REAL ESTATE DIVISION
OVERALL OPERATIONS
The year 2001 was not a propitious one for real estate business. First, it was an election year, an occasion for anxiety and people refrained from long term investments. The events of September 11 and its immediate effect, reduced foreign exchange earnings due to a steep fall in exports and remittances from overseas Bangladeshis further dampened prospects of new sales. Therefore, the company did not launch any new project either in the land or in the apartment sector. However it embarked on an active acquisition program to build up it's stock of land for future apartment and land sales projects.
APARTMENT PROJECTS
Shinepukur's construction of Manoshi Lake View project (MLVP) Phase - III made rapid progress with all the 3 buildings structural and brick works completed up to the 5th floor. The handover of the apartments will start by first week of January 2003. The Grand Terrace project Building - B with 43 apartments was handed over in 2001. Building - D with 55 apartments will be ready for handover by June 2003. The Mohona project, in Chittagong the 1st building with 37 apartments was handed over to their respective owners by December this year. Work in the second building is progressing smoothly.
PRESENT STATUS OF APARTMENT PROJECTS OF OUR COMPANY
The company has so far taken up a total of 10 apartment projects at different places of Dhaka and Chittagong Metropolitan cities. Name of Project Flat Size (in sft.) Price Range (Taka) Status Belvedere, Dhanmondi 2060 35,50,000 Completed & handed over Charmville, Green Road 1425-1660 21,50,000-24,50,000 Completed & handed over Manoshi Lake View, Mirpur 850-1294 11,00,000-16,90,000 In 1st phase 80 flats were handed over. In 2nd phase another 40 flats were handed over. Manoshi - Phase - III 924 13,00,000 In third phase 84 flats are under construction.
1294 16,90,000 Manoshi Tower, Mirpur 1075-1425 14,00,000-18,00,000 Construction of twelve-storied building of 54 flats delayed due to legal problem. Grand Terrace, Eskaton 1400-1880 24,50,000-32,00,000 Out of 196 flats, construction works of 98 flats are in advanced stage of which 43 are ready for habitation. Mohona, Chittagong 1420 21,00,000 Completed & handed over. Mohona - Phase - II 1420 24,00,000 Under construction Alindo, Dhanmondi 1600- 1700 31,50,000-33,50,000 Completed & handed over. Casaflores, Baridhara 3000 75,00,000 Completed & handed over. Melody, Gulshan 2750- 2900 63,00,000-66,00,000 Completed & handed over. Nandan, Hatkhola 1135- 1360 16,00,000-19,00,000 Under construction
ANNUAL REPORT 2001
SHINEPUKUR HOLDINGS LIMITED
15
JUTE DIVISION
OVERALL OPERATIONS
Despite declining world demand for woven carpets due to global economic recession, increased competition with more manufacturers as well as with cheaper synthetic yarn, our company performed better in 2001 compared to last year. During the year both our production and exports have increased. We have maintained our leadership position in the jute yarn & twine industry
by producing quality products & providing timely services to our customers. During the year we fully repaid the Janata Bank's BMR&E loan. At present, Jute Division has no long term loan outstanding with any financial institution/Bank. We are confident that, with a committed team
of competent professionals, our company will be able to retain its leadership position in the industry in the coming years also.
PROCUREMENT, PRODUCTION & EXPORT
There was a 'drought' during the jute sowing season of 2001. Also, carry over stocks from the previous crop year were significantly less. As a result, raw jute price was higher during the year. In fact, the availability of white jute and golden/bright colour of Tossa jute having strong fiber required for producing finer yarn, were scarce during the year. In spite of these, during the year, we could buy 11,269 M.Ton of raw jute at an average rate of Taka 21,024/M.Ton. Last year we procured 14,613 M. Ton of raw jute at an average price of Taka 20,083/M.Ton. Procurement of other materials like Jute Batching Oil, Starch, Enzyme, Dyes & Packing Materials were on time ensuring planned production & shipment of the goods. During 2001, our production volume increased to 12,591 M.Ton, by 2% over last year. Production capacity utilization in tonnage was almost 100%. Last year's production capacity utilization in tonnage was 98%. The range of counts produced during the year were between 6 Lbs to 260 Lbs, averaged at 13 Lbs. It may be mentioned that the present production capacity of our jute spinning mills, based on average
count of 12, is 42 M. Ton per day & 12,600 M.Ton per annum. In 2001, in addition to normal carpet yarn & twine for high-speed CRM & CRT looms, we also produced Bleached, Dyed, Polished & Coated yarn . The quality of our yarn & twine during the year was excellent and
to the satisfaction of the buyers. During 2001, we exported 12,579 M.Ton, valued US$ 9.003 million of jute yarn & twine which is 2.75% higher than last year (12,242 M.Ton). This was the largest volume of jute yarn & twine exported by our company in any 12 months since our company started exporting jute yarn & twine. The average FOB export price in US Dollar decreased to $ 611 (from last years $ 659), due to lower demand as well as increased competition. The economic recession in Japan & poor growth in European & Southeast Asian economies caused decline in demand for woven carpets. There were less than 30 jute yarn & twine manufacturers in the mid nineties in Bangladesh. By 2001, more than 50 jute & twine mills were manufacturing jute yarn & twine in Bangladesh. In India, besides large jute mills, mini jute yarn & twine mills have been set up to produce jute yarn & twine for export. Synthetic yarns are being produced at a cheaper rate to substitute the jute yarn. As a result, the price of jute yarn & twine has been gone down.
Corporate Governance
T he maintenance of effective corporate Governance remains a
key priority to the Board of Shinepukur Holdings 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 focus to the Business objectives of the company and be reinforced by a culture of openness and clear accountability. Keeping
this in mind, there are clear structure and accountabilities supported by well understood policies and procedures to guide the activities of company's management, in its day-to-day business and in the areas associated with internal control.
INTERNAL FINANCIAL CONTROL
The Directors are responsible for the Company's system of Internal Financial Control. Although no system of internal control can provide absolute assurance against material misstatement and loss, the company's 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 areas: Management Structure: Shinepukur Holdings Ltd. has two business operating divisions, namely - Jute Division & Real Estate Division. These divisions are independently managed and all the books of accounts including those required under section 181 of the companies Act 1994 are maintained separately for each division. These divisions are operating a well defined management structure headed by Chief Executive Officers under whom there are various departmental heads and according to hierarchy, various senior and mid level management staffs and departmental head meet at regular interval. Financial Reporting: There are comprehensive management reporting disciplines with involve the preparation of annual budget by all operating departments. Executive management reviews the
budgets and actual results are reported against the budget and revised forecasts are prepared at regular interval. As s e t Ma n a g eme n t : The company has sound asset management policy, which reasonably assures the safeguarding of assets against unauthorised use or disposition. The company also follows proper records 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 CEOs'. These include monthly treasury operations, financial statements. Other areas are also given emphasis by reviewing on quarterly basis. These include
information strategy, environmental matter and insurance matter.
BOARD
The Board of Directors: The Board of Directors is responsible to the shareholders for the strategic development of the company, the management of the company's asset in a away that maximizes
performance and the control of the operations of the business. The Board of Directors is responsible for approving company policy and is responsible to shareholders for the company's financial and operational performance. Responsibility for the development and implementation of company policy and strategy, day-to-day operational issues in delegated by the Board to the management of the company. Board structure and procedure: The membership of the Board during the year ended 31 December 2001 and 2000 stood at four Directors, which is higher than the legal minimum requirement of three Directors. The Shareholders appoint the Directors in general meeting and through them exercise their control and proprietorship over the company. The Company's Board currently comprises the Chairman and other three Directors. Of the other three Directors one is nominated by Beximco Holdings Limited and another one is nominated by NewDacca Industries Limited (who is also Managing Director of the company). The name of the Directors appears on page 5. The quorum for the Board is at least three Directors present in person. Appraisal Review Board: Appraisal review Board annually appraises the performances of every level of employees as per established policy. It determines the annual increment, promotion and parameter of remuneration for all level of management for the respective divisions. The Chief Executive officers heads the Board with member for Human resource department and departmental heads. Going Concern After making appropriate enquires at the time of approving the financial statements the directors are convinced that the Company has adequate resources to carry out its operational existence for the foreseeable future and that it is therefore appropriate to adopt going concern basis in preparing the financial statements.
OTHER
Relations with shareholders: The Annual General Meeting is 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.
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OVERALL OPERATIONS
The year 2001 was not a propitious one for real estate business. First, it was an election year, an occasion for anxiety and people refrained from long term investments. The events of September 11 and its immediate effect, reduced foreign exchange earnings due to a steep fall in exports and remittances from overseas Bangladeshis further dampened prospects of new sales. Therefore, the company did not launch any new project either in the land or in the apartment sector. However it embarked on an active acquisition program to build up it's stock of land for future apartment and land sales projects.
APARTMENT PROJECTS
Shinepukur's construction of Manoshi Lake View project (MLVP) Phase - III made rapid progress with all the 3 buildings structural and brick works completed up to the 5th floor. The handover of the apartments will start by first week of January 2003. The Grand Terrace project Building - B with 43 apartments was handed over in 2001. Building - D with 55 apartments will be ready for handover by June 2003. The Mohona project, in Chittagong the 1st building with 37 apartments was handed over to their respective owners by December this year. Work in the second building is progressing smoothly.
PRESENT STATUS OF APARTMENT PROJECTS OF OUR COMPANY
The company has so far taken up a total of 10 apartment projects at different places of Dhaka and Chittagong Metropolitan cities. Name of Project Flat Size (in sft.) Price Range (Taka) Status Belvedere, Dhanmondi 2060 35,50,000 Completed & handed over Charmville, Green Road 1425-1660 21,50,000-24,50,000 Completed & handed over Manoshi Lake View, Mirpur 850-1294 11,00,000-16,90,000 In 1st phase 80 flats were handed over. In 2nd phase another 40 flats were handed over. Manoshi - Phase - III 924 13,00,000 In third phase 84 flats are under construction.
1294 16,90,000 Manoshi Tower, Mirpur 1075-1425 14,00,000-18,00,000 Construction of twelve-storied building of 54 flats delayed due to legal problem. Grand Terrace, Eskaton 1400-1880 24,50,000-32,00,000 Out of 196 flats, construction works of 98 flats are in advanced stage of which 43 are ready for habitation. Mohona, Chittagong 1420 21,00,000 Completed & handed over. Mohona - Phase - II 1420 24,00,000 Under construction Alindo, Dhanmondi 1600- 1700 31,50,000-33,50,000 Completed & handed over. Casaflores, Baridhara 3000 75,00,000 Completed & handed over. Melody, Gulshan 2750- 2900 63,00,000-66,00,000 Completed & handed over. Nandan, Hatkhola 1135- 1360 16,00,000-19,00,000 Under construction
ANNUAL REPORT 2001
SHINEPUKUR HOLDINGS LIMITED
15
JUTE DIVISION
OVERALL OPERATIONS
Despite declining world demand for woven carpets due to global economic recession, increased competition with more manufacturers as well as with cheaper synthetic yarn, our company performed better in 2001 compared to last year. During the year both our production and exports have increased. We have maintained our leadership position in the jute yarn & twine industry
by producing quality products & providing timely services to our customers. During the year we fully repaid the Janata Bank's BMR&E loan. At present, Jute Division has no long term loan outstanding with any financial institution/Bank. We are confident that, with a committed team
of competent professionals, our company will be able to retain its leadership position in the industry in the coming years also.
PROCUREMENT, PRODUCTION & EXPORT
There was a 'drought' during the jute sowing season of 2001. Also, carry over stocks from the previous crop year were significantly less. As a result, raw jute price was higher during the year. In fact, the availability of white jute and golden/bright colour of Tossa jute having strong fiber required for producing finer yarn, were scarce during the year. In spite of these, during the year, we could buy 11,269 M.Ton of raw jute at an average rate of Taka 21,024/M.Ton. Last year we procured 14,613 M. Ton of raw jute at an average price of Taka 20,083/M.Ton. Procurement of other materials like Jute Batching Oil, Starch, Enzyme, Dyes & Packing Materials were on time ensuring planned production & shipment of the goods. During 2001, our production volume increased to 12,591 M.Ton, by 2% over last year. Production capacity utilization in tonnage was almost 100%. Last year's production capacity utilization in tonnage was 98%. The range of counts produced during the year were between 6 Lbs to 260 Lbs, averaged at 13 Lbs. It may be mentioned that the present production capacity of our jute spinning mills, based on average
count of 12, is 42 M. Ton per day & 12,600 M.Ton per annum. In 2001, in addition to normal carpet yarn & twine for high-speed CRM & CRT looms, we also produced Bleached, Dyed, Polished & Coated yarn . The quality of our yarn & twine during the year was excellent and
to the satisfaction of the buyers. During 2001, we exported 12,579 M.Ton, valued US$ 9.003 million of jute yarn & twine which is 2.75% higher than last year (12,242 M.Ton). This was the largest volume of jute yarn & twine exported by our company in any 12 months since our company started exporting jute yarn & twine. The average FOB export price in US Dollar decreased to $ 611 (from last years $ 659), due to lower demand as well as increased competition. The economic recession in Japan & poor growth in European & Southeast Asian economies caused decline in demand for woven carpets. There were less than 30 jute yarn & twine manufacturers in the mid nineties in Bangladesh. By 2001, more than 50 jute & twine mills were manufacturing jute yarn & twine in Bangladesh. In India, besides large jute mills, mini jute yarn & twine mills have been set up to produce jute yarn & twine for export. Synthetic yarns are being produced at a cheaper rate to substitute the jute yarn. As a result, the price of jute yarn & twine has been gone down.
Corporate Governance
T he maintenance of effective corporate Governance remains a
key priority to the Board of Shinepukur Holdings 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 focus to the Business objectives of the company and be reinforced by a culture of openness and clear accountability. Keeping
this in mind, there are clear structure and accountabilities supported by well understood policies and procedures to guide the activities of company's management, in its day-to-day business and in the areas associated with internal control.
INTERNAL FINANCIAL CONTROL
The Directors are responsible for the Company's system of Internal Financial Control. Although no system of internal control can provide absolute assurance against material misstatement and loss, the company's 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 areas: Management Structure: Shinepukur Holdings Ltd. has two business operating divisions, namely - Jute Division & Real Estate Division. These divisions are independently managed and all the books of accounts including those required under section 181 of the companies Act 1994 are maintained separately for each division. These divisions are operating a well defined management structure headed by Chief Executive Officers under whom there are various departmental heads and according to hierarchy, various senior and mid level management staffs and departmental head meet at regular interval. Financial Reporting: There are comprehensive management reporting disciplines with involve the preparation of annual budget by all operating departments. Executive management reviews the
budgets and actual results are reported against the budget and revised forecasts are prepared at regular interval. As s e t Ma n a g eme n t : The company has sound asset management policy, which reasonably assures the safeguarding of assets against unauthorised use or disposition. The company also follows proper records 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 CEOs'. These include monthly treasury operations, financial statements. Other areas are also given emphasis by reviewing on quarterly basis. These include
information strategy, environmental matter and insurance matter.
BOARD
The Board of Directors: The Board of Directors is responsible to the shareholders for the strategic development of the company, the management of the company's asset in a away that maximizes
performance and the control of the operations of the business. The Board of Directors is responsible for approving company policy and is responsible to shareholders for the company's financial and operational performance. Responsibility for the development and implementation of company policy and strategy, day-to-day operational issues in delegated by the Board to the management of the company. Board structure and procedure: The membership of the Board during the year ended 31 December 2001 and 2000 stood at four Directors, which is higher than the legal minimum requirement of three Directors. The Shareholders appoint the Directors in general meeting and through them exercise their control and proprietorship over the company. The Company's Board currently comprises the Chairman and other three Directors. Of the other three Directors one is nominated by Beximco Holdings Limited and another one is nominated by NewDacca Industries Limited (who is also Managing Director of the company). The name of the Directors appears on page 5. The quorum for the Board is at least three Directors present in person. Appraisal Review Board: Appraisal review Board annually appraises the performances of every level of employees as per established policy. It determines the annual increment, promotion and parameter of remuneration for all level of management for the respective divisions. The Chief Executive officers heads the Board with member for Human resource department and departmental heads. Going Concern After making appropriate enquires at the time of approving the financial statements the directors are convinced that the Company has adequate resources to carry out its operational existence for the foreseeable future and that it is therefore appropriate to adopt going concern basis in preparing the financial statements.
OTHER
Relations with shareholders: The Annual General Meeting is 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.
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