Director's Report To The Shareho

For the year ended 30th june 2015


Dear Shareholders

As-salamo Alaikum,

On behalf of Directors, I convey hearty compliments ,cordial and warm wishes to all of you for your auspicious presence and kind participation in the twenty sixth Annual General meeting of Tallu Spinning Mills Ltd . I also feel proud and delighted to have the opportunity to present before you the Audited Financial Statements ended on 30th june 2015 of the company together with the reports of the Chairman , . Directors and the Auditors for your consideration and approval.

Business Environment

The Bangladesh textile and garment industry of Bangladesh has gone through lot of obstacles in the last few years . But this has not affected the growth of the sector ,regardless of rising energy and raw material costs and ever growing labor unrest .The ongoing global economic crisis is having an impact on all export depended economics . Evan high performing countries like China and India have recorded slowdowns . Others high performing countries like those Malaysia, Thailand, Philippines and Indonesia are also suffering badly because of the ongoing crisis . In contrast ,export of textile products from Bangladesh surprisingly remains quite buoyant . Readymade garments export have increased by 3.92 percent , during July 2014 to 2015 over the corresponding period of last year .The industry has set a target of US $ 30.5 billion in garments export by 2016 , which would create an additional 1.4 million job opportunities within the sector and subsequently open up opportunities across different occupations .Many challenges have remained un resolved, but The overall outlook for this nation's industry remains bright .

In the subject year , the export of RMG crossed over a good time in Bangladesh . It is evident , the sector of has grabbed the most prospective stand compared to the other sectors of business in Bangladesh . The textiles sector , in particular , has generated quite substantial employment opportunities in the country . About 40,00000 people are directly working in this sector and relatively 4,00,00,000 people are indirectly dependent on the textile industries Bangladesh will in a position to frame up the prestige of high standard by ensuring more and more employment on one hand and by eradicating the poverty gradually in the country on the other . At one time , Bangladesh may have the way to take her own status to a leading role in the world economy if she can ensure the provision of required power and gas to meet the need of industries .

Operations Review

The management as usual, was prompt to take necessary steps to counter possible threats and difficulties although there was intense tooth and nail competition from different privileged countries having competitive advantages. The company, with remained firm to achieving its core objectives and the reporting year was satisfactory for the company. With consistently rigorous cost management, we were able to keep the expenses within frame.

During the year under review, total 51,528 spindles and 896 rotors were kept ready for operations at the production plants of the company . The Directors report that during 2014-2015 the company produced 2,253,571 kg & 3,229,333 kg cotton yarn of different counts respectively in Unit - l & ll of the project as against 2,562,930 kg and 3,823,022 kg cotton yarn production in the preceding year.

At the end of the financial year 2014-15 the total turnover of the previous year, was registered at Tk, 1344,30 million as against turnover of Tk.155,38 million in the previous year, representing 38.12% decrease over the previous year . The resultant of all anti-adverse factors has led the company to achieve a positive income of Tk, 10.33 million in the reporting year .

Financial Report

The operating financial results of the company for the year under review both for Unit - l & ll comparison to the previous year are given here under :

Particulars Unit - l Taka Unit - ll Taka 2014-2015 Taka 2013-2014 Taka
Sales Revenu 588,815,883 755,487,845 1,344,303,728 1,551,377,301
Coste of Goods Sold 507,422,264 633,154,416 1,140,576,680 1,222,113,906
Gross Profit 81,393,619 122,333,429 203,727,048 329,263,395
Admin/Selling/Written off Expenses 9,425,708 9,831,286 19,256,994 20,909,345
Financial Expenses 64,644,952 101,271,382 165,916,334 157,089,374
Operations Profit / Loss 7,322,959 11,230,761 18,553,720 151,264,676
Non- Operations Income 1,251,500 181,078 1,432,578 2,607,284
Allocation to WPPF 408,308 543,421 951,729 7,327,237
Net Profit / Loss Before Tax 8,166,151 10,868,418 19,034,569 146,544,723
Net Profit / Loss After Tax 4,412,599 5,921,357 10,333,956 122,966,868
Ration (%) % % % %
Gross Profit to Sales 13.82 16.19 15.13 21.23
Admin/Selling/Written off Expenses to Sales 1.60 1.30 1.43 1.35
Financial Expenses to Sales 10.98 13.50 12.34 10.13


BMRE Scheme

In the year 2014 your company's effort was continued to modernize and upgrade the production facilities from back process to ring section of the existing project due to technologically backward and less efficient machinery running into the factory since 1989 .

In connection with this, completion of the expansion project and commencement of commercial operations after successful installation ,commissioning ,testing and trial running of 10,080 State of the Art high - tech spindles were made from 14th October 2015 in the factory . The company has implemented the expansion scheme without any bank or institution borrowing .For this expansion scheme production will be increased by 15,00,000 kg of cotton yarn in 30s/1 conversion per year in addition to the existing production .As a result , profitability of the company will be increased .


Appropriation & Declaration of Dividend

The Directors propose to appropriate as follow :

Particulars 2014-201 Taka 2013-20147 Taka
Accumulated Surplus / Deficit - opening balance 151,736,424 28,769,556
Add: Net profit the year 10,33,958 122,966,868
Less : Proposed Stock Dividend @ 10% (81,213,970)  
Accumulated Surplus 80,856,410 151,736,424


Declaration of Dividend

On the basis of the proposed appropriation the Board of Directors is pleased to recommend for declaration of stock dividend to all shareholders at the rate of 10% for the year under report .This will involve an amount of Tk. 81,213,970 .

Directors and Election

The following persons were the members of the Board of Directors of the company in the reporting year . The number and amount of shares held by each Director at the beginning and end the reporting financial year are also furnished in the following statement as per Stock Exchange Listing Regulations .

Name Designation Shares held 01.07.2014 Amount Taka Shares held 30.06.2015 Amount Taka
Mrs. Rabeya Khatun Chairman 1626157 16,261,570 1626157 16,261,570
Mr. Md. Atiqul Haque Managing Director 5603950 56,039,500 5603950 56,039,500
Mr. Md. mozammel Haque Director 1626157 16,261,570 1626157 16,261,570
Mr. Md. Rafiqul Haque Director 5603949 56,039,490 5603949 56,039,490
Mr. Md. Mahbubul Haque Director 5603950 56,039,500 5603950 56,039,500
Mr. Mohammad Jalal Uddin BDBL Director Nil Nil Nil Nil
Mr. Md.Abdul Allam Ind. Director Nil Nil Nil Nil
Mr. Md.Shakil Choudhury Ind. Director Nil Nil Nil Nil

In accordance with Article 120 of the Articles of Association of the company Mr. Md. Atiqul Haque and Mr. Md. Mahbubul Haque retire from the Board , and being eligible they have offered themselves for re-election as per Article 121 of the Articles of Association of the company.

The company is committed to maintain high standard of pollution free environment at mill area . accordingly tree plantation activities is implementing every year at mill premises.

Auditors

The present Auditor, Kazi Zahir Khan & Co, Chartered Accountants will retire at 35th Annual General meeting . As per Bangladesh securities and Exchange commission notification no BSEC/CFD/23/2014/Vol-12/252 dated July 08, 2015, Kazi Zahir Khan & Co are not eligible for conducting Audit of listed companies . The Audit Committee recommends to engage Zoha Zaman Kabir Rashid & Co . Chartered Accountants as the Audit Committee for the year 2015-2016. The Directors endorsed the recommendation of the Audit Committee for appointment of the auditors for the year 2015-2016 subject to the approval in the Annual General meeting . Zoha Zaman Kabir Rashid & Co . Chartered Accountants have expressed their willingness to accept appointment as statutory auditors .

Corporate Governance

Corporate Governance is the practice of good corporate citizenship ,through which the company is governed by the board keeping in view its accountability to the shareholder , stakeholders and to the society .The status report required to be presented by the company in pursuance to notification no: SEC/CMRRCD/2006-158/134/Admin/44 of August 07.2012 issued by the Securities and Exchange commission is furnished in the Annexure- l.

Conclusion

Esteemed shareholder, we are confident that your company would continue to receive your unstinted support and valued patronization during the days ahead .There is no room for doubt that the achievement so far made by the company is the outcome of concerted efforts by the employees of the company ,guidance of the board of the Director , patronization of our financial patrons and all-out co-operation of our esteemed shareholders. We offer our heartiest congratulations and convey sincere thanks to them on thin auspicious day the company.

We have further the liberty and privilege to offer sincere thanks and gratitude to Securities and Exchange commission, Dhaka and Chittagong stock Exchanges, National Board of Revenue for their support and co-operation throughout the year . On behalf of the Board.