North South University
A Business plan on
Vietnam Airlines, Bangladesh
Prepared for:
Prepared by:
Raisul Islam (Rsm)
Asif Rahman
Lecturer, North South University.
I.D. # 092 0543 030
MD. Junayed Quadery
Course: Working Capital Management (Fin 340)
I.D. # 092 0415 030
Section: 3
Pramit Kumar Das
I.D. # 093 0170 030
MD. Tanvir Rahman Mojumder
I.D. # 093 0319 030
Date of Submission: 3rd January, 2013
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Acknowledgement:
We would like to thank our honorable faculty Mr. Raisul Islam for assigning us this project. He
also helped us in making this project. By doing this project we came to know about the success
possibility of airline business in Bangladesh. We are also great full to the Civil Aviation
Authority of Bangladesh ( CAAB) who helped us by giving many necessary information. Finally
we are thankful to Almighty Allah for completion this project in due time.
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Table of Contents
Contents
Page No.
Introduction
04
Mission & Vision , Management
05
SWOT Analysis
06
Competitors, Strategy and Alliance
09
Development Team
10
Business Plan
11
Marketing Strategy
13
Memorandum of Vietnam Airlines
15
Memorandum
of
Vietnam
Airlines, 20
Planning
Analysis
(Proforma 26
Bangladesh
Financial
Analysis) of Vietnam Airlines Bangladesh:
Conclusion
3|Page
32
Introduction:
Airlines industry is one of the most profitable businesses in the world. Both the governments and
private sectors are the dominant in the industry. But in Bangladesh this industry has not been
performing well since its initial stage but most of the country around the world moving ahead by
depending on it. The Airlines market in Bangladesh is very demandable but due to
mismanagement it is not moving ahead. So there is a strong scope for Airlines to expand their
market. The internal or domestic private investors are not capable to invest at a big scale. At this
point the existing foreign Airlines companies can take this advantage very easily. In this report
we are proposing a business plan for Vietnam Airlines as General Sales Agent (GSA) in
Bangladesh. This Airline is the world’s third fastest growing Airline Company that has been
operating its activities in many South Asian countries. As a GSA of Vietnam Airlines, we have
studied many factors regarding this industry in Bangladesh and we have found that it is so
profitable for Vietnam Airlines if it starts its operation in this country.
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An overview of Vietnam Airlines:
Vision:
To expand Vietnam Airlines ltd. in the aviation market in Bangladesh as well as the whole
world.
Mission:
To utilize the emerging airline market facilities in Bangladesh and to provide safe, Reliable,
efficient and economical air transport services and to satisfy customer’s exceptions while earning
sustainable profit and continuing to be a caring employer.
Goal
To provide and develop Safe, Efficient, Adequate, Economical and properly coordinated air
transport services, internal as well as international.
Management:
The airline has been wholly owned by the Vietnam government. Even though Vietnam Airlines
is state-owned, it plans to launch an initial public offering (IPO). This year has been ruled out
because of the unfavorable global economic situation, but the company is in the final stages of
selecting an investment bank to assist and hopes to complete the IPO in next year.
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SWOT Analysis:
In order to analyze the success possibility of Vietnam Airlines in Bangladesh we need to look at
the current situation of this country. Though the Airlines market is not good but it is growing
very faster. In that case Vietnam Airlines carefully observe its capability to operate its business
in Bangladesh. Presented below is the SWOT analysis of Vietnam Airlines
Strength of Vietnam Airlines:
 Vietnam Airlines has many wide bodies, the carrier is adding narrow bodies to
strengthen its network in China, India and Myanmar and many other countries in Asia.
 The experienced man power that it is really a good strength of Vietnam to lead the
market .These efficient man power are mostly experienced in the field rather that the
literary experts of present days. So if Vietnam Airways can utilize the potentiality of
these forces effectively undoubtedly it will be the emerging tiger of this arena.
Weakness of Vietnam Airlines:
 The main weakness of Vietnam is the miss management. The management of Vietnam
could never worked independently since the government owned type of organization with
having inevitable government influence in almost enact and every corporate aspects of
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this organization and always there was pressure from outside to entertain personal
interest.
 Even from the very initial period Vietnam could not be able to recruit or deploy theright
professional person for the right place to achieve it’s desired objectives. Thisunavoidable
government influence .As a consequence Vietnam Airlines has reached at thismeasurable
stage with aging fleet and burden of debts.
 At the same time considering the global standard of International Airlines, Vietnam
Airlines is lagging behind. The staffs are not provided with modern technologies like
Computer, internet facilities etc. Therefore, information flows, faster customer services
are not ensured from the part of employees.
Opportunity of Vietnam Airlines:
 The market is based on labor traffic, retuning residents, business travelers, medical
purpose and tourists. The cargo market based on RMG, leather goods, medicine,
perishables.
 15carrier for its home like hospitality. The returning residents also prefer national carrier
for home essence.
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 In terms of cargo, the perishables are mostly dependent on Airline services and also
demanded for the RMG. In fact Airlines has over flow demand for cargo in Bangladesh.
Threats for Vietnam Airlines:
 The main threat is considered the free entry of mega carriers like Saudia ,Gulf ,Etihad etc.
Currently about 25 carriers are operating to/from Bangladesh. These carriers are mostly
modern and have good financial strength and experience in this line. It would be very
tough for Vietnam Airlines to survive in the market if it does not take necessary actions
immediately to restructure the brand.
 The local private carriers are also doing well to be threat for Vietnam Airlines
 The airline market in Bangladesh is a growing industry. So establishing and operating
business in this area is not as easy as other countries.
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Competitors:
Pressure from the private sector and the recognition of
Vietnam Airlines difficulties in
effectively serving the aviation market, the CAAB (civil Aviation Authority of Bangladesh ) has
begin to liberalize the aviation market in Bangladesh and to provide authority for new airlines to
operate both domestically and internationally. From the foreign carrier side Vietnam Airlines
will face tough competition in almost all sectors. Especially the mega carriers Saudia, Emirates,
Gulf, Etihad, Qatar, Emirates etc are moving very fast to occupy the market share of middle east
bound passengers. Whereas the Cathay Pacific, Dragon Air, Singapore Airlines, Thai Airways,
Malaysian Airlines are the great hurdle for the market of ASEAN bound passengers. Even for the
regional sectors the Jet Airways, Indian Airlines, Air India, King Fisher may be a big factor to
push Vietnam Airlines out of race.
Strategic positioning
Our strategic positioning is so big. We decided to establish more services outlets all over the
country. Our plan is not only doing service activity but also some sorts of social and
environmental works in a sense of corporate social responsibility.
Strategic alliance
An arrangement between parent Vietnam Airlines and subsidiary Vietnam Airlines in
Bangladesh that will decide to share resources to undertake a specific, mutually beneficial
project. Strategic alliance is less involved and less permanent than a joint venture, typically pool
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resources to create a separate business entity. In a strategic alliance, each company maintains its
autonomy while gaining a new opportunity. A strategic alliance could help a company develop a
more effective process, expand into a new market or develop an advantage over a competitor,
among other possibilities.
Development team:
We will have big well developed team for our business. We always look forward for new
strategies. We will try to find out new ideas for our Airlines business.
Vietnam Airlines in Bangladesh will follow the same practices like its parent country. Under
this full guidelines will be provided by the parent company that should be addressed in such a
corporate Code of Conduct or Ethics Policy in order to provide clear guidelines to affected
Persons on acceptable and unacceptable business practices. The guidance recommends that such
a policy apply to (and be acknowledged in writing by) the entire organization, including
subsidiaries, and all employees, officer, director and agents (banks should consider having
outside parties acknowledge some or all of their Code depending generally on the relative
importance of the agent or consultant's services to the institution and whether the third party is
covered by a professional code or standard that prescribes ethical conduct). Training and
compliance monitoring should be integral parts of the Code or Policy. Violator should be subject
to specific and appropriate actions to deter wrongdoing, compel accountability, and promote
adherence to the Code or Policy.
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Our company guidance includes by reference many other pre-existing laws, regulations, Our
Company Statements of Policy, and other guidance. Codes of Conduct may take the form of
separate statements of ethical principals or standards of behavior for affected persons,
supplemented with attachments or by cross-references to relevant policies or procedures
designed to help individuals make ethical business decisions in a specific situation. Every airline
should review all of the elements contained in this guidance and compare them to its existing
Code of Conduct or Ethics Policy to ensure that all elements are appropriately addressed.
Business Plan:
Business plan is crucial to the overall success and growth of the airline, and must be kept in mind
in the organizational plan and structuring of the airline.

Establishing a high level of operational oversight and quality control that will ensure that
the airline always lives up to its marketing commitments and fulfills the promise of a
high level of service, customer satisfaction, convenience, and safety, at a reasonable,
highly competitive fare.

Avoiding the temptation to go head-to-head with established carriers on routes that
already are well-served, unless solid evidence exists of additional, significant pent-up
demand, or widespread customer dissatisfaction with existing services.

Maintaining flexibility that enables the airline to always respond and adapt to changing
market conditions and opportunities, without being erratic, and employing equipment,
scheduling, and staffing on a basis that is sufficient to get the job done properly,
efficiently, and at a high rate of return, without "overkill" or fielding costly excess
capacity or, conversely, unduly cancelling scheduled flight operations.
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
Identifying, developing, and quickly and cost-effectively exploiting opportunities for new
markets, new market concepts, and expanded sales potential.

Supplementing regularly scheduled passenger service with both regularly scheduled and
also special cargo services when and where sufficient demand exists, and also with
seasonal, peak-period, and other intermittent passenger services on certain key regional,
seasonal, and variable routes where very high load factors can be predicted despite
existing but lower-quality competition, or where competition cannot meet the demand.
Larger, longer-range, or specialized aircraft may be employed on a charter or wet-lease
basis to provide these supplemental, but potentially highly profitable, passenger and
cargo services.

Looking to combine the core aviation business with ancillary marketing concepts and
activities and ground-based operations that support, supplement, and complement the
aviation elements of the business, including such activities as package-, group-, and
charter-travel program offerings; value-added sales and customer services, both land- and
Internet-based; construction and operation of enhanced passenger-, baggage-, and cargohandling facilities and services; and other logical business pursuits both within and
outside the immediate aviation business.

Avoiding growth for growth's sake, and instead looking for solid niche-enlargement
opportunities that will allow incremental, but always profitable, expansion.
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Marketing Strategy
The proposed new airline intends to cut out new territory as it goes about marketing itself. While
it will clearly serve the target markets of South Asia and Europe, it will just as clearly be a
different kind of player on the field, and will seek to be known not only as a Western airline, but
at the cutting edge of the aviation business in Europe.
The airline's emphasis on the latest information and electronic technology, and its stress on
comfort, convenience, safety and customer service, will be cornerstones on which the marketing
strategy will be built.
The airline will utilize a combination of methods to achieve the recognition that it both desires
and needs. A fairly large advertising budget is planned to buy the space and time to get its name
and message in front of the largest possible group of potential customers that it can. Given the
crowded field of Bangladeshi airlines, it is better to come on like a lion than a lamb, or it may be
lost in the herd.
The airline will also utilize public relations to good advantage to extend and supplement its
advertising budget.
There are a number of "hooks," aside simply from its newness, that the airline can utilize to get
the media's attention. The airline is opening up new markets, and it also is transcending the
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technological barrier with the latest technology in the business in Bangladesh, or anywhere. It
has big ambitions, but knows that it needs to serve the customer first to realize them and it wants
to know and serve its markets better than anyone else.
Everything about this airline, from its name to its colors, from the look of its planes to its airport
kiosks, from its smart but informal crew uniforms to its advertisements and literature should set
it apart and it costs little more to do things freshly and smartly than the more ordinary way of
doing things. An organization is new only once in its life, so the airline should grab that
opportunity and get all the attention it can at the outset and it needs to have both an adequate
budget, as well as an outwardly directed management, to achieve that end.
The new airline will become known as one where all the staff practice the motto, "We have a job
to do, and we do it every day - for you!""
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Memorandum:
MEMORANDUM OF ASSOCIATION
(amended by Special Resolutions passed on
26 January l987 and l6 July l992)
OF
Vietnam Airlines Company Limited
l. The Name of the Company is "Vietnam Airlines Company Limited".
2. The Company is to be a public company.
3. The Registered Office of the Company will be situate in Socialist Republic of Vietnam.
4. The Objects for which the Company is established are:(A) To establish airlines for the purpose of transport of passengers and cargo of all descriptions
and to provide air charters and such other services as may be incidental to or conveniently
combined with other business or airlines on domestic as well as international routes.
(B) To succeed to the undertaking of the Vietnam Airlines Board (a corporation established by
the Civil Aviation Act l98l and constituted in accordance with the Vietnam Airlines Board Act
l993), including all property, rights, liabilities and obligations of the Board, both inside and
outside the Vietnam, which are to be vested in the Company by virtue of section 3 of the Civil
Aviation Act l993.
(C) To carry on business as an airline and air transport undertaking and to provide air transport
services and carry out all other forms of aerial work, whether on charter terms or otherwise, and
to carry on any other trade or business or do anything which is calculated to facilitate or is
auxiliary to or associated with such business including to carry on any business now or formerly
carried on by the Vietnam Airlines Board and its subsidiary and associated companies.
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(D) To buy, sell, manufacture, repair, alter, improve, manipulate, prepare for market, let and take
on hire, and generally deal in all kinds of aircraft, plant, machinery, apparatus, tools, utensils,
materials, produce, substances, articles and things.
(E) To carry on any business involving the ownership or possession of land or other immovable
property and to build, construct, maintain, alter, enlarge, pull down and remove or replace any
buildings, shops, factories, offices, works, machinery, engines and to clear sites for the same or
to join with any person, firm or company in doing any of the things aforesaid and to work,
manage and control the same or join with others in so doing.
(F) To provide for any person technical advice or assistance, including research services, as
respects any matter in which the Vietnam Airlines Board had or the Company has skill or
experience.
(G) To maintain, unless and until terminated in accordance with its provisions, any scheme for
the payment of pensions, allowances or gratuities which has been established by virtue of any
enactment for the benefit of members, or employees, of the Vietnam Overseas Airways
Corporation, the Vietnam Airlines Board, or for the benefit of other persons entitled to benefit
under such a scheme who are connected with the Corporations or the Board, and which is in
force when the Company succeeds to the property, rights, liabilities and obligations of the Board.
(H) To act as an investment holding company and to co-ordinate the business of any companies
in which the Company is for the time being interested, and to acquire (whether by original
subscription, tender, purchase, exchange or otherwise) and whole of, or any part of the stock,
shares, debentures, debenture stocks, bonds or other securities issued or guaranteed by anybody
corporate, constituted or carrying on business in any part of the world or by any Government,
sovereign ruler, commissioner, public body or municipal or local authority and to hold the same
as investments and to sell, exchange, carry and dispose of the same.
(I) To enter into contracts, agreements and arrangements with any other company for the
carrying out by such other company on behalf of the Company of any of the objects for which
the Company is formed.
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(J) To acquire, undertake and carry on the whole or any part of the business, property and
liabilities of any person or company carrying on any business which the Company is authorized
to carry on or possess, or which may seem to the Company capable of being conveniently carried
on or calculated directly or indirectly to enhance the value of or render profitable any of the
Company's property or rights, or any property suitable for the purposes of the Company.
(K) To enter into any arrangements with any Government or authorities, supreme, municipal,
local or otherwise, that may seem conducive to the Company's objects or any of them, and to
obtain from any such Government or authority any rights, privileges, and concessions which the
Company may think it desirable to obtain, and to carry out, exercise and comply with any such
arrangements, rights, privileges and concessions.
(L) To apply for, or join in applying for purchase or by other means acquire and protect, prolong
and renew whether in the Socialist Republic of Vietnam or elsewhere any patents, patent rights,
brevets d' invention, licenses, registered designs, protections and concessions, which may appear
likely to be advantageous or useful to the Company, and to use and turn to account and to
manufacture under or grant licenses or privileges in respect of the same, and to expend money in
experimenting and testing and making researches, and in improving or seeking to improve any
patents, inventions or rights which the Company may acquire or propose to acquire.
(M) To enter into partnership or into any arrangement for sharing profits, union of interests, cooperation, joint venture, reciprocal concession, or otherwise with any company, or with any
employees of the Company, including in such case if thought fit the conferring of a participation
in the management or its directorate, or with any company carrying on or engaged in any
business or transaction capable of being conducted so as directly or indirectly to benefit the
Company. And to lend money to, guarantee the contracts of, or otherwise assist any such
company, and to take or otherwise acquire shares or securities of any such company, and to sell,
hold, re-issue, with or without guarantee, or otherwise deal with the same.
(N) To subsidize and assist any persons or companies and to act as agents for the collection,
receipt or payment of money and generally to act as advisers, consultants, brokers and agents for
and render services to customers and others.
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(O) To enter into any guarantee, contract of indemnity or surety ship and in particular either with
or without the Company receiving any consideration or advantage, direct or indirect, from giving
any such guarantee, and to guarantee or secure by personal covenant or by mortgaging or
charging all or any part of the undertaking, property and assets present and future and uncalled
capital or by both such methods or by any other means whatsoever the performance of the
obligations and the payment of any monies (including but not limited to capital or principal,
premiums, dividends or interest, commissions, charges, discount and any costs or expenses
relating thereto whether on any stocks, shares or securities or in any other manner whatsoever)
by any company, firm or person including but not limited to any company which is for the time
being the Company's holding company as defined by Sections 736 and 736A of the Companies
Act l985 as amended by the Companies Act l989, or a subsidiary of the Company or of the
Company's holding company as so defined or any company, firm or person who is for the time
being a member or otherwise has any interest in the Company or is associated with the Company
in any business or venture or any other person, firm or company whatsoever.
5. The authorized capital of the company is $800 million divided into 16 million ordinary shares
of $50 each with power to enhance, reduce or consolidate the share capital and to divide the
shares of the company into different classes and kinds subject to the provisions of the Companies
Act, 1981.
We the several persons, whose names and addresses are subscribed below are desirous of being
formed into a Company in pursuance of the Memorandum of Association and we respectively
agree to take the number of shares in the capital of the Company set opposite to our respective
names:-
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Name and
NIC No.
Father's/
National
Occupati
Residenti
Number
Signature
surname
(in case of
Husban
ity with
on
al
of shares
s
(present &
foreigner,
d's
any
Address
taken by
former) in
Passport
Name in
former
in full
each
full (in
No)
full
National
Block
subscriber
ity
Letters)
Total number of shares to be
taken
Dated: the....................................day of..................................20...........
Witness to above signatures.
No.
1
No.
2
Signatures
Signatures
Name:
Name:
Father’ s name
Father’ s name
CNIC No.
CNIC No.
Occupation:
Occupation:
Address:
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Address:
THE COMPANIES ACT, 1994
(COMPANY LIMITED BY SHARES)
Memorandum of Association
Of
Vietnam Airlines Bangladesh Limited
I.
The name of the Company is "Vietnam Airlines Bangladesh Limited”
II.
The Registered Office of the Company will be situated in the Peoples Republic of Bangladesh.
III.
The objects for which the Company is established are following:1.
To act as general sales agent of Vietnam Airlines in Bangladesh.
2.
To seek and obtain association and recognition from IATA(International Air Transport
Association), international airlines, local airlines, and international and local travel agents,
associations and to kept liaison with tourist bureaus, government departments and other agencies
dealing with travel and transport.
3.
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For the purposes of achieving the above objects, the company is authorized:-
1)
To borrow or raise money by means of local and foreign currency loans from
scheduled banks, industrial banks and financial institutions and other specialized
institutions or non-bank finance companies for the purpose of purchase, manufacture,
market, supply, export and import of machinery, and improvements, repair and
renovations of buildings,, sheds, offices, commercial complexes, building and for the
purpose of working capital or for any other purpose.
2)
To arrange money by issue of debentures, debenture stock, perpetual or otherwise
convertible into shares and to mortgage, or charge the whole or any part of the
property or assets of the Company, present or future, by special assignment or to
transfer or convey the same absolutely or in trust as may seem expedient and to,
purchase, redeem or payoff any such securities.
3)
To purchase/import raw materials, machinery, equipments and allied items required in
connection thereto in any manner the company may think fit;
21 | P a g e
4)
To purchase, take on lease or in exchange, hire, apply for or otherwise acquire and
hold for any interest, any rights, privileges, lands, building, easements, trade marks,
patents, patent rights, copyrights, licences, machinery, plants, stock-in-trade and any
movable and immovable property of any kind necessary or convenient for the purposes
of or in connection with the Company's business or any branch or department thereof
and to use, exercise, develop, grant licences in respect of or otherwise turn to account
any property, rights and information so acquired, subject to any permission required
under the law.
5)
To open accounts with any Bank or Banks and to draw, make, accept, endorse,
execute, issue, negotiate and discount cheques, promissory notes, bills of exchange,
bills of lading, warrants, deposit notes, debentures, letter of credit and other negotiable
instruments and securities.
6)
To own, establish or have and maintain branches and agencies all over Bangladesh.
7)
To acquire by concession, grant, purchase, barter, licence either absolutely or
conditionally and either solely or jointly with others any lands, buildings, machinery,
plants, equipments, privileges, rights, licences, trade marks, patents, and other movable
and immovable property of any description which the Company may deem necessary
or which may seem to the Company capable of being turned to account, subject to any
permission as required under the law.
8)
To invest surplus money of the Company in shares, stocks or securities of any
company, debentures, debenture stocks or in any investments, short term and long
term participation, term finance certificates or any other government securities in such
manner as may from time to time be decided by the directors, without indulging non
banking finance business, banking business or an investment company or any other
any lawful business.
9)
To guarantee the performance of contracts, agreements, obligations or discharge of any
debt of the company or on behalf of any other company or person subject to the
provisions of section 195 of the Companies Act, 1994 in relation to the payment of any
financial facility including but not limited to loans, advances, letters of credit or other
obligations through creation of any or all types of mortgages, charges, pledges,
hypothecations, on execution of the usual banking documents or instruments or
otherwise encumbrance on any or all of the movable and immovable properties of the
company, either present or future or both and issuance of any other securities or
sureties by any mean in favour of banks, Non-Banking Finance Companies (NBFCs)
or any financial institutions and to borrow money for purpose of the company on such
terms and conditions as may be considered proper.
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10)
To purchase, hold and get redeemed, debentures, bonds of any company, financial
institution or any Government institutions;
11)
To enter into arrangements with the government or authority (supreme, municipal,
local or otherwise) or any corporation, company, or persons that may seem conducive
to the Company’s objects or any of them and to obtain from any such government,
authority, corporation, company or person any charters, contracts, rights, privileges
and commission which the Company may think desirable and to carry on exercise and
comply with any such charters, contracts, decrees, rights, privileges and concessions.
12)
To act as representatives, for firm or company and to undertake and perform subcontracts, and also act in the business of the Company through or by means of agents,
sub-contractors and to do all or any of the things mentioned herein in any part of the
world and either alone or in collaboration with others and by or through agents, subcontractors or otherwise.
13)
To sell, transfer, mortgage, pledge, exchange or otherwise dispose of the whole or any
part of the property or the undertaking of the Company, either together or in portions
for such consideration as the Company may think fit and in particular, for shares,
debenture-stock or securities of any Company purchasing the same or to any other
legal entity or person, by other means, permissible under the law.
14)
To conduct, encourage, promote, support, arrange and organize seminars,
symposiums, exhibitions, fairs, conferences, lectures, demonstrations and other similar
activities for promotion of sales or other business interests of any person, companies,
firms, individuals, associations, local or government bodies, foreign governments, and
international agencies, in Pakistan and any part of world for and on behalf of
customers and for that purpose to carry out market surveys, researches, training
programs and other activities.
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15)
To carry out joint venture agreements with other companies or countries within the
scope of the objects of the company.
16)
To make known and give publicity to the business and products of the company by
means the company may think fit.
17)
To establish, promote or assist in establishing or promoting and subscribe to or
become a member of any other company, association or club whose objects are similar
or in part similar to the objects of this Company or the establishment or promotion of
which may be beneficial to the Company, as permissible under the law.
18)
To give any servant or employee of the Company commission on the sale of the
products and for that purpose to enter into any agreement or scheme of arrangement as
the Company may deem fit and to get any servant or employee of the Company
insured against risk of accident in the course of their employment.
19)
To establish and support or aid in the establishment and support of associations,
institutions, funds and conveniences calculated to benefit the directors employees, exemployees of the Company or any dependent thereof and to grant pensions, gratuities,
allowances, relief and payments in any manner calculated to benefit the persons
described herein.
20)
To apply for and obtain necessary consents, permissions and licenses from any
Government, State, Local and other Authorities for enabling the Company to carry on
any of its objects into effect as and when required by law.
21)
To cause the Company to be registered or recognized in any foreign country and carry
on its business activities in any part of the world.
22)
To do and perform all other acts and things as are incidental or conducive to the
attainment of the objects of the company;
6.
It is, hereby, undertaken that the Company shall not engage in banking business or Forex,
illegal brokerage, or any business of investment company or non-banking finance company or
insurance or leasing or business of managing agency or in any unlawful business and that nothing
contained in the object clauses shall be so construed to entitle it to engage in such business directly
or indirectly and the Company shall not launch multi-level marketing (MLM), Pyramid and Ponzi
schemes.
7.
Notwithstanding anything stated in any object clause, the company shall obtain such other
approval or license from Competent Authority, as may be required under any law or the time being
in force, to undertake a particular business.
IV.
The liability of the members is limited.
V.
The authorized capital of the company is $300 million divided into 15 million ordinary
shares of $20 each with power to enhance, reduce or consolidate the share capital and to divide
the shares of the company into different classes and kinds subject to the provisions of the
Companies Act, 1994.
We the several persons, whose names and addresses are subscribed below are desirous of being formed
into a Company in pursuance of the Memorandum of Association and we respectively agree to take the
number of shares in the capital of the Company set opposite to our respective names:Name and surname NIC No. (in case Father's/
(present & former) of
foreigner, Husband's
in full (in Block Passport No)
Name in full
Letters)
Nationality
Occupation
with
any
former
Nationality
Residential
Address in full
Total number of shares to be taken
Dated: the....................................day of..................................20...........
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Number
of Signatures
shares taken by
each subscriber
Witness to above signatures.
No.
1
No.
2
Signatures
Signatures
Name:
Name:
Father’ s name
Father’ s name
CNIC No.
CNIC No.
Occupation:
Occupation:
Address:
Address:
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Financial Planning Analysis (Proforma Analysis) of Vietnam Airlines
Bangladesh:
(Figures in millions, Currency is USD)
Cash Flow Statement of Vietnam Airlines Bangladesh
2007
2008
2009
2010
2011
Cash Flows From Operating Activities
Net Income
Depreciation and amortization
Deferred income taxes
Accounts receivable
Inventory
Account payable
Other working capital
Other non-cash items
Net cash provided by operating activities
1,429
278
26
-304
2,841
4,269
-517
57
429
-851
2,328
1,445
-7
147
24
40
-40
395
312
-15
1,676 2,718
1,966 3,285
-127
29
224
54
1,522
1,703
Cash Flows From Investing Activities
Investment in property, plant and equipment
Acquisitions Net
Purchases of investments
Sales/Maturities of investments
Purchases of intangibles
Other investing activities
Net cash used for investing activities
-2,097
-9
0
-48
852
-1,301
14
-22
-1,339
-1,347
-302
-1
533
-34
-1,159
- 963
2
-261
-20
-288
-567
0
-623
-56
-901
-1,580
344
-1,313
-1,863
-55
-1,186
-162
1
-237
-100
-45
-383
711
-272
-1,557
-1,055
Net cash provided by (used for) financing activities -2,832
-1,403
-336
284
-2,884
Net change in cash
Cash at beginning of period
Cash at end of period
Free cash in flow
OperatingCashFlow
Capital Expenditure
Free Cash Flow
48
5,094
5,119
54
5,119
3,839
57
3,839
4,472
59
4,472
7,434
64
7,434
4,703
4,269
-2,144
2,125
1,445 1,966
-2,053 - 1,594
-607
372
3,285
-1,243
2,042
1,703
-1,697
6
Cash Flows From Financing Activities
Common stock issued
Dividends
Other financing activities
26 | P a g e
Proforma Balance Sheet of Vietnam Airlines Bangladesh
ASSETS
Current Assets
Cash
Net accounts receivable
Inventory
Temporary investment
Prepaid expenses
Total Current Assets
2008
2009
2010
2011
$54
$367
$177
$12
$2
$612
$57
$396
$191
$12
$2
$658
$59
$426
$203
$12
$2
$702
$64
$435
$205
$12
$2
$718
$42
$656
$903
$608
$61
$2,270
$2,882
$43
$656
$928
$631
$65
$2,323
$2,981
$43
$684
$983
$642
$68
$2,420
$3,122
$46
$727
$1,021
$654
$72
$2,520
$3,238
LIABILITIES
Current Liabilities
Accounts payable
Short-term notes
Current portion of long-term notes
Accruals & other payables
Total Current Liabilities
$246
$24
$14
$14
$298
$252
$25
$14
$14
$305
$258
$26
$14
$14
$312
$277
$28
$15
$14
$334
Long-term Liabilities
Mortgage
Other long-term liabilities
Total Long-term Liabilities
$897
$443
$1,340
$931
$485
$1,416
$978
$527
$1,505
$1,021
$576
$1,597
SHAREHOLDERS' EQUITY
Capital stock
Retained earnings
Total Shareholders' Equity
TOTAL LIABILITIES & EQUITY
$300
$944
$1,244
$2,882
$300
$960
$1,260
$2,981
$300
$1,005
$1,305
$3,122
$300
$1,007
$1,307
$3,238
Fixed Assets
Long-term investments
Land
Buildings (net of depreciation)
Plant & equipment (net)
Furniture & fixtures (net)
Total Net Fixed Assets
TOTAL ASSETS
27 | P a g e
Proforma Income Statement of Vietnam Airlines Bangladesh
REVENUE
Gross sales
Less sales returns and allowances
Net Sales
2008
$500
200
$300
2009
$650
230
$420
2010
$720
280
$440
2011
$850
320
$530
COST OF SALES
Beginning inventory
Plus goods purchased / manufactured
Total Goods Available
Less ending inventory
Total Cost of Goods Sold
$350
120
$470
360
$110
$360
165
$525
420
$105
$420
185
$605
435
$170
$435
190
$625
440
$185
Gross Profit (Loss)
$190
$315
$270
$345
OPERATING EXPENSES
Selling
Salaries and wages
Commissions
Advertising
Depreciation
Other
Total Selling Expenses
$35
12
10
14
5
$76
$41
14
12
15
6
$88
$46
16
14
16
6
$98
$52
18
20
16
7
$113
General/Administrative
Salaries and wages
Employee benefits
Payroll taxes
Insurance
Rent
Utilities
Depreciation & amortization
Office supplies
Travel & entertainment
Postage
Equipment maintenance & rental
Interest
Furniture & equipment
Total General/Administrative Expenses
$12
4
2
6
8
2
3
1
3
1
0
0
3
$45
$14
5
3
6
8
2
4
1
3
1
0
1
4
$52
$16
5
3
7
9
2
4
1
3
1
1
1
4
$57
$18
6
4
7
9
3
5
1
4
2
1
2
5
$67
Total Operating Expenses
$121
$140
$155
$180
Net Income Before Taxes
Taxes on income
Net Income After Taxes
$69
22
$47
$175
32
$143
$115
26
$89
$165
28
$137
$0
0
$0
0
$43
12
$0
0
$47
$143
$120
$137
Extraordinary gain or loss
Income tax on extraordinary gain
NET INCOME (LOSS)
28 | P a g e
Ratio Analysis
Liquidity Ratio
2007
2.053691275
1.459731544
314
2008
2.157377049
1.531147541
353
2009
2.25
1.599358974
390
2010
2.149700599
1.535928144
384
2011
2.214191617
1.582005988
395.52
548
16
26.89473684
562
18
27.91176471
603
19
30.81557377
612
21
27.375
630.36
23
28.19625
DSO
60.31779661
54.88518519
54.22857143
44.10416667
45.42729167
DPO
52.63684211
45.39495798
46.37295082
41.45357143
42.69717857
cash conversion period
34.57569135
37.40199191
38.67119438
30.02559524
30.9263631
liquidity RATIO
Current Ratio
Quick Ratio
working capital
working capital
requirement
net liquid balance
D.I.H
Interpretation:
The overall liquidity position is in satisfactory level. As during this period, both the ratios were
above the industry average. Almost all the ratios are nearly constant and rapidly growing.
According to time series analysis between the year 2007 to 2011. Its Days inventory held, days
sales outstanding, days payable outstanding ratios are looking very good according the industry
average. So they should be concern about their inventories, payables and receivables.
29 | P a g e
Debt management Ratio and turnover ratio
2007
2008
2009
2010
2011
56.83553088
57.7323046
58.19987188
59.94441013
61.74274243
Ratio
3
5.64516129
6.052631579
7.173913043
7.389130435
Inventory Turnover
13.57142857
13.07692308
11.84466019
13.33333333
13.73333333
Average Collection Period 60.31779661
54.88518519
54.22857143
44.10416667
45.42729167
Average Payment Period
52.63684211
45.39495798
46.37295082
41.45357143
42.69717857
Total Asset Turnover
0.104094379
0.140892318
0.140935298
0.163681285
0.168591723
Debt Ratio
Times
Interest
Earned
Interpretation:
The overall debt management and turnover ratios position is not in satisfactory level. But as a
growing company it is not bad. Their average collection period and average payment period is
satisfactory according to other companies. So they should be concern about that. The other debt
management and turnover ratios are is in satisfactory lever according to industry average and
quite good for a growing farm.
30 | P a g e
Performance Ratio
Performance Ratio
2007
2008
2009
2010
2011
16.10169492
23.33333333
19.28571429
20.53571429
21.15178571
Operating Profit Margin 5.847457627
12.96296296
8.214285714
9.821428571
10.11607143
Net Profit Margin
3.983050847
10.59259259
8.571428571
8.154761905
8.399404762
R.O.A
1.630811936
4.79704797
3.843689942
4.231006794
4.357936998
R.O.E
3.778135048
11.34920635
9.195402299
10.48201989
10.79648049
Gross Profit Margin
Interpretation:
The overall performance ratios position is in satisfactory level according to industry average. All
the ratios are at growing stage. But between the performance ratios net profit margin ration fall
after a certain period which is alarming for a company. So they should be concern about that.
Overall the performance is good so far according to time series analysis.
31 | P a g e
Conclusion:
After compliting all the analysis we find that Vietnam Airlines, Bangladesh will be a feasible
investment in Bangladesh as a GSA of Vietnam Airlines. It is possible to generate a great pool of
profit by operating in Bangladesh for Vietnam Airlines. Beacuse the number of fliers in
Bangladesh are increasing day by day and airlines indutries are one of the booming industries in
Bangladesh. We think, Vietnam Airlines, Bangladesh will do a good business in Bangladesh and
serve the customer quality service in full manner.
32 | P a g e