Bangladesh Lamps Limited
Directors’ Report for the year ended on 30 June 2023
Dear Shareholders,
Assalamu Alaikum. On behalf of the Board of Directors and myself, I am pleased to welcome you to the 62nd Annual General Meeting of Bangladesh Lamps Limited and present before you the Annual Report and Audited Financial Statements of the Company for the year ended 30 June 2023.
Business Performance
I would like to express our gratitude to all our valued shareholders for your continued confidence on the Board of Directors of Bangladesh Lamps Limited to deliver consistent sales growth year on year. This year we have almost 11% growth in Sales Revenue despite of the Company confronted lot of challenges throughout the year. Following are the major challenges we have faced this year:
- In first half of the fiscal year, raw material cost of the Company increased significantly due to massive devaluation of BDT against US dollar. Therefore, the Company had to pay excess material cost which was not possible to recover through increasing sales price. On November 2022, when the Company was trying to recover those challenges by reducing raw materials procuring cost, the Govt. imposed duties on lighting parts of the LED bulbs by withdrawing SRO-119 benefits. Therefore, all companies across the industry had to pay custom duties from 10% to 98% on different lighting parts. These two reasons combinedly affected the Gross Profit margin. Therefore, the Company’s gross profit percentage sharply fallen by 3.3% as compared to the last year;
- Moreover, Finance Cost increased due to the borrowing rates of offshore banking has become more than double from last year. So, the Company’s finance cost increased by 115% against the last year;
- Operating cost increased significantly due to expansion of network, travelling and distribution cost.
As a result, despite of increase in sales revenue, the Company could not able to increase profit in this year as expected. However, the Company has invested on certain capital machineries to produce the parts of LED bulbs in its manufacturing plant to get duty benefits which ultimately will increase profitability. Also, the Company has taken some initiatives to optimize its operating cost. We expect these initiatives will help to increase the Company’s overall margin in the next financial year.
Dividend
Keeping in view of the performance of the Company, the Board of Directors is pleased to recommend a cash dividend of Taka 1.00 per share of Taka 10.00 each (i.e., 10%) for the year 2022-2023.
The appropriation of profit is shown below:
| (Taka) | |
| Profit for the year ended 30 June 2023 | 10,990,476 |
| Total Divisible Profit | 10,990,476 |
Proposed appropriations:
| Proposed dividend @ Tk. 1.00 per share on 10,026,550 ordinary shares of Tk. 10.00 each | 10,026,550 |
| Transfer to General Reserve | 963,926 |
| Total appropriation | 10,990,476 |
Shareholders & share value
The total number of shareholders of the Company on 30th June 2023 was 5,641 as against 4,578 in the last year. The price index of shares on that date stood at Taka 252.20 per share at the Dhaka Stock Exchange and Taka 256.70 per share at the Chittagong Stock Exchange.
Board Matters
The Board of Directors of Bangladesh Lamps Limited comprises of 08 (eight) members including 02 (two) Independent Directors. Ms. Shahnaz Rahman is the Chairperson of the Board of Directors of the Company. Ms. Simeen Rahman is the Managing Director & 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 professionals of each key functional area. The Board of Directors met 07 (seven) times during the period under review.
We express our deep sense of grief and profound sorrow at the sad demise of Mr. Arshad Waliur Rahman, Director of the Company, who passed away on 16th June 2023, and Ms. Rokia Afzal Rahman, Independent Director of the Company, who passed away on 5th April 2023. During their long association with the Company, they made enormous contributions to the Company. Their extraordinary contribution to establishing Bangladesh Lamps Limited as the leading lighting manufacturing Company in Bangladesh will always be remembered.
Consequent to the demise of Ms. Rokia Afzal Rahman, Independent Director of the Company, the Board of Directors appointed Mr. Mohammad Zahid Hossain FCA, ACA (ICAEW), ACMA, CGMA, CPA (Aust.) as Independent Director of the Company, in compliance with the provision of the Corporate Governance Code issued by the Bangladesh Securities and Exchange Commission and upon recommendation by the Nomination & Remuneration Committee (NRC) of the Company.
It is to be mentioned that the Bangladesh Securities and Exchange Commission (BSEC) has accorded its consent vide their letter No. BSEC/CA/CG/2023/26/Part-01/16 dated 30 July 2023 to the appointment of Mr. Mohammad Zahid Hossain FCA, ACA (ICAEW), ACMA, CGMA, CPA (Aust.) as Independent Director in the Board of Directors of the Company. However, the said appointment will be placed before the Shareholders for their kind approval at the 62nd annual general meeting of the Company.
The attendance record of the Directors in the Board meetings is as follows:
| Name of Directors | Meetings held | Entitled to attend | Attended |
| Ms. Shahnaz Rahman | 7 | 7 | 7 |
| Ms. Simeen Rahman | 7 | 7 | 7 |
| Mr. Arshad Waliur Rahman (Passed away on 16th June 2023) | 7 | 7 | 4 |
| Ms. Shahzreh Huq | 7 | 7 | 7 |
| Mr. Saifur Rahman | 7 | 7 | 5 |
| Mr. Atiqur Rahman | 7 | 7 | 7 |
| Mr. Shamsur Rahman | 7 | 7 | 7 |
| Ms. Rokia Afzal Rahman (Independent Director) (Passed away on 5th April 2023) | 7 | 7 | 4 |
| Mr. Md. Habibur Rahman Mollah, FCA (Independent Director) | 7 | 7 | 6 |
| Mr. Mohammad Zahid Hossain, FCA (Independent Director) (Appointed on 13th June 2023) | – | – | – |
Audit Committee
The Audit Committee comprises 03 (three) Directors. The Committee is headed by the Independent Director, Mr. Md. Habibur Rahman Mollah, FCA. The objective of the Audit Committee is to ensure adequate and effective 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.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee (NRC) comprises 03 (three) Directors. The Committee is headed by the Independent Director Mr. Md. Habibur Rahman Mollah, FCA. The NRC assists the Board in formulating policy for the formal and continued process of considering the remuneration/ honorarium of Directors and top-level executives. The NRC has a guiding role to the management to identify the Company’s needs for employees at different levels and determine their selection, transfer or replacement and promotion criteria.
Corporate Reporting
The Board of Directors is pleased to inform the following as required by the Bangladesh Securities and Exchange Commission (BSEC):
Industry outlook and possible future development:
The business trend and growth in the lighting industry were moderate during the year ended 30 June 2023. The LED (Light Emitting Diode) segment has grown significantly because of the energy-saving benefit and longer life and we anticipate the next lighting solution will come with LED. However, we have faced huge challenges during the year 2022-2023, particularly with non-warranty products made with low-quality chips.
Segment-wise or product-wise performance:
The segment-wise net sales performance of the Company during the year 2022-2023 is shown below:
(Taka in Million)
| Year | Energy saving LED Bulbs | Energy saving LED Tube Lights | Electric Bulbs | Electrical accessories | Total |
| 2022-2023 | 1,184.51 | 435.22 | 97.99 | 86.97 | 1,804.69 |
| 2021-2022 | 1,083.82 | 416.45 | 122.73 | 4.40 | 1,627.40 |
Risks and concerns including internal & external risks factors:
Internal risk factors
The Company is fully aware of the 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 Note 40 of the Audited Financial Statements.
External risk factors
The Company’s results may be affected by factors outside its control such as pandemic situations, political unrest, strikes, civil commotion and act of terrorism.
In line with global practice, the government initiates change in environmental, health, and safety laws and regulations and energy-saving activities from time to time. The Company keeps track of these changes and pay special attention and proactive business strategy are being formulated to ensure conformity with the changes.
While many of the risk areas are beyond the control of any single Company, Bangladesh Lamps Limited closely monitors the trends and developments in each of the risk areas and takes the best possible measures to mitigate them through product and market diversification, efficient sourcing of materials, use of latest technology and investment in research and development to gain sustained competitive advantage.
Cost of Goods Sold, Gross Profit Margin & Net Profit Margin :
During the year ended 30 June 2023, the net sales of the Company were Taka 1,804.69 million and the net profit after tax was Taka 10.99 million. The comparative financials of the Company are shown in the following table:
Taka in Million
| Taka in Million | ||
| Particulars | For the year ended 30 June 2023 |
For the year ended 30 June 2022 |
| Revenue | 1,804.69 | 1,627.40 |
| Cost of sales | (1,422.54) | (1,229.09) |
| Gross profit | 382.15 | 398.31 |
| Other income | 23.24 | 22.93 |
| Operating expenses | (322.56) | (275.09) |
| Profit before net finance cost | 82.83 | 146.16 |
| Net finance cost | (55.76) | (22.07) |
| Profit before contribution to workers participation fund & welfare fund | 27.07 | 124.08 |
| Contribution to workers participation fund & welfare fund | (1.29) | (5.91) |
| Profit before income tax | 25.78 | 118.17 |
| Income tax expenses | (14.79) | (35.91) |
| Net Profit after tax | 10.99 | 82.27 |
Extra-ordinary activities
No extra-ordinary activities and their implications (gain or loss) have been recognized in the Financial Statements of the Company during the year under review.
Related party transactions:
All transactions with related parties have been made on a commercial basis and were conducted based on the “Arm’s Length Principle”. Details of related party transactions have been disclosed under Note 41 of the Audited Financial Statements.
Explanation of significant variance:
Earnings per share (EPS) of the Company has decreased significantly due to sharp increase in finance cost, currency devaluation and adverse changes in duty structure. Net operating cash flow per share (NOCFPS) of the Company has decreased mainly due to payment to supplier.
Remuneration paid to Directors including Independent Directors:
The Board of Directors including Independent Directors received fees for attending Board Meetings only in accordance with the Articles of Association of the Company. The remunerations to the Directors including Independent Directors have been disclosed in Note 39 of the Audited Financial Statements.
Financial statements prepared following all applicable laws & regulations:
The Financial Statements together with the Notes thereon have been drawn up in accordance with International Financial Reporting Standards (IFRS), The Companies Act 1994, Securities and Exchange Rules 2020 and other applicable laws and regulations. These statements present fairly the Company’s state of affairs and the results of its operations, cash flows and changes in equity.
Proper books of accounts maintained:
Proper books of accounts have been maintained by the Company.
Appropriate accounting policies applied in the preparation of Financial Statements:
Appropriate Accounting Policies have been consistently applied in the preparation of Financial Statements and the accounting estimates are based on reasonable and prudent judgment.
IAS & IFRS have been followed in the preparation of Financial Statements:
International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as adopted in Bangladesh, have been followed in the preparation of the Financial Statements and any departure therefrom has been adequately disclosed.
Internal control:
The Company maintains a sound internal control system that gives reasonable assurance that the Company’s resources are safeguarded and the financial position of the Company is well managed.
Protection of minority shareholders from abusive actions:
The minority shareholders of the Company have been protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly and have effective means of redress.
Going concern:
The Directors are of the opinion that the Company is a going concern and there are no indications of significant doubts upon the Company’s ability to continue as a going concern. Accordingly, Financial Statements are prepared on a going-concern basis.
Significant variations have been highlighted:
All significant variations in operating results from the previous year have been highlighted and the reasons thereof have been explained.
The key operating and financial data:
The key operating and financial data for the last ten years is enclosed.
Interim dividend declaration:
No dividend has been declared as an interim dividend.
The pattern of shareholding:
The pattern of shareholding (name-wise) is also enclosed.
Management’s discussion and analysis signed by Managing Director & CEO:
A Management Discussion and Analysis signed by the Managing Director and Chief Executive Officer (CEO) presenting a detailed analysis of the Company’s position and operations along with a brief discussion of changes in the Financial Statements is enclosed.
The declaration or certification by the Managing Director & CEO and the CFO to the Board:
The Declaration by the Managing Director and Chief Executive Officer (CEO) and the CFO to the Board as required under condition No. 1(5)(xxvi) of the Corporate Governance Code is disclosed as per Annexure-A.
Corporate Governance Compliance Certificate & Report
In accordance with the requirement of the Bangladesh Securities and Exchange Commission (BSEC), the Corporate Governance Compliance Certificate as well as the Report regarding compliance with the conditions of the Corporate Governance Code as required under condition No. 1(5)(xxvii) is enclosed as per Annexure-B and Annexure-C respectively.
Directors
ln 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, Ms. Shahnaz Rahman and Ms. Simeen Rahman who were appointed by Transcom Limited as Directors of the Company will not retire by rotation.
Out of the other Directors, Mr. Atiqur Rahman, Mr. Shamsur Rahman and Ms. Shahzreh Huq 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.
Appointment of Independent Scrutinizer
In order to comply with the Directive issued by the Bangladesh Securities and Exchange Commission (BSEC), dated 10 March 2021, the Board appointed Messrs. M. Mohashin & Co., Chartered Secretaries, as Independent Scrutinizer to authenticate due process of election and voting at 62nd Annual General Meeting (AGM) of the Company.
Appointment of a professional to certify compliance with the CGC
In order to comply with the Corporate Governance Code (CGC) issued by the Bangladesh Securities and Exchange Commission (BSEC) dated 03 June 2018, the Company has taken the initiative to appoint a professional firm that will provide the certificate as stated in the aforesaid Code. Messrs. Basu Banerjee Nath & Co., Chartered Accountants, have expressed their willingness to act as a professional in issuing the certificate of compliance for the year 2023-2024.
Auditors
The Company appointed Messrs. Ahmed Zaker & Co., Chartered Accountants, as the statutory auditors of the Company for the year 2022-2023 in its 61st Annual General Meeting held on 19th December 2022. Afterward, the Bangladesh Securities and Exchange Commission (BSEC) issued an updated Panel of Auditors on May 30, 2023, wherein Messrs. Ahmed Zaker & Co., Chartered Accountants, were not in the panel of auditors.
In view of the above, Messrs. Ahmed Zaker & Co., Chartered Accountants, expressed their unwillingness to act as the Statutory Auditors of the Company for the year 2022-2023, which created a casual vacancy in the office of the Statutory Auditors of the Company. Meanwhile, Messrs. A. Qasem & Co., Chartered Accountants, submitted their Expression of Interest (EOI) for appointment as the Statutory Auditors of the Company for the year 2022-2023. Accordingly, upon recommendation by the Audit Committee of the Company, the Board of Directors of the Company appointed Messrs. A. Qasem & Co., Chartered Accountants, as the auditors to fill up the casual vacancy in the office of the Statutory Auditors of the Company for the year 2022-2023, as per provisions of the Companies Act.
The existing auditors of the Company Messrs. A. Qasem & 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 2023-2024.
Acknowledgment
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 cooperation extended to the Company. We expect that this commitment will persist in the future as well so that the Company can attain greater success.
Dated, Dhaka
October 18, 2023
On behalf of the Board
Shahnaz Rahman
Chairperson