Bangladesh Lamps Limited

Directors’ Report for the year ended on 30 June 2022

Dear Shareholders,

Assalamu Alaikum. On behalf of the Board of Directors and myself, I am pleased to welcome you to the 61st 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 2022.

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 Ltd. to deliver consistent business growth year on year.

The company continued to face new challenges in the financial year 2021-22. In addition to the on-going Covid pandemic burden in the first half of the year, the Russia-Ukraine war posed a new threat to supply chain leading to higher commodity and raw material prices during the 2nd half of this year. However, the company managed to maneuver through these difficult times, and was able to achieve 19% revenue growth and 72% growth in Profit after tax against last year. This is highest recorded revenue and profit in a single financial year in BLL’s history.

This outstanding achievement was possible due to higher sales growth in LED, management’s timely decision making to tackle critical issues, cost optimization in sales and manufacturing operations as well as efficiently managing working capital.

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 of the Company. The comparative sales and profitability of the Company are shown below:

(Taka in Million)

Particulars	2021-2022	2020-2021	Increase
Net sales	1,627.40	1,370.20	19%
Net Profit after tax	82.27	47.76	72%

Dividend

Keeping in view of the performance of the Company, the Board of Directors is pleased to recommend cash dividend of Taka 2.00 per share of Taka 10.00 each (i.e. 20%) and stock dividend @ 7% (i.e. 7 bonus shares for every 100 shares) for the year 2021-2022.

The appropriation of profit is shown below:

	(Taka)
Profit for the year ended 30 June 2022	82,266,333
Total Divisible profit	82,266,333

Proposed appropriations:

Proposed dividend @ Tk. 2.00 per share on 9,370,608 ordinary shares of Tk. 10.00 each	18,741,216
Reserve for Bonus Shares @ 7%	6,559,426
Transfer to General Reserve	56,965,691
Total appropriation	82,266,333

Shareholders & share value

Total number of shareholders of the Company at 30th June 2022 was 4,578 as against 3,658 in the last year. The price index of shares on that date stood at Taka 267.50 per share at the Dhaka Stock Exchange and Taka 278.40 per share at the Chittagong Stock Exchange.

Board Matters

The Board of Directors of Bangladesh Lamps Limited comprises of 09 (nine) 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 areas. The Board of Directors met 07 (seven) times during the period under review.

The tenure of Mr. Akhtar Ahmed who served the Company as the Independent Director was expired on 24th December, 2021. The Board placed on record the valuable contributions made by Mr. Akhtar Ahmed towards the progress of the Company. Complying upon the provision of the Corporate Governance Code issued by the Bangladesh Securities and Exchange Commission on 3rd June 2018, the Board of Directors appointed Mr. Md. Habibur Rahman Mollah as Independent Director of the Company, subject to approval of the Shareholders at the upcoming Annual General Meeting. It is to be mentioned that the said appointment was recommended by the Nomination & Remuneration Committee (NRC) 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	7	7	5
Ms. Shahzreh Huq	7	7	7
Mr. Saifur Rahman	7	7	6
Mr. Atiqur Rahman	7	7	7
Mr. Shamsur Rahman	7	7	7
Mr. Akhtar Ahmed (Independent Director) (Tenure expired on 24th December, 2021)	7	3	3
Ms. Rokia Afzal Rahman (Independent Director)	7	7	4
Mr. Md. Habibur Rahman Mollah (Independent Director) (Newly appointed w.e.f. 1st January 2022)	7	4	4

Audit Committee

The Audit Committee comprises of 03 (three) Directors. The Committee is headed by the Independent Director, Mr. Md. Habibur Rahman Mollah. The objective of the Audit Committee is to ensure an 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 of 03 (three) Directors. The Committee is headed by the Independent Director Mr. Md. Habibur Rahman Mollah. The NRC assists the Board to formulate policy for formal and continued process of considering 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 was moderate during the year ended 30 June 2021. The LED (Light Emitting Diode) segment has grown significantly because of the energy saving benefit and longer life and we anticipate next lighting solution will come with LED. However, we have faced huge challenges during the year 2020-2021, particularly with non-warranty products made with low quality chip.

Segment-wise or product-wise performance:

The segment-wise net sales performance of the Company during the year 2021-2022 is shown below:

(Taka in Million)

Year	Energy saving LED Bulbs	Energy saving LED Tube Lights	Electric Bulbs	Electrical accessories	Total
2021-2022	1,083.82	416.45	122.73	4.40	1,627.40
2020-2021	891.71	316.68	151.68	10.13	1,370.20

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 the Note 38 of the Audited Financial Statements.

External risk factors
The Company’s results may be affected by factors outside its control such as pandemic situation, political unrest, strike, civil commotion and act of terrorism.

Threat to sustainability and negative impact on environment
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 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 2022, the net sales of the Company was Taka 1,627.40 million and the net profit after tax was Taka 82.27 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 2022	For the year ended 30 June 2021
Revenue	1,627.40	1,370.20
Cost of sales	(1,229.09)	(1,039.82)
Gross profit	398.31	330.38
Other income	22.93	33.48
Operating expenses	(275.09)	(270.55)
Profit before net finance cost	146.16	93.31
Net finance cost	(22.07)	(18.80)
Profit before contribution to workers participation fund & welfare fund	124.08	74.51
Contribution to workers participation fund & welfare fund	(5.91)	(3.55)
Profit before income tax	118.17	70.96
Income tax expenses	(35.91)	(23.20)
Net Profit after tax	82.27	47.76

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 commercial basis and were conducted on the basis of “Arm’s Length Principle”. Details of related party transactions have been disclosed under Note 39 of the Audited Financial Statements.

Explanation on significant variance:

Earnings Per Share (EPS) has increased significantly due to higher sales growth in LED, cost optimization in sales & manufacturing operations as well as efficiently managing working capital. Net operating cash flow has decreased due to increase in suppliers’ payment for purchasing raw materials.

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 37 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 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 preparation of Financial Statements:

International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as adopted in Bangladesh, have been followed in preparation of the Financial Statements and any departure therefrom has been adequately disclosed.

Internal control:

The Company maintains a sound internal control system which 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 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 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’s Discussion and Analysis signed by Managing Director and Chief Executive Officer (CEO) presenting 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 Corporate Governance Code is disclosed as per Annexure-A.

Corporate Governance Compliance Certificate & Report
In accordance with the requirement of Bangladesh Securities Exchanges Commission (BSEC), Corporate Governance Compliance Certificate as well as Report regarding compliance of conditions of 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. Saifur 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 61st Annual General Meeting (AGM) of the Company.

Appointment of 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 initiatives to appoint a professional firm who 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 for issuing the certificate on compliance for the year 2022-2023.

Auditors
The existing auditors of the Company Messrs. Ahmed Zaker & 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 2022-2023.

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.