Bangladesh Lamps Limited

Directors’ Report for the year ended 30 June 2024

Dear Shareholders,

Assalamu Alaikum. On behalf of the Board of Directors and myself, I am pleased to welcome you to the 63^rd 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 2024.

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. During the fiscal year 2023-2024, the Company earned revenue of Taka 1,732.91 million against Taka 1,804.69 million in 2022-2023. In the first half of 2023-2024, the company generated revenue of Taka 762.78 million, a 20% decrease from the previous year. However, in the second half, revenue increased to Taka 970.13 million, entering a growth phase with a 14% increase compared to the same period in 2022-2023. In addition, the Company has implemented several cost-optimization initiatives in various areas, which we believe will help enhance overall margins in the upcoming financial year. Our skilled professionals continue to work diligently to expand our sales network, create new markets, and introduce new products, all aimed at maximizing the Company’s revenue potential.

• Due to global supply chain issues and political unrest, we could not achieve our targeted revenue. Additionally, there was an increase in material costs due to adverse changes in custom duties, higher freight costs, rise in the dollar exchange rate, and a sharp increase in finance costs. As a result, the company faced a significant impact on profitability and incurred a loss after tax of Taka (134.35) million in 2023-2024.
• This year, the net assets of the Company have decreased primarily due to a reduction in the fair value adjustment of the company’s investments and a decline in operating profitability.

Despite these challenges, we remain optimistic that, through the proactive initiatives of our experienced management and the dedication of our skilled professionals, the Company will move toward profitability.

Dividend

The Company has, so far, been maintaining steady dividend payouts. The management of the Company always valued the interest of the shareholders. This year the Company did not make profit. In spite of this fact, the Board recommends a cash dividend of Taka 0.50 per share of Taka 10.00 each (i.e. 5%) and a stock dividend @ 5% (i.e. 5 bonus shares for every 100 shares) for the year 2023-2024.

The appropriation of profit is shown below:

	(Taka)
Profit/(Loss) for the year ended 30 June 2024	(134,351,773)
Add: Transfer from General Reserve	144,378,323
Total divisible profit	10,026,550

Proposed appropriations:

Cash Dividend @ Tk.0.50 per share on 10,026,550 ordinary shares of Tk. 10.00 each	5,013,275
Reserve for Stock dividend @ 5%	5,013,275
Total appropriation	10,026,550

Shareholders & share value

The total number of shareholders of the Company on 30^th June 2024 was 4,951 as against 5,641 in the last year. The price index of shares on that date stood at Taka 134.30 per share at the Dhaka Stock Exchange and Taka 130.10 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.

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
Ms. Shahzreh Huq	7	7	7
Mr. Saifur Rahman	7	7	6
Mr. Atiqur Rahman	7	7	6
Mr. Shamsur Rahman	7	7	7
Mr. Md. Habibur Rahman Mollah, FCA (Independent Director)	7	7	7
Mr. Mohammad Zahid Hossain, FCA (Independent Director)	7	7	6

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 global lighting industry is indeed undergoing significant transformations, largely driven by advancements in LED technology. The shift towards smart lighting solutions and smart accessories is particularly notable, features like remote control, sensors and app-based solutions are enhancing user experience.

Consumer preferences are evolving toward customizable and aesthetically pleasing designs that also prioritize human-centric lighting.  Consumers and businesses are prioritizing products that are energy-efficient, recyclable, and free of hazardous materials.

As interior design becomes a focal point for homeowners, there’s a trend toward customizable switch and socket designs that match various decor styles. This includes a variety of colors, finishes, and designs to suit personal preferences. There is a trend toward multifunctional switch sockets that combine various functionalities, such as USB charging ports alongside traditional power outlets.

Sustainability remains a crucial factor, with consumers increasingly seeking energy-efficient and recyclable products. However, challenges persist, such as low-quality components in non-warranty products and global supply chain disruptions exacerbated by political instability. We Bangladesh Lamps Ltd. is working towards to meet the customer evolving requirements, we are relentlessly working to introduce aesthetically designed lights and switch sockets with advanced features.

Segment-wise or product-wise performance:

The segment-wise net sales performance of the Company during the year 2023-2024 is shown below:

(Taka in Million)

Year	Energy saving LED Bulbs	Energy saving LED Tube Lights	Electric Bulbs	Electrical accessories	Total
2023-2024	820.10	482.07	83.93	346.81	1,732.91
2022-2023	1,184.51	435.22	97.99	86.97	1,804.69

Risks and concerns including internal & external risk 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 41 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 acts of terrorism.

Threat to sustainability and negative impact on the environment

In line with global practice, the government initiates changes in environmental, health, and safety laws and regulations and energy-saving activities from time to time. The Company keeps track of these changes and pays special attention and proactive business strategies 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 2024, the net sales of the Company were Taka 1,732.91 million and the net profit after tax was Taka (134.35) 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 2024	For the year ended 30 June 2023
Revenue	1,732.91	1,804.69
Cost of sales	(1,435.31)	(1,422.54)
Gross profit	297.60	382.15
Other income	16.81	23.24
Operating expenses	(331.35)	(322.56)
Profit/(loss) before net finance cost	(16.94)	82.83
Net finance cost	(102.87)	(55.76)
Profit/(loss) before contribution to workers’ participation fund & welfare fund	(119.81)	27.07
Contribution to workers participation fund & welfare fund	—	(1.29)
Profit/(loss) before income tax	(119.81)	25.78
Income tax expenses	(14.54)	(14.79)
Net Profit/(loss) after tax	(134.35)	10.99

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 42 of the Audited Financial Statements.

Explanation of significant variance:

The Earnings per Share (EPS) has decreased significantly compared to last year due to several factors. Revenue dropped by 4%, and the gross profit margin declined by 4%, mainly because of higher material costs, adverse changes in custom duties, increased freight costs, and a rise in the dollar exchange rate. Additionally, net finance costs increased by 84% due to higher bank borrowing rates, while other income decreased by 28%. The Net Asset Value (NAV) per share also declined, primarily due to a reduction in the fair value adjustment of the company’s investments and lower operating profitability. Furthermore, the Net Operating Cash Flow per Share (NOCFPS) decreased as a result of higher interest payments, supplier payments and changes in working capital related to higher inventory levels to meet upcoming opportunities.

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 40 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. Saifur Rahman, Mr. Atiqur Rahman and Mr. Shamsur Rahman 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. Ahmmed Hoq Siddiqui & Co., Chartered Accountants, as Independent Scrutinizer to authenticate due process of election and voting at 63^rd 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. M. Mohashin & Co., Chartered Secretaries, have expressed their willingness to act as a professional in issuing the certificate of compliance for the year 2024-2025.

Auditors

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 2024-2025.

Amendment of the Company’s name to “Bangladesh Lamps PLC” instead of “Bangladesh Lamps Limited”.

Consequent upon the provision of the Companies Act, 1994 (second Amendment Act, 2020) the Board of Directors of the Company has considered to amend the registered name of the Company to “Bangladesh Lamps PLC” instead of “Bangladesh Lamps Limited”. Accordingly, the Board has decided to place the same before the Shareholders at the 63^rd Annual General Meeting of the Company for their kind approval. 

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.