REGISTERED OFFICE Sena Kalyan Bhaban (19th Floor) 195, Motijheel C/A, Dhaka-1000, Bangladesh, Tel: 8765432, 2345678

Fax: 88-02-9564883 E-mail:digs@digsgroup.com,Website:www.digsgroup.com Name Date of Incorporation Inauguration of Commercial Operation Listing with Dhaka Stock Exchange Listing with Chittagong Stock Exchange Authorized Capital Paid-up-capital Shareholders Equity Business Lines Number of Employees Production Way Trade(export + domestic) : : : : : : : : : : : : Diganta Textiles Ltd. December 21,1985 March 14,1993 April 18,1995 December 26,1996 Tk.500 million Tk.109.12 million Tk.181.45 million Manufacturing 100% cotton yarn 1,620 persons Labor Intensive Technology based Cotton Yarn

MANAGEMENT EXECUTIVES:
Sl. No. 1 2 3 4 5 Name Mirza Mohammad Sadman Samit Khandaker Abullahil Baqi Tanzina Yasmin Mahbuba Akter Niladry Shekhar Adhikary Designation Managing Director Deputy Managing Director Company secretary & Senior General Manager Senior General Manager, Factory (Admin) General Manager

Company Profile:
Diganta Textiles limited, one of the concerns of Haque Group, was incorporated in 1985 with an aim to produce cotton yarn of different counts to export through back to back L/C. The factory is located in Rupatoli in Barisal District on a total land area of 10.25 acres where the entire area is completely utilized. Initially the company set up a spinning mill with14400 spindles and started its commercial operations from 1993. Then the Company expanded its capacity by establishing the second unit in 1996 with 13440 spindles and third unit in 2000 with 36288 spindles. Presently the Company has a total annual production capacity of 7028 million lbs cotton yarn of 26c, 30c and 34c with 71136 spindles and 672 rotors. The Company is enlisted with both the exchanges.

Product:
Diganta Textile Ltd. was incorporated with an aim to produce cotton yarn of different count and started commercial operations from 1995 with 14400 spindles. After that the Company established two new units. In December 2007 the Company faced a major fire accident in their third unit. Presently the Company has 71136 spindles and 672 rotor units having annual production capacity of 6.32 million lbs. The Company produced 5.41 million lbs of yarn registering a capacity utilization rate of 65% in 2010. Exhibit: Performance of the Business Year: Production Capacity (in million lbs) Actual production (in million lbs) Cost of Production (in millions BDT) Average cost (per unit BDT) Total Cost(in millions BDT) Net Sales(in million BDT) Gross Profit (%) Net Profit (%) 2006 6.32 5.75 40.18 6.98 40.71 48.42 22 13.73 2007 6.32 5.68 40.23 7.08 41.06 48.12 21.72 13.71 2008 6.32 5.56 40.25 7.23 41.31 48.03 21.68 13.69 2009 6.32 5.48 40.26 7.34 41.35 47.91 21.59 13.68 2010 6.32 5.41 40.28 7.44 41.38 47.86 21.54 13.5

50 45 40 35 30 25 20 15 10 5 0

Actual Production (in m illiom lbs ) Averag C t (pe unit e os B DT) Net S ales (in m illion B DT) Net Profit (% )

2006

2 007

20 08

2009

2010

Raw Materials:
Most of the profitable textile mills have efficient cotton procurement strategies. Raw cotton, the primary input, constituted on an average 67% of the Cost of Goods Sold of XTL over the last five years of operation and has significant impact on the operational performance. The ongoing global financial crisis continues to weigh on cotton production prospects in the new marketing year. World cotton production in 2009 was forecasted to be 106 million bales, reflecting a further 1% decline from the production estimates of 2008. Rising global mill use combined with proportionately smaller increases in production put downward pressure on global ending stocks. XTML imported most of its raw cotton from Uzbekistan, Tajikistan, Turkmenistan, West Africa and United States of America. Raw cotton is imported by sea (from countries other than India) and by road (from India through Benapole border), which are then carried to the factory located at Rupatoli in Barisal by means of hired trucks contracted by the Company for a whole year.

Production Process:
Technology remains the important factor in maintain a competitive position in the business. The Company started its operation of the first unit in 1989 with machines imported from China, Japan, Germany, Romania, India, Italy, USA, Switzerland and Pakistan. The Company expanded its capacity by establishing a second unit in 1996 and a third in 2000 with the machineries imported from those countries.

Present situation:
From the date of our incorporation the performance of our company has been more or less satisfying. Our productivity has been relatively high and we enjoyed almost 15% profit on our capital employed, due to the low competitive situation of the market. But from last 4 or 5 years we have realized that our profit rate has decreased to a stable rate of 13% annually. Recently we have realized that the capacity utilization rate for our machines is falling. We have analyzed that the workers working in the factory are not exploiting the maximum capacity of the technology being used for production. Machines are not being operated properly and they are not producing to their optimum level of output. This is resulting in more wastage of valuable resources and also an increase in cost of production. Our managers have also identified a very different problem. They have identified that the workers are not satisfied with management of the Company. They feel they are being neglected and are more willing to leave our company and work for other companies. They have also complained that the management authorities are constantly applying pressure on them to achieve their targeted level of output, otherwise the management body scares them with threats of rendering them jobless and most importantly the management body most of the time threaten them about withdrawing their privileges. This means that the workers feel unsecured and as a result most of them do not work to their optimum level of output. As a result these have had a negative impact on the Companys productivity. Our workers are not efficient and our managers are not effective. This is because we have been following negative participative & autocratic leadership style. This has affected our business negatively. As we have mentioned before, our workers are dissatisfied with the management authorities and tend to leave our organization. Also this type of leadership has resulted in a decrease in our productivity and our limited resources are not being properly utilized. Our labor market research has revealed that workers working for our competitors are totally satisfied and also the workers working for us prefer working for our competitors. This is mainly because our competitors are following positive participative style accompanied with democratic leadership style. Previously we could manage our workers and properly utilize our resources with our form of leadership style as there were ample workers and fewer competitors. But now as competition between the textiles producers have increased, this has affected the market of factors necessary for production. Producers are competing to gather more resources. As a result resources have gotten scarce. Labour is a very important resource that is required for production in this form of business. Our competitors, following the more friendly style of leadership is at an advantage. They are attracting competent employees who are more willing to work for them at the existing wage rate. On the other hand we are facing a lack of competent employees in our organization. This has enabled us to realize the problems within our organization.

DECISION:
We want to change our leadership style. We will adopt a more worker friendly style. We will be following the combination of democratic and positive participative style. We are hopeful that this will be helpful in solving the problems of our company. Like our competitors we will be able to attract more competent employees as well as improve the productivity of our company. Also we are hoping that this decision is likely to reduce the fear of workers towards the management authorities and also provide them with a security of their job.

JUSTIFICATION:
1. The Productivity of the employees is likely to increase: The workers in
our company are afraid of the management bodies. They are working under a constant fear of losing their job. Under such circumstances they are naturally not working at their capacity level of output. These affect the companys productivity negatively. They are more concerned with achieving their targeted level of output than the quality of output. By adopting positive participative style of leadership we will create a friendly environment for our workers. We will motivate our workers to work at their capacity level of output. We will make sure that our workers are not afraid of the management body; in fact we will hope that they will share their problems with the management authorities. We will provide them with incentives and bonus so that they are inspired to work more and at their capacity of level output. This is likely to increase the employees productivity and also increase the level of output for the company, which in turn may lead to an increase in the profits for the company.

2. Proper utilization of resources: The workers are not working at the optimum
level of output. As a result the valuable resources of the organization are being misused. The resources necessary for production are being wasted. In a competitive market the improper usage of resources is a major drawback for companies. Due to improper usage resources the cost of production of the textiles produced is higher than the cost of production of other competing textile producer. On the other hand we are facing operating at a stage where the price of our product is stable and rigid. This is mainly because we are facing extreme completion from competitors who are producing the similar product and is following the positive participitative and democratic style of leadership. As a result they are able to utilize their resources properly, which substantially reduces their cost of production. Thus they are able to earn more profits by charging the same price as us. Not only that, since their cost of production lower than us

they have the potential to charge lower prices than us. If they do so we are likely to lose our customers and also suffer from losses. Under such circumstances it is a must to properly utilize the resources necessary for production. A leadership is the process of influencing a group of people to achieve desired objectives. In this case, ensuring the proper utilization of resources is an objective of the process of leadership. Since resources are not being utilized properly we can deduce that the method of leadership is faulty. So it is prudent for us to change our method of leadership. Positive participative leadership motivates the workers to at their maximum capacity. As a result the business will be able to achieve optimum level of output. Thus the total output produced by the business increases by a significant amount. Also this form of leadership is likely to decrease the misuse of valuable resources. If the resources are properly utilized then it will result in lesser wastage and thus they will be able to achieve economic efficiency. Also proper utilization of resources means lower cost of production. If the cost of production is lower our textiles are going be more competitive in the market. Not only that, lower cost of production means better profits with the existing price. Also with lower cost of production we will be able to face any pricing strategies taken by our competitors. This means that if our competitors decide to reduce the price of their products to attract more customers and also to drive us out from the market, we will also be able to respond by reducing our prices to retain our customers. On the other hand, the increase in output is likely to benefit our company. With proper utilization of resources and increase in output, the average cost of our company is likely to decrease. If average cost decreases with the level of output we will be able to achieve economies of scale. This in turn is likely to decrease the price of our product.

3. Lack of competent employee: Because of the leadership method we have been

following we are facing a huge lack of competent employees. These competent employees are being attracted by our competitors following the positive participative and democratic leadership style. In this way these workers feel themselves as loyal toward our competitors. In these leadership styles employees are allowed to take part in the decision making process so they feel themselves important for the Company. If we change our leadership style like our competitors we can gain more competent employees for our company.

4. Right man for the right job: As our employees are not working at their full
capacity, it is difficult for our managers to evaluate their skills. This makes it quite impossible to allocate the correct worker in the correct place. We can not understand the optimum level at which these workers should be working. So we can not divide the work of our organization according to the skill levels of our workers. This problem delays our decision making process and even after making our decision we can not say that our decision was the correct one. Not only that, after taking a decision it gets difficult for us to implement the decision.

By adopting these new leadership strategies we hope to identify the optimum levels at which these workers should be working. We also feel that these leadership strategies will motivate the workers to work at their full capacity and thus helping us to divide the work according to the skills of the workers. This means that we will be able to put the right person in the right place which will increase the efficiency of our organization and also increase the quality of our products.

5. Keeping up with competition: Due to the fact our employees are dissatisfied
with the management body and with the working environment so they are not working to their full capacity. Our productivity level is dropping and in order to make profit, we might have to price our product higher than our competitors. This is a negative impact on the market for our products and thus we are likely to lose valuable customers. With these new strategies in place, our workers will work at their full capacity. They will feel that they are part of the organization and will try their best to serve the organization well. They will be satisfied with the management body and with the working environment. They will also know that the more profit the organization makes the more bonus the employees will get. So this will increase our productivity and allow us to keep up with the competition as we will be able to charge similar or lower prices.

6. Reputation in the job market: Because of our negative attitude towards our
employees we are creating a negative impression in the job market. The skilled workers working outside our organizations are losing interest in our organization. They are more willing to work for our competitors because of their positive attitude towards their employees. This negative reputation regarding our organization management style and working environment is creating an adverse effect for our companys overall image. By taking these new strategies we will be able to regain our lost reputation in the job market. The workers will be more tolerant to a positive approach and will also be more attracted towards the new and improved working environment. This is likely to increase our goodwill among the workers and this will provide us with the opportunity of recruiting new skilled workers. These skilled employees are likely to increase the companys productivity and also lower the wastage of valuable resources. Not only that, decrease in wastage of raw materials is likely to decrease the overall cost of production for the companys products and thus increasing the level of profit for the company. Thus it can be said that, these new skilled employees combined with the existing skilled employees is likely to take our organization to new heights.

EVALUATION OF DECISION:
Before finally implement our decision we have to take a look at the negative sides of our decision by evaluating it. We can evaluate our decision from two perspectives: Managerial perspective and Workers perspective. These two are discussed below.

Managerial perspective:
Costs will increase if we have to implement this decision properly. We have to provide various facilities to the workers and improve the quality of our equipments to implement this decision. Performing these actions will certainly cost us a fair amount of money. By this process the cost will increase. If we are going to involve the workers in the decision making process it is supposed to become a lengthy process which is not acceptable while we need immediate decisions. We cant take the opinion of everyone in decision making. It also has to be taken in mind that all the workers are not skilled enough to provide support in the decision making process. By taking this decision we want to change our reputation in the corporate world. But the fact is it is not so easy to change a reputation immediately. It takes a fair amount of time to change an existing reputation and build up a new one especially from negative to positive. One can have efficiency in more than one sector. But as we are going to specify the roles and responsibilities of the managerial employees, we will not be able to utilize the diversified skills possessed by each employee. This may be stated as under use of the human resources available. As we have planned to develop our workers it will take our resources. But the main concern is, when a worker is developed he has all proper freedom to decide whether to work in our company or not. If he decides to leave, that will mean that our resources invested on them will come to no use or completely be wasted. As the persons working in our management are best suited to the negative style of motivation, they are naturally supposed to face problem in following the positive motivational style. It is because motivation is a skill derived from the individual nature and personality of the managers. They may feel it insulting while the will have to blend with the general workers as they belong to a higher class.

Workers perspective:
As we are trying to provide the workers the freedom they never had there is always a possibility that they will miss use the freedom given to them. A responsible mental setup has to be developed within the workers for the decision having the full effect. If the workers lack dedication it will lead to misuse of the resources. The workers may face difficulty in adjusting with the new situations as the environment within the organization as a result of the change in leadership style. They may be confused over the managerial activities. So, we have to make sure that the information flow is significant and the communication channel is clarified.

IMPLEMENTATION:
To implement our decision our mangers are taking some steps regarding our situation. These steps are as follows:

1. Positive Motivation Program: For implementing our decision we can start

positive motivational program. We can appraise our workers for their efforts. We can signify their role in the success of the business. We can state them as being the main reason behind the success for our organization. We can let them know that we are grateful for their coordination and efforts to make the company successful. We can arrange some motivational campaign or entertainment program that will highly motivate them to work more efficiently and effectively. We can also assure them that we are here for the betterment of our employees and we will provide them with any assistance they need for doing their work properly.

2. Personal communication with employees: We can create personal

communication channels with our workers. We can let them know what we are doing for them, for their betterments and for our organizational improvement. We can develop a better interrelationship between managers and managed. We can allow them to share their problems with the management authorities. In other words, we can behave with them in a friendly manner. This will make our employees more cooperative and open. They will then share all of their professional problems with the management authorities. This will help the managers to solve the problems of the workers and thus provide a friendlier environment for the workers to work in.

3. Inclusion in decision making: We can involve them in the managerial decision

making process. We can share our ideas with them also share their views about a particular decision. We can also consider their ideas and then implement those ideas as a decision if we feel necessary. We can ask them about the available resources of the company and the resources required in implementing a particular decision. This will help to reduce the wastage of resources and also will act as a guideline while making decisions for the organization. The inclusion of workers in the decision making process, will also help us to make the decisions friendlier to the workers. This will make the workers think that the decision is not imposed on them; rather they will think that it is their decision and will rather be more willing to implement those decisions. Thus the implementations of decisions are likely to be easier.

4. Job safety: We need to provide our workers with job safety. Our workers need job
safety to feel that they are part of the company. If they are given job safety they will be tension free and work with a clear mind. When the workers can work with a clear mind they can produce more and improve our profit level. So we will provide them with job safety and make them tension free regarding the safety of their job.

5. Modify wage system: Following the old style, we give wages to our workers in
the basis of hours. We should change our method by giving wages on the basis of output. We can also segment our workers into high quality, medium quality and low quality. We can give wages on the basis of these segments. Workers who can produce more will be paid more. If the workers are going to be paid properly according to their output they will certainly be inspired to work more and with more efficiency . This will improve our profit level.

6. Increase working facilities: We can provide the workers with more comfortable
working environment. We can provide ample air and light facilities in their working place. They will be provided with emergency exits in the case of a sudden calamity. They will be provided with emergency treatment if they suddenly fall sick or get injured while they are working. We can also increase their break time .We can improve their canteen facilities and provide them with hygienic food. We can provide them recreation facilities such as watching television etc which they can enjoy during their break time.

7. Specify the responsibility: We are going to specify the responsibilities of our

workers, according to their skills and capacities. We will not bestow any responsibility on any worker which is beyond their capacity. We also will give them authority to express their opinions about our decision. That means that they can express whether they like the decision or not. This will allow them to know their duties and responsibilities and work accordingly. It will also pave the path to ensure proper judgment of those works. By this strategy we can evaluate our decision properly whether the skill levels we have set are

correct or incorrect. If we see that some people have been bestowed responsibilities that are beyond their skills we can give that worker a task which is more suitable for him.

8. Make shorter span of management for supervisors: To ensure that the

duties and responsibilities of our managers and supervisors we are going to have shorter span of management. A short span of management we will allow our managers and supervisors to know their subordinates and ensure full control over them. By knowing them well the managers will realize how to bring out the best of these workers. This will also remove any confusion about who exactly will give those orders.

9. Make changes in supervisors regarding their popularity in the workers: Everyone is not granted or accepted by everyone for various reasons. We can
make our supervisors more effective by placing them in that group of people to whom he has the highest acceptance. Like we can place a supervisor from Barisal in a group where the population is mostly from Barisal where he is likely to get more acceptance. This will prompt the workers to work properly for their supervisor and bring him success.

10. Clarify communication methods or channels: We will very much clarify

the flow of information. We will determine the channels and methods of communication and will also determine which information will be transferred through which channel. With the communication channel clarified the flow of information will be very easy and this will increase the chances of the information being transferred successfully and the desired result will be achieved from the exchange of the message. This process will surely give us a clear idea regarding who will give direction or orders and who will receive direction or orders. This will ensure that the message is transferred at a quicker rate and success is achieved.

11. Necessary improvements in equipments: The workers want improved and

efficient equipments so that they can work efficiently and working in an efficient manner is rather easy if the equipments improved. In time many types of equipment get damaged and these equipments no longer remain efficient. These equipments are very difficult to use and certainly frustrates the workers which might even lead to the workers not working to full capacity as they lose interest in working with these damaged equipments. So the improvement of these equipments is a must for the continuous success of the company.

12. Development of workers: All the workers have some special talent in them.
They should be provided with the right sort of environment for the complete development of these talents. We will provide them training and help them in their work. If they cant understand something properly we will give them complete guidance so that they can master their art completely and turn into complete developed workers. It will lead to the proper utilization of human resources and surely improve our level of profit. This process will also make the workers a lot more confident about themselves. They will now believe that they are good enough to contribute in the development of the company and feel that whatever profit the company makes they are also a part of it.