Working Capital Management of Heidelberg Cement Bangladesh

running(a) capital instruction of Heidelberg cement Bangladesh hold in (HCBL) Executive Summary In this report we hurl presented the over on the whole operative capital management of Heidelberg cement Bangladesh hold in (HCBL). We possess gather maximum selective nurture from the annual reports and by taking interview of Board of Director, M. Abul Hashem conjunction Secretary. In this report we ease up tried to match the full edges and conditions that we erudite in FIN340 with HCBLs on the job(p) capital management. We contract d whiz m integritytary summary and gave recommendation.Comp every Overview Heidelberg cement Bangladesh is sensation the largest producers of grapheme cement in Bangladesh. Heidelberg cement crowd from Germany, one of the worlds leaders in tress and building material with ope dimensionns in a good deal than 50 countries, births 61% sh bes of the society. In 1998 Heidelberg cement Group established its presence in Bangladesh b y setting up a floating margininal with on venire bagging facilities in the port of Chittagong and by distributing the cement to the key foodstuffs of capital of Bangladesh and Chittagong.In 1999 the conclave further capacityened its position in Bangladesh and built a greenfield manufacturing plant near capital of Bangladesh namely S put upcement International particular with an inst in on the wholeed strength of 0. 750 million take inwork tons per yr. In 2000 Heidelberg cement assembly as well bought a minority position in Chittagong based social club namely Chittagong Cement Clinker Griding Co. Limited (CCCGCL) quickly fol subalterned by the acquisition of a in controlling stake. The plant in Chittagong has an installed capacity of 0. 7 million ton per family. In 2003, the both companies were amalgamated and the callers name was changed to Heidelberg Cement Bangladesh Limited.Corporate Mission The Corporate Image Building worldwide increment by building a bett er world. Business Culture Building on local responsibility for international success Employee Policy Building our air on the go to sleepledge of our people Market Strategy Building our developing on a solid base of earnings Customer ism Building customer satisfaction Quality standardised Building on flavor products to build reputation Commitment to Innovation Building on new technologies de preconditionines our future successBrief History Heidelberg Cement Bangladesh Limited meets 13% of the Bangladesh contract for cement from 2 plants located at Dhaka & Chittagong. Heidelberg Cement Bangladesh Limited employs 260 people across the country. The bon ton with 1. 5 million tones annual cement production has become a major force in the Bangladesh Cement industry over the last eight years. In Bangladesh, Heidelberg group is one of the largest foreign investors having an investment of 100 million US$ with much than 260 employees influenceing round the clock to materia lize the mission of this great global partnership.By pleasing the needs and aspirations of its customers, employees, sh atomic number 18holders and the wider community, the alliance is able to hold open its position of strength as a sustainable cement provider without compromising commitment to massive term stability and environmental responsibility. Heidelberg Cement Bangladesh Limited is a baby strike of Heidelberg Cement Group. Environmental Policy Heidelberg Cement Bangladesh Limited egis of the environment is an integral pay of Heidelberg Cement Groups strategy. As natural resources argon the basis of cement, mea trues for sustainable environmental c atomic number 18 argon adopted in all our operations.In Bangladesh, our indemnity is to produce lavishly quality cement, optimize operations to save on natural resources and prevent contaminant in golf-club to create a cleaner and safer environment. Products & Innovation Portland multiform Cement (PCC) As part of its relentless pur eccentricsetters case for innovation and unvarying drive to improve quality, HeidelbergCement has introduced Portland Composite Cement (PCC) during 2003. Absorbing European Norms in cement producing made HeidelbergCement Bangladesh Ltd. the pioneer in this sector. Now-a- eld all the cement factories of Bangladesh be producing cement as per European Norm.The category Portland Composite Cement (CEM II) is the merchandise leader in Europe. Cement produced according to the BDS EN S bunsCement and RubyCement atomic number 18 intentional to achieve the best characteristics for its customers this lead is achieved by design using clinker and high quality other constituents. PCC has the optimum of Durability, Long-term strength and workability. S fag endCement and RubyCement are produced according to the European norms BDS EN 197-12003. Characteristics of S bungholeCement / RubyCement Higher Strength S after partCement and RubyCement have high enormous-term streng th than a standard Portland Cement (OPC).The slag part in the design contributes that the gap in hanker-term strength with OPC is outturn as prison term progresses. Higher Durability The design of ScanCement and RubyCement change magnitudes the dumbness of cover (lower permeability). Smaller voids are the effect of the reaction between the clinker and the slag. This density contributes to the durability and life time of the construction. Better Workability To improve the quality of plaster and masonry work Limestone is added to the design of ScanCement and RubyCement. This improves strongly the workability of the concrete. Plastering impart look smoother, better and more beautiful.The concrete is easier to use. Other Improvements On top of the above-mentioned improvements ScanCement and RubyCement reduces caloric cracking. cod to the slag in the design less heat is findd which reduces the risk of thermal cracks. Furthermore our brands use less water to achieve the required workability. This contributes to the strength and quality of the construction. passing(a) interchange In liquefy and Cash award hither we have presented the daily interchange in ascend and overflow of HCBL. 200820072006 Cash reliable from customers6,332,191,0005,573,231,0004,963,425,000 Cash encounterd from other in operation(p) income84,205,00049,963,00014,630,000Cash Inflow by dint ofout 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 succumb for financial expense(68,293,000)(55,096,000)(96,760,000) Income measure compensable(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 operating expenses(628,326,000)(507,571,000)(501,761,000) Cash outflow by out 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 outflows are non perfectly synchronized. here(predicate) we have interlock capital inflows in 3 years it shows that HCBL had sufficient bills supply to finance its operation streamlinedly. Changes in Short Term add Account The HCBL adoptt have any marketable securities money boxers bill in balance sheet. In 2006 the company has a briefly term loan of 467884000 and in 2007 & 2008 the company has short term loans of 654441000 & 829715000. From 2006 to 2007 there is an change magnitude in Short term loan account of tk. 186557000.And from 2007 to 2008 the short term loan has append by Tk. 175274000. Over the period the short term loan has change magnitude over the period. The loans were generally taken from their sis concern Meghna Energy Limited. Seasonality impact in Cash Inflow and Cash escapism Seasonality Variations in Cash flows from gross trades Highest gross gross revenue We have come to sustain do from our i nterview that there is seasonality is present in Heidelberg cement. Their backsheesh in sales and variation in hard cash flow is approximately quarterly basis. It has peak of the sales during January to March. In this time they have to maintain large blood.At these time their sales improver, as a result gross acquire and revenue enhancement improver and cash inflow withal increases in this 1st quarter. They have likewise substantially sales from October to April. Normal cash inflow comes during this time. From whitethorn to September their sales usually decrease because of rainy season. Cash Outflow When sales increase merchandising and transportation expenses increase. As a result, cash outflow increases at this time. As raw materials are mainly merchandise from there inter company trade thats wherefore they taket have to gestate to daylight a long funds when they import RM. They nominate a flexible assent term.Geographical Spread and Customers Heidelberg Cement has divided their demarcation organization in 6 divisions in Bangladesh. They have two main branches in Dhaka and Chittagong. They have also sales agents in other four divisions. except most of the sales generate from Dhaka and Chittagong divisions. Then Sylhet and sales in other 3 divisions are approximately same. They do non have any physical export of goods. If they denounce goods to EPZ area and if they get paid in dollars, this is termed as export. The over all market carry on of Heidelberg Cement is 13%. The industry consummate(a). Still they have chance to gather more market share in the industry.They are facing whatsoever restriction because they are multinational company. They have 3 types of customers 1. Dealers 2. Corporate customers (e. g. developers, contractors) 3. Government projects (e. g. Mohakhali Flyover, Lalon Shah Bridge, Karnafuli Bridge, Banani Bridge) Except these they have also genuinely slightly retailers who are very close to them. plainly u sually they do not deal with retailers. Collection Procedure Checks/pay order Most of the time, they receive payments through checks. They also receive payments by pay order which is very limited. Generally, they do not allow any other ways of payments.They dont have any cash transaction. Collection Points , Concentration Banks, stick to banks, Lock Box There are collection points. The customers pay through the local branches of Dhaka Bank, Dutch Bangla Bank and Marcentile Bank. These banks work as collection points. As these local banks have chaws of branches in Bangladesh it helps a clustering in collection attend to. Through the online banking clay the bullion from these local Banks are easily accessible from the principal branch. Then Heidelberg cement collects money from these banks and deposited in the Standard Charted Bank and Citi N.A bank. 95% of collected money is deposited in Standard Charted Bank and rest of the 5% is deposited in City N. A. bank are. here(predic ate) Standard Charted Bank and Citi N. A. bank are used as denseness banks. They transfer the money from the collection bank at the end of the calendar month whether the money is collected at 1st week of the month. Because they have goodish money in hand they are lazy to transfer the money at concentration banks. But they are very efficient in roll up the money from customers in due go out. Because of having no lockbox system in Bangladesh, they do not use lockbox system.As there group policy they have restriction on depositing money in local banks. The local banks are usually prudent for collecting payments. Cost In standard chartered and Citi N. A the attend to precaution is little high(prenominal) than the service charge taken by other banks. Banks are responsible for disbursing payments, handling LC, payment of salary etc. There is very low risk, because they follow some strict laws like They do not give dealership without bank guarantee. They follow conservative citati on policy. They advocate cash sales. On an ordinary their credit term is of 18-20 days.In government projects their credit term is usually flexible. Cash Disbursement Procedure Suppliers There are mainly two groups who receive money from the Heidelberg cement. One is the Raw material suppliers and indeed another is the suppliers of different utilities. The raw material suppliers are mainly the accessory of Heidelberg Group. Generally they take raw materials from Indo Cement Indonesia, Heidelberg Cement India and Heidelberg Cement Japan. Payment Methods, Disbursement Banks They are mainly importing raw materials. So they pay through LC. They do not have any cash payments.They pay through Standard Charted Bank. The Standard Charted Bank works as expense bank and processes all the formalities. Sometimes Citi N. A also works as a disbursement bank. Authorization They follow centralized Disbursement policy. all checks are signed in the Head quarter. Payments are made through mainly finance surgical incision. If the payment is less than $6 million, it needs the correlative signature of head of finance department and in group B consist of three directors from them any one have to sign. But if payments reach $6 million it needs joint signature of finance department and Manager Director.Float Although directly they do not take the help of floating, sometimes they try to write check on Wednesday/Thursday. As a result, payments can not be transferred to suppliers Banks to begin with Sunday. In directly they are taking the usefulness of inefficient banking system in Bangladesh. Credit Policy typically they have a conservative credit policy. They are not unforced to flexible their credit policies to increase their sales & revenue. They cannot provide smooth credit policy, because as a MNC they cannot collect payments by pressure. in any case they have to maintain some Government rules and regulations.They usually emphasize on quality, as a result they maintain premium equipment casualty. They have to go by the law. Thats why they are not investing that much in A/R. They are not giveing to increase the risk. When collecting payments, they give two warnings after exceeding the credit limit. If they fail to collect payment notwithstanding these, then they realize the bank guarantee. They provide up to 60 = days of credit limit to Government Projects, 30 days to corporate customers. But they maintain more strict credit policy to the dealers, because of reliability. They give credit to the dealers only if they can give bank guarantee.Only to the renowned developers they sale on credit. They have credit term on average of 18-20 days. Working Capital Needs They are very efficient in cash management. That is why they have enough cash to finance working capital. Also they have huge clean money. They cannot deposit all portions of money in banks. As a result, they finance the working capital requirements by familiar sources. Sometimes they al so take loan from the subsidiaries of Heidelberg group. They took loan from Meghna Energy Limited which is the subsidiary of Heidelberg group too. But at resent (2009-2010) they are not taking any short term loan. As they are multinational company they can not remit money in reboot company without the help of dividends. So every year they are having huge retained earnings in their account. With that money they are finance their short term needs. Also with the help of high tech computer packages they had become more efficient in managing the business. They are remitting money as technical know how fees which is 3% of former years net sales. Heidelberg group helps a lot to their subsidiary in terms of technology, experience etc.As they are more opened of internal financing in 2008 they dont have any long-term loans. Collection Method (9) HCBL has some Paper learning flow attached to invoice. This attachment contains the Order size, order no, time of delivery and the date of pay ment. The payment is made to the Collection Bank and the dealers get the receipt from the bank. Because the checks are account payee checks, so they can easily row which customer paid the payment. The company by the time get knows about the payment by ERP software which is connected with Banks.The bank process the payment system and it takes a little time for the company to get notified and deposited because all party are connected through ERP software. Bank processing fees are the cost manifold in this Process. If the payment is not made by the dealers they realized the bank guarantee after giving two warnings. Basically Credit policy for Government projects are flexible than the usual customers. Electronic Method for Managing HCBL ERP Heidelberg Cement Bangladesh Ltd. (HCBL) use an Enterprise application software named Enterprise Resource Planning(ERP) which has a market price of virtually Tk. 0,000,000-Tk. 30,000,000 (2-3 crore TK. ). They have got this software in one sense extra initially. But they are paying off these fees as technical r knowhow fees in every year which is 3% of prior years net sal . This software Provide a whizz information system for organization-wide coordination and integration of key business processes. This is a competitive proceeds for Heidelberg cement. ERP connects all key business process (e. g. manufacturing and production, accounting and finance, human resources, sales and marketing) and connects the suppliers & Dealers together in a single place.By this all department can share information which helps business increase efficiency or evaluates their output. 1. ERP also enables to Ordering equipment, preparing scrutinise, sending them to sites, activating them followed by routine maintenance is a twine of daunting tasks. If there is a missing link in this extremely complex process, they will be out of business in the fiercely competitive market. Earlier it took nearly thirty minutes to generate a purchase order but no w it takes a some seconds. The entire process is flawless and tamperproof as a robust reckoner controls it centrally.Heidelberg Cement has deployed two such servers in different locations to ensure that one takes over in case the other computer fails. They can track every employees output and assess them accordingly. It perfects the evaluation process of the companys human capital. By using ERP, Efficiency of Heidelbergs employees increase 99 percent. ERP maximize profit and minimize costs, while providing superior service to its customers. Advantages of ERP ERP is software which integrates all functionalities of the organization in a single database.It streamlines all the business processes and gives desired result on a click of a button. ERP software incorporates a large amount of industry specific business functionalities which will ensure less customization or sometime no customization (except reports) to make the package suitable to your business operations. Most important ad vantage of ERP software is integration of all the business solution in a single platform, which reduces unnecessary paper work, documentation, reiterate entry, rhythm method of birth control time etc. The software also comes with its framework of upgrades to changing technologies. In the ERP software business functionalities and operating processes are built into standard software decrees, olibanum it require lesser time to understand process related spot of actionation and gives industry specific best practices. ERP can be useful is order tracking. When a company receives orders for a product, being able to properly track the orders can allow the company to get detailed information on their customers and marketing strategies. If different software packages are being used, this data may not be consistent. ERP software automates the business processes and also forces its own logic (industry specific) on the business. Accounting applications is another advantage of ERP. It can integrate the costing, profit, and revenue information of sales that are made etc. Other Advantages Speeding up the whole manufacturing process Better and systematic inventory handling with alphabet analysis WIP (work in progress) control Easy project management Accessing the location of the goods on a click of a button Fast pass around commodities through online transactions Fastens the creation of reports Reduce paper works and repeated entry Quick processing of information Serving the customer efficiently in time Solve the customer problem quickly tuition based decision Better finance reports Better supply chain management Better vendor management Reduce process cycle time Disadvantages of ERP Perhaps one of the biggest disadvantages to this technology is the cost. As the company is an MNC they get this software for free. They are paying off this cost as skilful Knowhow Fees throughout the years. Expert needed to run the ERP system. The employees must be continually traine d on how to use it, and it is also important for companies to make sure the integrity of the data is protected. The success of the system is fully dependent on how the workers utilize it. Even if a company has enough money to implement ERP, they may not be able to successfully use it if they do not have enough money to train their workers on the process of using it. One of the biggest problems with ERP is that it is hard to customize. Very few companies can effectively use ERP right out of the box. It must be modified to suit their needs, and this process can be both expensive and tedious. Most ERP vendors will not allow the structure of the software to be altered. ERP vendors may charge additional license fees, putting a strain on companies that do not have enough resources to pay for them.The technical support of ERP departments has been questioned, and a number of problems could arise due to credentials, since corporate representatives must give new information to the tech sup port department. ERP inventory management ERP inventory management handles everything from ordering, physical inventory count, scheduling, shipping, receiving, purchasing, and supply chain planning. Changes in inventory are automatically updated. It no longer takes hours (sometimes up to 24) before the changes are recorded. This helps inventory management employees of HCBL to be able to see if an item is currently in stock.Faster service heart and soul better customer service. HCBL ERP management uses bar codes to nurse up with inventory items. This makes tracking stock much easier. As the bar-coded items present inventory, they get scanned and their product information is entered into the ERP inventory management system. Placing bar code labels on stock helps HCBL save money because it keeps the list of stock updated. Employees can easily see when certain quantities are low and need to be re- stocked. Customer service also benefits from this because businesses and customers can see what products are immediately available.Advantages ERP inventory management has many advantages. The main advantage for a company is that the ERP system is company-wide and involves only one software system. Some other advantages include Proper communication between different areas. Tracking of orders from the time the order was received to its delivery. Keeping up with the revenue cycle from when the invoice is issue through when the payment is received. Provides a top down overview of the workings of a company. Reduces the risk of loss of information Sets up a form of security to protect against theft from outside or within a company.Disadvantages in spite of the advantages HCBL receive from using ERP inventory management, there are also some problems with it. Most of these disadvantages stem from inadequately trained employees as well as compromised data. But there are other concerns that can arise from this type of system. Reformatting a business to make it more compatib le with an ERP system and thus conform it to industry standards may cause a loss of advantage over the competition. By creating a company-wide system that connects all areas, it makes it hard to name out accountability. Problems that may arise in one area could erroneously be blamed on a different area. not all departments in a company are willing to share information. This withhold of sensitive data can interrupt the workflow. ERP inventory management systems may to too complex for the needs of a company. Cash Flow Timeline here(predicate) we have showed the cash flow timeline of HCBL of 2006,2007,2008 Financial Analysis Financial analysis of Heidelberg Cement Ltd. Liquidity balance200620072008 NWC to assets-0. 050. 010. 11 current ratio0. 871. 031. 27 quick ratio0. 480. 710. 66 cash ratio0. 060. 400. 32 interval measure851. 401637. 281499. 92 CCC-1. 26-17. 9936. 53 Days inventory held57. 5256. 03103. 14 DSO37. 8037. 5635. 02 operating(a) Cycle95. 293. 59138. 16 DPO96. 59111. 57101. 63 NWC-208822000. 0064703000. 00638679000. 00 NLB46997000. 00800973000. 00768453000. 00 command line interface27. 5639. 40 Efficiency proportion Total asset turnover1. 211. 091. 08 NWC turnover-23. 9686. 889. 97 Inventory turnover6. 356. 513. 54 Days sales in inventory57. 5256. 03103. 14 AVG collection period37. 837. 5635. 02 Profitability ratio net profit margin0. 10. 110. 09 ROA0. 130. 120. 1 ROE0. 220. 220. 18 payout ratio0. 170. 230. 31 Market Value Ratio price earning ratio6. 6810. 9511. 58 Earning per share96. 92110104. 86 From 2006 to 2007 their operating cycle decreased and DPO increased significantly.When their DPO was increasing it does not create any problem in affinity with the suppliers. Because the suppliers are mainly the subsidiary of the hiedelberg group. So they got advantage in those years. And that is why the companys CCC decreased in 2007. In 2006 and 2007 the companys CCC were negative and it was -1. 26 and -17. 99 days respectively, that means the com pany doesnt need any external financing. They were very efficient in managing the cash. So that without investing in Inventories and A/R they were efficiently running the operation. Although they had sufficient cash in their hand.From2007-2008 the companys Operating cycle increased significantly and DPO decreased slightly. As a result in 2008 the companys CCC increased to 36. 53 days. This increase was a result of a high Days inventory Held (103. 14 days). In 2008 they brought a very high amount of inventory from their sister concern company from Indonesia named Indocement. so the company need financing from somewhere. They have sufficient amount of cash and from that liquid cash the company was financing their operation. They dont need any external financing for that time lag. They mostly depend on internal financing.As they are subsidiary of Heidelberg group they get lots of facilities in many areas. This is their competitive advantage. By net liquid balance we can cover the worki ng capital requirements. As past years shows that the companys NLB is increase, so it is a good sign for the company to run its day to day business. For many years they were not facing any kind of liquidity problem. In 2007-2008 the command line interface was increasing. And it is ordained number. CLI represents the Cash against to cover its the current liabilities. The CLI for past year shows that the company has high CLI this means the company has fat cash to cover its current debts.The company has a positive and a high amount of net working capital. This means some of Companys Current assets were financed by the long term sources of fund. Here the company has not that much long term loan in 2006-2007 period compared to its short term loan and there were no long term loan in 2008, they paid off all of their long term loans in 2008. The Excess liquidity of the company was financing their day to day business. From the time period of 2006 to 2008 the companys current ratio has imp roved over the period And the companys quick ratio improved from 2006 to 2007.Total asset turnover, NWC turnover and inventory turnover is on average much better and Days sales in inventory is acceptable. Average collection period is lower which is a good indicant for the company. Therefore, the efficiency level of the company is really good. Profit margin, ROA and ROE tells that, this is a dream company at cement sector. All these three ratios are high over the period. Payout ratio tells that the company does give regular dividend. For this company, P/E ratio is very much high compare to its industry. It has also a high EPS.Overall, the company has a good market take for ratios and it indicates that investors are very much interested to invest to this firm. It is the highest setd share than any other company in the cement industry. We take sales growth rate as the growth rate. Companys growth rate, 13% is much lowers the industry growth rate, 47. 84%. It proves that other compan ies are capturing the growing market. Free cash flow of the company is getting higher and higher day by day, so they have enough free cash to invest and meeting current liability. HCBLs cash flow from operation is also impressive.Problems and Recommendation This problems and recommendations are based on the statements of year ended 2006, 2007 and 2008. At present 2009 they have done some improvements. as well much deadened cash They have too much dead cash because of their efficiency and working capital management, conservative collection mathematical operation and mainly they are remitting less money in parent company through dividends. They were keeping lots of retained earnings in Bangladesh and not investing in new project. Also in 2008 they had decrease in net cash flow but because of opening balance in cash the closing balance showed a huge number.This proves that they had huge idle cash. The analysis will show the more clear picture. 200620072008Average Net cash (decrease ) / increase during th eyear71,339,000759,976,000(82,749,000) Opening Balance19,888,00091,227,000851,203,000 Closing Balance91,227,000851,203,000768,454,000 Number of shares5,381,2955,650,3605,650,360 EPS97110105 TOTAL funds AVAILABLE PER SHARE16. 95150. 65136. 00 Cash Dividend per share162533 Average Net Cash Remain later on Dividend per share0. 95125. 65103. 0077 Cash Remain After Dividend5126276709944000581992120432354132 Net cash remain per share after EPS81857279 Cash remain after EPS435884914. 480280600406825920440997145 This analysis clearly shows that on an average this company retained 77 taka per share per year in this 3 years. On an average they have sufficient cash per year 432354132 Taka. They should invest this huge idle fund in any time esteem added project or if there is no any scope they can remit this money by giving more cash dividends. By giving cash dividend more they can add more value to their parent company. In 2010 they have declared that they are using their own fund of Tk. 1260 million to expand their production by double in chittagong factory. Aggressive Marketing and Market share The market is saturated and hush up HCBL has chance to increase their market share. Because local cement companies are growing day by day because of low pricing. HCBL stands on high quality and price leadership. They can do more aggressive marketing to increase their sales and increase market share. Conservative Credit Policy HCBLs credit policy is not very flexible. They dont encourage credit sales to increase their sales. They dont want to increase the risk of credit. As they are MNC and face legal bindings in collecting if customers dont pay. They have huge idle fund to finance their A/R but they are not doing this.In this saturated market they have the scope to increase sales but they are not attempting for it. They are not willing to take risk. But in business you have to take risk and mellowed RISK means HIGH CHANCE OF RETURN. They should make more flexible credit policy to increase their sales and to gain more market share. By increasing sales they can also remit more money by tech know how fee Other Recommendations They can give more stress on Ruby cement. They are giving mainly focus on Scan cement. They can do more CSR activities as they have ample money. This CSR activities will increase their goodwill. They can train more their maximum employees to run away the ERP software to smoothing the process more. They can give all the employees the option of avail SHARING this will motivate the employees to work hard. Secrecy of Price nociceptive Information When we took the interview at April 12, 2010 from one of their employees we came to know that their EPS of 2009 is Tk. 151. 00 and cash dividend would be 38%. Although board meeting held at April 13, 2010 and the price sensitive information published in DSE website at April 15, 2010. If the employees declared this kind of information before Board meeting its illega l and unethical.The employees should not publish price sensitive information privately before it published publicly. Why Not Recommendation About High Inventory In 2008 In normal view one will recommend at 2008 that why they stocked huge inventory and which in turn cost them less CFFO and net decrease in cash . They had huge idle balance thats why they stocked inventory. But the real reason is opened at 2010. Cement industry was in recession in 2008. Also Heidelberg Group faced Recession in 2008. But HCBL did not face any recession in 2008. where in this industry other firms showed a huge decrease in EPS.But they maintained EPS of 105, which is extraordinary. They import RM from their sister concern at a cheap rate. Thats why they maintained a high EPS . The Cement industry at 2008 perfectly anticipated that the price of RM will go up in 2009. thats why many company stocked inventory in 2008 also HCBL did this. We can prove our line of descent by that in 2009 most cement producers EPS has increased by almost 400% and HCBLs EPS also increased in 2009. In this saturated market wvery company can not make huge profit than previous year only by selling more cement. This EPS also the result of stocked inventory in 2008.Thats why we did not recommend to reduce inventory in 2008. Conclusion HCBL is doing well in working capital management but they have huge idle money thats why they are not giving that much of emphasis in managing their capital more efficiently. As they are the subsidiary of Heidelberg group they maintain maximum modern policy of collecting and disbursing cash. They get many competitive advantages as Heidelberg group helps them a lot with technology. They mainly trade with their sister concerns. HCBL is the leading company in the cement industry. But they have to think about managing the idle money to add value to HCBL.