Financial challenges faced by SMEC International & strategies to mitigate them

Abstract

This report analyzes the financial risk experienced by SMEC International, (delays on projects, cost overruns, and late payments) and proposes solutions that can help reduce such risks. The research is separated into three chapters. Chapter 1 gives a general account of the internship experience at SMEC International, which consists of the undertaken works, such as the calculation of revenue using IFRS 16 and the reconciliation of banks, providing the preparation of a trial balance and analysis of an exchange rate. It is also a reflection on challenges faced, the complexity of IFRS 16 and lack of networking opportunities, and gives recommendations on how future internships can be improved. Chapter 2 presents SMEC international, its history, structure, values and major projects, such as partnership with international organizations such as the World Bank and ADB. The chapter brings to focus the sustainability practices by SMEC and their sticking to the CSR aspects by means of projects like the Winter Blanket Drive and the Greater Dhaka Sustainable Urban Transport Project. Chapter 3 deals with the SMEC financial challenges where special emphasis is given to the effects of project delays, cost overruns and late payments on the financial stability of the company. The report examines the cause and effects of such problems, and considers the effectiveness of cost-benefit analysis, resource calendars, ERP systems, and contingency plans in controlling such financial risks. The research intends on streamlining the financial management of SMEC so that it will be in a position to have improved project implementation and economic sustainability.