Bangladesh Lamps PLC.

Directors’ Report for the year ended 30 June 2025

Dear Shareholders

Assalamu Alaikum. On behalf of the Board of Directors and myself, I am pleased to welcome you to the 64^th Annual General Meeting of Bangladesh Lamps PLC. and present before you the Annual Report and Audited Financial Statements of the Company for the year ended 30 June 2025.

Business Performance

The Board of Directors of Bangladesh Lamps PLC. extends its sincere appreciation to the valued shareholders for their continued confidence and support. During the fiscal year 2024–2025, the Company achieved revenue of Tk. 1,884.79 million, compared to Tk. 1,732.91 million in 2023–2024, representing an 8.76% growth over the previous year.

During the 1^st quarter of 2024-2025, the Company incurred a significant loss of Tk. 58.84 million, primarily due to the July uprising in 2024. As a result, we could not achieve our targeted sales, which affected to overall profitability of the Company. Although the Company achieved reasonable sales in the subsequent three quarters, it was not sufficient to generate a net profit. Consequently, the fiscal year closed with a net loss of Tk. 65.52 million against a net loss of Tk. 134.35 million in last year.

Moreover, in May 2025, the Government issued a new SRO in the National Budget, increasing duties from average of 10% to 28%. This SRO further affected profitability adversely. To comply with the SRO requirements, the Company has committed an investment of nearly BDT 100 million in molds and machineries to establish in-house production facilities for plastic and metal parts used in switch sockets and lighting body components. This investment is expected to reduce duties from 28% to an average of 10%, which will positively contribute to profitability in the coming years.

Alongside this initiative, the Company’s dedicated professionals are actively working to strengthen the sales network, expand into new markets, and introduce innovative products. These efforts are aimed at maximizing revenue potential and ensuring long-term sustainable growth.

Despite the prevailing challenges, the Board remains confident that, through the proactive initiatives of the experienced management team and the continued dedication of skilled professionals, Bangladesh Lamps PLC. is well-positioned to progress toward sustainable profitability.

Dividend

Bangladesh Lamps PLC. has historically maintained steady dividend payouts and has always prioritized the interests of its shareholders. Although the Company did not record any profit during the year, the Board of Directors has recommended a cash dividend of Taka 1.00 per share of Taka 10.00 each (i.e., 10%) for the financial year 2024-2025.

The total appropriation is mentioned below:

Proposed appropriation

Shareholders & share value

The total number of shareholders of the Company on 30^th June 2025 was 4,469 as against 4,951 in the last year. The price index of shares on that date stood at Taka 116.60 per share at the Dhaka Stock Exchange PLC. and Taka 117.50 per share at the Chittagong Stock Exchange PLC.

Board Matters

The Board of Directors of Bangladesh Lamps PLC. comprises of 09 (nine) members including 02 (two) male and 01 (one) female Independent Director. 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 06 (six) times during the period under review.

The attendance record of the Directors in the Board meetings is as follows:

Re-appointment of Managing Director & CEO

The Board of Directors re-appointed Ms. Simeen Rahman as Managing Director & CEO of the Company, subject to the consent 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.

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 experiencing a rapid transformation driven by continuous advancements in LED technology. Consumer preferences are shifting toward energy-efficient and customizable lighting solutions that balance functionality with aesthetic appeal.

In the local market, however, several challenges persist. The widespread availability of low-quality, non-warranty products, along with non-compliance in customs and VAT practices, allows certain operators to offer unrealistically low prices, undermining fair competition. Moreover, the prevalence of credit-based invoicing practices, particularly with electrical outlets and electronics cluster markets, continues to pose significant credit risks within the industry.

Bangladesh Lamps PLC. is aligning its strategy with these evolving industry dynamics. The Company is committed to introducing innovative and aesthetically designed lighting and switch-socket solutions that integrate advanced features while ensuring sustainability, reliability and enhanced customer satisfaction.

Segment-wise or product-wise performance:

The segment-wise net sales performance of the Company during the year 2024-2025 is shown below:

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 40 of the Audited Financial Statements.

External risk factors

The Company’s results may be affected by factors outside its control, such as pandemics, political unrest, strikes, civil commotion and acts of terrorism.

Threat to sustainability and negative impact on the environment

In alignment with global practices, the Government periodically introduces changes in environmental, health, and safety regulations, as well as energy-saving initiatives. The Company carefully monitors these developments and adopts proactive strategies to ensure full compliance.

Recognizing that many sustainability risks are beyond the control of any single entity, Bangladesh Lamps PLC. consistently tracks emerging trends and challenges. To mitigate such risks, the Company focuses on product and market diversification, efficient material sourcing, adoption of advanced technology and continuous investment in research and development, thereby strengthening its long-term competitive advantage.

Cost of Goods Sold, Gross Profit Margin & Net Profit Margin:

During the year ended 30 June 2025, the net sales of the Company were Taka 1,884.79 million and the net loss after tax was Taka 65.52 million. The comparative financials of the Company are shown in the following table:

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:

The Company’s Earnings per Share (EPS) has become negative mainly due to the July 2024 uprising in Bangladesh, which significantly affected profitability during the reporting period.

While break-even sales with some profits were achieved in the next three quarters, the sharp rise in customs duties from 10% to 28% prevented the Company from generating net profit. Consequently, the year closed with a net loss of Tk. 65.52 million.

Net Asset Value (NAV) per share has also decreased due to higher short-term financing and negative retained earnings. Operating cash flow has remained negative because of higher interest costs and larger payments to suppliers. However, cash outflow improved to Tk. (145.88) million in 2024–2025 compared to Tk. (198.67) million in 2023–2024, showing gradual progress in managing cash resources.

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 fairly present 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) and 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 the Managing Director & CEO:

A Management’s 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

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, 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, Ms. Shahzreh Huq, 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.

The Board of Directors appointed Ms. Maria Howlader as Female 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 and approved by the Bangladesh Securities & Exchange Commission (BSEC).

The Board of Directors re-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 re-appointment was recommended by the Nomination & Remuneration Committee (NRC) of the Company and approved by the Bangladesh Securities & Exchange Commission (BSEC).

 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 the due process of election and voting at 64^th 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 professional, in issuing the certificate of compliance for the year 2025-2026.

Auditors
Messrs. A. Qasem & Co., Chartered Accountants, completed their three-year term and, in compliance with the Notification of Bangladesh Securities and Exchange Commission (BSEC), were not eligible for re-appointment as Statutory Auditors of the Company.

Meanwhile, Messrs. Ahmed Zaker & Co., Chartered Accountants, submitted their Expression of Interest (EOI) for appointment as Statutory Auditors of the Company for the year 2025–2026. Upon recommendation of the Audit Committee, the Board of Directors of the Company appointed Messrs. Ahmed Zaker & Co., Chartered Accountants, as the Statutory Auditors of the Company for the year 2025–2026, subject to approval by the shareholders at the 64th Annual General Meeting of the Company.

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.