The document provides an overview of Royal Footwear Ltd., a footwear manufacturing company in Bangladesh. It discusses the company's background, management structure, production process, financial performance, and SWOT analysis. Some key points: - Royal Footwear produces shoes for export and has an annual production capacity of 42 million pairs. It employs over 1,000 people. - Financially, the company has seen steady growth in profits margins and returns. Net profit margin increased from 14.88% to 16.13% from 2017 to 2018. - The company's strengths include strong demand, competitive pricing, and financial solvency. Weaknesses include low production capacity and limited transportation. - If

1. Chapter - 1
Introduction

2. 1.1 Background of the report
By the grace of Almighty of Allah, I have been assigned to prepare an internship report on
Performance Analysis of Royal Footwear Ltd. – a footwear manufacturing and export oriented
company of Bangladesh. I went through various functions and activities of the company with an
analytical point of view during the last few months. This inspired and helped me a lot to furnish
my internship report with a great deal of enthusiasm. I believe that I have tried all the way to
follow the previous studies retaining my originality in writing the report.
1.2 Scope of the Report
The report includes the overall picture of the performance of the Company. To evaluate the
performance of the company total loans, total assets, total liabilities, net profit have been
discussed in the report. The company is doing business for almost 7 years. Both of the primary
and secondary data have been used to represent the collected data of the report. All the office
employees and staffs are good enough and their behavior was so polite. They are much busy with
their works but they helped me a lot to make this report. They provide me all the information that
needed to me.
1.3 Rationale of The Study
I have done my internship program to analysis and find out the performance analysis of the
company. The internship program is a practical aspect of our theoretical learning. It creates a
way to apply the theoretical learning in practically. In this view internship plays a central role in
each professional degree. The study helps the students to formulate suitable policies taking into
different ideas.
1.4 Objectives of The Report
 The major objective of the study is to performance analysis of the company.
 The general objective of the study is to provide an overview of learning of the intern
during the internship program and fulfill the internship requirement.

3. 1.5 Sources Of Data
The study covers two types of data- Primary data & Secondary data
Primary Data: Major source of primary data are collected by the practical knowledge during the
internship period and by working on the organization.
Secondary Data: Secondary data are collected from the company profile and the audit report.
1.6 Limitations of The Report
The study is not free from some practical limitations. The limitations have been faced during the
study and the time of working and data collection:
 The time we got for our internship program is not enough to get a clear idea about a
company’s actual financial and other works.
 Due to lack of practical experience in accounts and finance relatd works, some errors
might occur during the study
1.7 Structure of The Report
 Introduction
 Company Profile
 Performance Analysis
 Findings
 Conclusion

4. Chapter - 2
Company Profile

5. 2.1. Company Details
Royal Footwear Ltd. is a footwear manufacturing and hundred percent export oriented company
which is located at 1/1 Tilargati, Kakil, Sathaish, Tongi, Gazipur-1711. And the corporate office
in house#407, Road#29, New DOHS, Mohakhali, Dhaka. The project was set up as a shoe
manufacturing factory under the name and style of Royal Footwear Ltd. at Tongi, Gazipur, and
details has been enumerated at technical aspect. The project has been designed for producing
international standard quality shoe for national and international markets. The sponsors are the
entrepreneur of existing leather industry and engaged in manufacturing finished leather for about
13 years & are successful in this sector.This is an existing synthetic leather shoe manufacturing
project. The promoters would like to expand the business by manufacturing additional
production. The annual rated capacity of the project based on two shifts operation per day. Royal
Footwear Ltd is working with Decathlon as their customer and the annual production capacity of
this project is 42,00,000 pair per annum. The existing project creates job opportunities for 1187
personnel in various categories. All of the raw materials are imported under bond license and
hundred percent duties free facilities.
Land: The existing project land value has been estimated at tk 36.00 crore
Factory Shed and other civil works: The cost of existing factory building, administrative building
warehouse, machinery room, office room, electrification and sanitation works has been estimated
at tk 20.15 crore
The project promises a financial rate of return about 33%.
Total fixed costs of the project have been estimated at tk. 89,22 crore.

6. 2.2.Management Aspects
2.2.1. Corporate Set-Up, Promoters and their background:
The project is a private Ltd. company in the name and style of Royal Footwear Ltd. All the
sponsors have prolonged experience in the line of business. The existing project is being
promoted by a group of three persons. They are well and enough experienced in running and
managing of a number of industrial concerns and other businesses. The particulars of the
sponsors with position and extend of shareholding are as under:
Sl.No Name of The Directors Status Share
(%)
1 Md. Billal Hossain Chairman 30
2 Md. Zakir Hossain Patwary Managing Director 45
3 Md. Kamrul Alam Director 25
2.2.2. Legal Structure of The Proposed Company:
The overall management during implementation and on completion on the project will be vested
with the Chairman and Managing Director. They will assume overall responsibilities of running
the day to day operation and administration of the company with sufficient executive and
financial power. The board of directors of the project at the moment acquired sufficient
knowledge and skills in this line of business. They will be assisted by the expert engineers and
technical personnel.

7. 2.2.3 Organ gram
Managing Derctor
Derector
COO
GM Accounts
Finance & HR
Manager
Assistant Manager
Senior officer
officer
Deputy Manager
GM Commercal
Manager
Assistant Manager Senior Officer Officer
GM Factory
Manager
production
Manager
merchandising
Aaasitant
Merchandiser

8. 2.3.Technical Aspects
2.3.1. Purpose & Design:
This is an existing leather shoe manufacturing project now is planning for expansion program
under the name and style of ROYAL FOOTWEAR LTD. It has been designed on the basis of
modern machinery and raw materials. It is generated employment opportunities for 1187
personnel in different level of job. As per designed implementation schedule the proposed
project is completed. The fixed costs of the project have been estimated at tk 89.22. Details of
the fixed costs ave been shown in financial aspects.
2.3.2.Project Land & Location:
The existing project is located at 1/1 Tilargati, Kakil, Sataish, Tongi, Gazipur-1711, Bangladesh.
The present market value has been estimated at tk. 36.00 crore. All infrastructural facilities like
power, communication, labor etc are available at and around the project site. The land is
considered to be suitable and adequate to house all facilities and establishment of the proposed
scheme. The place is ideally suitable for the project.
2.3.3.Factory Shed & Other Civil Works:
The farm is set up with factory building, machinery room, office, guard room, internal road,
boundary wall etc. The total cost of existing work has been estimated at 20.15 crore.
2.3.4.Machinery & Equipment:
The exiting machinery value of this shoe manufacturing company is tk 15.87 crore. The sponsor
are planning to import brand new machineries at a costs of tk 12.32 crore. The detail list of both
imported and local machinery and their respective price is enclosed in price quotation
2.3.5. Utilities:
Electricity – The project is required a connected load of 700 KW and the maximum demand
during full swing operation has been worked out at 200 KW. The required power is made
available from the connection of Rural Electrification Board.
Water – The daily requirement of water for the project has been met up by the shallow tube –
well to be sunk at the project site.

9. 2.3.6. Leather Shore Manufacturing Process:
Manufacturing process of leather shoe starts by cutting out the upper components from skin and
the linings and insole from leather or manmade sheets. Next the edge of the upper components
are tapered or skived to reduce the bulk seams. The eyelets are then inserted in lacing styles and
the various upper components are stitched and cemented together. The insoles are then attached
temporarily to the bottom of the last by tacks and the heel stiffeners and the toe puffs are located.
Cement lasting involves stretching the edge of the upper round the last bottom and attaching it to
the insole bottom with cement. After removing the tacks holding the insole to the last, the shoes
are conditioned, the shanks which stiffen up the waist of the shoe are attached t the insoles and
the sole units are stuck on the bottom. The final manufacturing stage involves cleaning,
inspecting and packing.
2.3.7. Safety Management:
Adequate safety management to meet the fire hazards and first hand medical aid box to be
purchased to mitigate any short of accident of the employee. For this purpose necessary
provisions for firefighting equipments has been incorporated in the list of local machinery.
2.3.8. Pollution Control & Waste Disposal:
The project will not generate any wastes, which may harmful. Thus the project will not create
any threat towards environment pollution. Moreover, if necessary, the promoters will arrange for
an environmental Impact Assessment. Study to be carried out by a component consultant and
would obtain necessary clearance from the department of environment and pollution control
before starting operation.
2.3.9. Quality Control:
Quality of the products is a main thing for marketing in the present competitive world market. A
number of quality control equipments and tools have been included in the project for maintaining
proper quality of production.
2.3.10. Repair & Maintenance:

10. Repair and maintenance cost is 0.5% for the building in every year. On the other hand for
machinery it is 0.5%, 1%, 1.5% of the machinery cost for the year of 1st , 2nd and 3rd and
subsequent year of operation.
2.3.11. Stores & Spares:
The cost of spares and stores for the first one year included with the cost of main machinery and
equipment’s to be imported and it is assumed that 0.5%, 1%, 1.5%, and 2% of machinery cost
has been earmarked for the subsequent years of operation.
2.3.12 SWOT Analysis:
Strength:
1. More demand in market and customer
2. Competitive price with high quality product
3. Strong marketing and channel
4. Financially solvent so any time the decisions can be made
5. Factory is full healthy and hygienic
Weakness:
1. Low production capacity in compare with market demand
2. Company has limited transport to distribute the materials
Opportunity:
1. Company can extend the products with in the short period
2. To gain more market share company may extend another unit
3. Company establish own sales center
Threats:
1. Company has no standard employees policy so any time they can switch
2. Due to product unavailability market share may be decrease

11. Chapter - 3
Financial Performance &
Commercial Activities

12. 3.1.FinancialEvaluation
Profitability potential of the project has been estimated for three years of operation to assess the
financial viability of the project. The financial projections include estimation of sales, operating
cost, administrative and selling expenses and financial overheads. The statement showing
earning forecast is shown in the financial aspect. The assumptions of earning forecast are as
follows:
1. The factory will work on the basis of three shifts operation in loom section and three
shifts operation in dyeing section per day and 300 working days in a year.
2. The sales prices of the proposed products have been considered at ex-factory price.
3. The costs of raw materials as well as the selling prices of the finished goods have been
kept constant throughout the projected years on the assumptions that any increase in the
price of raw materials will be off-set by the consequential increase in selling prices.
4. An increment @5% per annum has been considered in the calculation of wages and
salaries and the amount of bonus is considered to be equal to two months pay
5. Depreciation has been charged on straight line method on the following rates:
o Building 5%
o Machinery 10%
o Other Assets 20%
6. Capacity utilization has been assumed at 70%, 75%, 80%, 85%, 90% for the first 5 years
of operation.
7. Economic life of the project has been assumed to be 30 years without any major
replacement.
8. The project is expected to break-even at 29% of the assumed capacity utilization.
9. The projected balance sheet of the proposed company is enclosed in financial aspect
which shows a healthy financial position.

13. 3.3. Fixed Costof the Project
Item Cost Incurred Cost to be Incurred Total
L/C F/C
Land 210000 150000 360000
Production Building 120000 60000 180000
Chemical Warehouse Shade 2000 2000
Administrative Building 12000 7500 19500
Existing Machinery 158736 158736
Imported Machinery 123200 123200
Misc.L/C cost 5%of L/C
value
6,160 6,160
Installation 2380 2120 4500
H.T.L.T Cables 7,000 5,000 12,000
Furniture & Fixture 1500 1000 2500
Vehicle 5000 5000 10000
Electrification & Power
connection
6000 3700 9,700
Office and fire equipment 1000 1000 2000
Consultancy Fee 400 100 500

14. 3.4. Working Capital Assessment
Tied Up Period Year 2017 Year 2018
In Days
Raw Materials 90 189810 197505
Work in Process 5 10545 10973
Finished Goods Stock 30 108927 114114
Receivable 15 54464 57057
Other Expenses 3000 3500
Current Assets 366746 383149
Current Liabilities:
283385 249047
Working Capital 65% above
Net Working Capital 128361 134102
Pre-operating Exp. 1000 500 1500
Fixed Cost 527516 242080 123200 892296

15. 3.5 ProjectedEarnings Forecast
Items Year 2017 Year 2018
Sales Revenue 1200420 1259700
Cost of Goods Sold 930834 973609
Gross Profit 269586 285091
General admin and other Expenses 31473 31698
Operating Profit 238114 253394
Financial Expenses 51940 42158
Net Operating profit before tax 186173 211236
Tax 7558 8003
Net Profit 178615 203233
Ratio (%)
Gross Profit to Sales 22.46% 22.63%
Operating Profit to Sales 19.84% 20.12%
Net Profit to Sales 14.88% 16.13%
3.6. Financial Ratio
Ratio

16. Year 2017 Year 2018
Gross Profit Margin 22.46% 22.63%
Operating Profit Margin 19.84% 20.12%
Net Profit Margin 14.88% 16.13%
Return On Equity 18.40% 19.33%
Leverage 25.05% 19.15%
Gross Profit increase from the year 2016 to 2017 – 0.17%
Operating Profit margin increased - 0.28%
Net Profit Margin increased – 1.25%
Return on Equity increased – 0.93%
Leverage decreased – 0.9%
3.7. Sales Revenue
Item Quantity Rate Total Revenue
Synthetic Leather Shoe 2400000 325 780000
Synthetic Leather Shoe 1800000 390 702000
Total 1482000
Sales at Capacity Utilization
4th Year 5th Year
85% 90%
Sales Revenue 1200420 1259700

17. 3.8. Costof Goods Sold
Items Year 2017 Year 2018
Raw materials 701100 743850
Wages and salary 119380 119381
Stores and spares 2758 2986
Fuel, Diesel and lubricant 28000 28000
Electricity, Water 28500 29000
Repair and Maintenance 2879 3150
Depreciation 38769 38769
Rent, Tax and Insurance 8923 8923
Other Manufacturing Overhead 525 550
Total 930834 974609
Increasing amount of expenses and ratios:
Raw Materials – tk 42,750 or 5.75%
Store and Spares – tk 228 or 7.63%
Electricity and Water – tk 500 or 1.72%
Repair and Maintenance – tk 271 or 8.60%

18. Other Manufacturing Overhead – tk 25 or 4.54%
3.9. CashFlow Statement
Year 17 Year 18
Sales Revenue 1200420 1259700
Total Operating Expenses 962306 1006306
Non Operating Exp. 51940 42158
Total Cost 1014247 1048464
Net Profit Before Tax 186173 211236
Income Tax 0 0
Net Profit After Tax 186173 211236
Depreciation & Write off 38769 38769
Cash Flow After Tax 224942 250004
Principal Repayment 75248 75248
Net Cash Flow 149694 174757
Net Profit before Tax has been increased at 11.86%
Net profit after tax has been increased at 11.86%
Net Cash Flow at increased 14.34%
3.10 Commercial Activities :

19.  Monitoring over all activities of Export section.
 Monitoring all activities of Import section.
 Co-ordinate with all activities with all other section of Commercial department (Export
section, Import section, Customs section, Bank section, Audit section, BKMEA
,BGMEA& EPB section).
 Co-ordinate with Marketing & Merchandising department and Accounts & Finance
department regularly for shipment schedule and fund management activities respectably.
 Responsible for prepare & submit monthly, quarterly and annual report to the
management for necessary action.
Master LC
Import
B2B LC
Proferma Invoice
Commercial Invoice
Packing List
Bill of Lading
Bill of Exchange
Certificate Of Orgin
Export
Export Doccumentation
Invoice
packing list
EXP
GSP
Safta
Bill of Lading
Customs & Bond
UP
In Bond
Ex Bond
Renewal Audit

20.  Responsible for monitoring overall activities of commercial department, co-ordinate the
activities of commercial department with other department & outside parties, government
offices, local liaison offices of buyer, audit farms, bank etc.
 Reporting to the top management of the company & participating in the Executive
committee of the company to take decision with top management.
 Responsible to give a good account and prove to be equal to your responsibility
 Responsible for place booking to forwarder accordingly.
 Making Invoice, P-list and pass EXP form from Bank to ship out the export consignment.
 Responsible to collect MasterL/C from Bank and open Back to Back L/C for raw
material procurement for Export.
 Responsible for monitoring overall activities of commercial department, co-ordinate the
activities of commercial department with other & inter department, outside parties,
government offices, local liaison offices of the buyer, audit firms, bank etc…
 Prepare & submit Utilization Declaration from respective authorities which are required
to Export goods.
 Submit & collect GSP certificate form component authorities.
 Responsible for renewal of Bond license, Fire license, Group Insurance policy, Annual
audit report from customs authorities.
 Work with quite efficient, trustworthy, committed and dedicatedly.
 In charge to give instruction to finishing department to move cargo for Export in time.
Short notes on commercial activities
Wasrehousing
Insurance
Advertising Andpublicity
Banking & finance
Others aids

21. Chapter – 4
Findings

22. Financial:
All of the raw materials are imported under Back to Back L/C. That is why the company doesn’t
face any financial problem and there has no need to mortgage. But the company not yet
profitable so it is dependable to another concern.
Operational:
Most of the operational and production planning including warehouse planning are not
centralized. The responsible persons make decisions by their own. So here creates a great
problem.
Human Resource:
As the company is not yet profitable so the office employees and workers doesn’t get salary in
proper time so it creats a great effect in workers. The workers don’t stay a long time in this issue.
Accounts:
There has no skilled and professionally strong accounts background job holder in the company.
Management:
There has lackings of monitoring from the board of directors – Chairman, Managing Directors
and Directors.
Marketing:
Because of lacings of monitioring from board of directord the company cannot improve in
marketing. From the last 3 years the company cannot get any new customers.

23. Chapter – 5
Recommendation
&
Conclusion

24. Recommendations
After completing my internship program on Royal Footwear Ltd. I have some comments about
the company which I notice during the time of my internship period. Royal Footwear Ltd. is a
compliance factory and works under hundred percent export oriented bonded facilities. Their
production ability and the workers ability is good. But the company didn’t get any new
customers on the last three years. Though the company is capable to fill up any requirement of
the customers but they can’t take enough profit because of their internal management policy. The
starts their works with Decathlon and all the works are done by the requirement of Decathlon.
Corporate politics and corruption are the main obstacle in the working way of the company and
not to monitor in properly from the board of directors is another major reason. It is possible to
get in enough profit and to reach in the goal if they properly utilize the existing machineries and
the existing manpower in proper way.
Conclusion
This is a common thing that every thing will have both positive and negative sights. If it is
possible to avoid the negatives and utiize the positive sights the success would be obvious. If the
management of the company sincerely looks at some points like at the market, cost management
and the internal necessary matters hope so it will have a great success and the company has that
chance. As the bonded and export oriented company they have a great opportunity to compete on
the national and international market. The main thing is to proper planning and implementation.
Hope so the managenet authority will look after in this sight at soon.