FIN 301

Financial Management

TOPIC:

A FINANCIAL REPORT OF C&A TEXTILES LTD

Submitted by:

SARDAUNA ABDUL-SOBUR DEMBO

Submitted to:

Mr. Ahmed Abir Choudhury

Lecturer,BRAC Business School(BBS)

BRAC University

Date of Submission:

26th of August, 2022

Table of contents

Introduction 2

Analysis of stock volume performance 3,4

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 4,5
Analysis of stock fluctuation

Causes of stock fluctuations 6,7

7
Conclusion

8
References

9,10
Appendix

Introduction

C&A Textiles Ltd. is a textile and garment manufacturer and distributor. T-shirts, polo
shirts, tang tops, shorts, sweet shirts, boxers, skirts, leggings, fleece jackets, and other ready-
made garments are among its offerings. The company was established on February 19, 2001, and
is based in Dhaka, Bangladesh. 01 by the Office of the Registrar of Joint Stock Companies and
Firms On December 22, 2013, the company was converted into a public limited company and the
share value was reduced from Tk. 100 to Tk. 10. And this company operated well before the loan
fraud which happened in 2017 and which led to the company being liquidated and it was
acquired in 2021 by ALIF GROUP and promises to bring the company back to profitability and
existence.

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Analysis of volume performance

The volume's peaks and troughs will reveal how profitable the business is. Beginning in
August 2020, the company's volume began with 356,169 taka and increased to 4664894 taka on
August 18 before declining from that point until the end of the month. A similar scenario
occurred in September until it reached the company's highest peak of volume for the two months
on September 15, after which it decreased as well, with the difference between the two months
equaling 821,824 when the peak and trough of volume are subtracted and maintains trough till
the end of the month .In the month of October, the peak began at 1308929 taka and continued to
fluctuate within the range until the 9th of the month, when it began to decrease. In November,
the maximum volume of the company fell to 221,674 taka from 1490685 taka and it maintains
the flows within 221674 to 1041344 taka. And this starts to rise in the middle of December,
reaching 2258789 Taka, after which it was impacted by a number of factors such as Covid 19
and internal strikes, causing it to fall. In 2021, the company started with a trough of less than
5000000 taka and continues to decrease till it reaches February where it has a very sharp fall and
decrease till the end of the month. Furthermore, in March it has increased from trough to peak
and raised above 5000000 taka and continue to have a top and bottom rise and fall till the end of
the month. In April and May, the company experienced a trough in their trade volume whereby it
falls to 77858 taka since then it has a zig zag increment in trade volume and it started rising at
the end of May where the trade volume pumps up in till it reaches June where the company have
a bullish trade and by the middle of the months it falls back and continue the waves till it reaches
end of October where it started decreasing in larger numbers till it decreased to the end of the
year and the reason for this is that there is transfer of ownership from C&A to Alif group which
has affected the company trade volume.

In 2022, the company experienced a trough from the beginning of the trade volume and
increased rapidly till it increased to above 400000 taka and it had a sharp decline till it entered
February and continued to fluctuate and start increasing at the end of the month. In the beginning
of March, the company had a bullish trade volume almost to 5000000taka and later had a bearish
trade volume at the middle of the month and since then it has had an up and down trade volume
till the middle of April and decreased till the end of March. Apparently, this makes the trade
volume continue to have a downward trend and start increasing by the back to above 200000
taka and which maintain the top and bottom waves of the trade volume till it reaches august 8th
August where it increased to 5197301 taka and later fell back. All these are caused by inflation
(increment in exchange rate) between taka to dollar. And which indicate that this business is not
a lucrative business because the number of trough is more than peak in the trade volume and
according to Zimul Islam said, "The acquisition of C&A Textiles would save the investors.
Because its owners were not available. It became a bank loan defaulter. The government's utility
bill was due. Everyone will benefit if the company is launched now.`` So far, the company is

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under a huge debt and bad debt ,it isn't worth investing in which the advanced chart from WSJ
market shows the typical evidence that the company is not worth investing because the company
had a trough in the year 2020 and 2022 but peaked in the trade volume in 2021.

According to a study of stock price fluctuations, C&A Limited began fluctuating in the
month of August 2020 with a return that ranged from 5.2, 10 down to 8.3, and then started
declining. There was a sharp decline to -3.70, -7.69 and it decline to 0 at the beginning of
September 2020, and then it started fluctuating between the positive of 6.8 and 9.00 The price
fluctuation of C&A Limited in October is incredibly detrimental and severe since it fluctuates to
negative and most days it fluctuates to zero taka, indicating that the company suffered a
significant loss and the prices change in addition to being caused by the COVID 19 as well
having a sudden surge from zero to 8 taka at the end of September and then beginning to
oscillate between eight takas and negative figures. The stock's return in December 2020 bounces
between 0 and a positive figure, then declines to a negative number before falling sharply to zero
during the final six days of the month and all these are caused due to the COVID 19 that had
affected the company, and internal strikes of some operation parts in the organization and lack of
management because earlier in 2020, C&A Textiles' managing director Rukshana Morshed was
arrested in Chattogram in a case filed over a defaulted loan because the company borrowed huge
loan from a company which they did not pay on time and which has led to the arrest of the
managing director and it affect the management of the organization. The director sold
approximately 1.22 crore shares of the company's stock without making any prior disclosures,
earning about Tk 12 crore from the trades, which also contributed to market volatility, up until
the year 2020.

In 2021, the company decreased from January 12 with a negative return until January 31
with 0 taka return due to the stock price fluctuating between 4 taka and negative number. In the
month of February, C&A limited return drastically decreased with 0 taka in most of the days and
began oscillating from February 24 until February 28.From March 2021, the company's daily
stock started at 10 and decreased quickly until the negative number narrowed. In April 2021, the
company also witnessed a decline from 0 taka and continued to fall, and most of their days are
filled with negatives number and 0 taka return. It began with 5 taka in the month of May,
declined to 0 and then fluctuated back to 4, with some positive numbers until the 18th of June,
and then started dropping with negative numbers till the 31s although the stock price in June
2021 had a strong return, it also fluctuated around negative numbers like -4 and 0 and increased
to a return in the final three days of the month. July prices begin to fluctuate from 9.0 and started
dropping with 0.1 until zero on July 7, 2021. They then quickly increased back up until July 18
before dropping off with negative numbers. By August, the stock price started at 5.0 and dropped
with negative numbers until it reached zero. From August 10 to August 17, the price increased
with a positive return, fluctuating between the two until it increased back to 9.09 at the end of the

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month. September began with 0% return and eventually decreased down to -1.3 before
fluctuating back to 1.40. It then began to oscillate between positive and negative returns until
ending the month with a negative return -1.40.By the beginning of October 2021, the stock price
return had increased from 0 to 7.142 and then decreased back to 0; it has subsequently fluctuated
between 9.09 and 1.25 until the end of the month. November starts off well until the 7th of the
month, then starts to decline until the 15th. From that point on, it fluctuates between a positive
return of 1.25 and 1.28 until the end of the month, when it ends in 0.The stock return in
December 2021 began with a negative return of -1.3 and increased back to 1.333 before falling to
0 and beginning to bounce around a positive return of 1.5 and a negative return of -1.3 before
ending at 0.

All these fluctuations are caused by Covid 19 because as of 2020-21 the case keep
increasing with has led to most employees has been laid off and due to lockdown most from the
most countries the importation of cotton has barred, and the political instability in Bangladesh
also affected the oscillation of the price.

In the year 2022, The Company began the month of January with 2.65% and decreased until
it reached 0 by the 6th of the month. By January 9, it had increased to 6.32%, and from that point
on, it began to decrease until it reached 0 at the end of the month. The enterprise starts with a
return of 0% and keeps depreciating until February 7. It then increases in February 8 to 3.75%,
which it then depreciates until January 15 when it increases again to 5.9% and starts fluctuating,
reaching a good return at the end of the month. In the month of March, the company started its
return with a negative percentage and did the same on the second day. On the third day of the
month, it began to increase with 6.12%, and from that point on, it fluctuated between negative
and positive percentages until it reached zero return on march 9; from that point, it began
oscillating from the negative percentage and continued until April 28 before increasing to
4.675% and then beginning to decrease. In the month of April, the company began with a return
of 1.8%, dropped swiftly to negative returns and zero until the 19th of April, and then began to
fluctuate with negative% until it dropped to zero at the end of the month. By MAY, the company
started with -2.9%, increased on the third day of May, decreased with negative%, increased again
on the eighth day of May, fluctuated between positive and negative%, and remained primarily
negative% until the end of the month. The company's return began in June with 1.09% and
decreased to 0 sequentially. It then fluctuated steadily with differences of 0.03% and 0.02% until
it increased to 2.88% by the 15th of June and decreased quickly with negative percentage till it
reached 1%.In July, the company's return actually started with -0.99%, increased to 4%, and then
decreased steadily until it reached 4.04% on the 20th of the month, and then decreased again
until it fell to 3% at the end of the month. In August 2022, the company began with 1.941% and
decreased to 0%, then returned to 1.9% on August 8th and finally decreased. In the year 2022, a
lot has caused the company stock price to fluctuate due to the war which happened between
Ukraine and Russia in February 20 which the company of C&A textile ltd do import cotton
which they use for the production of the textile and clothes. The second cause is the inflation

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which happens in Bangladesh which makes the price of goods increase and the increment in
exchange rate of dollars also causes fluctuation in the price of goods and services.

Causes of stock fluctuations for C&A TEXTILES LTD.

(A)

Following my inquiry, I was able to identify the elements that influence and cause the
variation in the stock price of C&A Textiles Ltd., with the first having to do with the following:
economic factor;

Economic factor; as Bangladesh's inflation rate rises, the consumer price index rises as
well. This decline in the real value of money which influences C&A Textile Ltd by raising the
cost of their textile goods' production and the cost of materials, which leads to budget cuts and
double-digit inflation and lowers textile exports.

Political instability: Since 2018, Bangladesh's political power has been unstable, which
has had an impact on the stock price and caused fluctuations in the price of C&A Textile Ltd.'s
goods since they are riskier to invest in, and thus causes the stock price to change owing to trade
union difficulties.

Global factor: The pandemic issue, which has negatively impacted numerous industries in
the nation, also negatively impacts C&A Textiles LTD, making sales, exports of textiles, and
imports of cotton difficult for the sector. This has led to price fluctuations and instability in the
stock price.

Another global factor is the war between Ukraine and Russia which has affected the
importation of cotton from across the globe because C&A textile pricing also fluctuates due to
the industry reliance on importing cotton and the volatility in raw material prices.

Industry specific- Since 2017, the business has closed owing to loan fraud, which first
subsequently increases stock prices and causes them to continue decreasing until the industry
winds up. So as they have started their operation of the industry the price of their stock fluctuates

(B)

To understand the systematic and unsystematic risks of the C&A textiles ltd, we have to
look at the factors which affected the stock fluctuations;

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 Systematic risks, such as employee strikes or trade union disputes, may be anticipated by
investors depending on how the business is run. For instance, the stockholder in C&A may be
aware that a significant change in corporate policy is imminent, but may not fully comprehend
the specifics of the new laws or how consumers and businesses would respond.

Additionally, textiles and cotton are C&A's ltd primary raw materials. Cotton and other
raw materials used in C&A are generally imported from China and India. Additionally, C&A
purchases a sizable quantity of packaging and carton products from regional suppliers. Since
most raw materials are imported, changes in the exchange rates for the appropriate currencies
could have a detrimental effect on the industry's profitability and liquidity. As a result, the
business is vulnerable to currency risk, which in turn causes stock price volatility.

For instance, during the COVID-19 , the importation of cotton was challenging for the
company and people were hesitant to purchase goods because the market share had been
negatively impacted because the majority of employees had lost their jobs and were laid off, so
the demand for the textiles reduced. War, inflation, and COVID19 are all examples of
unsystematic risks that C&A ltd faces and that cause fluctuations in stock prices. Because this
risk cannot be reduced by proper diversification. And also the war between the Ukraine and
Russia has drastically led to the fluctuation in stock price of the industry which is the typical
example of unsystematic risk.

Conclusion

A detailed investigation of C&A Textile Ltd. reveals that the company saw a significant
decline in trade volume performance for the two years 2020 and 2022 and which shows C&A
textile sector is experiencing one of its most challenging times ever. Which the reasons for these
include the global recession inflation, COVID 19, which has severely impacted the worldwide
textile industry. And the company was also severely impacted by significant internal challenges
and that the only approach to deal with this is to change the way they do things, including paying
off their debts to stop internal strikes, among other things that are impeding the company's
performance.

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 Reference

Apparel Resources News-Desk. “C&A Textiles Set to Be Acquired by Bangladesh Business

Conglomerate Alif Group: Reports.” Apparel Resources, 15 July 2022,
www.apparelresources.com/business-news/trade/ca-textiles-set-acquired-bangladesh-
business-conglomerate-alif-group-reports.

Islam, Rafiqul. “C&A Textiles Reborn.” The Business Standard, 14 June 2022,
www.tbsnews.net/economy/rmg/ca-textiles-reborn-439826.

Tbs Report. “C&A Textiles to Issue New Shares to Alif Group to Reopen Factory after 4 Years.”
The Business Standard, 16 Feb. 2022, www.tbsnews.net/bangladesh/ca-textiles-issue-
new-shares-alif-group-reopen-factory-after-4-years-371863.

Wall Street Journal. “CNATEX | C&A Textiles Ltd. Advanced Charting - WSJ.” C&A Textiles
Ltd., www.wsj.com/market-data/quotes/BD/XDHA/CNATEX/advanced-chart. Accessed
22 Aug. 2022.

“CNATEX | C&A Textiles Ltd. Advanced Charting - WSJ.” C&A Textiles Ltd.,
www.wsj.com/market-data/quotes/BD/XDHA/CNATEX/advanced-chart. Accessed 22
Aug. 2022.

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