Working Capital Management of Heidelberg Cement Bangladesh

Working capital administration of Heidelberg Cement Bangladesh Limited (HCBL) Executive Summary: In this report we have introduced the general working capital administration of Heidelberg Cement Bangladesh Limited (HCBL). We have assemble greatest data from the yearly reports and by taking meeting of Board of Director, M. Abul Hashem; Company Secretary. In this report we have attempted to coordinate the terms and conditions that we learned in FIN340 with HCBL’s working capital administration. We have done budgetary examination and gave recommendation.Company Overview: Heidelberg Cement Bangladesh is one the biggest makers of value concrete in Bangladesh. Heidelberg Cement Group from Germany, one of the world’s pioneers in development and building material with activities in excess of 50 nations, possesses 61% portions of the organization. In 1998 Heidelberg Cement Group set up its quality in Bangladesh by setting up a gliding terminal with on board stowing offices in th e port of Chittagong and by conveying the concrete to the key markets of Dhaka and Chittagong.In 1999 the gathering additionally reinforced its situation in Bangladesh and assembled a greenfield producing plant close to Dhaka in particular â€Å"Scancement International Limited† with an introduced limit of 0. 750 million tons for every year. In 2000 Heidelberg Cement bunch likewise purchased a minority position in Chittagong based organization to be specific â€Å"Chittagong Cement Clinker Griding Co. Restricted (CCCGCL)† immediately followed by the obtaining of an in controlling stake. The plant in Chittagong has an introduced limit of 0. 7 million ton for each year. In 2003, the two organizations were amalgamated and the company’s name was changed to Heidelberg Cement Bangladesh Limited.Corporate Mission: The Corporate Image : Building overall development by building a superior world. Business Culture : Building on neighborhood obligation regarding universal a chievement Employee Policy : Building our business on the information on our kin Market Strategy : Building our development on a strong base of profit Customer Philosophy : Building consumer loyalty Quality Standard : Building on quality items to construct notoriety Commitment to Innovation : Building on new advancements decides our future successBrief History Heidelberg Cement Bangladesh Limited meets 13% of the Bangladesh interest for concrete from two plants situated at Dhaka and Chittagong. Heidelberg Cement Bangladesh Limited utilizes 260 individuals the nation over. The organization with 1. 5 million tones yearly concrete creation has become a significant power in the Bangladesh Cement industry throughout the most recent eight years. In Bangladesh, Heidelberg bunch is one of the biggest remote financial specialists having a venture of 100 million US$ with in excess of 260 representatives working nonstop to appear the crucial this extraordinary worldwide company.By fulfilling t he necessities and goals of its clients, representatives, investors and the more extensive network, the organization can keep up its situation of solidarity as a reasonable concrete supplier without bargaining duty to long haul solidness and ecological obligation. Heidelberg Cement Bangladesh Limited is a sister worry of Heidelberg Cement Group. Natural Policy Heidelberg Cement Bangladesh Limited Protection of the earth is an indispensable piece of Heidelberg Cement Group’s procedure. As common assets are the premise of concrete, measures for supportable ecological consideration are received in all our operations.In Bangladesh, our arrangement is to deliver top notch concrete, improve tasks to save money on normal assets and forestall contamination so as to make a cleaner and more secure condition. Items and Innovation Portland Composite Cement (PCC) As a major aspect of its tenacious interest for development and consistent drive to improve quality, HeidelbergCement has prese nted Portland Composite Cement (PCC) during 2003. Retaining European Norms in concrete creating made HeidelbergCement Bangladesh Ltd. the pioneer in this part. Presently a-days all the concrete production lines of Bangladesh are delivering concrete according to European Norm.The classification Portland Composite Cement (CEM II) is the market chief in Europe. Concrete created by the BDS EN ScanCement and RubyCement are intended to accomplish the best attributes for its clients; this outcome is accomplished by configuration utilizing clinker and top notch different constituents. PCC has the ideal of: Durability, Long-term quality and usefulness. ScanCement and RubyCement are delivered by the European standards BDS EN 197-1:2003. Attributes of ScanCement/RubyCement: Higher Strength ScanCement and RubyCement have higher long haul quality than a standard Portland Cement (OPC).The slag part in the plan contributes that the hole in long haul quality with OPC is broadening as time advances. Higher Durability The structure of ScanCement and RubyCement builds the thickness of solid (lower porousness). Littler voids are the impact of the response between the clinker and the slag. This thickness adds to the sturdiness and lifetime of the development. Better Workability To improve the nature of mortar and brick work Limestone is added to the plan of ScanCement and RubyCement. This improves firmly the functionality of the solid. Putting will look smoother, better and more beautiful.The concrete is simpler to utilize. Different Improvements on the previously mentioned upgrades ScanCement and RubyCement diminishes warm breaking. Because of the slag in the structure less warmth is created which lessens the danger of warm splits. Besides our brands utilize less water to accomplish the necessary functionality. This adds to the quality and nature of the development. Day by day Cash Inflow and Cash Outflow: Here we have introduced the day by day money inflow and outpouring of HCBL . 200820072006 Cash got from customers6,332,191,0005,573,231,0004,963,425,000 Cash got from other working income84,205,00049,963,00014,630,000Cash Inflow all through the year6,416,396,000. 00 5,623,194,000. 00 4,978,055,000. 00 Daily Cash Inflow17,579,167. 12 15,406,010. 96 13,638,506. 85 200820072006 Payment for money related expense(68,293,000)(55,096,000)(96,760,000) Income charge paid(206,802,000)(96,947,000)(35,495,000) Cash paid to suppliers(5,480,284,000)(3,835,873,000)(3,334,740,000) Cash paid for working expenses(628,326,000)(507,571,000)(501,761,000) Cash surge all through the year(6,383,702,992. 00)(4,495,484,993. 00)(3,968,753,994. 00) Daily Cash outflow(17,489,597. 24)(12,316,397. 24)(10,873,298. 1) Net Daily Cash Inflow89,569. 883,089,613. 722,765,208. 24 Cash inflows and surges are not flawlessly synchronized. Here we have net money inflows in 3 years; it shows that HCBL had adequate cash gracefully to back its activity proficiently. Changes in Short Term Loan Account : The HCBL don’t have any attractive protections account in asset report. In 2006 the organization has a transient credit of 467884000 and in 2007 and 2008 the organization has momentary advances of 654441000 and 829715000. From 2006 to 2007 there is an expansion in Short term credit record of tk. 186557000.And from 2007 to 2008 the transient advance has increment by Tk. 175274000. Over the period the momentary credit has expanded over the period. The advances were for the most part taken from their sister concern Meghna Energy Limited. Regularity sway in Cash Inflow and Cash Outflow: Seasonality Variations in Cash streams from deals: Highest deals: We have come to know from our meeting that there is regularity is available in Heidelberg concrete. Their top in deals and variety in income is around quarterly premise. It has pinnacle of the deals during January to March. In this time they need to keep up enormous inventory.At these time their business increment, thus net benefi t and income increment and money inflow additionally increments in this first quarter. They have additionally great deals from October to April. Typical money inflow comes during this time. From May to September their deals for the most part decline on account of stormy season. Money Outflow: When deals increment showcasing and transportation costs increment. Subsequently, money outpouring increments right now. As crude materials are chiefly imported from that point entomb organization exchange that’s why they don’t need to pay quickly a tremendous cash when they import RM. They get an adaptable credit term.Geographical Spread and Customers: Heidelberg Cement has isolated their business in 6 divisions in Bangladesh. They have two principle branches in Dhaka and Chittagong. They have additionally deals operators in other four divisions. Be that as it may, the majority of the deals create from Dhaka and Chittagong divisions. At that point Sylhet and deals in other 3 divi sions are around same. They don't have any physical fare of merchandise. In the event that they offer merchandise to EPZ territory and on the off chance that they get paid in dollars, this is named as fare. The over all piece of the pie of Heidelberg Cement is 13%. The business soaked. Still they have opportunity to assemble more piece of the overall industry in the industry.They are confronting some limitation since they are global organization. They have 3 kinds of clients: 1. Vendors 2. Corporate clients (e. g. designers, contractual workers) 3. Government ventures (e. g. Mohakhali Flyover, Lalon Shah Bridge, Karnafuli Bridge, Banani Bridge) Except these they have additionally not very many retailers who are extremely near them. Be that as it may, normally they don't manage retailers. Assortment Procedure: Checks/pay request: Most of the time, they get installments through checks. They additionally get installments by pay request which is restricted. For the most part, they don't permit some other methods for payments.They don’t have any money exchange. Assortment Points , Concentration Banks, Deposit banks, Lock Box: There are assortment focuses. The clients pay through the neighborhood offices of Dhaka Bank, Dutch Bangla Bank and Marcentile Bank. These banks fill in as assortment focuses. As these neighborhood banks have heaps of branches in Bangladesh it enables a great deal in assortment to process. Thro