FOR THE YEAR ENDED 30TH JUNE, 2015
Dear Respected Shareholders,
Northern Jute Manufacturing Company Limited
On behalf of the Board of Directors and Management of Northern Jute Manufacturing Company Limited, I welcome you to the 35th Annual General Meeting of the Company. I have the pleasure to enclose herewith the Directors’ Report together with the Audited Financial Statements of the Company for the year ended June 30, 2015 along with the Auditors’ Report thereon. These were approved by the Board of Directors on October 25, 2015 which has been prepared in compliance with section 184 of the Companies Act 1994 and Bangladesh Securities and Exchange Commission’s Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 7th August, 2012 and other applicable laws
M/s Northern Jute Manufacturing Company Limited was set up with 700 spindles on 3.12 acres of land at BSCIC Industrial Estate, Kumargara, Kushtia with the production capacity of 1,928 M Tons based on three shifts per day of 8 hours each of 300 working days in a year in the year 1982.
Subsequently, the mill was expanded by installing an additional 560 spindles. Northern Jute Manufacturing Company Limited is a Public Limited Company. The Company is listed with Dhaka Stock Exchange Limited.
The global economy continued to expand during 2015 at a moderate and uneven pace, as the prolonged recovery process from the global financial crisis was still saddled with unfinished post-crisis adjustments. Global recovery was also hampered by some new challenges, including a number of unexpected shocks, such as the heightened geopolitical conflicts in various areas of the world. Growth of world gross product (WGP) is estimated to be 3.1 per cent in 2015, marginally better than the growth of 2.6 per cent registered in 2014.
Despite political agitation early in 2015 in Bangladesh that adversely affected transport services, exports and private investment, growth in Bangladesh held up well because of brisk domestic demand, boosted by higher worker remittances, private sector wages, and public investment. Inflation in FY2015 was 6.99 % a bit lower than 7.98 in FY 2014, reflecting large public stocks of food grains, normal weather, a supportive monetary policy, and lower global food and commodity prices that a steady exchange rate allowed to passed through. Export growth was 3.3% in FY2015, which is significantly lower from 12.1% in FY2014. Imports rose by 11.2% in 2015, accelerating from 8.9% growth in FY2014. Larger imports of food grains, machinery, fertilizer, and industrial raw materials helped to propel the expansion. As exports grew significantly more slowly than imports, the trade deficit widened markedly.
This Industrial sector produce a wide variety of Jute yarn and twine from the world’s best quality of raw jute, meeting the international quality requirements for the whole over the world . It’s products are used for Carpet Weaving, Wall Covering Jute Webbing, Fabrics for shopping Bags, packaging of Foods & Materials, Handicrafts, Jute cloth for various uses like Canvas, Decorative Fabrics, Laminated cloth, Safety Fuse for Explosive and many other uses.
The earnings from exportation of Jute and Jute Goods are increasing day by day. During the fiscal year 2014-15 country’s total export earnings amounting to Tk. 242,340.83 Crore . Of the total export earnings, Raw Jute and Jute Goods contributed Tk. 7,612.50 Crore or 3.14%. During July,14 to June,15 earnings from Jute yarn and Twine only except Raw Jute and Other Jute Goods increased by 3.59% to Tk. 4,289.83 Crore compared to Tk. 4,140.97 Crore in the corresponding period of last year.
But this is not the end of whole story. The FY 2014-15 was not an easy year for the economy of Bangladesh and was confronted with serious challenges due to severe interference in production, transportation and service delivery created by the continued political crisis that affected not only the domestic market but also the international market. Country’s jute exports has also faced new challenges due to depression of Dollar, sporadic utility supply, unrest situation in Middle East etc.
However, Government has decided to formulate an independent policy to revive the glory of the country’s “golden fibre’, further expand it’s market at home and abroad and also promote its diversified uses, which is very much necessary to make the jute sector an important factor in the national economy, keeping in view Bangladesh’s up gradation to the status of a middle income country over the next few years.
After a long period of shutdown the company has resumed its commercial operation again since March, 2014. Now the mills are running on a 3 shift basis. Total production capacity of Northern Jute Manufacturing Co. Ltd. is 3,528 (M.T) where as during this year the production was 2,044.66 (M.T). It is 57.96% of total production capacity.
Norther Jute manufacturing company limited manufacture Jute Yarn and Twine. Total sales during the year was 2,153.42 M. Ton of Jute Yarn/Twine.
The cost of production has varied during the past years, primarily due to wide fluctuations in the price of raw jute, packing materials, fuel & power, unit of production and spare parts which were beyond the control of the Management. Total cost of production during the year is Tk. 104,744,186 against Tk. 73,019,038 in 2013-14.
The Company’s marketing operations continued its emphasis on export sales over the years. Total sales during the year ended 30 June, 2015 was Tk. 124,013,915 against Tk. 104,800,417 in 2013-14.
In order to upgrade the production facilities, the company made an additional net capital expenditures of Tk. 6.54 million. This investments had enabled the company to sustain the rate of production efficiency at the reasonable level over the years.
The Company contributed substantially to the Foreign Exchange Reserve of the Country during the reporting year through its export marketing operation. Total Export earning during 2014-2015 was $ 1,606,060.34.
The Company’s before and after tax profit for the year 2015 were for 6.14 million and 5.49 million respectively compared to Tk 4.03 million and Tk 2.87 million respectively in the previous year.
|Particulars||2014-15 (Tk.)||2013-14 (Tk.)|
|Cost of Goods Sold||105,518,099||89,427,306|
|Net Profit/(Loss) before provision||6,141,494||4,028,652|
|Net Profit / (Loss) after provision||5,490,342||2,866,937|
|Ea rning Per Share (EPS)||3.08||1.61|
The Company earned net profit of Tk. 5,490,342 during the year ended June 30, 2015. It has been recommended by the board of directors to be appropriated in the following manner:
|a) Provision for proposed cash dividend for the year 2015 @ 20 % (Tk. 2.00 Per share)||Tk. 35,70,000|
|Transfer to retained earnings||Tk. 19,20,342|
In pursuant to Article 125 of the Articles of Association of the Company, Engr. Md. Rezaul Karim retire and is being eligible himself for reelection in pursuant under Article 127 of the Articles of Association.
In the mean time, Mr. Shah Alam Sheikh resigned from the position of Independent Director vide his letter dated 05.04.2015 and the Board accepted his resignation on 13.04.2015. After having qualifying number of shares he has applied vide his letter dated 18.04.15 to appoint him as Shareholding Director of the Company. The Board after discussion appointed Mr. Shah Alam Sheikh as Shareholding Director in its meeting No. 131 held on 20.04.15.
Mr. Uzzal Kumar Nandi also resigned from the position of Independent Director vide his letter dated 16.04.2015 and the Board accepted his resignation on 20.04.2015. He also after having required equities applied to the Board for appointing him as Shareholding Director. The Board after threadbare discussion decided to appoint him as Shareholding Director as
well as Chairman of Board in its meeting No. 132 held on 26.04.15.
Mr. Iqbal Sayeed, Independent Director will retire on 30.10.2015 as per BSEC’s notification dated 07.08.12 under condition 1.2 (VI) and eligible himself for reelection for another one term. Brief resume and other information of the above mentioned Directors as per Clause 1.5 (xxxii) of BSEC’s notification dated 7th August,2012 are depicted Annexure – III.
The Company has no subsidiary companies.
The meeting was informed that the existing Auditors of the Company M/s. Malek Siddiqui Wali, Chartered Accountant retires at this Annual General Meeting and being eligible offered themselves for appointment as Auditors of the company for the year ended 30 June, 2016.
As a corporate citizen, Northern Jute has endeavored most to discharge its responsibility towards the society and the environment . Our social responsibility includes our clients, employees, Shareholders, business associates and the society
Managing Director giving financial assistance to a student
as a whole. We extend our help to local Mosque and other social organizations in Kushtia where our Factory located. We always try our level best to contribute financial help to the meritorious Children of our Employees for their education and medical needs.
Corporate governance is key to its sustenance. Good Corporate Governance is key to successful sustenance. Our Corporate Governance is as follows:
In line with the concept of good corporate management practice and the provisions of the Articles of Association, The Board of Directors, the top Management tier is responsible for overall control and supervision of the entire affairs of the Company primarily through strategic planning & budgetary control mechanisms. To this end, The Board of Directors holds periodic meetings to resolve issues of policies and strategies, correctly recording the minutes/ implementation of the decisions taken by the Executive Management. During the year under review the board held 10 (Ten) meetings to transact various agendas.
The Board of Directors is reconstituted every year by the shareholders through retirement /re-election/ election of its members.
The positions of Chairman and Managing Director are held separate persons. The Chairman is responsible for the functions of the Board & time worthy vigorous policy making while the Managing Director serves as the Chief Executive of the Company looking after the activities/performances of the workforce time to time visiting the Factory.
In line with BSEC guidelines for ensuring good governance practices, a three member audit committee was formed where an Independent Director acts as Chairman of the committee. All the members of the Audit Committee are Non-executive Directors. The audit committee of the Board held 4 (four) Meetings during the year.
The Shareholders as owners are required to be provided with material information on the Company's operation quarterly, half-yearly and annually. They have also provided routine services by the Company Secretary in any company matters which is permissible. The Board is however responsible to the Shareholders as well as investors for publication of price sensitive information as per regulations of Bangladesh Securities and Exchange Commission. The Company has also a website to provide permissible information/ notices/price sensitive information/financial reports/disclosures and others for the Shareholders and interested investors.
Corporate Governance is the practice of good citizenship, through which the company is governed by the board, keeping in view its accountability to the shareholders and to the society. A statement in pursuance to clause 1.5, audit committee report as per clause 3.5, certificate from professional accountants as per clause 7(i) and a status of compliance as per clause 7(ii) of the BSEC notification No. SEC/CMRRCD/2006-158/134/admin/44 dated 7th August, 2012 are depicted/disclosed in the Annexure-I, IV, V, and VI respectively.
The term risk refers to the possibility of inadequate profits or even losses due to uncertainties, e.g., changes in tastes, preferences of consumers, strikes, insufficient supply of raw materials etc. The Major Risk associated with the Jute Industries are:
- Insufficient supply of good quality imported seed;
- Lack of awareness among jute farmer regarding best post harvest technology and how practice affected prices,
- Low mills productivity in terms of machinery
- Lack of skill labour
- Lack of market linkages
- Unfavourable Market Price
- Price Volatility
- Weak bargaining power
- Multiple intermediary levels
- Govt. Procurement Policy, etc
Northern Managemnt continuously develop their management, marketing and operational strategies to overcome the above challenges.
Global market for jute products is overwhelmingly dependent upon developing countries. More than 90 percent of the demand for jute goods originates from a handful of Asian countries. Along with developed countries, the demand for jute goods in developing countries has gone up. Recent rise of global awareness on jute products may create new demand, particularly in developed countries such as USA, Canada, Australia and Japan, where consumer groups are becoming increasingly conscious of the carbon footprint of consumer goods. With a good marketing plan, we take the opportunity to get a hold on these markets.
I take this opportunity , on behalf of the Board of Directors, to express my heartfelt gratitude to all of our valued clients, shareholders and well wishers from home and abroad for their wholehearted co-operation and active support in discharging the responsibilities reposed on me as well as the Board during the year under review.
I also thank Registrar of Joint Stock Companies & Firms (RJSC), Bangladesh Security and Exchange Commission (BSEC), Dhaka Stock Exchange (DSE), Janata Bank Ltd., Shahjalal Islami Bank Ltd., Government and private sector Organization and many others for their sincere support and whole hearted co-operation to our Company.
Again I, on behalf of the Board, also put on record my deep appreciation for the service and loyalty of the executives, officers and employees and workers of the Company at all levels without which we could not have achieved this result.
Thanks are also due to all Directors, all executives, officers, staff and workers of the company for their excellent, sincere, dedicated efforts in achieving company’s target during the year under review.
To ensure financial security we always welcome your suggestions and opinion to improve present and future services of the company. On behalf of the Board of Directors,