Internship Report on

Accounts and Financial Activities of Corona Group

Submitted to:
Mr Amitabh Mohanty
BIMIT, BBSR
Submitted by:
Type ur name
REGD NO:
Date of Submission:
29/09/2018
Under the guidance of

INTERNAL GUIDE EXTERNAL GUIDE

Amitabh Mohanty Debasis Das
Asst. Professor (finace) Asst. Manager (finace)
BIMIT, BBSR Corona, BBSR

BHUBANESWAR INSTITUTE OF MANAGEMENT

AND INFORMATION TECHNOLOGY

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 Acknowledgement
This report, based on three months study, is the part of MBA program, which helps me to
gather practical information, which is necessary for my future life. I would like to express my
deep respect to my honorable academic supervisor Dr. Salehuddin Ahmed, Professor, BRAC
Business School, BRAC University for giving me his valuable time and all the necessary
guidance, which inspired me to prepare this report.

During this period I have gone through the various departments of Corona Group and
especially gathered knowledge about the Accounts & Finance department with their great
cooperation. In preparing the report I receive active cooperation from the AGM of the
departments, Accounts controllers, senior officers and staff of Corona Group. I am grateful to
the Liberian of Corona Group who helped me by supplying many kinds of necessary
information. This report suffers from many shortcomings although I have exerted my best
effort while preparing this report. I seek excuse for the errors that might have occurred in
spite of the best of my efforts.

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 Executive Summary
Corona Industries is one of the major business companies of Corona Group. Corona Group has six
major businesses. Among them Corona Tractors is one major business. Based on the profit potentiality
partial products are traded and partial are manufactured in their own manufacturing company. The main
product portfolio consists of Corona Tractors, Corona Luk- oil, Corona Service, Corona Agro Foods are
manufactured, Imported, and Inventories in Darikandi factory and sold under Corona Group brand.
Tractors, LuK-Oil, Spare Parts are traded and imported products. The Spare Parts unit sells their
products through their own retail outlet and through selected dealers. Dealers are considered as the
Primary customers through whom CTL sells their products to the secondary customers who actually are
the final customers. Spare Parts depends heavily on their dealers for the business. Therefore, they are
much concerned about the dealer policy, process and overall operation. For dealership appointment
CTL follows a systematic selection policy inviting them for application with required documents.
Documents and all other issues are assessed through an assessment form in proper system. There are
specific policies for commission, delivery and transportation etc. for the dealers. There are different
incentives for dealers to encourage satisfactory business. CTL heavily depends on relationship building
and makes the most of it for business. Dealers help CTL to reach remote places for business though it
becomes difficult to minimize cost under different circumstances due to different issues related to the
dealers. Dealers present several opportunities for CTL’s business like switching customers in,
campaigning etc. On the other hand their illegal activities may also cost CTL a great deal when dealers
take advantages of unfair means to maximize their own profit and interest. CTL conducts the order and
delivery process in a systematic way. Dealers can pay to Tel through cash, cheque, DD, pay order to
fulfill the transaction. CTL enjoys dealer coverage in all districts of Bangladesh. CTL very much depends
on push strategy with a little pulling activity. There are different promotional activities taken towards
dealers. Article offer and cash discounts are the most popular trade promotions. Dealers sell their
products to the ultimate users. For their own business purposes and profits dealers can also deal with
other competing companies of CTL and products of those companies. CTL emphasizes much on
Customer Service. There are two systems prevailing. One is customer service from Darikandi
Narayongonj which is called Home Care and for remote places there are Inter-Service systems are
available where appointed agents work for CTL. There are issues which CTL needs to show their
concern. For example transparency in commission, dealer profit margin, management communications,
transportation, pull strategy. These are some of the issues which affect dealer’s satisfaction and Dealer’s
satisfaction is related to CTL‘s business success. So this is a critical issue to look at. Finally, Spare Parts
business unit is a small though an important business for CTL and Spare Parts success depends a lot
on their proper management and dealings with the dealers. A proper dealer management of dealers can
bring about great success for Corona Tractors Business.

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Contents
CHAPTER- ONE 5
INTRODUCTION 5
1.1 Origin of the Report 5
1.2 Objectives of the Report 5
1.3 The Methodology of Report 6
1.4 Scope of the Report 6
1.5 Limitations of the Report 6
CHAPTER- TWO 8
“A Brief Of CORONA GROUP 8
2.1 A Brief History of Corona Group 8
2.2 Objectives of the Corona Group 9
2. 3 Mission 10
2.4 Vision 10
2.5 Our Value 11
2.6 Management Strategy 11
2.7 SWOT Analysis: 11
2.8 Company Profile 14
CHAPTER THREE 15
ORGANIZATIONAL STRUCTURE 15
3.1 HUMAN RESOURCES DEPARTMENT 15
3.2 MARKETING DEPARTMENT 16
3.3 MARKETING SERVICES DEPARTMENT 17
3.4 FINANCE DEPARTMENT 20
3.5 MIS Department 25
3.6 Distribution Department 26
3.7 Warehouses 26
CHAPTER FOUR 27
(POLICY GUIDELINE FOR FINANCE AND ACCOUNTS) 27
4.1 Introduction 27
4.2 Cash receipts 27
4.3 Cash disbursement 27
4.4 Account payable 28
4.5 Recurring expenses 28
4.6 Payroll 29
4.7 Imp rest cash 29
4.8 Advances 29
4.9 Prepayments & security deposits 30
4.10 Investment 30
4.11 General ledger 30
4.12 Accounting Activities 31
CHAPTER Five 33
CONCLUSION & RECOMMENDATIONS 33
5.1 CONCLUSION 33
5.2 RECOMMENDATIONS 33

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 CHAPTER- ONE

INTRODUCTION
1.1 Origin of the Report

This report, based on three months study, is the part of MBA program, which helps me to gather
practical information, which is necessary for my future life. I would like to express my deep
respect to my honorable academic supervisor Dr. Salehuddin Ahmed, Professor, BRAC
Business School, BRAC University for giving me his valuable time and all the necessary
guidance, which inspired me to prepare this report.

1.2 Objectives of the Report

The specific objectives of the report are to know in details about the operation of Corona Group.

The project has been directed by the following objectives:

 Exploring that how Corona Group. Control their total financial activities.

 Exploring that how Corona Group. Control their inventory management.

 Exploring the performance of Corona Group.

 Exploring the emergence of Corona Group and its contribution in the economy of Bangladesh.

 To apply the practical knowledge in this theoretical area

 To know about the various kinds of product and service provided by Corona Group.

 To know about the investment policies of Corona Group.

 To know the rules and regulations of Corona Group regarding the sector wise investment and
modes of investment.

 To know about the investment processes of Corona Group.

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 To analyze the performance regarding the investment activities of Corona Group using some
important trend analysis such as – investments of Corona Group, Classified investments to total
investments, provision against classified investments, investment deposit , capital adequacy etc.

 To compare the performance regarding investments of Corona Group with its Competitors.

 To find out the relationship between investment income and different investment modes
through various types of analysis.

 Finally to identify the findings regarding the investment activities or other relevant things those
are essential for the Companies and give some recommendations to overcome the problems
those are found.

1.3 The Methodology of Report

Research Approach: The project has been basically a descriptive type of research.

Data Collection Instruments: The study has been primarily based upon information extracted
from official documents. Interviews with the managers and officers of various departments
were also being conducted. On the other hand, secondary sources (WEB Site) were used to
collect data regarding the company and different kinds of papers, annual reports, etc are the
major secondary sources.

1.4 Scope of the Report

The report covers the organizational structure, background, functions and the performance of
the Corona Group. The scope of the study is just to acquaint with the operational scenario of
Corona Group.

1.5 Limitations of the Report

There were some limitations of the study and therefore the report may lack some crucial data.
Such as;

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♦ The general activities of Finance department are so vast. So that’s why they were not being able
to give me enough time.
♦ Time of my internship program was very short. So it was not possible to collect more information
within this short time.
♦ They did not provide me vast information because of their official obligations.
♦ All the information is not included in this report due to confidentiality of organization.

The project has encountered these limitations that may have hinder progress. But with constant
effort, my goal was to minimize the negative efforts of these limitations.

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 CHAPTER- TWO
“A Brief of CORONA GROUP

2.1 A Brief History of Corona Group:

Corona Group started with the establishment of Corona industries Ltd in 1982. Corona is one
of the leading and fastest growing diversified business houses in Bangladesh. It employees
over 237 people. Presently the group consists of the following individual companies:
Corona Industries Ltd.
Corona Oil and Lubricants Ltd.
Corona Tractors Ltd.
Corona Services Ltd.
Corona Agro Food Ind. Ltd. Corona Holdings Ltd.

Corona Group.

Introduction:

The company started its’ operation Since1982 by taking over Corona Industries as a product of Tractors
in Bangladesh. Today, the company is one of the leading group of company in the country; marketing ,
Importing and distributing the products of Tractors , Oil and Lubricants , Service of spare parts , Agro
Food and Holdings that ensure the customer satisfaction to provide the product quality and help the
agricultural sector over all the countries . Corona Tractors Ltd. imported the renowned brand product of
Tractors, Rotavetor, Power Tiller, Harvester from INDIA, ITALY, BELARUSH, and RUSSIA.

Introduction:
Corona Tractors is one of the oldest business units of the Corona Group. The overall contribution of this
Tractors and Agri. Equipments is very much important from the diversified business perspective. The
basic products that is Tractors and Agri. Equipments All these products fall under the categories of
1. Belarus 520, 2 wheel Drive, 4Stock, 4Cylinder and 62HP.

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2. Swaraj-855 Tractor, 3-Cylinder, 55HP,Diesel Engine, Hydraulic System with Differential lock system,
new sheet metal and rear tyre size:16.9-28 without canopy.
3. Swaraj-855 Tractor, 3-Cylinder, 55HP,Diesel Engine, Hydraulic System with Differential lock system,
new sheet metal and rear tyre size:16.9-28 without canopy. (power Steering)
4. Swaraj-855 Tractor, 3-Cylinder, 55HP,Diesel Engine, Hydraulic System with Differential lock system,
new sheet metal and rear tyre size:14.9-28 without canopy.
5. Swaraj-855 Tractor, 3-Cylinder, 55HP,Diesel Engine, Hydraulic System with Differential lock system,
new sheet metal and rear tyre size:14.9-28 without canopy. (power Steering).
6. Swaraj-744 Tractor, 3-Cylinder, 48HP,Diesel Engine, Hydraulic System with Differential lock system,
new sheet metal without canopy.
7. Swaraj-744 Tractor, 3-Cylinder, 48HP,Diesel Engine, Hydraulic System with Differential lock system,
new sheet metal without canopy (Power Steering).
8. Swaraj-735 Tractor, 3-Cylinder, 39HP,Diesel Engine, Without Hydraulic System with new sheet metal
without canopy.
9. Swaraj-834 Tractor, 3-Cylinder, 34HP,Diesel Engine, Without Hydraulic System and without canopy.
10. Swaraj-843 Tractor, 4-Cylinder, 42HP,Diesel Engine, Hydraulic System and without canopy.
11. Swaraj-724 Tractor, 2-Cylinder, 26.5HP,Diesel Engine, without Hydraulic System and without canopy.
12. Rotary Cultivator Model: ZS155E,ITALY(36 Blades).
13. Rotary Cultivator Model: ZS155E,(42 Blades).
14. Rotary Cultivator Model: ZS185E,(54 Blades).
15. Combine Harvester, Model-R-1, 450,45HP.
16. Combine Harvester, Model-R-1, 350 G,35 HP.
17. Power Tiller, GN 121, 12 HP.

2.2 Objectives of the Corona Group.

 To achieve and continue growth in sales
 To continuously develop human resources

Provide our Consumers with the Best Service & Shopping Experience in the Country.
Provide our Consumers with Products of Latest Technology. Develop our Employees to
achieve their real potential. Provide our Shareholders with steady Asset Growth and Return
on investment above our Industry Norm. Grow our Revenue and Profits at a rate above
the Industry Norm.

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2. 3 Mission
Our mission is to improve the quality of life by providing comforts and
conveniences at affordable prices.

The mission statement emphasizes on the company's inclination towards fulfilling the need
of the people, by offering them a novel set of quality products at a reasonable cost. Over
the years, Corona Group has come up with a variety of goods and Company like Corona
Luk Oil, Corona Industries, Corona Tractors, Corona Services,Corona Agro Food IND. &
Corona Holdings etc. to meet the ever-changing needs of people.

A vision becomes tangible as a mission statement. This statement has some parts, those
are listed below:

 Improve the life of people.

 Providing comfort and conveniences.
 Affordable price.
Last but not in the list,
 Providing service generation to generation.

These entire conditions make Corona Group mission successful.

2.4 Vision

To be the most admired and respected familiar company in the country.

Corona Group has been successful in realizing this vision by creating a lasting brand name
in every Agri. Equipment all over the Country among the world. Corona Group has
continued to expand in the field of consumer durables by acquiring new companies
producing related products.
It also describes aspiration for the future, without specifying the means necessary to
achieve those desire ends. Corona Group has continued to expand in the field of consumer
durable and also increasing social responsibility. It has created a lasting brand name in
every Agri. hold all over the world.

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 2.5 Our Value
To treat our employees, recognizing them as assets of the company to honor
and maintain high ethical standards.

1. Consumers: We live up to the expectations of a responsible Organization by contributing

to the improvement in the Quality of life of our customers through outstanding product &
services.
2. Employees: We respect each other as individual and encourage cross functional teamwork
while providing Opportunities for career development.
3. Dealers: We provide a reasonable return to our Dealers while, safeguarding their
investment.
4. Suppliers: We develop our suppliers to be partners in progress arid share our growth with
them.
5. Competitors: We respect our competitors and recognize their contribution to mixed value.
6. Community: We conduct our business by conforming to the ethics of our country and
share the social responsibility of the less fortunate.

2.6 Management Strategy

Corona Group consistently focuses on growth and risk minimization through product
diversification and increasing the market share of existing products by responding to
changing customer needs.
Strategy:

A Proper strategy is important to the success of a business. Strategy to sale the products are- Push
Strategy: Push strategy requires pushing the dealers to sale the products on their own responsibility.
Sales of our products largely depend on the dealers. Dealers convince the customers to buy our
products. In this case dealers take the responsibility to publicize the product to sale. They also do it to
achieve their own sales target given by CTL.

Pull Strategy: Pull strategy requires creating a demand of the product in the mind of the customers by
advertisements and other promotional activates.

2.7 SWOT Analysis:

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 This SWOT analysis is done to understand what the dealers present for CTL. That means what strength,
weakness, opportunity, threat do the dealers possess in terms of CTL’ business.

Strength:
• Reaching the product to remote places: it is really convenient to reach consumers of remote areas of
the country through dealers.
• Flexibility: as per the requirement or the situation of the business in certain areas CTL can easily
withdraw their businesses,
• No fixed assets cost: Dealer are not CTL fix assets. Therefore cost can be minimized of establishing
fixed assets like CTL own retail outlet.

• Worlds most known brand company in global advanced product and distribution
services.
• It has a manufacturing department where produced three types of product.
• 171 wholesale dealers over the Bangladesh.
• Employees feel more job security.
• Number of employees in 2011 is 237.
• Strong local presence

• Favorable brand image

• Comprehensive knowledge of the total market and client

• Good quality and top quality of products with solution

• Using advance high-tech technology

• Because of long term experience, customers reliability and loyalty

Efficient after sales service

Weakness:
 Great number of dealers may cause problems in cost minimization.
 Another problem is that with the increase in number of the dealers we will also have to increase the
number of after sales service which is called Inter Service system. It may not be possible to give proper
service in the remote areas. And as a result it may hamper the goodwill of the br

 They cannot complete their regular work within the month as like selling price or receivable.
 For the leakage of few employments in the credit department, each employee has taken
more pressure. For that reasons it is possible to make mistake at the time of data inputting.

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 Enterprise Resources Planning (ERP) is very important software for day to day business
operation. But till now it is not running.
 Lack of brand awareness

 Higher tax on home appliances ness

 Lack of consistency in promotional activities

 Less competitive price; competitor sourcing product at cheaper price  Less

organized distribution

 Less compliance to market deman

Opportunity:
 Campaigning: It is easier to start a campaign from a dealer point. Many other times a dealer informs us
about a local occasion in that place in which we can take business advantage of and operate a campaign
from that point of dealer.
 Switching Customer In: With proper strategy we can motivate the dealers to convert consumers of other
products into users of our products.
 Visibility: Dealers are a point to increase the visibility of our product by properly placing our product in
the shelf of the dealers.
 It has a congenial environment facility for all of the jobholders performing
their task with more efficiently.
 Always making a combination of flows of the information, goods and funds.  Air-
conditioned office rooms
 There is a brotherhood relationship from top to bottom, due to this one of the employees
can easily feel lower risk free job situation than any other organization of the Bangladesh,
for this reasons the employees also try to perform their responsibility with more accurately
and intimately.
 The market position of the company is very good because its financial strength is good and
growth rate also increasing up day by day.
 Exclusive Gratuity and Bonus Facility.
 There is a system of incentives for the sales executive based on fulfilling the target as a
sales promotion and also for the credit executives based on the credit collecting of their
credit limit.

 Product sales by credit system.

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 Threat:
 One of the threats from the dealer is that they sometimes do not use the warranty card in the systematic
order.

 They do not fill up the warranty card at the time of sale and manipulate it to fill up later on which increases
the chances of our increase in cos

 Other competitive worldwide company whose have similar product & services.
 Perception of future demand of the customer.
 Foreign currency fluctuation and devaluation of the local currency.
 Higher tax on Home Appliances

 Competitor sourcing product at a cheaper price.

 Investors are not interested to invest more in Bangladesh because of the unstable political

condition of our country. As a result there would be less industrializing than expected. It

will reduce the sale.

 Government is slow in decision due to inefficient administration.

 Impact on goodwill: dealers can spoil the reputation of CTL to gain personal interest.


2.8 Company Profile

. Registered & Corporate Office :

“Kazi Tower” (3rd Floor)
86 inner Circular (VIPs) Road, Naya paltan,
Dhaka –1000.
Tel: 9333764, 9362527 Cell: s01711-898667
Fax: 880-2-9342973
E- mail: Corona [email protected]
• Corona Plant :
Darikandi, Sonargaon,
Narayangonj, Cell: 01711-898669.

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CHAPTER THREE

ORGANIZATIONAL STRUCTURE

3.1 HUMAN RESOURCES DEPARTMENT

Creating a complement and healthy working environment, Corona Group values its Human
Assets and committed to their growth and prosperity. The success of any business
organization depends on the quality of its human resources i.e. their caliber and
commitment. Corona Group is committed to ensure that the Company is capable of
continued growth and profitability by satisfying customers' needs and to provide employees
with high level of job satisfaction. Consequently, Company's personnel initiatives are
designed to encourage open communication, creativity, innovation and initiative. Because
the Company believes well trained and proactive employees with high level of job
satisfaction will ultimately contribute to the increase in profitability of the Company.

HUMAN RESOURCES
DEPARTMENT

HR ADMINISTRATION TRAINING LEGAL

MANAGEMENT

Major functions of this department are:

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  Recruiting, transferring,
promoting and terminating of
employee.
 Arranging training both in-house
and outside.
 Personnel policy evaluation and
implementation.
 Maintaining protocol, counseling
and discipline of organization.
 Legal aspects.
 Recording employee’s salary,
leave administration and annual
performance
evaluation.
Handling recruitment & selection, training & development, job review, Performance
appraisal, employee relations, and disciplinary issues in Accordance with relevant
policies, procedures and
Formulating HR policies and procedures
Implementation of Company HR policies and
Reviewing HR policies and procedures and revising as per need of the Organization
Ensuring the departmental policies is competitive within the Company
HR planning and budgeting
Handling employee disciplinary actions and or separations i.e. termination,
Discharge, dismissals and voluntary separations
Managing Performances and ensuring evaluation of all employees
Handling grievances of employees
Check & calculate Allowances for applicable cases to include in monthly Payroll.

3.2 MARKETING DEPARTMENT

Corona Group has a unique retail network. Its products are sold more than 230 outlets
across the country. These are strategically located all over Bangladesh. Corona Group is
the only company in the country with such an extensive retail network. As a retail company,
marketing consumer durable products, Corona Group efforts have been focused on the
store-merchandising concept.

This division is headed by the Marketing Director, who is reportable to the Managing
Director (MD). Under him have three units:
1. Sales
2. Distribution
3. Sewing School.

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 Marketing Director is assisted by Sales Managers. That is for Retail part. Also reported be
Deputy Manager, who is assigned for Distribution part and Assistant Manager, who is
assigned for Education part. All other employee works for this department and all time get
connected. By this they report to their superior.

Market Segment:

Market segment is important for every business. Segmenting and targeting a segment is crucial for the
success of the business. It reflects how well a business understands its market. Corona has targeted a
mass market. But if we carefully see it is not actually mass market. It is the mass market in case of the
suburban and rural areas. But in the urban areas the target market is the low income middle middle and
lower middle class people.

MARKETING
DEPARTMENT

SALES DISTRIBUTION SEWING

(RETAIL) SCHOOL

3.3 MARKETING SERVICES DEPARTMENT

The head of this department, the Marketing Services Director, has three sub-sections
management team under him. They are:
1. Product Management.
2. Advertisement & Sales Promotion.
3. Service Center

Promotional activities are essential to every market now days. There are two types of
promotional activities undertaken by the CTL.

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Trade Promotion: CTL takes several trade promotional activities to boost up the dealers sales
and their attitude to sale.

Cash Discount: dealers are given cash discount on the basis of-
Buy certain product: Cash discounts are arranged for dealers if they buy particular items.
Certain quantity: A minimum of certain quantity buy may also benefit them with a cash
discount. Article Offer
Foreign trip: Satisfactory business may result in gaining a foreign trip free of cost and borne by
CTL.
Product: Product gifts are also in practice for satisfactory business deals.

Consumer promotion: CTL also undertakes some Consumer promotion activities to attract end
users.
Scratch card: Every transaction will have a scratch card given to the consumer. And random
prizes, discounts are given upon scratching the card.
Cash Discount: Cash discount on special promotion offers are also given to attract consumer

Advertisement:

The advertisement issue is a controversial issue for CTL Agro. Equipment of product. Very
little advertisement activities are taken by CTL products. CTL does the advertising through –
T.V
Radio.
Newspaper.

These advertise to create consumer pull are really very poor not in terms of quality but in
terms of frequency. A special consideration and emphasize can be given to be more strong in
the market. Advertisement really makes differences in today’s competitive market.
Customers:
T & A distribution has two customers to deal with. The primary customers are the dealers.
The secondary and the final customers are the consumers. So CTL has to deal separately with

18
the two customers. Two different actions plans are required for the two different customers
though they are somewhat related to each other. But still CTL takes special focus on each one
of them.

Customer Service:

Customer Service is very Crucial to Brand Image for any Business. CTL arranges the customer
service in a systematic way. The end users are given a warranty card along with the product
they buy. So in case of any problem or defect in the product the end users are supposed present
the warranty card to get the service of the warranty period. Dealers relate themselves with the
customer service in two different ways.

CTL Customer Service in Darikandi: Dealers send any complaint products to the Darikandi
Home Care Service near Narayangonj Town.
Inter-Service in Different Regions: To make it cost effective and give the consumer best
possible service in minimum time CTL has some authorized agent in different regions for
customer service. So dealers sent the complaints product to the Inter-Service for repairing them
MARKETING SERVICES DEPARTMENT

PRODUCT ADVERTISEMENT SERVICE

MANAGEMENT & SALES PROMOTION CENTRE

The first section is Product Management, which is headed by the Business Development
Manager, second is Advertisement & Sales Promotion, which is headed by Advertisement &
Sales Promotion Manager, while the last section Service Centre is headed by Manager. All these

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managers are under Marketing Services Director. And Marketing Services Director reports
directly to Chief Operating Officer.
3.4 FINANCE DEPARTMENT
This division is responsible for ensuring optimum and most efficient uses of the company's
resources through various controlling and monitoring activities. It is headed by the
Controller & Finance Director, and consists of the Audit, Corporate Affairs, Credit,
Commercial, MIS and Accounts. However, the last four units are reportable to the Chief
Accounts Manager, who is himself reportable to the Controller. There have a lot of activities
of individual department. The following is the organization chart of the department:

CONTROLLER &
FINANCE DIRECTOR

FINANCE COMMERCIAL INTERNAL CORPORATE MIS CREDIT

& ACCOUNTS & LOGISTICS AUDIT AFFAIRS

1. Finance & Accounts:

In the finance & accounts department they are responsible for control cash flows operation.
They are responsible for makes sure that, the operation running smoothly. Their general
activities are describing below:

Accounts division creates and maintains records of company transactions for both internal
and external audiences.

The Accounts unit may be considered a department by itself, for it has the following
functional units - Sales Accounts, Costing & Inventory, Payables, Cash
Management, and General Ledger.

The company accounts represent the financial statements. The investment in associate
companies was accounted under the cost method. The carrying value of associate company
investments is shown at cost and only dividend income received from associate companies
is recognized as income.

Credit department:

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 In the credit department they are responsible for control hire purchase operation. They are
responsible for makes sure that, the operation running smoothly. Their general activities
are describing below:

What is hire purchase?

Hire purchase is a form of credit. The customer agrees to buy goods and to pay for those
goods in installments. The customer has the right to possess and uses the goods from the
time the contract is made. Seller has security interest in the goods until all amounts owing
by the customer are paid.

How a hire purchase accounting is opened:

Application form
(to be filled up by the customer)

Scoring form
(to be filled up by the shop manager)

Photograph
(3 copies)

Two Guarantors
(Signature & addresses)

Physical verification
(By the shop personnel)

Agreement
(Among customer & two guarantors and shop managers)

Down Payment

Money Receipts

Products Delivery

Monthly Installments
(From next month)

Credit scoring:

A customer must meet before granting credit approval i.e. credit scoring form. The criteria
are likely to include:

 The buyers previous credit history

 Their ability to pay
 Their current income
 Residence status

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 Profession & length of profession
 Age family size
 Guarantors
 Whether they have any other outstanding debt payable at the present time.

Customer should fill up the credit scoring form first then it has to be verified by the shop
management.

Guarantors:

For credit approval we require two guarantors. A person acting as a guarantor must sign a
guarantee agreement in writing. A guarantor is not just providing a credit reference for the
purchaser. They shall be held liable for the debt if the customer defaults on the agreement.

Hire purchase contract

A hire purchase contract must be in writing, be signed by the customer, the guarantors
and the retailer, and disclose:

 A description of the goods

 The name and address of the hirers & guarantors
 Financial details of the contract  The number of installments
 The amount of each installment
 When, where, and to whom each installment is to be paid.

Defaulters for above 6 months - The process will start from 5th Steps.

Black List – The customer who have failed to pay minimum 6 installments are listed as
bad customers. The list has to be updated quarterly. Shop Manager will be able to assess
the Black Listed customers when he makes a new sale.

Legal Recourse – From now on we will go for legal actions against the defaulters. It will
be a message to the bad customers that no one can be escaped without making payment.
But HP documentations have to be needed complete & authentic.

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 Commercial & logistics:

In the commercial & logistics department they are responsible for control all import
transactions and opening of L/C operation. They are responsible for makes sure that, the
operation running smoothly. Their general activities are describing below:
1. Requisition for order
2. Purchase of product
3. L/C Opening
4. Select L/C opening Bank
5. Insurance
6. Vat
7. Warehouse

Requisition for order

This department confirms how many and what types of product or equipment does the
company need or wants to purchase.

Purchase

After getting confirmation, the purchase department involved to buy product. And they try
to follow up its related work.

L/C Opening

To get confirmation of purchase, then the company goes to open L/C for foreign purchase.
In that case they need requisition for that confirmation that, how much product has in their
hand. After getting requisition they starting their work.

Select L/C opening Bank

First they select in which Bank (must be negotiated), they would like to open L/C. Then
collect L/C form from that Bank, fillup the form, attached insurance cover note and submit
to the Bank.

Insurance

There are several insurance companies, which should be maintained in order to protect
and purchase product and assets of the company. At present the following insurance
coverage is in place in the company:-

1. Sonar Bangla Insurance Co. Ltd.

2. Provati Insurance Ltd.

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3. Cristal Insurance Ltd.
4. Eastland Insurance Co. Ltd.

The finance and accounts department should maintain the respective file of the policy and
ensure regular premium payment and charge the same in general ledger as expenses.

Vat

Vat is one of the major indirect taxes in Bangladesh. It is paid on the value that an
individual or an organization adds to goods and services at each stage of their production
and distribution. The tax eventually gets passed on to the consumers. Vat is payable to
the government on the service revenue.

Warehouse

Inventory Procurement & Management

• Based on annual sales plan and regular forecasts.

• Product-wise inventory available as required
• Identification of idle stock & transfer to other locations.
•
Monthly Stock Building Plan

• Objective is to move the products through a system on regular basis.

Product Delivery

Implementation in phases-

• Consolidation of product mix for a single/multiple destination.

• Consolidation of product mix required for a month –single/multiple destinations.

Internal Audit department:

In the internal audit department they are responsible for control to reduce variance of
income and cost operation. They are responsible for Keeping close watch on irregularities
(if any) & taking prompt actions. Coordination with all locations to identify phased out
/defective/ obsolete products, spare parts & prompt disposal. They are responsible for

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 makes sure that, the operation running smoothly. Their general activities are describing
below:

REGULAR AUDIT AT-

Sales Agents
Corporate Office
Warehouses
Services Centre
Manufacturing Unit

Corporate Affairs:

In the corporate affairs department they are responsible for control all company related
secretarial matters operation. They are responsible for makes sure that, the operation
running smoothly. Their general activities are describing below:

 Company Legal Issues

 Statutory Accounts & Dividends
 Corporate Tax & Other Taxes
 Fixed Assets Management
 Treasury Functions
 Board Meeting Issues

3.5 MIS Department

Management Information System (MIS) section presents ERP (Enterprise Resources

Planning) for less time consume. ERP is a new division which deals with computerized
financial data transaction within the organization. And shortly MIS will bring online record
transaction.

Enterprise Resource Planning software systems (ERP) encompass a wide range of software
products supporting day-to-day business operations and decision making. ERP serves
many industries and numerous functional areas in an integrated fashion attempting to
automate operations from supply chain management, inventory control, manufacturing
scheduling and production, sales support, customer relationship management, financial

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 and cost accounting, human resources and almost all other data-oriented management
process. ERP systems have become increasingly prevalent over the last 10 years
throughout the world. By the year 2000, ERP systems have been implemented in over 60%
of multi-national firms.

3.6 Distribution Department

Corona Group has a unique retail network. Their products are sold through their own chain store
numbering 90 and exclusive sales agents numbering 50, strategically located all over Bangladesh.
Corona Group is the only company in the country with such an extensive retail network of its own.
As a retail company, marketing consumer durable products, their efforts have been focused on the
store-merchandising concept. They have successfully given a different perspective to all their retail
stores keeping in mind what makes a good purchasing experience.

3.7 Warehouses
There are eight warehouses in Corona Group. These are located in- 1. Dhaka
2. Dinajpur

3. Comilla

4. Rajshahi

5. Jessore

6. Rangpur

7. Mymensing

8. Kishoregonj

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 CHAPTER FOUR

(POLICY GUIDELINE FOR FINANCE AND ACCOUNTS)

4.1 Introduction
This manual is prepared as a guideline for the operating activities of finance & accounts
department of the company. This will lay the foundation for a system of internal accounting
controls. Examples of the key documentation are included in this manual to achieve the
objectives of the department. This manual is intended to be used only as an aid and should
not be considered a replacement for management involvement.

4.2 Cash receipts

Cash receipts through company’s money receipts. In corporate finance and accounts
department each deposit must be entered into a collection register manually. After the
entry the receipts are handed over to the concerned revenue section for posting to match
against revenue. Collection register will generate cash collection report.

4.3 Cash disbursement

Cash disbursement should be controlled strictly as this is a liquid asset. Basic control of
cash disbursement should be as follows:

1. Management will approve payment vouchers.

2. All payments especially vendor payment must be made through cheque.
3. The signatories of the cheque will be top management and top level staff is authorized.
4. No cheque should be prepared without the approval of payment vouchers.

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 Cash is generally disbursed for the major categories of accounts payable, recurring
expenses, payroll, impress cash. The procedures of cash disbursements are presented
below:

4.4 Account payable

1. An authorized individual, who indicated approval by initialing the invoice, should approve
invoices for payment in writing after review.

2. Checks maybe generated manually.

3. Supporting documents referred to as voucher to as voucher are attached to the cheque for
signing. The documents usually contain as:-

 Purchase order
 Receiving report
 Invoice

4. Money receipt should be received when payment is made.

5. Source tax should be deducted, if applicable, form the payment.

4.5 Recurring expenses

Recurring expenses are of different types. They may be one time in a month, occasionally
and regular. The monthly ones are utilities bills and examples of regular type are
conveyance, entertainment, etc. expenses in connection with business travel, training,
promotional etc are occasional expenses in nature.

(i) Monthly

Monthly expenses should be paid on the basis of invoice/ bill submitted by the authority
concerned. Payment is this regard should be ensured to the designated deposit centers
within the stipulated time in order to avoid disruption of services.

(ii) Occasional

Occasional expenses are incurred for specific purposes in this regard are as follows:
 Expense report should be completed on a timely basis

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  Receipts for expensed should be attached to the expenses report prior to the expense
report.
 Date, time and business purpose should be stated.
 The staff should sign and dated the expense report prior to its submission to finance and
accounts department.
 Before disbursement or adjustment of advance made against him/her, the expenses report
should be approved by the authority.

4.6 Payroll
The salary of the staff should be paid on the basis of the employment agreement with the

company.

4.7 Imp rest cash

Imp rest cash fund is a revolving fund maintained at a constant amount to cover the small
cash expenditures such as conveyance, entertainment, minor office supplies etc.

At all times the general ledger imp rest fund account balance in the name of respective
should be the amount of cash that was originally advanced.

The following procedures are helpful in maintaining the imp rest cash fund account:

1. To establish the imp rest fund account, make a fund available to the in charge for an
amount sufficient to cover small expenditures for a designated period of time.

2. The in charge is required to provide expenditure vouchers to corporate office immediately

after the close of designated period of time.

3. The concerned section of finance and accounts department should process the vouchers
and send to the proper authority for approval.

4. Discrepancy detected at the examination of vouchers.

5. The amount in the vouchers as found and approved should be made available to the
concerned after posting to the concerned account.

4.8 Advances
There may require some unavoidable advance such as:

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 Advance to vendor for specific product.

Advance to employee on humanitarian ground

Whatever the nature of advance this should be made available to the beneficiary after
proper approval from the top management of the company. The department should take
necessary steps to realize the advance as per understanding.

4.9 Prepayments & security deposits

Prepayments required for rental office should be made available as per agreement on
approval by the management. The department of finance and accounts should adjust the
prepayments as per agreement. No lapse in this regard will be allowed. In addition, there
require some security deposits for securing business telephone, customs etc. these should
be made through cheque subject to the approval from the management. The corporate
finance and accounts department will be responsible to bring back the same at the end of
the stipulated period. In addition, the transactions should be accounted for properly.

4.10 Investment
Investment policies are too complex to fully discuss here, but controls for managing
investments should include the following:

• The finance and accounts department is to implement the investment decision to the
company.
• The present policy in this regard is to place fund in fixed deposit reserve with banks and in
saving certificated issued by the government.
• The investment will be made when the board of directors takes decision.
• The interest earning in this regard will be accounted for on maturity of the investment.

4.11 General ledger

The general ledger (G/L) accumulated all accounting activities for an accounting period.
The importance of the (G/L) systems become apparent in light of a double entry objective
that:-

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(a) All transactions are properly accumulated, classified, summarized and recorded in the
accounts and,

(b) Financial transactions and reports accurately reflect the details of all operations. As
evidenced by the objective, the activities of a (G/L) system are varied, ranging from the
preparation of journal entries to the production of the final financial statements. The basic
flow of events for a (G/L) system is simple, revolving mainly around the journal entry.
Initially journal entries are prepared by summarizing the period’s activity. Journal entries
are then posted to the (G/L). Reports are generated from the (G/L), reviewed for accuracy
and any variances are explained. Finally, financial statements are produced from the final
general ledger. Because of the impact of the (G/L) system, the following key controls are
imperative:-

 Approval of all journal entries by a designated authority before posting.

 Checking of validation sheet of journal entries to confirm the accuracy of the posting.
 Review of month end financial statements by departmental heads.

4.12 Accounting Activities

As stated above, summarization of the month’s activities is done via journal

entry. The different accounting activities that give rise to journal entries are
as follows:-

Cash activities

 Cash receipts: Cash payment is received through money receipt from different sources o

Cash sales o Credit collection

All receipts either cash or cheque must be entered to the respective revenue centers
individually. At the end of the month journal entries of accumulated figure is to be posted
to the (G/L) accounts.

 Disbursements: Posting is required at the time of each payment individually to the

respective head of accounts.

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 Operating activities

 Accounts payable: There are some recurring expenses identifies as accounts payable such
as o Direct cost- o General cost- Salary, Rent etc.

This type of expenses is to be recorded on cash basis in the existing data base file. At the
end of month this is to be treated as payment against account payable in the reporting
software.

 Account receivable: Credit sales will be treated as accounts receivable and at month end
journal entries receivable is to be posted to the (G/L) in order of revenue center.
 Payroll: Salary for the working month is to be paid and at the end of each month payable
account for salary is to be posted and when paid payment is to be adjusted in reporting
software.
 Depreciation: Depreciation is to be charged on- o Fixed assets: Building, leasehold

improvement, plant and machinery, motor vehicles, furniture equipment and tools as per
journal entry to be posted in the reporting software.

 Prepaid/ Advanced: It is to be ensured at the time of posting of payment/ adjustment that

prepaid/ advance account (such as prepaid office rent, operational advances) is properly
accounted for.
 Additional entry: Any additional journal entry, if required must be supported by proper
documentation

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 CHAPTER Five

CONCLUSION & RECOMMENDATIONS

5.1 CONCLUSION

The analysis of the firm’s financial statements consists of mixture of steps and pieces that
interrelate and affect each other. No one part of the analysis should be interpreted in
isolation. Short term liquidity impacts profitability; profitability begins with sales, which
relate to the liquidity of assets. The efficiency of asset management influences the cost
and availability of credit, which shapes the capital structure. Every aspect of a firm’s
financial condition, performance, and outlook affects the share price. The last step of
financial statement analysis is to integrate the separate pieces into a whole, leading to
conclusions about the business enterprise. The specific conclusions drawn will be affected
by the original objectives established at the initiation of the analytical process.

5.2 RECOMMENDATIONS

So there have some weaknesses that act as barriers for being better performance of Corona Group. If
the company can reduced this kind of barriers, company can be successes. So they can take some
action to recover those barriers that is:-

 Have to can increase sales

 Company must follow the chain of command

 To make effective salary structure

 Have to reduced short term loan

 Have to reduced new store expansion Because if it increase more in a year, the expenses of lease
payment are increasing too.

The managerial performance of Corona Group is also very good but for more better in future they can
take some action which is given below:

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 Adaptation of more advance technology in their production process.

Improvement of compensation structure for the staffs and employees.

Uses of Modern updated software’s in all departments for accomplishing the task which I think will make
the work more effective and efficient. It will also save a lot of time and energy.

Evaluation for the good performance of the employees by introducing award and incentives.

Corona Group should try to perform some social responsibility like establishment of Hospital, providing
medical facility to any rural areas for particular period of time etc.

Corona Group should improve its existing distribution system.

Delivery schedule should be modified, i.e., the number of weekly delivery should be increased according
to the demand and expectations of the dealers.

More surveys can be done in order to identify more deeply the causes of poor performance and other
areas of flaws.

Customers’ database should be maintained using software that is more sophisticated so that existing road
map/plan can easily be modified anytime.

Modern and versatile software should be used to run the process of keeping records and invoices so that
anytime a recheck can be possible.

Crosschecking of every records and activities should be introduced and practiced.

Beside distribution, Corona Group should concentrate on improving the other areas of operation as well.

Brand equity in terms of market share should be the main focal now because distribution alone can do
nothing if the customers ultimately do not demand the product

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 BIBLIOGRAPHY

♦ -Lyn M. Fraser –“Understanding financial

statement” – (Ed-5th )

♦ – Ross Westerfield Jordan -“Fundamentals of

Corporate finance” – (Ed-5th )

♦ – Bodie * Kane * Marcus “Investment” – (Ed-

5th )

♦ – Richard Pike * Bill Neale “Corporate

Finance & Investment” - (Ed-5th )

♦ – Rose “Money and Capital Markets” –(Ed-6th

)

♦ Choudhury, Dr. T.A. Modes of Payment in

International Trade, Reading Materials on
International Trade & Finance (E- 102),
BIBM, 2000.
♦ Kothari, C R, Research Methodology
Methods & Techniques, (2nd Ed.). New
Delhi, H. S. Poplai for Wisha Prakashan

♦ Corona Group different Manual.

♦ www.Corona Groupbd.com.

♦ Oral discussion with department managers.

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