Report on Business Strategy of Shinepukur Ceramics Limited

Introduction

This Internship Report has been prepared as a requirement for the completion of the BBA program of the American International University Bangladesh. The primary goal of internship is to provide an on the job exposure to the student and an opportunity for translation of theoretical conceptions in real life situation. Students are placed in enterprises, organizations, financial institutions, research institutions as well as development projects. The program covers a period of 12 weeks of organizational attachment.

After the completion of four year academic BBA program, I, Ara Hosney student of American International University-Bangladesh was placed in Shinepukur Ceramics Ltd for the Internship Program.

The duration of my organizational attachment was twelve weeks, starting from 16^th May to 12^st July,2006. As a requirement for the completion of the program, I need to submit a report, which includes an overview of the organization.

I was placed in the different division of the Accounts Section under the supervision of the Manager of the company. With his reference I was helped by the senior officers and all other employees in other divisons. This paper covers details of the project findings along with an overview of Shinepukur Ceramics Ltd with particular reference to its  Accounts Management Operations.

Origin of the Report

This report has been prepared to develop an understanding about the organizational and operational aspects of the Production activities and Accounts Management of Shinepukur Ceramics Ltd. to define what types of polices and practices are in Shinepukur Ceramics Ltd and how Accounts operations of Shinepukur Ceramics Ltd are done and how it will be adding value to its central operation later than finding the position with comparing with the other five ceramics industry.

However, this report will be based on the author’s firsthand experience during the semester-long attachment with Gazipur Branch. This relates with the theoretical study of major courses under finance and accounting program.

Therefore, there are few abstract theories in this report, although theory is used when it helps to explain or structure of a real-world process.

 Objective of the Report

• Broad Objective

   Purpose is to know the policy and Accounts procedure of the Shinepukur Ceramics Ltd & make a true picture of the Shinepukur Ceramics Ltd. Recently the BAXIMCO Co are conducting this type of business with huge investment & variety of offers. And they are capturing mainly foreign customers. So, objective is to find out the management policy, practices and measuring the performance & comparing them with the other Ceramics Co 

• Specific objective

The specific objective of the report has described bellow:

• To gather over all-comprehensive knowledge of Accounts functions.
• To explain the meaning and concept of management Policies and practices.
• To acquire in depth knowledge about Accounts management.
• To compare them with the other company.
• How they attracting the Foreign customers.

 Scope of the report

The report gives a narrative overview of Shinepukur Ceramics Ltd. Management polices, practices and as well as performance that is position of in the ceramics industry. All the financial data or information are as of 2000 and some are 2004 because the all data’s of 2005 are not available .Not only the Shinepukur Ceramics’ data but also other five ceramics company’s  financial data also given that also the scope of this report. But their policy and practices are the out of the scope. However, since the financial data allocation information is classified and sensitive in nature, dummy figures have been used to illustrate the model, without affecting the academic aspects of the exercise.

Methodology

This report is prepared on the extensive use of secondary data available in different text, reports, journals etc, as well as primary data collected from the bank personnel; by means of informal interview. Consulting of Annual Report and discussion with the officials o

Gazipur Branch about methods and procedure of different types of  management polices and practices, problems associated to these types of activities etc.

The necessary information for the project was obtained from reports generated by the Accounts software (A to Z) used by Shinepukur Ceramics Ltd.

The methodology that was followed through out the study may be summarized below:

Primary Sources:

• By taking interviews of the employees of Shinepukur Ceramics Ltd, Gazipur branch.
• By discussing several ideas with familiar business organization.
• Official records of Shinepukur Ceramics Ltd.

 Secondary Sources:

• Gathering information from the Shinepukur Ceramics Ltd Annual Report.
• Gathering information from Shinepukur Ceramics Ltd website.
• Internet and business journals.
• Printed forms and international Division of Shinepukur Ceramics Ltd.

 Conceptual Framework of the report

The first part of report will be an introductory part, after that a part of brief description about management, performance, and activities. I will also give a brief description about the production process, accounts polices, recording system by Shinepukur Ceramics. In.

this report I also try to give a view of activity analysis of different section of the two markets and also the accounts departments also. I also discuss the position of the company with comparing other five ceramics company in Bangladesh and find out the weakness of the part and try giving some possible solution about that section.

 Limitation of this Report

       All time they were extremely busy, but they gave me much time to make this report properly. But as it was the factory, they were not able to give me sufficient document and papers, as they and me would like. On the way of my study, I have faced the following problems which may be termed as the limitations/shortcoming of the study. These are:

    Privacy: This is the private limited company so they are not bound to open all information. And they all time tense that all information are not opened to their competitor. So for depth I can’t find all information what my paper need.

    Short time period: The first obstruct is time itself. Due to the time limit, the scope and dimension of the study has been curtailed. For an analytical purpose adequate time is required. But I was no given adequate time to prepare such as in depth study.

    Non-availability of adequate data: To understand the facts about the study in a realistic way and more clearly the quantitative expression of information is represented by data. It was very difficult to collect data, which is very essential, because the Head Office is in Dhanmondi and I worked in Factory which is in Saver. That’s why I could not provide necessary secondary data in all area of the study.

    Lack of Records: Sufficient books, Publications, Fats and Figures are not available. These constrict narrowed the scope of accurate analysis. If these limitations were not been there, the report would have been more useful and attractive.

    Poor Library Facility: Most of the company has its own modern, rich and wealthy collection of huge and various types of related books, Journals, Magazines, Papers, Case Studies, Term Papers, Assignments etc. But is not well ornamented.

    Lesser Experience: Experience makes a man efficient such kind of research activity is done by me for the first time. That’s why inexperience creates obstacle to follow the systematic and logical research methodology.

Topic Review

Achievement of high economic growth is the basic principles of present economic policy. Achieving this objective, the ceramics plays an important role. Though this is not as old like as the other industry but now it plays an important role to earn the foreign money. The successful running of any productive industry depends upon how much they are cost effective. Exports from Shinepukur Ceramics comprise about 60% of the National Tableware Export turnover of Bangladesh. As recognition of this contribution, SCL was awarded National Export Trophy (Gold) in December 2003 for the Financial Year 2000-2001.

Bone China is the life blood of SCL. The basic function of SCL is to produce the World class bone China and Porcelain Tableware Industrial Units. SCL is a 100% export oriented unit, equipped with the latest and modern Machinery’s and Kiln’s from TAKASAGO MINO, and SKK Japan and comprises of two independent units producing high quality Porcelain and Bone China Tableware.

Shinepukur Ceramics is a member of the Largest Private Sector Conglomerate, BEXIMCO, in Bangladesh with about 20,000 people in the permanent payroll, handling a diversified range of merchandise to and from Bangladesh. Since commencement of the commercial production at the end of 1999, Shinepukur has successfully developed a substantial export market for the top-of-the-line Bone China and Porcelain Tableware and the customer portfolio now includes world renowned Tableware companies in the UK, USA, Spain, Italy, Australia, New Zealand, Norway Sweden, Russia, UAE, Denmark, Germany, Turkey, and India.

In addition, SCL is equipped with the top-of-the-testing and Quality Control Laboratory facilities, Decal Plant, Carton-Packaging Plant, Modeling Unit, and has at its disposal its captive gas-based Power Generation capability, and the best effluent discharge mechanisms in place. The Company is also an ISO 9001/2000 certified Company.

Shinepukur ceramics Ltd: at a Glance

Shinepukur Ceramics is a member of the Largest Private Sector Conglomerate, BEXIMCO, in Bangladesh with about 20,000 people in the permanent payroll, handling a diversified range of merchandise to and from Bangladesh. The Group’s in-house manufacturing interests encompass Seafood, Jute Yarn, Pharmaceuticals, Textiles, Knit, Denim, Garments, Real Estate and Engineering. BEXIMCO is also involved in Media, Computers and the IT Arena’s.

 Shinepukur Ceramics ltd. was incorporated as a private limited company on January 26, 1997 with a view to establishing world Class bone China and Porcelain Tableware Industrial Units.

As part of a meticulously planned expansion program of the Group, BEXIMCO has setup this state-of-the-art Ceramic Tableware Plant, SHINEPUKUR CERAMICS LTD. (SCL) on the outskirts of Dhaka in 1999. SCL is a 100% export oriented unit, equipped with the latest and modern Machinery’s and Kiln’s from TAKASAGO MINO, and SKK Japan and comprisesof two independent units producing high quality Porcelain and Bone China Tableware. The Porcelain unit has a capacity of 30,000 pieces, whilst the capacity of the Bone China unit being 10,000 pieces a day. The Bone China unit has in fact been setup on the basis of the latest technology from NIKKOJapan, coupled with extensive training facilities to our Production team, both locally and internationally.

In addition, SCL is equipped with the top-of-the-testing and Quality Control Laboratory facilities, Decal Plant, Carton-Packaging Plant, Modeling Unit, and has at its disposal its captive gas-based Power Generation capability, and the best effluent discharge mechanisms in place. The Company is also an ISO 9001/2000 certified Company.

Since commencement of the commercial production at the end of 1999, Shinepukur has successfully developed a substantial export market for the top-of-the-line Bone China and Porcelain Tableware and the customer portfolio now includes world renowned Tableware companies in the UK, USA, Spain, Italy, Australia, New Zealand, Norway Sweden, Russia, UAE, Denmark, Germany, Turkey, and India.

Exports from Shinepukur Ceramics comprise about 60% of the National Tableware Export turnover of Bangladesh. As recognition of this contribution, SCL was awarded National Export Trophy (Gold) in December 2003 for the Financial Year 2000-2001.

The Industrial units were established at the BEXIMCOIndustrial park, Gazipur about 35km from Dhaka. The land and covered area of the industrial units are about 20 acres and 350000sft respectively. They feel proud of their technical collaboration with NIKKO Company, the master of Bone China maker in Japan and a Company of great International reputation. As a result of this association, they have been able to break the technological barrier and have become the pioneer in the field of Bone China manufacturing in Bangladesh. In the past years, the Company has successfully maintained its market share in the top-end global market of Bone china Tableware with strategic alliance with leading brand manufactures in Europe and USA.

Management

The company continues to be managed and run under the direct supervision / guidance of Mr. Salman F. Rahman, deputy Chairmen of Beximco group.

CORPORATE DIRECTORS

Board of Directors:

Chairmen:  A S F Rahman

Vice Chairmen

Director: O K Chowdhury

Management Committee:

Vice Chairment: Salman F Rahman

General Manager: Md. Rafiqul Islam, FCA (Finance, Accounting, IT)

General Manager: S R Ansari ( Porecelain Plant)

General Manager: Farque Ali (Bone China)

Company Secretary:  Md. Asad Ullah, FCS

Auditors:

M/S M. J. Abedin & co.

Chartered Accountants

NationalPlaza (6^th Floor)

1/G Free school Street

sonargon Road, Dhaka – 1205

Legal Advisor:

M/S Huq & Co.

Banker:

Sonali bank

Southeast Bank Ltd

Operations:

The company started its commercial operation of porcelain and Bone China units in the year 1999 and has been continuing as one of the fastest growing Company in the Industry.

Despite the complex economic issues world wide along with increased competition from new entrants posing new challenges for every concern in this industry, this company is fully geared to meet these challenges and continues to perform well by focusing on product quality, product innovation, and customer’s satisfaction and by improving the customer base.

At 2003 for installing the new machinery, the gross turnover stands at Tk. 1126.02 million with a growth of 11.94% as compared to previous year’s turnover of Tk.1005.90 million.

Considering the rapid increase of demand of the products in foreign and domestic market, the management of the company took steps to expand its porcelain unit to double the existing production capacity and keep its share in the international and domestic markets.

Product

They are producing two types of product. They are

• Bone china
•  Porcelain

Bone china:

As the latest venture of the most successful Corporate Group of the Country, (BEXIMCO, since 1965), Shinepukur is blazing the trail in ceramic tableware manufacturing in Bangladesh. The Company offers an exquisite range of the finest, world-class tableware in Bone China. Shinepukur culminates all its knowledge, skill, efforts, and traditions in superbly crafted Tableware demanded by discerning customers

Porcelain:

Shinepukur tableware is designed to be an affordable luxury. From dinner plates to salt and pepper pots, it offers a complete range of product groups in a variety of shapes, decorations, and patterns. The unique tableware from Shinepukur introduces a new tren

in fine dining. Customers are at liberty to choose from full range dinner set, place setting, starter set, tea set, coffee set, soup set etc. serving any desired number of persons.

Plants of Shinepukur ceramics Ltd

Every Manufacturing company has the production plant to produce the products. This is also the manufacturing company. They divide their factory in the two plants they are:

  Decals Plant

  Packaging plant

• Decals Plant:

This is the main production house of this company. In this house all products are produced Raw material to finished products.

• Packaging plant:

This is the newly set up house for producing the Packaging items to increase their efficiency.

Markets

• International Market

Their main focus is to catch up the international market. And they already did it most efficiently and effectively. As a result of the promotional campaign and product quality, they have achieved a commendable success in penetrating and surviving in the highly competitive global ceramics tableware market. Now they have world reknowned customers’ portfolio, namely: Richerd Ginoria, Tognana porecellane, fade porecellain,

Rody time and rossi in Italy Royal Dulton, finwick and Sainsbury Supermarkets Ltd in UK, HC, Distribution and perfect home in Norway and libbey Inc. in USA.

      Some of the Top Ceramic Tableware Exhibitions

• Frankfurt Fair – Ambiente, Germany
• Frankfurt Fair – Tendence, Germany
• Maison and Object, France
• Macef Fair, Italy
• Beijing/ Kawloon Fair, China
• Barcelona Fair, Spain

• Birmingham Fair, UK
• Houseware Show, USA
• NRA Show, USA
• NY Tabletop Show, USA
• Hospitality Style Asia, Singapore

      Shinepukur regularly participates in the following shows:

• Frankfurt Fair – Ambiente in February.
• Frankfurt Fair – Tendence in August.
• NY Tabletop Show in May and October, every year.

·        Domestic market

Normally they do not worry about the domestic market because their main focus is the foreign market because of higher price. Only exporting their products they maximize their profit all time.

 Topic Review

The rivalry among the competitors and the growth in the industry depends upon the intensity of competition. A high amount of competition is observed in the Ceramics sector of Bangladesh. There are more than 8 industries in Bangladesh that is fight for their own share of the market.

In the Ceramics Industry, Shinepukur Ceramics Ltd is one of the top listed in the market. Among the ceramics industry, Shinepukur Ceramics Ltd is the prominent one to make available of choice able products not only on the country but also global market.

Despite Prevalence of some unstable conditions in industrially advanced countries as well as in the global financial situation, Shinepukur Ceramics Ltd continued to maintain its trend of progress. This has been possible as a result of timely adoption of appropriate measures to cope with the changing condition in the country, pursuance of sound management policy, relentless of labor of a team of highly professional workforce, risk management analysis, strict observance of rules & regulations and intensive supervision. . For the investment they had a very good specialized team who has a depth analytical power. This company is a sister concern of the BEXIMCO COMPANY. For that reason if any main decision or new capitalization processes then all board helped them.

All these works are related and relevant with my major courses like Strategic Management Accounting, Capital Budgeting, Working capital Management, Financial Institutions and Money Market and other courses as well.

Share Exchange polices    

 They are aware that a proposal for acquisition of 100% share of Shinepukur Ceramics Limited (Shinepukur Ceramics) by exchange of Bangladesh export import company limited (Beximco0 shares is under consideration of the shareholders of the two companies, subject to SEC’s consent to further issue of capital against exchange of one Beximco share for three Shinepukur ceramics shares. S. F. Ahmed & co, charted Accounts, an association firm of Ernst & young International, Inc of New York, USA, the values, determined the value of a share of Beximco at tk.66.67 compared to that of Shinepukur Ceramics at Tk. 21.73; and suggested the share exchange ratio between Beximco and Shinepukur ceramics at 1(One) Beximco share for 3(Three) Shinepukur Ceramics Shares. Financial analysis shows that the shareholders of both the Beximco and Shinepukur Ceramics would be benefited from the share exchange as the Earning per share (EPS), Earning based value and discounted cash Flow- Value based on the considerate accounts of the two companies, would be much better.

Cash Management

   Every company maintains their cash too much sincerely. Because cash is the most liquidity assets of the company by which every problem can be solved. Even in any critical situation, Money is the most efficient assets than other assets. If any company can not manage their cash properly then they can be failed to run their company because this is the most sensitive assets. Shinepukur ceramics Ltd is sincere about their cash. For that reason, they maintain two types of accounts:

  Bank Accounts

  Cash Account

• Bank Accounts:

Any big amount transaction and outside transaction is recorded in the Bank Accounts.

These accounts are recorded in the HEAD OFFICE.

Consuming section can be any one section like when a section needs any thing like in production section they need raw material, Glaze etc. and Accounts section needs IPO books, Voucher books etc at that time they are consumer. For that time they will make DMR (Departmental Material Requisition). DMR requires Brand, Name Quality, Price and other thing what a specific product needed. Three (3) are made of the DMR. One copy goes to Store Section, another copy goes to Accounts section, and one copy is making for him. Some will be made in store as SPR (Store Purchase Requisition) in the storing section. After that they will send it to the Procurement section. If they purchase then no other purchase order/ Work order will not be make. If they purchase by other company then they have to make the PO (Purchase Order)/WO (Work Order) to that company. This is like as DMR. Extra thing is added that is deliver time. When they deliver the product then storing people observe the quality of those products and if they satisfied then they give QC (Quality Certified) and send those to the store and Accounts Department. Accounts department pay the price.

SR (Store requisition) is used by the consuming section when they need their demanded products from the store to their section.

 Accounting Policies

• Basis of Presentation of Financial Statements

The financial statements have been prepared on “Historical Cost” basis, except land being revalued.

• Property, plant & Equipment and Depreciation

No depreciation is charged on land and land development, which stated at revalued amount. Other property, plant and Equipment are stated at their cost less accumulated depreciation. Cost represents cost of acquisition or construction and capitalization of pre-production expenditure including interest during construction period. Cost of plant and machinery also includes net exchange loss incurred on conversion of foreign currency loans at the year-end, capitalized in compliance with the requirements of Companies Act 1994. All other full year’s depreciation has been charged on additions irrespective of date when the related assets are put into use. Depreciation on all other fixed assets is computed using the straight-line method in amounts sufficient to write off depreciable assets over their estimated useful economic lives. Expenditure for maintenance and repairs are expensed; major replacements, renewals and betterments are capitalized.

The cost and accumulated depreciation of depreciable assets retired or otherwise deposed of are eliminated from the assets and accumulated depreciation, and any gain or loss on such disposal is reflected in operations for the year.

The annual depreciation rates applicable to the principal categories are:

Building & other constructions………….5%

Plant & Machinery……………………….7.5%

Furniture & Fixtures……………………….20%

Transport & Vehicle……………………….20%

Office equipment…………………………..20%

Full amount of depreciation on plant and machinery and 80% of depreciation on building and other construction have been charged to manufacturing overhead, and the remaining amount of total depreciation has been charged to administrative expenses as per previous practice consistently applies.

Property, plant and Equipment acquired under leases were not capitalized but the lease rentals were expensed as they incurred.

• Inventories

Inventories are stated at the lower of cost and net realizable value. Costs of inventory held are generally calculated on the weighted average method on a consistent basis. Net realizable value is bases on estimated selling price less any further costs expected to be incurred for completion and disposal.

• Trade Debtors

These are carried at original invoice amount. This considered good and collectible, and therefore, no amount was written off as bad debt and no debt was considered doubtful to provide for.

• Creditors and Accrued Expenses

Liabilities are recognized for amounts to be paid in the future for goods and services received, whether or not billed by the supplies.

• Provisions for ‘Cost of Post Employment Benefits

The Company operates a contributory provident fund and a group insurance scheme for its permanent employees. Provident fund is administrated by a Board of Trustees and is funded by contributions partly from the employees and partly from the Company at pre-determined rates. These contributions are invested separately from the Company’s assets

The expected cost of these benefits is included in profit and loss accounts over the period of employment.

• Taxation:

The Company was enjoying tax holiday for five years with effect from 1^st April 1999 and 1 November 1999 in respect of porcelain unit and Bone China unit respectively, which has been expired during the year under review.

• Revenue recognition

Sales are accounted for on preparation of invoices alongw3ith delivery of goods from godown.

• Lease

Lease rentals against assets acquisition have been expenses as they incurred

• Foreign Currency Translation

Transactions denominated in foreign currencies are translated into Bangladesh Taka and recorded at rates of exchange ruling on the date of transaction.

• Trade Debtors and Borrowings in Foreign Currencies

Debtors against export sales have been converted into Taka at the exchange rates ruling on the date balance sheet.  Exchange difference has been recognized as gain/ loss for the year.

Borrowings denominated in foreign currencies held at year-end to finance the imported plant and machinery is carried at principal amount and is translated into Taka at year-en

Exchange rates. Net exchange difference is included in the carrying amount of related machinery as a requirement of the ‘Companies Act, 1994.

The rates of relevant foreign exchanges at year-end are:

Tk.0.57960.5526

• Cash Flow statement

Cash flow Statement has been prepared as per requirement of (IAS)-7 as adopted in Bangladesh following direct method like SEC.

• Additional Information on Financial Statements

Responsibility for preparation and presentation of Financial Statements

The Board of directors is responsible for the preparation and presentation of Financial Statements under Section 183 of the Companies Act 1994.  Risk and Uncertainties for use of estimates in preparation of Financial Statements. The preparation of Financial Statements in conformity with the Bangladesh Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Actual results could differ from those estimates. Estimates are used for accounting of certain items such as long term contracts, provision for doubtful accounts, depreciation and amortization, employees’ benefit plans, taxes, reserves and contingencies.

• Reporting Currency and Level of precision

The figures in the Financial Statements resent Bangladesh currency (Taka), which have been rounded off to the nearest Taka except where indicates otherwise.

Activity Based Management Costing (ABC)

According to the kaleidoscopic nature of the costs (KNC) they maintain the Activity Based Management Costing (ABC) because firstly they are taking the order then start producing.

ABC shows the linked set of order tasks within and across an organization that produce products and services.

An activity is a series of work tasks that have defined input and output. For example “Service Food” in a restaurant is an activity. It starts with a customer order (input) and includes tasks such as written down the order giving it to the cook, and picking up the plates when ready. It ends with the placing the foods on the tables (output). Activity use resources such as people, space, materials, suppliers, utilities, computers, and so on. The resources consumed by an activity are the cost of that activity.

ABC is the systematic documentation of the major activities in an organization. The documentation is designed to uncover what causes each activity to begin (its driver). The cost of activity, how much time is needed and how well is performed (Quality). ABC allows organization to design work and improve the cast, quality, and time of performing activities.

Value Chain costing

Value chain costing is the process of decomposition the cost of a product or service into the various steps involved in providing that product from the cost elementary raw material to its disposal.

Value chain costing shows what part of a customer’s price is the converter’s internal cost and profit margin and what part is the cost and margin of other firms in the extended enterprise.

*PRI: Pre Shipment Inspection.

*4. C&F Bill:

New designing policy and shape of products

New designs and shapes are developed in both the porcelain and Bone China units to meet the demand of the buyers’ abroad. They always improve their products’ design and shape according to the customers’ demand and satisfaction.

Despite the complex economic issues world wide along with increased competition from new entrants posing new challenges for every concern in this industry, this company is fully geared to meet these challenges and continues to perform well by focusing on product quality, product innovation, and customer’s satisfaction and by improving the customer base.

products Polices

The company started its commercial operation of porcelain and Bone China units in the year 1999 and has been continuing as one of the fastest growing Company in the Industry.

They are producing two types of product. They are

• Bone china
• Porcelain

Bone China:

The brilliant on-glaze decoration makes Bone China Tableware special. Shinepukur’s lightweight Bone China is thermal shock and chip-resistant making it practical as well as beautiful for the Formal Table. The brilliant whiteness of the translucent body gives the colors a great luminosity and vividness, impossible on any other Tabletop. The Compan

now offers about 60 Shapes and over 200 designs; from classical gold rim to trendy floral and geometric Decals.

As the latest venture of the most successful Corporate Group of the Country, (BEXIMCO, since 1965), Shinepukur is blazing the trail in ceramic tableware manufacturing in Bangladesh. The Company offers an exquisite range of the finest, world-class tableware in Bone China. Shinepukur culminates all its knowledge, skill, efforts, and traditions in superbly crafted Tableware demanded by discerning customers. Incorporated on January 26th 1997, Shinepukur is set on 115,00 square meters of land at the BeximcoIndustrial Park at Gazipur, about 35 kilometers north of Dhaka. The plant was commissioned on December 9, 1999. This export-oriented company has a production capacity of 1250 Tons of Bone China per Annum.

Raw Material used in the Bone China:

• DCP
• Ball Clay TM
• Ball Clay TA
•  GF-88
• Quartz
• China Clay Premium
• CaCO3
• FRIT-233/1353
• MU Clay
• HA Clay/ISK -04
• W/G Bone Ash
• China Clay KBC
• NZ-10
• SWK/CCDO2

Porcelain:

The Glaze of Shinepukur Porcelain is unique and peerless, a dexterous preparation of the most experienced and professional ceramic technologists in the region. Perhaps the best white Porcelain, exceptionally translucent and crystalline. Shinepukur pioneers in applying microwave-proof gold, a state-the-art user-friendly technology, and edge decoration of tableware. Patterns with such decoration can be used in microwave oven safely. The Porcelain Unit has capacity to produce about 2500 tons per Annum. Shinepukur tableware is designed to be an affordable luxury. From dinner plates to salt and pepper pots, it offers a complete range of product groups in a variety of shapes, decorations, and patterns. The unique tableware from Shinepukur introduces a new trend in fine dining. Customers are at liberty to choose from full range dinner set, place setting, starter set, tea set, coffee set, soup set etc. serving any desired number of persons. Raw Material used in the Porcelain:

• Alluminium Oxide
• DCP
• Ball Clay TM
• Ball Clay TA
•  GF-88
• Quartz
• China Clay Premium
• China Clay  11-C
• China Clay T-75
• GF-K 38A/K-18
• Fledsper
• CaCO3
• Talc

Production Polices

They have at 2003 for installing the new machinery; the gross turnover stands at Tk. 1126.02 million with a growth of 11.94% as compared to previous year’s turnover of Tk.1005.90 million.

Considering the rapid increase of demand of the products in foreign and domestic market, the management of the company took steps to expand its porcelain unit to double the existing production capacity and keep its share in the international and domestic markets.

They have two plants in their factory:

• Decals Plant
• Packaging plant

Decals Plant:

At the decals plant always try to premise the backward linkage operation. At present the plant has a total printing capacity of 5000 sheets per day in three shifts. Their in house production of decals has tremendously reduced import cost of decals during the year under review.

Packaging Plant:

They already set up a packaging plant to avoid dependence on the suppliers of packing materials, to minimize cost and to maintain regularity of the shipment of delivery system.

BEP Calculation Polices

According to their company policy , the cost that changes to their level of activity and some cost changes in relation to unit used(telephone charge), that are considered as variable cost . Fixed costs are those costs which are fixed with in a relevant range. Fixed cost yearly changes because the company increases salary and bonus every year in certain proportion. According to this, for our calculation purpose we determine 2004 as a base year.

 Ratio Analysiy

• Current Ratio:

Current Assets and Liabilities are converted to cash over the following 12 months; the current ratio is a measure of short term liability. To a creditor particularly a short term creditor such as a supplier, the higher the current ratio, the better. To the firm a high ratio indicates liquidity, but it also may indicate an inefficient use of cash and other short term assets. Absent some other extra ordinary circumstances, we would expect to see a current ratio of at least 1, because a current ratio of less then 1 would mean that net workin

capital is negative. This would be unusual in a healthy firm, at least most types of business.

The current ratio like any ratio is affected by various types of transactions. For example the firm borrows over the long term to raise money. The short run affected would be an increase in cash from the issue proceeds and an increasing in long-term debt Current liabilities would not be affected, so the current ratio would rise.

The Current Ratio of the Shinepukur Ceramics Ltd was less than 1 up to 2002 but it was increasing after that but not over too much. That means their company is sincere over their current Assets and Current Liabilities. And they al time maintain the inventory, Cash, Accounts Receivable properly over their Current liabilities like Notes Payable.

• Quick Ratio:

Inventory is often the least liquid current asset. It’s also the one for which the book values are least reliable as measures of market value, because the quality of the inventory isn’t considered. Some of the inventory may later turn out to be damaged, obsolete or lost.

Their quick ratio increases over the last five years. But only by cash and Accounts Receivable all current liabilities can not be paid because this ratio is less than 1. And other thing is that last year the ratio is less than the 50% that means without selling the inventory or long term portion current liabilities cannot obsolete. 

• Cash ratio:

Their cash ratio increases from the 2002. But only by cash they cannot pay their liability like if all current creditors want their money immediately they cannot pay that money.

• Net Working Capital to Total assets

• Interval measure

• Total Debt Ratio:

The total debt ratio takes into account all debts of all maturities to all creditors.

Over the five years their debt increases from 54% to in 2003 82% but at 2004 it decreases to 76%. The cause of increasing the debt is to increasing the new plant over their.

• Debt to Equity Ratio:

Debt to Equity shows the structure of the capital. That means how much capital is developed by the Equity and how much is developed by Debt.

Graph shows that they are more debt financing than the Equity. Another thing is that at 2003 the shifted more cause is that in that times they launch a new plant that was the packaging plant. For that reason they have to take more loans in that time

• Equity Multiplier:

Graph shows that every year the equity multiplier is increasing.

• Long term debt ratio:

Long term debt ratio shows that how much long term debt is financed by the long term debt.

Graph shows that the long term debt portion is increasing. Another thing is that at 2003 the shifted more cause is that in that times they launch a new plant that was the packaging plant. For that reason they have to take more loans in that time.

• Time interest earned ratio:

• Inventory turnover:

Inventory turnover shows how fast a company can sell their product

Normally they sell their inventory smoothly.

• Day sales Inventories:

Normally they sell their product about 79 days that means around 2.5 months they sell their products.

• Receivable turnover:

Receivable turnover shows how fast a company collects the money.

Their receivable turnover increases day by day that means that means Shinepukur company collected its outstanding credit accounts and reloaned the money averagely 5.83 times over the times.

• Average collection period:

Their collection period is decreasing day by day. They are trying to more efficient than previous year. On average Shinepukur Ceramics Ltd collects their money 63days that means 2monts 3 days 

• Fixed Asset turnover:

Fixed assets turnover shows that for every taka fixed assets how money is generated.

Their return on fixed assets is smoothly increasing but in 2003 it is increasing highly because in that time they launch a new plant so that time their return also increases more.

But in 2004 it slightly decreases because they tried to pay more liability to decrease the interest rate.

• Total Asset Turnover:

Total assets turnover shows that for every taka assets how money is generated

Their return on total assets is smoothly increasing but in 2003 it is increasing highly because in that time they launch a new plant so that time their return also increases more.

But in 2004 it slightly decreases because they tried to pay more liability to decrease the interest rate.

• Net Profit Margin:

 Net Profit margin shows How much profit is generated for every taka sells.

Their net profit margin was negative before 2003 because they have no packaging plant and at time they have to order another party for packaging. But after 2003 it is going to positive because they set up a new packaging plant. So they money is not going to out. They also can sell their packaging items also.

• Return on Asset:

Return on Asset shows how much profit is generated for every taka Assets.

Their Return on Asset was negative before 2003 because they have no packaging plant and at time they have to order another party for packaging. But after 2003 it is going to positive because they set up a new packaging plant. So they money is not going to out. 

• Return on Equity:

Return on Equity shows how much profit is generated for every taka Equity.

Their Return on Equity was negative before 2003 because they have no packaging plant and at time they have to order another party for packaging. But after 2003 it is going to positive because they set up a new packaging plant by new equity then debt.

Comparative Analysis

Comparative information have been disclosed in respect of the year 2000 to 2004 for all numerical information in the Financial Statements and also the narrative and descriptive information is given:

• Current Ratio

Current Assets and Liabilities are converted to cash over the following 12 months; the current ratio is a measure of short term liability. Here SCL is the second position but it is the increasing portion at the 5^th year that means it is working better.

From the beginning SCL is over then other company. That means their quick payment capability is better then other company.

Though cash ratio is third position but this is the increasing position, so they now they are sincere about their cash. But idle cash is not good enough for any companPcc

Their current assets increase more from their total assets. That means they increase their operation activities

SCL is the highest position from the other company.

Their debt ratio is the second position But Bengal Company is more debt financing then the SCL. But other company is more equity financing. For that reason SCL has to give more interest then the other 3 companies.

Their debt ratio is the second position But Bengal Company is more debt financing then the SCL. But other company is more equity financing. For that reason SCL has to give more interest then the other 3 companies.

Though SCL is the lowest position from beginning but now this is the highest positio m

This graph shows that SCL has the more long term debt then the other company. That means they have give more interest then the other company

This graph shows that SCL has to give more interest then the other company from their EBIT.

SCL’s inventory turnover is highest then the other company that means they are selling their inventory quickly then the other company.

SCL’s inventory turnover is lowest then the other company that means they are selling their inventory around the 100 days that is more better position then the other company.

SCL is the increasing position, but not the highest position. That means other is doing better to collect money then the SCL. But they are try to increase it.

SCL is the decreasing days, but not the highest position. That means other is doing better to collect money then the SCL. But they are tried to decrease it.

• Fixed Assets Turnover:

Their return was negative but now it is increasing. But positive side is that now it is the highest portion then the other company. And the return is more increasing then the other company.

Their return on Total Assets was negative but now it is increasing. And at the 2004 SCL’s return is the highest position.

Their Profit margin was negative but now it is increasing. But positive side is that now it is the highest portion then the other company. And the return is more increasing then the other company. SCL’s net profit margin was negative before 2003 because they have no packaging plant and at time they have to order another party for packaging. But after 2003 it is going to positive because they set up a new packaging plant. So they money is not going to out. They also can sell their packaging items also.

Their Return on Assets was negative but now it is increasing. But positive side is that now it is the highest portion then the other company. And the return is more increasing then the other company.

Their Return on Equity was negative but now it is increasing. But positive side is that now it is the highest portion then the other company. And the return is more increasing then the other company.

Findings:

While at the time of working, I have attained a newer kind of experience. After collecting and analysis data I have got some findings. These findings are completely my personal view of point, which are given below-

•   They are more Debt financing then the Equity financing. For that reason they have to give more interest so, they do not catch up their profit.
•   Lack of employees to work on for that reason one employee has to take more loads.
•   Return on Equity, Profit Margin, Return on Assets all were negative but when they set the packaging plant then all ratios start to increase.
•   They increase their efficiency about their Collection period.
•   According to the Comparing analysis, they have more debt then the other ceramics company.
•   SCL is more sincere about their employees, labors like all time they provide medical facilities, give snacks, good environment, security, pension facilities etc.
•    Their product’s cost so High so local customer cannot afford this ceramics.
•   They are Not using their full Capacity
•   They are more conscious about their Quality like to purchase the raw material, all time they like one supplier so that they raw material can not be changed. Another thing at the time of loading the raw material they checked so that firstly quality can not be changed.
•   They are more conscious about the customer satisfaction. Like about the design and shape they always take more special care about their customers. If the customer like the presentable product then that’s have no problem but if they want new design or their own design then they take order their own design.
•   Reworking in payroll, Inventory section.
•   They are more conscious about their delivery time. They said that that is the main goodwill that “they do not pay the delay charge”.
•   They take two types of labor, their non fixed labors are more then fixed. When their pressure is more then they hire more labor.
•   Their Loaning amount is increasing day by day.
•   Marketing personnel are working under pressure because they have to deal with large number of customers every day. They can’t make a balance with these two most of the time.
•   Lack of Photo Copy Machine, Fax Machine, & others necessary accoutrement
•   They are using most newly Technology to produce the world class ceramics so that it will be the best product in Bangladesh.
•   They are 100% Export Company. So they tried to produce that product what is taken from ordered.

Issues that should be Taken Care Of

I have observed some problems and difficulties with SCL services while doing my internship. From my personal observation and from customer’s suggestions, following suggestions can be made for future progress in service

•   Firstly I want to say that they may use the full capacity  so that cost redaction will effective
•   They might be sincere about their profit margin
•   Their Long term ratio is increasing for that reason interest also increases more so tried to decrease that.
•   Their all long term ratio is taken from two sources. They may take it from different sources. Because it will be reduce their risk
•   They may take a special care of their Cash ratio because if all the short creditors want to take their taka then they have to take hand in their fixed deposit.
•   They may be sincere about their the local market then their profit will increase
•   Enhance performance of the employees.
•   Preparedness for meting the challenge of globalization under WTO environment

Conclusion:

From my practical implementation for gathering working experience in SCL at Gazipur Branch, I have tried my best to observe an organizational working policy and their procedure in a very confident way. In this report I have explained my best in respect of my real life working experience which is gathered from different division of company sector in Gazipur branch of SCL.

This paper shows us a real picture of Shinepukur Ceramic Ltd and polices practices and comparing analysis. As a most newly and private Ltd ceramics company, it is as good as the other company. Now this is the market leader as a ceramics company. Another thing is that they think only Monno Ceramics is their main and only one competitor. SCL has been working from its very beginning to ensure the best use of its creativity, well disciplined, well managed and perfect growth. Exports from Shinepukur Ceramics comprise about 60% of the National Tableware Export turnover of Bangladesh. As recognition of this contribution, SCL was awarded National Export Trophy (Gold) in December 2003 for the Financial Year 2000-2001. SCL is playing a vital role in Socio-Economic development of Bangladesh.