INTERNSHIP REPORT

ON

ANALYZING FINANCIAL PERFORMANCE

OF

NAVANA CNG LIMITED

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Bangladesh University of Business & Technology (BUBT)

Internship Report On

Analyzing Financial Performance of Navana CNG Limited

Submitted to:Md. Amdadul Hoque Internship Supervisor

Chairman, Department of Finance Bangladesh University of Business and Technology (BUBT)

Submitted by:Mohammad Imam Hossain

ID: 1011230100511th Intake, EMBA Program

Major in Finance Department of Finance

Bangladesh University of Business and Technology (BUBT)

Date of Submission: 15 September, 2012

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DECLARATION

I am Mohammad Imam Hossain; hereby declare that the report of internship program

titled “Analyzing Financial Performance of NAVANA CNG LTD.” is uniquely

prepared by me.

I also confirm that, the report is only prepared for my academic requirement not for other

purpose and no submitted this report any other place before it. It might be with the

interest of the opposite party of the corporation. I also assure that, this report was not

submitted to any other private and public universities or any institutions.

...........................................Mohammad Imam Hossain ID: 10112301005 11th Intake, EMBA Program Department of Finance Bangladesh University of Business & Technology

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CERTIFICATE OF SUPERVISOR

This is to certify that Mohammad Imam Hossain is a student of EMBA, ID No. 10112301005

successfully completed his “Internship Program” entitled “Analyzing Financial Performance

of NAVANA CNG LIMITED” a study on NAVANA CNG LTD. under my supervision as the

partial fulfillment for the award of EMBA degree.

He has done his job according to my supervision and guidance. He has tried his best to do this

successfully. I think this program will help his in the future to build up his career. I wish his

success and prosperity.

…………….……………...

Md. Amdadul Hoque

Assistant Professor

Department of Finance.

Bangladesh University of Business & Technology (BUBT)

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EXECUTIVE SUMMARY

Based on the findings on the economic and environmental impact of CNG fuelled vehicles, the study concluded that Bangladesh should increase its energy security and improve air quality by implementing alternative fuel vehicles. In this context, the study recommended that there is need to bring public passenger transport as early as possible on CNG. The study also recommended that for vehicles which could not be converted to CNG for practical reasons, low sulphur diesel should be permitted as a transitional fuel for a limited period of time before total phase out. Furthermore, future distribution infrastructure should be set into motion to ensure that it stays ahead of the growing demand and takes into account the turnaround time of vehicles at the dispensing stations. Practical date for stopping all diesel operations by commercial passenger transport in the city should be set. Financial incentives should be provided to bus operators purchasing new and retrofitted CNG buses in the form of sales tax and excise tax exemption and low interest loan.

Navana Group has established itself as one of the leading and fastest growing group of companies in Bangladesh. Diversification always was the key factor of flourish the group. NAVANA CNG LIMITED, a sister concern of NAVANA GROUP, is the leading CNG service provider of Bangladesh. Its years of experience are the standard setter of CNG industry. NAVANA CNG LIMITED is the sole distributor of the world famous CNG product manufacturers like LANDI REZO s.p.a, Italy, Safe s.r.l, Italy VANAZ ENGINEERS, India and OMNITEK, USA. Company Motto is SAVING, SAFETY and RESPECT to the environment.

The spiraling price of gasoline fuel in the international market as well as in local market has created the opportunity to become stronger as an industry. At the same time the life of the industry depends heavily on proven storage of gas new discovery of gas.

The company is always trying for better environment friendly energy solution. Keeping that in mind the company is expanding its operation in the vast marine sector which the largest means for transportation all over the country. This is demand of time, being successful in this project will open a new window to save precious foreign currency. The study was designed “Analyzing the Financial Performance of NAVANA CNG LTD.”. This report is prepared as requirement of the internship of EMBA program of different universities. This report will give a clear idea regarding financial condition and status of NAVANA CNG LTD. Especially this report focuses on the financial strength analysis of Navana CNG.

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ACKNOWLEDGEMENT

First I would like to thank the Almighty Allah, Alhamdulillah with his blessing; I have completed

this report successfully. It was a big challenge in completing this report as part of EMBA

program. I would also like to thank my guardian, without whom this effort would have been

worth nothing. Their love, support and patience have taught me about sacrifice, discipline and

compromise.

I would like to express my gratitude to my respectable faculty Chairman Mr. Md. Amdadul

Hoque for his continuous support, inspiration and greatly appreciation to prepare this internship

report on “Analyzing Financial Performance of NAVANA CNG Ltd.” Preparing this report

was a valuable experience for me. It acts as a window to the real life practice.

I would like to thank to Mr. Sumit Kumar Saha, General Manager, and Sr. Asstt. Manager –

Accounts & Finance, Mr. Imran Hossain, Manager - Technical, Mr. Md. Ashiqur Rahman,

Manager - Marketing & Business Development, Mr. Md. Arifur Rahman of Navana CNG Limited

for their co-operation. All the members of Technical, Sales & Marketing & Finance and Accounts

Department had given their time and effort to work out this report from the last few years’

information.

This report is combined effort of all and without their participation it would have been so difficult

for me to complete it in short time.

Finally, I would like to thank all others whose strong supports make me able to complete this

report.

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PART-1

INTRODUCTION

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1.0 Introduction

The student undertakes Master of Business Administration (Executive) need to go for internship

to an organization to gather practical knowledge and experience. Internship is an arrangement by

which a student works in a company for a limited period of time. It is required to submit an

internship report after completing three months internship. This program helped to acquire

knowledge about different activities of the company as well as its financial performance.

1.1 Background of company

NAVANA CNG Limited a sister concern of NAVANA GROUP was formed in 2004, and has

quickly emerged itself as the leading CNG service provider of Bangladesh. Its years of experience

are the standard setter of CNG industry.

NAVANA CNG Limited is the sole distributor of world famous CNG and LPG conversion kit

manufacturer LANDIRENZO s.p.a. Italy. NAVANA CNG Limited solely represents the

renowned manufacturer of CNG Refueling Station Technology Safe s.r.l.

At present NAVANA CNG Limited is running 8 numbers of CNG conversion workshop and 14

numbers of CNG refueling stations located as major cities. So far, Navana CNG Limited has sold

more than 211 numbers of refueling stations all over Bangladesh, which is more than 60% market

share in the industry. NAVANA CNG Limited is an unlisted company. All unlisted companies are

required to complete certain procedures to get listing at Dhaka Stock Exchange (DSE).

1.2. Significance of the Report

Education becomes more effective when there is a combination of theory and practical

knowledge. Theoretical knowledge achieved perfection with the implication of practical

knowledge. The internship program can combine theoretical knowledge with practical situation.

A practical orientation program is really essential for a student as our educational system is

mostly text based. Professional experience is very important to be established. In this situation I

got a bit practical experience by analyzing financial performance of NAVANA CNG Limited.

1.3 Scope of the Report

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This report is about the financial performance of NAVANA CNG Limited for the period 2007 to

2011.The focus of this report is mainly on the existing financial ratios of the company to analyze

the current financial position by NAVANA CNG.

1.4. Objectives of the Report

1.4.1 General Objectives

The key objective of the report is to analyze the financial performance of NAVANA CNG

Limited.

1.4.2 Specific Objectives

There are some specific objectives also. This are-

To analyze the financial statements of NAVANA CNG Limited.

To calculate the different financial ratios.

To understand the implications in analyzing and interpreting the financial ratios.

To identify the findings and raise possible recommendations for NAVANA CNG Ltd.

1.5 Methodology

1.5.1 Type of Research

This report is descriptive in type that briefly reveals the overall financial activities performed by

NAVANA CNG Ltd. Collection of primary and secondary data have been required for the

analysis. Annual reports of NAVANA CNG were the source of secondary data in this regard.

Ratio analysis and Trend analysis have also been used as major tools for the financial

performance analysis of NAVANA CNG Ltd.

1.5.2 Types of Data Used

In order to analyze the financial performance of NAVANA CNG Ltd. two types of data have been

used. This are-

Primary Data-data observed or collected from first hand experience.

Secondary Data-published data and the data collected in the past or by other parties.

1.5.3 Sources of Data

The required information were collected from the Primary and secondary sources.

1.5.3.1 Primary Sources

Conversations with the different officials of NAVANA CNG Limited.

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Focus group discussion

Take expert opinion from the officers.

Direct Observation.

Informal Discussion.

1.5.3.2 Secondary Sources

Annual report of NAVANA CNG Ltd.

Different textbooks and journals.

Various reports and articles related to study.

Some of my course elements as related to this report.

Web base support from the internet and intranet.

1.5.4 Data Collection Procedure and Instruments

1.5.4.1 Data Collection Procedure

Conducting this report the following procedures have been used to collect data with the respective

instruments:

Collection of Primary Data:

All the relevant data and information were mainly collected from the observation, Informal

discussion, group discussion, conversation and so on.

Collection of Secondary Data:

Secondary data are collected basically from Annual Reports, Journals, Brochures, Paper,

Magazines, Publications, Books and others form of publications, Official websites.

1.5.4.2 Instruments Used for Analysis

Quantitave data were collected and analyzed according to acceptable standards of practice.

Different tables and graphs are used to make data more meaningful and comparable. Qualitative

data are analyzed rationally. Important percentages and averages are calculated. I have used two

major tools to analyze the financial performance of NAVANA CNG Ltd. This are-

Ratio analysis

Trend Analysis

Ratio Analysis:

Ratio analysis is a widely used tool of financial analysis. The term ratio refers to the numerical

and quantitative relationship between two variables. It is defined as the systematic use of ratio to

interpret the financial statements so that the strengths and weaknesses of the company as well as

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its historical performance and current financial condition can be determined. Ratio can be

classified into four broad groups-

1) Liquidity Ratios

2) Activity Ratios

3) Debt Ratios

4) Profitability Ratios

Trend Analysis:

It is really important to analyze trends in ratios as well as their absolute levels. This analysis

informs us whether a company’s financial condition improving or deteriorating.

Other Tools:

After collecting all the data they are coded and data are processed, analyzed, and graphically

represented using MS excel and MS word.

1.6 Limitations

Time frame of this report was very limited. It was really tough to know details about a

giant company like-NAVANA Group within a short span of time.

Sometimes I could not communicate with the respective personnel of NAVANA CNG

Ltd. properly as they are very busy.

Because of Strategic and comparative position of the company, it could not disclose the

confidential information which might make the report more worthy.

As I am not that much experienced to analyze financial performance of a giant company,

there might have some short comings. But I tried sincerely to submit a significant report.

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PART-2

COMPANY PROFILE

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2.0. Company Profile

2.1. Background

NAVANA GROUP under the prominent leadership of Mr. Shafiul Islam Kamal as Chairman

emerged into a separate physical entity from Islam Group after the death of its Chairman Mr.

Jahurul Islam which was then the largest business group in Bangladesh. NAVANA GROUP

comprising of a number of companies, has diversified its activities in various areas like product

and project marketing, construction and real estate business, international trading, distributorship

and production of various items and already attained significance in the business arena of

Bangladesh.

NAVANA LIMITED, the flagship company of the

NAVANA GROUP (previously Islam Group) was

established in 1964 by the then Group's founder

Mr. Jahurul Islam and had an auspicious step into

the business under an exclusive distributorship

agreement with TOYOTA of Japan to market

Toyota cars in the then East Pakistan.

It was indeed a great honour for our the then

Chairman Mr. Jahurul Islam and the Vice

Chairman Mr. Shafiul Islam Kamal (now

Chairman of NAVANA GROUP) who are entrusted in the business community as pioneer in the

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business arena of the country. Due to the dynamic leadership of the key figure of the Group, with

in a short span of five years, Toyota Corona, nicknamed the "Miracle Car" captured 80 percent of

the 1300-1500 cc Volkswagen, Opel, Hillman, Austin, Morris etc. This was a tremendous

marketing achievement set forth by NAVANA, Toyota is still enjoying. As an outcome of

NAVANA's pragmatic marketing strategies and huge efforts Toyota Car's resale value has been

reached the highest level in Bangladesh compared to that in other countries which has been

appeared as major factor influencing customer's buying decision in favour of Toyota. The market

subsequently and till today associated with the name of Toyota as symbol of reliability, durability

and quality.

In a later years the Group has entered into an exclusive distributor franchise with HINO Motors of

Japan and as a result of the dynamic leadership of the Group's Chairman and with a team of

experienced marketing experts the HINO brand has been able to attain a significant market share

in our heavy transport sector and now HINO is the symbol of prestige.

In the marketing front the group is enjoying a tremendous success in marketing of world reputed

brand Goodyear in Automobile Tyre Sector. Goodyear Tyre have been able to gain a significant

amount of market share and recently it has been the Market Leader in commercial tyre segment.

This has been possible due to the Group's excellent reputation, marketing strategies and due

efforts. In August 1981, the Group set up Aftab Automobiles Ltd. to assemble Toyota and Hino

vehicles for the Bangladesh market. Aftab Automobiles Ltd. is the largest private sector

automobile assembling plant in Bangladesh. Aftab Automobiles Ltd. became a listed company on

the Dhaka Stock Exchange in 1987. In 1998 Aftab Automobiles Ltd. has gone under a massive

BMRE program and as a result of the program, it started its Body Fabricating Unit, Paint

Manufacturing Unit and Battery Unit. Soon after separating from Islam Group, Mr. Shafiul Islam

Kamal who was also incharge of Construction Division and the Real Estate Division in the then

Islam Group formed a new construction & real estate developing unit of the Group named:

Navana Construction Ltd. and Navana Real Estate Ltd., which is now one of the leading

construction and real estate developing company in Bangladesh.In the trading front, the Group

has brought into existence a separate trading unit in 1996 namely Biponon Limited. This company

commenced business in the potential field of Health and Medical Equipment Sector. And within a

short span of one year since its commencement it was awarded with one of the biggest single

tender under the Ministry of Family & Welfare, worth of US$ of 5.0 million to supply &

installation of Medical Equipment under EC finance.

Taking into consideration of the importance of the aid worthy projects the group introduced

another company in 1998 namely Navana Interlinks Limited in its chain. Navana Interlinks

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Limited has started involving in the potential sector of Civil Aviation, Telecommunication, Power

Development, Heavy & Light Industry Sector, Food Sector, Chemical & Bulk Commodities

Supply & Indenting, as well as turnkey projects in these sectors.

And within a short span of time the company has picked a number of projects some of them have

come into matured stage. In the very potential IT arena the group has landed with a new company

namely Navana Computers & Technologies Ltd. In short span of time it has earned a reputation

and gained customer satisfaction in IT market. It is already appointed as the Reseller of Hewlett

Packard. In 1999, it started production of NAVANA brand AVR & subsequently considering the

market prospect it also started production of IPS & UPS in May 2000. The recent success of this

company is to enter into a distributorship agreement with GATEWAY INC., USA for marketing

its complete range of products in IT market.

Aftab Automobiles Ltd., the listed company on Dhaka Stock Exchange has introduced a new unit

for manufacturing paints with brand name NAVANA PAINTS. The company started production

in November 1999 and launched marketing through exhibition at DITF 2000. The response from

the users so far is tremendous. Aftab Automobiles Ltd. also established a new unit of

manufacturing of Batteries under the brand name of NAVANA. And within a short span of time

since its inception the company has able to establish its good will n the market. Over the years

NAVANA GROUP has established itself under the dynamic leadership of Mr. Shafiul Islam as

Chairman. With the dynamic leadership of Mr. Shafiul Islam - Chairman, Navana Group has

established itself as one of the leading and fastest growing Group of companies in Bangladesh.

And more diversification is awaited in the different sectors like Public Pay Phone Service,

Pharmaceutical Sector, and LPG distribution.

2.2. Sister concern of NAVANA Group:

  Aftab Automobiles Ltd.  

     Assembling Unit    Bus Body UnitNavana Paints Ltd.Navana Battery Ltd.Navana Furniture Ltd.Navana Limited

      Toyota       Hino      Toyota 3S Center

Navana Real Estate Ltd.Navana Construction Ltd.Navana Textiles Ltd.Navana Interlinks Ltd.

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Biponon LimitedNavana Petroleum Ltd.Navana Renewable Energy Ltd.Navana Electronics Ltd.Navana Taxi Cab Co. Ltd.Navana CNG LimitedNavana Logistics Limited

 

2.2.1 Aftab Automobiles Ltd.

Aftab Automobiles Ltd, a sister concern of NANANA Group mainly a vehicle assembling and

small parts manufacturing company. The company has been successfully assembling TOYOTA &

HINO vehicles for Bangladesh market since 1982, recently lunched HINO -Mini bus. Company

has gone through an extensive BMRE and as a result of that Paints and Battery units were

established. It has a great IT and R&D department. R&D department related to parts design, shape

size and its proper function or any difficulty then again check and rectify. We started this

department in full fledged research and development work with assistance of experience research

experts and Engineers.

2.2.2 Navana Paints

After long time, now paint are the output of modern science & technology, carrying both

decorative & protective character in modern days everybody like to think how easily they

save/protect their creations through decoration by using paints & for this RnD works done

through out the world continuously to evaluate more protective & save products as well as

decoration for mankind. With an ambition to take part countries paint demand & producing

trusted Decorative and industrial paint for twenty - first century Aftab Automobiles Limited

started paint manufacturing unit at Fouzderhat Industrial Estate, Chittagong, Bangladesh from

1999.

2.2.3. Navana Battery

Aftab Automobiles Ltd. Introduced a Battery Manufacturing unit, concern of Navana Group in

January 2002, and manufacturing different type of automotive batteries (from small car to big

lorries) and marketing the same in the country. The company also manufactures batteries for

Instant Power Supply (I.P.S.). Soon the company will go for Industrial, Motorcycle and UPS

batteries. The company plans to export its product abroad very shortly.

Our motto is, 'WE GIVE YOU THE QUALITY, QUALITY GIVES YOU THE

GUARANTEE' and that is, "BECAUSE WE CARE FOR YOU" and for which we offer our

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customers a very special personalized after sales-service with absolute and non-

compromising QUALITY with CONFIDENCE.

2.2.4. Navana Furniture

NAVANA Furniture is the Brand Name of the furniture unit of Aftab Automobile Ltd. Founded

in 2002, NAVANA furniture possesses capabilities that are fully integrated, from designing,

prototyping, material selection and moulding through testing, assembling and distribution.

Abreast of being a strong leading player in the market, all our -produced furniture are guaranteed

to have met the stringent quality and standards. NAVANA Furniture has its own factory in Savar.

Operating in a combined area of more than 12,000 sq.m of factory and warehousing. Using fully

mechanized system, imported raw material, modern technology for manufacturing furniture of

contemporary designs.

All our Products are tasteful, durable, functional and of competitive price. We offer a wide

product range that can be tailored for customer requirement and most suitable for modern offices.

2.2.5. Navana Ltd.

NAVANA LIMITED, the flagship company of the NAVANA GROUP (previously Islam Group)

was established in 1964 by the then Group's founder Mr. Jahurul Islam and had an auspicious step

into the business under an exclusive distributorship agreement with TOYOTA of Japan to market

Toyota cars in the then East Pakistan.

It was indeed a great honour for our the then Chairman Mr. Jahurul Islam and the Vice Chairman

Mr. Shafiul Islam Kamal (now Chairman of NAVANA GROUP) who are entrusted in the

business community as pioneer in the business arena of the country. Due to the dynamic

leadership of the key figure of the Group, with in a short span of five years, Toyota Corona,

nicknamed the "Miracle Car" captured 80 percent of the 1300-1500 cc Volkswagen, Opel,

Hillman, Austin, Morris etc. This was a tremendous marketing achievement set forth by

NAVANA, Toyota is still enjoying. As an outcome of NAVANA's pragmatic marketing

strategies and huge efforts Toyota Car's resale value has been reached the highest level in

Bangladesh compared to that in other countries which has been appeared as major factor

influencing customer's buying decision in favor of Toyota. The market subsequently and till today

associated with the name of Toyota as symbol of reliability, durability and quality.

In a later years the Group has entered into an exclusive distributor franchise with HINO Motors of

Japan and as a result of the dynamic leadership of the Group’s Chairman and with a team of

experienced marketing experts the HINO brand has been able to attain a significant market share

in our heavy transport sector and now HINO is the symbol of prestige.

2.2.6. Navana Real Estate Ltd.

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Navana Real Estate Ltd. (NREL) was formed in late 1996 under the Chairmanship of Mr. Shafiul

Islam Kamal to cater the boom in Real Estate Development in Bangladesh. NREL within a short

span of time turned out as one of the most trusted company in this sector and has already been

working in various numbers of apartments, commercial and land projects. The motto of NREL is

not only to deliver apartment or land ahead of schedule but also to maintain the highest-grade

construction quality that has gained trust and respect in customers.

2.2.7. Navana Construction Ltd.

Navana Construction Ltd. (NCL), a full-fledged construction wing of Navana Group came into

physical existence in 1996 under the Chairmanship of Mr. Shafiul Islam Kamal, the Ex-Vice

Chairman and the very Key Person of Islam Group was responsible for procurement & the

execution of the construction jobs of Bengal Development Corporation (BDC), the construction

company of the Islam Group.

Mr. Shafiul Islam during his tenure with Islam Group personally supervised and gave guidance to

procure the construction work of BDC which included Road Ways, Embankments, High-Rise and

Low-Rise Buildings, Commercial Blocks, Industrial Civil Engineering Works, Service and Utility

Buildings for Airport, Railways, Universities, Power Plant Civil Works since past 35 years in &

abroad Bangladesh.

2.2.8. Navana Textile Ltd.

Navana Textiles Ltd. (Sweater Unit) is a 100% export oriented sweater factory situated at its own

premises at kalma, Saver, Dhaka. It produces pullover, Cardigan, Vest, Top, Muffler, Scarf made

with 100% Acrylic, Wool, Cotton as well as many types of composite & fancy yarns. Navana

Textiles (Sweater Unit) is well experienced in manufacturing fine as well as heavy gauge sweaters

and exporting quality products to many countries.

2.2.9. Navana Interlinks Ltd.

Since its inception Navana Interlinks Ltd. (NIL) at the trading front to diversify business

towards wide range of trading and project marketing, NIL comprises of a team of experienced &

professional personnel is maneuvering in the Power & Tele-communication, Civil Aviation,

Consumer Products, Security Equipment, Industrial Chemicals, Machineries, Petroleum Products,

Agro Products as well as in Turnkey Projects and some potential projects are already in pipe line.

Electrical, Construction and Security equipment of different manufacturers of different origin is

providing up to highest level of satisfaction to the customers. We represent some world famous

manufacturers of Electrical, Construction and Security equipment and consumables, and maintain

business relationships with some renowned and prestigious trading houses

2.2.10. Biponon Ltd.

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Biponon Limited came into being in 1996 as an specialized company in the field of Medical &

Health Sector. This company comprises a team of experienced & trained Bio-Medical & Electro-

Medical Engineers and also a group of skilled marketing professionals. Within a short span of

time Biponon has already positioned itself as market leader in medical and scientific equipment.

Also it has proved its reliability by providing its customer prompt and satisfactory after sales

service. The area and departments where this company is doing business are Medical & Health

Sector and has been successfully doing business in Ministry of Health, CMSD, DGMS, DGDP,

Atomic Energy Commission, Probin Hospital, ICMH, Diabetic Association of Bangladesh, etc.

2.2.11. Navana Distribution Ltd.

Keeping in mind to contribute to upgrade the living standard the Group is also setting up a new

company for producing & marketing of high quality consumer products and marketing of other

FMCG products of world renowned companies. Navana Distributions Ltd. (NDL), is a new

venture of Navana Group, has started its operation in February, 2003. Since its inception, NDL is

producing & marketing FMCG like Flour, Suzi, Salt, Rice, Chanachur, Mastered Oil etc. with a

very rewarding market response which encouraged introducing more new products in the

pipeline.

2.2.12. Navana Computers & Technologies Ltd.

Navana Computers & Technologies Ltd. (NCTL) came into physical existence in the ever

potential IT Sector in 1997 with a motto to cater to the fast growing demand of the market and to

satisfy it's clients by prompt & quickest possible service. It was not difficult for NCTL to be one

of the leading contenders in the computer market in such a short time as Navana Group has a vast

experience in service oriented business in Bangladesh and now a day the name NAVANA stands

for quality & trust. Soon after NCTL landed in the market it has been able to attain a considerable

amount of market sham in the IT Sector. Strongly keeping in mind it gathered highly trained and

experienced sales and technical personnel for backup support.

In the subsequent years of its inception NCTL has been providing due sales and technical support

to various corporate and individual end users and on the other hand rendering its service to the

distributors & wholesalers. NCTL is well equipped and enriched with experienced & trained work

force that are able enough in network installation, computer assembling and shooting of various

IT troubles. In April 2000, NCTL signed up with GATEWAY INC., USA to market its full range

of product including PC, Laptop, Server, Work Station etc. in Bangladesh. In six months time

FJCTL has already made its mark in brand PC sector with GATEWAY.

2.2.13. Navana Soft

To meet the long cherished demand of the local and international organizations, NavanaSoft has

the effort to excel the quality and features of the software & web application. Our track record for

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the past 5 years proves our success in the business. NavanaSoft is always thriving to provide

value-added services to its customers, in order to create a niche in the industry. Our mission is to

be the one of the best successful ICT service provider and exporter delivering the best customer

experience in the markets we serve. We strive to produce the best quality Software & Services,

bettering ourselves each time, each day, each minute. We try to provide hassle free services to our

customers, which we believe is every customer's unstated need.

2.2.14. Navana Electronics Ltd.

Navana Electronics Ltd., a prospective company of NAVANA GROUP is running its business

since October 1996 under the prominent leadership of Mr. Shafiul Islam Kamal the successful

Chairman of the group. Formerly, Navana Electronics was part of Navana Computers &

Technologies Ltd. upto year 2000. After successful completion of the first step, it emerged into a

separate physical entity as Navana Electronics Ltd. from Navana Computers & Technologies Ltd.

2.2.15. Navana Taxi Cab Co. Ltd.

Every day it serves near about 1500 customers by providing our taxi cab on the call basis. At the

same time to get this kinds of prompt service some reputed organization such as Novartis (BD)

Ltd, Shah Cement Industries Ltd. Aftab IT, Lafarge Surma Cement are continuously using taxicab

on the call basis as well as monthly basis. It is an excellent achievement because there are a lot of

taxicab companies in Dhaka city but only Navana Taxi cab doing well and are hopeful that can

expand business very soon. As taxicabs are brand new and made from Japan, so all those cabs are

looking nice and properly clean & service by us that is why we already got the advertisement

from the various companies for different products in the blank spaces of the taxicab. Rental of the

blank spaces of our taxicab we are developing our revenue income. It is a tremendous

performance & achievement of our company. Already we would able to grow the confidence of

the passenger regarding, their safety and security by establish the security check-post various

location in Dhaka city. If any passenger lost any things in the cabs it is 75% possible to refund to

them and it very well known the passenger. After consideration of all those things we are clearly

ahead than other companies.

2.2.16. Navana Logistics Ltd.

The quick pace of globalization of economic activities is confronting most companies with new

challenges. Due to internationalization production and sourcing activities are spread across many

countries. Therefore, a permanent flow of information and goods have become a necessity and

requires a complex global network. A reliable, sophisticated and competitive logistics services are

necessary in the present worldwide transportation industry today. With a view of above need gap,

NAVANA LOGISTICS LTD commenced its operation as a concern of country’s leading business

group “NAVANA GROUP” headquartered in Dhaka, Bangladesh. "NAVANA LOGISTICS" is

well equipped with well trained and experienced operations staffs who are having years of

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experience in handling both inbound and outbound AIR and SEA shipments worldwide. Expertise

in various modes of freight forwarding skillful operation staffs is dedicated to meet customers'

need as per their requirements. Having excellent relationship with both steamship lines and

airlines Navana Logistics is enabled to enjoy competitive rates and the benefit of which are being

enjoyed by their customers. Through the international agency networks company provide a full

scale global service all over the world solving complicated logistical problems and making timely

response and delivering goods and information to the overseas and domestic customers in the

most economical and efficient manner. At Navana Logistics Limited, we are completely

committed to provide quality responses and deliver efficient services to fulfill our customers need.

We firmly believe that our growth is on our customers’ success and satisfaction.

2.3. NAVANA CNG LTD.

NAVANA CNG LIMITED, a sister concern of NAVAVA GROUP, is the leading CNG service

provider of Bangladesh. Its years of experience are the standard setter of CNG industry.

NAVANA CNG LIMITED is the sole disturber of the world famous CNG and LPG conversion

kit manufacturer LANDI RENZO s.p.a, Italy. NAVANA CNG LIMITED solely represents the

renowned manufacturer of CNG Refueling station Technology Safe s.r.l, Italy. For Three Wheeler

conversion, NAVANA CNG LIMITED is marketing the product of VANAZ ENGINEERS, India.

It has also collaboration with OMNITEK, USA, Altenergy, India and Argenchip, Argentina for

diesel vehicle conversion to CNG. Our motto is SAVING, SAFETY AND RESPECT to the

environment.

2.3.1. Services

Petrol/Octane driven vehicle conversion to CNG Diesel driven vehicle conversion to cng 3-Wheeler convertion to cng LPG Conversion Selling gas through CNG refueling station Selling CNG Refueling station on turn key basis Selling of CNG Refuelling station on turn key basis Package maintenance program for CNG Refueling station Cylinder Re-testing facility at out own culinder testing station. Providing training on CNG conversion and refueling station

2.3.2. Backup Services

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A comprehensive Back-Up Service is available for the vehicles that converted into CNG in our

workshop. We solve any CNG conversion related problems for a very small amount of service

charge. Beside this, with in the warranty period, our valuable clients who have converted their

vehicles to CNG; in our workshop within one year can get back-up survive in free cost?

2.3.3. Petrol/ Octane Conversion

In 1954, Landi Renzo began designing and building natural gas and LPG automotive conversion

systems for vehicles in many countries around the world. Since its foundation, Landi Renzo has

become a leader and one of the world's most important companies in the sector. It operates in five

continents with various subsidiaries, offices, authorized dealers and service centers. The fact that

it has sold more than 4 million systems is the proof of the high technological content and quality

of all Landi Renzo products.

2.3.4. CNG Cylinder

Navana has cylinders of various capacities to fit customers’ requirements. These are with

capacities of 40 WL, 50 WL, 60 WL, 90 WL, 95WL etc. The cylinders are form:

Inflex, Argentina, EKC, India

The cylinders are manufactured maintaining the NZ (New Zealand) 5454 standard, which ensures

the high quality and safety of the cylinders.

2.3.5. Diesel Conversion

Nowadays, conversion of Petrol run vehicle into Gas run vehicle is very common. Owners of

petrol run vehicle are very satisfied with their gas system. But we have good news for the owners

of the diesel run vehicle. They can also save their fuel cost by getting converted their engine into

gas system. There are two types of conversion:

Dedicated gas system Dual fuel system

In a dedicated system the vehicle will run only on gas. There will be no option for diesel. The

conversion cost is high and saving will be more than 70%. But in dual fuel system the vehicle will

run both on gas and diesel at the same time. Engine will get 20% Diesel and 80% Gas. The

conversion cost is less and saving will not be more than 50%.

In both systems Engine gets clean fuel so the life of engine increases and maintenance cost

reduces. Engine runs with no power loss and generates same torque as before. As in conversion

engine goes under major overhauling it acts as a new vehicle. The American and European

technologies used for the conversion ensure the smooth run of the vehicle.

2.3.6. CNG Refueling Station

A complete CNG refueling station includes following items:

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Compressor (1 unit)

Storage (1 unit)

Priority panel (1 unit)

Dispenser (2 units)

Air compressor (1 unit)

High pressure tube and fittings

Electrical cables

Spare parts (4000 hrs operation)

What about Navana Experience in CNG Field in Bangladesh? COMPERATIVE STUDY SAFE

s.r.l ITALY COMPRESSOR, SOLE DISTRIBUTOR NAVANA LTD.:

Navana is the Pioneer in CNG business from the last 2002 for both CNG Conversion & CNG Re-

fueling station Navana sold so far 211 CNG stations all over in Bangladesh up to May, 2011.

Presently Navana itself has 9 conversion workshop located at various location of Bangladesh.

Also 20 CNG Re-fueling stations under own operation and has planned to set-up more 10 stations

in the year of 2013 for Navana itself.

Present Scenario of Navana CNGTotal nos. of station sold so far in all over Bangladesh is 211. At present the nos. of Stations in operation in area wise are given bellow:

Dhaka: 134 Chittagong: 30 Comilla: 14 Sylhet: 12 Feni: 05 Bogra: 07 Bhairob: 09

2.3.7. Cylinder Retesting Station

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NAVANA CNG LIMITED, a sister concern of NAVAVA GROUP, is the leading CNG service

provider of Bangladesh. Its years of experience are the standard setter of CNG industry.

NAVANA CNG LIMITED is the sole disturber of the world famous CNG and LPG conversion

kit manufacturer LANDI RENZO s.p.a, Italy. NAVANA CNG LIMITED solely represents the

renowned manufacturer of CNG Refueling station Technology Safe s.r.l, Italy. For Three Wheeler

conversion, NAVANA CNG LIMITED is marketing the product of VANAZ ENGINEERS, India.

It has also collaboration with OMNITEK, USA, Altenergy, India and Argenchip, Argentina for

diesel vehicle conversion to CNG.

At present, NAVANA CNG LIMITED is running four CNG conversion workshops located at

various locations of Bangladesh. Two of them are at Dhaka and the remaining two are at

Chittagong and Sylhet. Now Navana CNG limited incorporation with EKC, India proudly

presents Cylinder testing station. The principle aim of a periodic inspection and testing Procedure

is that at the completion of the test. The Cylinders may be reintroduced into service for a future

period of time.

2.3.8 Rating of Competitors:

CompetitorsCustomer Awareness

Quality of Service

Technical Assistance

Service Provider

ServiceAvailability

Promotions

Southern 4 4 4 3 3 4

Rahim Afrooz 4 3 4 4 3 3

Intraco 3 3 3 3 2 5

Navana 5 5 4 5 4 4

NOTE: 5 = Very high, 4 = High, 3 = Moderate, 2 = Low, 1 = Very Low

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If we see the above table, we can clearly identify that the customer awareness, quality service and

service provider is extremely high for Navana CNG. But on the other hand regarding promotion

Intraco is extremely high than the all other CNG industries in Bangladesh

2.4. About Navana CNG:

2.4.1. Vision:

Our vision is to be the point of reference for complete CNG solution.

2.4.2. Mission:

We strive to deliver defect free services and perpetuate an attitude of "do it right at the first

time".

2.4. 3.SLOGAN:"For a clean alternative".

2.4.4. Objective:

The objectives of NAVANA CNG LTD. Ltd are –

To conduct business operation based on market mechanism within the legal and social

framework.

To be able to take risks in one's sphere of competencies and responsibility.

To be able to progress in the face of uncertainty.

To contribute new and effective ideas.

To stand up for one's position vis-à-vis the environment and management.

To create and develop added value in one's actions.

2.4.5. Corporate Strategy:

We strive for excellence in all endeavors.

Meeting all applicable legal requirements, we set our goals to achieve customer satisfaction

and to deliver defect free services (CNG Conversion, re-fuelling station and cylinder re-testing)

on time. Implementation of this policy makes it essential that each person be committed to

perform exactly as specified. It is our basic operational philosophy to concentrate on

prevention method to make quality a way of life and perpetuate an attitude of 'do it right at the

first time'. We are committed to achieve this by providing adequate resources and trained

manpower that strictly adhere to the procedure of ISO 9001:2008 Quality Management System

(QMS). The top management of Navana CNG Limited is committed to continual improvement of

its QMS processes.

2.4.6. Capital Structure:

The authorized capital of the company is Tk. 500,000,000 and the paid-up capital is Tk.

436,000,000 (Source: Annual Report-2011)

2.4.7. Company Values

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2.4.8. Corporate Focus

The company’s vision, its mission and objectives are to emphasis on the quality of product,

process and services leading to the growth of the company with good governance practices.

2.4.9. Top Management Profile

 A brief bio-data of the directors of NCL board is given below:

Mr. Shafiul Islam Kamal, Chairman, 1949:

A Bachelor of Science, Mr. Shafiul Islam Kamal joined the Islam Group, a reputed business

conglomerate in Bangladesh in 1968 and started his career with automobile business as well as in

the construction, real estate business. In the early years, he gained valuable experience by being

involved in the management of the Group's diverse business operations. He played a major role in

establishing "Navana" as the Toyota brand car trading company in Bangladesh, and finally set up

Aftab Automobiles Ltd. He was also responsible for the construction company named Bengal

Development Corporation (BDC) where he was directly responsible for the construction work of

BDC in the Middle East and from 1981, he was also taking care of Eastern Housing Limited, then

the largest real estate development company in Bangladesh. In 1996, the then Chairman of Islam

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Group, he separated from Islam Group with Navana Ltd. and Aftab Automobiles Ltd. and formed

Navana Group.

He has a very good relationship with all the top politicians, bureaucrats, top military officials and

other business key persons of the country.

Mr. Shafiul Islam Kamal is the Chairman of Navana Group, consisting of sixteen companies,

involved amongst others in vehicles assembling, body building and trading; real estate;

construction; CNG conversion and CNG stations; textiles; car rental; electronics; IT; petroleum

and renewable energy.

 Mr. Saiful Islam, Vice-Chairman, 1975:

An MBA, Mr. Saiful Islam joined the Navana Group in 1997. In the early years, he gained

valuable experience by being involved in the management of the Group's diverse business

operations. He has been appointed as Managing Director & CEO of Aftab Automobiles Ltd. in

2006. He took various business related professional courses at home and abroad. He traveled

almost all the countries of the world.

At present, Mr. Saiful Islam is the Vice Chairman of Navana Group, consisting of sixteen

companies, involved, amongst others, in vehicles assembling, body building and trading; real

estate; construction; CNG conversion and CNG stations; textiles; car rental; electronics; IT;

petroleum and renewable energy.

 Mrs. Khaleda Islam, Director, 1955:

Mrs. Khaleda Islam is the wife of Mr. Shafiul Islam Kamal, Chairman of the Navana Group.

Mrs. Khaleda Islam has experience in business for more than 30 years. She traveled many

countries of the world.

At present, Mrs. Khaleda Islam is a Director of Navana Group, consisting of sixteen companies,

involved, amongst others, in vehicles assembling, body building and trading; real estate;

construction; CNG conversion and CNG stations; textiles; car rental; electronics; IT; petroleum

and renewable energy.

 Mr. Sajedul Islam, Director, 1979:

A BBA, Mr. Sajedul Islam, a young enthusiastic entrepreneur of the country, joined the Navana

Group in 1999. In the early years, he gained valuable experience by being involved in the

management of the Group's diversified business operations. He is the Chief Executive of Navana

Real Estate Limited and Navana Construction Limited. He took various business related

professional courses at home and abroad. He traveled many countries of the world.

At present, Mr. Sajedul Islam is a Director of Navana Group, consisting of sixteen companies,

involved, amongst others, in vehicles assembling, body building and trading; real estate;

construction; CNG conversion and CNG stations; textiles; car rental; electronics; IT; petroleum

and renewable energy.

 Ms. Farhana Islam, Director, 1983:

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A BBA, Ms. Farhana Islam, a young enthusiastic entrepreneur of the country, joined the Navana

Group in 2004. In the early years, she gained valuable experience by being involved in the

management of the Group's diversified business operations. She took various business related

professional courses at home and abroad. She traveled many countries of the world.

At present, Ms. Farhana Islam is a Director of Navana Group, consisting of sixteen companies,

involved, amongst others, in vehicles assembling, body building and trading; real estate;

construction; CNG conversion and CNG stations; textiles; car rental; electronics; IT; petroleum

and renewable energy.

 Mr. Shahedul Islam, Director, 1984:

A BBA, Mr. Shahedul Islam, a young enthusiastic entrepreneur of the country, joined the Navana

Group in 2001. In the early years, he gained valuable experience by being involved in the

management of the Group's diversified business operations. He took various business related

professional courses at home and abroad. He traveled many countries of the world.

At present, Mr. Shahedul Islam is a Director of Navana Group, consisting of sixteen companies,

involved, amongst others, in vehicles assembling, body building and trading; real estate;

construction; CNG conversion and CNG stations; textiles; car rental; electronics; IT; petroleum

and renewable energy.

 

Mr. Md. Ekramul Haq, ICB Nominated Director:

Mr. Md. Ekramul Haq is an ICB Nominated Director who represents the Debenture Trustee and

the Debentureholders.

At present, Mr. Md. Ekramul Haq is a Deputy General Manager of the Investment Corporation of

Bangladesh.

Description of senior executives and officers:

 Mr. Saiful Islam, Chief Executive Officer (CEO), 1975:

An MBA, Mr. Saiful Islam joined the Navana Group in 1997. In the early years, he gained

valuable experience by being involved in the management of the Group's diverse business

operations. He has been appointed as Managing Director & CEO of Aftab Automobiles Ltd. in

2006. He took various business related professional courses at home and abroad. He traveled

almost all the countries of the world.

At present, Mr. Saiful Islam is the Vice Chairman of Navana Group, consisting of sixteen

companies, involved, amongst others, in vehicles assembling, body building and trading; real

estate; construction; CNG conversion and CNG stations; textiles; car rental; electronics; IT;

petroleum and renewable energy.

 Mr. Md. Nurul Huq, Adviser, 1950:

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Mr. Md. Nurul Huq is an Adviser of the Company, responsible for its technical affairs. Mr. Md.

Nurul Huq completed his Graduate in Chemical Engineering in 1970 from the Bangladesh

University of Engineering & Technology (BUET), Dhaka. He also did Masters in Engineering

from the University of Bradford, United Kingdom in 1978.

Mr. Md. Nurul Huq has experience for around forty years. He started his career in Natural Gas

Company, Dhaka as Asstt Project Manager. Then, he worked in Burmah Eastern Ltd. (now

known as Padma Oil Company Ltd.); Jalalabad Gas Transmission & Distribution Systems Ltd.;

Titas Gas Transmission & Distribution Systems Ltd.; and PETROBANGLA.

After retiring from PETROBANGLA as a General Manager in 1992, he acted for a short period

as a Director of Orion Engineering and Consultant Ltd. until he joined Navana Group in 1992.

Mr. Md. Nurul Huq is a Chartered Professional Engineer, Australia; and a Member Institute of

Engineers, Australia; a Member Institute of Engineers, Australia and Bangladesh; and an

Associate, Institute of Petroleum, United Kingdom.

Mr. Asadul Islam FCS, FCA, Chief Finance Officer (CFO), 1969:

A Masters in Commerce, Mr. Asadul Islam qualified Chartered Accountancy in 2001 and

Chartered Secretary in 2002. Mr. Asadul Islam has more than 10 ten years of professional

experience. He was the Deputy Controller of Accounts of Quasem Group. He then joined Abdul

Monem Ltd. as its Head of Finance. He joined Navana Group as its Sr. General Manager; and also

acts as Chief Financial Officer of Aftab Automobiles Ltd.

In addition, Mr. Asadul Islam is Senior General Manager (Finance & Accounts) and the Chief

Finance Officer (CFO) of the Company.

Mr. Asadul Islam is a Fellow Chartered Accountant (FCA) of the Institute of Chartered

Accountants of Bangladesh (ICAB); and a Fellow Chartered Secretary (FCS) of the Institute of

Chartered Secretaries of Bangladesh(ICSB).

 Mr. Muhammad Shahidul Islam Khan ACA, Head of Internal Audit, 1973:

A Masters in Commerce of 1995 from Dhaka University, Mr. Muhammad Shahidul Islam Khan

qualified Chartered Accountancy in 2008.

Mr. Muhammad Shahidul Islam Khan completed Chartered Accountancy Course from Ahmad &

Ahmad, Chartered Accountants. After completing course, Mr. Muhammad Shahidul Islam Khan

joined Navana Group as Head of its Internal Audit.

Mr. Muhammad Shahidul Islam Khan is an Associate Member of the Institute of Chartered

Accountants of Bangladesh (ICAB).

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 Mr. Sumit Kumar Saha, General Manager, 1977:

An MBA from the East-West University in 2006, Mr. Sumit Kumar Saha completed his

Graduation in Mechanical Engineering from the Bangladesh University of Engineering &

Technology (BUET), Dhaka in 2001.

After completing Engineering, Mr. Sumit Kumar Saha joined Doel Group as a Maintenance

Engineer. Thereafter, Mr. Sumit Kumar Saha joined Navana Limited as a Project Engineer of its

CNG Project; and got training in Italy and India.

At present, Mr. Sumit Kumar Saha is the General Manager of the Company; and in charge of its

overall day to day operations.

 Mr. Tareque Enamur Rahim, Company Secretary, 1955:

Mr. Tareque Enamur Rahim is an Honours Graduate in Economics from Dhaka University in

1978.

Mr. Tareque Enamur Rahim joined Navana Group in 1982 and has worked in Administration,

Corporate Affairs and Secretarial Departments.

At present, Mr. Tareque Enamur Rahim is the Deputy General Manager and Company Secretary

of the Company.

 

2.4.10. Management System and Style

NAVANA CNG Limited has participating management through representation from each

department.

2.4.10.1 Quality control policy of Navana CNG Ltd.

NAVANA CNG Ltd. strives for excellence in all endeavors.

Meeting all applicable legal requirements, they set their goals to achieve customer satisfaction and

to deliver defect free services (CNG Conversion, re-fuelling station and cylinder re-testing) on

time. Implementation of this policy makes it essential that each person be committed to perform

exactly as specified. It is our basic operational philosophy to concentrate on prevention method to

make quality a way of life and perpetuate an attitude of 'do it right at the first time'. 

They are committed to achieve this by providing adequate resources and trained manpower that

strictly adhere to the procedure of ISO 9001:2008 Quality Management System (QMS). 

The top management of Navana CNG Limited is committed to continual improvement of its QMS

processes.

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2.4.10.2. Corporate Governance

The modern definition calls Corporate Governance the framework of rules and practices by which

a board of directors ensures accountability, fairness, and transparency in the firm's relationship

with its all stakeholders (financiers, customers, management, employees, government, and the

community). This framework consists of -

(1) Explicit and implicit contracts between the firm and the stakeholders for distribution of

responsibilities, rights, and rewards,

(2) Procedures for reconciling the sometimes conflicting interests of stakeholders in accordance

with their duties, privileges, and roles, and

(3) Procedures for proper supervision, control, and information-flows to serve as a system of

balances.

Corporate Governance involves in decision making process. These aspects of governance are

shared by the Board of Directors, Executive Management, Operational Participants and Workers

in the fulfillment of common goals that increases the benefit of all stakeholders.

The organism through which the corporate governance functions are carried out are-

I. Board of Directors

a) Constitution

The Board of Directors, the top level management provides the policy and the strategic support

and also direction for the entire range of corporate activities. The Board of Directors consists of

five members. The list of Board of Directors is as follows-

Table-2: The Board of Directors

SL NO

NAME & DESIGNATION

NAME OF HUSBAND, FATHER & MOTHER

ADDRESS & PHONE NO.

TIN NO.

01 Mr. Shafiul Islam, Chairman & Managing Director

S/o. Late Aftab Uddin Ahmed, M/o. Late Rahima Khatun

House # NE (I)7, Road # 80, Gulshan, Dhaka. Phone No: 9552212

265-100-0636 , LTU-3

02 Mrs. Khaleda Islam, Director

W/o. Shafiul Islam, D/o. Late Syeda Fateha Khanam, D/o. Late Dr. Syed Hafiz Uddin Ahmed

House # NE (I)7, Road # 80, Gulshan, Dhaka, Phone No: 9552212

158-102-5613 , Circle-58

03 Mr. Monwarul Islam, Director

S/o. Late Nazirul Islam, M/o. Late Suraiya Islam

61, Bijoy Nagar, North South Road, Dhaka, Phone No. 9552212

210-1000-0842, Co-Circle-19

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04 Mr. Saiful Islam, Director

S/o. Shafiul Islam, M/o. Khaleda Islam

House # NE (I)7, Road # 80 Gulshan, Dhaka Phone No: 9552212

349-102-6362 Circle-11

05 Mr. Sajedul Islam Director

S/o. Shafiul Islam, M/o. Khaleda Islam

House # NE (I)7, Road # 80 Gulshan, Dhaka Phone No: 9552212

106-100-8991 Circle-11

b) Role and Responsibilities

The main role of the Board of Directors, which is the highest level of authority, is to provide

general superintendence. They oversee the operations and control the affairs of the company

through appropriate delegation and accountability processes via the lines of command. However

the Board of Directors hold the ultimate responsibility and accountability with due diligence for

conducting the activities of the company as per provisions of law in the interest of the

stakeholders, the state and the society. The Board of Directors holds periodic meetings and

provides appropriate decisions and directions to the Executive Management. They usually

consider operational performance, financial results, and review of budgets, capital expenditure

procurement of funds, procurement of raw materials, plant and machinery, recruitment, training,

other interest of the stakeholders, employees and workers. The Board of Directors takes special

care in designing and articulating productivity and compensation plans of employees and workers

and rewarding them appropriately on the basis of quality and quantity of performance. They also

try to create friendly environment by removing all kinds of hazards.

c) Relationship with Government

To maintain a good relationship with Government NAVANA CNG Ltd has to ensure payments

of all dues to govt. in the form of import duty, custom duty and port charges, added tax

(VAT),corporate taxes and other levies as when they become due.

d) Relationship with Bankers

NAVANA CNG Ltd oversees the financial transactions and ensures to company’s commitments

to the lenders without default.

e) Relationship with Suppliers

As the company has to import plant, machinery and almost all the raw materials from abroad, it

maintains a cordial relationship with its international as well as local suppliers.

f) Corporate Social Responsibilities

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NAVANA CNG Ltd. is committed to respect the ethical principles designed to govern its

activities. This organization values individuals who support themselves strongly with

organization’s vision, mission, values and driving forces. NAVANA CNG Ltd. is an equal

opportunity employer that embraces diversity to foster positive, innovative thinking that will

benefit people worldwide. NAVANA CNG Limited is strongly committed as a socially

responsible organization. In 2009, NAVANA CNG created a Corporate Social Responsibility

department, confirming its commitment to bringing together its major initiatives in the fields of

economic, social and environmental responsibility.

II. Audit Committee

III. Executive Management

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IV. Other Governance Apparatus

For corporate good governance practices, NAVANA CNG Ltd. uses some top ranking

professional service providers including-legal advisors, bankers, insurers and technical experts

who continuously assist the Board of Directors and the Executive Management.

1. Legal Advisors

In order to gain the best legal services for good corporate governance, NAVANA CNG Ltd has

appointed a legal advisor,

Abdur Razzaque & Associates

67, Naya Paltan ( 4th Floor)

Dhaka,Bangladesh

2. Bankers

Efficient and effectiveness of business operation largely depends on the quality and efficiency of

banking service received by the company. Efficient banking service can also make the cost of

operation down. NAVANA CNG Ltd has established long-term business relationship with the

following banks which provide the most efficient banking:

Dhaka Bank

Dutch Bangla Bank Ltd.

Shahajalal Islami Bank Ltd.

Standard Bank Ltd.

Uttara Bank Ltd.

3. Auditors

The role of the auditors in certification of the financial statement is the most significant aspect of

Corporate Governance. NAVANA CNG Ltd rigidly follows the code of International Accounting

Standards (IAS) and International Standard of Auditing (ISA).Required disclosures of Financial

34 | P a g e

Statements have been possible due to the high level of capability and integrity of- M.M. Rahman

& CO., Chartered Accountant, Prachi-Niket, 54, Dilkusa C/A, Dhaka, who play a very

trusyworthy role.Regulatory Authority has allowed their continuation as auditors.

4. Shareholding position:

Shareholders are the most important stakeholders. The Shareholding position of NAVANA CNG

LTD. is as follows:

Table-3: Shareholding position of Navana CNG limited:

Class of Shareholders Number of

Investors

Number of

Shareholder

Shares

Holding %

Shares

Holding %

Sponsors 9 18,512,998 42.50% 50.00%

General Public 27,250 16,374,012 37.59% 44.50%

Institutional Investor 428 8,672,990 19.91% 5.50%

Total 27,687 43,560,000 100.00% 100.00%

PART-335 | P a g e

THEORITICAL ASPECT

3.0. Theoretical Aspects

3.1. Financial Performance Analysis

Financial Performance is a subjective measure of how well a firm can use assets from its primary

mode of business and generate revenues. This term is also used as a general measure of a firm's

overall financial health over a given period of time, and can be used to compare similar firms

across the same industry or to compare industries or sectors in aggregation.

Financial performance analysis refers to an assessment of the viability, stability and profitability

of a business, sub-business or project. It is performed by professionals who prepare reports using

36 | P a g e

ratios that make use of information taken from financial statements and other reports. These

reports are usually presented to top management as one of their bases in making business

decisions. Based on these reports, management may:

Financial performance analysis is a vital to get a financial overview about a company. It generally

consists of the interpretation of balance sheet and income statement. Ratio analysis and trend

analysis can be done by using these two statements. These analyses are the major tools for

analyzing the company’s financial performance. An Analyst can compare a present condition with

the past for the company to determine whether there is an improvement or deterioration or no

change.

3.2. Balance sheet

In financial accounting, a balance sheet or statement of financial position is a summary of the

financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities

and ownership equity are listed as of a specific date, such as the end of its financial year. A

balance sheet is often described as a "snapshot of a company's financial condition". Of the four

basic financial statements, the balance sheet is the only statement which applies to a single point

in time of a business' calendar year. A standard company balance sheet has three parts: assets,

liabilities and ownership equity.

3.3. Income Statement

Income statement also referred as profit and loss statement (P&L), earnings statement, operating

statement or statement of operations is a company's financial statement that indicates how the

revenue is transformed into the net income. It displays the revenues recognized for a specific

period, and the cost and expenses charged against these revenues, including write-offs (e.g.,

depreciation and amortization of various assets) and taxes. The purpose of the income statement is

to show managers and investors whether the company made or lost money during the period

being reported.

3.4. Ratio Analysis

A tool used by individuals to conduct a quantitative analysis of information in a company’s

financial statements.Ratios are calculated from current year numbers and are then compared to

previous years, other companies,the Industry, or even the economy to judge the performance of

the company.The basic inputs to ratio analysis are the firm’s income statement and balance sheet

for the periods to be examined. Ratio analysis is predominately used by proponents of

fundamental analysis.

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In finance, a financial ratio or accounting ratio is a ratio of two selected numerical values taken

from an enterprise’s financial statements. There are many standard ratios used to try to evaluate

the overall financial condition of a corporation or other organization. Financial ratios may be used

by managers within a firm, by current and potential shareholders (owners) of a firm, and by a

firm’s creditors. Security analysts use financial ratios to compare the strengths and weaknesses in

various companies. If shares in a company are traded in a financial market, the market price of the

shares is used in certain financial ratios.

In short, ratio analysis is essentially concerened with the calculation of relationships which, after

proper identification and interpretation may provide information about the operations and state of

affairs of a business enterprise.The analysis is used to provide indicators of past performance in

terms of critical success factors of a business.This assistance in decision-making reduces reliance

on guesswork and intution and establishes a basis for sound judgement.

3.4.1. Significance of using ratios

The significance of a ratio can only truly be appreciated when:

1. It is compared with other ratios in the same set of financial statements.

2. It is compared with the same ratio in previous financial statements (trend analysis).

3. It is compared with a standard of performance (industry average).Such a standard may be

either the ratio which represents the typical performance of the trade or industry, or the ratio

which represents the target set by management as desirable for the business.

3.4.2 Types of ratio comparisons

Three types of ratio comparisons can be made:

1. Cross-sectional Analysis: Cross-sectional analysis involves the comparison of different

firms’ financial ratios at the same point in time. The typical business is interested in how

well it has performed in relation to its competitors.

2. Time- series Analysis: Time-series analysis is applied when a financial analyst evaluates

performance over time. Comparison of current to past performance utilizing ratio analysis

allows the firm to determine whether it is progressing as planned.

38 | P a g e

3. Combined Analysis: The most informative approach to ratio analysis is one that

combines cross-sectional and time-series analyses.

3.4.3 Some Words of Caution

1. A single ratio does not generally provide sufficient information from which to judge the

overall performance of the firm.

2. Be sure that the dates of the financial statements being compared are the same.

3. It is preferable to use audited financial statements for ratio analysis.

4. Be certain that the data being compared have been developed in the same way.

3.4.4. Groups of Financial Ratios

Financial ratios can be divided into four basic groups or categories:

A. Liquidity ratios

B. Activity ratios

C. Debt ratios and

D. Profitability ratios

Liquidity measures the ability to maintain positive cash flow, while satisfying immediate

obligations. Activity ratio measures the speed with which accounts are converted into sale or cash.

Debt ratio measures the amount of other people’s money used in generating profit. Profitability

measures the ability to earn income and sustain growth in both short-term and long-term. A

company's degree of profitability is usually based on the income statement, which reports on the

company's results of operations.

A. Analyzing Liquidity

Liquidity refers to the ability of a firm to meet its short-term financial obligations when

and as they come due. It also refers to the solvency of the firm’s overall financial position

The main concern of liquidity ratio is to measure the ability of the firms to meet their

short-term maturing obligations. Failure to do this will result in the total failure of the

business, as it would be forced into liquidation.

The three basic measures of liquidity are-

1. Net Working Capital: A measure of liquidity calculated by subtracting total current

assets by current liabilities. Current assets normally include cash, marketable securities,

accounts receivable and inventories. Current liabilities consist of accounts payable, short

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term notes payable, short-term loans, current maturities of long term debt, accrued income

taxes and other accrued expenses (wages).

Net Working Capital=Total Current Assets-Total Current Liabilities

2. Current Ratio: The Current ratio expresses the relationship between the firm’s current

assets and its current liabilities. A measure of liquidity calculated by dividing the firm’s

current assets by current liabilities.

Current Ratio=Current assets/Current liabilities

3. Quick Ratio: Quick ratio measures assets that are quickly converted into cash and they

are compared with current liabilities. This ratio realizes that some of current assets are not

easily convertible to cash like- inventories. The quick ratio, also referred to as acid test

ratio, examines the ability of the business to cover its short-term obligations from its

“quick” assets only. The quick ratio is calculated as follows:

Quick (Acid-test) Ratio= (Current assets-Inventory)/Current liabilities

B. Analyzing Activity:

If a business does not use its assets effectively, investors in the business would rather take their

money and place it somewhere else. In order for the assets to be used effectively, the business

needs a high turnover.

Unless the business continues to generate high turnover, assets will be idle as it is impossible to

buy and sell fixed assets continuously as turnover changes. Activity ratios are therefore used to

asses how active various assets are in the business. Activity ratios are discussed next-

1. Inventory Turnover: Ratio measures the stock in relation to turnover in order to determine

how often the stock turns over the business. It indicates the efficiency of the firm in selling its

product. It is calculated by dividing the cost of goods sold by the average inventory.

Inventory Turnover = Cost of Goods Sold for the Year / Average Inventory

Inventory Turnover shows efficiently the company is managing its production, ware-housing, and

distribution of product, considering its volume of sales. Higher ratios over six or seven times per

year- are generally thought to be better, although extremely high inventory turnover may indicate

a narrow selection and possible lost sales. A low inventory turnover rate, on t he other hand,

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means that the company is paying to keep a large inventory, and may be overstocking or carrying

obsolete items.

2. Average Collection Period: The average collection period measures the quality of debtors

since it indicates the speed of their collection.

The shorter the average collection period, the better the quality of debtors, as a short

collection period implies the prompt payment by debtors.

The average collection period should be compared against the firm’s credit terms and

policy to judge its credit and collection efficiency.

An excessively long collection period implies a very liberal and inefficient credit and

collection performance.

The delay in collection of cash impairs the firm’s liquidity. On the other hand, too low a

collection period is not necessarily favorable, rather it may indicate a very restrictive

credit and collection policy which may curtail sales and hence adversely affect profit.

Average Collection Period=A/C receivable/ (Annual Sales/360)

3. Average Payment Period: The average payment period is calculated in the same manner

as the collection period.

Average Payment Period=A/C payable/(Annual purchases/360)

4. Fixed Asset Turnover: The fixed assets turnover ratio measures the efficiency with which

the firm has been using its fixed assets to generate sales. It is calculated by dividing the firm’s

sales by its net fixed assets as follows:

Generally, high fixed assets turnovers are preferred since they indicate a better efficiency

in fixed assets utilization.

The ratios indicate the degree to which the activities of a firm are supported by creditors’

funds as opposed to owners.

The relationship of owner’s equity to borrowed funds in an important indicator of

financial strength.

The debt requires fixed interest payments and repayment of the loan and legal action can

be taken if any amounts due are not paid at the appointed time. A relatively high

proportion of funds contributed by the owners indicate a cushion (Surplus) which shields

creditors against possible losses from default in payment.

Note: The greater the proportion of equity funds, the greater the degree of financial

strength. Financial leverage will be to the advantage of the ordinary shareholders as long

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as the rate of earnings on capital employed is greater than the rate payable on borrowed

funds. The following ratios can be used to identify the financial strength and risk of

business.

Fixed Asset Turnover=Sales/Net Fixed Asset

5. Total Asset Turnover: Total asset turnover is the relationship between sales and assets.

The firm should manage its assets efficiently to maximize sales.

The total asset turnover indicates the efficiency with which the firm uses all its assets to

generate sales.

It is calculated by dividing the firm’s sales by its total assets.

Generally, the higher the firm’s total asset turnover, t he more efficiently its assets have

been utilized.

Total Asset Turnover=Sales/Total Asset

C. Analyzing Debt:

The debt position of the firm indicates the amount of other people’s money being used in

attempting to generate profits. In general, the more debt a firm uses in relation to its total assets,

the greater its financial leverage, a term used to describe the magnification of risk and return

introduced through the use of fixed-cost financing such as debt and preferred stock.

There are two general types of debt measures of the degree of indebtedness and measures of the

ability to service debts.

The degree of indebtedness:

The degree of indebtedness measures the amount of debt against other significant balance-sheet

amounts. Two most commonly used measures are the debt ratio and the debt-equity ratio.

1. Debt Ratio: This is the measure of financial strength that reflects the proportion of capital

which has been funded by debt, including preference shares. A debt ratio greater than 1.0

means the company has negative net worth, and is technically bankrupt. This ratio is

calculated as follows:

Debt Ratio=Total liabilities/Total assetsWith higher debt ratio (low equity ratio), a very small cushion has developed thus not giving

creditors the security they require. The company would therefore find it relatively difficult to raise

additional financial support from external sources if it wished to take that route. The higher the

debt ratio the more difficult it becomes for the firm to raise debt.

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2. Debt-equity Ratio: This ratio indicates the extent to which debt is covered by shareholders

funds. It reflects the relative position of the equity holders and the lenders and indicates the

company’s policy on the mix of capital funds. The debt to equity ratio is calculated as

follows:

Debt-equity Ratio =Long –term debt/stockholder’s equity

The Ability to Service Debts: This is the second type of debt measure, refers to the ability of a

firm to meet the contractual payments required on scheduled basis over the life of a debt. The

firm’s ability to meet certain fixed charges is measured using coverage ratios.

1. Time Interest Earned Ratio: This ratio measure the extent to which earnings can decline

without causing financial losses to the firm and creating an inability to meet the interest cost.

The times interest earned shows how many limes the business can pay its interest bills

from profit earned.

Present and prospective loan creditors such as bondholders, are vitally interested to know

how adequate the interest payments on their loans are covered by the earnings available

for such payments.

Owners, managers and directors are also interested in the ability of the business to service

the fixed interest charges on outstanding debt.

The ratio is calculated as follows:

Time Interest Earned Ratio=EBIT/Interest

D. Analyzing Profitability:

Profitability is the ability of a business to earn profit over a period of time. Although the profit

figure is the starting point for any calculation of cash flow as already pointed out profitable

companies can still fail for lack of cash.

Without profit, there is no cash and therefore profitability must be seen as a critical success

factors.

A company should earn profits to survive and grow over a long period of lime.

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Profits are essential, but it would he wrong to assume that every action initiated by

management of company should be aimed at maximizing profits, irrespective of social

consequences.

The ratios examined previously have tendered to measure management efficiency and risk.

Profitability is a result of a larger number of policies and decisions, 'the profitability ratios show

combined effects of liquidity, asset management (activity) and debt management (gearing) on

operating results. The overall measure of success of a business is the profitability which results

from the effective use of its resources.)

1. Gross Profit Margin:

Normally the gross profit has to rise proportionately with sales.

It can also he useful to compare the gross profit margin across similar businesses

although there will often be good reasons for any disparity

The ratio is calculated as follows:

Gross Profit Margin = (Sales-COGS)/Sales=Gross Profit/Sales

2. Operating Profit Margin: The operating profit margin represents what are often called the

pure profits earned on each sales dollar. A higher operating profit margin is preferred. The

operating profit margin is calculated as follows:

Operating Profit Margin=Operating Profit/Sales

3. Net Profit Margin: This is a widely used measure of performance and is comparable across

companies in similar industries. The fact that a business works on a very low margin need not

cause alarm because there arc some sectors in the industry that work on a basis of high

turnover and low margins, for examples supermarkets and motorcar dealers. What is more

important in any trend is the margin and whether it compares well with similar businesses.

The net profit margin is calculated as follows:

Net Profit Margin=Net Profit after Tax/Sales

4. Return on Investment (ROI): Income is earned by using the assets of a business

productively. The more efficient the production, the more profitable the business. The rate of

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return on total assets indicates the degree of efficiency with which management has used the

assets of the enterprise during an accounting period. This is an important ratio for all readers

of financial statements. Income is earned by using the assets of a business productively. The

more efficient the production, the more profitable the business. The rate of return on total

assets indicates the degree of efficiency with which management has used the assets of the

enterprise during an accounting period. This is an important ratio for all readers of financial

statements. The return on investment is calculated as follows:

Return on Investment=Net Profit after Tax/Total Assets

5. Return on Equity (ROE): This ratio shows the profit attributable to the amount invested

by the owners of the business. It also shows potential investors into the business what they

might hope to receive as a return. The stockholders' equity includes share capital, share

premium, distributable and non-distributable reserves. The ratio is calculated as follows:

Return on Equity=Net Profit after Tax/stockholder's equity

6. Earning per share (EPS): Whatever income remains in the business after all prior claims,

other than owners claims (i.e. ordinary dividends) have been paid. will belong to the ordinary

shareholders who can then make a decision as to how much of this income they wish to

remove from the business in the form of a dividend, and how much they wish to retain in the

business, "the shareholders are particularly interested in knowing how much has been earned

during the financial year on each of the shares held by them, for this reason, an earning per

share figure must be calculated. Clearly then, the earning per share calculation will be:

Earnings available for common stockholders/Number of Shares of common stock

outstanding

7. Price/earning Ratio: P/E ratio is a useful indicator of what premium or discount investors

are prepared to pay or receive for the investment. The higher the price in relation to earnings,

the higher the P/E ratio which indicates the higher the premium an investor is prepared lo pay

for the share. This occurs because the investor is extremely confident of the potential growth

and earnings of the share. High P/E generally reflects lower risk and/ or higher growth

prospects for earning. The price-earning ratio is calculated as follows:

Price/Earning Ratio=Market price per share of common stock/EPS

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3.5 Trend Analysis

It is important to analyze trends in ratios as well as their absolute levels. Trend analysis gives

clues as whether a firm’s financial condition is likely to improve or to deteriorate. For trend

analysis, a base year is selected and the amounts appearing on the base years’ financial statements

are assigned a weight of 100%.Comparisons are then made to the base year by expressing the

other years’ amount as a percentage of the base years’ amounts .Trend analysis are useful for

comparing financial statements over several years as they disclose the changes occurring through

time so that the management can clearly see the result they need.

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PART-4

FINANCIAL ANALYSIS

4.0. Financial Analysis of NAVANA CNG Limited

4.1. Quantitative Analysis of NAVANA CNG Limited

4.1.1. Ratio Analysis of NAVANA CNG Limited:

4.1.1.1. Analyzing Liquidity Ratio:

I. Authorized Capital and Paid up capital:

Year Authorized capital Paid Up Capital Reserve and Surplus

2007 200 51 123.04

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2008 200 100 282.49

2009 500 300 327.16

2010 500 363 555

2011 500 436 747

Source: Annual Report (2010-2011) of NAVANA CNG LTD.

Graphical Presentation:

Figure: 1

Interpretation:

The authorized capital, Paid up Capital and Reserve & surplus is sufficiently increase per year

that is a positive sign for NAVANA CNG.From 2007 to 2011 it increase approximately six

times and it can be increase more by proper increasing paid up capital.

II. Current Ratio:

It is a measure of liquidity calculated by dividing the firm's current assets by its current liabilities.

The higher the current ratio, the better the liquidity position of the firm. It indicates the short term

financial solvency of the firm. This ratio also indicates the extent to which current liabilities are

covered by those assets expected to be converted to cash in the near future.

Current Ratio= Current assets/Current liabilitiesTable 6: Current Ratio

NAVANA CNG LTD.

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Year Current Assets Current Liabilities Current Ratio

2007 440 206 2.14

2008 575 76 7.57

2009 466 196 2.38

2010 650 192 3.39

2011 892 235 3.80

Source: Annual Report (2010-2011) of NAVANA CNG LTD.

Graphical Presentation:

Figure: 2

Interpretation:

The short-term financial solvency of Navana CNG Limited is better position in last five years,

because the current ratio was acceptable limit. In 2008 and 2011 the current ratio was optimistic,

which was better than other company. In 2008 the CR is 3.6 times from 2007.But in 2009 it was

little poor. The company can increase its current assets and reduce its current liabilities for more

CR.

III. Net Working Capital:

The difference between the company's current assets and its current liabilities can be positive or

negative. When the current assets exceed the current liabilities, the firm has positive net working

capital. When current assets are less than current liabilities, the firm has negative networking

capital. An enterprise should have sufficient networking capital in order to be able to meet the

claims of the creditors and the day-to-day needs of business. The greater is the amount of

networking capital, the greater is the liquidity of the firm. Inadequate working capital is the first

sign of financial problems for a firm.

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Net Working Capital=Total Current Assets-Total Current Liabilities

Table 5: Net Working Capital

NAVANA CNG LTD.

Year Current Assets Current Liabilities Net working Capital

2007 440 206 234

2008 575 76 499

2009 466 196 270

2010 650 192 458

2011 892 235 657

Source: Annual Report (2010-2011) of NAVANA CNG LTD.

Graphical Presentation:

Figure: 3

Interpretation: We know that acceptable of net working capital (NWC) is 1:1. The net working

capital (NWC) of NAVANA CNG is extremely satisfactory over all the last five years from 2007

to 2011, because it showed a positive networking capital which indicates a huge liquidity of the

company. However NAVANA CNG has achieved a record of positive networking capital in

2011. NAVANA CNG Limited can increase its more current assets by enhancing the accounts

receivable, reduce its current liabilities and by reducing its bank overdraft and short term loan.

4.1.1.2 Analyzing Activity Ratio:

I. Fixed Asset Turnover:

The fixed asset turnover ratio measures the effectiveness is generating net sales revenue from

investments in net property, plant and equipment back into the company evaluates only the

investments.

Fixed Asset Turnover=Sales/Net Fixed Asset

Table 12: Fixed Asset Turnover

NAVANA CNG LTD.

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Year Sales Net Fixed Assets Fixed Asset Turnover

2007 727 186 3.90

2008 984 287 3.42

2009 1236 587 2.10

2010 1368 548 2.50

2011 1392 576 2.42

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 4

Interpretation:

The acceptable of fixed asset turnover ratio for large organization is generally four times but it

varies industry to industry. The fixed asset ratio of NAVANA CNG is 3.90 was in 2007, 3.42 in

2008 and 2.10 in 2009. That means, the fixed assets of NAVANA CNG is inefficiently used to

generate sales in 2009. But it is had an increasing–decreasing trend. So it should utilize its fixed

assets more efficiently to accelerate sales.

II. Total Asset Turnover:

The total turnover is similar to fixed asset turnover since both measures a company's effectiveness

in generating sales revenue from investments back into the company. Total asset turnover

evaluates the efficiency of managing all of he company's assets.

Total Asset Turnover=Sales/Total AssetTable 13: Total Asset Turnover

NAVANA CNG LTD.

Year Sales Total Assets Total Asset Turnover

2007 727 627 1.16

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2008 984 879 1.12

2009 1236 1094 1.12

2010 1368 1235 1.10

2011 1392 1506 0.92

Source: Annual Report (2010-2011) of NAVANA

Graphical Presentation:

Figure: 5

Interpretation:

The acceptable of total asset turnover for large organization is two times. The total asset turnover

ratio of NAVANA indicates that total assets are not efficiently used to generate sales throughout

the period from 2007 to 2011, as they are below the acceptable ratio. This ratio was 1.16 in 2007,

1.12 in 2008 and 1.12 in 2009. So the ratio showed a decreasing trend. Company’s management

should be more efficient in utilizing the company’s total assets to generate sales.

4.1.1.3 Analyzing Debt Ratio:

I. Debt Ratio:

The Debt ratio measures, the proportion of total assets provides by the firm’s creditors. This ratio

indicates the amount of other peoples’ money being used to generate profits. The higher the ratio,

the greater the firm’s degree of indebtedness and the more financial leverage it has.

Debt Ratio=Total liabilities/Total assetsTable 14: Debt Ratio

NAVANA CNG LTD.

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Year Total Liabilities Total Assets Debt Ratio

2007 452 627 0.72

2008 496 879 0.56

2009 467 1094 0.42

2010 317 1235 0.25

2011 323 1506 0.21

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 6

Interpretation:

The debt ratio of NAVANA CNG indicates greater indebtedness and high degree of financial

leverage, to generate profits during 2007 to 2011. In 2007 it was 72%, in 2008 65% and in 2009

42% and decrease it in 2010 & 2011. As its financial leverage is high, it holds lower financial

risks. NAVANA CNG can achieve optimum capital structure by reducing debt capital as well as

by increasing equity capital to finance its total assets.

II. Debt-Equity Ratio:

The debt-equity ratio indicates the relationship between the long term funds provided by the

creditors and these by the firm’s owners. A high ratio shows a large share of financing by the

creditors of the firm; a low ratio implies a smaller claim of creditors. The debt-equity ratio

indicates the margin of safety to the creditors.

Debt-equity Ratio =Long -term debt/stockholder’s equity

Table 15: Debt-equity Ratio:

NAVANA CNG LTD.

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Year Long-term Debt Stockholders’ Equity Debt-equity Ratio

2007 452.50 174.04 260%

2008 497.23 382.49 130%

2009 464.09 627.16 74%

2010 321.3 918 35%

2011 319.41 1183 27%

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 7

Interpretation:

The debt-equity ratio of NAVANA CNG is highly pleasing, as its debt is substantially decreasing

during 2007 to 2011.for example- the debt-equity ratio of 0.74 in 2009 implies that, Navana has

Tk.1 of owner’s capital to pay the liability of Tk.0.74, which really indicates a better condition in

this regard.

4.1.1.4 . Analyzing Profitability Ratio:

I. Gross Profit Margin:

The gross profit margin measures the percentage of each sales dollar remaining after the firm has

paid for its goods. The higher the gross profit margin is the better. A high ratio of gross profits to

sales is a sign of good management of cost of goods sold.

Gross Profit Margin = (Sales-COGS)/Sales=Gross Profit/Sales X 100

Table 17: Gross Profit Margin

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NAVANA CNG LTD.

Year Gross Profit Sales Gross Profit Margin

2007 228 727 40.94%

2008 407 984 41.32%

2009 477 1236 38.58%

2010 601 1368 43.93%

2011 605 1392 43.44%

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 8

Interpretation:

We know that the acceptable limit of gross profit margin is 20% to 30% and NAVANA CNG

achieved the acceptable limit and it’s better than the other companies. The cost of goods sold is

efficiently managed by NAVANA CNG as it produced a satisfactory gross profit margin ratio.

That means, it success to achieve adequate coverage for operating expenses and better return to

the owners of the business. The company can increase its more sales and manage its cost of goods

sold more efficiently.

II. Operating Profit Margin:

The operating profit margin measures the percentage of each sales dollar remaining after all costs

and expenses other than interest, taxes are deducted. This profit is called pure profit because they

measure only the profits earned on operations. A high operating profit margin is preferred.

Operating Profit Margin=Operating Profit/Sales X 100

Table 18: Operating Profit Margin

NAVANA CNG LTD.

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Year Operating Profit Sales Operating Profit Margin

2007 113 727 15.43%

2008 209 984 21.18%

2009 245 1236 19.80%

2010 401 1368 29.31%

2011 403 1392 28.98%

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 9

Interpretation:

We know that the acceptable of operating profit margin is 20%.The operating profit margin ratio

indicates the cost price effectiveness of the operation. Here NAVANA CNG is the better

condition regarding the operating efficiency last the four years but it was poor in 2007 as it has

produced the sufficient operating profit margin 0.22 in 2008, 0.20 in 2009, 0.30 in 2010 and 0.29

in 2011. The company should enhance its sales by managing the operating cost efficiently.

III. Net Profit Margin

The net profit margin measures the percentage of each sales dollar remaining after all costs and

expenses, including interest and taxes have been deducted. The higher the firms net profit margin,

the better.

Net Profit Margin=Net Profit after Tax/Sales X 100

Table 19: Net Profit Margin

NAVANA CNG LTD.

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Year Net Profit After Taxes Sales Net Profit Margin

2007 112 727 15.43%

2008 208 987 21.18%

2009 245 1236 19.80%

2010 291 1368 21.27%

2011 301 1392 21.62%

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 10

Interpretation:

We know that the acceptable limit of net profit margin is 5% to 10%. NAVANA CNG was highly

efficient in sales performance during that period and success to achieve the cost-effectiveness of

operations as it has better net profit margin. Net profit margin was positive than acceptable in

2007 to 2011, but except it was little poor 0.15 in 2009. NAVANA CNG can increase its

management’s ability to operate the business by enhancing sales with the cost effectiveness of the

operation.

IV. Return On Investment:

The return on total assets (ROA) often called the return on investment (ROI) measures the overall

effectiveness of management in generating profit with its available assets. The higher the firm’s

return on total assets is better.

Return on Investment=Net Profit after Tax/Total Assets X 100

Table 20: Return on Investment

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NAVANA CNG LTD.

Year Net Profit After Taxes Total Assets Return on Investment

2007 112 440 25.45%2008 208 575 36.17%2009 245 466 52.57%2010 291 650 44.76%2011 301 892 33.74%

Source: Annual Report (2010-2011) of NAVANA CNG LTD

Graphical Presentation:

Figure: 11

Interpretation:

NAVANA CNG Ltd. has achieved a scanty and highly satisfying return on investment in 2007 to

2011 which indicates the effective management in generating profits with its available assets

during this period and its ROI was better in 2008 to 2009 and increasing sign is positive for

NAVANA CNG. The company can increase more its efficiency by utilizing the firm’s assets to

generate adequate profitability.

V. Return on Asset/Capital Employed (ROCE):

In the ROCE the profits are related to the total capital employed. The term Capital employed

refers to long-term funds supplied by the creditors and owners of the firm. The amount of Capital

employed is equal to non-current liabilities+ owner’s equity. This ratio provides sufficient insight

into how efficiently the long-term funds of the owners and creditors are being used. The higher

the ratio, the more efficient is the use of capital employed to generate profit.

ROCE= Net profit after taxes/ Total capital employed X100

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Table 21: Return on Asset/Capital Employed

NAVANA CNG LTD.

Year Net Profit After Taxes Total Capital Employed Return on Capital employed

2007 112 627 17.90%

2008 208 879 23.72%

2009 245 1094 22.36%

2010 291 1235 23.56%

2011 301 1506 19.98%

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure 12

Interpretation:

NAVANA CNG Ltd. achieved satisfying return on asset from 2007 to 2011 which indicates the

effective management in generating profits with its total asset during 2007 to 2011 and its ROA

was better and increasing during from 2008 to 2011 which expose a positive sign of this

company. The company can increase more its efficiency by utilizing the firm’s capital to generate

adequate profitability.

VI. Return On Equity:

The Return on common equity (ROE) measures the return earned on the common stockholders’

investment in the firm. Generally, the higher this return, the better off is the owners.

Return on Equity=Net Profit after Tax/stockholder's equity X 100

Table 22: Return on Equity:

NAVANA CNG LTD.

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Year Net Profit After Taxes Stockholders’ Equity Return on Equity

2007 112 174.04 64.42%

2008 208 382.49 54.50%

2009 245 627.16 39.01%

2010 291 918 31.70%

2011 301 1183 25.44%

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 13

Interpretation:

The earnings ability of NAVANA CNG Ltd. or the common stockholders’ was good condition in

2007 and 2010 but gradually decrease in 2011.Specially in 2007 it achieved a moderate level of

ROE and sufficient level. The company should achieve the best use of equity capital to enhance

the earning per share (EPS) and stockholders’ return.

VII. Earnings Per Share:

EPS represents the number of dollars earned during the period on behalf of each outstanding share

of common stock- not the amount of earnings actually distributed to shareholders. That means

EPS measures the profit available to the equity shareholders on a per share basis that is the

amount that they can get on every share held.

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EPS= Earnings available for common stockholders/Number of Shares of common stock

outstanding

Table 23: Earning Per Share

NAVANA CNG LTD.

Year

Earnings available for

common stockholders

Number of Shares of

common stock outstanding Earning Per Share

2007 112000000 20000000 5.60

2008 208000000 20000000 10.40

2009 244661587 36300000 6.74

2010 290789036 36300000 8.01

2011 300882758 43560000 6.91

Source: Annual Report (2010-2011) of NAVANA CNG

Graphical Presentation:

Figure: 14

Interpretation:

NAVANA CNG has got a deprived EPS during 2007, but in 2008 it is improved a lot and

achieved a positive EPS, which much satisfying and increasing in 2008. The EPS was 5.60 in

2007, 10.40 in 2008 and 6.74 in 2009, .8.01 in 2010 and 6.91 in 2011. The company should

increase its net profit after taxes available only for common shareholders which can improve the

EPS. In this regard the firm should achieve the favorable effect of financial leverage.

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PART-5

FINDINGS,

RECOMMENDATION

AND

CONCLUSION

5.0. Major Findings

5.1. Findings on NAVANA CNG Limited

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5.1.1. From Quantitative Analysis

5.1.1.1. Ratio Analysis:

I. Liquidity Ratios:

The net working capital (NWC) of NAVANA CNG is satisfactory position all the

last five years from 2007 to 2011, because it showed a positive networking

capital which indicates a huge liquidity reserve of the company.

The short-term financial solvency of NAVANA CNG is strong.

II. Activity Ratios:

The capital turnover ratio of NAVANA CNG indicates that total capital was not

efficiently managed and utilized throughout the period from 2007 to 2011.

The average collection period is shorter which may discourage the credit sales.

The fixed assets of NAVANA CNG are efficiently used to generate sales.

The total asset turnover ratio of NAVANA CNG indicates that, total assets are

efficiently used to generate sales throughout the period from 2007 to 2011, as

they are acceptable limit.

III. Debt Ratios:

The debt ratio of NAVANA CNG indicates a little indebtedness and lower degree

of financial risk, to generate profits during 2007 to 2011.

NAVANA CNG has adequate earnings to pay its interest charges.

IV. Profitability Ratios:

The cost of goods sold is righty managed by NAVANA CNG as it produced a

sufficient gross profit margin ratio.

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NAVANA CNG is in the better condition regarding the operating efficiency

during the last five years as it has produced the acceptable operating profit

margin.

NAVANA CNG was highly efficient in sales performance during that period and

success to achieve the cost-effectiveness of operations as it has very good net

profit margin.

NAVANA CNG has achieved an enough return on investment, which indicates

the effective management in generating profits with its available assets.

NAVANA CNG achieved a highly satisfying return on capital employed which

indicates the effective management in generating profits with its total capital

employed during 2007-2011.

The earnings ability of Navana CNG or the common stockholders’ investment

was in good condition during the period.

NAVANA CNG has got very optimistic Earning per Share (EPS) during 2007 to

2011.

5.2. Conclusion

NAVANA CNG LTD is a sister concern of Navana Group is a trend better in the CNG Industry.

The company is always trying for better environment friendly energy solution. Keeping that in

mind the company is expanding its operation in the Welding rod and uPVC industry sector which

the largest means for great achievement all over the country. This is a demand of time, being

successful in this project will open a new window to save foreign currency. Getting listed DSE

will bring this company closer to the mass people and clearer of its operation.

5.3. Recommendations

NAVANA CNG Limited can take the following recommendations into consideration:

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NAVANA CNG Limited can increase its current assets more by enhancing the accounts

receivable and can decrease its current liabilities by reducing its bank overdraft and short

term loan.

The company can try to increase its quick assets like-cash, accounts receivable and

marketable securities.

It also can reduce inventory to improve its inventory turnover ratio.

Company’s management should be more efficient in utilizing the company’s capital to

generate sales.

NAVANA CNG Limited is supposed to offer attractive credit policy to its customers by

extending credit period from 60 days to 90 days.

The company should try to utilize its fixed assets more efficiently to accelerate sales.

The company’s management should be more efficient in utilizing the company’s total

assets to generate sales.

It should aim to achieve optimum capital structure by reducing debt capital as well as by

increasing equity capital to finance its total assets.

The company ought to enhance its earnings by accelerating its sales as well as by

minimizing its operating costs in order to get adequate earnings.

NAVANA CNG Limited should make an effort to increase its sales and manage its cost

of goods sold efficiently.

The company can enhance its sales by managing the operating cost efficiently.

It should amplify its management’s ability to operate the business by enhancing sales

with the cost price effectiveness of the operation.

The company should try hard to intensify its efficiency in utilizing the firm’s assets to

generate adequate profitability.

The company should increase its efficiency in utilizing the firm’s capital to generate

adequate profitability.

It is supposed to achieve the best use of equity capital to enhance the earning per share

(EPS) and stockholders’ return.

NAVANA CNG Limited should increase its net profit after taxes available only for

common shareholders which can improve the EPS. In this regard the firm should achieve

the favorable effect of financial leverage.

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BIBLIOGRAPHY

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Bibliography:

Books:

1. Lawrence J. Gitman “Principal of Managerial Finance”, 11 th Edition (April 2004)

Pearson edition

Website:

1. www.navanacng.com

2. www.navana.com

Annual Report:

1. Navana CNG Ltd., 2007

2. Navana CNG Ltd., 2009

3. Navana CNG Ltd., 2011

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ANNEXURE

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