company (producing soap noodles), the backward linkage industry of Keya Cosmetics Limited of Keya Group.The said Scheme of Amalgamation was duly approved by Hon'ble High Court Division of Bangladesh Supreme Court vide case Company matter no.28 of 2011. The ed office and Factory of the Company is at Jarun, Konabari, Gazipur and the Liason Office is located at Navana Tower (14th Floor), 45 South Gulshan Avenue, Gulshan-1, Dhaka-121 2.

C). Address of ed Office and Factory of the Company:

d). Nature of Business: The nature of the company is to manufacture of cosmetics product and sell them to the local & foreign markets. The company has sophisticated machinery to produce the best quality cosmetics products. 2.00 SUMMARY OF SIGNIFICANT ING POLICIES AND OTHER MATERIAL INFORMATION: a). Statement of Compliance: The financial statements have been prepared in conformity with the provisions of the Companies Act 1994, the Securities and Exchange Rules 1987, ing Standard (lAS) which is adopted by the Institute of Chartered ants of Bangladesh and the relevant rules and regulations. b). Basis of Preparation: The financial statements have been prepared in accordance with the going concern principle and "Historical Cost" convention the significant basis under mercantile ing system. c). Recognition of Fixed Assets and Depreciation: Fixed Assets are stated at their historical cost less accumulated depreciation in accordance with lAS 16 "Property, Plant and Equipment". Cost represents cost of acquisition or construction and capitalization of pre production expenses including interest during construction period (ID). .'J). Depreciation: No depreciation is charged on land and land development. Incase of disposal of fixed assets, no depreciation is charged in the year of disposal. Depreciation of all properties is computed using the reducing balance method in amount sufficient to write off depreciable assets over their estimated useful economic lives. The annual depreciation rates applied to the principal categories are:

J

9çeya, Cornttic Ltd.

Annual Report 2010-11

Factory Building Plant and Machinery Other Machinery Laboratory Equipment Electrical Equipment Office Equipment Furniture and Fixture Vehicles Fire Fighting Equipment Software Development Other Assets

5% 10% 10% 10% 15% 15% 10% 20% 15% 15% 15%

Depreciation has been charged to factory overhead and istrative overhead on usages basis consistently. e).Recognition of Lease Property: Disclosure Under lAS-i 7 Property, Plant and Equipment acquired under leases are capitalized and the lease liabilities for those property, plant & equipment are shown in the balance sheet in separate head on principal amount. No Lease Loan is outstanding as on balance sheet date. f). Inventories: IAS-2 Inventories comprise raw material, packing material, work in progress, finished goods, stationery and spare parts. All these are stated at the lower of the cost and net realizable value in accordance with IAS-2 "Inventories" after due allowance for any obsolete or show moving items. The cost of inventories is assigned by using weighted average cost formula. Net realizable value is determined after deducting the estimated cost of completion and/or cost to be incurred for affecting the sale from sale price. g).Sundry Debtors: These are carried at original invoice amount.This is considered good for collection, and therefore, no amount was written off as bad debt and no debt was considered doubtful to provide for. h).Cash and Equivalents: According to IAS-7 "Cash Flow Statement" cash in hand and demand deposits and cash equivalent are short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. lAS-i "Presentation of Financial Statement" provides that cash and cash equivalents are not restricted in use. Considering the provisions of lAS-i & IAS-7, cash in hand and bank balances have been considered as cash and cash equivalents. i).Creditors and Accrued Expenses: Liabilities are recognized for amounts to be paid in future for goods and services already received, whether or not billed by the suppliers. j). Taxation: The company is a publicly traded company as per Income Tax Ordinance 1 984.Therefore, provision for income tax has been made at the existing rate of 27.50% in respect of business income and 20% on dividend income. k).Tax-holiday Status: The company has enjoyed tax-holiday for five years for its for all units which has already been expired on February 2002, December 2002 & March 2005 respectively. I) Workers' Profit Participation and Welfare Fund (WPPF): This represents 5% of net profit, after charging WPPF, which is being maintain as per the related Law of the country. Comtic Ltd.

Annual Report 2010-11 m). Foreign Currency Translation: Transaction 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 The Effects of Changes in Foreign Currency Rates. n). Turnover From Net Sales: Net sales comprises the invoice value of goods supplied by the company and consists of Local sales of cosmetics product less 15% Value Added Tax (VAT) & Supplementary Duty and Export Sales of cosmetics product which bears no VAT. o). Revenue Recognition: The revenue are recognized after satisfying all the conditions for revenue recognition as provided in IAS-18 "Revenue Recognition" i) Sales through the distributors are recognized at the time of delivery from depots whether or not billed. ii) Other sales are recognized at the time of delivery from factory godown. p). Basic Earnings: This represents earning for the period attributable to ordinary shareholders. As there was no preference dividend, minority interest, or extra ordinary items, the net profit after tax for the period has been considered as fully attributable to the ordinary shareholders. q). Weighted Average Number of Ordinary Shares Outstanding: This represents the number of ordinary shares outstanding at the beginning of the period plus the number of ordinary shares issued during the period multiplied by a time-weighting factor.The time weighting factor is the number of days the specific shares are outstanding as a proportion of the total number of days in the period. r). Earning Per Share (EPS): The company calculates Earning per Share (EPS) in accordance with IAS-33 "Earning per Share" which has been shown on the face of Profit and Loss and the computation of EPS is stated in Notes-27 appearing hereinafter. i). Basic Earning per Share - This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the period. ii). Diluted Earnings per Share - No diluted EPS is required to be calculated for the period, as there was no scope for dilution during the period under review. s). Cash Flow Statement Cash Flow Statement has been prepared in accordance with IAS-7 "Cash Flow Statement" and the cash flow from operating activities have been presented under direct method as prescribed by 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". t). ment Expense: To establish brand name and capture market share the company had to spend in advertising and publicity during the year which has been charged to Income Statement as selling expenses in the current year. u). General Information on Financial Statement Responsibility for preparation and presentation of financial statement The Board of Directors is responsible for the preparation and presentation of financial statements under section 183 of the Companies Act 1994. The financial statements were amalgamated with figures of 2 (two) companies named Keya Detergent Limited and Keya Soap Chemicals Limited as on 30.06.2011 as per Amalgamated Scheme. Impairment In accordance with the provisions of lAS 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 of impairment. If any such indication exists, then the asset's recoverable amount is estimated and impairment losses are recognized in statement of comprehensive income. No such indication of impairment has been raised till to date. Cornetic lid.

Annual Report 2010-11 v). Components of the Financial Statement Following are the components of Financial Statements: a).Statement of Financial Position b).Statement of Comprehensive Income c).Statement of change in equity d).Statement of Cash Flow e).Notes to the Financial Statements w). Proposed Dividend: This has been considered as "Shareholder's Equity" in accordance with Companies Act 1994, the Securities & Exchange Rules 1987 and lAS 10 (Original Version) "Contingencies and Event Occurring after the Balance Sheets Date adopted by ICAB, lAS 10 (Original Version) provides that "Dividend Proposed or Declared after Balance Sheet Date but before approval of the Financial Statements should be either adjusted or disclosed".

I

x). Reporting Period: 01-07-2010 to 30th June, 2011. y). Reporting Currency: The figures in the financial statements represent Bangladesh Currency (Taka), which has been rounded off to the nearest Taka. z). Comparative Information: During the year 2010-2011, the Company amalgamated with two other companies under the same group. According to amalgamation, a new company was formed after amalgamation, which name was fixed as an existing Company, Keya Cosmetics Limited. So, no comparative column has been disclosed in this year. 30/06/2011 3,0

FIXED ASSETS

768,284,817

Details of property, plant and equipment and depreciation as of June 30,2011 are shown in the Schedule - A .The break up of the balance are as below: At Cost Less Depreciation Deferred Expenses



3.1 3.2

3.1 At Cost less Depreciation

766,630,166 1,654,651 766,630,166

Details of fixed assets and depreciation as of June 2010 are shown in the annexed schedule -A .The break up of the balance are depicted below: Fixed Assets at cost: Opening Balance Addition during the year Closing Balance Accumulated Depreciation: Opening Balance Charged during the year Closing Balance Written Down Value

1,271,390,845 27,526,280 1,298,917,125 456,070,387 76,216,572 532,286,959 766,630,166

9"eya Corniotics Ltd.



Annual Report 2010-11 3.2

Deferred Expenses Opening Balance Written off during the period

1,654,651 21,311,885 (19,657,234)

Management has decided to amortize the defered expenes of Cosmetics within next 5 (five) years from 2006-2007. Management has decided to amortize the defered expenes of Detergent within next 5 (five) years from March 2008 Management has decided to amortize the defered expenes of Soap Chemicals within next 5 (five) years from 2006-2007.

4.0

4.1





.•.

INVESTMENT Investment on share Share money deposit

4.1 4.2

6.051225 111 160,225,171 445,000,000

Investment in Share Keya Spinning Mills Ltd. (Ordinary Share) Keya Cotton Mills Ltd. Port Folio with PH Central Depository Bangladesh Ltd. (CDBL) Keya Sweaters Ltd.

No. of shares 8,380,000 6,300,810 456,945 50,000

83,800,000 63,008,100 1,000,371 7,416,700 5,000,000

4.2 Investment on Share Money Deposit 45,000,000

Keya Yarn Mills Ltd. Share money deposit will be converted into share capital and Keya Yarn Mills Limited will issue 44,50,000 fully paid ordinary shares ofTk.100/- each in favour of Keya Cosmetics Limited. 5.0 STOCK OF GOODS MATERIALS & STORES 5 Raw .1 & Packing Materials Work in Process Finished Stock Spare Parts & Stationary Goods

5.2 5.3

75178,5: 310,655,781 359,744,378 39,685,543 65,092,803

Stock and Stores have been taken valued and certified by the management and consist of the following: 5.1 Raw & Packing Materials Raw Materials Packing Materials

• 31O,65.**

5.2 Work in Process Cosmetics Detergent Soap Chemicals

359,744378 124,211,376 40,081,684 195,451,318

5.3

257,940,875 52,7 14,907

Finished Stock

.0 MATERIAL IN TRANSIT

I

7.0 LOANS, ADVANCES AND DEPOSITS Advance Income Tax VAT Current SD Current

94 yL Comtic lid.

7.1 7.2 7.3

61,653,506 41,928,125 1,050,102

Annual Report 2010-11 VAT Payment under Sub- Judicial Advance against land purchases Advance against Expenses Advance against Salary Advance against House Rent Prepaid Insurance Marginal Deposit A/c Deposit with Rural Electrification Board (REB) Deposit against TNT Deposit with BOC Prepaid ment Expenses/Film Making Expenses Other Advance Deposit with TGTDCL (Titas Gas)

S

3,212,239 120,000,000 32,060,313 159,999 134,500 5,365,506 9,823,811 211,306 15,000 24,000 533,336 400,000 2,573,952

7.1 Advance Income Tax As per last year Addition during the year Adjustment for the year

61,653,506 8,1 72,940 69,175,671 (15,695,105)

7.2 VAT Current & Supplementary Duty Balance as per last Paid through challan Paid on purchase Paid on Export (DEDO) Adjustment during the year Payable during the year 7.3 SD Current Balance as per last Paid through challan Payable during the year

41,928,125 33,1 07,463 59,000,000

8.0 TRADE DEBTORS Receivable from Export Receivable from Distributor No amount was due by the directors, managing agent, managers and other officers of the company and any of them severally or tly with any other person. Considered good. No provisions has made against the debtors. 9.0 OTHER RECEIVABLE Others Receivable 10.0 CASH & BANK BALANCES Cash in Hand Cash at Bank Bank Asia Ltd., CD A/C 00833007207 Bank Asia Ltd., CD A/C 00833007139 Premier Bank Ltd. A/C 11100014034 One Bank Ltd., CD A/C 00118376008 Dhaka Bank Ltd. For. Exc. Branch CD-4444 Dutch Bangla Bank Ltd.Gulshan Br.-CD A/C: 116-110-3398 IFIC Bank Ltd Konabari Br. lFlC Bank Ltd., CD A/C 0021 33007801 Premier Bank Ltd A/c - . . .12791

15,059,393 (9,518,988) (398,209,391) 1,050,102 2,317,012 9,500,000 (10,766,910) 380,378,450 69,501,710 310,876,740

. 60,397 60,397 2,103,098 7,461,491 7,440 830,759 5,320 89,812 49,415 35,374 10,157 29,553 5,104

Comttic lid

0

Annual Report 2010-11 1,828,455 2,31 3,639 71,328 122,278 1,818,952 40,773 200,695 2,436

Sonali Bank B.B.Avenue CD A/c-33007687 Sonali Bank B.B.Avenue STD A/c-36001134 Sonali Bank Ltd., CD A/C 33011813 Pu ball Bank Ltd., IBB BR. A/C 11015200/0549 Pubali Bank Ltd., IBB BR. A/C 31000262/2871 Standard Bank-Guishan Branch, CD A/C 33007895 Standard Bank Ltd., Gulshan Branch CD A/C 33009652 Standard Bank Ltd., Guishari Branch CD A/C 33009644 Auditors observation: 1)Cash in hand as of 30.06.2011 was shown as per books of the company. Our audit was post dated. As a result we could not physically cash as on 30.06.2011. However a cash custody certificate was obtained from the Managing Director of the company. 2) Bank Balances were reconciled & certified by the respective bank branches as on 30.06.2011 which were found in agreement with books of .

611,524,740

11.0 SHARE CAPITAL Authorized Share Capital: 7,00,00,000 Ordinary Shares @ Tk. 10.00 each Issued, Subscribed & Paid up Capital: 611,52,474 Ordinary Shares of Tk 10.00 each a. Composition of Share holders: No. of Shares

%ofholdings

11,070,296 223,407 415,479 392,856 7,656,711 45,849 100,000 675,109 51,416 40,521,351

18.10% 0.37% 0.68% 0.64% 12.52% 0.07% 0.16% 1.10% 0.08% 66.26%

Mr. Abdul Khaleque Pathan Mrs. Feruza Begum Mrs. Khaleda Parvin Mr. Masum Pathan Keya Knit Composite Limited Khaleque & Co. (Pvt.) Ltd. Keya Cotton Mills Ltd. Keya Yarn Mills Ltd. Keya Sweaters Ltd. General Public

700,000,000 611,524,740 Taka 110,702,960 2,234,070 4,154,790 3,928,560 76,567,110 458,490 1,000,000 6,751,090 514,160 405,213,510

611,524,740 61,152,474 Total At the date of amalgamation, Keya Cosmetics Limited has been issued and subscribed 2,88,00,000 fully paid shares @ Tk 10/- each, in which Keya Detergent Limited holds 54,000 shares which was forfeited according to Clause 14(b) of Scheme of amalgamation. That is why, the total number of share stands at 2,87,46,000 shares. At the same date, Keya Detergent Limited has been issued and subscribed 1,78,59,600 fully paid ordinary shares @ Tk 10/- each, in which Keya Cosmetics Limited holds 3,95,000 shares which was cancelled and did not made allotment. According to Clause 14(a) of Scheme of amalgamation, the exchange ratio between Keya Cosmetics Limited and Keya Detergent Limited is 1:1.16694. So total shares of Keya Cosmetics Limited has been issued to the existing shareholders of Keya Detergent Limted stands at 1,49,66,151. At the san,L uate, Keya Soap Chemicals Limited has been issued and subscribed 3,10,00,000 fully paid ordinary shares @Tk 10/- each, According to scheme of amalgamation, the exchange ratio between Keya Cosmetics Limited and Keya Soap Chemicals Limited is 1:1.77749. So totalshares of Keya Cosmetics Limited has been issued to the existing shareholders of Keya Soap Chemicals Limted stands at 1,74,40,323. As per above details,the total number of shares of Keya Cosmetics Limited comes to 6,11,52,474.

Cosmetics Ltd.



Annual Report 2010-11 b. Distribution Schedule - Disclosures under the Listing Regulations of Dhaka and Chittagong Stock Exchange Ltd.:

2010-2011 Holdings of Shares

C.



2009-2010

No. of holders Number of Shares Holding %

Less then 500 500 to 5,000 5,001 to 10,000 10,001 to 20,000 20,001 to 30,000 30,001 to 40,000 40,001 to 50,000 50,001 to 100,000 100,001 to 1,000,000 Over 1,000,000 Total Market price per share Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd.

6,531 4,727 383 268 76 41 28 42 48 6 12,150 1

1552,170 8,256,275 2,666,590 3,618,018 1,845,330 1,459,981 1,345,265 2,894,670 14,096,883 23,417,292 61,152,474

2.54% 13.50% 4.36% 5.92% 3.02% 2.39% 2.20% 4.73% 23.05% 38.29% 100.00%

Number of Shares 1,056008 5,531,620 2,276,829 2,232,861 1,080,100 841,100 553,600 2,790,200 6,903,950 5,533,732 28,800,000

1

Taka 87.00 86.70

d. There was no foreign shareholding of the company as on 30.06.2011. 12.0 SHARE 13.0 RETAINED EARNINGS Opening Balance Surplus during the Year Dividend Declared 14.0 LIABILITIES TO BANK (LONG TERM LOAN)

$

24,000,000

1!! 850,034,683 667,714,960 268,379,323 (86,059,600) 72,769,228

Dhaka Bank Ltd., Foreign Exchange Branch, A/C 1318

34,502,430

Dhaka Bank Ltd., Foreign Exchange Branch, A/C 052760001 Bank Asia Ltd., A/C No. 00835001111 One Bank Ltd., A/C No. 18376024 Standard Bank Ltd. Guishan A/C 01 0935003959

11,723,328 12,083,847 7,395,057 7,064,565

The above long term loan are secured by ed mortgage of the factory land and land development and building and other civil works and 15.0 BANK LOAN & OVERDRAFTS CC Loans CC(P)556 Sonali Bank, BBA Avenue Branch CC Hypo CC(H)548 Sonali Bank, BBA Avenue Branch CC Hypo CC(H) A/c- 000-523-00, Premier Bank, Banani LTR -Premier Bank LTR- Standard Bank Prime Bank Ltd., A/C 72901 328 Prime Bank Ltd., Dilkusha Branch, LTR Dhaka Bank Ltd., Foreign Exchange Branch-LTR Dhaka Bank Ltd., CC A/C 203-175-259 One Bank Ltd., Principal Branch-LTR LTR - Bank Asia Ltd.

949,778,473 123,995,764 41,131,202 50,989,701 59,583,677 81,227,025 27,547,539 9,987,432 144,663,829 55,509,875 185,329,919 169,812,509

Comotie Ltd.



Annual Report 2010-11 Auditors observation :The above loan balances were certified by the bankers concerned.

160

The excess utilization was due to charge of interest as on 30.06.2011 which has since been adjusted. The rate of interest of above short term loans are varied from 15% to 16%. , 96,336,816 SUNDRY CREDITORS 2,272,542 92,769,590 1,006,285 288,399

Creditors for ment Creditors for Materials Creditors for Transport Expenses Creditors for Others Auditors observation: These are unsecured and falling due within one year and considered good for payment. 17.0

OUTSTANDING LIABILITIES Wages & Salary Gas Bill AGM Expenses Audit Fees Tax deducted at source: From Salary

18.0

12,287,052 3,853,081 2,880,078 4,621,165 100,000 832,728

PROVISION FOR INCOME TAX

166,106,484

Opening Balance Provision this year on Operating Income Provision this year on Non Operating Income Adjustment

135,183,974 82,652,279 3,878,938 (55,608,707)

Provision of income tax has been calculated under the Income Tax Rules applicable for the assessment Year 2010-2011 19.0

20.0

1.0

L

UNCLAIMED DIVIDEND

4,132,591

Opening balance Proposed for the last year Paid during the year

6,038,819 86,059,600 (87,965,828)

WORKERS' PROFIT PARTICIPATION FUND

17,745,527

Opening Balance Add: During the year Add: Interest Paid during the year

4,759,951 17,745,527 (4,759,951) 2,817,514,128

TURNOVER Sales (Local) Cosmetics Detergent Soap Chemicals Sales (Export) Cosmetics Detergent Wastage/scraps sale Foreign exchange earn this period from Export

C --rnetie g lid.

1,130,984,627 455,729,5 16 1,057,248,233 173,551,752

$2,479,310.74



Annual Report 2010-11

22.0 COST OF GOODS SOLD Raw, Packing and Spare Parts Consumed: Manufacturing Overhead Add :Opening Work In Progress Less: Closing Work in Progress Cost of Goods Manufacture Add: Opening Finished Stock Less: Closing Finished Stock COST OF GOODS SOLD 22.1

22.2

1,808,850,555 22.1 22.2

Raw, Packing and Spare Parts Consumed:

1,658,605,105

Opening Stock Local Purchase Import Purchase Goods available for use Less: Closing Stock

192,330,065 1,188,852,304 588,078,518 1,969,260,887 310,655,782 1,658,605,105

Manufacturing Overhead

146,474,633

Fuel oil & Lubricant Salary and Wages Repairs & Maintenance Utility Charges-Gas Labour Charges & Overtime Carriage Inward Tool Charges Depreciation (as per schedule) 23.0

1,658,605,105 146,474,633 318,068,986 (359,744,378) 1,763,404,346 85,1 31,752 (39,685,543) 1,808,850,555

3,278,179 48,794,202 2,322,473 23,752,890 657,364 508,310 186,145 66,975,070

SELLING & ISTRATIVE OVERHEAD: Salary & Allowances Director's Remuneration ment AGM Expenses Audit, Legal & Professional Charges Marketing Meeting Expenses Carriage Outward Conveyance Defered Expenses written off Depreciation as per schedule Entertainment Fees & Forms Repairs & Maintenance Electricity Medical Expenses

117,475,818 23.1

15,276,280 4,433,182 55,144,380 4,526,457 485,500 338,393 734,168 206,005 19,657,234 9,241,502 313,846 518,766 380,101 64,719 271,254

91;9yc1 Con—metier. Ltd. 51

Annual Report 2010-11

29,642 76,576 672,404 174,507 88,393

Misc Expenses Postage & Courier Rent, Rates and Taxes Sample Expenses Printing & Stationery

2,732,607 254,062 1,855,840

TA/DA Telephone! Fax / Email Expenses Merger Expenses



Fl

Directors Remuneration

23.1

Abdul Khaleque Pathan - Managing Director Feruza Begum - Chairman Khaleda Parvin - Director Masum Pathan - Director

4,433,182

24.0



130,197,999

FINANCIAL EXPENSES Bank charge Interest on Bank Loan Rental's on Leases

24.1

1,248,182 3,1 85,000

4,656,954 125,320,012 221,034



24.1 24.2



U

Interest on Bank Loan

125,320,012 34,793,316 18,210,804 72,3 1 5,892

Interest-CC (Hypo & Pledge) Interest on bank (Term loan) Interest on LIM, LTR & PAD 24.2

221,034

Lease Rental paid during the year

85,472 135,562

Prime Finance & Invest. Ltd. International Leasing Co. Ltd. 25.0

pq

NON OPERATING INCOME

4.39

BASIC EARNING PER SHARE (EPS) IAS-33

Conitic lid.

19,394,691 2,000,000 1,166,666 81,000 395,000 15,752,025

Dividend from Prefe. Share of KSML for the year 2010 Dividend from Prefe. Share of KSML for the year 2011 Dividend Income from KCL Dividend Income from KDL Dividend Income from KCML

Earning attributable to the shareholders (Net Profit after Tax) Weighted average number of shares outstanding during the year



26.1



268,379,323 61,152,474



Annual Report 2010-11

26.1

WEIGHTED AVERAGE NUMBER OF ORDINERY SHARE The computation of above is given below: Period

No. ofshare

01.07.2010 to 30.06.2011 Total 27.0

I

61,152,474

No. of weighted average share

Weight 365 da

61,152,474 61,152,474

NET ASSETS VALUE PER SHARE

25.04

Net Worth of the Company Number of Shares 28.0

29.0

30.0

31.0

1,531,304,154 61,152,474

NET OPERATING CASH FLOW PER SHARE Net Operating Cash Flow Number of Shares

2.50 152,756,695 61,152,474

REMUNERATION TO OFFICERS: a)Aggregate amount and break-up thereof of remuneration paid to officers under para 4(1) of part (ii) of the Securities & Exchange Rules b) Aggregate amount c) Break-up Basic remuneration House rent allowance Conveyance allowance RELATED PARTY TRANSACTION (lAS -24)

35,238,765 26,909,602 1,922,114 596,808,100

Investment in Share Share Money Deposit

151,808,100 445,000,000

64,070,482

FINANCIAL INSTRUMENTS AND RELATED DISCLOSER lAS 32 Interest Bearing

Financial Assets Investment in share Trade Debtors Cash & Cash Equivalents Financial Liabilities Bank Loan & Overdrafts Sundry Creditors Outstanding Liabilities Net Financial Assets/(Liabilities)

Maturity within one year 389,943,039 380,378,450 9,564,589 1,058,402,340 949,778,473 96,336,816 12,287,052 (668,459,301)

Maturity more than one year 151,808,100 151,808,100 72,769,228 72,769,228 79,038,872

9cey Corrutic g ltd. 53



Annual Report 2010-11

32.0

33.0

34.0

35.0

36.0

37.0

39.0 a. a(i)



Capital Expenditure Commitment There was no contingent liabilities as on 30.06.2011 except L/C liabilities. There was no credit facility available to the company under any contract, other than trade credit available in the ordinary course of business and not availed of as on 30.06.2011. Payment of Foreign Currency Import of Machinery & spare parts of the machinery. Import of Raw Materials. No other expense included consultancy fee, royalty, technical expert and professional advisory fee, interest, etc. was incurred or paid in foreign currencies except as stated above. Foreign Exchange Earned Exported in USD. No other income included consultancy fee, royalty, technical expert and professional advisory fee, interest, etc. was incurred or paid in foreign currencies except as stated above. Commission, Brokerage or Discount against sales No commission was incurred or paid to distributors, agents nor any brokerage or discount was incurred or paid against sales. Credit Facility Not Availed There was no credit facility available to the company under any contract, but not availed as on 30th June 2011 other than trade credit available in the ordinary course of business. Segment Reporting As there is single business and geographic segment within the company operates as such no segment reporting is felt necessary. Attandance Status of Board Meeting of Directors During the period from 01.07.2010 to 30.06.2011 there were 18 (Eighteen) Board Meetings were held. The attandance status of all the meetings is as follows:

For Board Meeting, attendance fees were not paid to the Directors of the Company. Disclosure as per requirement of Schedule XI, Part II of the Company Act. 1984 Disclosure as per requirement of Schedule XI, Part II, Note 5 of Para 3 Employee Position for Keya Cosmetics Mills Limited (As at 30th June 2011) Total Employee Worker Officer & Staff Salary Range (Monthly) Factory Head Office 2.00 - 2.00 Below Tk. 3,000/- - 537.00 405.00 83.00 49.00 Above Tk. 3,000/- 539.00 407.00 83.00 Total 49,00 Disclosure Lis per reqtlir(rnerlt of schedule X1, Pdri II, Prd

,yaCo—smeties:Ltd.

Annual Report 2010-11

b(i)

Period of payment to Directors is from 1st July 2010 to 30th June 2011.

b(ii)

The above Directors of the company did not take any benefit from the company other than the remuneration and festival bonus. a.Expense reimbursed to the managing agent -Nil b. Commission or other remuneration payable separately to a managing agent or his associate -Nil c.Commission received or receivable by the managing agent or his associate as selling or buying agent of other concerns in respect of contracts entered into such concerns with the company - Nil. d.The money value of the contracts for the sale or purchase of goods and materials or supply of services, entered into by the company with the managing agent or his associate during the financial year. e.Any other perquisites or benefit in cash or in kind stating - Nil f. Other allowances and commission including guarntee commission - Nil. g. Pensions, etc.1)Pensions -Nil 2)Gratuities - Nil 3)Payment from Provident Fund - Nil 4)Compensation for loss of office - Nil 5)Consideration in connection with retirement from office - Nil.

C.

Disclosure as per requirement of Schedule XI, Part II, Para 7 Details of production capacity utilization Particulars Annual Production Capacity

d

I

Licence Capacity

Installed Capacity in MT

Actual Production in MT from 1st July 2010 to 30th June 2011

Not mentioned in the Licence

33,600.00

27,235.40

CapacityUtilization from 1st July 2010 to 30th June 2011 81.06

Disclosure as per requirement of Schedule Xl, Part II, Para 8 i) Raw Materials, Spare Parts, Packing Materials and Capital Items Import Raw Materials Spare Parts Packing Materials Total

588,078,518 - - 588,078,518

Purchase in Taka Local ] 804,050,998 39,876,510 20,168,515 864,096,023

Total 1,392,129,516 39,876,510 20,168,515 1,452,174,541

Consumption in Taka 1,612,247,052 29,684,561 16,673,492 1,658,605,105

% of Consumption of total purchase 115.81 74.44 82.67

The value of imported raw materials is calculated on CIF basis. ii)The Company has not incurred any expenditure in foreign currency for the period from 1st July 2010 to 30th June 2011 on of royalty, know-how, professional fee, consultancy iii) Foreign exchange earning USD 2479310.74 equivalent of BDT 173,551, 752/- in respect of export has been calculated on FOB basis. iv)The Company has not earned any foreign exchanges for royalty, know-how, professional fees and consultancy fees. v)The value of export from the period from 1st July 2010 to 30th June 2011.

Co--meties Ltd.



Annual Report 2010-11

e.

Disclosure as per requirement of Schedule XI, Part II, Para 3' Compliance status of Disclosure of Schedule XI, Part II, Para 3 Requirements under condition Complied 3 (i)(a) The turnover Not Applicable 3 (i)(b) Commission paid to selling Not Applicable Brokerage and discount of 3 (0(c) Complied 3 (i)(d)(i) The value of the raw Complied 3 (i) (d)(ii) The opening and closing Not Applicable 3 (D(e)ln the case of trading Not Applicable 3(i)(f)ln the case ofCompanies Not Applicable 3 (i)(g) Opening and closing stocks, Not Applicable 3 (i)(h) In the case of other Complied 3 (i)(i) Work-in-progress, which hay Complied 3 (i)(j) Provision for depreciation, Not Applicable 3 (i)(k) Interest on the debenture Complied 3 (i)(l) Charge for income tax and 3 (i)(m) Reserved for repayment of Not Applicable share capital and repayment of loans Not Applicable 3 (i)(n)(i) Amount set aside or Not Applicable 3 (i)(n)(ii) Amount withdrawn from Not Applicable 3 (i)(o)(i) Amount set aside to Not Applicable 3 (i)(o)(ii) Amount withdrawn from 3 (H( p ) Expenditure incurred on each separately for each item: (i)

Complied

(H) Power and Fuel (Hi) Rent (iv) Machinery (vi)(1) Salaries, wages 40.0

41.0 42.0

43.0

4

Subsequent Disclosure of Events after the Balance Sheet Date - Under lAS 10 There is no non-adjusting post balance sheet event of such importance, non disclosure of which would affect the ability to the s of the financial statements to proper evaluation and decision. Details of Lease Agreement: There is no lease assets. So no lease agreement was required or signed. Disclosure as per requirement of schedule XI, Part - I (A. Horizontal Form) of Companies Act. 1994 s Receivable F In regard to sundry debtors the following particulars shall be given separately:(I) Debt considered good in respect of which the company is fully secured: The debtores occurred in the ordinary course of business are considered good and secured. (II) Debt considered good for which the company hold no security other than the debtors personal security There is no such debt in this respect as on 30 June 2011. (Ill) Debt considered doubtful or bad The company does not make any provision for doubtful debts as on 30 June2011, because of the fact that sales/export are being made on regular basis with fixed maturity dates. (IV) Debt due by directors or other officers of the company There is no such debt in this respect as on 30 June 2011.

Cometic lid.



Annual Report 2010-11

44.0 45.0

I 46.0 47.0

48.0

49.0

rj

50.0

(V)Debt due by Common Management There are no amount due form sister company under common management as on 30 June 2011. (VI)The maximum amount due by directors or other officers of the company There is no such debt in this respect as on 30 June2011. Approval of the financial statements: These financial statements were authorized for issue in accordance with a resolution of the company's Board of Directors on 21st August 2011. General a. Comparative amounts Wherever considered necessary previous year's figures have been restated, in order to conform to current year's presentation. b.Presentation currency The annexed financial statements are presented in Bangladeshi currency (Taka), which have been rounded off to the nearest Taka. Events after the Balance Sheet date: Proposed Dividend In the board metting held on 21 August 2011, the management proposed to declare 21% stock dividend for the year 2010-11 subject to the appoval by the share holders in AGM. Internal Control The following steps have been taken for implementation of an effective internal control procedure of the Company: A strong internal control and compliance division has been formed with a view to establish a well desgnated system of internal control. Regular review of internal audit reports with view to implement the suggestion of internal auditors in respect if internal control To establish an effective management system that includes planning, organizing and supervising culture in the factory as well as at Head Contingent Liability There is no contingent liability. General Comments and Observations Previous period's figure have been regrouped/reclassified whereever considered necessary to confirmed to current period's presentation. All shares have been fully called and paid up. Auditor's are paid only statutory audit fees. No foreign exchange remitted to the relevant shareholders during the period under audit. No amount of money was expended by the company fo rcompensating any of the Board for special service rendered. There was no bank guarantee issued by the company on behalf of Directors.

Abdul Khaleque Pathan Chairman

9

Khaleda Pervin Managing Director

Syed Noorul Alam Company Secretary

9çeya.

Cometics lid.

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Annual Report 2010-11

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Z te ya Cosmeties ltd. 0

Proxy Form

I/We

of ..............................................................................being a member of Keya Cosmetics Limited

herebyappoint Mr./Ms...........................................................................................................................................................................

I

.................................................................................................................................................................of ...................................................................................................................................asmy/ourproxy to attend and vote for me/us on my/our behalf at the 15th Annual General Meeting of the Company to be held on 30th September, 2011 at 11.00 am. at the Factory Premises of the Keya Knit Composite Limited of Jarun, Konabari, Gazipur and at any adjournment thereof. As witness me/our hand this

day of September, 2011

'

r

Signature of Proxy________________________________________________ Signature BO ID/Folio No.

I

of

Member. __

L

9çeya. Cosmetic ltd. Attendance Slip I/We hereby record my presence at the 15th Annual General Meeting of Keya Cosmetics Limited on Friday, 30th September, 2011 at 11.00 a.m. at the Factory Premises of the Keya Knit Composite Ltd. of Jarun, Konabari, Gazipur.

Nameof the Shareholder ...........................................................................................Signature................................................. Numberof Shares ....................................................................................BO ID/Folio No.............................................................

Nameof the Proxy ................................................................................................Signature......................................................... N.B. The member attending the meeting is kindly requested to mention the ed name and Folio/BO ID

number on this slip and present the same at the registration counter on the day of the meeting.

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