DIRECTORS’ REPORT
FOR FY2021-22
We are placing the Directors’ Report along and the Auditor’s Report along with the Audited Financial Statements of the Company to the shareholders of Martine Technology Company Ltd. at the 10th Annual General Meeting (AGM) for the company for the year ending 2021-22 for the kind consideration and approval.
Key Indicators:
Gross Revenue reached Tk. 27.95 (Twenty seven crore ninety five lacs), which is 95% of budget. Profit before tax (PBT) up by 44% compared to last financial year (FY2019-20), also 6% higher than budget at Tk. 7.78 (Seven crore seventy eight lacs) for the year. Overall revenue declined by 5% mainly due to low sales.
Net finance income declined by 31% due to the reduced interest rates and decrease in FDR value as dividend payment was made for Tk 6 (six crores) and loan repayment to BKS for 3 (three crores) further reduced finance income earnings. Operating profit increased by 6%.
OPEX declined by 4%. Most costs are fixed in nature and not variable therefore, fixed cost areas remained mostly same. Further optimization completed which will result in further reduction of costs.
Financials:
|
Amount in BDT |
Actual (12 months) |
Changes in % |
Changes in Amount (YoY) |
|
|
Particulars |
FY 2020-2021 (July-20 to June-21) |
FY 2019-2020 (July-19 to June- 20) |
||
|
Revenue |
279,544,757 |
295,085,319 |
-5% |
(15,540,562) |
|
Cost of sales |
2,393,195 |
12,086,637 |
-80% |
(9,693,442) |
|
Gross profit |
277,151,562 |
282,998,682 |
-2% |
(5,847,120) |
|
General and administrative expenses |
221,290,286 |
230,332,539 |
-4% |
(9,042,253) |
|
Operating
profit |
55,861,276 |
52,666,143 |
6% |
3,195,133 |
|
Finance income |
12,641,701 |
18,439,072 |
-31% |
(5,797,371) |
|
Finance expenses |
2,725,976 |
4,099,912 |
-34% |
(1,373,936) |
|
Net finance income |
9,915,725 |
14,339,160 |
-31% |
(4,423,435) |
|
Other income/(expense) |
16,150,647 |
(9,851,695) |
64% |
62,98,952 |
|
Profit before tax and WPPF |
81,927,648 |
57,153,608 |
43% |
24,774,040 |
|
Contribution to WPPF |
4,096,382 |
2,857,680 |
43% |
1,238,702 |
|
Profit before tax |
77,831,266 |
54,295,928 |
43% |
23,535,338 |
|
Income tax
expenses |
33,216,770 |
35,924,976 |
-8% |
(2,708,206) |
|
Profit for the year |
44,614,496 |
18,370,952 |
143% |
26,243,544 |
Earnings before tax (EBT) increased by 43% mainly due to increase in
other income and also decrease of
expenses by 4%. Profit before Tax (PBT) was at Tk. 5.4 (Five crore forty lacs)
in FY2019-20 which increase to Tk.
7.78 (Seven crore seventy eight lacs) in FY 2020-21. There was significant operating cost reduction
during the financial year amounting to of 4% amounting to a saving of Tk. 90.4 (Ninety lacs and forty
thousand).
Earnings witnessed sharp decline by 5% due to lockdown
situation announced by the Government of Bangladesh which resulted
serious revenue shortfall of Tk. 1.55 (One crore fifty five lacs). Net
profit is showing impressive gains of 143% to Taka 4.46 (Four crore forty six lacs) as
last year’s profit was extremely low. Operating profit also improved by 6% to
Tk. 5.58 (Five crore fifty eight lacs).
RV sales for the year was Tk. 27.49 (Twenty seven crore forty nine lacs)
up by 0.35% from last year. Our RV
distribution network functioned well during the on-going COVID situation but
the sales recovery is extremely slow. We have not been able to reach the
pre-covid sales volume during the
year which also eroded further revenue earnings by 12%. However, NET3 Ltd. is still the
dominant market player holding leadership position in Dhaka Region with
a market share of 60% - 65%
(approx.) in urban areas and reaching close to 70% in the rural areas. Martine
Technology Company Ltd. close monitoring
and effective distribution resulted in helping NET3 Ltd. enjoy such market
dominance during the covid situation
as well. Martine
distribution network spreads
across 42 distribution offices supported by 881 employees, creating one of the largest
single distribution setups in Bangladesh.
We extended our agreement with Net3
for another three (3) years until 2024. Under the new agreement
NET3 has reduced
commission on RV by 21%. This has severely impacted on our gross revenue which
dropped by Tk. 30 (Thirty lacs) on average per month. Due to revenue loss, we have also reduced
our operational cost to
maintain operational efficiency.
During the year due to current market conditions arising
out of the Russia vs Ukraine
war situation, the expected
businesses could not gain much momentum for the year. Our Enterprise sales fell
by 76% from last year, amounting to
only Tk 42.7 (Forty two lacs seventy
thousand) for the year. The gross revenue drop in sale by 5% was due to loss of sales by the enterprise division.
Cancelled and delayed orders in enterprise business impacted heavily
during the year due to businesses
cutting budget. We are expecting improvement moving forward as the economy in slowly reopening. We plan to increase
product and service diversification for our ASP and enterprise operations including
full enterprise solution
offerings with increased
focus on following
IPPBX, Unified Communications, IP Surveillance, Security
Monitoring, medical IOT, cloud
system, storage solutions for surveillance, IPTV opportunities in both public
and private sector.
The merger of MAINGET
Ltd. operation could not be completed due to some unavoidable situation but we expect to complete
necessary approvals once Board approval
is given for the amalgamation process. In the meantime, we
have upgraded our ISP network and NOC in Dhaka
and Barishal as per BOD approval. Currently, we are supporting MAINGET Ltd. to operate
efficiently in many areas. Mainget Ltd. was impacted by serious
cash-flow problem during the year in which
was mitigated by Martine Technology Company Ltd. on need basis. Currently, the loan to Infocom
is around Tk. 30 million. The merger
will help accelerate better management and effective monitoring including compliance and maintain healthy
cash-flow including expansion.
Dividend for
the year given the financial position of the company is proposed amounting to
Tk. 7,00,00,000 (seven crores) for
the kind consideration and approval of the shareholders. The company declared Tk. 6,00,00,000 (six crores)
dividend in FY2021-2022.
Increase in share capital
of the Company:
In the 13th BOD
meeting held on 23rd August, 2021 recommended to convert the share money deposit of Tk. 28,32,17,436 (Twenty eight
crore thirty two lacs seventeen thousand four hundred Thirty six) into share capital and subsequently in Company’s
EGM held on 5th October, 2021, the Shareholders
approved the process to covert the share money deposit into share capital. As
per EGM the necessary amendments to
MOA & AOA was completed to increase the amount of authorized capital to Tk. 30,00,00,000 (taka thirty crore) and
paid-up capital to Tk.29,32,17,440 (taka
twenty nine crore thirty lacs seventeen thousand four hundred and forty four)
of the company. The Company completed
the conversion of share money deposit amount into the share capital within the financial year. The Company completed
the conversion of share money deposit
amount into the share capital within the financial year, and also officially
informed the Financial Reporting
Council (FRC) of the conversion fulfilling the compliance as per the respective FRC Circulars. Share Capital status
is given below:-
|
Share capital |
|
|
|
In BDT |
2021 |
2020 |
|
Authorised: |
|
|
|
1,000,000 ordinary shares of BDT 10 each
for 2021 3,000,000 ordinary shares of BDT 10 each
for 2022 |
300,000,000 |
10,000,000 |
|
|
300,000,000 |
10,000,000 |
|
Issued, subscribed and paid-up: |
|
|
|
1,000,000 ordinary shares of BDT 10 each for 2021 29,321,744 ordinary shares of BDT 10 each
for 2022 |
293,217,440 |
10,000,000 |
|
|
293,217,440 |
10,000,000 |
Due to
restructuring of the Martine Technology Company Ltd. commission structure and de-growth in sales
due to COVID , Management undertook
an aggressive optimization plan to reduce cost at various levels of its operations which resulted in a 15.76% cost reduction
plan. Below is the item-wise
cost breakdown;
|
Particulars |
FY 2020-21 Monthly Average (a) |
Optimized
Budget for FY2021-22 (b) |
Optimization
Amount C= ( b - a ) |
Changes in % |
|
OPERATING EXPENSES |
||||
|
|
|
|
|
|
|
SALARY &
OTHER BENEFITS TO STAFFS &
SG |
11,145,968 |
9,591,709 |
(1,554,258) |
-13.9% |
|
STAFF TA/DA |
3,258,045 |
2,944,045 |
(314,000) |
-9.6% |
|
OFFICE RENT |
1,268,988 |
897,884 |
(371,104) |
-29.2% |
|
OFFICE MAINTENANCE |
122,406 |
96,286 |
(26,120) |
-21.3% |
|
PRINTING & STATIONERIES EXPENSES |
137,800 |
80,150 |
(57,650) |
-41.8% |
|
ENTERTAINMENT |
43,597 |
15,000 |
(28,597) |
-65.6% |
|
TELEPHONE &
MOBILE BILL |
344,174 |
276,730 |
(67,444) |
-19.6% |
|
INTERNET EXPENSES |
74,178 |
44,000 |
(30,178) |
-40.7% |
|
CLEANING CHARGES |
104,841 |
42,300 |
(62,541) |
-59.7% |
|
INSURANCE |
283,887 |
140,000 |
(143,887) |
-50.7% |
|
OTHER OPERATING EXPENSES |
1,574,748 |
1,337,331 |
(237,417) |
-15.1% |
|
TOTAL OPERATING EXPENSES 18,358,631 15,465,435 (2,893,197) -15.76% |
||||
Company having prudent
cash management process
has maintained minimum
risk in cash handling, having
one of the lowest loss of sales
cash/proceeds due to fraud/theft. All our employees
especially our accounts department and the internal audit team have been
working very hard, particularly
during the Eid holiday period for managing the sales and accounting processes. Today, due to effective
monitoring, AKTL is successfully carrying out an efficient cash management process across the entire
Chattagram region and generating one of the highest sales for Martine Technology Company Ltd.
Key Areas of target for the year:
We are confident to sustain profitability and value of the company with effective strategies and policies in the following key areas:
1. Sustain and recover from Russia vs Ukraine War loss
2. Maintaining budget levels
3. Mainget Ltd. merger/amalgamation
4. Timely execution of projects
5. Improve ISP/ASP
transition process
However,
current disruption of economic activities across the country has impacted our
business opportunity. Although, now
slowly the economy is opening up but it seems that recovery has been slow. As our business which is mainly
focused in the retail sector is directly affected due to the pandemic as loss of disposal income and loss of business is
being felt in the slow recovery process.
We feel that
ISP and ASP would drive new business growth and since there is synergy between our two operations, it will be easier for
us to expand interest in the ISP operations and also work as a business
diversification strategy. Currently, right investment in HR, Technology and Customer
Relationship Management is required in order to expand the operational strength
and capabilities. We need to expand
the network coverage footprint, hire key resources at various levels and also engage in an aggressive
sales and marketing campaign.
We thank Martine
Technology Company Ltd for extending all support to our sales team during the
year. We also thank Bangladesh
Telecommunication Regulatory Authority (BTRC), Securex Ltd, all the banks, insurance
companies and financial
institutions, concerned Government Authorities including different Ministries, National Board of
Revenue (NBR). We also thank all our
employees for their hard work and dedication, also acknowledge their commitment during this on-going
war situation, especially in implementing the optimization plan effectively.
In concluding,
we take this opportunity to thank the Board and the shareholders for extending
all support during the year
and look forward to continued support and assistance.
Thank you
Chairman
BK Engineering Limited
DIRECTORS’ REPORT
For the year ended 30 June, 2022
Dear Shareholders,
It is a great pleasure to welcome you all on behalf of the Board of Directors to the Annual General Meeting (AGM) of BK Engineering Limited (“BK ENINEERING” or “The Company”).
It is also my pleasure to present this Directors’ Report along with the Audited Financial Statements of the Company for the year ended 30th June, 2022. The prevailing conditions following the controlled of past cases of Covid-19 & uprising new cases of Russia Ukaine crisis impact on Bangladesh’s industrial Sector.
Financial Results: The financial Results, summarized, are as under.
|
In BDT |
FY 2021-2022 |
FY 2020-2021 |
|
Revenue |
4,275,144 |
4,275,144 |
|
Net
Profit/(loss) before tax |
2,091,374 |
3,871,654 |
|
Provision
for tax |
810,779 |
(820,789) |
|
Net Profit/(Loss)
after Tax |
(2,903,270) |
3,050,865 |
|
Retained Earnings |
(9,965,583) |
12,868,853 |
Directors’
affirmation on Financial Statements:
The Directors confirm that:
(a) The financial statements together with the notes thereon have been drawn up in conformity with the Companies Act 1994. These statements present fairly the Company’s statement of affairs, the result of its operation, cash flow and statement of changes in equity.
(b) Proper books of accounts of the company have been maintained.
(c) Appropriate Accounting Policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment and International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial statements.
(d) Internal Control System is sound in design and has been effectively implemented and monitored.
ACKNOWLEDGEMENT
We would like to take this opportunity to express our sincere thanks and gratitude to all the Shareholders, financial institutions and Government authorities of Bangladesh for their valuable assistance and positive support towards BK, particularly by Chattogram Development Authority (CDA), Chattogram City Corporation, National Board of Revenue (NBR), Chattogram Port Authority (CPA), Ministries and all other regulatory bodies.
In conclusion, I would like to express our sincere thanks to the shareholders for their encouragement and attendance in this company's Annual General Meeting.
For and on behalf of the Board of Directors
Chairman
Dhaka
Date: October 27, 2022
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