COMP501: Report on Auckland Haozhen Handicraft Company Limited

This report, prepared for COMP501 Fundamentals of Information Technology, analyzes Auckland Haozhen Handicraft Company Limited. It begins with an executive summary and an introduction to the company, its history, and its objectives. The report then delves into the organization and its products, followed by an organizational chart illustrating the company's structure. Key position descriptions and key performance management objectives are outlined, providing insights into the roles and responsibilities of stakeholders. The financial section includes a balance sheet, sales forecast, and cash flow statement. The report concludes with a summary of findings and recommendations for future business development, including the potential for online expansion and supply chain improvements. The report also provides bibliography and appendix with financial statements.

Running head: COMP501 FUNDAMENTALS OF INFORMATION TECHNOLOGY
COMP501 Fundamentals of Information Technology
2.112 Information Technology Concepts
PART 2: Group Assignment
Assignment 1: Semester 2, 2019
Name of the Student
Name of the University
Author’s Note

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COMP501 FUNDAMENTALS OF INFORMATION TECHNOLOGY
Executive Summary
The report is prepared for the development of an Investor brochure for Auckland Haozhen
Handicraft Company Limited with an objective to offer a platform for the industry for interaction
with the national and international experts. The organization and product description is given in
the report that the company follows in the process of manufacturing, design and innovation. A
study is made on the current bottlenecks of the existing handicraft company in the areas of
technology and production and identifying the improvement that can be made in the current
business. An organizational chart is prepared after analyzing the current stakeholders and their
position in the business hierarchy is defined. The key performance objectives and the description
of the position is given in the report that helps in identification of the involvement of the
stakeholders in the business. The balance sheet, cash flow statement and sales forecast statement
is prepared and attached in the appendix.

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Table of Contents
Introduction......................................................................................................................................3
Organization and products...............................................................................................................3
Organizational Chart........................................................................................................................4
Key position Description.................................................................................................................5
Key Performance Management Objectives.....................................................................................6
Financials.........................................................................................................................................7
Conclusion.......................................................................................................................................9
Bibliography..................................................................................................................................10
Appendix........................................................................................................................................12
Balance Sheet Statement............................................................................................................12
Sales forecast.............................................................................................................................14
Cash flow...................................................................................................................................16

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COMP501 FUNDAMENTALS OF INFORMATION TECHNOLOGY
Introduction
The report is prepared for Auckland Haozhen Handicraft Company Limited in New
Zealand. The company started its operation in the year 2002 and has issued 20,000 number of
shares and it is issues to 2 group of shareholders. Each of the group has 1 entity and both of them
have 50 percent of the shares. During the period of operation the company have changed its
physical address one time from Avondale, Auckland to Bucklands Beach, Auckland
(www.bizdb.co.nz, 2019). The name of the current shareholders are Bin Yu and Li Ming Zheng,
Bin Yu is also the director of the company since 27th September 2002. Auckland Haozhen
Handicraft Company Limited has the main objective of exporting handlooms and handicraft
products and it plays an important role for developing and marketing handicraft products. An
analysis is made on the organization and products and an organization chart is prepared. A
description is provided for the key positon and the key performance management objectives are
described. The finance is discussed in context of balance sheet, cash flow and sales forecast for
the preparation of the report.
Organization and products
Auckland Haozhen Handicraft Company Limited has its physical registered office in 14
Beatrix St, Avondale, Auckland and it currently uses the address 18 John Street, Whangarei,
0110 for its operation. The branches of Auckland Haozhen Handicraft Company Limited has in
house facility providing production of ready-made garments and there are different retail outlets
and is controlled by the craft Museum. Almost 15 years of exports and development have
resulted in improving the customer relationship and dedicated buyers. It has strong links with
weavers, craftsman, clusters and societies causing it to increase the strength of the primary

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sources. The sampling control, monitoring of production, inspection of quality and competitive
procurement helps in improving the trade related skills. With the increase in global competition
from different countries by imitating Machine made products as crafts the company uses skills of
the craftsman for making their product unique and distinguishable from the machine products.
The main products manufactured by Auckland Haozhen Handicraft Company Limited are
given below:
 Art Metal ware
 Wooden Art Wares
 Embroidered Goods
 Hand Printed textiles
 Artistic Leather Goods
 Teracotta/ Ceramic
Organizational Chart
An analysis is made on the current business framework for the development of the
organizational chart. There are 2000 shares issued for 2 shareholders belonging to 2 groups. For
the first group it contains one entity and has 1000 shares, the entity is an individual namely Bin
Yu. For the second group another shareholder has rest 50 percent of the share and the name of
the individual is Li Ming Zheng (www.businesscheck.co.nz, 2019).

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Key position Description
The director of the company Bin Yu is responsible for developing the key growth
strategy for sales and marketing with the implementation of action plans and tactics. The director
needs to successfully execute the strategies for the achievement of the financial targets and
building relationship with the stakeholders and understand the current trend of the customers.
Since the director is experienced about the company’s role and responsibility he bears the
general responsibility level of the position (www.bizdb.co.nz, 2019). The availability of the
unique raw materials is handles by the procurement manager and they also engage different
communities for production of wide range of exclusive and unique handicraft items. The director
emphasizes on the recent trends of traditional and domestic market, he also analyzes the
increased flow of tourists as the tourists also provide market for the handicraft products. The
director arranges international seminars for the promotion and increasing export of handicraft
items with the help of international craft exchange program. Effective control on the marketing
result is maintained and corrective action is taken such that marketing objectives are achieved
and all things are under the budget constraint. The products of the competitor are monitored

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along with their sales and marketing activities for establishment and marinating good
relationship with strategic partners and influencers.
Key Performance Management Objectives
The main objectives for the management of the key performance in the handicraft business are
given as follows:
 To eliminate the bottlenecks that exists in the handicraft sector in the production areas
and suggestion of different measures for improving the issues
 To organize customer oriented product and design development
 To implement new techniques for production and manufacturing the handicraft products
 Take necessary measures such that the skills of the labour can be improved and they can
improve the quality of the products
 To use marketing channels and tie ups for the promotion of the handicraft items and
reach more number of peoples
 To share the techniques of patterns, processes, finishing and techniques between the
skilled and unskilled labours for getting the maximum production of items in limited time
duration
 To arrange fair and promote the use of eco-friendly crafts such as wooden furniture, cane,
bamboo and metal
 Creation of handicraft sourcing hubs throughout the country as a center of excellence and
integration of forward and backward links
 Inclusive model and integration for promotion and overall development of handicraft
sectors in all parts of the country

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 To prepare roadmap for sustainable and inclusive development of New Zealand
handicraft sector.
Financials
The handicraft business is an opportunity driven business and it can be improved with the
installation of upgraded and new manufacturing facilities. There are different competitors such
as exporters controlling manufacturing or finishing, private players having lean structure and
flexible policies. The availability of the cheap labour is a problem and it can cause disturbance in
the operation cycle. There are as different uncertainty such as season change, change in customer
preference that are needed to be adapted by the organization such that they can keep pace with
the changes in expectation and get the maximum profit from the business. The current assets in
the business is needed to be utilized for the achievement of gains in productivity. Different
measures should be applied such that the cost reduction for increasing profitability. The
reduction of wastage of material by increasing the skills of the labours can help in increasing
profit. Better market input is also needed to be provided to the artisans and craftsman such that
they can improve the quality of the product and meet the demand of the customers by preparing
products with innovative design.
The following graphs are used for the demonstration of sales forecast for the handicraft
item by analyzing data for 2 years.

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Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
% Change
0
500
1000
1500
2000
2500
3000
3500
4000 2-Year Units Sold
Product/Service A Product/Service B Product/Service C
Figure 1: 2 Years unit sold graph
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
% Change
0
5000
10000
15000
20000
25000
30000
35000
40000
45000 2-Year Gross Profit
Product/Service A Product/Service B
Figure 2: 2 Years Gross profit Graph
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
% Change
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40% 2-Year Growth Rate
Product/Service A Product/Service B
Figure 3: 2 Years Growth rate

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Conclusion
From the above report it can be concluded that Auckland Haozhen Handicraft Company
Limited has two shareholders with 50 – 50 percent shares. The company started its operation
since 2002 and the name of the Director with 50 percent share is Bin Yu. The organization sells
and manufactured different types of handicraft items such as Art Metal ware, Wooden Art
Wares, Embroidered Goods, Hand Printed textiles, Artistic Leather Goods, Teracotta/ Ceramic
items. The organizational chart is prepared and it helps in identification of the roles and
responsibility of the stakeholders associated with the business process of Auckland Haozhen
Handicraft Company Limited. A description is given for the key position and their corresponding
management objectives are also attached with the report. Financial data is gathered regarding the
business and a balance sheet is prepared for the business. A sales forecast report and cash flow
statement is also prepared for the analysis of the growth of the business and providing suggestion
for the expansion of the current business process to reach more number of people at a time. The
company have multiple opportunity for the expansion of the business with transforming the
current business framework into online shop such that it can more number of people and gain the
leading position against its competitors. It can also organize the scattered presence of artisans/
weavers and craftsman across the country and engage them to supply their product from their
location and smoothen the supply chain.

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Bibliography
Abor, J. Y. (2017). Financial Planning and Forecasting. In Entrepreneurial Finance for
MSMEs (pp. 199-224). Palgrave Macmillan, Cham.
Ali, M. M. (2016). Strategic Impact Assessment, Business Proliferation and Innovation of
Creative Entrepreneurship: A Study on Bangladesh Ngo Foundation.
Auckland Haozhen Handicraft Company Limited - business information. (2019). Bizdb.co.nz.
Retrieved 27 July 2019, from
https://www.bizdb.co.nz/company/9429036316731/#finances
Auckland Haozhen Handicraft Company Limited, Whangarei, NZ - Company Info.
(2019). Businesscheck.co.nz. Retrieved 27 July 2019, from
https://www.businesscheck.co.nz/ltd/9429036316731/
Cornwall, J. R., Vang, D. O., & Hartman, J. M. (2015). Day-to-Day Cash Flow Management and
Forecasting. In Entrepreneurial Financial Management (pp. 150-164). Routledge.
Ferreira, J., Sousa, B. M., & Gonçalves, F. (2019). Encouraging the subsistence artisan
entrepreneurship in handicraft and creative contexts. Journal of Enterprising
Communities: People and Places in the Global Economy.
Hand, J. R., & Martin, N. (2017). Biases in Analysts' Multiyear Forecasted Income Statements,
Balance Sheets, and Cash Flow Statements.
Jalbert, T. (2017). A Model for Forecasting Small Business Financial Statements and Firm
Performance. Business Education & Accreditation, 9(2), 61-84.

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Khansalar, E., & Namazi, M. (2017). Cash flow disaggregation and prediction of cash
flow. Journal of Applied Accounting Research, 18(4), 464-479.
Krylov, S. (2016). The Company Cash Flows Target-Oriented Forecasting Based on Financial
Position Analysis. Available at SSRN 2811603.
Muhammad, T., & Kim, K. M. (2018, April). Sustainable and ICT-Enabled Development in
Developing Areas: An E-Heritage E-Commerce Service for Handicraft Marketing.
In Journal of Physics: Conference Series (Vol. 989, No. 1, p. 012009). IOP Publishing.
Pitkänen, A. (2016). Cash Flow Forecasting: Proposal for New Long-Term Cash Flow Forecast
in the Case Company.
Tran, T., Deng, H., & Ong, C. E. (2018, November). Critical Factors for the Adoption of Social
Sustainability Practices in Vietnamese Handicraft Organizations. In 2018 IEEE
Conference on e-Learning, e-Management and e-Services (IC3e) (pp. 122-127). IEEE.

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Appendix
Balance Sheet Statement
BALANCE SHEET AS AT 31ST MARCH, 2019
Particulars Note
No
31st MARCH,
2019 in USD
31st MARCH,
2018 in USD
I. EQUITY AND LIABILITIES
(1) Shareholder's Funds
(a) Share Capital 1.1 1380.00 1380.00
(b) Reserves and Surplus 1.2 24000.00 230.00
(2) Non-Current Liabilities
(a) Other Long Term Liabilities 2.3 84.00 80.00
(b) Long Term Provisions 2.4 778.00 1100.00
(3) Current Liabilities
(a) Short-Term Borrowings 3.1 325.00 1500.00
(b) Trade Payables 3.2 5400.00 5000.00
(c) Other Current Liabilities 3.3 2700.00 2300.00
(d) Short-Term Provisions 3.4 278.00 95.00
Total 34945.00 11685.00
II. Assets
(1) Non-Current Assets
(a) Property, Plant and Equipment 1.1.1 28334 800
(b) Intangible Assets 1.1.2 1.6 1.5
(c) Capital Work-in-Progress 1.1.3 4 -

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(d) Non-Current Investments 1.1.4 4 4
(e) Deferred Tax Assets (net) 1.1.5 - 850
(f) Long Term Loans and Advances 1.1.6 270 220
(g) Other Non-Current Assets 1.1.7 1 -
(2) Current Assets
(a) Inventories 1.2.1 3400 4700
(b) Trade Receivables 1.2.2 1700 3200
(c) Cash and Bank Balance 1.2.3 1000 830
(d) Short-Term Loans and Advances 1.2.4 160 270
(e) Other Current Assets 1.2.5 245 260
Total 35119.6 11135.5
Accounting Policies 4.1
Contingent liabilities 4.2
Account Notes 4.3

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Sales forecast

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Cash flow
CASH FLOW STATEMENT FOR THE YEAR ENDED
Particulars 31st March,
2019
31st March,
2018
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit / (Loss) before Tax 2100 1400

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Adjustments for:
- Depreciation 50 95
- Interest Income 30 220
- Interest Expenditure 75 75
- Profit / Loss on Fixed Assets sold / discarded (Net) - 0.5
Operating Profit before Current / Non-Current Assets and
Liabilities
2100 1790.5
Adjustments for:
Trade receivable 1500 450
Inventories 1300 4370
Short/Long term Loans/Advances & Other Current Assets 75 1350
Short/Long term Labilities and Provisions 640 190
Gratuity, Leave encashment & Others Employees Benefit 18 110
Cash generated from operation 230 3740
- Net Income Tax paid - 5
Net Cash from Operating Activities (A) 230 3735
B. CASH FLOW FROM INVESTING ACTIVITIES
- Purchase of Fixed Assets and change in Capital Work-in-
Progress
12 52.6
- Proceeds from sale of Fixed Assets - 0.05
- Interest Received 30 221
Net Cash from Investing Activities (B) 18 168.35

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C. CASH FLOW FROM FINANCING ACTIVITIES
- Interest paid 77.28 77.21
- Dividend paid - 35
- Dividend Tax paid - 7
Net Cash from Financing Activities (C) 77.28 77.21
Net Increase / (Decrease) in Cash & Cash Equivalents
(A+B+C)
172.75 3690.25
Cash & Cash Equivalents as at 1st April, 2018 833.3 4520.6
Cash & Cash Equivalents as at 31st March, 2019 1006.05 830.35
Notes for the Cash Flow Statement
Cash and its equivalence including the cash flow statement
comprised of following amounts in balance sheet:-
a. Cash on hand and balances with banks 730 349.13
b. Fixed Deposits with banks (Refer Note No. 2.15.) * 275.2 485.22
c. Cash and Cash Equivalents 1005.2 834.35
d. Exchange rate changes effect
e. Cash and Cash Equivalents restated as at 31st March, 2019 1005.2 834.35