BSRM Annual Report
BSRM Annual Report
BSRM Annual Report
Every nation has a story. That story begins with imagination, the seed of an idea –
to build a nation. A seed that is nurtured and grown, through determination and hard work,
until one day, a nation arises in its full glory.
Intertwined with the story of a nation, is our story. For the foundations of a modern, safer nation
are forged in steel - BSRM steel. We are, were and continue to be for the nation, with the nation. And
every year that story continues taking the nation – and BSRM – to new horizons.
Letter of Transmittal
We are pleased to enclose herewith a copy of the Annual Report of BSRM Steels Limited together with the Audited Financial
Statements, Auditors’ Report thereon and Report of the Board of Directors for the year ended June 30, 2019 for your
information and records.
Yours sincerely,
33
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Annual Report 2018 -19
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60
61
62
99
159
162
167
168
169
171
Our Vision
Our Values
Code of Conduct
BSRM Group’s Milestones
Awards & Recognitions
Performance at a Glance
Key Financial Highlights
19
21
22
25
26
29
32
Corporate Structure
Message from the Chairman
Managing Director’s Round Up
Directors' Report
Declaration by CEO and CFO
Certificate on Compliance with Conditions of Corporate Governance Code
Corporate Governance Compliance Report
71
83
87
89
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94
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BSRM GROUP
OUR VISION
ASPIRE TO…..
Maintain our leadership position in the
OUR VISION
steel industry by-producing the best
quality steel products, continuously
enhancing customer satisfaction and
becoming a reliable business partner of
our Customers and Suppliers.
CODE OF CONDUCT
BSRM always adopts best, ethical
and transparent business practices
to be fair and honest in all its
dealings.
QUALITY NATIONAL
EXCELLENCE EXPORT
AWARD AWARD
13
National Export Award
2016-17, 2015-16 and 2013-14
HIGHEST
PRESIDENT’S TAX PAYER
AWARD AWARD
President’s Award for Tax Card for “1st Highest Tax Payer” in
Industrial Development 2014 engineering category for the tax period 2016-2017
Awards & Recognitions
ICSB ICAB
NATIONAL NATIONAL
AWARD AWARD
14
ICSB National Award, Gold 2015 16th ICAB National Award for
Best Presented Annual Report 2015
AWARDS & RECOGNITIONS
ICSB SAFA
NATIONAL AWARD
AWARD
Certificate of ICSB National Award 2015 Certificate of Merit from SAFA 2015
ICAB
NATIONAL
AWARD
ICAB National Awards for Best Presented Annual Report 2012, 2013 & 2015
Awards & Recognitions
ENVIRONMENT CONSUMER
AWARD AWARD
15
Divisional Environment Award 2013 Best Electricity Consumer Award 2015
BEST
JBCCI
ENTERPRISE
AWARD
AWARD
Tk. Tk.
2,338 3,369 17
PERFORMANCE AT A GLANCE
Million Million
Tk. Tk.
1,728 4.60
Million
Tk. . Tk
55.58 (12.43)
Financed by
Share Capital 3,759.53 3,417.75 3,417.75 3,417.75 3,417.75 3,417.75 3,417.75
Revaluation Reserve 7,940.93 2,613.85 2,602.00 2,123.84 2,131.59 2,137.03 2,153.63
Non Controlling Interest - 107.08
Retained Earnings 9,196.76 6,777.30 5,503.47 3,829.60 3,531.28 1,940.31 1,343.87
Shareholders' Equity 20,897.22 12,808.90 11,630.30 9,371.19 9,080.62 7,495.09 6,915.25
18
Long Term borrowings 9,067.95 1,777.56 1,117.90 1,547.13 548.39 431.90 425.05
Retirement benefit obligations - Gratuity 164.44 136.97 98.76 57.37 55.88 39.02 26.29
KEY FINANCIAL HIGHLIGHTS
Deferred Tax Liabilities 1,790.40 1,157.75 1,211.09 840.59 831.76 729.34 680.30
Total Capital Employed 31,920.00 15,881.18 14,058.05 11,816.28 10,516.64 8,695.35 8,046.89
Operational Results
Revenue 61,060.15 48,289.93 37,996.41 17,265.18 32,316.10 38,535.94 36,229.05
Gross Profit 5,051.91 4,879.17 4,557.30 3,114.69 4,368.65 2,807.32 3,250.15
Profit from Operations 3,369.05 3,180.65 3,273.59 2,379.86 3,257.93 1,892.83 2,314.40
Profit before Interest, Taxes & Depreciation Allowances 3,993.81 3,644.34 3,746.02 2,509.49 3,500.74 2,119.63 2,538.47
Profit before Tax 2,338.26 2,308.53 2,360.49 2,114.92 2,593.95 1,510.68 2,318.92
Profit after Tax 1,728.13 1,800.80 1,705.41 1,313.32 2,081.88 1,086.21 1,693.47
Ratios
Gross Profit ratio - % 8.27% 10.10% 11.99% 18.04% 13.52% 7.28% 8.97%
Net Profit ratio - % 2.83% 3.73% 4.49% 7.61% 6.44% 2.82% 4.67%
EBITDA margin to Sales - % 6.54% 7.55% 9.86% 14.53% 10.83% 5.50% 7.01%
Return on Shareholders Equity - % 8.27% 14.06% 14.66% 14.01% 22.93% 14.49% 24.49%
Return on Capital Employed - % 5.41% 11.34% 12.13% 11.11% 19.80% 12.49% 21.05%
Current Ratio - Times 1.16 1.07 1.08 1.13 1.06 1.01 0.97
Quick / Acid test ratio 0.71 0.58 0.70 0.80 0.57 0.40 0.61
Inventory turnover ratio - Times 4.07 3.34 4.23 3.12 4.69 3.42 6.37
Total Assets turnover ratio - Times 0.93 1.06 1.17 0.60 1.31 1.42 1.52
Earnings per Share (EPS) - Taka 4.60 4.79 4.98 3.84 6.09 3.18 4.95
Price/Earnings (P/E) ratio - Times 12.68 14.64 18.25 24.46 15.81 27.59 13.87
Price/Equity ratio - Times 5.83 7.01 9.09 9.40 9.63 8.77 6.87
Dividend per share (DPS) - Taka 2.50 2.00 2.00 1.50 3.00 1.50 1.50
Dividend Payout ratio 0.54 0.42 0.40 0.39 0.49 0.47 0.30
Dividend Cover ratio 1.84 2.40 2.40 2.56 2.03 2.12 3.30
Net Assets Value (NAV) per share - Taka 55.58 37.48 34.03 27.42 26.57 21.93 20.23
Net Operating Cash Flow per share - Taka (12.43) 2.20 1.07 9.05 16.87 (8.76) 13.45
Debt Equity ratio - Times 1.57 1.73 1.93 1.72 1.48 2.36 1.99
Interest coverage ratio 2.76 3.14 5.94 17.75 5.37 6.32 5.83
Market price per share at 30 June/ 31 December - Taka 58.30 70.10 90.90 94.00 96.30 87.70 68.70
Market Capitalization at 30 June/31 December 21,918 23,958 31,067 32,127 32,913 29,974 23,480
Contribution to National Exchequer 4,708 4,954 2,936 2,149 2,009 2,949 2,454
Average Number of Employees 1255 974 624 596 578 553 573
*Information of 2016-2017 shows consolidated financial data.
Key Performance Indicators
25000 6000
20,897 4,879 5,052
20000 5000 4,557
4,369
12,809 4000 3,250
15000 2,807 3,115
9,371 11,630 3000
9,081
10000 7,495
6,915 2000
5000 1000
0 0
2013 2014 2015 2016 2016-17 2017-18 2018-19 2013 2014 2015 2016 2016-17 2017-18 2018-19
Jan-Jun Jan-Jun
19
Operating Profit (Taka in Million) Net Profit after Tax (Taka in Million)
14.53%
15 25%
21.05% 19.80%
12 10.83% 20%
9.86%
9 7.55% 15%
7.01% 6.54% 12.49% 11.11% 12.13% 11.34%
5.50%
6 10%
5.41%
3 5%
0 0%
2013 2014 2015 2016 2016-17 2017-18 2018-19 2013 2014 2015 2016 2016-17 2017-18 2018-19
Jan-Jun Jan-Jun
24.49%
25 22.93% 8
7 6.09
20
6 4.79
14.49% 14.01% 14.66% 14.06% 4.95 4.98 4.60
15 5
3.84
4 3.18
10 8.27% 3
2
5
1
0 0
2013 2014 2015 2016 2016-17 2017-18 2018-19 2013 2014 2015 2016 2016-17 2017-18 2018-19
Jan-Jun Jan-Jun
Key Performance Indicators
60 55.58 3.00
3.0
2.50
50 2.5
37.48 2.00 2.00
40 34.03 2.0
26.57 27.42 1.50 1.50 1.50
30 1.5
20.23 21.93
20 1.0
10 0.5
0 0.0
2013 2014 2015 2016 2016-17 2017-18 2018-19 2013 2014 2015 2016 2016-17 2017-18 2018-19
Jan-Jun Jan-Jun
20
Price Earnings Ratio (Times) Market price per share (Taka)
KEY PERFORMANCE INDICATORS
23.27 34.89
36.69 37.07
10.01 9.23
Founded in 1952, BSRM Group broadened its business to Following Graph shows the last 5 year’s performance of our
produce advanced technology based steel products in branded product Xtreme 500W:
Bangladesh. BSRM Steels Limited is the flagship company of
BSRM Group It is a high grade steel manufacturing company. The Performance of Xtreme 500W (MT)
main product of BSRM Steels is Xtreme500W which is only EMF
tested and Fatigue tested ductile rod in Bangladesh. 1,000,000 946,900
800,000
Quality is the measure of something as measured against agreed 657,550
587,670 617,457
standards. It means conforming to specifications. Reliability has 600,000 577,417
two related definitions. One is the state of being dependable.
400,000
The other is consistency – that is, the degree to which
something yields the same or compatible result time after time. 200,000
Reliability is a function of the design; Quality is a result of the -
manufacturing. Therefore, we can state while the Tensile Test is 2014 2015 Jan 16-Jun 17 2017-18 2018-19
22 the measure of Quality of the steel, the Fatigue Test is the
measure of Reliability of Steel.
Unique Feature of Xtreme 500W
PRODUCTS & MARKETS
Market performance
1. High design yield strength of 500 Mpa (72500psi) (Min)
BSRM is the market leader in the national steel industry.Net
sales for 2018-19 were 756,820 MT with value in Taka 2. Requires 15% less steel in construction compared to Grade
61,060.15 (in million). The Chart shows sales growth of BSRM 60 rebar’s available in the market.
Steels Limited for the last seven years.
3. The bars have superior ductility and can be safely bent
Sales Qty. (MT) without cracking.
756,820 4. All bar sizes are rolled to a very close tolerance (possible on
800,000 692,504 710,995
679,803 a DANIELI computerized rolling mill) so that customers get more
601,935 604,513
600,000 meters of steel per ton - more value for money without having to
400,000 373,747
sacrifice structural integrity.
200,000 5. De-scaled bars have better bonding with concrete and less
-
wastage at site. Estimated savings: 0.5%
2013 2014 2015 Jan-Jun 2016- 2017- 2018-
2016 17 18 19 6. Xtreme bars are safely weld-able under field conditions.
Another 0.5% to 1.5% of steel is saved by avoiding large
Product-wise performance splices if the steel is welded. Our Xtreme 500W was tested for
weldability by a global electrode manufacturer, in Bangladesh,
A. Xtreme500W Linde. They have published a brochure to promote the unique
Why Xtreme500W…. welding features of Xtreme 500W, a rare honor for the
company.
According to European Steel Code EN 10002, Elongation at
Maximum Force (EMF) test is mandatory to measure the 7. The bars are needle-straight, thanks to the Danieli QTB
ductility of steel. process - no need for straightening on the construction site.
Bangladesh Standard BDS:ISO:6935-2 of 2009 also requires Landmark Infrastructure where Xtreme 500W was used:
EMF in Steel. Fatigue tests are conducted with the object of
determining the number of cyclic loadings a steel can endure, As the premier reinforcing steel bar and only EMF tested ductile
within a stress range. BSRM Steels products were subjected to rod of the country, Xtreme 500W has put its indelible stamp on
5 million cyclic load reversals which was tested in UK. At present the infrastructure projects of the country. It has emerged as the
in Bangladesh BSRM is the only company to ensure EMF and rebar of choice among international contractors in high value
Fatigue Testing steel. projects where the reliability and quality of construction materials
are of paramount importance. BSRM is proud to be associated
Today our journey has been vindicated by the overwhelming
with some of the largest and most visible projects of the country.
support of our loyal and dear customers who have put faith in
These are:
our products.
• Padma Multipurpose Bridge • Reduces the chance of sudden collapse of the structure
• Padma Bridge Rail Link Project • High strength steel
• MaghbazarMouchak Flyover • Ensures the highest Elongation at Maximum Force (EMF)
• Bhoirab Railway Bridge • Suitable for all seismic zones of Bangladesh as per BNBC
• BhoirabAsugonj Power Plant (Bangladesh National Building Code)
• Double line project of Chittagong Railway. B) BSRM Fast Build
• The pride of Dhaka, the 9.6 kilometer Gulistan-Jatrabari
fly-over (Mayor Mohammad Hanif Flyover) In 2019, BSRM introduced its new Service Center, BSRM Fast
• Saidabad Water Treatment Plant Phase-II Build, to provide customized rebar solutions for all construction
related needs. Under this value adding service center,BSRM
• Hatirjheel Integrated Development Project
offers BBS (Bar Bending Schedule) Development, Cut & Bend,
• Zillur Rahman Flyover (Mirpur-Airport &Banani) and stirrups.
• Dhaka Elevated Express way project
• Payra thermal power plant BSRM Fast Build strongly follows the Bangladesh National
Building Code and ACI to deliver all these customized rebar
• Lebukhali Bridge
solutions. The main purpose of this service is to provide
• Roopur Nuclear Power Plant simplified rebar solutions by ensuring compliance with
• Rampal Coal Power plant regulations, safe & cost effectiveness. 23
• Metro Rail Project
The Benefits of BSRM Fast Build Service Center:
• Bus Rapid Transit Project
making it ever safer. The new Grade 80 is usage is prescribed Minimal inventory
Just in time
delivery as per
in the ACI Code of 2014 and the BNBC 2015. The new Grade holding cost agreed schedule
a) Xtreme B500DWR:
In pursuit to our continuous quest for research and innovation, BSRM Fast Build Cut & Bend production process involves fully
we brought another product “XTREME B500DWR” which fully automated world class European machines at BSRM’s state of
conforms to BDS ISO 6935-2:2016. Grade B500DWR also the art factory.
Conforms B500C of BS 4449:2005 and Fe 500S of IS
Stirrup is another vital offering from BSRM Fast Build. It is a
1786:2008 – British Standard and Indian Standard
closed loop of reinforcement bar that is used tohold the main
respectively.
reinforcement bars together in an RCCstructure. The Rings/
The new Grade B500DWR has a minimum Tensile Strength to Stirrups are manufactured through automatic& sophisticated
Yield Strength (T/Y) Ratio: 1.25 machines, using strictest quality control toensure consistency,
quality & accurate dimensions. They are compliant with the
The product complies with the provisions of the Bangladesh
Bangladesh NationalBuilding Code (BNBC) and ACI.
National Building Code (BNBC).
The country’s growing infrastructure regarding new Bridges,
FEATURES OF XTREME B500DWR: Flyovers, and Rail Roads will provide ample scope for this new
• Increases ductility and safety addition to the BSRM Product and Service line
Building
a Sustainable
Nation
Notice is hereby given that the 17th Annual General Meeting of shareholders of BSRM Steels Limited will be held on
Thursday, December 19, 2019 at 9:30 AM at Shoronika Community Centre, 13 Love Lane, Chattogram to transact the
following business and to adopt necessary resolutions:
1. To receive, consider and adopt the Audited Financial Statements of the Company for the year ended June 30, 2019
together with the Directors' Report and the Auditors' Report on those Financial Statements.
3. To declare and approve Dividend for the year ended June 30, 2019.
5. To appoint Professional Accountant to certify on compliance status of Corporate Governance code as per BSEC 25
notification BSEC/CMRRCD/2006-158/207/Admin/80 Dated: 3rd June, 2018.
Notes:
• Shareholders whose name appears in the share register of the company or in the Depository Register as on the “Record Date”
i.e. October 27, 2019 are entitled to attend the Annual General Meeting (AGM) and receive the dividend.
• A shareholder entitled to attend and vote at the meeting may appoint a proxy or proxies in his/her stead and forms of proxy
must be lodged at the Company’s Share Office, Ali Mansion, 1207/1099 Sadarghat Road, Chattogram not later than 48 hours
before the AGM.
• Shareholders are requested to update their 12 digit ETIN information through their respective Depository Participant (DP)
before the AGM date.
• The Annual Report 2018-19 and Proxy Form are available at the Company’s Website www.bsrm.com.
• Annual Report will also be sent to the individual email address of the shareholder’s mentioned in their respective BO account.
Corporate & Contact Information
BOARD OF DIRECTORS
Mrs. Bilkis Alihussain was born in
in the industry. He was recognized as management of Financial and
1975. He completed his graduation
CIP (Commercially Important Person) Administrative aspects of the
in Economics from McGill University,
in the large scale industry category Company. He is also a member of
Canada and received MBA from
for a number of times. He is a the Audit Committee of the
renowned LUMS University. He has
Qualified Chartered Accountant and Company.
joined the family business in 2001
a fellow member of the Institute of
with an aim to set high industry Mr Zohair Taherali and his family
Chartered Accountants of
standards for the performance of the were recognized by National Board
Bangladesh.
Company. He is actively in of Revenue (NBR) as ‘Kar Bahadur’
Mr. Alihussain and his family were supporting the operation of the in 2016-2017 for paying highest
recognized by National Board of Company as Managing Director. He tax in national exchequer.
Revenue (NBR) as ‘Kar Bahadur’ in has introduced modern management
2016-2017 for paying highest tax to practices in the Company and
the national exchequer. continuously instilling a team spirit in
the industry. He was recognized as
He has been actively participating in
CIP(Commercially Important Person)
various social activities like Rotary
in the large scale industry category.
Club, Ma O Shishu Hospital,
Chirayata Shanti Society, Patient He has also been recognized as CIP
Welfare Committee of Chittagong (Commercially Important Person) for
Medical College and Hospital etc. He the year 2017 under the 'Product
is the founder of a School at Export & Trade' category.
Nasirabad, Chattogram which imparts
Mr. Aameir was recognized as the
free education to more than 570
highest taxpayer in Chattogram
underprivileged students.
District for the year 2014-15 and
2015-16 by the National Board of
Revenue (NBR).
Bangladesh Steel
Chairman Managing Director Director --- ---
Re-Rolling Mills Limited
Chairman &
Chittagong Power Company Ltd. Director Director --- ---
Managing Director 31
BOARD OF DIRECTORS
Bangladesh Steels Limited Director Managing Director Chairman Director ---
BSRM Steel Mills Limited Chairman Managing Director Director Director ---
BSRM Real Estates Limited Chairman Managing Director Director Director ---
Chairman &
H. Akberali & Co. Limited Director Director Director ---
Managing Director
Section Steel Industries Limited Managing Director Chairman --- --- ---
ADVISERS
• Moize Hussain, Adviser
• M. Firoze, Adviser Marketing & Product Development
• Tapan K. Poddar FCA, FCMA, Financial Consultant
Corporate Structure
Board of Directors
33
General Manager General Manager Finance
Deputy Managing Director
Human Resources & Accounts and Company
CORPORATE STRUCTURE
Secretary
General Manager
Corporate Affairs &
Dhaka Corporate Office Assistant General Senior Manager
Manager CSR & Chief Financial Officer
General Manager
Manufacturing
Senior Manager
Information Technology
Assistant General
Manager Administration
Senior Manager
Supply Chain
Mr. Alihussain Akberali FCA Chairman
Message from the Chairman
Assalamualikum
My Dear Shareholders, Members of the Board, Distinguished Guests, Ladies & Gentlemen
It is a great honour and privilege for me to address all of you on behalf of the Board of Directors and I am delighted to welcome all
the shareholders to the 17th Annual General Meeting of your Company. Your presence in this important meeting is a testimony of your
strong support and faith in us and this inspires us to achieve newer milestones of success.
Financial Performance:
I take this opportunity to share the Company's performance in the fiscal year 2018-19 by presenting the following operational and
financial results of the company:
Particulars Unit July’18 to June’19 July’17 to June’18
Production M. ton 758,405 727,034
Sales M. ton 756,820 710,995
Capacity utilization % 108% 104%
Revenue BDT Million 61,060 48,290 35
Gross Profit BDT Million 5,052 4,879
Net Profit after Tax BDT Million 1,728 1,801
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Mr. Aameir Alihussain Managing Director
Managing Director’s Round Up
Dear Fellow Shareholders, Ladies and Gentlemen: In terms of economic performance, this year Bangladesh was
in top position amongst its global peers and the future
I am delighted to welcome you all to the 17th Annual General
promises significant growth. During this year, there were
Meeting of the Company. We have posted our annual report
several structural reforms implemented in the country
in web site www.bsrm.com for your review.
including enactment of Value added Tax and Supplementary
To begin with, I would like to recap the performance Duty Act 2012 amongst others. These structural initiatives
highlights of 2018-19. The performance of BSRM Steels are important for enhancing the country’s future
Limited has been quite satisfactory. I am pleased to report competitiveness. The World Bank, global bilateral institution,
that the Company has made Tk. 1.728 Billion profit this year. expects that Bangladesh will grow at an average of 8.00% a
Sales stood Tk. 61,060 million and EPS stood Tk. 4.60. We year over the fiscal years of 2019-2020. A number of
sold 756,820 M. Ton of our products against our budgeted medium and large scale infrastructure projects are in
sales of 750,000 M. Ton. progress to reach this goal. Responding to this, we are going 39
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Dear Shareholders
Assalamualikum.
Your Directors take pleasure in presenting audited financial Report on the business and operations of your Company for the
year ended June 30, 2019. I am glad to welcome you all at the 17th Annual General Meeting (AGM) of BSRM Steels Limited.
This report has been prepared in compliance with the Companies Act 1994 and Bangladesh Securities and Exchange
Commission Notification No: BSEC/CMRRCD/2006-158/207/Admin/80 dated 03 June, 2018.
According to the International Monetary Fund (‘IMF’), global economic growth is expected to decline to 3.3% in 2019. But
improved momentum for emerging market and developing economies is projected to continue up to 2020. The outlook for
South Asia remains broadly positive. 43
DIRECTORS' REPORT
Output growth of Bangladesh accelerated to 7.9 percent in FY 2018-19 from 7.3 percent in FY 2017-18, supported by strong
private consumption. In the past few years, inflation has been relatively stable within the 5-6 percent range. Growth is expected
to remain strong at around 8.0 percent in FY 2019-20, led by private consumption and investment. Inflation is expected to
remain below 6.0 percent. Despite robust economic growth, non-performing loans remain high, particularly in the state-owned
commercial banks. Financial sector regulation and supervision need to be further strengthened to improve the health of the
banking sector, and the role of the state-owned banks needs to be reassessed. To provide alternative sources of long-term
investment financing, improving the business environment and developing a well-functioning domestic capital market is a
medium-term priority. Large projects, increasing urbanization, rising living standards and stronger purchasing power have all
driven growth in the steel industry. We are continuously supplying our products to all mega projects as under taken by the
government.
Some operational and financial data are given below for better understanding of the overall performance of the Company:
Operational Performance:
Capacity Utilization (%) 108.34 103.90 97.30 103.50 99.50 104.00 105.00
Sales (M. Ton) 756,820 710,995 692,504 373,747 604,513 679,803 601,935
We have set up our plant using state-of-the-art technologies and churn out world-class products. We are working on
continuous improvement in our process and management efficiency. As a result, the production efficiency of the mill is very
impressive during last couple of years and again we produced more than its installed capacity.
Financial Performance: Amount in BDT in million
Jan’16 to
July’18 to July’17 to July’16 to
Particulars Jun’16 2015 2014 2013
June’19 June’18 June’17*
(6 months)
Sales 61,060.15 48,289.93 37,996.41 17,265.18 32,316.10 38,535.94 36,229.05
Gross Profit 5,051.91 4,879.17 4,557.30 3,114.69 4,368.65 2,807.32 3,250.15
Profit before interest, taxes,
3,369.05 3,180.65 3,273.60 2,379.86 3,257.93 1,892.83 2,314.39
WPP & WWF
Less: Interest & WPP & WWF (1,328.76) (1,120.19) (417.23) (246.38) (739.29) (378.95) (492.82)
Add/(Less): Profit on Bargain
Purchase
- 10.2 - - - - -
Add/(Less): Share of
297.97 237.88 (225.87) (18.56) 75.31 (3.2) 497.36
profit/(loss) of associate
Less: Tax expenses (610.13) (507.74) (655.07) (801.61) (512.07) (424.47) (625.46)
Net Profit 1,728.13 1,800.80 1,705.41 1,313.32 2,081.88 1,086.21 1,693.47
EPS (Tk.) 4.60 4.79 4.98 3.84 6.09 3.18 4.95
*Information of 2016-2017 shows consolidated financial data.
44
Revenue from sale of products was higher as compared to the previous year, primarily due to increase volumes. The company
has taken good initiative to control Selling & Distribution expense, financial expense and administration expense. Net profit has
DIRECTORS' REPORT
Addition to fixed assets & CWIP 5,871.94 2,320.56 1,163.89 83.78 758.16 227.39 296.23
Operating cash flow (4671.88) 752.33 364.43 3,093.49 5,766.33 (2,995.28) 4,595.39
The Net Asset Value per share (NAV) of the Company has been increasing consistently which is a very positive sign of growth
and prosperity of the Company. In this year the NAV per share Tk. 55.58 which was Tk. 37.48 in previous year. Debt equity
ratio has been increased to 61:39 from 67:33 of previous year 2017-2018 and EBITA also has been increased to Tk. 3,939
Million from Tk. 3,644 Million of previous year 2017-2018. Overall financial position of the company is impressive in the
income year 2018-2019. During this year all lands of the company have been revalued as per guidance of BSEC and recorded
in the books of account of the company as of June 30, 2019.
Discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin:
Cost of Goods Sold: Amount in BDT in million
During the year under review, cost of inventories was higher as compared to the previous year due to high rate of MS scrap,
Ferro Alloys and other items in international market. High cost of raw material, other alloys and increment of other costs and
expenses lead to increase cost of goods sold compared to last year.
Gross Profit Margin Amount in BDT in million
Particulars 2018-19 2017-18 Change (%)
Gross Profit 5,052 4,879 3.54
The gross profit for year 2018-2019 increased by BDT 172.75 million compared to the last year 2017-2018. During the year
2018-19 Gross Profit Margin was 8.27% which was 10.10% in 2017-18. Percentage of Gross profit margin has decreased
as the company had to purchase raw materials M S Billets at higher prices.
Net profit has stood Tk. 1,728.13 Million which was Tk 1,800.77 Million in 2017-18. During the year 2018-19 Net Profit
Margin was 2.83% which was 3.73% in 2017-18. Net profit margin has decreased due to high price of raw materials and
income tax expense. 45
DIRECTORS' REPORT
July'18- Apr'19- Jan'19- Oct'18- July'18
Particulars
June'19 Jun'19 Mar'19 Dec'18 Sept'18
Profit Before Tax (BDT in Million) 2,338 790 496 443 609
Profit after Tax (BDT in Million) 1,728 559 380 330 459
The sales and profitability of steel industry depends on seasons in Bangladesh and raw material price in international market.
Some of the months are the peak season for steel industry. The profitability of that period is always high. Sales of third quarter
is high because it was peak period of sales. The price of raw material is high in the second and third quarter. For that reason,
EPS is less in those two quarters. EPS in fourth quarter is high due to average decrease in Raw material price.
Operation of Associate Company: BSRM Steel Mills Limited
The Company has invested Tk. 1,000,000,000 in shares of BSRM Steel Mills Limited and holding 25.35% of equity. This
associate started its production in June, 2016. Equipped with the world’s largest induction furnace, the plant is capable to
produce 862,500 M. Ton prime quality billets. The new plant supply us quality billet to produce our product. Some key financial
information of this plant is appended below:
• The M.S Rod segment which produces different graded Rod and sell the same to several dealers, end users, other corporate
users, EPZ based companies and India.
• The M.S Billets segment which produces different graded Billets and transfer the same to produce M.S Rod.
Segment information is included in note 3.14 of the Audited Financial Statements.
BSRM Xtreme500W was the first high strength steel in Grade 500 introduced in Bangladesh construction market in 2008.
BSRM Xtreme500W rapidly gained market share and is the undisputed market leader in this category. Besides Xtreme500W,
the company also manufactures Grade 420D steel to meet the requirements of certain Govt. projects in the power sector. The
company has decided to brand the Grade 420D as ‘Ultima’. The Company rolled out new Grade reinforcing steel conforming
to the U.S. standard ASTM 706 Grade 80 in the 2016 which is more economical as it will require 20% less steel in
construction. The new Grade 80 is marketed under the Brand name ‘Maxima’.
Risk assessment and mitigation is an integral part of any business. The Board of Directors are regularly monitoring, assessing
and identifying potential risk and threats to our profitability and sustainable growth. Our Risk Management capabilities are
supported by a strong management structure, information system, and regular analysis of market, economic scenario and
robust policies to cope with the challenges.
A summary of the significant risks and the way of managing risks adopted by our company is included in Annexure-1 and
Note-43 of the Financial Statements.
Board of Directors periodically assesses operational & financial performance. A detailed report on discussion is included in
Annexure-D.
Certification by the CEO & the CFO:
Declaration or certificate by the CEO & the CFO to the board as required under condition no. 3(3) is included in Annexure-A
Credit Rating:
Credit Rating information and Services Limited (CRISL) assigned rating as below:
AA+ ST-2
The entities rated “AA+” are adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating
indicates a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly
from time to time because of economic conditions.
“ST-2” indicates high certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection
factors. Risk factors are very small.
47
Our Company in the evaluation of Credit Rating Company was also placed with “Stable Outlook”.
DIRECTORS' REPORT
Board of Directors:
i. Composition and size of the Board:
On 30th June 2019, there were 5 members on the Board, The Board comprises Chairman, Managing Director, two
directors and one independent director.
ii. Board Meeting and attendance:
The Board met 7 times during the period from July 01, 2018 to June 30, 2019. Following table shows the attendance
of directors in the meeting.
No. of meeting held
Name of the directors Position No. of meeting attended
during the year
Mr. AlihussainAkberali FCA Chairman 7 5
Mr. Aameir Alihussain Managing Director 7 6
Mr. Zohair Taherali Director 7 6
Mrs. Tehseen Zohair Taherali Director 7 5
Mr. Gobinda Chandra Paul FCA Independent Director 7 6
The member who could not attend the meeting was granted leave or was outside the country.
iii. Details of Directors being appointed and re-appointed:
Mr. Aameir Alihussain and Mr. Zohair Taherali will retire by rotation at the conclusion of 17th Annual General Meeting as
per section 97 & 98 of the Articles of Association of the Company and being eligible Mr. Aameir Alihussain and Mr. Zohair
Taherali, offer them-selves for re-appointment.
iv. A brief resume of the directors and their expertise and names of Companies in which Directors holds the directorship and
membership have been disclosed in Board of Directors segment.
The Board of Directors ensures that the Group has an effective internal control system which ensures that the assets of the
Company are safeguarded and appropriate systems are in place to minimize and detect fraud, errors and other irregularities.
The Company has adopted Standard Operating Procedures (SOP) for the betterment of internal control system. To generate
accurate data and information within reasonable time frame, we have already commissioned most modern software called
Enterprise Resource Planning (ERP). The Company has established a separate internal audit department to ensure internal
control and compliance in place. On the other hand, Audit Committee regularly monitors and review the reports generated by
the internal audit department and takes corrective measures.
Extra-ordinary gain or loss:
There is no extra ordinary gain or loss during the year.
Related Party Transactions:
All transactions with related parties have been made on a commercial basis. Details of the related party transactions have
been disclosed under note 10 and 20 of the financial statements as per IFRS/BFRS.
Utilization of IPO proceeds and Financial Result after IPO:
Company had no unutilized IPO fund since 2009, Company is maintaining a stable financial performance.
Remuneration of Directors including Independent Director:
Directors were remunerated as per the decision of the Board and a detailed report of the Directors’ Remuneration is included
in Annexure-3 and Note 29.01 of Financial Statements.
Dividend:
The Board of Directors has recommended 25% cash dividend per share for the year ended June 30, 2019. The dividend
on equity shares, if approved would be paid to those members whose name appears on the register of members as on
48 record date.
Contribution to National Exchequer:
DIRECTORS' REPORT
Being a responsible corporate entity, BSRM is paying and facilitating collection of Government’s revenue. In 2018-2019,
BSRM Steels Limited collected and contributed Tk.4,708 million to the government exchequer as Income Tax, VAT and
Duties along with utility bill which is appended below:
191
848 Custom Duty
Tax
17. ICSB National Award (Silver Award) for Corporate Governance Excellence 2014. – (BSRM Steels Ltd)
DIRECTORS' REPORT
18. Best Electricity Consumer (Industry) award for the year 2015 (BSRM Ltd.)
19. Mercantile Bank Awards (Industry & Commerce) for the year 2015. (BSRM Group).
Information Technology
Standing on the age of digitization and technological advancement, engagement to customers and stakeholders requires
greater emphasis on mastering Information Technology. BSRM has implemented a strong and up-to-date IT set up, that
continuously ensures required information to be extracted from E-business solution at any point of time to mitigate risks and
develop financial performance. Our IT team has developed customer-friendly windows that allow them to order, complain, query
through an automated system within the shortest possible time. Details of Information technology are set out in the Chapter
‘Sustainable Growth’ in Page No. 88 in this report.
As one of the visions of BSRM is “Be an employer of choice, with focus on nurturing talent and developing future leaders of
the organization”, BSRM takes pride in developing a successful, dynamic and competent set of human assets. As we believe
our visions and values are only achievable through the placement of the right person at the right place, we have effectively
established a sound Human Resource saga that consists of mind-blowing stories of equal opportunity, continuous learning and
development, relentless industry relation and molding skilled workforce. Details of Human Resource are set out in the Chapter
‘Sustainable Growth’ in Page No. 87 in this report.
Code of Conduct:
The Board of Directors of the Company has adopted a Code of Conduct for the Directors. All the Directors have signed as
acceptance to its compliance.
Auditors:
Present auditor M/S A. Qasem & Co., Chartered Accountants (A member firm of Ernst & Young Global), Faruk Mahal (3rd
Floor), Plot# 93, Agrabad C/A will retire in 17th AGM and being eligible to conduct audit for the year 2019-20 and they have
conveyed their willingness to accept for re-appointment for the said periods. The Board has recommended as the statutory
Auditor for the year ended on June 30, 2020 subject to the approval of shareholders in the next Annual General Meeting.
Professional Accountant for Compliance of Corporate Governance:
Pursuant to the BSEC’s directive, Board has recommended Mr. Sidhartha Barua FCA, Managing Partner of M/s M.A. Mallik
& Co., Chartered Accountants, Aziz Chamber (2nd Floor), 6 Jubilee Road, Chattogram to appoint as a Professional
Accountant to issue Certificate on Compliance of Corporate Governance Code enacted by Bangladesh Securities and
Exchange Commission for the year ended on June 30, 2020 subject to approval of the shareholders in the next Annual
General Meeting
Reporting and Compliance of Corporate Governance:
Status of compliance with the requirements / conditions of Bangladesh Securities and Exchange Commission (BSEC)
Notification No: BSEC/CMRRCD/2006-158/207/Admin/80 dated 03 June, 2018 on corporate governance has been
included in the Report in Annexure-C.
Subsequent Events:
There is no subsequent event after the date of Financial Position and till the date of this report which could affect the ability
of the users of these financial statements to make an appropriate evaluation.
Directors’ Responsibilities Statements:
50
Pursuant to the BSEC notification No. BSEC/CMRRCD/2006-158/207/Admin/80 dated 03 June, 2018 the Directors
DIRECTORS' REPORT
confirm that:
a) The financial statements prepared by the management of BSRM Steels Limited fairly present its state of affairs, the
result of its operations, cash flows and changes in equity.
b) Proper Books of Account of the Company has 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.
d) International Accounting Standard (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting
Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed
in preparation of the financial statements and any departure there from has been adequately disclosed.
e) The system of internal controls sounds in design and has been effectively implemented and monitored.
f) There are no doubts upon the company’s ability to continue as a going concern and the annual accounts have been
prepared as a going concern basis.
g) The key operating and financial date for the last six years is disclosed in Annexure-4.
h) The pattern of shareholding is disclosed in Annexure-5.
i) A compliance status report with requirements of corporate governance as required by BSEC has been disclosed in
Regulatory Compliance Report segment.
j) Directors’ profile and their directorship and business interest in other organizations have been disclosed in Board of
Directors segment.
k) There was no declaration of bonus share or stock dividend as interim dividend.
Acknowledgements:
The Board of Directors and the management would like to thank all the employees, shareholders, suppliers, customers,
dealers, bankers, business partners for their consistent support and encouragement to the company. Board also take this
opportunity to thank BSEC, DSE, CSE, NBR, BIDA, RJSC and other government bodies for their continues support and
cooperation in 2018-2019 and look forward to the same in 2019-2020.
Allah Hafiz,
Aameir Alihussain
Managing Director
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52
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weeiY wb‡gœ †`qv n‡jv|
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1| b¨vkbvj †cÖvWvKwUwfwU GÛ †KvqvwjwU Gw·‡jÝ GIqvW©-2017
2| 2013-14, 2015-16, 2016-17 mv‡j RvZxq ißvwb U«wd AR©b (weGmAviGg w÷jm wj.)
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gš¿Yvjq‡qi KvQ †_‡K cÖksmvcÎ jvf|
4| 2014 mv‡j wk‡ívbœq‡b we‡kl Ae`vb ivLvq fvwi wkí wefv‡M ivó«cwZ cyi¯‹vi AR©b- (weGmAviGg w÷jm wjwg‡UW)
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†gavmb` AR©b
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10| w÷j K¨vUvMwi‡Z 2011, 2013, 2014, 2015, 2016, Ges 2017 mv‡ji †miv eª¨vÛ wn‡m‡e cyi¯‹…Z (weGmAviGg MÖæc)
11| 2010 mv‡ji †e÷ G›UvicÖvBR Ae `¨ Bqvi (weGmAviGg MÖæc)
12| wW A¨vÛ we K‡c©v‡iU A¨vIqvW© 2010 I 2012 (weGmAviGg w÷jm wj.)
13| 2012 mv‡j Avjx‡nv‡mb AvKeiAvjx GdwmG ÔcÖvBW Ad wPUvMvs (PÆMÖv‡gi AnsKvi)Õ Dcvwa‡Z f~wlZ|
14| wefvMxq cwi‡ek cyi¯‹vi 2013 (wem‡Kv wj.)
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w÷jm wj.)
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cÖwZ‡e`b I K‡c©v‡iU Mfb¨©vÝ-Gi Kgcøv‡qÝ:
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cÖwZ‡e`‡bi A¨v‡b·vi-wm †Z hy³ Kiv n‡q‡Q|
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59
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e¨e¯’vcbv cwiPvjK
ANNEXURE-A
[As per condition No. 1(5)(xxvi)]
BSRM Steels Limited
Declaration by CEO and CFO
Dated: September 16, 2019
Subject: Declaration on Financial Statements for the year ended on 30th June 2019.
1. The Financial Statements of BSRM Steels Limited for the year ended on 30th June 2019 have been prepared in
compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as
applicable in the Bangladesh and any departure there from has been adequately disclosed;
2. The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, in
order for the financial statements to reveal a true and fair view;
3. The form and substance of transactions and the company’s state of affairs have been reasonably and fairly presented
in its financial statements;
4. To ensure above, the company has been taken proper and adequate care in installing a system of Internal control and
maintenance of accounting records;
5. Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and
procedures of the company were consistently followed; and
6. The management’s use of the going concern basis of accounting in preparing the financial statements is appropriate
and there exists no materials uncertainty related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern.
(i) We have reviewed the financial statements for the year ended on June 30, 2019 and that to the best of our knowledge
and belief:
a) these financial statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;
b) these statements collectively present true and fair view of the company’s affairs and are in compliance with existing
accounting standards and applicable laws;
(ii) There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are
fraudulent, illegal or in violation of the code of conduct for the company’s Board of Directors or its members.
Sincerely yours,
61
DIRECTORS’ REPORT
ANNEXURE-C
[As per condition No. 1(5)(xxvii)]
Compliance Status
Condition
Title Remarks
No.
Complied Not Complied
1 BOARD OF DIRECTORS
1(1) Size of the Board of Directors
The total number of members of a company’s Board of Directors (hereinafter √
referred to as “Board”) shall not be less than 5 (five) and more than 20 (twenty).
1(2) Independent Directors
All companies shall have effective representation of independent directors on their
Boards, so that the Board, as a group, includes core competencies considered
relevant in the context of each company; for this purpose, the companies shall
62
comply with the following: -
1(2)(a) At least one-fifth (1/5) of the total number of directors in the company’s Board shall
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Accountant or Chartered Financial Analyst or Chartered Certified Accountant or √
Certified Public Accountant or Chartered Management Accountant or Chartered
Secretary or equivalent qualification;
1(3)(c) The independent director shall have at least 10 (ten) years of experiences in any
field mentioned in clause (b) √
1(3)(d) In special cases the above qualifications may be relaxed subject to prior approval of
N/A
the Commission.
1(4) Duality of Chairperson of the Board of Directors and Managing Director or
Chief Executive Officer:-
1(4)(a) The positions of the Chairperson of the Board and the Managing Director (MD)
and/or Chief Executive Officer (CEO) of the company shall be filled by different √
individuals.
1(4)(b) The Managing Director (MD) and/or Chief Executive Officer (CEO) of a listed N/A
company shall not hold the same position in another listed company
1(4)(c) The Chairperson of the Board shall be elected from among the non-executive
directors of the company; √
1(4)(d) The Board shall clearly define respective roles and responsibilities of the
√
Chairperson and the Managing Director and/or Chief Executive Officer;
1(4)(e) In the absence of the Chairperson of the Board, the remaining members may elect
one of themselves from non-executive directors as Chairperson for that particular √
Board’s meeting; the reason of absence of the regular Chairperson shall be duly
recorded in the minutes.
1(5) The Directors' Report to Shareholders
The Board of the company shall include the following additional statements or
disclosures in the Directors’ Report prepared under section 184 of the Companies
Act, 1994 (Act No. XVIII of 1994):-
1(5)(i) An industry outlook and possible future developments in the industry √
1(5)(ii) The segment-wise or product-wise performance √
1(5)(iii) Risks and concerns including internal and external risk factors, threat to
√
sustainability and negative impact on environment, if any;
1(5)(iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin,
√
where applicable;
1(5)(v) A discussion on continuity of any extraordinary activities and their implications (gain
or loss); √
Compliance Status
Condition
Title Remarks
No.
Complied Not Complied
1(5)(vi) A detailed discussion on related party transactions along with a statement showing
amount, nature of related party, nature of transactions and basis of transactions of √
all related party transactions;
1(5)(vii) A statement of utilization of proceeds raised through public issues, rights issues N/A
and/or any other instruments
1(5)(viii) An explanation if the financial results deteriorate after the company goes for Initial
Public Offering (IPO), Repeat Public Offering (RPO), Rights Share Offer, Direct N/A
Listing, etc.;
1(5)(ix) An explanation on any significant variance that occurs between Quarterly Financial
N/A
performances and Annual Financial Statements;
1(5)(x) A statement of remuneration paid to the directors including independent directors; √
1(5)(xi) A statement that the financial statements prepared by the management of the issuer
company present fairly its state of affairs, the result of its operations, cash flows and √
changes in equity;
64 1(5)(xii) A statement that proper books of account of the issuer company have been √
maintained;
1(5)(xiii) A statement that appropriate accounting policies have been consistently applied in
DIRECTORS’ REPORT
preparation of the financial statements and that the accounting estimates are based √
on reasonable and prudent judgment
1(5)(xiv) A statement that International Accounting Standards (IAS) or International Financial
Reporting Standards (IFRS), as applicable in Bangladesh, have been followed in √
preparation of the financial statements and any departure there from has been
adequately disclosed;
1(5)(xv) A statement that the system of internal control is sound in design and has been √
effectively implemented and monitored;
1(5)(xvi) A statement that minority shareholders 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;
1(5)(xvii) A statement that there is no significant doubt upon the issuer company’s ability to
continue as a going concern, if the issuer company is not considered to be a going √
concern, the fact along with reasons there of shall be disclosed;
1(5)(xviii) An explanation that significant deviations from the last year’s operating results of the √
issuer company shall be highlighted and the reasons thereof shall be explained;
1(5)(xix) A statement where key operating and financial data of at least preceding 5 (five)
√
years shall be summarized
1(5)(xx) An explanation on the reasons if the issuer company has not declared dividend
N/A
(cash or stock) for the year;
1(5)(xxi) Board’s statement to the effect that no bonus share or stock dividend has been or
N/A
shall be declared as interim dividend;
1(5)(xxii) The total number of Board meetings held during the year and attendance by each
√
director;
1(5)(xxiii) A report on the pattern of shareholding disclosing the aggregate number of shares
(along with name-wise details where stated below) held by:-
1(5)(xxiii)(a) Parent or Subsidiary or Associated Companies and other related parties (name-wise
√
details);
1(5)(xxiii)(b) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head
of Internal Audit and Compliance and their spouses and minor children (name-wise √
details);
1(5)(xxiii)(c) Executives; and √
1(5)(xxiii)(d) Shareholders holding ten percent (10%) or more voting interest in the company
√
(name-wise details);
1(5)(xxiv) In case of the appointment/re-appointment of a director the company shall disclose
the following information to the shareholders:
Compliance Status
Condition
Title Remarks
No.
Complied Not Complied
DIRECTORS’ REPORT
1(5)(xxv)(e) Briefly explain the financial and economic scenario of the country and the globe; √
1(5)(xxv)(f) Risks and concerns issues related to the financial statements, explaining such risk √
and concerns mitigation plan of the company; and
1(5)(xxv)(g) future plan or projection or forecast for company’s operation, performance and
financial position, with justification thereof, i.e., actual position shall be explained to √
the shareholders in the next AGM;
1(5)(xxvi) Declaration or certification by the CEO and the CFO to the Board as required under
√
condition No. 3(3) shall be disclosed as per Annexure- A and
1(5)(xxvii) The report as well as certificate regarding compliance of conditions of this Code as
required under condition No. 9 shall be disclosed as per Annexure- B and √
Annexure- C.
1(6) Meetings of the Board of Directors
The company shall conduct its Board meetings and record the minutes of the
meetings as well as keep required books and records in line with the provisions of
the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of √
Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not
inconsistent with any condition of this Code
1(7) Code of Conduct for the Chairperson, other Board members and Chief
Executive Officer
1(7)(a) The Board shall lay down a code of conduct, based on the recommendation of the
Nomination and Remuneration Committee (NRC) at condition No. 6, for the √
Chairperson of the Board, other board members and Chief Executive Officer of the
company;
1(7)(b) The code of conduct as determined by the NRC shall be posted on the website of
the company including, among others, prudent conduct and behavior;
confidentiality; conflict of interest; compliance with laws, rules and regulations; √
prohibition of insider trading; relationship with environment, employees, customers
and suppliers; and independency.
2 GOVERNANCE OF BOARD OF DIRECTORS OF SUBSIDIARY COMPANY
2(a) Provisions relating to the composition of the Board of the holding company shall be
made applicable to the composition of the Board of the subsidiary company; N/A
2(b) At least 1 (one) independent director on the Board of the holding company shall be
a director on the Board of the subsidiary company; N/A
2(c) The minutes of the Board meeting of the subsidiary company shall be placed for N/A
review at the following Board meeting of the holding company
2(d) The minutes of the respective Board meeting of the holding company shall state that N/A
they have reviewed the affairs of the subsidiary company also;
Compliance Status
Condition
Title Remarks
No.
Complied Not Complied
2(e) The Audit Committee of the holding company shall also review the financial
N/A
statements, in particular the investments made by the subsidiary company
3 MANAGING DIRECTOR (MD) OR CHIEF EXECUTIVE OFFICER (CEO), CHIEF
FINANCIAL OFFICER (CFO), HEAD OF INTERNAL AUDIT AND COMPLIANCE
(HIAC) AND COMPANY SECRETARY (CS)
3(1) Appointment √
3(1)(a) The Board shall appoint a Managing Director (MD) or Chief Executive Officer (CEO),
a Company Secretary (CS), a Chief Financial Officer (CFO) and a Head of Internal √
Audit and Compliance (HIAC);
3(1)(b) The positions of the Managing Director (MD) or Chief Executive Officer (CEO),
Company Secretary (CS), Chief Financial Officer (CFO) and Head of Internal Audit √
and Compliance (HIAC) shall be filled by different individuals;
3(1)(c) The MD or CEO, CS, CFO and HIAC of a listed company shall not hold any executive √
position in any other company at the same time;
66 3(1)(d) The Board shall clearly define respective roles, responsibilities and duties of the √
CFO, the HIAC and the CS;
3(1)(e) The MD or CEO, CS, CFO and HIAC shall not be removed from their position without
DIRECTORS’ REPORT
5(2)(b) The Board shall appoint members of the Audit Committee who shall be
non-executive directors of the company excepting Chairperson of the Board and √
shall include at least 1 (one) independent director;
5(2)(c) All members of the audit committee should be “financially literate” and at least 1
(one) member shall have accounting or related financial management background √
and 10 (ten) years of such experience;
5(2)(d) When the term of service of any Committee member expires or there is any
circumstance causing any Committee member to be unable to hold office before
expiration of the term of service, thus making the number of the Committee
members to be lower than the prescribed number of 3 (three) persons, the Board √
shall appoint the new Committee member to fill up the vacancy immediately or not
later than 1 (one) month from the date of vacancy in the Committee to ensure
continuity of the performance of work of the Audit Committee;
5(2)(e) The company secretary shall act as the secretary of the Committee; √
5(2)(f) The quorum of the Audit Committee meeting shall not constitute without at least 1 √
(one) independent director.
67
5(3) Chairperson of the Audit Committee
DIRECTORS’ REPORT
5(3)(a) The Board shall select 1 (one) member of the Audit Committee to be Chairperson √
of the Audit Committee, who shall be an independent director;
5(3)(b) In the absence of the Chairperson of the Audit Committee, the remaining members
may elect one of themselves as Chairperson for that particular meeting, in that case
there shall be no problem of constituting a quorum as required under condition No. √
5(4)(b) and the reason of absence of the regular Chairperson shall be duly recorded
in the minutes.
5(3)(c) Chairperson of the Audit Committee shall remain present in the Annual General
√
Meeting (AGM).
5(4) Meeting of the Audit Committee
5(4)(a) The Audit Committee shall conduct at least its four meetings in a financial year. √
5(4)(b) The quorum of the meeting of the Audit Committee shall be constituted in presence
of either two members or two-third of the members of the Audit Committee, √
whichever is higher, where presence of an independent director is a must.
5(5) Role of Audit Committee
The Audit Committee shall:-
5(5)(a) oversee the financial reporting process; √
5(5)(b) monitor choice of accounting policies and principles; √
5(5)(c) monitor Internal Audit and Compliance process to ensure that it is adequately
resourced, including approval of the Internal Audit and Compliance Plan and review √
of the Internal Audit and Compliance Report;
5(5)(d) oversee hiring and performance of external auditors; √
5(5)(e) hold meeting with the external or statutory auditors for review of the annual financial
√
statements before submission to the Board for approval or adoption;
5(5)(f) review along with the management, the annual financial statements before
√
submission to the Board for approval;
5(5)(g) review along with the management, the quarterly and half yearly financial
√
statements before submission to the Board for approval;
5(5)(h) review the adequacy of internal audit function; √
5(5)(i) review the Management’s Discussion and Analysis before disclosing in the Annual
√
Report;
5(5)(j) review statement of all related party transactions submitted by the management; √
5(5)(k) review Management Letters or Letter of Internal Control weakness issued by
√
statutory auditors;
Compliance Status
Condition
Title Remarks
No.
Complied Not Complied
5(5)(l) oversee the determination of audit fees based on scope and magnitude, level of
expertise deployed and time required for effective audit and evaluate the √
performance of external auditors; and
5(5)(m) oversee whether the proceeds raised through Initial Public Offering (IPO) or Repeat
Public Offering (RPO) or Rights Share Offer have been utilized as per the purposes N/A
stated in relevant offer document or prospectus approved by the Commission.
5(6) Reporting of the Audit Committee
5(6)(a) Reporting to the Board of Directors
5(6)(a)(i) The Audit Committee shall report on its activities to the Board. √
5(6)(a)(ii) The Audit Committee shall immediately report to the Board on the following
findings, if any:
5(6)(a)(ii)(a) report on conflicts of interests; N/A
5(6)(a)(ii)(b) suspected or presumed fraud or irregularity or material defect identified in the N/A
internal audit and compliance process or in the financial statements;
68
5(6)(a)(ii)(c) suspected infringement of laws, regulatory compliances including securities related
N/A
laws, rules and regulations; and
DIRECTORS’ REPORT
5(6)(a)(ii)(d) any other matter which the Audit Committee deems necessary shall be disclosed to
N/A
the Board immediately;
5(6)(b) Reporting to the Authorities
If the Audit Committee has reported to the Board about anything which has material
impact on the financial condition and results of operation and has discussed with the
Board and the management that any rectification is necessary and if the Audit
Committee finds that such rectification has been unreasonably ignored, the Audit N/A
Committee shall report such finding to the Commission, upon reporting of such
matters to the Board for three times or completion of a period of 6 (six) months from
the date of first reporting to the Board, whichever is earlier.
5(7) Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee, including any report made
to the Board under condition No. 5(6)(a)(ii) above during the year, shall be signed √
by the Chairperson of the Audit Committee and disclosed in the annual report of the
issuer company.
6 NOMINATION AND REMUNERATION COMMITTEE (NRC)
6(1) Responsibility to the Board of Directors
6(1)(a) The company shall have a Nomination and Remuneration Committee (NRC) as a
√
sub-committee of the Board;
6(1)(b) The NRC shall assist the Board in formulation of the nomination criteria or policy for
determining qualifications, positive attributes, experiences and independence of
directors and top level executive as well as a policy for formal process of √
considering remuneration of directors, top level executive;
6(1)(c) The Terms of Reference (ToR) of the NRC shall be clearly set forth in writing
√
covering the areas stated at the condition No.6(5)(b).
6(2) Constitution of the NRC
6(2)(a) The Committee shall comprise of at least three members including an independent √
director;
6(2)(b) All members of the Committee shall be non-executive directors; √
6(2)(c) Members of the Committee shall be nominated and appointed by the Board; √
6(2)(d) The Board shall have authority to remove and appoint any member of the √
Committee;
6(2)(e) In case of death, resignation, disqualification, or removal of any member of the
Committee or in any other cases of vacancies, the board shall fill the vacancy within √
180 (one hundred eighty) days of occurring such vacancy in the Committee;
Compliance Status
Condition
Title Remarks
No.
Complied Not Complied
6(2)(f) The Chairperson of the Committee may appoint or co-opt any external expert and/or
member(s) of staff to the Committee as advisor who shall be non-voting member, if √
the Chairperson feels that advice or suggestion from such external expert and/or
member(s) of staff shall be required or valuable for the Committee;
6(2)(g) The company secretary shall act as the secretary of the Committee; √
6(2)(h) The quorum of the NRC meeting shall not constitute without attendance of at least √
an independent director;
6(2)(i) No member of the NRC shall receive, either directly or indirectly, any remuneration
for any advisory or consultancy role or otherwise, other than Director’s fees or √
honorarium from the company.
6(3) Chairperson of the NRC
6(3)(a) The Board shall select 1 (one) member of the NRC to be Chairperson of the
√
Committee, who shall be an independent director;
6(3)(b) In the absence of the Chairperson of the NRC, the remaining members may elect
one of themselves as Chairperson for that particular meeting, the reason of absence √
69
of the regular Chairperson shall be duly recorded in the minutes;
6(3)(c) The Chairperson of the NRC shall attend the annual general meeting (AGM) to
DIRECTORS’ REPORT
√
answer the queries of the shareholders.
6(4) Meeting of the NRC
6(4)(a) The NRC shall conduct at least one meeting in a financial year; √
6(4)(b) The Chairperson of the NRC may convene any emergency meeting upon request by
√
any member of the NRC;
6(4)(c) The quorum of the meeting of the NRC shall be constituted in presence of either two
members or two third of the members of the Committee, whichever is higher, where
√
presence of an independent director is must as required under condition No.
6(2)(h);
6(4)(d) The proceedings of each meeting of the NRC shall duly be recorded in the minutes √
and such minutes shall be confirmed in the next meeting of the NRC
6(5) Role of the NRC
6(5)(a) NRC shall be independent and responsible or accountable to the Board and to the √
shareholders;
6(5)(b) NRC shall oversee, among others, the following matters and make report with
recommendation to the Board:
6(5)(b)(i) formulating the criteria for determining qualifications, positive attributes and
independence of a director and recommend a policy to the Board, relating to the
remuneration of the directors, top level executive, considering the following:
6(5)(b)(i)(a) the level and composition of remuneration is reasonable and sufficient to attract, √
retain and motivate suitable directors to run the company successfully;
6(5)(b)(i)(b) the relationship of remuneration to performance is clear and meets appropriate
√
performance benchmarks; and
6(5)(b)(i)(c) remuneration to directors, top level executive involves a balance between fixed and
incentive pay reflecting short and long-term performance objectives appropriate to √
the working of the company and its goals;
6(5)(b)(ii) devising a policy on Board’s diversity taking into consideration age, gender,
√
experience, ethnicity, educational background and nationality;
6(5)(b)(iii) identifying persons who are qualified to become directors and who may be
appointed in top level executive position in accordance with the criteria laid down, √
and recommend their appointment and removal to the Board;
6(5)(b)(iv) formulating the criteria for evaluation of performance of independent directors and √
the Board;
6(5)(b)(v) identifying the company’s needs for employees at different levels and determine
√
their selection, transfer or replacement and promotion criteria; and
Compliance Status
Condition
Title Remarks
No.
Complied Not Complied
BSRM Steels Limited is the country’s largest 500 steel bars Preparation of Financial Statements:
branded as “Xtreme500W” brand. The Company has
The financial statements have been prepared on a going
anchored this position based on its market-leading
concern basis following accrual basis of accounting in
capacities, world-class manufacturing assets, high
accordance with the applicable International Accounting
production utilization levels, optimized cost structures,
Standards and International Financial reporting Standards.
vibrant sales and distribution network, superior post-sales
support and robust customer engagement programs. The Accounting Policies and Estimates and changes in that
overall Company’s position has been reflected in the Policies and Estimates for preparation of Financial
Financial Statements which has prepared following all Statements:
International Financial Reporting Standards and International
Accounting Standards. The company’s position and future Accounting Policies and Estimates and changes in that
planning, methods of financial statement preparation has Policies and Estimates for preparation of Financial 71
been summarized below: Statements are disclosed in Note no. 3 of the statement of
DIRECTORS’ REPORT
financial position and on page 110 of Annual Report for the
fiscal year 2018-2019.
The following operating and financial review is intended to convey the Management’s perspective on the financial and operating
performance of the Company at the end of the Financial Year 2018-19. During the year under review, the Company recorded
a profit after tax of 1,728 Million against previous year’s net profit of 1,800 Million. The decrease is primarily on account of
deferred tax expenses over previous year. The basic earnings per share for the Financial Year 2018-19 was Tk. 4.60 per share
against Tk. 4.79 per share in the previous year. The analysis of major items of the financial statements is given below:
Revenue:
Taka in Million
Particulars 2018-19 2017-18 Change (%)
During the year under review, sale of products was higher as compared to the previous year due to increased volume of sales.
Cost of Goods Sold:
Taka in Million
Particulars 2018-19 2017-18 Change (%)
During the year under review, purchase price of raw materials was higher as compared to the previous year and out of 29%
changes, raw materials cost represents 26%. Other cost like salary, depreciation, consumption of stores and spares etc had
no significant impact on profit.
Other Expenses:
Taka in Million
Particulars 2018-19 2017-18 Change (%)
The Company’s operating expenses (Selling, distribution, marketing, administrative, net Finance Cost and Income Tax
expenses) increased to BDT 3,531 mn in 2019 from BDT 3,233 mn in 2018 which represents 9% increment.
Shareholders’ fund: Shareholders’ fund increased to BDT Inventory: Inventory comprises finished goods of BDT
20,897 mn in 2019 from BDT 12,808 mn in 2018 and 6,336 mn, raw materials of BDT 6,590 mn, stores and
represents 63% addition. consumables spares of BDT 2,064 mn. The Company has a
policy of maintaining adequate inventory to ensure
Non-current assets:
uninterrupted operations.
Fixed assets additions: During the year 2019, the total
Trade and other receivables: These largely comprise of
additions to the fixed assets, including second melting unit at
trade receivables where in average receivables cycle is
Mirsarai, was BDT 5,871.94 mn. The major additions to the
maintained at 35 days.
fixed assets were land, building, purchase of plant and
machinery etc. Cash and bank balance: Cash and bank balances include
cash in hand of BDT 5.65 mn, balances in bank account of
Capital work-in-progress: The capitalization of second
BDT 507.53 mn and fixed deposits receipt of BDT 401.57
melting unit at Mirsarai has been completed in this year
mn. Liquid balances of cash and bank are necessary for the
2018-2019. The remaining Capital work-in-progress
smooth functioning of the business.
includes construction work for factory building, plant and
machinery.
Equity and liabilities Capital and reserves: The equity government projects resulting which trade receivables has
capital comprised 375,952,500 equity shares of BDT 10 increased by BDT 3,671 mn at the end of June 2019.
each. The market value of the share is BDT 58.30 is (as on Purchase and suppliers payments have also increased by
30 June 2019, DSE) resulting market capitalization of BDT BDT 1,566 mn during the year 2018-19. Resulted net
21.92 bn. operating cash flow per share reduced to BDT (12.43) in
2018-2019 from BDT 2.90 in 2017-18.
Non-current borrowings: Non-current borrowings include
BDT 5,557 mn in 2019 for new melting unit plant at Cash flow from investing activities: Net cash used in
Mirsarai. investing activities increased to BDT 6,098 mn in 2018-19
from BDT 1,914 mn in 2017-18 due to high outflow of cash
Current borrowings: Current borrowings includes current
for acquisition of Property, Plant and equipment.
portion of long term loan of BDT 424 mn for new melting unit
plant at Mirsarai. Cash flow from financing activities: Net cash used in
financing activities increased to BDT 11,161 mn in
Current Liabilities: Current liabilities stood BDT 33,888
2018-2019 from BDT 1,612 mn in 2017-18 due to new
mn in 2018-19 from BDT 29,799 mn in 2017-2018.
loan taken for second melting unit at Mirsarai and less cash
Analysis of Cash Flows: dividend (i.e. @ 10%) paid in 2018-2019 for the year 2018 73
against 20% in 2017-2019 for the year 2017.
DIRECTORS’ REPORT
Cash flow from operating activities: The Company has
decided to provide extended credit facilities to new
Global and Local Economic Scenario: some risks. Global warming and green house effects, makes
Bangladesh cyclone prone area. Moreover, energy crisis,
According to the International Monetary Fund (‘IMF’), global
port congestion, poor infrastructure etc creates obstacles for
74 economic growth is expected to further decline to 3.3% in
prospect of steel industry. However, now some positive steps
2019. But improved momentum for emerging market and
have been taken by the Government. LNG supply, Rooppur
DIRECTORS’ REPORT
Aameir Alihussain
Managing Director
ANNEXURE -1
DIRECTORS’ REPORT
which new industrial investments proposal from home and
Foreign currency risk is the risk of changes in exchange
aboard have failed to materialize.
rates that adversely affect the company’s earnings, equity,
For ensuring uninterrupted power supply BSRM Group has and competitiveness.
made a deal with PGCB and installed a substation for
We are hugely involved with Foreign Trade i.e. Import &
tapping power from the 230 KV national grids. Moreover,
Export and thus we are also exposed to Foreign Currency
now more than 10,000 MW power can be produced in
Risks. Exchange rate gains or losses related to foreign
Bangladesh. The government is also planning for setting up
currency transactions are recognized as transaction gains
some big power stations. There is another regular risk of
and losses in our income statement as incurred. We also
having an adequate and regular supply of gas. The
maintain foreign currency account in which export collection
Company is also aware of such risks and its mitigation
is directly deposited and we can meet foreign currency
through the alternative supply of fuel.
payment requirements. In the year 2017-18 company has
2. Market Risks not been affected due to Foreign Currency fluctuation.
Further, as a mitigation plan we plan to purchase USD in
Like other industry, trade, and commerce, we are also advance based on the market situation.
exposed to market risks arising from adverse changes in:
Competition and Economic conditions
• Interest Rate;
• Currency Rate (foreign exchange rates); Competition refers to the risks of decreasing present market
• Competition, and share caused by new entrants. We try to mitigate this risk
• Economic conditions through active brand management and customer
relationship and by ensuring timely supply of quality
To manage these risks, we undertake various risks specific product.
measures and strategies on regular basis.
As we are continuously in attempts to explore any untapped
Interest Rates opportunity and also to adopt customer’s needs, we believe
Interest rate risk refers to the risk that increases cost of we would be able to cope with any situation in the industry
capital which will have an adverse impact on consolidated we are working.
net financial income.
3. Technology Related Risks ii. BSRM Recycles 373,700 Cubic Meters of water every
day. We have invested in technologically superior European
Highly automated and competitive types of machinery are
Water Treatment Plant in its steel plants which has helped
available with the Company for the manufacture of various
BSRM to recycle every drop of used water and achieve zero
steel products. The Company has so far been one of the
water wastage.
pioneers in Bangladesh in setting up mills with State of the
Art European Technology for further processing of the input iii. BSRM plants 10,000 trees in its factories. We have
materials. The Company also implemented Oracle under taken a plan for reforestation effort in collaboration
e-Business Suite to integrate the operation of basic with partner organizations, conducts tree plantation
functions namely, Finance and Accounts, Sales and programs around main steel plants.
Marketing, Supply Chain, Inventory, Maintenance, and
We firmly believe that-ZERO can save life.
Manufacturing. Business Intelligence (BI) Analytics Tool for
BSRM Group went go live in May 2018 which help senior
management and Board members to have information from
one central place.
76 4. Environmental Risks
DIRECTORS’ REPORT
DIRECTORS’ REPORT
during the strategy and objective setting processes as well
In addition, several good practices recommended by the
as the day-to-day activities and decision-making
Committee of Sponsoring Organizations (COSO) for ERM
have also been incorporated to further the BSRM Group’s • Risks should be understood and prioritized based on the
endeavor to build world class ERM framework and event frequency and impact to one or more objectives
processes. • The same metrics used to measure objectives e.g.,
BSRM Enterprise Risk Management (“ERM”) Framework revenue, customer satisfaction metrics, are to be preferably
provides guidance to implement a consistent, efficient, and leveraged during risk management activities
economical approach to identify, evaluate and respond to • Risk response strategies are to be evaluated for those
key risks that may impact business objectives. risks deemed to be high or medium priority
BSRM’s enterprise risk management framework is directed • Key risk management information (e.g., key events,
to enable management to effectively deal with uncertainty results of risk assessments, risk responses) is to be
and associated risk and opportunity, enhancing the documented in a timely and structured manner
capacity to build value.
• Policies, procedures and practices should be in
• Promoting risk awareness throughout the BSRM Ltd as synchronisation with risks
well as BSRM Group of Companies.
• A portfolio view of risks is to be reviewed by the Board,
• Defining risk appetite Audit Committee, Management Team and Chief Risk
• Identifying and managing multiple and cross-enterprise Officer on a regular basis
risks
• Identifying risk management team with clearly defined
roles and responsibilities
• Formalizing risk response decisions
• Reducing operational surprises and losses
• Formalising a process for identifying opportunities arising
out of risk situations
• Improving deployment or more efficient use of capital and
resources
BSRM’s Risk Management Framework comprises of:
Strategy
Objectives/ Risk
Culture Appetite
Policy
defines
framework
to
implement
strategy
78
Risk Management Methodology of BSRM:
DIRECTORS’ REPORT
Risk
Simply stated risk is the possibility that an event will occur and adversely affect the achievement of objectives. Risks can be
thought of as threats, uncertainty or lost opportunity.
• Evaluates and reports on how well the chosen responses are being implemented
The ERM guidelines provide supporting information to assist Management in the execution of the ERM processes.
ERM process is the systematic application of management policies, procedures and practices to the activity of communicat-
ing, consulting and establishing the context for ERM in BSRM Group of Companies. The ERM process comprising of risk
identification & assessment, risk treatment and risk monitoring applies across the organizational lifecycle.
Against the given background, the key process constituents of ERM are:
Risk Identification
Risk Evaluation
Disclosure of Risk Reporting:
We are following the below process for risk reporting in BSRM Group of Companies:
Risk response and mitigation Detailed current risk response and Designated Mitigation owner and Risk
details of Management actions with Manager will monitor it.
timelines
Risk Report at Business unit and A report/ form of communication Risk Managers, Chief Risk Officer and
corporate level intended to inform particular Risk Steering Committee will monitor
stakeholders by providing information it.
regarding the current state of key
risks and its management. It is
79
represented by a "Heat Map" where
key risks are plotted and is supported
DIRECTORS’ REPORT
by the detailed risk profiles
Risk report at group level Executive Summary Report with the Chief Risk Officer will monitor it.
selected top risks and responses at
group level
Remuneration Paid to Directors ANNEXURE-3
80
Key Operating and Financial Data of ANNEXURE -4
Preceding 6 Years
DIRECTORS’ REPORT
as on June 30 2019
a) Parent/Subsidiary/Associated companies and other related parties
Name Relation No. of Shares Held
Total 201,804,671
b) Directors /CEO/CS/CFO/Head of Internal Audit & Compliance and their spouses and minor children.
DIRECTORS’ REPORT
Accounts and Company Secretary 30,006
Mr. Moklesur Rahman Akhtar FCMA Senior Manager & Chief Financial Officer Nil
Mr. Murtaza Zoher Bengali Senior Manager Internal Audit & Compliance Nil
c) Shareholding status of top 5 salaried employees other than CEO, CS, CFO & HIAC
Mr. Mohammed Reazul Kabir FCA Assistant General Manager Finance & Accounts 2,051
Growth and development is a journey that has no destination. And with every success, our
nation has larger dreams – and BSRM is helping bring those dreams to life. In fact, BSRM procures
around 1.6 million tonnes of raw material annually, handling around 14,000 MT of inbound and
outbound raw materials and finished goods daily; with market capitalization of 38,655 million taka
(as of 30th June 2019). The Group assets are worth 126795 million taka (as of 30th June 2018)
and BSRM contributed Taka 17,365 million to the National Exchequer in 2018-2019.
Corporate Social Responsibilities
Continue to evolve as a responsible business house fulfilling legal and ethical issues
of doing business within a set of values that guide BSRM business processes ranging
from procuring materials from genuine suppliers to serving social causes. Retain and
uphold BSRM “SIMPLE ACHIEVEMENTS” made since 1952:
BSRM GROUP S - Stands Tall as One of the Leading Business Houses in Steel Industry
CSR PLAN I - Innovative & Efficient Business Operations
M - Makes Huge Investments in Protecting Environment, Preserving the Planet
P - Produces Best Quality Steel Products, Contributing in Building ‘Safer Nation’
L - Largest Tax Payer in the Steel Sector
E - Employer of Choice
SUSTAINABLE GROWTH-Green Environment, Human align our people with our vision and values and make them
Resource and Information Technology Development a key factor for success in business transformation and
change process.
To keep our human resources safe and sound and the
environment clean, we have taken number of measures. Here at BSRM, we believe people join us for a career, not
We always give priority to maintain work place safe, secure for a job. Our KPI based performance management system
and ensure the green environment for all of our employees helps people to be accountable for their roles and find out
as well as for our country. their weak areas to develop. It helps us to identify the high
performer for a bigger role within the group. Talent
Green Environment….
Management team strives to maintain a performance
In BSRM Steels Limited we are using world class Water based culture, identifying critical positions, finding out the
Treatment Plant (WTP) for recycling the water for reusing possible successors and helping them develop to future
87
and to keep the environment free from pollution. leadership.
SUSTAINABLE GROWTH
The Company has also commissioned Air Pollution Control In order to nurture talent, we at BSRM, believe that
(APC) system in melting factory to keep the air free from institutionalizing a learning culture positively helps safety,
Pollution. In the same way, we are going to implement a sustainability, quality and productivity of the organization.
rain water harvesting project for our new billet casting plant Our Learning and Development activities are systematic,
at Mirsarai. It will have marvelous positive impact on the organized, and ensure that individual training needs are
environment. well defined, understood, and catered to. Frequent
trainings, local and abroad, are provided to confirm
As recognition of your effort to keep the environment clean adequate development opportunities for all our people. Pre
and greener, we were awarded the “Divisional evaluation and post assessment translate to the training
Environmental Award” by Poribesh Odhidaptar. effectiveness and utilization.
Human Resources Function…. A large number of skilled workforces are working with us
We are on a journey to build a safer nation. To make this to produce the best quality of steel for our customers. We
drive meaningful we always desire to have the best people are committed to give our people a safe and compliant
in our team. Our people are our asset. We truly believe that workplace. Our Industrial Relation team works closely with
our employees are integral to our success. We can only be our Plant Human Resources to make sure that our people
consistent with our values; Sustainable Growth, Quality, have a place to talk and they must feel their concerns are
Reliability, Trust, Leadership, Social Responsibility and attended. We pay attention to give a work life balance and
Customer Satisfaction if we foster the right people at the engagement to our people. Employee Engagement
right time, work as a team, develop talents, enhance programs are rolled out to not only engage
leadership capabilities and maximize the potential of our
human capital.
Our HR policies are formulated to give the best to our people, and also at the
same time guarantee the control and utilization of resources. Our HR
Operations team is responsible for policy administration and timely review of
HR policies. Our people deserve the best of us, and hence we focus on our
Benefit Policy to ensure that our talent receives benefits and allowances such
as Festival Bonus, Provident Fund, Gratuity, Car Scheme, Children Education
Scheme, Employee Education Scheme, Employee Children Achievement
Award for distinct academic result, Domiciliary Scheme, Executive Health
88
Check-up Scheme, Hospitalization Scheme, Maternity Benefit Scheme,
Wedding Gifts, WPPF, Pilgrimage Leave etc.
SUSTAINABLE GROWTH
Information Technology….
When it comes to empowering IT, BSRM has always been the pioneer in
Bangladesh Manufacturing industry. While our ERP support is working
relentlessly to accurately reflect our production and financial info in oracle
eBS, our development team remains ever vigilant to ensure the best service
possible to our beloved customers.
Corporate Governance Report to assist in decision-making and leading the Company for
the benefit of its shareholders. Board of Directors is
We take pride in doing the right things the right way – and
performing the responsibilities, among others, setting the
are committed to the highest standards and practices of
company’s strategic objectives, providing leadership,
corporate governance, professionalism as well as business
supervision and safeguarding shareholders’ interest.
integrity, accountability, transparency and ethics in our
quest and commitment at all levels to the continuous Selection and appointment of new Directors
enhancement of stakeholders value as evident that we
Directors should ensure that the Company is properly
have awarded several times by ICSB for the best practices
managed to protect and enhance shareholder value and to
of corporate governance in our organization. Good
meet the Company’s obligations to shareholders, to the
Governance is the cornerstone of sustainability and
industry and to the law. In carrying out this duty, the Board
creation of long term value – both inherently underlying the
should always be mindful of the need for establishing a 89
structures and work processes of BSRM Steels Limited in
Board that enhances the efficient and effective running of
its history of being a pioneer in the industries, we operate
The Board of Directors of BSRM Steels Limited consists of • to review the business risk management;
members whopossess a wide variety of knowledge and
• to review the internal audit assessment;
90 experience in different arena of corporate world. This
ensures that together, they formulate the right policy for • to ensure the good corporate practices.
REGULATORY COMPLIANCE REPORT
The Audit Committee of BSRM Steels limited is pleased to (d) Oversee hiring and performance of external auditors.
submit the following report on the activities of year
(e) Hold meeting with the external or statutory auditors for
2018-019:
review of the annual Financial Statements before
According to the Notification on Corporate Governance of submission to the Board for approval or adoption.
Bangladesh Securities & Exchange Commission (BSEC)
(f) Review along with the management, the quarterly and
dated June 03, 2018 the board has established Audit
half yearly & annual Financial Statements before
Committee as a sub -committee of the Board.
submission to the Board for approval.
The Committee:
(g) Review the adequacy of internal audit function.
The present committee members, nominated by the Board
(h) Review the Management’s Discussion and Analysis
92 are as follows:
before disclosing in the Annual Report.
Mr. Gobinda Chandra Paul FCA Chairman
REPORT OF AUDIT COMMITTEE
Mr. Zohair Taherali Member (j) Review Management Letters or Letter of Internal
Control weakness issued by statutory auditors.
Mr. Shekhar Ranjan Kar FCA Secretary
(k) Oversee the determination of audit fees based on scope
Terms of References: The terms of reference of the Audit
and magnitude, level of expertise deployed and time
Committee have been determined by the Board as per BSEC
required for effective audit and evaluate the
notification. The Committee is responsible to the Board of
performance of external auditors.
Directors and reports on its activities regularly. The
Committee assist the Board in its general oversight of
financial reporting, internal controls and functions relating to
internal audit as well as ensures compliance with the
Corporate Governance Code of BSEC.
The members of Audit Committee met four times during this reporting period. The Committee carried out the following
activities among others:
• Reviewed the quarterly, half yearly and yearly Financial Statements of the company and recommended to the board
for adoption and circulation.
• Reviewed the land valuation report as certified by ACNABIN, Chartered Accountants, its, valuation process, accounting
treatment and disclosure as per BSEC Notification dated August 18, 2013.
• Reviewed the findings of inter audit team and its corrective actions
• Assessed the findings of external auditors and compliance of IAS/ IFRS for preparation of Financial Statements.
• Reviewed the adequate internal control system of the company are in place.
93
• Reviewed the compliance requirements of BSEC guidelines, notification and other laws.
The audit committee has recommended the board to re-appoint existing external auditor of the Company- A. Qasem & Co
Chartered Accountants, Faruk Mahal (3rd Floor), Plot# 93, Agrabad C/A, Chattogram the member firm of Ernst & Young
(EY) in Bangladesh for the position of statutory auditor for the year 2019-2020.
Audit Committee expressed their sincere thanks to all members of Board, team of internal audit, team of accounts & finance
and management of the company for their support.
(i) formulating the criteria for determining qualifications, 2. Finalization of organization structure.
positive attributes and independence of a director and 3. Developed strategy to handle manpower turnover.
recommend a policy to the Board, relating to the
4. Introduction of new attendance policy.
Members of NRC have also observed the following activities d) Employee Benefit Policy to attract the job seekers and
of the Company: retain internal talents.
a) Appointment and Retirement policy of Director, Top Level e) Succession planning of the company to have our future
Executives and Senior Management including Company leaders ready according to the requirements.
Secretary (CS), Chief Financial Officer (CFO) and Head of f) Ensuring extensive training and development plan for the
Internal Audit and Compliance (HIAC). individual or group of people.
b) Term/ Tenure of Independent Director. g) A transparent recruitment and selection policy where
c) Evaluation of performance of Director and top level competent candidates get hired.
executives. h) Practicing a clear career path system for employees which
d) Remuneration policy for Directors and top level Executive. reflect in Organization Structure.
The Committee reviewed the following activities of the Appreciation:
Company: The NRC expresses their sincere thanks to the members of
a) Organization Structure where reporting line is clearly the board and the management for their support, guidance
defined for the directors and top management team along and co-operation while carried out the responsibilities. 95
with standard manpower planning exercise for each and
Growth and development is a journey that has no destination. And with every success,
our nation has larger dreams – and BSRM is helping bring those dreams to life. The first Metro
Rail, Bus Rapid Transit and Elevated Expressway in Bangladesh are all being built with BSRM Steel,
as well as the prestigious Padma Bridge and the Rooppur Nuclear Power plant – the dreams of
today that will soon become the reality of tomorrow.
Certificate of Membership of BAPLC
97
“MY HOME IS
AS GREAT AS THE
PADMA BRIDGE TO ME”
We understand what your home is to you. That's why at BSRM, we forge steel for
building homes and national mega structures with the same expertise.
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30 June 2019 30 June 2018
Teke
Intaosible asset
Computer Software (Oracle ERP) 5.01 48,416,546 27,536,840
Trade Mark 5.02 86,739 93,004
__!g5g!rE_ _n,62e,u!_
5.01 Computef Software
Cost
Opening balance 43,117,355 33,581,355
Add: Acquisition of BISCO 9,536,000
Less: Adjustments (202,800)
Additions during the year 2s,819,s76
Closing balance 68,731,131 43,t17,355
Amortisation
Opening balance 15,580,516 8,825,593
Add: Opening Balance ofBISCO 2,701.867
Less: Adjustments (202,800)
Add: Charged during the year 4,e39870 1,053,056
Closing balance 20.314.58s 15.580-516
Net Book Value 48.416.546 27.s36.840
Trade Mark
Cost
Opening balance 125,300 t25,300
Add: Addition during the year
Closing balance 125,300 12s,300
Amortisation
Opening balance 32,296 26,031
Add: Charged during the year 6,265 6,265
Closing balance 38,561 32,296
Net Book Value t6,739 93,004
Canital work-in-nroeress
Opening balance 2,841,135,643 882,398,624
Add: Additions during the year 6.01 s,s05,043,3s3 2,223,693,744
8,346,178,996 3,106,092,367
Less: Capitalized during the year (8,200,374,166) Q64,956,724)
_l4s,E04,gl!_ __?,84r,131911_
6.01 Details of Capital work-in -proqress
Particulars Opening
Additions .
caPitalized chsinc Balance
Bdonce durins tne verr
Civil Construction 2,43i,32r,324 1,439,017,669 (3,8s2,864,326) t9,474,667
Plant & Machinery 394,314,7_48 4,050,788,550 (4,318,773,135) 126,330,163
Motor Vehicle 2,920,129 (2,920,t29)
Software
, 13,499,s71 t2,317,005 (25,516,576\
2,841,135,643 5,505,043,353 (8'200,374,166) I45.E04.831
Property, Plant and Equipment under construction/acquisition is accounted for and measured at cost as capitat work-in-progress until
constructior/acquisition is completed and it is ready for use.
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Growing the
Nation through
its People
Our employees are the key to our success. The total culture we have created is our most
powerful strength; a strength that has drawn not just individuals, but families to our side for generations –
a legacy passed down from fathers to sons. We emphasize continuous learning through training.
During 2017-2018 alone, we have conducted over 1300 training programs with over 65,000 man-hours.
And our KPI-based job performance management systems help people learn their roles and find
out which areas they most need to develop in order to become stronger than steel.
Shareholders’ Information
Time: 9:30 AM
FINANCIAL CALENDAR
During the periods mentioned, the operational results of the company were announced on:
159
SHAREHOLDERS’ INFORMATION
2018-2019
ANNUAL
Jan'19 to Mar'19
25th April 2019
REPORT July'18 to Sept'18
10th November 2018
25th November
2019
Oct'18 to Dec'18
21st January 2019
RECORD DATE
70
68
66
64
62
60
160 58
56
SHAREHOLDERS’ INFORMATION
54
52
50
Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19
Movement of share price on Dhaka Stock Exchange Ltd. (DSE) during the year 2018-19
DIVIDEND DATE
The Board in its 242nd meeting held on September 16, 2019 recommended Dividend 25% Cash per share on
September 16, 2019.
LISTING
The company’s shares are listed at the Stock Exchanges at Dhaka and Chittagong of Bangladesh.
Closing Price of per share of your company as at 30th June 2019 was Taka 58.30
DIVIDEND
Year Rate of Dividend Form of Dividend
2018-19 25% Cash (Recommended)
2017-18 10% and 10% Stock & Cash respectively
2016-17 15% Cash (Recommended as Final)
2016-17 20% Cash (Interim)
2015 30% Cash
2014 15% Cash
2013 15% Cash
2012 10% and 5% Cash and Stock respectively
2011 15% Cash
2010 20 % Stock (Bonus)
2009 15% Stock (Bonus)
EPS
Year Taka
2018-19 4.60
2017-18 4.79
2016-17 8.66 (18 Months) 161
2015 6.09
SHAREHOLDERS’ INFORMATION
2014 3.18
2013 4.95
2012 2.53
2011 2.46
2010 2.82
2009 1.68
MARKET CAPITALIZATION
Year Taka in million
2018-19 21,918
2017-18 23,958
2016-17 31,067 (18 months)
2015 30,247
2014 29,974
2013 23,480
2012 22,101
2011 38,572
2010 57,200
2009 14,670
PLANT LOCATION
Rolling Unit:- 4, Fouzderhat Industrial Estate, Chattogram, Bangladesh. Tel: +88(031) 2770192-3.
Melting Unit-1: 202-205, Nasirabad Industrial Estate, Baizid Bostami Road, Chattogram, Bangladesh. Tel: +88-031-2581361-3.
INVESTOR CORRESPONDENCE
Mail to: BSRM Steels Ltd., Ali Mansion, 1207/1099, Sadarghat Road, Chittagong, Bangladesh,
Voice: +880 31 2854901-10, E-mail:[email protected], Fax: +880 31 610101 Web: www.bsrm.com
EVENTS & IMAGES
162
Shareholders alongwith
Events & Images members of Board at 16th AGM
Mr. Alihussain Akberali FCA,
Chairman of the Company
along with Company Secretary
and other Directors addressed
number of issues to the
shareholders at 16th AGM
Mr Aameir Alihussain,
Managing Director
Nominated Commercially
Important Person (CIP) in
Large Industry (Manufacturing)
Category for the year 2016
BSRM achieved
the “National
Kazi Anwar Ahmed, Export Trophy
General Manager Silver, 2013-14”.
Corporate Affairs Honorable Prime
Reciving the award Minster Sheik
of “Best Brand Hasina handed
of Bangladesh in over the esteemed
Steel Category award to
in -2017” Finance Director
Mr. Zohair Taherali
SALMA BEGUM
A COURAGEOUS HEART, STRONGER THAN STEEL
Salma Begum* may look like any other girl, but in her heart she is different.
Through sheer force of will, she tried to stand on her own two feet after becoming a widow
at an early age. During her time of need, BSRM Foundation Training Center extended a helping hand.
Learning several handwork skills from the foundation, Salma has now become self-dependent.
With her earnings, she has raised a brick-built house and sent her son to school. She has inspired
many women to gather their courage and dream of a better future.
From Salma Begum and countless women just like her, we have learned one thing –
that there is no steel stronger than their unwavering willpower. BSRM is grateful to stand
beside such unstoppable women of steel.
Olipur Market,
RANGPUR Goneshpur, R K Road, Rangpur
OFFICE Tel: +88 01714094579
COX’S BAZAR
OFFICE
Profit Income
Basic EPS Basic Earnings per Share (Profit attributable to the Ordinary shareholders divided
by weighted average number of Ordinary shares)
168
Diluted EPS Diluted Earnings or Income per Share
GLOSSARY OF TERMS
Deferred Tax Difference between the carrying value of property, plant & equipment as per
financial statements and tax written down value and financial position liability
method for gratuity obligation.
Return on Shareholders’ Equity Net Profit after Tax divided by Shareholders’ Equity
Return on Capital Employed Net Profit after Tax divided by Capital Employed
Quick / Acid Test Ratio Current Assets less Inventories divided by Current Liabilities
P/E Ratio Market value per share as at reporting date divided by EPS
Dividend Covered Ratio Net Profit after Tax divided by declared Dividend
Debt-equity Ratio Current plus long term liabilities divided by shareholders’ equity
Market Capitalization Market price per share multiple by Ordinary number of Shares
Shareholders’ Note
169
SHAREHOLDERS’ NOTE
Shareholders’ Note
170
SHAREHOLDERS’ NOTE
BSRM Steels Limited
Registered office: Ali Mansion, 1207/1099 Sadarghat Road, Chattogram.
R e g i s t e r e d o f f i c e : A l i
PROXY FORM
B S R M
M a n s i o n ,
P R O X Y
S t e e l s L i m i t e d
1 2 0 7 / 1 0 9 9
F O R M
S a d a r g h a t R o a d , C h a t t o g r a m .
I/We .......................................................................................................................................................(Name)
Of .........................................................................................................................................................(Adress)
a Shareholder of BSRM Steels Limited (“the company”) hereby appoint,
Mr./Ms. ...................................................................................................................................................(Name)
Of .........................................................................................................................................................(Adress)
as my /our proxy , to attend on my/our behalf at the 17th Annual General Meeting (AGM) of the Company to be held on
December 19, 2019 and at any adjournment thereof or any poll that may be taken in consequence thereof and to vote on
my/our behalf as he/she thinks appropriate on all resolutions.
Dated this ...................................................................................day of.....................................................2019.
....................................... .......................................
Signature of the Shareholder Signature of the Shareholder 171
Folio /BO ID No: Folio /BO ID No:
PROXY FORM
Dated .............................. Dated ..............................
.......................................
Signature of the witness
Note: The Proxy Form, dully filled in and stamped, must be deposited at the Registered Office of the Company, Ali Mansion,
1207/1099 Sadarghat Road, Chattogram not later than 48 hours before the time fixed for the holding of the meeting.
Signature Verified
.......................................
Authorized Signature
BSRM Steels Limited
ATTENDANCE SLIP
I hereby record my presence at the 17 th Annual General Meeting of BSRM Steels Limited on December 19, 2019.
I/We .................................................................................................................................................................
BO ID
Signature Verified
....................................... .......................................
Signature Authorized Signature
BSRM Steels Limited
Note: Please complete this Attendance Slip and deposit at the registration counter on the day of the meeting.
Corporate Office:
Ali Mansion, 1207/1099 Sadarghat Road, Chattogram
Bangladesh. Tel: +880 31 2854901-10
Fax: +880 31 610101, Email: [email protected]