Directors’ Report

Bangladesh Lamps Limited

Directors’ Report 2015

 

Dear Shareholders,

Assalamu Alaikum. On behalf of the Board of Directors and myself, I am pleased to welcome you to the 55th Annual General Meeting of Bangladesh Lamps Limited and present before you the Annual Report and Financial Statements of the Company for the year ended 31st December 2015.
Business

The performance of the Company in terms of profitability and growth has marked satisfactory improvement during the year 2015. The net sales of the Company registered a growth of 7.46% to Taka 1,262.86 million in 2015 from Taka 1,175.15 million in 2014. The net profit after tax has increased by 55.18% to Taka 30.86 million in 2015 from Taka 19.89 million in 2014 despite country wide shutdowns during the first four months of 2015.

We have consolidated our business position in 2015. Alongside, we are continuously working to bring about more efficiency in the supply chain and human resource management of the Company. We are also in the process of reorganizing our sales operation to expand the reach of our products to the remotest parts of the country. Such activities are ongoing and will be further strengthened and more business opportunities will be explored as part of our effort to improve and expand the business of the Company for sustainable long term growth and profitability.

We are also constantly working to support the energy saving initiatives of the country. In addition to increasing the production of energy efficient Compact Florescent Lamps (CFL), we have enriched our product portfolio by introducing Light-emitting Diode (LED) bulbs and LED tube lights in the market.

Some of the performance highlights of the company for the year 2015 are as follows:

Increase in Net Sales7.46%
Increase in Net Profit after tax55.18%
Reduction in Net Finance Expenses32.49%

Dividend
Keeping in view the performance of the Company in the year 2015, the Board of Directors is pleased to recommend cash dividend of Taka 2.00 per share of Taka 10.00 each (i.e. 20%) for the year 2015.

The appropriation of profit is shown below:

(Taka)
Profit for the year30,858,552
Add: Un-appropriated profit brought forward
____________
Total Divisible profit30,858,552
Proposed appropriations ———————-
Proposed dividend @ Taka 2.00 per share on
9,370,608 ordinary shares of Taka.10.00 each 18,741,216
Transfer to General Reserve12,117,336
———————–
 Total appropriation30,858,552
———————–

Shareholders & share value

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Total number of shareholders of the Company at 31st December 2015 was 2,537 as against 3,780 in the previous year. The price index of shares on that date stood at Taka 260.40 per share at the Dhaka Stock Exchange and Taka 255.10 per share at the Chittagong Stock Exchange.
Board Matters
The Board of Directors of Bangladesh Lamps Limited comprises of 12 (twelve) members including three Independent Directors. Mrs. Shahnaz Rahman is the Chairman of the Company. Mr. Latifur Rahman is the Managing Director and Chief Executive Officer (CEO) of the Company. To enable the Board to function effectively and allow Directors to discharge their responsibilities efficiently, full and timely information is made available to them by the professional managers of each of the business segments. The Board of Directors met 5(five) times during the year under review. The attendance record of the Directors is as follows:

Name of DirectorsTotal MeetingsAttended
Mrs. Shahnaz Rahman55
Mr. Latifur Rahman55
Mr. Saifur Rahman55
Mr. Atiqur Rahman55
Mr. Shamsur Rahman54
Mr. Obaidur Rahman Khan55
Mr. Arshad Waliur Rahman54
Mrs. Simeen Hossain55
Mrs. Shahzreh Huq55
Mr. Ahmed Shafi Choudhury (Independent Director)55
Mrs. Rokia Afzal Rahman (Independent Director)54
Mr. Anis-uz-Zaman Khan (Independent Director)55

Audit Committee
The Audit Committee comprises of four Directors. The Committee is headed by the Independent Director, Mr. Ahmed Shafi Choudhury. The objective of Audit Committee is to ensure and improve the proper and adequate internal control to facilitate the smooth functioning of the Company’s operations and assist the Board in discharging its responsibilities. The Audit committee also reviews the interim and annual financial statements before submission to the Board.

Corporate Reporting
The Board of Directors is pleased to inform the following as required by the Bangladesh Securities and Exchange Commission:

  • The growth in the lighting industry which encompasses the Electric Bulbs (GLS), Compact Fluorescent Light (CFL), LED bulbs, Fluorescent Tube Light (FTL) and its accessories like Ballast, Luminiare, Industrial Shades etc. was moderate during 2015. The CFL segment, however, has grown significantly because of its energy saving benefit and longer life.
  • Segment-wise or product-wise performance :

The segment wise business performance of the Company during the year is shown below:

Particulars
 GLS
CFL
FTL
Starter
Ballast
Luminaire
LED
Total
Net Sales (Tk.’million)
 355.62
778.88
99.63
8.75
6.40
0.02
13.56
1,262.86
Profit/
(loss) before WPPF &Tax (Tk. ’million)
 (25.50)
58.54
(19.28)
1.69
0.69
(0.001)
4.71
20.84
Other income (Tk. ’million)
23.08
Contribution to WPPF (Tk. ’million)
2.09
Net Profit before Income Tax (Tk. ’million)
41.83
  • The Company is aware of the different risks associated with doing business and is prepared to manage those risks through a professional approach. The financial and other risks have been disclosed in the notes 33 and 38 to the financial statements respectively.
  • During the year 2015, the net sales of the Company registered a growth of 7.46% and the net profit after tax has also increased by 55.18% over 2014. The financials are shown in the following table:
Particulars             Taka in Million
 2015  2014
Net Sales Revenue1,262.861,175.15
Cost of goods sold(963.56)(896.91)
Gross profit299.30278.24
Other income23.0819.90
Operating expenses(271.99)(257.93)
Profit from operation50.3840.21
Net finance expense(6.46)(9.57)
Profit/(loss) before contribution to WPPF43.9230.64
Contribution to WPPF(2.09)(1.46)
Profit/(loss) before income tax41.8329.18
  • No extra-ordinary gain or loss has been recognized in the financial statement.
  • All transactions with related parties have been made on commercial basis. Details of related party transactions have been disclosed under Note No. 34 of the Financial Statements.
  • No significant variance occurred between Quarterly Financial performance and Annual Financial Statements.
  • The Board of Directors including Independent Directors received fees for attending Board Meeting only in accordance with the Articles of Association of the Company. The remuneration of Tk.300,000 was paid to the Managing Director of the Company during the year.
  • The Financial Statements together with the notes thereon have been drawn up in conformity with the Companies Act 1994 and Securities and Exchange Rules 1987. These statements present fairly the Company’s state of affairs and the results of its operations, cash flow, and changes in equity.
  • Proper books of accounts of the Company have been maintained.
  • Appropriate Accounting Policies have been consistently applied in the preparation of Financial Statements and the accounting estimates are based on reasonable and prudent judgment.
  • International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.
  • The systems of internal control are sound and have been effectively implemented and monitored.
  • There are no significant doubts upon the Company’s ability to continue as a going concern.
  • All significant variations in operating results from the previous year have been highlighted and reasons thereof have been explained.
  • The CEO and CFO have certified to the Board that they have reviewed the Financial Statements and believe that these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.
  • The CEO and CFO have certified to the Board that they have reviewed the Financial Statements and believe that these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws.
  • The CEO and CFO have further certified to the Board that there are, to the best of their knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company’s codes of conduct.
  • The key operating and financial data for the last ten years is enclosed.
  • The pattern of shareholding (name wise) is also enclosed.

Corporate governance compliance Report

In accordance with the requirement of Bangladesh Securities Exchanges Commission, Corporate Governance Compliance Report is enclosed.

Directors
In terms of article 113 of the Articles of Association of the Company, Transcom Limited is entitled to appoint one-third of the total number of Directors who shall not retire by rotation. Accordingly, Mr. Latifur Rahman and Mrs. Shahnaz Rahman who were appointed by Transcom Limited as Directors of the Company will not retire by rotation.

Out of the other Directors, Mr. Shamsur Rahman, Mr. Obaidur Rahman Khan, Mr. Arshad Waliur Rahman and Mrs. Simeen Hossain will retire by rotation in accordance with article 124 of the Articles of Association of the Company, and being eligible, offer themselves for re-election.

Mr. Ahmed Shafi Choudhury and Mrs. Rokia Afzal Rahman have been re-appointed as Independent Directors by the Board of Directors of the Company for a period of three years in accordance with the Corporate Governance Guideline of Bangladesh Securities & Exchange Commission dated 7th August 2012. The appointment of the Independent Directors will be approved at the 55th Annual General Meeting of the Company.

Auditors

The Company appointed Messrs. Basu Banerjee Nath & Co., Chartered Accountants, as the statutory auditors of the Company for the year 2015 in the 54th Annual General Meeting held on 5th May 2015. Subsequently, the Bangladesh Securities and Exchange Commission prepared a panel of audit firms eligible for appointment as the statutory auditors of all the listed companies effective from 1st August 2015 (No. SEC/CMRRCD/2009-193/174/Admin/61 dated July 08, 2015). Messrs. Basu Banerjee Nath & Co., Chartered Accountants was not in the panel of auditors.

In view of the above, Messrs. Basu Banerjee Nath & Co., Chartered Accountants, expressed their unwillingness to act as the statutory auditors of the Company for the year 2015, which created a casual vacancy in the office of the statutory auditors of the Company. Accordingly, the Board of Directors of the Company appointed Messrs. Nurul Faruk Hasan & Co., Chartered Accountants, as the auditors of the Company to fill up the casual vacancy in the office of the statutory auditors for the year 2015, as per provisions of the Act.

The existing auditors of the Company Messrs. Nurul Faruk Hasan & Co., Chartered Accountants, will retire at this meeting. They are, however, eligible for re-appointment and have indicated their willingness to be re-appointed as the statutory auditors for the year 2016.

Acknowledgement
On behalf of the Board of Directors and myself, I would like to thank our shareholders, employees of the Company, our business partners including distributors, customers, banks, financial institutions, government agencies, and our suppliers for their continuous support and co-operation extended to the Company. We expect that this commitment will persist in future as well, so that the Company can attain greater success.

On behalf of the Board

Dated, Dhaka                                                                                 ����������                      Shahnaz Rahman
March 08, 2016                                                                            ��                                 Chairman