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A N N U A L R E P O R T 2 0 0 8
MISSION
EACH OF OUR ACTIVITIES MUST BENEFIT AND ADD VALUE TO THE COMMON WEALTH OF OUR SOCIETY. WE FIRMLY BELIEVE THAT, IN THE FINAL ANALYSIS WE ARE ACCOUNTABLE TO EACH OF THE CONSTITUENTS WITH WHOM WE INTERACT; NAMELY: OUR EMPLOYEES, OUR VALUED CUSTOMERS, OUR SUPPLIERS, OUR BUSINESS ASSOCIATES, OUR SHAREHOLDERS AND OUR FELLOW CITIZENS.
Table of contents
2 Notice of the twelfth Annual General Meeting 3 Corporate Information 4 Chairmans Statement 8 Corporate Governance 10 Report of the Directors 13 Report of Auditors to the Shareholders 14 Balance Sheet 15 Profit and Loss Account 16 Statement of Changes in Equity 17 Cash Flow Statement 18 Notes to the Accounts Annexed Proxy Form and Attendance Slip
Notice
SHINEPUKUR CERAMICS LIMITED
17, DHANMONDI R.A, ROAD NO.2, DHAKA-1205
To transact any other business of the Company with the permission of the Chair. By order of the Board,
(1) The Record Date shall be on 25th May, 2009. The Shareholders whose names will appear in the Share Register of the Company or in the Depository Register on that date will be entitled to attend at the Annual General Meeting. (2) A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meeting.
(3) Admission to the meeting room will be strictly on production of the attendance slip sent with the Notice as well as verification of signature of Member(s) and/or proxy-holder(s).
Corporate Information
BOARD OF DIRECTORS A S F Rahman Salman F Rahman Nazmul Hassan Md. Asad Ullah
Chairman Vice Chairman Managing Director Company Secretary
ManaGement Committee Nazmul Hasan Md. Faruque Ali Mohammad Ashek Alam Md. Luthfor Rahman
Managing director General Manager General Manager General Manager
AUDITORS M/s. M. J. Abedin & Co. National Plaza (6th Floor) 109, Bir Uttam C.R. Datta Road, Dhaka-1205 Legal Advisers M/s. Huq & Co. 47/1, Purana Paltan, Dhaka-1000 Bankers Sonali Bank Local Office, Motijheel C/A, Dhaka-1000 Southeast Bank Ltd. Dhanmondi Branch, Dhaka-1205 Registered Office House No. 17, Road No. 2 Dhanmondi R/A, Dhaka-1205
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Chairmans Statement
I take this opportunity to welcome you all on behalf of the Board of Directors to this 12th Annual General Meeting of your company. I take this opportunity to lay before you a brief resume of the affairs of the company for the year 2008 and its future plan. Performance During the year, the Company attained net sales of Tk. 1,529.92 million as against Tk. 1,386.13 million of 2007. I am pleased to inform you that sales of Bone China and Porcelain Products our core business, continued to grow in 2008 as well. During the year local sale of the products decreased by 9.57% but our export sales for the year grew by 15.27%. The overall sales increased by 10.37%. Your company earned a pre-tax profit of Tk. 210.40 million as against Tk. 172.86 million of 2007. As you know, most of our raw materials are imported from European countries. In the early to mid of 2008 after several devaluation of taka against euro, these materials have become costlier. But due to our committed drive for containment of cost, we have succeeded in neutralizing the adverse effect of devaluation. Our gross profit increased by 9.60% and pre-tax profit by 21.71% over last year in absolute terms. This by any standard is an appreciable achievement. Expansion Program I feel proud to inform you all that the Management of Shinepukur Ceramics Ltd (SPCL) entered into an MOU with Mr. Konrad Schmiling, Managing Director of Ceramics Info Center, Germany for supply , erection and commissioning of SPCLs Bone China expansion unit, having a capacity of 4.50 MT per day, an increase of 150% over present bone china production capacity. The expansion project will be completed by end of 2009 at an estimated cost of Taka 800.00 million. Once the expansion project is completed, additional export sales of Taka 1,100.00 million and additional net profit of Taka 200.00 million is expected. Appointment of Chairman, Vice Chairman and Managing Director The Board of Directors in their meeting held on 10th May 2009 appointed Mr. A S F Rahman and Mr. Salman F Rahman as Chairman and Vice Chairman respectively of the Company. The Board also appointed Mr. Nazmul Hassan as Managing Director of the Company for a period of five years effective from 10th May, 2009, subject to the consent of Shareholders in this A G M. Mr. Ahmed Shahryar Rahman and Mr. Ahmed Shayan F
Rahman have resigned as Directors of the Company with effect from 10th May, 2009. After re-constitution, the Board of the Company stood as follows: 1. Mr. A S F Rahman - Chairman 2. Mr. Salman F Rahman - Vice Chairman 3. Mr. Nazmul Hassan - Managing Director Listing The Companys shares have been listed under Direct Listing Method with Dhaka and Chittagong Stock Exchanges w.e.f. 18th November 2008. Dividend Keeping in view the performance of the company, the Board of Directors proposes 10% cash dividend and 20% stock dividend (1 bonus share for each 5 shares held) for your approval. Social Commitment We believe in our responsibilities towards the society we operate in. All our activities are therefore directed to the well being of the society in general. As part of the social commitment, the company sponsors news supplements on important social occasions. We also provided active co-operation and support to different organizations and professional institutions in their socio-cultural development programs. Acknowledgement I take this opportunity to express my sincere thanks to our customers, bankers, suppliers, government agencies, regulatory bodies and everyone with whom the company interacted in conducting its business. We are grateful to you, the shareholders, for extending at all times, your invaluable support and cooperation to bring the Company to the level it has reached today. The success we have achieved so far was only possible because of the collective efforts of all concerned. Once again, I convey my heartiest thanks to all our stakeholders and look forward to their continued support and cooperation in future.
Corporate Governance
The maintenance of effective corporate governance remains a key priority of the Board of Shinepukur Ceramics Limited. Recognizing the importance of it, the board and other senior management remained committed to high standards of corporate governance. To exercise clarity about directors responsibilities towards the shareholders, corporate governance must be dynamic and remain focused to the business objectives of the Company and create a culture of openness and accountability. Keeping this in mind, clear structure and accountabilities supported by well understood policies and procedures to guide the activities of Companys management, both in its day-today business and in the areas associated with internal control have been instituted. INTERNAL FINANCIAL CONTROL The directors are responsible for the Companys system of internal financial control. Although no system of internal control can provide absolute assurance against material misstatement and loss, the Companys system is designed to provide the directors with reasonable assurance that problems are timely identified and dealt with appropriately. Key procedures to provide effective internal financial control can be described in following heads: Management structure - The Company is operating through a well defined management structure headed by Managing Director (MD) under whom there are general managers for various departments and according to hierarchy, various senior and mid level management staffs. The MD, General Managers meet at regular intervals represented also by finance, marketing and personnel heads. Budgeting - There are comprehensive management reporting disciplines which involve the preparation of annual budgets by all operating departments. Executive management reviews the budgets and actual results are reported against the budget and revised forecasts are prepared at regular intervals. Asset management - The Company has sound asset management policy, which reasonably assures the safeguarding of assets against unauthorized use or disposition. The Company also follows proper records
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Shinepukur Ceramics Limited
and policy regarding capital expenditures. Functional reporting - In pursuance with keeping the reliability of financial information used within the business or for publication, the management has identified some key areas which are subject to monthly reporting to the chairman of the board. These include monthly treasury operations and financial statements. Other areas are also given emphasis by reviewing on a quarterly basis. These include information for strategy, environmental and insurance matters. STATEMENT OF DIRECTORS RESPONSIBILITIES FOR PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS The following statement is made with a view to distinguishing for shareholders the respective responsibilities of the directors and the auditors in relation to the financial statements. The Companies Act, 1994 requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit for the year to that date. In preparing those financial statements, the directors: select suitable accounting policies and then apply them in a consistent manner; make reasonable and prudent judgments and estimates where necessary; state whether all applicable accounting standards have been followed, subject to any material departures disclosed and explained in the notes to the financial statements; take such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities; ensure that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the Company; ensure that the financial statements comply with disclosure requirements of the Companies Act, 1994 and the Securities and Exchange Rules, 1987; and prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.
BOARD The board - The board is responsible to the shareholders for the strategic development of the company, the management of the Companys assets in a way that maximizes performance and the control of the operation of the business. The board of directors is responsible for approving Company policy and is responsible to shareholders for the Companys financial and operational performance. Responsibility for the development and implementation of Company policy and strategy, day-to-day operational issues is delegated by the board to the management of the Company. Board structure and procedure - The membership of the board during the year end as on 31-12-2008 stood at three directors. All directors are equally accountable as per law to the shareholders for the proper conduct of the business. The Companys board currently comprises the Chairman, Vice-Chairman and other one director. The name of the directors appears on page 3. The quorum for the board is at least three directors present in person. GOING CONCERN After making enquires, the directors, at the time of approving the financial statements, have determined that there is reasonable expectation that the Company have adequate resources to continue operation for the foreseeable future. For this reason, the directors have adopted the going concern basis in preparing the financial statements. RIGHTS AND RELATIONS WITH SHAREHOLDERS Control rights of shareholders - At annual general meeting, shareholders have rights of participation. They have the right to ask questions on and request from information from the board regarding item on the agenda to the
extent necessary to make an informed judgment of the Companys affairs. Relations with shareholders - The annual general meeting are used as an important opportunity for communication with both institutional and general shareholders. In addition, the Company maintains relations with its shareholders through the corporate affairs secretarial department. The following information can be addressed through the secretarial department : Dividend payment enquires; Dividend mandate instruction; Loss of dividend warrants; Notification of change of address; and
The board believes that it is important to respond adequately to all the queries of both institutional and general shareholders. At the AGM, the shareholders are offered an opportunity to raise with the board any specific question they have concerning the Company. In addition, meetings are also held between individual directors and institutional shareholders at various times during the year.
Mr. Nazmul Hassan Mr. Ahmed Shahryar Rahman Mr. Ahmed Shayan F Rahman Mr. O K Chowdhury [Resigned as Director on 07-05-08] The Company was converted from Private Limited Company to Public Limited Company on 07-05-2008.
Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and Their spouse and Minor children: Mr. A S F Rahman, Shareholder Mr. Salman F Rahman, Shareholder Mr. O K Chowdhury, CEO Mr. Nazmul Hassan, Chairman Mr. Ahmed Shahryar Rahman, Director Mr. Ahmed Shayan F Rahman, Director Executive: Shareholders holding 10% or more Voting interest in the company: 2 1 1 1 1 1 Nil Nil
AUDIT COMMITTEE The Company has an Audit Committee, which met once in 2008 to consider its half yearly report for the half year to 30th June 2008. CORPORATE AND FINANCIAL REPORTING The Directors are pleased to confirm the following: (a) The financial statements together with the notes thereon have drawn up conformity with the Companies Act 1994 and Securities and Exchanges Rules 1987. These 10
Shinepukur Ceramics Limited
CORPORATE GOVERNANCE COMPLIANCE STATUS REPORT In accordance with the requirement of the Securities and Exchange Commission Corporate Governance Compliance Status Report is annexed.
AUDITORS The Directors hereby report that the existing Auditors M/s. M. J. Abedin & Co. , Chartered Accountants, National Plaza (6th floor), 109, Bir Uttam C R Datta Road, Dhaka-1205 who was appointed as Auditors of the Company in Eleventh Annual General Meeting carried out the audit for the year ended on 31 December, 2008. M/s. M. J. Abedin & Co. , Chartered Accountants, National Plaza (6th floor), 109, Bir Uttam C R Datta Road, Dhaka-1205 the Auditors of the company retire at this meeting and have expressed their willingness to continue in the office for the year 2009. On behalf of the Board of Directors
Nazmul Hassan Chairman Dated : 30 April, 2009 Note : When the Directors Report was approved, Mr. Nazmul Hassan was the Chairman and authorised by the Board to sign it, subsequently Mr. A S F Rahman appointed on 10th May 2009 as Chairman of the Company and signed the Chairmans Statement at page 5 and 7.
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Condition. Title No 1.1 1.2 1.3 1.4(a) 1.4(b) 1.4(c) 1.4(d) 1.4(e) 1.4(f) 1.4(g) 1.4(h) 1.4(i) 1.4(j) 1.4(k) 2.1 2.2 3.00 4.00 5.00
Board Size Independent Director Chairman & Chief Executive Directors Report on Financial Statements Books of Accounts Accounting Policies IAS applicable in Bangladesh System of Internal Control Going Concern Deviation in Operating Results Key Operating & Financial Data Declaration of Dividend No. of Board Meetings Pattern of Shareholdings CFO,HIA & Company Secretary Appointment Board Meeting Attendance Audit Committee External/ Statutory Auditors Reporting the Compliance in the Directors report
To be appointed in 2009
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Financials
13
AUDITORS REPORT
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BALANCE SHEET
AS AT 31 DECEMBER 2008
Notes NET ASSETS: Non-Current Assets Property, Plant and Equipment 21 Investment in Shares 22 Long Term Loan 23 Current Assets Inventories 24 Trade Debtors 25 Advances and Deposits 26 Cash and Cash Equivalents 27 Current Liabilities and Provisions Short Term Loan from Banks (Secured) 28 Long Term Loan-Current Matuirity (Secured) 29 Creditors, Accruals and other Payables 30 Dividend Payable Income Tax Payable 31 Net Current Assets FINANCED BY: Shareholders Equity Share Capital 32 Fixed Assets Revaluation Surplus 33 Retained Earnings-As per Statement of Changes in Equity Non-Current Liabilities Long Term Loan (Net-off Current Matuirity) Deferred Tax Liability 34 35 Tk. 2008 3,256,104,293 2,993,818,409 2,500,000 259,785,884 1,193,107,130 855,108,197 247,899,640 83,247,316 6,851,977 1,340,348,231 866,144,105 315,339,151 97,671,671 - 61,193,304 (147,241,101) 3,108,863,192 2,376,363,149 700,236,000 1,354,284,953 321,842,196 732,500,043 721,470,301 11,029,742 Tk. 3,108,863,192 2007 1,795,324,187 1,792,824,187 2,500,000 1,263,361,276 845,990,031 294,189,238 116,977,600 6,204,407 1,142,008,842 694,844,316 207,040,261 77,127,125 99,090,000 63,907,140 121,352,435 1,916,676,622 1,034,628,881 660,600,000 192,466,272 181,562,609 882,047,741 876,947,130 5,100,611 1,916,676,622
Approved and authorized for issue by the Board of Directors on 30 April 2009 and signed for and on behalf of the board:
O K Chowdhury CEO Per our report of even date. M. J. Abedin & Co. Chartered Accountants
Annual Report 2008
15
Tk. Tk.
Approved and authorized for issue by the Board of Directors on 30 April 2009 and signed for and on behalf of the board:
16
Approved and authorised for issue by the Board of Directors on 30 April 2009 and signed for and on behalf of the board :
17
Approved and authorised for issue by the Board of Directors on 30 April 2009 and signed for and on behalf of the board:
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2.
3. 4.
5. 6. 7. 8. 9.
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11. Provisions In accordance with the guidelines as prescribed by BAS 37: Provisions, Contingent Liabilities and Contingent Assets, provisions are recognized in the following situations: a. when the company has an obligation ( legal or constructive) as a result of past events; b. when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and c. reliable estimates can be made of the amount of the obligation.
12. Accrued Expenses and Other Payables Liabilities are recognized for the goods and services received, whether paid or not for those goods and services. Payables are not interest bearing and are stated at their nominal value. 13. Going Concern The company has adequate resources to continue in operation for the foreseeable future. For this reasons the directors continue to adopt going concern basis in preparing the accounts. The current credit facilities and resources of the company provides sufficient fund to meet the present requirements of its existing business. 14. Financial Instruments Non-derivative financial instruments comprise accounts and other receivables, cash and cash equivalents, borrowings and other payables and are shown at transaction cost. 15. Impairment In accordance with the provisions of BAS 36: Impairment of Assets, the carrying amount of non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated and impairment losses are recognized in profit and loss account. No such indication of impairment has been raised till to date. 16. Segmental Reporting No segmental reporting is applicable for the company as required by BAS 14: Segment Reporting, as the company operates in a single industry segment and within a single geographical segment. 17. Statement of Cash Flows The Statement of Cash Flows has been prepared in accordance with the requirements of BAS 7: Statement of Cash Flows. The cash generated from operating activities has been reported using the Direct Method as prescribed by the Securities and Exchange Rules, 1987 and as encouraged by BAS 7 whereby major classes of gross cash receipts and gross cash payments from operating activities are disclosed. 18. Related Party Disclosures Information in respect any transactions with related parties has been disclosed in a separate note as required by BAS 24: Related Party Disclosures. 19. Events After The Reporting Period In compliance with the requirements of BAS 10: Events After the Reporting Period, post balance sheet events that provide additional information about the companys position at the balance sheet date are reflected in the financial statements and events after the balance sheet date that are not adjusting events are disclosed in the notes when material.
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20.2 Property, Plant and Equipment 20.2.1 Recognition and Measurement Property, plant and equipment (including assets acquired under finance lease) are capitalized at cost of acquisition and subsequently stated at cost revalued amount less accumulated depreciation in compliance with the requirements of BAS 16: Property, Plant and Equipment. The Cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes. 20.2.2 Pre-Operating Expenses and Borrowing Costs In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing cost considering the requirement of BAS 23: Borrowing Costs. 20.2.3 Subsequent Expenditure The company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred, it is probable that the future economic benefits embodied with the item will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have been put into operation, such as repairs and maintenance is normally charged off as revenue expenditure in the period in which it is incurred. In situation where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefit expected to be obtained from the use of the fixed assets, the expenditure is capitalized as an additional cost of the assets. All other costs are recognized to the profit and loss account as expenses if incurred. All up-gradation/enhancement are generally charged off as revenue expenditure unless they bring similar significant additional benefits. 20.2.4 Software Software are generally charged off as revenue expenditure. Purchase software that is integral to the functionality of the related equipment is capitalized as part of that equipment. 20.2.5 Disposal of Fixed Assets On disposal of fixed assets, the cost and accumulated depreciation are eliminated and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sales proceeds. 20.2.6 Depreciation on Fixed Assets Depreciation is provided to amortize the cost of the assets after commissioning, over the period of their expected useful lives, in accordance with the provisions of BAS 16: Property, Plant and Equipment. Depreciation is provided for the period in use of the assets. Depreciation is calculated on the cost of fixed assets in order to write off such amounts over the estimated useful lives of such assets. Depreciation is provided on all fixed assets except Land & Land Development at the following rates on reducing balance basis over the periods appropriate to the estimated useful lives of the different types of assets: Building and Other Construction Plant and Machinery Furniture & Fixture Transport & Vehicle Office Equipment 5% 7.5% 20% 20% 20%
Annual Report 2008
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20.4 Inventories Inventories are carried at the lower of cost and net realizable value as prescribed by BAS 2: Inventories. Cost is determined on weighted average cost basis. The cost of inventories comprises of expenditure incurred in the normal course of business in bringing the inventories to their present location and condition. Net realizable value is based on estimated selling price less any further costs expected to be incurred to make the sale. 20.5 Trade Debtors Trade Debtors are recognized at cost, which is the fair value of the consideration given for them. 20.6 Advances and Deposits Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions, adjustments or charges to other account heads. Deposits are measured at payment value. 20.7 Cash and Cash Equivalents Cash and Cash equivalents are carried in the balance sheet at cost and include cash in hand and with banks on current and deposit accounts, which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same. 20.8 Leases In compliance with the BAS: 17 Leases, cost of assets acquired under finance lease along with obligation there against have accounted for as assets and liabilities respectively of the company, and the interest element has been charged as expenses. 20.9 Income Tax Expenses Current Tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or subsequently enacted after the reporting date, and any adjustment to tax payable in respect of prior years. Provision for taxation for the year ended 31 December 2008 has been made on the basis of the provisions of the Income Tax ordinance 1984 and the Finance Ordinance 2008. Currently the tax rate applicable for listed companies is 27.50 % and there is a 50% exemption of income tax on profit relating to export sales. Deferred Tax The company has recognized deferred tax using balance sheet method in compliance with the provisions of BAS 12: Income Taxes. The companys policy of recognition of deferred tax assets/ liabilities is based on temporary differences (taxable or deductible) between the carrying amount (Book value) of assets and liabilities for financial reporting purpose and its tax base, and accordingly, deferred tax income/expenses has been considered to determine net profit after tax and earnings per shares (EPS). The tax base of assets is the amount that will be deductible for tax purposes against any taxable economic benefits that will flow to an entity (the companty / SCL) when it recovers the carrying amount of the assets. The tax base of liabilities is their carrying amount, less any amount that will be deductible for tax purposes in respect of the liabilities in future periods. In 2008, deferred tax liability is arrived at by applying the corporate tax rate applicable for listed companies (27.50%) on the temporary taxable differences. Exemption of 50 % income tax on profit relating to export is considered for deferred tax purposes. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and / are reduced to the extent that it is no longer probable that the related tax benefit will be realized. The deferred tax asset/income or liability/expense does not create a legal obligation to, or recoverability from, the income tax authority.
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(b) (c)
This represents 5% of net profit before tax contributed by the Company as per provisions of Bangladesh Labor Law, 2006 and is payable to workers as defined in the said law.
20.11 Earnings Per Share This has been calculated in compliance with the requirements of BAS 33:Earnings Per Share by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year. Basic Earnings This represents earnings for the period attributable to ordinary shareholders. As there was no preference dividend, minority interest or extra ordinary items, the net profit after tax for the year has been considered as fully attributable to the ordinary shareholders. Weighted Average Number of Ordinary Shares Outstanding during the year Current Year (2008) The Bonus Shares issued during the year 2008 were treated as if they always had been in issue. Hence, in computing the basic EPS of 2008, the total number of shares including the said bonus shares has been considered as the Weighted Average number of Shares outstanding during the year 2008. Earlier Year (2007) The number of shares outstanding before the bonus issue has been adjusted for the proportionate change in the number of shares outstanding as if the bonus issue had occurred at the beginning of the earliest period reported (2007), and accordingly, in calculating the adjusted EPS of 2007, the total number of shares including the subsequent bonus issue in 2008 has been considered as the Weighted Average Number of Shares outstanding during the year 2007. The basis of computation of number of shares as stated above is in line with the provisions of BAS 33: Earnings Per Share. The logic behind this basis, as stated in the said BAS is, that the bonus shares are issued to the existing shareholders without any consideration, and therefore, the number of shares outstanding is increased without an increase in resource generating new earnings. Diluted Earnings Per Share No diluted EPS is required to be calculated for the year, as there was no scope for dilution during the year under review.
20.12 Foreign Currency Transactions The Financial records of the company are maintained and the financial statements are stated in Bangladesh Taka. Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date. The monetary assets and liabilities, if any, denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchanges ruling at that date. Exchange differences are charged off as revenue expenditure in compliance with the provisions of BAS 21: The Effects of Changes in Foreign Exchange Rates. However, as a requirement of the companies Act 1994, exchange loss relating to foreign currency loan has been capitalized to relevant fixed assets being procured under the said obligation.
20.13 Proposed Dividend The amount of proposed dividend has not been accounted for but disclosed in the notes to the accounts alongwith dividend per share in accordance with the requirements of the Para 125 of Bangladesh Accounting Standard (BAS) 1 (Revised 2008): Presentation of Financial
Annual Report 2008
23
146,044,230 777,341,958 33,748,478 16,711,233 5,818,601 16,389,190 92,720,954 2,665,266 834,270 1,825,789 162,433,420 870,062,912 36,413,744 17,545,503 7,644,390 311,394,601 1,143,558,437 10,661,066 3,337,078 7,303,154 351,072,849 433,853,724 662,467,450 1,577,412,161 10,661,066 3,337,078 7,303,154 324,830,740 1,089,423,676 12,141,202 4,134,724 6,548,453
(a)
Disclosure on Revaluation of Land under Bangladesh Accounting Standard (BAS) 16 Property,Plant and Equipment (i) The basis used to revalue the land is the market price prevailed on the date of revaluation. (ii) The effective date of revaluation was 31.12.2008. (iii) An independent professional valuer , M/S G.K.Adjusters Ltd.(Insurance Surveyors, Loss Adjusters, Controllers, Consultants and Valuers) of Chand Mansion (5th floor) ,66,Dilkusha Commercial Area, was involved to carry out the said revaluation. (iv) The Carrying amount of land and land development as on 31.12.2008 would have been Tk.163,279,120 had the land been carried under cost basis. (v) The revaluation surplus of Tk.192,466,272 is shown as Revaluation Surplus. The revaluation surplus is included in the opening balance of land. SF Ahmed & Co, Chartered Accountants and valuers have revalued the lands, buildings and plant & machinery of the Company as of 31 December 2008, following current cost method. Such revaluation resulted in a revaluation surplus aggregating Tk. 1,161,818,681 (c) Assets include Leased Assets of Tk. 7,750,000 at cost and Tk. 3,589,120 at written down value. 2008 1,185,680 2007 1,185,680
(b) Disclosure on Revaluation of Land under Bangladesh Accounting Standard (BAS) 16 Property, Plant and Equipment
22. INVESTMENT IN SHARES : TK. 2,500,000 This consists of Investment in Shares of listed Companies as follows : (a) In 3,655 Shares of Beximco Synthetics Ltd. (Average cost price per share is Tk.324.40 against face value of Tk.100.00)[Market value as on 31.12.08 Tk. 164.50] (b) In 65,716 Shares of Bextex Ltd. (Average cost price per Share is Tk.20.00 against face value of Tk.10.00)[Market value as on 31.12.08 Tk. 23.90] The aggregate market value of investment at the closing of the year in Dhaka Stock Exchange was Tk. 2,117,246.00
1,314,320 2,500,000
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25. TRADE DEBTORS : Tk. 247,899,640 This is considered good and is falling due within one year. No amount was due by the directors ( including Managing Director ), managing agent, managers and other officers of the company and any of them severally or jointly with any other person. No amount was due by any associated undertaking. 26. ADVANCES AND DEPOSITS: Tk. 83,247,316 This is considered good and consists of as follows: Advances 62,824,973 92,878,993 Deposits 20,422,343 24,098,607 Tk. 83,247,316 116,977,600 The break -up of advances is as follows: L/C-Margin 24,251,063 45,549,652 Suppliers 13,988,350 19,957,883 Income Tax (Note -26.1) 12,874,835 14,231,071 Trade Fair 5,088,775 6,167,361 Employees (other than officers) 474,198 553,698 Marketing Expenses 3,714,661 3,044,782 L/C-Insurance 1,361,574 1,409,365 Factory Expenses - 5,050 L/C- Commission 214,017 494,994 Advance Travel 245,000 552,637 Show Room 612,500 912,500 Tk. 62,824,973 92,878,993 No amount was due by the Directors (including Managing Director ), Managing Agent, Managers and other Officers of the Company and any of them severally or jointly with any other person. No amount was due by any associated undertaking. Advances to employees ( other than officers ) are realisable from monthly salary in installments. The break -up of deposits is as follows: Bank Guarantee Margin 2,755,718 2,755,718 Security Deposit 10,247,402 10,247,402 Earnest Money Deposit - 20,000 Lease Deposit 3,700,134 3,700,134 VAT Deposit 3,719,089 7,375,353 20,422,343 24,098,607
Annual Report 2008
25
29. LONG TERM LOAN - CURRENT PORTION : Tk. 315,339,151 This consists of as follows: Foreign Currency Loans : Marubeni Corporation ( 322,883,392) (in 2007 216,000,000) Local Currency Loans : Southeast Bank Ltd. Sonali Bank PAD Blocked Sonali Bank Project Sonali Bank CC Blocked First Lease International Ltd.
26
31. INCOME TAX PAYABLE: Tk. 61,193,304 This is arrived at as follows : Opening Balance Add: Tax provided in the year 2008 (Note - 42) Less: Adjustments (Note-26.1) Less: Tax paid
32. SHARE CAPITAL :Tk. 700,236,000 This represents : (a) Authorised : 500,000,000 Ordinary Shares of Tk.10/-each (b) Issued, subscribed and paid -up: 66,060,000 Ordinary Shares of Tk.10/-each fully paid-up in cash 3,963,600 Ordinary Shares of Tk.10/-each fully paid-up bonus shares 70,023,600
(c) Compositon of Shareholding: Beximco Group and its Associates Institutions Other Investors and General Public
27
33. FIXED ASSETS REVALUATION SURPLUS : Tk. 1,354,284,953 This represents surplus on revaluation of lands, buildings and plant & machinery made during the years 2004 to 2008, the details of which have been disclosed in Note-21. 34. LONG TERM LOAN : Tk. 721,470,301 This represents loans from : Foreign Currency Loans : Marubeni Corporation ( 432,000,000) (in 2007 696,000,000) Local Currency Loans : 211,832,099 140,679,916 31,877,524 2,280,762 386,670,301 Tk. 721,470,301 233,670,501 163,512,463 39,846,916 4,012,450 441,042,330 876,947,130 334,800,000 435,904,800 2008 2007
Sonali Bank Project Sonali Bank PAD Blocked Sonali Bank CC Blocked First Lease International Ltd.
Loan from Marubeni Corporation is arrived at after crediting of Tk.123,920,598 (in 2007 Tk.26,715,783) being increase in liability on conversion of the loan balance in foreign currency as on 31.12.08 at the exchange rates ruling on the Balance Sheet date. Nature of Security : Pursuant to Supplementary Lenders Paripassu Security Sharing Agreement dated 24.06.2004 among Marubeni Corporation, Industrial Promotion and Development Co.of Bangladesh Ltd.(IPDC), Southeast Bank Ltd., Sonali Bank and Shinepukur Ceramics Ltd., Marubeni Corporation, IPDC, Southeast Bank Ltd. and Sonali Bank are secured by : (i) Equitable mortgage over the immovable property. (ii) Hypothecation by way of a floating charge on all other movable assets both present and future. (iii) First Charge over all the finished stock, Work-In-Process and current assets excluding book debts. Terms of Repayment : Marubeni Corporation : In 14 (Fourteen) half-yearly installments commencing from December, 2004.
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36. REVENUE (TURNOVER) FROM NET SALE : Tk. 1,529,918,239 This is made up as follows : 37. A. Local Gross Sales Less: Value added tax Less: Commission Net Local Sales B. Export Sales Less : Freight, C&F and Others Charges C. Duty Drawback Net sales (A+B+C) COST OF GOODS SOLD : Tk. 1,030,525,596 This is arrived at as follows: Opening WIP Raw Material Issued (Note- 37.1) Material available for consumption Closing WIP Consumption Manufacturing overhead (Note- 37.2) Cost of production Opening Finished Goods Cost of Goods Available for Sale Closing Finished Goods Cost of Free Distribution of Sample
140,678,634 527,443,803 668,122,437 (159,342,294) 508,780,143 527,188,509 1,035,968,652 209,837,006 1,245,805,658 (213,823,346) (1,456,716) Tk. 1,030,525,596
126,375,485 475,640,125 602,015,610 (140,678,634) 461,336,976 473,098,758 934,435,734 207,274,364 1,141,710,098 (209,837,006) (1,404,833) 930,468,259 29
8,603,163 5,976,491 6,424,156 2,192,112 2,707,151 494,094 1,574,762 6,890,657 339,656 859,525 2,987,783 271,537 175,000 42,000 Tk. 39,538,087
9,011,615 5,088,684 7,317,623 2,257,293 1,499,954 482,523 1,337,214 346,489 275,050 848,413 127,084 125,000 29,869 28,746,811
30
40. FINANCIAL EXPENSES : Tk. 188,309,477 This consists of as follows : Interest on Loan from Banks Others Interest on Long Term Loan to a Related Party Bank Commission & Charges
41. OTHER INCOME :Tk. 471,606 This consists of as follows : Interest on FDR and STD A/c Received Profit on Fixed Assets Disposal
42. INCOME TAX EXPENSES : TK. 30,481,549 This represents: (a) Current Tax Tax for the year under review Excess Provision of earlier year Current Tax
31
44. PAYMENTS/PERQUISITES TO DIRECTORS AND OFFICERS (a) Directors : No amount of money was expended by the company for compensating any member of the board for special services rendered. No board meeting attendance fee was paid to the directors of the company. (b) Officers : Managerial Remuneration Bonus Perquisites : Housing Medical Transport 45. PRODUCTION CAPACITY AND ACTUAL PRODUCTION IN THE YEAR 2008 Porcelain Bone China Reason for shortfall : Production as per market demand. Production Capacity (in pieces) 21,600,000 3,600,000 Actual Production (in pieces) 13,256,507 2,894,919 Shortfall 25,640,050 2,254,336 10,551,200 1,705,813 563,537 Tk. 40,714,936 23,627,396 1,828,998 9,722,968 1,571,913 519,301 37,270,576
(8,343,493) (705,081)
46. CAPITAL EXPENDITURE COMMITMENT There was no capital expenditure contracted but not incurred or provided for as on 31.12.08. There was no material capital expenditure authorised by the board but not contracted for as on 31.12.08. 47. CONTINGENT LIABILITIES There was no sums for which the company is contingently liable as on 31.12.08. 48. CLAIMS NOT ACKNOWLEDGED There was no claim against the company not acknowledged as debt as on 31.12.08 49. CREDIT FACILITIES NOT AVAILED There was no credit facilities available to the company but not availed of as on 31.12.08 under any contract, other than trade credit available in the ordinary course of business. 50. COMMISSION, BROKERAGE OR DISCOUNT AGAINST SALES Selling commission of Tk.21,654,343 was incurred and paid during the year 2008. No other commission,brokerage or discount was incurred or paid by the company against sales during the year 2008. 51. EVENTS AFTER THE REPORTING PERIOD The material events after the reporting period have been disclosed below: (a) On 30 April 2009 the board of directors recommended 10% cash dividend and 20% stock dividend (20 Shares for every 100 Shares held) which are subject to the shareholdersapproval at the forth-coming annual general meeting. 32
Shinepukur Ceramics Limited
O K Chowdhury CEO
33
Proxy Form
I/We of adjournment thereof. As witness my hand this day of June, 2009. Signed by the said in presence of (Signature of the Proxy) Date (Signature of witness) Signature of the Shareholder(s) Register BO ID/Folio No. Dated Revenue Stamp Tk. 8.00 of being a member of Shinepukur Ceramics Limited hereby appoint Mr./Mrs/Miss as my Proxy to attend and vote for me on my behalf at the 12th Annual General Meeting of the Company to be held on Tuesday the 16th June, 2009 at 12:30 pm at 1, Shahbagh C/A, Dhaka and at any
Note : A member entitled to attend and vote at the General Meeting may appoint a Proxy to attend and vote in his/her stead. The Proxy Form, duly stamped, must be deposited at the Registered Ofce of the Company not later than 48 hours before the time appointed for the meeting. Signature veried
Authorized Signatory
Shareholders Attendance Slip I hereby record my attendance at the 12th Annual General Meeting being held on Tuesday the 16th June, 2009 at 1, Shahbagh C/A, Dhaka. Name of Member/Proxy Register BO ID/Folio No holding of ordinary Shares of Shinepukur Ceramics Limited.
N. B.
Signature of Shareholder(s) Please present this slip at the reception desk. Children and non-members will not be allowed at the meeting.
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