A Report on OLYMPIC INDUSTRIES LIMITED.

2012-

2016

5th April, 2017

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Course Title: Corporate Finance

Course Code: FIN 431

Submitted to:

Mahjabeen Ferdous

Department of Business Administration

Stamford University Bangladesh

Submitted By:

Niloy Saha BBA 054 16669

Rimon Khan

BBA 054 16679

Saiful Islam Saif BBA 054 16695

Md. Rabiul Awal BBA 042 13437

Stamford University Bangladesh Debt’ of Business Administration

Program - BBA

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Title: A REPORT ON OLYMPIC

INDUSTRIES LIMITED

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Letter of TRANSMITTAL

5th April, 2017 Mahjabeen Ferdous Department of Business Administration Stamford University Bangladesh Subject: Submission of a Report on OLYMPIC INDUSTRIES LIMITED Dear Madam, It is indeed a great pleasure for us to be able to hand over the result of our hardship of the FIN report on OLYMPIC INDUSTRIES LIMITED. This report is the result of the knowledge which has been acquired from the respective course. We tried our level best for preparing this report. The information of this report is mainly based on Internet information. Some other details were gathered from the Web-side of that company. All of us gave our hundred percent for making this report come together. We, fervently hope that you will find this plan worth reading. Please feel free for any Query or clarification that you would like us to explain. Hope you will appreciate our hard work and excuse the minor errors. Thanking you for your cooperation. Thanking You, Yours Sincerely For Stamford University Bangladesh.

Niloy Saha BBA 054 16669

Rimon Khan BBA 054 16679

Saiful Islam Saif BBA 054 16695

Md. Rabiul Awal BBA 042 13437

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Acknowledgment

In real sense, a project is a combined effort of student skill and knowledge under the precious

guidance of their experience and kind guidance of their training staff .Thus any project cannot

be accomplished to one’s satisfaction without proper guidance and the total cooperation of all

those involved in the project .So we are very thankful to the kind persons who have helped us

immensely during our whole BBA. At first we express our deep gratitude and sincere thanks to

God for providing us sufficient strength to make this repot successfully and also our respected

faculty Mahjabeen Ferdous for her valuable guidance interest and consistent encouragement to

us in the preparation of this project report. Then comes the contribution made by all those

respondents (employees) who attended the survey. Without their valuable input, this report

and research could not have been successful. Also, the co-operation of my group member, who

guided properly to get the information’s.

We also want to extend our greatest thanks to all those who are associated and contributed in

this project.

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Executive summary

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts .Fundamental analysis constitutes of conducting company stock valuation and predicts its probable price evolution, making a projection on its business performance, evaluating its management and make internal business decisions, calculating its credit risk. It focuses exclusively on the company's business in order to determine whether or not the stock should be bought or sold. The other major argument against fundamental analysis is more practical than theoretical. These critics charge that fundamental analysis is too unscientific a process, and that it's difficult to get a clear picture of a company's value when there are so many qualitative factors such as a company's management and its competitive landscape.

However for practical practice we worked on Olympic industries Limited for its fundamental analysis. We analyzed the competitive situation of the company and its price pressure in the market environment. The way the financial position of the company is influenced by other internal and external factors is analyzed through fundamental analysis. We calculated the ratio that assisted to compare it financial position against some other variables. Ratio analysis described the strength, profitability return of the company .By fundamental analysis we calculated the intrinsic value of the Olympic industries limited which is calculated based on the financial data given 2011-2016. Moreover we forecasted the particulars of financial statements from 2012-2016. The derived intrinsic value is then compared to the market to take buy and sell decision.

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Table of Content…

NO Topic Page Number

I. Company Overview 08

II. Industry Overview 08

III. MISSION STATEMENT 09

IV. STAKEHOLDERS 11

V. EXPORTS 11

VI. BRANDS 11

VII. INVESTORS 11

VIII. SUSTAINABILITY 11

IX. MILESTONES 12

X. FOCUS AREAS 13

XI. INDUSTRY ANALYSIS 13

XII. STATEMENT OF FINANCIAL POSITION OF OLYMPIC INDUSTRIES LIMITED

15

XIII. STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

16

XIV. CASH FLOW STATEMENT 17

XV. RATIO ANALYSIS 18

XVI. SALES & DISTRIBUTION 20

XVII. FACILITIES 20

XVIII. CONCLUDING REMARK 21

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OLYMPIC INDUSTRIES LIMITED

COMPANY OVERVIEW Olympic Industries Limited was incorporated in 1979 as Bengal Carbide Limited and started its commercial operation in 1982. The company was initially engaged in producing Dry cell Battery. Later on, in 1996 the Company diversified its business into biscuit and confectionery items and in 2008, by acquiring Tripti Industries Ltd., into ball pen industry. As per 2013 annual report, the Company has 6 lines of biscuit, 4 lines of confectionery item, 3 lines of ball pen and 3 lines of dry-cell battery. It also produces biscuits under a third party manufacturing agreement with a processor in Chittagong. As on June 30 2013, the capacity utilization of biscuit & confectionery, battery and ball pen segments were 70%, 40% and 57% respectively. The production facilities of the Company are situated at Kanchpur and Bondar of Narayangonj. Among three business segments biscuit & confectionery unit generates 91.67% revenue followed by battery (4.62%) and ball pen (3.71%). The Company produces Horlicks iscuits for GlaxoSmithKline under a third-party manufacturing agreement. It offers various products choices to customers in each revenue segment. As per the Company’s proclamation, it is currently the market leader in the biscuit market and in second position in the battery market in Bangladesh. It also enjoys economies of scale compared to other competitors in the industry. The firm took initiative to export biscuits in 2013 and earn token revenue. The Firm enlisted in the DSE and CSE in 1989 and 1996 respectively. Around 31.49% of shares of the company are held by Sponsors whereas Institutional, General and Foreign Investors held 30.31%, 27.45% and 10.75% respectively.

INDUSTRY OVERVIEW

According to BBS data, the food manufacturing sector contributes 1.66% of Bangladesh's total GDP in 2009-10, where total production is 6,2203 MT. Over 100 automatic manufacturers and 4,500 traditional factories are manufacturing bread and biscuits in the country. A projected market size of the automated bread and biscuits is about BDT 2,370 core annually, except traditional bakery products. According to Bangladesh Auto Biscuit & Bread Manufacturing Association (BABBMA), this industry is growing at 12-15% per year. Olympic is the market leader securing around 16% market share followed by Al-Amin (10.1%) and Pran (6.0%). Other participants .e.g., Globe, Danish, Romania, New Olympia etc. held less than 5% each of the total market share in the auto biscuit business in Bangladesh. In dry-cell battery industry, Quasem Drycells Limited is the pioneer in terms of Dry-Cell Manufacturing, where it has successfully established its ‘SUNLITE’ brand as a leader and Olympic Industries Ltd. Is in the second position in the battery market in Bangladesh.

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MISSION STATEMENT At Olympic, we believe that being a good business means contributing to the well-being of our workers, our customers, our community, and our planet. We want to add value by making good products which nourish people, all the while creating jobs and contributing to the Bangladesh economy.

They aspire to

Maintain their leadership position in the biscuit industry by producing the best quality products for their consumers that are unique, innovative and delicious

Protect the interest of their shareholders through fiscal prudence Be an employer of choice while developing future leaders for their organization and the country Be stewards of social responsibility in Bangladesh through our initiatives.

They believe that quality and integrity is the recipe of our success. Now the leader in the biscuit market, we were only able to get to where we are today by staying true to our core values and by developing new quality products we believe our customers will love.

They believe that a good business must be sustainable. So we want to take on goals which not

only give back to society, but which also hold their to a higher standard as corporate citizens. In order to better guide our decisions, they have tied all of our projects to the Sustainable Development Goals set out by the United Nations. We have chosen goals which are most applicable to our line of work and which are closest to our employees’ hearts; those which relate to nutrition, education, equity, and climate change. We are committed to CSR for the long-run, and we welcome accountability for our actions. We commit to producing frequent reports which are detailed and accessible to all our stakeholders. They are committed to making a CSR program we can all be proud of.

They are committed to providing their workers with a better life by providing them the working conditions they deserve, and the environment that helps them thrive.

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They are committed to providing their customers with products which are both healthy and delicious.

They are committed to giving back to their community by improving food and nutrition security, and increasing access to education.

They are committed to ensuring that their planet stays healthy and plentiful.

In undertaking all our projects, their commit to considering gender issues and to actively contribute to the elimination of discrimination against women.

Finally, their commit to holding ourselves accountable for the way we conduct business and for the projects we engage in. their commit to continuously monitoring and evaluating the projects that we fund or take on.

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STAKEHOLDERS No CSR program is honest and solid without changes from within. A company which is serious about corporate responsibility must commit to making itself better first. As such, they will focus on projects which improve the life of workers, their close communities, and the environments we directly affect. After the first initial years, we plan to expand their projects outward, eventually reaching more distant communities and stakeholders.

EXPORTS Olympic is the largest biscuit manufacturer in Bangladesh. We have seven biscuit production lines, three confectionery lines and a bakery line. Olympic’s products are synonymous with quality, as represented by its market share and consumer confidence in our products. Consumers buy our products because of our dedication towards producing healthy, safe and hygienic products. Olympic was the first biscuit manufacturer in Bangladesh to be ISO 22000 certified. All of our production facilities are Halal certified, audited by Halal Bangladesh. We offer a majority of our products in multilingual packaging and can provide as much flexibility as required for your specific requirements.

BRANDS

Energy Plus, Tip and Nutty are three of the most widely sold biscuits in Bangladesh and are all premier constituents of our product portfolio. Over the past two decades, we’ve introduced new, unique and innovative products never offered before in Bangladesh. And our entire team is working hard to cook up new recipes to satisfy your every craving.

INVESTORS Olympic is publicly listed on both national stock exchanges in Bangladesh. And we’re also a constituent of the Dhaka Stock Exchange’s DSE30 index. We’re constantly thinking of ways to make our amazing company even better. We think we’re pretty unique and we hope you’ll think so too.

SUSTAINABILITY Living in Bangladesh, we have experienced first hand how important sustainable practices are to a company and to its stakeholders. We have recently committed to taking on environmental, social and governance challenges in order to become a better corporate citizen.

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MILESTONES

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FOCUS ARES

FOOD & NUTRITION

As a food company, they are concerned with all our stakeholders' nutrition. This is why we have decided to channel their resources toward ensuring that our workers and their families are well fed. This means more than just calories: we aim to eradicate all forms of malnutrition, including micronutrient deficiencies.

EDUCATION

They have so many talented colleagues which do not have access to the necessary education to reach their full potential. We aim to create jobs, ensure good working conditions, and provide our workers with the tools they need to help themselves. As Nelson Mandela said “Education is the most powerful weapon which you can use to change the world.”

CLIMATE CHANGE

Bangladesh is one of the countries most negatively affected by climate change. We believe that it is everyone's responsibility to save the planet. This is why we commit to reducing our carbon footprint, as well as the effects of climate change in Bangladesh.

GENDER EQUITY

The most productive work environments are those where men and women are treated with equity. In Bangladesh, as in all countries, there are still many gender disparities in the workplace. We aim to bridge the gap by considering gender in every project we undertake and implementing policies which promote equity.

Industry analysis

Strengths

Brand building capabilities

Diversified product range

The depth of distribution

Low and mid price range of the products

Industry catering to masses.

Weaknesses

Dependence on retailers and grocery store

Lack of technology up gradation

Opportunities

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Bangladesh Biscuit Manufacturers Association (BBMA) estimates annual growth of around 20% in next couple of years.

Growing demand of Sugar free cream crackers & diet biscuits.

A package of fiscal incentives provided by government

Threats

Fluctuations in the prices of raw materials, transportation costs &distribution

Entry of ITC (having very good distribution channels) in to biscuitindustry)

Emerging local bakery products

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RATION ANALYSIS

Current ratio, also known as liquidity ratio and working capital ratio, shows the proportion of current

assets of a business in relation to its current liabilities.

Current Ratio Interpretation: Acceptable current ratio aloes vary from industry to industry. Generally, a

current ratio of 2:1 is considered to be acceptable. The higher the current ratio is, the more capable the

company is to pay its obligations. Current ratio is also affected by seasonality. There, OLYMPIC has

1.9728 which it good and show good asset.

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Z Score Comment:

X1 = Working Capital / Total Assets X2 = Retained Earnings / Total Assets X3 = Earnings Before Interest and Taxes / Total Assets X4 = Market Value of Equity / Total Liabilities X5 = Sales / Total Assets Z score bankruptcy model:

Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + .999X5 Zones of Discrimination: Z > 2.99 -“Safe” Zone 1.81 < Z < 2.99 -“Gray” Zone Z < 1.81 -“Distress” Zone Here, Olympic Industries Limited’s companies last 5 years Z Score is more than 2.99. so, that company is Safe or Not bankruptcy.

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SALES & DISTRIBUTION

Olympic has one of the most extensive sales and distribution networks in Bangladesh, with 1,887 sales representatives across all 64 districts of the country. Building on the resources of our 754 strategically positioned distributors, our products are available at over 1,000,000 retail outlets across Bangladesh. Breadth and availability of our products in even the most far-reaching or remote corners of the country is our forte. Olympic works very closely with retailers of all sizes, ranging from tea stalls to general stores to large supermarkets. Olympic has invested in 100,000+ co-branded store signage to prominently affirm the availability of our products. Our sales force is equipped with the latest technology to ensure seamless sales operations and to capture pertinent market data.

FACILITIES

Olympic operates seven biscuit lines across two production facilities. We also operate three confectionery lines and one bakery line. A majority of our machinery has been procured from Italy and India. We have always purchased cutting edge, modern machinery. In 2010, we made an even greater commitment to industrial automation. Each biscuit lines procured after 2010 has a high degree of automation, including technologies such as bulk handling, continuous mixing and dual-fuel burners. With our ISO 22000 certification and implementation of SAP ERP, Olympic is the only biscuit manufacturer in Bangladesh to have full backward traceability of all of our products. This allows us to implement strong quality control checks and continually improve our processes. Our modern machinery, alongside our dedicated, hard-working operations, maintenance and quality control teams, create a unique combination of manufacturer experience unparalleled in Bangladesh

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Concluding Remark

Olympic Industries Limited is one of the longest running manufacturing-based companies in Bangladesh. The Company changed their business focus over the period from steel Production to battery production and now to the biscuits & confectionery segment. It has successfully penetrated the biscuits & confectionery market and set itself as the market Leader. As on today, 14 days RSI and 14 days MFI of the firm were 63.31 and 89.59 respectively. Source: Annual Reports, the Financial Express, the Daily Star, https://www.youtube.com/channel/UCkdR_PnIfxe1FKN1kz27ewg Olympics’ website: http://olympicbd.com/, http://www.investopedia.com/