Financial Performance Analysis of NAVANA CNG LTD. (A sister concern of Navana Group)

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: 10112301005
th
11 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
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

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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.
 Focus group discussion
 Take expert opinion from the officers.
 Direct Observation.
 Informal Discussion.

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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
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

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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
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

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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
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.

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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 Unit
Navana 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.
Biponon Limited
Navana Petroleum Ltd.
Navana Renewable Energy Ltd.
Navana Electronics Ltd.
Navana Taxi Cab Co. Ltd.
Navana CNG Limited
Navana 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 &

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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
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

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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.
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

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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.
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.

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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
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

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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
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

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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

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

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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:
• Compressor (1 unit)
• Storage (1 unit)
• Priority panel (1 unit)
• Dispenser (2 units)

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• 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 CNG
Total 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

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

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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:

Customer Quality of Technical Service Service
Competitors Promotions
Awareness Service Assistance Provider Availability

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

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

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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;
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,
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,
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,

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 NAME & NAME OF HUSBAND, ADDRESS & PHONE TIN NO.
NO DESIGNATION FATHER & MOTHER NO.
01 Mr. Shafiul Islam, S/o. Late Aftab Uddin House # NE (I)7, Road # 265-100-0636
Chairman & Ahmed, M/o. Late Rahima 80, Gulshan, Dhaka. , LTU-3
Managing Director Khatun Phone No: 9552212

02 Mrs. Khaleda Islam, W/o. Shafiul Islam, D/o. Late House # NE (I)7, Road # 158-102-5613
Director Syeda Fateha Khanam, D/o. 80, Gulshan, Dhaka, , Circle-58
Late Dr. Syed Hafiz Uddin Phone No: 9552212
Ahmed
03 Mr. Monwarul Islam, S/o. Late Nazirul Islam, M/o. 61, Bijoy Nagar, North 210-1000-
Director Late Suraiya Islam South Road, Dhaka, 0842, Co-

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Phone No. 9552212 Circle-19

04 Mr. Saiful Islam, S/o. Shafiul Islam, M/o. House # NE (I)7, Road # 349-102-6362
Director Khaleda Islam 80 Gulshan, Dhaka Circle-11
Phone No: 9552212

05 Mr. Sajedul Islam S/o. Shafiul Islam, M/o. House # NE (I)7, Road # 106-100-8991
Director Khaleda Islam 80 Gulshan, Dhaka Circle-11
Phone No: 9552212

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.

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f) Corporate Social Responsibilities
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

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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 Number of Shares Shares
Investors Shareholder Holding % 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-3

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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
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

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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.

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

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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.

3. Combined Analysis: The most informative approach to ratio analysis is one that
combines cross-sectional and time-series analyses.

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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
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

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

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

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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 assets
With 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
2008 200 100 282.49
2009 500 300 327.16
2010 500 363 555

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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 liabilities
Table 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

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.
Net Working Capital=Total Current Assets-Total Current Liabilities

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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

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.

Year Sales Net Fixed Assets Fixed Asset Turnover
2007 727 186 3.90
2008 984 287 3.42

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2009 1236 587 2.10
2010 1368 548 2.50
2011 1392 576 2.42
Source: Annual Report (2010-2011) of NAVANA CNG

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 Asset
Table 13: Total Asset Turnover
NAVANA CNG LTD.

Year Sales Total Assets Total Asset Turnover
2007 727 627 1.16
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
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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 assets
Table 14: Debt Ratio
NAVANA CNG LTD.

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

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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.

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%

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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
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%

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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.

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%

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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.

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%

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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
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

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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
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%

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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.

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%

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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.
EPS= Earnings available for common stockholders/Number of Shares of common stock
outstanding
Table 23: Earning Per Share
NAVANA CNG LTD.
Earnings available for Number of Shares of
Year common stockholders 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

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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.

PART-5

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FINDINGS,
RECOMMENDATION
AND
CONCLUSION

5.0. Major Findings
5.1. Findings on NAVANA CNG Limited
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:

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 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.
 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.

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 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:
 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.

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 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

Bibliography:

 Books:

1. Lawrence J. Gitman “Principal of Managerial Finance”, 11th Edition (April 2004)
Pearson edition

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 Website:

1. www.navanacng.com

2. www.navana.com

 Annual Report:

1. Navana CNG Ltd., 2007

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Financial Performance Analysis of NAVANA CNG LTD. (A sister concern of Navana Group)

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