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NAVANA REAL ESTATE LIMITED
INFORMATION MEMORANDUM FOR ROAD SHOW
FOR
INITIAL PUBLIC OFFERING (IPO)
OF
3,00,00,000 (THREE CRORE) ORDINARY SHARES OF TK 10 (TEN) EACH AT AN
INDICATIVE PRICE OF TK [*]/- INCLUDING A PREMIUM OF TK. [*]/- TOTALLING
TK. [*] UNDER BOOK BUILDING METHOD
Credit Rating at AA3 by Credit Rating Agency of Bangladesh
ISSUER COMPANY
NAVANA REAL ESTATE LIMITED
125/A, Motijheel C/A, Dhaka-1000.
Phone: 9552212, Fax: 02-9566324
Website: www. navana-realestate.com
MANAGER TO THE ISSUE
ICB CAPITAL MANAGEMENT LIMITED
( A S U B S I D I A R Y O F I C B )
BDBL Bhaban (Level-16), 8, DIT Avenue, Dhaka - 1000.
Phone: 7160326-7, Fax: 02-9555707
Website: www. icbcml.com.bd
REGISTRAR TO THE ISSUE
LANKABANGLA FINANCE LIMITED
Safura Tower (Level-11), 20 Kemal Ataturk Avenue,
Banani, Dhaka-1213.
Phone: 9883701–10, Fax: 8810998
Website: www.lankabangla.com
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 2
General Information
� ICB Capital Management Limited, the Issue Manager, has prepared this
Information Memorandum (“IM”) based on the information provided by Navana Real
Estate Limited (the Company/the Issuer) and also upon several discussions with the
Chief Executive Officer and concerned executives of the issuer company. The
Directors, including Chief Executive Officer of Navana Real Estate Limited and ICB
Capital Management Limited collectively and individually, having made all reasonable
inquires, confirm that to the best of their knowledge and belief, the information
contained herein is true and correct in all material aspects and that there are no other
material facts, the omission of which would make any statement herein misleading.
� No person is authorized to give any information or to make any representation not
contained in this prospectus, and if given or made, any such information or
representation must not be relied upon as having been authorized by the Issuer or
Issue Manager.
� The Issue as contemplated in this document is made in Bangladesh and is subject to
the exclusive jurisdiction of the courts of Bangladesh. Forwarding this prospectus to
any person resident outside Bangladesh in no way implies that the Issue is made in
accordance with the laws of that country or is subject to the jurisdiction of the laws of
that country.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 3
Risk Factors
Interest Rate Risk
Interest rate risk is borne by interest bearing assets of an organization. Changes in the
Government’s monetary policy along with increased demand for loans/investments tend to
raise interest rates. Such rises in interest rates mostly affect companies having floating rate
loans or companies investing in long term debt securities. In the event of monetary policy
tightening by the Government to combat increased economic growth and inflation, the company will require a prudent strategy to take the firm from incurring negative net cash
flow from operations.
Management Perception:
The management of NREL is aware of the interest rates at which the debts of the company
are being financed. Management intends to finance long-term funds using fixed interest rate
debt and finances short-term funds at reasonable competitive rates. The company has been
repaying borrowed funds on a continuous basis to reduce such interest risk. The recent trend
shows that, NREL funded ongoing projects by advance against sales. Besides that,
management also utilizes retained earnings and bank loan to finance projects.
Input Cost Risks
Input cost risk is the risk of businesses when procuring materials or commodities in high
global demand. Increasing demand and supply shortages create volatility in these commodity
values therefore the timing, quantity and price of purchase must be closely planned. Input
costs, such as MS rod and cement, represent material direct costs in the industry.
Management Perception:
Management of NREL would hedge their exposure to input price volatility by purchases of
such inputs at right price at the right time; and by charging for contingency against such
inputs in selling prices.
Industry Risks
Real Estate business, especially apartment projects started to flourish and showed robust
growth in the Dhaka City from the early 1980s. At present, more than 250 real estate and
land development companies are operating their business. Demands of flats and land are
high and thereof most of the developers of housing estate are concentrating in this segment
of business and make a competitive market.
Management Perception:
Based on the number and size of projects besides Brand strength in marketplace and
upcoming project portfolio, NREL has a strong position that is the key for success in real
estate sector. The Company has established brand name in real estate market with its asset
quality and customer services. Diversification in terms of location within Dhaka and
Chittagong will assist them to capture different income groups. Therefore, the Company
targets prime locations as well as locations that will be affordable by middle class income group people.
Market Risks
Market risk refers to the risk of adverse market conditions affecting the sales and profitability
of the company. Mostly, the risk arises from falling demand which would affect the
performance of the company.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 4
Management Perception:
Management is fully aware of this market risk; and has planned to act accordingly. On the
other hand, strong marketing and brand management would help the company increase their customer base.
Potential or Existing Government Regulations
The Company operates under the Companies Act, 1994, Real Estate Development and
Management Act, 2010; Dhaka Metropolitan Construction Rules, 2006; Income Tax Ordinance 1984, Customs Act, 1969, Value Added Tax (VAT) Act 1991 and rules, regulations
and notifications made under these laws. Any abrupt changes of the policies made by the
regulatory authorities may adversely affect the business of the Company. NREL operates in a
highly regulated market with registration, plan approvals and inspections required by RAJUK
periodically.
Management Perception:
NREL is the one of the leading real estate developers of the country. This company is doing
business following all laws, rules and regulations. Changes in regulatory framework will bring
changed strategies of doing business by the dynamic management of the Company.
Potential changes in global or national policies
Political instability and the associated deterioration of law and order stand in the way of timely implementation of the projects.
Management Perception
Management is optimistic about growth opportunities in Bangladesh. They believe they target
an untapped market of customers who are seeking quality service, reliability and timeliness
with their management team.
Operational risk
The real estate industry has witnessed challenges such as earthquakes and floods. It stands
as one of the most challenging industries to operate in to date.
Management Perception
Fortunately, the local industry does not have such a troubled backdrop and has immense
opportunities for growth.
FINANCIAL STRUCTURE OF THE COMPANY
� The Financial Structure of the Company is as follows:
Particulars No of
Shares
Face Value
(Taka)
Amount in
Taka
Before IPO:
Authorized Capital 1,000,000 1,000 1,000,000,000
Paid up capital as on 31 August, 2010 300,000 1,000 300,000,000
Paid up capital as on 30 September, 2010 30,000,000 10 300,000,000
Total paid up capital before IPO 30,000,000 10 300,000,000
After IPO:
To be issued as IPO 30,000,000 10 300,000,000
Paid up capital (Post IPO) 60,000,000 10 600,000,000
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 5
* Board of Directors had decided to denominate the share price from Tk.1000.00 to Tk. 10.00
on 12th August 2010 which has been approved by the shareholder of the Company in their Extra
Ordinary General Meeting dated 8th September 2010.
� Capital Structure
Particulars as at 31 August 2010 as at 31 August 2009
Shareholders’ Equity:
Share Capital 300,000,000 51,000,000
Retained Earnings 881,924,935 408,218,519
Total 1,181,924,935 459,218,519
Debts:
Long-term loan 457,557,539 490,771,249
Short-term loan 1,483,279,899 996,801,968
Total 1,940,837,438 1,487,573,217
� Use of proceeds
The Company is planning to raise about Tk. 420.00 crore from the capital market through
IPO. The IPO proceeds will be utilized in the following manner:
Sl. No. Usage of Proceeds Amount (Taka)
1 Repayment of Loans 2,000,000,000
2 Acquisition of Investment Properties 750,000,000
3 Balance as Working Capital 1,450,000,000
Total 4,200,000,000
1. Repayment of Loans of Tk. 200.00 crore
NREL will repay the entire loans from banks and financial institutions aggregating around Tk
200 crore out of its IPO proceeds immediately upon completion of IPO formalities subject to
the approval of Securities & Exchange Commission. This will improve NREL’s profitability,
making it debt-free. The details of Loan taken from Financial Institution are stated below (as
per Audited Accounts):
Sl. No. Financial Institution Loan amount
(In Taka)
1.00 Long-term borrowings:
1.01 City Bank Ltd. 83,912,923
1.02 Delta Brac Housing Ltd. 30,638,971
1.03 Dhaka Bank Ltd. 50,000,000
1.04 Pubali Bank Ltd. 5,838,515
1.05 Southeast Bank Ltd. 175,900,049
1.06 United Commercial Bank Ltd. 136,571,845
2.00 Lease finance:
2.01 Dhaka Bank Ltd. 13,557,126
2.02 Dutch Bangla Bank Ltd. 1,604,565
2.03 EXIM Bank Ltd. 91,070,843
2.04 Standard Bank Ltd. 9,165,483
3.00 Short-term loan:
3.01 Al-Arafah Islami Bank Ltd. 53,807,500
3.02 Bank Alfalah Ltd. 49,600,000
3.03 Bank Asia, Pr. 215,000,000
3.04 EXIM Bank Ltd. 71,971,667
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 6
3.05 IFIC Bank Ltd. 140,626,648
3.06 NCC Bank Ltd. 154,490,723
3.07 National Bank Ltd. 77,439,941
3.08 One Bank Ltd. 150,000,000
3.09 Pubali Bank Ltd. 133,827,899
3.10 Social Islami Bank Ltd. 100,610,216
3.11 Southeast Bank Ltd. 20,000,000
3.12 Standard Bank Ltd. Pr. Br. 175,202,524
Total 1,940,837,437
The Loan amount would be paid which incurred after August 31, 2010:
1. Dhaka Bank Ltd. 50,000,000
2. Pubali Bank Ltd. 9,162,563
Total 59,162,563
2. Acquisition of investment properties
A part of the IPO proceeds at Tk. 75.00 crore shall be utilized by NREL to acquire land and
construct it’s Head Office in Road no. 9/A (new), Dhanmondi, Dhaka. This will improve its
capacity, reduce its expenses and improve its profitability. For this purpose a land measuring
19.80 decimal (12 katha) at Plot no. 231/A (Old), 35 (New), Road no. 18 (old), 9/A (new),
Dhanmondi R/A, Dhaka has been acquired on 31.10.2010 to construct the NREL Head Office.
Implementation Schedule
Date of Baina Nama: 04/01/2010
Date of Registration: 31/10/2010
Expected date of plan pass from RAJUK: 30/04/2011
Expected date of construction to be started: 01/05/2011
Duration of the construction period: 36 months
Expected date of completion: 30/09/2014
3. Balance as Working Capital of Tk. 145.00 crore
The balance IPO proceeds of Tk. 145.00 crore shall be used for meeting the costs of IPO and
NREL’s day to day operations as working capital.
Navana Real Estate Limited: An Overview
Company Profile
Navana Real Estate Ltd (NREL), a part of Navana Group, started its operation in 1996 as a
private limited company & converted as a Public Limited on 8th September, 2010. Since its
inception, NREL has completed and handed over a good number of projects in diversified
areas in Dhaka where it is capturing the market for high and middle-income people. Of late,
NREL has also started its operation in different areas of Chittagong.
Considering the future expansion of Dhaka City and related demand hike for housing, NREL
has extended its area of operation into land development projects, handing over one land
project in Kallyanpur and two projects at Ashulia. Ongoing land projects include two projects
at Narayangonj and Ashulia.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 7
NREL within a short span of time turned out as one of the most trusted company in Real
Estate sector and has been working in various numbers of apartments, commercial and land
projects. The motto of NREL is not only to deliver apartment or land ahead of schedule but
also to maintain the highest-grade construction quality that has gained trust and respect in
customers. Further NREL is pursuing the motto of becoming “different, dependable and
definitive”.
Nature of Business
The Company is engaged in purchasing land & developing the same for urban housing and
selling to the people of different income group. The company also purchases high land for
construction of multi-storied Apartment building, Shopping and Office spaces.
Principal Products/Services
Principal products are Apartment and Commercial spaces approximately cover more than
90% of total revenue. We have also Housing project which will flourish significantly in near
future.
Name of products/Services
The company produces different type of Apartment and commercial spaces in different
location of Dhaka and Chittagong city categorized like as Diamond, Gold, Silver and pearl.
Projects Overview:
NREL’s Apartment Portfolio status
Project Status Number of projects in 2009-10
Total No. of
Projects
Square feet of built-up
area
Square feet of saleable
area
Handed Over Projects 17 59 21,12,791 14,10,704
Ongoing Projects - 67 31,43,020 20,37,902
Upcoming Projects - 75 8256383 51,54,524
Handed Over Projects: During the accounting year 2009-10, NREL handed over total 17
projects to their client located at different areas like Gulshan, Banani, Dhanmondi, New
DOHS, Dhanmondi, Niketan, and Uttara. As a result, from incorporation, total handed over
projects of the Company reached 59. Average time needed to complete and hand over a
project since inception is 2 to 3 years. NREL had no significant delay in projects handover to
customers except some isolated events.
Name & Description of the Handover Project:
Name of Apartment
projects:
Location Handover Name of Apartment
projects:
Location Handover
Bailey Star Baily Road July-2009 Dianthus Uttara March-2009
Chateau De Husains Gulshan March-2010 Gloria Niketon Nov-2007
Southern Wood Dhanmondi Jan-2010 Paradise Uttara March-2006
Lake Shiri Garden Uttara August-2009 Raza Niloy Mirpur June-2007
Villa Gulshan July-2001 Sea Jewel (Sagor) Uttara July-2010
Suriya Imdad Garden Central Road July-2009 Carmem Skylana Uttara March-2009
Tower Gulshan April-2004 Pride Uttara July-2004
Kabir Garden Dhanmondi Jan-2006 Lake View Niketon April-2005
Verdancy Eskaton Aug-2007 Cottage Banani July-2004
Veneziane Dhanmondi Jan-2008 Sapphire Monami Banani Aug-2008
Garden Kallyanpur April-2009 Condominium Segun Bagicha June-2006
Sardinia Banani May-2010 Myriad Niketon April-2010
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 8
Homes Banani Feb-2001 Ville Akbar Mohakhali April-2010
La Fontana Niketon Nov-2008 Shefali Gulshan July-2006
Grosvenor Residence Gulshan March-2010 Banu Garden Mogbazar August-2006
Wood Sorrel Baridhara March-2010 Ecstasy Dhanmondi Nov-2005
Rangalia Banani Feb-2010 Timit Bashundhara August-2009
Motin Verbena Green Road Mar-2008 Vartex Wari Oct-2008
Laurestine Baridhara Sep-2009 Park Uttara Jan-2007
Cordelia Banani Jan-2010 Glory Mohammadpur July-2006
Karar's Islet New DOHS June-2010 Bliss Elephant Rd May-2005
Cosmos Hatkhola Feb-2007 Saffron DOHS Baridhara June-2010
Kinevart Bashundhara June-2010 Oleander Uttara July-2008
Sandriana Niketon March-2009 Rafia Diapensia Segun Bagicha July-2010
Bilkis Laurent Gulshan Nov-2009 Summer Hill Uttara Feb-2009
Pearl Uttara Sep-2006 Delphinium Mohammadpur Nov-2008
Orchid Gulshan Sep-2005 Villa Marvella New DOHS July-2010
Le Caprice Banani Jan-2010 Shamim Beaumont Banani June-2010
Venus Sukrabad June-2006 Sky View Niketon Sep-2005
Mirabad Navana Mirabad Aug-2008
Ongoing Projects: These projects are geographically concentrated in the northern part of
Dhaka like Uttara, Bashundhara, Baridhara, Gulshan, Banani, DOHS etc. Besides that, areas
like Segunbagicha, Hatkhola, Kamalapur, Kalabagan, Wari, Purana Poltan, Mohammadpur,
Lalmatia, Kakrail, Eskaton, Bashabo etc. also included. As per the acquisition agreements,
NREL will have to hand over 33% to 60% of total built area to the landowner and will retain
residual to NREL for sales.
Name & Description of the ongoing Project
Name Location Present status: % of
completion as per audited
accounts
Possible year
of handover
Apartment projects:
Alpenrose Segunbagicha 90% 2011
Ashir Animone Hatkhola 24% 2012
Aspodal Kamlapur 65% 2011
Ayesha Angelique Uttara 27% 2013
Aziza Serenity Banani 33% 2012
Beaufort Baridhara 24% 2013
Blue Cascade Bashundhara 21% 2012
Carnival Kalabagan 10% 2012
Casa Grande Gulshan 46% 2012
Celestial Wari 48% 2013
Circular Height Razarbagh 23% 2013
Darus Salam Uttara 27% 2012
DH Tower Panthapath 16% 2013
Diamonte Dhanmondi 52% 2011
Ellsworth Banani 35% 2012
Ferdous Fairfield Bashundhara 41% 2012
Feroza Wilhelm Gulshan 57% 2011
Fima Paradiso Bakshibazar 78% 2011
Hermitage Hatkhola 51% 2011
Kanak's Redulent Uttara 27% 2012
Karotowa Baridhara 22% 2013
Kazi Richmond Bara Moghbazar 61% 2011
Khalil Gravillea Bashundhara 36% 2011
Li Sianthus Banani 34% 2012
Lilium Memories Baridhara 14% 2013
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 9
Mandale Niketon 28% 2012
Manor Park Uttara 24% 2012
Mid Summer Dream Gulshan 38% 2012
Miru Arimidale Gulshan 29% 2013
Mojibunnessa De Lake Banani 39% 2011
Mukhles Monarch Purana Paltan 41% 2011
Neer Uttara 27% 2012
New Buri Place Subhanbagh 21% 2013
Platinum Residence Gulshan 66% 2011
Rabeya Easdale Mohammadpur 42% 2012
Rahim Ardent Kakrail 55% 2011
Rainbow Terrace Uttara 42% 2013
Rebecca Teodora Uttara 62% 2011
Roosevelt DOHS Baridhara 91% 2011
Saptabarna Lalmatia 72% 2011
Sattar Garden Eskaton 4% 2013
Shahria Rowshan Lalmatia 22% 2012
Shams Anjum Bijoy Nagar 23% 2012
Shaz Sylvan Baridhara 27% 2013
Siddique Sorrento West Dhanmondi 63% 2011
Sikder Wind Flower Bashundhara 30% 2012
Silver Dale Bashaboo 44% 2012
Siraj Lake Aster Dhanmondi 72% 2011
Somerset Shantinagar 39% 2011
South Wind Banani 39% 2011
Splendour Banani 28% 2012
Summer Wind Baridhara 52% 2011
Sylvania Nodda 5% 2013
Usha Sylvestris Gulshan 58% 2011
Water Edge Dhanmondi 63% 2011
Zohra Square Banlamotor 13% 2013
Ahmad Carnation Dorgahat, Ctg 22% 2013
Centifolio CDA R/A, Ctg 36% 2011
Devine Halishohor, Ctg 33% 2011
Faizan Height Mehedibag, Ctg 14% 2012
Florenza Abedin Colony, Ctg. 17% 2012
Jalal Palace Mehedibag, Ctg 7% 2013
Madani Tower Mehedibag, Ctg 4% 2013
Meherun Villa Nizam Rd, Ctg 10% 2012
Motaleb Grandure Nizam Rd, Ctg 31% 2012
Reza Ornilla Khulsi, Ctg 98% 2011
Weakinings Mehedibag, Ctg 12% 2012
Land projects:
Kallayanpur Land Project Kallayanpur, Dhaka 100% 2011
Green Homes Land Project Ashulia, Savar, Dhaka 100% 2011
Village Land Project Ashulia, Savar, Dhaka 100% 2011
Valley Land Project Konabari, Gazipur 100% 2011
Bhuiyan City Land Project Siddirgonj, Narayangonj 100% 2012
Upcoming Projects: To start the upcoming projects as per pre-scheduled manner, NREL
management has already acquired land in different areas. For 84 upcoming residential and
commercial projects, the Company already paid Tk. 179.93 crore as development cost and
upfront cash commitment. Future areas include Mirpur, Mohammadpur, Uttara, Banani,
Gulshan, Baridhara, Kamalapur, Tejgaon etc where it is capturing the market for upper and
upper middle-income class people.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 10
Name & Description of the Proposed Project:
Apartment Projects:
Name Location NREL's
Ownership Ratio
Progoti Bari Nirman Shomiti Plot at Mirpur # 11, Bl # F, Mouja # Senpara Parbata 65%
Sirajgonj Chakrijibee Somobay Somity Plot -1/3, Block-D, Sec-15, Mirpur Housing. 65%
Jamuna Bohumukhi Shamabay Somity Plot # 1/5, Block # D, Section # 15, Mirpur. 68%
Uttaran Shomity Shamiti Plot # 1/4-A, Block # B, Rd. # 01, Sec # 15, Mirpur. 70%
Nobodoy Housing Plot #27, Rd. #6/A, Nobodhoy housing, Mohammadpur. 55%
HatirJheel Eskaton, Hatirjheel. 50%
Unnamed P-272,275……, R-8/A, West Dhanmondi. 56.50%
Unnamed Plot- 174, Block- B, Basundhara. 50%
Unnamed Plot # 20, Garib E Newaz Avenue, Sec # 11, Uttara. 50%
Unnamed Plot- 309, 325, 325/A, Baro-Mogbazar, Dhaka. 58%
Unnamed Plot- 403, Block- A, Basundhara. 50%
Unnamed Plot # 21, Road # 12, Sector # 1, Uttara. 50%
Unnamed Plot # 52, Road # 7/C, Sec-9 Uttara. 50%
Unnamed Plot # 32, Road # 18, Block J, Banani. 38%
Unnamed Plot 52, Road 13, Sector-3, Uttara. 50%
Unnamed Plot 95,Road 13, Block E, Banani. 50%
Unnamed Plot # 18, Road # 5, Sector # 1, Uttara. 50%
Unnamed Plot # 11, Monipuri Para. 47%
Unnamed Plot # 17A & 18, Road # 3A & 4A, Sec # 05, Uttara. 50%
Unnamed Plot # 13, Road # 128, Gulshan. 44%
Unnamed Plot # 31/10, Block # D, Tajmahol Road. 50%
Unnamed Plot # 277, Elephant Road, Dhaka. 50%
Unnamed 1/15A, Iqbal Road, Mohammadpur, Dhaka. 50%
Unnamed Plot # 16, 17 Darus Salam Road, Kallyanpur, Dhaka. 57%
Unnamed Plot #4, Road# 2, Bl-K Baridhara, Dhaka. 40%
Unnamed Plot- 35, Road- 06, Dhanmondi R/A. 42%
Unnamed Plot- 06, Road-02, Bl-K, Baridhara. 40%
Unnamed Plot # 2A, Gulshan North Avenue. 50%
Wage Wood Plot # 24, Road # 65, Gulshan. 100%
Unnamed Plot # 19, Road # 01, Baridhara. 40%
Unnamed Plot # 10, Road # 12, Sec # 06, Uttara. 50%
Unnamed Plot- 22 Road- 1 Block- K, Baridhara. 30%
Unnamed Plot 4 Road -50 Block NWK , Gulshan. 40%
Unnamed Plot- 30A, 32, 32A, Road # 08, Gulshan. 50%
Unnamed 47 Lalchan Mokem Lane, Dholai Khal. 64%
Candle Light Plot -275/K, Road-27 Dhanmondi R/A. 50%
NAVANA HR TOWER Plot # 410-412-205,Tejgaon I/A. 50%
Unnamed Plot # 05, Sonargaon Janapath, Sec # 07, Uttara. 50%
Unnamed Plot # 35 & 35/A, Siddeswari New Circular Road. 53%
Unnamed Plot # 16, Mohakhali C/A. 50%
Unnamed Plot # 23, Road # 07, Block # K, Baridhara. 38%
Unnamed 64, Kakrail. 48%
Unnamed 12 Katha, 42/A, Zigatola. 60%
Unnamed 3 Nawab Abdul Gani Street, Wari, Dhaka. 50%
Chayabithi P-34, B-Cen(H), R-115, Gulshan. 40%
Islam Florentine P-14D, R-68, Gulshan 50%
Unnamed P 10, B Cws R-33, Gulshan 45%
Unnamed P 28/B, 29/A, Kakrail 50%
Unnamed P 312 B-C, Bashundhara 50%
Unnamed P 33,Segunbagicha. 50%
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 11
Unnamed P 35, R-18,Bl-J, Banani 40%
Unnamed P 65, Bijoynogor, Dhaka. 50%
Unnamed P-07(New), 701(Old) R-13, Dhanmondi. 50%
Unnamed P-24, R-4, B-C, Banani. 50%
Pristine Pavilion Gulshan. 50%
Sharif Oakdale P-28, R-99, B-Cen (D), Gulshan. 40%
Unnamed Fuwang Club 205,Tejgaon I/A. 50%
Unnamed P # 2, R # 8/A, Sector # 10, Uttara. 50%
Unnamed P 444, Gulbagh Malibagh. 68%
Unnamed P # 47, R- 3/F, Sector-09, Uttara. 50%
Unnamed P 17A,& B Kabi Jasimuddin Road, Komlapur. 50%
Villa Novera P-28, r-06, Sector-3, Uttara. 50%
Edenton P- 11/3/A, Kabi Jashimuddin Road, Kamalapur. 60%
G H Height P 767(Old) . 67(New) Satmasjid Road Dhanmondi. 50%
Hem Periwincle P # 419, B-A, Bashundhara. 50%
Lucky Water Fort P 29, R-8, Gulshan. 50%
Navana @ Link P 214, Tejgaon I/A. 50%
Rosedale P-100,B-D, R-10/2, Niketon, Gulshan. 40%
Sobia P 12, Bakshibazar, Lalbagh. 50%
Wisteria P-20&21, R-11, S- 9, Uttara. 50%
Unnamed Khilkhat. 100%
Regious Regious. 100%
Unnamed P 1047 & 1287 Nizam Road Ctg. 51%
Unnamed H # 2, R # 01, Khulshi 50%
Navana Kaligonj Commercial Complex Kaligonj 100%
Unnamed Plot # 33, Road # 30/24, Gulshan, Dhaka 50%
Unnamed P-10A,B-Nw(K),R-50,Gulshan 40%
Unnamed P-2/3, B-C, Lalmatia 50%
Unnamed P-34, R-6, Dhanmondi 33%
Land Projects:
Name Location Area in
Katha
NREL's
Ownership Ratio
Kaligonj Land Kaligonj, Gazipur 876.00 100%
Bhatara Land Badda, Dhaka 45.00 100%
Barua Land Khilkhet, Dhaka 49.09 100%
Dhogari Land Rajendrapur, Gazipur 171.51 100%
* The area mentioned in the proposed project is under planning and it will be finalised upon approval Rajuk and
other related Authority.
Relative contribution of Products/Services contributing more than 10% of the total
revenue
The relative contribution to sales and income of each product that accounts for more than
10% of the Company’s total revenue are mentioned below:
For the year ended Aug 31, 2010 For the year ended Aug 31, 2009 Product
Volume % Volume %
Apartments 2,821,617,292 99% 1,651,866,356 99%
Plot 22,195,000 1% 20,938,488 1%
Total 2,843,812,292 100% 1,672,804,844 100%
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 12
Associates, subsidiary/related holding Company & their core areas of business
NREL belongs to Navana Group, one of the well reputed business conglomerates in
Bangladesh. Navana Group emerged into a separate corporate entity from Islam Group after
the death of its Chairman, Mr. Jahurul Islam, which was then the largest business group in
Bangladesh. They comprise of a number of companies, have diversified their activities in
various areas like product and project marketing, construction and real estate business,
international trading, distributorship and production of various items and already attained
significance in the business arena of Bangladesh. There is no associate, subsidiary or holding
Company except the following sister companies:
NREL’s Sister Companies
Company Area of Operation
Navana Limited Toyota, Hino, Good year Tire, forklift, Toyota 3S Centre.
Aftab Automobiles Ltd. Automobile Assembling, Body Building
Navana Electronics Ltd IPS, UPS, Stabilizer, Generator manufacturing, marketing & sales.
Navana CNG Ltd CNG conversion & refueling.
Navana Logistics Ltd Freight Forwarders & Shipping Agent
Biponon Ltd Medical & Scientific equipment marketing & sales
Navana Interlinks Ltd Generator, building solution & energy savings light unit
Navana Construction Ltd Building and Road construction.
Navana Toyota Service Center Ltd. Servicing of Motor Vehicles.
Navana Computer & Techno. Ltd. Trading of ICT Products
Navana Building Products Limited Production of Ready Mix Concrete & Other Building Products
Navana Textiles Ltd. Readymade Garments
Navana Distributions Ltd. Consumable Goods Producer & Distributor
Navana Petroleum Ltd. Trading of Petroleum Products
Navana Taxi Cab Co. Ltd. Taxi cab service
Navana Power Co. Ltd. Power generation
Navana Renewable Energy Ltd. Renewable energy & solar system
Navana Batteries Ltd. Automotive batteries manufacturing
Navana Furniture Ltd. Home, office, hospital & Industrial furniture manufacturing
Navana Paints Ltd. Decorative paint manufacturing
Distribution of products/Services:
A strong team of marketing & sales are engaged to cater the product though Daily news
paper, web site, Direct mailing, REHAB fair, Personal contact, Project sign board, Bill board
and through existing buyer.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 13
Competitive Condition
Competitive conditions in the business
There are more than 1500 Companies in Real Estate sector in Bangladesh. Among them 898 are the members of REHAB. The sector contributed 14% to the Gross Domestic Product
(GDP) on the last fiscal year 09-10, & within a span of three decades, the turnover from this
industry has reached to more than 28000 million taka. The Govt. revenue has stands on
average 2000 million BD Taka per year from this sector. The market share of NREL is
approximately 10%. The followings are the major real estate companies in Bangladesh.
1. Building Technology & Ideas Limited.
2. Concord Real Estate & Development Ltd.
3. Bay Developments Ltd.
4. Asset Developments & Holdings Ltd.
5. South Breeze Housing Ltd. 6. Rangs Properties Ltd.
7. Shanta Properties Ltd.
8. Assurance Developments Ltd.
9. Eastern Housing Ltd.
10. Dom-Inno Builders ltd.
11. Sheltac.
12. Advanced Developments &
Technologies Ltd.
Description of the Property
Location of principal plants and other property of the company and their condition
The head office the Company is located at Dhanmondi, Dhaka.
Value of the Properties
Company owns the following operating assets and they are situated at different locations of
the Head Office/projects of the Company. Following table represents the classifications of
operating assets along with the written down value of the same as at 31 August 2010:-
Cost Depreciation Carrying amount
As at Addition As at As at Charged As at As at Particulars
01.09.09 during the year
31.08.10 01.09. 09 during the year
31.08.10 31.08.2010
Office space
3,595,203 -
3,595,203
-
-
-
3,595,203
Office equipments
5,338,318
1,203,760
6,542,078
1,632,410
883,740
2,516,150
4,025,928
Furniture & fixtures
3,093,275
6,885,132
9,978,407
1,307,454
867,095
2,174,549
7,803,858
Air conditioning system
12,732,694
-
12,732,694
1,903,022
1,082,967
2,985,989
9,746,705
Power
generator & electrical equipment
13,268,397
897,000
14,165,397
2,522,718
2,095,682
4,618,400
9,546,997
Construction equipments
74,590,943
5,334,550
79,925,493
17,998,973
11,146,774
29,145,747
50,779,746
Vehicles
70,924,062
37,990,000
108,914,062
33,496,918
13,575,086
47,072,004
61,842,058
Total
183,542,892
52,310,443
235,853,335
58,861,495
29,651,345
88,512,840
147,340,495
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 14
Board of Directors
The Board of Directors of NREL comprises of 5 (five) Directors. The name, age and position
of all Directors of the Company are as follows:-
Sl.
No. Name and address of director Age (Years) Position
1 Mr. Shafiul Islam 61 Chairman
2 Mrs. Khaleda Islam 55 Director
3 Mr. Saiful Islam 35 Director
4 Mr. Sajedul Islam 31 Director
5 Ms. Farhana Islam 27 Director
Short Bio-data of Directors:
Mr. Shafiul Islam Kamal, Chairman, 1949:
A Bachelor of Science, Mr. Kamal joined the Islam Group, a reputed business conglomerate
in Bangladesh in 1968 and started his career with automobile business as well as in the
construction, real estate business. In the early years, he gained valuable experience by being
involved in the management of the Group’s diverse business operations. He played a major
role in establishing “Navana” as the Toyota brand car trading company in Bangladesh, and
finally set up Aftab Automobiles Ltd. He was also responsible for the construction company
named Bengal Development Corporation (BDC) where he was directly responsible for the
construction work of BDC in the Middle East and from 1981, he was also taking care of
Eastern Housing Limited, then the largest real estate developing company in Bangladesh. In
1996, the then Chairman of Islam Group, he separated from Islam Group with Navana Ltd
and Aftab Automobiles Ltd and formed Navana Group. He has a very good relationship with
all the top politicians, bureaucrats, top military officials and other business key persons of
the country.
Mrs. Khaleda Islam, Director, 1955:
Mrs. Khaleda is the wife of Mr. Shafiul Islam Kamal, Chairman of the Navana Group. Mrs
Khaleda has experience in business for more than 30 years. She traveled many countries of
the world.
Mr. Saiful Islam, Vice-Chairman, 1975:
An MBA, Mr. Saiful joined the Navana Group in 1997. In the early years, he gained valuable
experience by being involved in the management of the Group’s diverse business operations.
He has been appointed as Managing Director & CEO of Aftab Automobiles Ltd and Navana
CNG Limited in 2006. He took various business related professional courses at home and
abroad. He traveled almost all the countries of the world.
Mr. Sajedul Islam, Director, 1979:
A BBA, Mr. Sajedul, a young enthusiastic entrepreneur of the country, joined the Navana
Group in 1999. In the early years, he gained valuable experience by being involved in the
management of the Group’s diversified business operations. He is the Chief Executive of
Navana Real Estate Limited and Navana Construction Limited. He took various business
related professional courses at home and abroad. He traveled many countries of the world.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 15
Ms. Farhana Islam, Director, 1983:
A BBA, Ms Farhana, a young enthusiastic entrepreneur of the country, joined the Navana
Group in 2004. In the early years, she gained valuable experience by being involved in the
management of the Group’s diversified business operations. She took various business
related professional courses at home and abroad. She traveled many countries of the world.
Description of the directors:
Sl.
No. Name
Age
Years Position
Date of Becoming
Director for the
first time
1. Mr. Shafiul Islam 61 Chairman 22 September 1996
2. Mr. Saiful Islam 35 Vice Chairman 22 September 1996
3. Mrs. Khaleda Islam 55 Director 22 September 1996
4. Mr. Sajedul Islam 31 Director 22 September 1996
5. Ms. Farhana Islam 27 Director 22 September 1996
Date of becoming first Directors and date of expiry of current term
Sl.
No. Name Present Position
Date of First
Directorship
Expiry of current
term
1. Mr. Shafiul Islam Chairman 22 September 1996
2. Mr. Saiful Islam Vice Chairman 22 September 1996
3. Mrs. Khaleda Islam Director 22 September 1996
4. Mr. Sajedul Islam Director 22 September 1996
5. Ms. Farhana Islam Director 22 September 1996
One third of total directors take retirement at every Annual General Meeting and re-elect is eligible other than Managing Director.
Directors Ownership in other Companies
Sl. No. Name Designation with
NREL
Entities where they have
Interest
Position
Navana Ltd. Chairman
Aftab Automobiles Ltd. Chairman
Navana Electronics Ltd. Chairman
Navana CNG Ltd. Chairman
Navana Logistics Ltd. Chairman
Biponon Ltd. Chairman
Navana Interlinks Ltd. Chairman
Navana Construction Ltd. Chairman
Navana Toyota Service Center Ltd. Chairman
Navana Computers & Tech Ltd. Chairman
Navana Building Products Ltd Chairman
Navana Textiles Ltd. Chairman
Navana Distribution s Ltd Chairman
Navana Petroleum Ltd. Chairman
Navana Taxi Cab Co. Ltd. Chairman
Navana Power Co. Ltd. Chairman
Navana Renewable Energy Ltd. Chairman
Navana Batteries Ltd. Chairman
Navana Furniture Ltd. Chairman
1. Mr. Shafiul Islam
Chairman
Navana Paints Ltd. Chairman
Navana Ltd. Vice-Chairman
Aftab Automobiles Ltd. Managing Director
Navana Electronics Ltd. Director
Navana CNG Ltd. Vice-Chairman & CEO
Navana Logistics Ltd. Director
Biponon Ltd. Director
Navana Interlinks Ltd. Director
Navana Construction Ltd. Director
Navana Toyota Service Center Ltd. Vice-Chairman & CEO
2. Mr. Saiful Islam
Vice-Chairman
Navana Computers & Tech Ltd. Director
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 16
Navana Building Products Ltd Vice-Chairman
Navana Textiles Ltd. Director
Navana Distribution Ltd Director
Navana Taxi Cab Co. Ltd. Director
Navana Power Co. Ltd. Director
Navana Renewable Energy Ltd. Director
Navana Batteries Ltd. Vice-Chairman
Navana Furniture Ltd. Vice-Chairman
Navana Paints Ltd. Vice-Chairman
Navana Ltd. Director
Aftab Automobiles Ltd. Director
Navana Construction Ltd. Director
Biponon Ltd. Director
Navana Computers & Tech Ltd. Director
Navana Interlinks Ltd. Director
Navana Taxi Cab Co. Ltd. Director
Navana Electronics Ltd. Director
Navana Textiles Ltd. Director
Navana Distribution Ltd Director
Navana CNG Ltd. Director
Navana Power Co. Ltd. Director
Navana Petroleum Ltd. Director
Navana Logistics Ltd. Director
Navana Renewable Energy Ltd. Director
Navana Batteries Ltd. Director
Navana Furniture Ltd. Director
Navana Paints Ltd. Director
Navana Building Products Ltd Director
3. Mrs. Khaleda Islam Director
Navana Toyota Service Center Ltd. Director
Navana Ltd. Director
Aftab Automobiles Ltd. Director
Navana Construction Ltd. Director
Biponon Ltd. Director
Navana Computers & Tech Ltd. Director
Navana Interlinks Ltd. Director
Navana Taxi Cab Co. Ltd. Director
Navana Electronics Ltd. Director
Navana Textiles Ltd. Director
Navana Distribution Ltd Director
Navana Logistics Ltd. Director
Navana CNG Ltd. Director
Navana Power Co. Ltd. Director
Navana Renewable Energy Ltd. Director
Navana Batteries Ltd. Director
Navana Furniture Ltd. Director
Navana Paints Ltd. Director
Navana Building Products Ltd. Director
4. Mr. Sajedul Islam Director
Navana Toyota Service Center Ltd. Director
Navana Ltd. Director
Aftab Automobiles Ltd. Director
Navana Construction Ltd. Director
Biponon Ltd. Director
Navana Computers & Tech Ltd. Director
Navana Interlinks Ltd. Director
Navana Taxi Cab Co. Ltd. Director
Navana Electronics Ltd. Director
Navana Textiles Ltd. Director
Navana Distribution Ltd. Director
Navana CNG Ltd. Director
Navana Power Co. Ltd. Director
Navana Petroleum Ltd. Director
Navana Logistics Ltd. Director
Navana Renewable Energy Ltd. Director
Navana Batteries Ltd. Director
Navana Furniture Ltd. Director
Navana Paints Ltd. Director
Navana Building Products Director
5.
Ms. Farhana Islam
Director
Navana Toyota Service Center Ltd. Director
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 17
Management of the Company
Particulars of Top Executives & Departmental Heads of the Company
Sl.
No. Name of the Officers Position
Educational
Qualification
Date of
Joining in the
Company
Last Job
Experience/
Last 5 Years Experience
Total
Experience
(Years)
1 Engr. Md. Shahidullah Executive
Director
B.sc. (Mech) 1-Feb-1996 Director, Islam
Group
39
2 Maj Gen (Retd) Mohammad Ali Advisor BA, MDS, NDC 16-Oct-2007 Bangladesh Army 37
3 Md. Alamgir Hossain, FCA Chief Financial Officer
Chartered Accountant
25-June-09 Finance Controller, Rangs Group
29
4 Engr. Md. Shakawat Hossain Sr. General
Manager (Project Operation)
B.Sc. (Civil) 1-Mar-2010 Vice Precedent,
Sanmar Properties Ltd.
24
5 Mohammed Fasiul Mowla Sr. General
Manager (Sales & Land
Development)
M. Com. 18-Sep-2004 D.G.M. (Sales &
Marketing), Advance
Development Ltd.
17
6 Md. Wahiduzzaman General Manager (Procurement &
Inventory)
M. Com, CC 3-Sep-2007 G.M. (Procurement),
Asset
Developments Ltd.
17
7 Syed Mobinul Bari General Manager
(Customer
Service)
B.Com. 8-June-2008 G.M. (Customer
Service), Asset
Developments Ltd.
27
8 Md. Mazedur Rahman General Manager
(Engineering)
B.Sc. (Civil) 15-Sep-2010 G.M.
(Engineering),
Dom-Inno
Developments Ltd.
20
9 A.S.M. Moin Dy. General
Manager
(Engineering)
B.Sc. (Civil) 3-Jan-1998 Project Engineer,
BDC Ltd, Islam
Group
24
10 Ezaz Ahmed, ACMA Sr. Manager ( F &
A)
Cost &
Management Accountant
14-May-2008 Manger, Premier
Leasing & Finance Ltd.
10
11 Tareque Enamur Rahim Company
Secretary
Honors Graduate 1982 Deputy Company
Secretary, Aftab
Auto Mobiles
33
12 Muhammad Shahidul Islam Khan,
ACA
Head of Internal
Audit
Chartered
Accountant
01-10-2004 Head of Internal
Audit, Navana
CNG Ltd.
10
VAT, income tax, customs duty or other tax liability
VAT: There is no VAT liability outstanding of the company.
Customs duty: There is no outstanding customs duty due to the company.
Tax: There is no outstanding tax due to the company and got clearance certificate from
National Board of Revenue up to Tax Year 2010-2011.
Determination of the offering price
Navana Real Estate Limited is one of the leading market participants in the real industry of
Bangladesh. The Company is enjoying a high growth in revenue and net profit in the past
couple of years.
Net Asset Value (NAV) gives asset-backing to the shares of the Company. Earnings Per Share
(EPS) indicates profitability against shares of the Company. Earnings-based Value and Book
Value-based Value have been taken to estimate a theoretical fair price that gives us good
indication of market demand for the shares of the Company. The weighted average price
derived from the four valuation methods, giving equal weight, is the indicative offer price for
the shares of Navana Real Estate Limited to be issued through the IPO under Book Building
Method.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 18
Different methods used to determine the fair price per share of the Company are presented
below:
Method 1 –Price based on Net Asset Value (NAV) based price per share:
Particulars Amount
A. Share Capital as at 31 August 2010 300,000,000
B. Reserve and Surplus as at 31 August 2010 881,924,935
C. Total Shareholders' Equity as at 31 August 2010 (A+B) 1,181,924,935
D. Number of shares as at 31 August 2010 30,000,000
E. Net Asset Value (NAV) Per Share as at 31 August 2010 (C/D) 39.40
Method 2 –Price based on Earning per Share (EPS):
The Company’s operational performances and financial results reflect its growth, financial
strength, earning and prospects that help investors in making informed investment decision.
These are summarized as follows:
Financial Year
Net Profit Paid-up Capital
no. of
outstanding share
Earning
per share
(EPS)
Diluted
no. of Share
Restated EPS
31-Aug-10 290,097,916 300,000,000 30,000,000 9.67 30,000,000 9.67
31-Aug-09 146,773,585 51,000,000 5,100,000 28.78 30,000,000 4.89
31-Aug-08 23,692,499 1,000,000 100,000 236.92 100,000 236.92
31-Aug-07 2,164,282 1,000,000 100,000 21.64 100,000 21.64
31-Aug-06 2,385,465 1,000,000 100,000 23.85 100,000 23.85
Average 64.17 59.40
Capital Issue Date & form:
Allotment no. Date of Allotment Consideration Amount in Tk.
1st
22-09-1996 Cash 1,000,000.00
2nd
27-08-2009 Cash 50,000,000.00
3rd
13-04-2010 Cash 49,000,000.00
4th
25-07-2010 Bonus 200,000,000.00
Total 300,000,000.00
The weighted average net profit after tax for the last 5 (five) years stands at Tk.
93,022,749.40 and the restated average EPS stands at Tk. 59.40. If we consider the share
price of the Company on the basis of price earning multiple of 10, the earning based value of
shares of the Company stands at Tk. 594.
Method 3 - Price Based On P/E Ratio of Similar Stocks:
Average P/E Ratio of Similar Companies
Sl. No.
Company Face Value
NAV EPS Market Price (12 months avg.)
P/E Ratio
1 Samorita Hospital Ltd. 100.00 138.48 27.77 1101.21 39.65
2 Eastern Housing Ltd. 100.00 153.96 18.28 859.65 47.03
3 Summit Alliance Port Ltd. 10.00 30.81 3.66 219.76 60.04
4 *Ocean Containers Ltd. 10.00 49.62 3.39 187.54 55.32
Average 50.51
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 19
Determining the Fair Value of Navana’s Stock:
Diluted EPS 9.67
Representative P/E Multiple (X) 50.51
Fair Value (BDT) 488.45
Method 4 - Price based on P/BV Ratio of Similar Stocks:
Average P/BV Ratio of Similar Companies
Sl.
No.
Company Face
Value
EPS NAV Market
Price
(12 months
avg)
P/BV
Ratio
1 Samorita Hospital Ltd. 100.00 27.77 138.48 1101.21 7.95
2 Eastern Housing Ltd. 100.00 18.28 153.96 859.65 5.58
3 Summit Alliance Port Ltd. 10.00 3.66 30.81 219.76 7.13
4 *Ocean Containers Ltd. 10.00 3.39 49.62 187.54 3.78
Average 6.11
Determining the Fair Value of Navana’s Stock:
NAV 39.40
Representative P/BV Multiple (X) 6.11
Fair Value (BDT) 240.73
* Seven Month Average Price
Finding and Calculation of the fair Price of share of NREL:
Particulars Value
Price based on Net Asset Value /Equity based value per share (NAV) 39.40
Price based on Earning per share (EPS) 594.00
Price Based On P/E Ratio of Similar Stock 488.43
Price based on P/BV Ratio of Similar Stock 240.73
*Average (Geometric Mean) 229.05
*The above valuation methods show highly skewed data. Therefore we use geometric mean rather than arithmetic mean. The geometric mean is a measure of central tendency, just like a median.
Therefore Based on the above calculation the fair value of the Stock of the Company stands
at Tk. 229.05 and we conservatively fix up the expected price @ Tk. 140.00 per share
including a premium of Tk. 130.00 per share.
OWNERSHIP OF THE COMPANY’S SECURITIES
In the financial year 2009-10, shareholding pattern of the Company changed. New four
shareholders were included in the Company. The authorized share capital of the Company
increased to Tk. 100.00 crore from Tk. 10.00 crore, and paid-up capital increased to Tk.
30.00 crore from Tk. 5.10 crore. Present shareholding pattern of the Company is given
below (as per audited accounts):
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 20
NREL’s Directors List and Shareholding Pattern
Name Position Held Total number of Share
% of share held
Mr. Shafiul Islam Chairman 1,19,800 39.93% Mr. Saiful Islam Vice Chairman 13,800 4.60% Mrs. Khaleda Islam Director 13,800 4.60%
Mr. Sajedul Islam Director 13,800 4.60% Ms. Farhana Islam Director 13,800 4.60% Mr. Md. Aminul Hoque Shareholder 15,000 5.00% Aftab Automobiles Ltd Shareholder 60,000 20.00% Laguna Autos Ltd Shareholder 25,000 8.33% Biponon Ltd Shareholder 25,000 8.33%
Total 3,00,000 100.00%
5% or more of the Shareholding structure of the Company (as per audited
accounts):
Sl.
No.
Name Status with
the
Company
No. of
Shares
Percentage of
ownership
1. Mr. Shafiul Islam Chairman 119,800 39.933%
2 Mr. Md. Aminul Hoque Share Holder 15,000 5.000%
3 Aftab Automobiles Ltd. Share Holder 60,000 20.000%
4 Laguna Autos Ltd. Share Holder 25,000 8.333%
5 Biponon Ltd. Share Holder 25,000 8.333%
Securities of the Company owned by each director (as per audited accounts):
Securities owned by each director are given below (as on 31 August 2010):
Sl.
No.
Name Status with the
Company
No. of
Shares
Percentage of
ownership
1. Mr. Shafiul Islam Chairman 119,800 39.933%
2. Mrs. Khaleda Islam Director 13,800 4.600%
3. Mr. Saiful Islam Director 13,800 4.600%
4. Mr. Sajedul Islam Director 13,800 4.600%
5. Ms. Farhana Islam Director 13,800 4.600%
Book Building Method
Book Building is a process through which an issuer attempts to determine the price to offer
its security based on demand from institutional investors. Under the process, the price of an
IPO share will be determined through an automated bidding to be participated by different
financial institutions and then the share will be opened for the IPO participant at the cut-off
price determined during the book building process. The bidding will be handled through a
uniform and integrated automated system of the stock exchanges, or any other organization
as decided by the Commission, especially developed for book building method. The entire
procedure of price discovery under book building method is delineated below:
a) The issuer/issue manager shall issue invitation to the eligible institutional investors,
both in writing and through publication in at least 5 (five) widely circulated national dailies,
giving at least 10 (ten) working days time, to the road show/presentation/seminar indicating
time and venue of such event.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 21
b) The invitation letter shall accompany an information document containing all relevant
information covering the proposed issue of the issuer. The eligible institutional investors shall
submit indicative price to the issuer/issue manager, signed jointly by the Chief Executive
Officer (CEO) and the Financial Analyst, highlighting the factors taken into consideration in
support of the indicative price, within the next 3(three) working days of the said road
show/presentation/seminar;
c) The indicative price band will be fixed based on the past performance, expected future
earnings of the issuer and the P/E ratio of other peer companies in the industry and the
determination of indicative price involves the following institutional investors registered with
or approved by SEC in this regard:-
- Merchant Bankers except the issue manager of the proposed issue;
- Foreign institutional investors;
- Recognized pension funds and provident funds;
- Banks and NBFIs under regulatory control of Bangladesh Bank;
- Insurance Companies regulated under Insurance Act, 1938;
- Institutional venture capital and institutional investors;
- Stock Dealers; and
- Any other artificial juridical person permitted by the SEC for this purpose.
d) Issuer in association with issue manger and eligible institutional investors quote an
indicative price in the prospectus with the rationale for such price and submit the prospectus
to the Commission with copy to the stock exchanges.
e) The indicative price range shall be determined as per price indications obtained from
at least 15 (fifteen) eligible institutional investors covering at least 3 (three) different
categories including at least 5 (five) merchant banks of such investors.
f) Eligible institutional investors bidding shall commence after getting consent from the
Commission for this purpose. Institutional bidding period will be 3 to 5 (Three to Five)
working days which may be changed with the approval of the Commission.
g) Eligible institutional investors (EIIs) shall not be allowed to participate in the bidding
unless they participate and quote in the Road Show for setting the indicative price. The EII
participating in the Road Show and quote price must also participate in the bidding. The
issuer and issue manager will jointly submit the attendance sheet and the quoted price by
the EII along with the draft prospectus to SEC.
h) Prospectus will be posted on the Websites of the Commission, stock exchanges, issue
manager and issuer at least 2 (two) weeks prior to the start of the bidding to facilitate
investors to know about the company and all aspect of offering.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 22
i) The indicative price shall be the basis for formal price building with an upward and
downward band of 20% (Twenty Percent) of indicative price within which eligible institutional
investors shall bid for the allocated amount of security.
j) If institutional quota is not cleared at 20% (Twenty Percent) below indicative price,
the issue will be considered cancelled unless the floor price is further lowered within the face
value of security. Provided that the issuer’s chance to lower the price shall not be more than
once.
k) No institutional investor shall be allowed to quote for more than 10% (Ten Percent) of
the total security offered for sale, subject to maximum of 5 (Five) bids.
l) The volume and value of bid at different prices will be displayed on the monitor of the
said system without identifying the bidder.
m) The institutional bidders will be allotted security on pro-rata basis at the weighted
average price of the bids that would clear the total number of securities being issued to
them.
n) Institutional bidders shall deposit their bid with 20% (Twenty Percent) of the amount
of bid in advance to the designated bank account and the rest amount to settle the dues
against security to be issued to them shall be deposited within 5 (Five) working days prior to
the date of opening subscription for general investors.
o) In case of failure to deposit remaining amount that is required to be paid by
institutional bidders for full settlement of the security to be issued in their favor, 50% (Fifty
Percent) of bid money deposited by them shall be forfeited by the Commission. The
securities earmarked for the bidder who defaulted in making payment shall be added to the
general investor quota.
p) The time gap between closure of bidding by Eligible Institutional Investors and
subscription opening for general investors is 25 working days or as may be determined by
the Commission.
q) The securities will be offered to the general investors, NRBs and Mutual Funds at the
cut-off price determined during the book building process.
Description of Securities Outstanding or Being Offered
a) Dividend, Voting and Preemption Right
In case of any declaration of cash/stock dividend by the Company or distribution of any
property of the Company, all the shareholders shall be entitled to it in proportion to their
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 23
shareholdings on the date of the book closure or record date for the purpose. The Company
will follow a dividend policy, which will allow it to provide a fair return on its shareholders’
investment and simultaneously allow for building up of the retained earnings and reserves as
a rule that would sustain growth of the Company. The share capital of the Company is
divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms of
the relevant provisions of the Companies Act 1994 and the Articles of Association of the
Company. All shareholders shall have the usual voting right in person or by proxy in
connection with, among others, election of Directors and Auditor(s) and other usual agenda
of General Meeting – Ordinary or Extra ordinary. On a show of hand, every shareholder
present in person and every duly authorized representative of a shareholder present at a
General Meeting shall have one vote and on a poll every shareholder present in person or by
proxy shall have one vote for every share held by him or her. In case of any additional issue
of shares for raising further capital the existing shareholders shall be entitled to Rights Issue
of shares in terms of the guidelines issued by the Securities and Exchange Commission from
time to time.
b) Conversion and Liquidation Right
The Company in its General Meeting may convert paid-up shares to any denomination. No
special preferences or privileges shall be attached to this conversion. If the company at any
time issues Preference Shares or Debentures or Bonds with the consent of SEC, such holders
of securities shall be entitled to convert such securities into ordinary shares if it is so
determined by the company. In case of winding- up or liquidation of the Company, all
shareholders have the same privileges and advantages as ordinary shareholder as regards
participation in profits and voting at meetings of the Company.
c) Right for Transfer
In terms of the provisions of the Companies Act 1994, Articles of Association of the Company
and other relevant rules in force, the shares of the Company are transferable. The Company
shall not charge any fee other than Government duties for registering transfer of shares. No
shares shall be transferred to an infant or a person of unsound mind.
d) Dividend Policy
I. The profits of the Company, subject to any special right relating thereto created or
authorized to be created by the Memorandum of Association and subject to the
provision of the Articles of Association, shall be divisible among the members in
proportion to the amount of capital paid -up on the shares held by them
respectively.
II. No larger dividend shall be declared than is recommended by the directors, but the
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 24
Company in its General meeting may declare a smaller dividend. If preference
share dividend is not paid in one year, such unpaid dividend shall be carried
forward to the next year or years; and become cumulative.
III. The declaration of directors as to the amount of net profit of the company shall be
conclusive.
IV. No dividends shall be paid otherwise than out of the profits of the year or any other
undistributed profits and general reserves. Dividend shall not carry interest as
against the Company.
V. The Directors may from time to time pay off the members such interim dividend as
appear to the Directors to be justified by the profits of the Company.
VI. A transfer of shares shall not pass the right to any dividend declared thereon after
such transfer and before the registration of the transfer.
VII. There is no limitation on the payment of dividends to the common stockholders.
e) Other Rights of Shareholders
The shareholders shall have the right to receive all periodic reports and statements, audited
as well as unaudited, published by the company from time to time. The directors shall
present the financial statements as required under the law and International Accounting
Standards and International Financial Reporting Standards as adopted by the Institute of
Chartered Accountants of Bangladesh. Financial statements will be prepared in accordance
with International Financial Reporting/Accounting Standards, consistently applied throughout
the subsequent periods and present with the objective of providing maximum disclosure as
per law and international Financial Reporting/Accounting Standard to the shareholders
regarding the Financial and operational position of the company.
In case of any declaration of stock dividend through issue of Bonus Shares, all shareholders
shall be entitled to it in proportion to their shareholdings on the date of book closure or
record date for the purpose.
The shareholders holding not less than 10% of the issued/fully paid up capital of the
Company shall have the right to requisition Extra-Ordinary General Meeting (EGM) of the
Company as provided under Section 84 of the Companies Act, 1994.
Availability of Securities
Sl.
Number Particulars
Number of
Shares
1 20% of IPO of Ordinary Shares are reserved for Eligible
Institutional Investors through Book Building Method
6,000,000
2 10% of IPO of Ordinary Shares are reserved for Mutual Funds 3,000,000
3 10% of IPO of Ordinary Shares are reserved for Non-Resident
Bangladeshis (NRB)
3,000,000
4 Remaining 60% of IPO of Ordinary Shares are reserved for
General Public
18,000,000
Total 30,000,000
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 25
1) 20% of the total public offering shall be reserved for the Eligible Institutional Investors
(EII), 10% shall be reserved for mutual funds, 10% for non-resident Bangladeshi (NRB) and
the remaining 60% shall be open for subscription by the general public.
2) The Institutional Investors will be allotted security on a pro-rata basis at the weighted
average price of the bids that would clear the total number of securities being offered to the
Institutional investors.
3) The securities offered to the Mutual Funds, NRBs and General Public will be at the cut-off
price determined during the Book Building Process.
4) In case of over-subscription under any of the categories mentioned in the above table,
the Issue Manger shall conduct an open lottery of all the applications received under each
category separately in accordance with the letter of consent issued by the Securities and
Exchange Commission.
5) In case of under-subscription under any of Mutual Funds or NRB category as mentioned
in the above table, the unsubscribed portion shall be added to the general public category,
and, if after such addition there is over-subscription in the general public category the issuer
and the issue manager shall jointly conduct an open lottery of all the applicants added
together.
6) In case of under-subscription of the public offering, the unsubscribed portion of shares
shall be taken up by the underwriter(s).
7) The lottery as stated in clause (5) and (6) should be conducted in the presence of the
representatives of Issuer, Stock Exchange(s) and the applicants, if there be any.
Corporate Directory
Miscellaneous Information:
Registered Office: Islam Chamber, 125A Motijheel C/A, Dhaka-1000.
Auditors:
Rahman Mostafa Alam & Co. Chartered Accountants
Banker AB Bank Limited City Bank Ltd.
Dhaka Bank Ltd. Pubali Bank Ltd. Southeast Bank Ltd. United Commercial Bank Ltd.
Manager to the Issue ICB Capital Management Limited
8, DIT Avenue, Dhaka-1000
Registrar to the Issue Lanka Bangla Finance Limited 20, Kemal Ataturk Avenue, Safura Tower (11th Floor) Banani, Dhaka.
Company’s Compliance Officer Md. Tareq Enamur Rahim Company Secretary
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 26
Financial Statements as at and for the period ended 30 September 2010
AUDITORS’ REPORT
To
The shareholders of Navana Real Estate Limited
We have audited the accompanying financial statements of Navana Real Estate Limited
(NREL) which comprise the statement of financial position as at August 31, 2010, and the
statement of comprehensive income, the statement of changes in equity and statement of
cash flows for the year then ended, and a summary of significant accounting policies and
other explanatory notes.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with Bangladesh Financial Reporting Standards (BFRS), and for
such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatements, whether due to fraud or
error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those
standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors’
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstance, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of
NREL as at August 31, 2010, and its financial performance and its cash flows for the year
then ended in accordance with Bangladesh Financial Reporting Standards (BFRS) and comply
with the applicable sections of the Companies Act, 1994, the Securities and Exchange Rules,
1987 and other applicable laws and regulations.
We also report that:
a) we have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit and made due
verification thereof;
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 27
b) in our opinion, proper books of account as required by the law have been kept by the
Company so far as it appeared from our examination of those books;
c) the Company’s financial position and statement of comprehensive income dealt with by
the report are in agreement with the books of account and returns; and
d) the expenditure incurred was for the purposes of the Company’s business.
Dated: Dhaka Rahman Mostafa Alam & Co. 14 October 2010 Chartered Accountants
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 28
Navana Real Estate Limited
Statement of Financial Position
As at 31 August 2010
Notes 31/8/10 31/8/09
BD Taka BD Taka
Assets
Non-current assets
Property, plant & equipment 3.00 147,340,495 133,401,599
Investment properties 4.00
396,550,000
-
Total non-current assets 543,890,495 133,401,599
Current assets
Inventories 5.00 1,485,600,054 870,687,489
Construction works in progress 6.00 3,166,160,453 2,067,986,787
Deferred revenues 7.00 1,004,022,468 255,455,671
Advances, deposits & pre-payments 8.00 1,909,692,127 1,355,935,466
Cash & bank balances 9.00 96,835,996 42,594,451
Total current assets 7,662,311,098 4,592,659,864
Total assets 8,206,201,593 4,726,061,463
Equity and liabilities
Capital and reserves
Share capital 10.00 300,000,000 51,000,000
Retained earnings 11.00 881,924,935 408,218,519
Total equity 1,181,924,935 459,218,519
Non-current liabilities
Long-term borrowings 12.00 367,844,124 468,324,514
Lease finance 13.00 89,713,415 22,446,735
Total non-current liabilities 457,557,539 490,771,249
Current liabilities
Current maturity: long term borrowings 12.00 115,018,179 130,692,535
Current maturity: lease finance 13.00 25,684,602 13,646,365
Short-term loan 14.00 1,342,577,118 852,463,068
Advance against sales 15.00 4,568,214,590 2,620,776,246
Accounts payable 16.00 289,230,349 67,818,737
Accrued expenses and other payables 17.00 225,994,281 90,674,744
Total current liabilities 6,566,719,119 3,776,071,695
Total liabilities 7,024,276,658 4,266,842,944
Total equity and liabilities 8,206,201,593 4,726,061,463
Net assets value per share (par value Tk. 1000 each)
3,940
1,531
The annexed notes 1 to 27 form an integral part of these financial statements
Sd/- Sd/- Sd/-
Chairman Director Chief Financial Officer
Signed in terms of our separate report of even date
Date: Dhaka Rahman Mostafa Alam & Co.
14 October 2010 Chartered Accountants
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 29
Navana Real Estate Limited
Statement of Comprehensive Income
for the year ended 31 August 2010
Notes Year ended
Year ended
31/8/10 31/8/09
BD Taka BD Taka
Revenues 18.00 2,843,812,292 1,672,804,844
Cost of revenues 19.00 (2,123,729,045) (1,247,066,909)
Gross profit 720,083,247 425,737,935
Other gains 20.00 580,104 5,300,616
Administration expenses 21.00 (120,796,067) (102,229,868)
Finance costs 22.00 (198,465,443) (165,613,695)
Profit before tax 401,401,841 163,194,988
Income tax expense 23.00 (111,303,925) (16,421,403)
Profit for the year 290,097,916 146,773,585
Earnings per share (par value Tk. 1000 each)
24.00 966.99 489.25
The annexed notes 1 to 27 form an integral part of these financial statements
Sd/- Sd/- Sd/-
Chairman Director Chief Financial Officer
Signed in terms of our separate report of even date
Date: Dhaka Rahman Mostafa Alam & Co.
14 October 2010 Chartered Accountants
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 30
Navana Real Estate Limited
Statement of Changes in Equity
for the year ended 31 August 2010
Share capital
Retained
earnings Total
BD Taka BD Taka BD Taka
Balance at 1 September 2008 1,000,000 33,001,501 34,001,501
Capital raised during the year 50,000,000 - 50,000,000
Prior years' adjustment - 228,443,433 228,443,433
Profit for the year - 146,773,586 146,773,586
Balance at 31 August 2009 51,000,000 408,218,519 459,218,519
Balance at 1 September 2009 51,000,000 408,218,519 459,218,519
Capital raised during the year 49,000,000 - 49,000,000
Issue of bonus share 200,000,000 (200,000,000)
-
Revaluation surplus of investment
properties - 383,608,500 383,608,500
Profit for the year - 290,097,916 290,097,916
Balance at 31 August 2010 300,000,000 881,924,935 1,181,924,935
Sd/- Sd/- Sd/-
Chairman Director Chief Financial Officer
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 31
Navana Real Estate Limited
Statement of Cash Flows
For the year ended 31 August 2010
Year ended Year ended
31/8/10 31/8/09
BD Taka BD Taka
A. Cash flows from operating activities
Receipts from customers 2,844,392,396 1,860,413,351
Payment for cost & expenses (2,547,125,174) (2,180,804,223)
Finance cost paid (172,881,774) (165,613,695)
Income tax paid (17,042,131) (4,110,593)
Net cash generated by/(used in)
operating activities 107,343,317 (490,115,160)
B. Cash flows from investing activities
Acquisition of property, plant and equipment (52,310,443) (97,436,885)
Acquisition of investment properties (12,941,500) -
Disposal of investment in shares - 5,697,071
Net cash used in investing activities (65,251,943) (91,739,814)
C. Cash flows from financing activities
Proceeds from issue of ordinary shares 49,000,000 50,000,000
Received from long-term borrowings - 549,405,543
Received from lease finance 79,304,917 1,718,312
Repayment of long-term borrowings (116,154,746) -
Net cash inflows from financing
activities 12,150,170 601,123,855
D. Net cash inflows in this year (A+B+C) 54,241,545 19,268,881
E. Cash and cash equivalents at the
beginning of year 42,594,451 23,325,570
F. Cash and cash equivalents at the end of
year (D+E) 96,835,996 42,594,451
Net operating cash flows per share (par
value Tk. 1000 each) 358
(1,634)
Sd/- Sd/- Sd/-
Chairman Director Chief Financial Officer
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 32
Notes to the financial statements
For the year ended 31 August 2010
1.00 Corporate history of the reporting entity
1.01 Legal status
Navana Real Estate Ltd (the Company) was incorporated in 1996 as a private company
under the Companies Act 1994.
The registered office of the company is located at 125/A, Motijheel Commercial Area,
Dhaka 1000, Bangladesh.
1.02 Principal activities
The main objectives of the Company are to carry out the business of real estate by
erecting building and structure and selling and hand over of the erected building and
structure, maintenance as post sales services and contract signing thereof and the company is also engaged in purchasing land and developing the same for urban housing
and selling to the different income group and carry out other related business as
management of the company deemed think appropriate and proper.
2.00 Significant accounting policies and basis of preparation of the financial
statements
2.01 Corporate financial statements and reporting
This comprises Statement of financial position, statement of comprehensive income,
statement of changes in equity, statement of cash flows, notes and explanatory
materials covering accounting policies.
This is prepared under the historical cost convention and in accordance with the
requirements of the Companies Act, 1994, the Securities and Exchanges Rules 1987
and other applicable laws, rules & regulations and the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) adopted by the
Institute of Chartered Accountants of Bangladesh (ICAB) as well as those standards,
disclosures recommended by IASs and as applicable to this Company.
The Board of Directors is responsible for preparing and presenting the financial
statements including adequate disclosures, who approved and authorized for issue of
this financial statements.
The preparation of the financial statements in conformity with the Bangladesh
Accounting Standards (BASs) requires Board of Directors to make estimates and
assumptions that affect the reported amounts of revenues and expenses, assets and
liabilities at the date of the reporting period. Due to the inherent uncertainty involved in
making estimates, actual result reported could differ from those estimates.
2.02 Principal accounting policies
The specific accounting policies selected and applied by the company’s directors for
significant transactions and events that have material effect within the framework of
BAS-1 “Presentation of Financial Statements”, in preparation and presentation of
financial statements have been consistently applied throughout the year and were also
consistent with those used in earlier years.
For a proper understanding of the financial statements, these accounting policies are
set out below in one place as prescribed by the BAS-1 “Presentation of Financial
Statements”. The recommendations of BAS-1 relating the format of financial statements
were also taken into full consideration for fair presentation.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 33
2.03 Fundamental accounting concepts/assumption
The financial statements have been prepared based on going concern, consistency
concept, accrual concept and such other convention as required by BAS-1 for fair
presentation of financial statements.
2.04 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.
2.05 Corporate accounting standards practiced
The following BAS is applicable to the financial statements for the year under review:
BAS 1 Presentation of financial statements
BAS 2 Inventories
BAS 7 Cash flow statement
BAS 8 Accounting policies, changes in accounting estimates and errors
BAS 10 Events after the reporting period
BAS 11 Construction contracts
BAS 12 Income taxes
BAS 16 Properties, plant and equipment
BAS 17 Leases
BAS 18 Revenue
BAS 19 Employee benefits
BAS 23 Borrowing costs
BAS 24 Related party disclosures
BAS 33 Earnings per share
BAS 34 Interim financial reporting
BAS 36 Impairment of assets
BAS 37 Provisions, contingent liabilities and contingent assets
BAS 38 Intangible assets
BAS 40 Investment property
2.06 Regulatory and legal compliance
The company complied with requirement of the following regulatory and legal
authorities:
a) The Companies Act, 1994;
b) The Securities and Exchange Rules, 1987;
c) The Securities and Exchange Ordinance, 1969;
d) The Securities and Exchange Commission Act, 1993
e) The Securities and Exchange (Public Issues) Rules, 2006;
f) The Income Tax Ordinance, 1984;
g) The Value Added Tax Act, 1991;
2.07 Reporting period
The period of the financial statements covers from 1st September to 31st August
consistently.
2.08 Functional and presentational (reporting) currency
The financial statements are prepared and presented in Bangladesh Currency (Taka),
which is the company's' functional currency.
2.09 Recognition of property, plant & equipment
These are capitalized at cost of acquisition and subsequently stated at cost less
accumulated depreciation. The cost of acquisition comprises of purchase price, including
import duties and non-refundable taxes and any directly attributable cost of bringing
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 34
the assets to its working condition for its intended use. 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.
There is no intangible asset and the fixed assets do not include any assets held under lease.
On retirement or otherwise disposal of fixed assets, the cost and accumulated
depreciation are eliminated and any gain or loss on such disposal is reflected in the
income statement which is determined with reference to the net book value of assets
and the net sales proceeds.
2.10 Depreciation of property, plant & equipment
No depreciation has been charged on the office space considering value appreciation
taken place in every year.
Depreciation on all other fixed assets is computed using the reducing balance method
so as to write off the assets over their expected useful life.
Full year’s depreciation has been charged on additions irrespective of the date when the
related assets are put into use and no depreciation is charged on retirement,
irrespective of date of retirement.
After considering the useful life of assets as per BAS-16, the annual depreciation rates
have been applied as under which is considered reasonable by the management.
2.11 Investment property
Investment property, which is property held to earn rentals and/or for capital
appreciation (including property under construction for such purposes), is measured
initially at its cost, including transaction costs. Subsequent to initial recognition,
investment property is measured at fair value. Gains and losses arising from changes in
the fair value of investment property are included in profit or loss in the period in which
they arise.
2.12 Inventories
Inventories represents stock of land, construction materials and construction work in
progress in the ordinary course of business within the company’s normal operating
cycles. a) Stock of land has been valued at cost. Cost includes the purchase consideration,
government duties related to purchase, land filling, wages and other direct
expenses related to development;
b) Stocks of construction materials and construction works in progress have been
valued at cost.
2.13 Impairment of assets
An asset is impaired if its recoverable amount is below the value currently shown on the
statement of financial position. Recoverable amount is taken as the higher of:
a) fair value less cost to sell (net selling price), and
b) value in use
At each statement of financial position, the company reviews all assets to look for any
indication that an asset may be impaired as per BAS 36. Based on such review
management considers that no indication of impairment for any assets existed on the
statement of financial position date.
2.14 Provisions
In accordance with the guidelines as prescribed by BAS-37: Provisions, contingent
liabilities and contingent assets, provisions are recognized in the following situations:
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 35
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.
2.15 Taxation
a) Current tax
The company is to pay income tax @ Taka 250/- per square meter for apartments sold
in the financial year 2009-2010 and @ Tk. 2,000/- per square meter in case of building
or apartments situated at Gulshan Model Town, Banani, Baridhara, Defense Officers
Housing Society (DOHS), Dhanmondi R/A, Lalmatia Housing Society, Uttara Model
Town, Bashundhara Residential Area, Dhaka Cantonment Area, Motijheel C/A, Dilkusha
C/A, Karwan Bazar C/A of Dhaka and Khulsi R/A, Panchlaish R/A and Agrabad of
Chittagong and in other than areas mentioned above @ Tk. 800/- per square meter for
apartments sold in the financial year 2010-2011 at the time of registration as full and
final settlement of company’s tax liability.
The company is to pay income tax @ 1% on deed value U/S 53H of the Income Tax
Ordinance 1984, in case of land in pursuance of Finance Act 2010.
b) Deferred tax
Deferred tax is recognized on difference between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax base used in the
computation of taxable profit, and are accounted for using balance sheet liability
method. Deferred tax liabilities are generally recognized for all taxable temporary
differences and deferred tax assets are recognized to the extent that it is probable that
the profits will be available against which deductible temporary difference, unused tax
loses or unused tax credits can be utilized. Such assets and liabilities are not recognized
if the temporary difference arises from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor accounting profit. Considering the practices
generally followed in Bangladesh the Company have been reserved deferred tax assets
or deferred tax liabilities in accordance with BAS 12 “Income Tax”.
2.16 Borrowing costs
In compliance with the requirements of BAS 23 “Borrowing Costs” borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale.
Borrowing costs are recognized as expenses in the period in which they incurred and
capitalized the same that incurred before commencement of commercial operation.
2.17 Revenue recognition
In compliance with the requirements of BAS 18 “Revenue”, revenue is recognized to the
extent that it is probable that the economic benefits will flow to the entity and the
revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received of receivable excluding VAT, discounts, commission, rebates and
other sales taxes where applicable.
Company traditionally makes allotment the plots of land and apartments ahead of
commencement of land reclamations & development and construction of apartments.
Company also receives money against such allotments on installments basis during
span of two to six years. The amount is booked under advance against sales at the time
of receipt and treaded as sale only when the allotted plots of land are registered and
handed over. In case of apartments, revenue is recognised by applying the percentage
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 36
of completion method in the manner explained in Bangladesh Accounting Standard 11
“Construction Contracts”.
2.18 Employees benefit
a) Provident fund scheme
The company operates a Contributory Provident Fund Scheme for its permanent
employees (who are interested to contribute to the Scheme). The company’s
contribution to the fund is charged off as revenue expenditure during the year to which the contribution relates. The fund is operated by a Board of Trustees. All confirmed
employees of the company are contributing 10% of their basic salary or Tk. 2,500/-
whichever is lower as subscription to the fund. The company contributes equal amount
of the employees’ contribution. Interest earned from the investment is credited to the
members account on yearly basis.
b) Gratuity scheme
Company provides unfunded gratuity benefit scheme. The company has been so long
providing @ one month’s basic pay. The company provide gratuity in actuarial basis as
per BAS 19. The accumulated amount provided so far is equal to the amount which is
required to pay off the gratuity of all the employees were they leave the company as on
date of statement of financial position.
2.19 Cash and cash equivalents
Cash in hand and cash at banks have been considered as cash and cash equivalents for
the preparation of these financial statements, which were held and available for use by
company without any restriction and there was insignificant risk of changes in value of
the same.
2.20 Statement of cash flows
Statement of cash flows is prepared principally in accordance with BAS-7 “Cash Flow
Statement” and the cash flows from the operating activities have been presented under
direct method.
2.21 Earnings per share
The company calculates earnings per share (EPS) in accordance with BAS 33. Basic
earnings per share have been calculated taking a capital base of 3,00,000 Ordinary
Shares of Tk. 1000/- each as issued up to August 31, 2010 which is shown in the face
of the statement of comprehensive income.
2.22 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 company's 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.
2.23 Segmental reporting
No segmental reporting is applicable for the company as required by BFRS 14: Segment
Reporting as the company operates in a single industry segment and within a single
geographical segment.
2.24 Financial assets & liabilities
Financial assets and liabilities are recognized on the statement of financial position date
when the entity has become a party to a contractual provision of the instruments.
a) Receivables
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 37
Account receivables are stated at their real value and consider good. No provision has
been made for doubtful debts and no amount was written off as bad.
b) Payable
Liabilities are recorded at the amount payable for settlement in respect of goods and
services received by the company.
2.25 Related party disclosure
As per BAS 24 parties are considered to be related if one the parties have the ability to control the other party or exercise significant influence over the other party in making
financial and operating decisions.
2.26 Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds received net of
direct issue costs. Financial charges are accounted for on an accrual basis.
2.27 Foreign currency translation
Transactions in foreign currencies are translated into Bangladesh taka at the rate of
exchange ruling on date of transaction. Monetary assets and liabilities expressed in
foreign currencies are translated into Bangladesh taka at the rate of exchange ruling
the statement of financial position date. Gain or losses resulting from foreign currency
transactions are taken to the statement of comprehensive income complying with BSA 21.
2.28 General
a) Figures shown in the accounts have been rounded off to the nearest taka.
b) Comparative figures and account titles in the financial statements have been re-
arranged/re-classified where necessary, to conform to changes in presentation in
the current year.
c) Figures in brackets indicated deductions.
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 38
31/8/10 31/8/09
BD Taka BD Taka
3.00 Property, plant and equipment
(Annexure A)
Cost 235,853,335 183,542,892
Accumulated depreciation 88,512,840 50,141,293
Carrying amount 147,340,495 133,401,599
Office space 3,595,203 3,107,282
Office equipments 4,025,928 3,828,017
Furniture & fixtures 7,803,858 2,366,989
Air conditioning system 9,746,705 10,952,029
Power generator & electrical equipment 9,546,997 10,786,141
Construction equipments 50,779,746 57,096,282
Vehicles 61,842,058 45,264,859
147,340,495 133,401,599
4.00 Investment properties
Fair value of investment properties 396,550,000 -
The fair value of the Company’s investment
properties at 31 August 2010 have been arrived
at on the basis of a valuation carried out at that
date by Messrs Ata Khan & Co., Chartered
Accountants, independent valuers not related to
the Company. Messrs Ata Khan & Co., are
members of the Institute of Chartered
Accountants of Bangladesh and they have
appropriate qualifications and experience in the
valuation of properties in the relevant locations. The valuation, which conforms to International
Valuation Standards, was arrived at by
reference to market evidence of transaction
prices for similar properties.
5.00 Inventories
Land stock (Note: 5.01) 1,444,084,843 479,054,977
Construction materials stock (Note: 5.02) 41,515,211 391,632,512
1,485,600,054 870,687,489
5.01 Land stock
Kallayanpur Land Project 1,380,000 4,332,806
Green Homes Land Project 4,821,000 3,013,783
Village Land Project 106,604,000 15,525,568
Valley Land Project 285,823,471 158,902,547
Bhuiyan City Land Project 452,745,723 246,506,251
Kaligonj Land 480,297,591 39,053,818
Bhatara Land 8,638,000
-
Barua Land 41,825,058 -
Kuturia Savar Land 55,000,000 11,720,202
Dhogari Land 6,950,000 -
1,444,084,843 479,054,977
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 39
5.02 Construction materials stock
Bricks & Brick Chips 256,754 23,487,645
Cement 488,763 45,986,743
Electrical Materials 1,960,054 43,298,576
M S Rod 10,643,217 124,870,951
Sand 37,651 7,865,773
Sanitary & Plumbing Materials 3,011,125 12,398,745
Stone & Stone Chips 1,111,342 12,398,211
Tiles, Marbles & Granite Materials 3,266,114 35,436,781
Other Material 1,004,432 31,274,195
Store in Transit 19,735,760 54,614,892
41,515,211 391,632,512
6.00 Construction works in progress 3,166,160,453 2,067,986,787
7.00 Deferred revenues
Opening balance 255,455,671
Addition during the year 1,029,894,043
1,285,349,714
-
Recognized as revenue during the year 281,327,246
Closing balance 1,004,022,468 255,455,671
Deferred revenues stand for the amount due
from the customers against calculation of
revenue based on percentage of work
completion in the manner explained in
Bangladesh Accounting Standard 11
“Construction Contracts”
8.00 Advances, deposits & prepayments
Advance against office rent 14,251,600 3,770,905
Advance against software purchase 2,700,000 2,100,000
Advance against construction materials
purchase 61,635,598
265,128,005
Advance against expenses 9,732,866 7,414,394
Advance against advertisement 4,517,063
-
Advance against salary 601,798 342,312
Advance to consultant 13,337,540 8,632,431
Advance to security service provider
- 566,231
Advance to others 3,000,000 41,373,372
Total advances 109,776,465 329,327,650
Security deposit 609,068
-
Prepayments for upcoming projects 1,799,306,594 1,026,607,817
1,909,692,127 1,355,935,466
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 40
9.00 Cash & bank balances
(a) Cash in hand 703,168 3,566,203
(b) Cash at bank 96,132,828 39,028,248
A B Bank Ltd. 48,520,960 15,654,379
City Bank Ltd. 2,138,359
-
Dhaka Bank Ltd. 6,278,856 1,807,232
Dutch Bangla Bank Ltd.
- 2,000
EXIM Bank Ltd. -
2,534,970
ICB Islamic Bank Ltd. 4,712
-
Mercantile Bank Ltd. 17,884,423 5,099,487
Mutual Trust Bank Ltd. 56,976 56,976
National Bank Ltd. 2,663,130 7,285,881
NCC Bank Ltd. 560,488 562,729
One Bank Ltd. 8,873,850
-
Pubali Bank Ltd. 1,414,379 348,329
Shahjalal Islami Bank Ltd. 96,387 112,400
Southeast Bank Ltd. 10,000
-
Standard Bank Ltd. 3,935,973 31,333
Standard Chartered Bank 2,389,423 5,336,707
United Commercial Bank Ltd. 2,419 13,045
Al-Arafah Islami Bank Ltd. 2,448 34,923
Bank Alfalah Ltd. 66,812 173
IFIC Bank Ltd. 763,514 94,743
Social Islami Bank Ltd. 469,720 52,941
96,835,996 42,594,451
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 41
31/8/10 31/8/09
10.00 Share capital
Authorized capital:
(1,000,000 Ordinary Shares @ Tk.1000 each) 1,000,000,000 100,000,000
Issued, Subscribed and Paid-up Capital:
(300,000 Ordinary Shares @ Tk.1000 each) 300,000,000 51,000,000
Number
of Shares
Share Capital Share Capital
Quantity BD Taka BD Taka
Balance at beginning of year 51,000 51,000,000 1,000,000
Issue of ordinary shares for cash 49,000 49,000,000 50,000,000
Issue of bonus shares 200,000 200,000,000 -
Balance at end of year 300,000 300,000,000 51,000,000
Share capital: Cash consideration 100,000,000 51,000,000
Share capital: Bonus issues 200,000,000 -
300,000,000 51,000,000
Shareholding position of the company:
Mr. Shafiul Islam 119,800 119,800,000 40,600,000
Mrs. Khaleda Islam 13,800 13,800,000 2,600,000
Mr. Saiful Islam 13,800 13,800,000 2,600,000
Mr. Sajedul Islam 13,800 13,800,000 2,600,000
Ms. Farhana Islam 13,800 13,800,000 2,600,000
Mr. Md. Aminul Hoque 15,000 15,000,000 -
Aftab Automobiles Ltd. 60,000 60,000,000 -
Laguna Autos Ltd. 25,000 25,000,000 -
Biponon Ltd. 25,000 25,000,000 -
300,000 300,000,000 51,000,000
11.00 Retained earnings
Balance at beginning of year 408,218,519 33,001,501
Prior years' adjustment - 228,443,433
Restated opening balance 408,218,519 261,444,934
Revaluation surplus of investment properties 383,608,500
Net profit for the year 290,097,916 146,773,586
Payment of dividends:
Cash dividend - -
Bonus dividend (200,000,000) -
Balance at end of year 881,924,935 408,218,519
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 42
12.00 Long-term borrowings
AB Bank Ltd. - 103,067,434
City Bank Ltd 65,912,923 -
Delta Brac Housing Ltd. 11,034,428 38,823,395
Dhaka Bank Ltd. 38,000,000 -
Pubali Bank Ltd. 2,919,258 56,183,534
Southeast Bank Ltd. 140,720,039 151,338,640
United Commercial Bank Ltd. 109,257,476 118,911,511
Total 367,844,124 468,324,514
Current maturity 115,018,179 130,692,535
482,862,303 599,017,049
13.00 Lease finance
Dhaka Bank Ltd. 9,520,650 13,469,719
Dutch Bangla Bank Ltd. - 1,604,565
EXIM Bank Ltd. 72,856,675 7,372,451
Standard Bank Ltd. 7,336,090 -
Total 89,713,415 22,446,735
Current maturity 25,684,602 13,646,365
115,398,017 36,093,100
14.00 Short-term loan
Al-Arafah Islami Bank Ltd. 53,807,500 68,780,277
Bank Alfalah Ltd. 49,600,000 57,379,331
Bank Asia Ltd. 215,000,000 -
EXIM Bank Ltd. 71,971,667 168,521,583
IFIC Bank Ltd. 140,626,648 153,791,532
NCC Bank Ltd. 154,490,723 182,798,021
National Bank Ltd. 77,439,941 88,034,040
One Bank Ltd. 150,000,000 17,887,113
Pubali Bank Ltd. 133,827,899 -
Social Islami Bank Ltd. 100,610,216 94,566,051
Southeast Bank Ltd. 20,000,000 20,705,120
Standard Bank Ltd. 175,202,524 -
1,342,577,118 852,463,068
15.00 Advance against sales
Against apartments projects & land projects 4,562,053,957 2,617,195,162
Against registration 4,123,768 2,376,841
Against utility 1,276,865 654,367
Against apartments owners association 760,000 549,876
4,568,214,590 2,620,776,246
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 43
16.00 Accounts payable
Liability for goods purchased 231,200,228 40,531,304
Payable to construction labors 58,030,121 27,287,433
289,230,349 67,818,737
17.00 Accrued expenses and other payables
Land owner signing money 62,928,361 56,882,057
Salary expense payable 17,118,231 9,492,652
Audit fee payable 100,000 30,000
Contributory provident fund 316,904 295,268
Liability against salary income tax 298,042 208,629
Liability for security services 199,785 -
Provision for gratuity 12,659,146 11,218,628
Provision for bank interest 25,583,669 -
Provision for tax 106,790,143 12,528,349
225,994,281 90,655,584
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 44
Year ended Year ended
31/8/10 31/8/09
BD Taka BD Taka
18.00 Revenues
Apartment projects: 2,821,617,292 1,651,866,356
(Against 17 completed projects & 67 on-
going projects
calculated based percentage of completion as
per BAS 11)
Land projects: 22,195,000 20,938,488
(Against 33 nos. plot in 3 land projects)
2,843,812,292
1,672,804,844
19.00 Cost of revenues
Apartment projects 2,109,793,746 1,231,731,129
Land projects 13,935,299 15,335,780
2,123,729,045
1,247,066,909
20.00 Other gains
Capital gain - 4,720,502
Rental income 580,104 580,104
Dividend income - 10
580,104 5,300,616
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 45
21.00 Administration expenses
Salary & Allowances 73,733,123 56,241,054
Festival bonus 5,314,974 3,534,302
Gratuity 1,440,517 1,292,245
Over time 1,065,832 877,982
Contributory provident fund 650,345 622,667
Office decoration 1,023,432 734,096
House rent 7,917,750 5,941,788
Traveling expenses 666,721 567,654
Conveyance 543,276 452,682
Entertainment 553,214 376,161
Plantation 332,134 326,339
Paper & Periodicals 537,032 445,609
Printing 162,355 45,231
Stationery 946,846 911,663
Books 145,823 83,550
Forms & Fees 245,000 218,000
Postage 386,245 356,401
Phone 432,341 350,980
FAX 111,204 187,500
Mobile phone 657,643 753,620
Water bill 673,263 513,500
Utilities bill 973,223 865,024
Mineral water bill 450,128 320,369
Legal fee 30,000 25,324
Audit fee 100,000 50,000
Bank Charges & Commission 475,300 430,520
Medical expenses 1,165,471 952,316
Office expenses 365,981 155,068
Welfare expenses 1,187,942 876,325
Liveries & Uniform 982,276 812,302
Survey expenses 411,765 320,356
Donation, subscription & gift 386,654 332,362
Mobilization expenses 354,642 156,321
Fuel, oils & lubricants 452,467 326,325
Sundry expenses 1,210,250 936,841
Office maintenance 983,372 732,125
Stamp (Judicial/Non-judicial) 376,865 325,140
Director remuneration 1,776,000 400,000
Publication expense 1,028,790 870,321
Sales promotion expenses 650,032 452,189
Business development expense 1,000,436 800,320
Preliminary expenses written off - 112,314
Deferred expenses written off - 8,997,763
Depreciation 8,895,403 8,147,219
120,796,067
102,229,868
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 46
22.00 Finance costs
Interest on long-term borrowings 81,374,765 87,672,576
Interest on lease finance obligations
7,067,425 2,301,389
Interest on short-term loan
110,023,253 75,639,730
198,465,443
165,613,695
23.00 Income tax expense
Tax paid under section 53FF of ITO '84
4,291,832 3,665,702
Tax pad under section 53H of ITO '84
221,950 227,350
Tax provision under section 53FF of ITO
'84
106,572,604 12,310,810
Tax provision for rental income
217,539 217,539
Tax deducted at source from dividend -
2
111,303,925
16,421,403
24.00 Earnings per share
Profit attributable to ordinary shareholders
290,097,916 146,773,585
Number of ordinary shares used to compute EPS
300,000 300,000
Basic earnings per share
966.99
489.25
*EPS for 2009 has been restated.
25.00 Related party disclosures
During the year, the company carried out a number of transactions with related
parties in the normal course of business. The names of related parties, nature of
transactions and total transaction value have been set out in accordance with the provision.
Nature of Transaction Outstanding value:
31/8/10
Name of related
party
Relationship transactions value Receivable/(payable)
Navana Electronics
Ltd.
Sister
concern
Buy of
products
37,370,060
(28,782,060)
Navana Building
Products Ltd
Sister
concern
Buy of
products
112,878,715 (31,516,615)
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 47
Navana Interlinks
Ltd.
Sister
concern
Buy of
products
5,228,413 -
26.00 Number of
employees
Number of regular employees receiving remuneration of Tk. 36,000 or above per annum
was 438 as at 31 August 2010.
27.00 Contingent liability
There were no contingent liabilities as at 31 August 2010
Issuer: Navana Real Estate Limited Issue Manager: ICB Capital Management Limited
Page- 48
Schedule of Property, plant & equipment For the year ended 31 August 2010
Particulars Cost Depreciation
As at
01.09.2009 Addition
during the year As at
31.08.2010 Rate
As at 01.09.2009
Charged during the
year
As at 31.08.2010
Carrying amount As at
31.08.2010
Office space 3,595,203 - 3,595,203 0% - - - 3,595,203
Office equipments 5,338,318 1,203,760 6,542,078 18% 1,632,410 883,740 2,516,150 4,025,928
Furniture & fixtures 3,093,275 6,885,132 9,978,407 10% 1,307,454 867,095 2,174,549 7,803,858
Air conditioning system 12,732,694 - 12,732,694 10% 1,903,022 1,082,967 2,985,989 9,746,705
Power generator & electrical
equipment 13,268,397 897,000 14,165,397 18% 2,522,718 2,095,682 4,618,400 9,546,997
Construction equipments 74,590,943 5,334,550 79,925,493 18% 17,998,973 11,146,774 29,145,747 50,779,746
Vehicles 70,924,062 37,990,000 108,914,062 18% 33,496,918 13,575,086 47,072,004 61,842,058
Total 183,542,892 52,310,443 235,853,335 58,861,495 29,651,345 88,512,840 147,340,495
Allocation of depreciation to:
Cost of revenues 70%
20,755,941
Administration expense 30%
8,895,403
Total 100% 29,651,345
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