1.1. INTRODUCTION:
Working capital refers to that part of the firm’s capital which is required for financing short term or current assets such as cash, marketable securities, debtors and inventories. Funds, thus invested in current assets keep revolving fast and are being constantly converted in to cash and these cash flows out again in exchange other current assets. Hence, it is also known as revolving or circulating capital or short term capital. Working capital, in general practice, refers to the excess of current assets over current liabilities. Management of working capital therefore, is concerned with the problem that arises in attempting to mange the current assets, the current liabilities and the interrelationship that exist between them. In other words it refers to all aspects of administration of both current assets and current liabilities. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, i.e., it is neither inadequate nor excessive. This is so because both inadequate as well as excessive working capital positions are bad for any business. Inadequacy of working capital may lead the firm to insolvency and excessive working capital implies idle funds which earn no profits for the business

1.2. ORIGIN:
Ms. Tasnima Aziza , Course Instructor of  FIN 406: Working Capital Management of Institute of Business Administration, Jahangirnagar University has assigned us  to submit a report with the topic, ‘Working Capital Management of Heidelberg Cement Bangladesh Limited (HCBL)’ on November 28, 2011. The report would follow the general instructions of submitting report. The report is prepared by group work. Our honorable teacher gave us some useful direction to prepare the report, which would be followed by a viva.

1.3. PROBLEM & PURPOSES
A study of working capital is of major importance to internal and external analyst because of its close relationship with the current day to day operations of a business. Efficient management of working capital is the key to the success of every business. In this study, an effort is made to analyze some given problems and purposes in Heidelberg Cement Bangladesh Limited (HCBL);

i)    To understand the components of working capital management of Heidelberg Cement Bangladesh Limited (HCBL)
ii)    To understand the working capital of Heidelberg Cement Bangladesh Limited (HCBL)
iii)    To understand the inventory types and amount of Heidelberg Cement Bangladesh Limited (HCBL)
iv)    To understand efficiency ratios of Heidelberg Cement Bangladesh Limited (HCBL)
v)    To understand overall working capital management of Heidelberg Cement Bangladesh Limited (HCBL)

1.4 RESEARCH METHODOLOGY:

    1.4.1 RESEARCH DESIGN:
The research is exploratory in nature.

    1.4.2 TYPES & SOURCE OF DATA:
    TYPES OF DATA
The methodology used in the study involves the collection secondary data. Majority of the data was collected with the help of the annual reports provided by the company.

    SOURCE OF DATA
 Secondary data were obtained from the internal records of the company i.e., from the published annual reports, website of the company, journals and magazines and also other books related to working capital management.
 
   1.4.3. PERIOD OF STUDY:
A five year period from 2006 to 2010 has been taken for the study.

   1.4.4. TOOLS OF DATA ANALYSIS:
    Ratio analysis
    Analysis of components of working capital

1.5 LIMITATIONS OF THE STUDY
In every program or activities, one has to face numerous constraints. During preparing the report, we have also faced some limitations. Such as,

The study is restricted for a period of five years,
The financial statements contain only historical data and would not necessarily reflect the future.
The reliability and accuracy of calculations and interpretation depends very much on the information supplied in the form of annual reports and other records,
Lack of professional knowledge  and understanding of the researchers,
In this short period of time, the research could not go through all detail aspects of working capital management.

2.1 INTRODUCTION OF HEIDELBERG CEMENT BANGLADESH:
Heidelberg Cement Bangladesh is one the largest producers of quality cement in Bangladesh. Heidelberg Cement Group from Germany, one of the world’s leaders in construction and building material with operations in more than 50 countries, owns 61% shares of the company. In 1998 Heidelberg Cement Group established its presence in Bangladesh by setting up a floating terminal with on board bagging facilities in the port of Chittagong and by distributing the cement to the key markets of Dhaka and Chittagong. In 1999 the group further strengthened its position in Bangladesh and built a greenfield manufacturing plant near Dhaka namely “Scancement International Limited” with an installed capacity of 0.750 million tons per year. In 2000 Heidelberg Cement group also bought a minority position in Chittagong based company namely “Chittagong Cement Clinker Griding Co. Limited (CCCGCL)” quickly followed by the acquisition of a  in controlling stake. The plant in Chittagong has an installed capacity of 0.7 million ton per year. In 2003, the two companies were amalgamated and the company’s name was changed to Heidelberg Cement Bangladesh Limited.

2.2 OVERVIEW OF HEIDELBERG CEMENT BANGLADESH LTD.
Heidelberg Cement Bangladesh Limited meets 13% of the Bangladesh demand for cement from two plants located at Dhaka & Chittagong. The company with 1.5 million tones annual cement production has become a major force in the Bangladesh Cement industry over the last eight years. In Bangladesh, Heidelberg group is one of the largest foreign investors having an investment of 100 million US$ with more than 260 employees working round the clock to materialize the mission of this great global company. By satisfying the needs and aspirations of its customers, employees, shareholders and the wider community, the company is able to maintain its position of strength as a sustainable cement provider without compromising commitment to long term stability and environmental responsibility. Heidelberg Cement Bangladesh Limited is a sister concern of Heidelberg Cement Group
Heidelberg Cement Bangladesh Limited Protection of the environment is an integral part of Heidelberg Cement Group’s strategy. As natural resources are the basis of cement, measures for sustainable environmental care are adopted in all our operations. In Bangladesh, our policy is to produce high quality cement, optimize operations to save on natural resources and prevent pollution in order to create a cleaner and safer environment.

2.3 CORPORATE MISSION OF HEIDELBERG CEMENT BANGLADESH LTD.
The Corporate Image    :  Building worldwide growth by building a better world.
Business Culture        :  Building on local responsibility for international success
Employee Policy        :  Building our business on the knowledge of our people
Market Strategy        :  Building our growth on a solid base of earnings
Customer Philosophy    : Building customer satisfaction
Quality Standard        :  Building on quality products to build reputation
Commitment to Innovation    :  Building on new technologies determines our future success

2.4 PRODUCT AND INNOVATION OF HEIDELBERG CEMENT BANGLADESH LTD.

2.4.1 PORTLAND COMPOSITE CEMENT (PCC):
As part of its relentless pursuit for innovation and constant drive to improve quality, HeidelbergCement has introduced Portland Composite Cement (PCC) during 2003. Absorbing European Norms in cement producing made HeidelbergCement Bangladesh Ltd. the pioneer in this sector. Now-a-days all the cement factories of Bangladesh are producing cement as per European Norm. The category Portland Composite Cement (CEM II) is the market leader in Europe.
 
2.4.2 CEMENT PRODUCED ACCORDING TO THE BDS EN:
ScanCement and RubyCement are designed to achieve the best characteristics for its customers; this result is achieved by design using clinker and high quality other constituents. PCC has the optimum of: Durability, Long-term strength and workability. ScanCement and RubyCement are produced according to the European norms BDS EN 197-1:2003.

2.4.3 CHARACTERISTICS OF ScanCement / RubyCement:     
Higher Strength
Higher Durability
Better Workability

2.5 CORPORATE SOCIAL RESPONSIBILITY OF HEIDELBERG CEMENT BANGLADESH LTD.
Heidelberg Cement Bangladesh Limited is deeply committed to the people, society and country where it operates. On the way to becoming the top player in our industry, Heidelberg Cement Bangladesh Limited has put a clear focus on customers, employees, social and environmental awareness building, safety and health issues and many more.