RAK Ceramics (Bangladesh) Limited - DSE

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(g)Potential changes in Global or National PoliciesChanges in the existing global or national policies can have either positive ornegative impacts for the company. Any scarcity or price hike of raw materialsdue to changes in policy in the international market might hamper theproduction and profitability. Furthermore, the performance of the companywould also be hampered due to unavoidable circumstances both in Bangladeshand worldwide like political turmoil. Since the risk involved with the potentialchanges in global or national policies is a macro factor, it is beyond thecapability of RAK to control.Management perceptionThe management of RAK Ceramics is always concerned about the prevailingand upcoming future changes in the global or national policy and shallresponse appropriately and timely to safeguard its interest. Due to the strongbrand equity of the company in the local market; and deep and profoundknowledge the company will always endeavor to withstand the unexpectedchanges or any such potential threats. Nevertheless, political stability and acongenial business environment is definitely the best situation in which RAKwill achieve its maximum potential. Political turmoil and the disturbance arebad for the economy as a whole and so also for the company. Government fiscalbudget 2009-10 has provision to discourage imported goods & support to localmanufacturer, Targeted GDP growth rate 10% by 2017 and share of industry40% in place of existing 28% will further boost the industrial development.(h)History of Non Operation:There is no history of non-operation in case of RAK Ceramics (Bangladesh)Limited since its commercial operation started. To overcome such risk in future,RAK has its own power backup, own water supply system and scientificinventory management system, which will reduce the risk.(i)Operational Risks:In order to minimize the operational risks due to shortage of power supply, RAKhas entered into a Power Purchase Agreement with one of the sister concern ofthe Group Company named RAK Power Private Limited which is engaged ingeneration of power towards exclusive use into RAK Ceramics.(j)Management risk:Turnover of key managerial personnel, executives and officers may have adverseimpact on business, operating results and future growth.
Management perceptionThe Company places high priority in developing human resources. Importanceis given to relevant on-the-job, in-house and external training programmes, sothat the people are well equipped with necessary skills. In line with thesebeliefs, RAK has been offering competitive package to its employees of all ranksto encourage professionalism, stimulate team-work and promote innovationreinforced with high ethical standards. The company has reputation for cordialand congenial working environment. The staff turnover ratio is at its lowestpoint. The company has been arranging training of its core personnel on acontinuous basis to cope with the growing challenges of the changing workenvironment, increase in customer expectations and growing sophistication oftechnology and processes. Succession strategy of the company developsalternative leaderships in all areas of its activities. Therefore, the managementof RAK feels that company is well prepared to handle the situation in theforeseeable future.(k) Distribution riskFor any company, the most crucial wing is the distribution channel. Widedistribution network and control over the network is essential to make thequality product available to the consumer at right time and price.Management perception:RAK has strong presence in all over the country and for this purpose they haveappointed 98 dealers for tiles and sanitary ware separately all over the countryin urban & rural areas to sell the products of the company to ultimatecustomers.(l) Risk associated with labour unrest:Smooth production is dependent on good relationship with the factory workersand their ability to provide high-quality services. In the event of disagreementswith the workers, the company may experience adverse impact.Management perception:RAK maintains good atmosphere at the work place and provides all sort offacilities to the workers as per law of the land. The work force is wellremunerated and most of them live in the surrounding areas or well equippedcompany provided accommodation facilities. So, it is unlikely for them to createsuch unrest. The company has healthy remuneration and welfare policies of thecompany for its human resources, which may reduce the risk of labor unrest.Again, to meet unique situations, company has alternative ways to overcomesuch critical circumstances.(m) Input risk:
Page 1 and 2: RAK Ceramics (Bangladesh) Limited(I
Page 3 and 4: Executive SummaryDate of Incorporat
Page 5 and 6: Directors’ involvement in other o
Page 7 and 8: Performance at a Glance:Tk. in mill
Page 9 and 10: Net Tangible Asset per Shareas on 3
Page 11 and 12: IPO process under Book Building Met
Page 13 and 14: (ii)Valuation based on Dividend Dis
Page 15 and 16: Consent of the Eligible institution
Page 17 and 18: Company. If exchange rate is increa
Page 19: and, in tandem with the real estate

RAK Ceramics (Bangladesh) Limited - DSE

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