company profile of mtnl

8/12/2019 Company Profile of MTNL

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PROJECT REPORT

IN

RATIOS ANAYLSIS

AN ANALYSIS OF BALANCE SHEET OF CEC INDIA PVT LTD

Submitted By:

PRIYANKA NEGI

MBAE3A


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CHAPTER 1:PROFILE OFTHE COMPANY


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1.0 Profile of the companyCEC International Corporation India Pvt. Ltd. (CICI) is 100% subsidiary of Continental

Engineering Corporation (CEC) Taiwan, founded in 1945 and headquartered at Taiwan.It is

a Civil Engineering Construction Company operating in the fields of MTRS, Highways,

Bridges, High Speed Railway, Townships, SEZs, Real Estate and Environment sectors.

Being a socially responsible corporate, CICI works in improving the quality of life of the

communities it serves whether it be within the organization, industry or society, the

company have a strong sense of social responsibility, which is reflected in their values and

actions.

Within a short span, they have been entrusted with the construction of high value projects

across segments like Delhi Metro, National Highways, Bridges, Urban Roads, Railways

and SEZ projects. The exponential growth in order booking to the tune of US$ 700 million

has resulted in rapid expansion of the company in terms of human resources, equipment &

machinery. They currently have more than 800 employees with 50+ International expertsfrom UK, Spain, Hong Kong, Malaysia, Thailand and Taiwan to deliver International

quality standards of project execution in India.

CICI works including design, stands out as the gateway for Technological and Engineering

excellence in Civil Engineering fields with 9 offices in India, CICI is fully equipped to contribute

their expertise and turn vision into reality.

The company follow standard operation procedures which allow us to be certified for ISO 9001,

ISO 14001 and OHSAS 18001 for its Quality, Environmental and Occupational Health & Safety

Management system .

1.1

Name of the company Continental Engineering Construction India Pvt Ltd

Address: Registered Office CEC International Corporation Pvt. Ltd

7th

floor Tower B,

Signature Tower

Gurgaon ,India ,Tel: 91-124-4918888

Administration Office G-8 3rd floor,Model Town 3 ,Delhi-110009

Tel no : 91-

Company website www.cici.co.in

National/Multinational Multinational company with operations in Taiwan,

China ,Bhutan ,Bangladesh and India.
http://www.cici.co.in/http://www.cici.co.in/http://www.cici.co.in/


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1.2 Nature of the organization and its business

CEC International Corporation (INDIA) Private Limited (CICI), a wholly-owned subsidiary ofCHC's Continental Engineering Corp. (CEC) established in December 2005, is a civilengineering and construction company based in Delhi. CICI commenced its operation in April

2006 when it started undertaking works to help CHCs flagship company ContinentalEngineering Corp execute its many projects in India. CICI has also established a significant andgrowing participation in the building of Indias transportation infrastructure, drawing on the vastexperience and expertise of CEC.

In the past few years, CICI has assisted CEC with its projects in India by providing managementexpertise, coordination with local authorities including tax authorities, executing the projects ona sub-contracting basis, where possible and generally providing a local Indian face to theoperations of CEC. However, with the recent award of Bangalore Metro Rail CorporationLimited- UG 2 project, where CICI is in joint venture with CEC and SOMA Enterprises Limited,CICI has taken its first steps to start its own journey to being a successful and known

infrastructure company in India.

As the number and scale of its operations in India grows, CICI partners with the followingoutstanding companies to meet increasing market demand: Tata Group, HCC, SOMA. RitwikConstructions, and CECI Engineering Consultants Inc.

1.21 Indian Civil And Construction Industry

The Construction industry of India is an important indicator of the development as it createsinvestment opportunities across various related sectors. The construction industry hascontributed an estimated 670,778 crore to the national GDP in 2011-12 (a share of around 8%).

The industry is fragmented, with a handful of major companies involved in the constructionactivities across all segments; medium sized companies specializing in niche activities activities;and small and medium contractors who work on the subcontractor basis and carry out the workin the field. In 2011, there were slightly over 500 construction equipment manufacturingcompanies in all of India. The sector is labor-intensive and, including indirect jobs, providesemployment to more than 35 million people.

History

The period from 1950 to mid 60s witnessed the government playing an active role in the

development of these services and most of construction activities during this period were carried

out by state owned enterprises and supported by government departments. In the first five-yearplan, construction of civil works was allotted nearly 50 per cent of the total capital outlay.

The first professional consultancy company, National Industrial Development Corporation(NIDC), was set up in the public sector in 1954. Subsequently, many architectural, designengineering and construction companies were set up in the public sector (Indian RailwaysConstruction Limited (IRCON), National Buildings Construction Corporation (NBCC), Rail


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India Transportation and Engineering Services (RITES), Engineers India Limited (EIL), etc.) andprivate sector (M N Dastur and Co., Hindustan Construction Company (HCC), Ansals, etc.).

In India Construction has accounted for around 40 per cent of the development investmentduring the past 50 years. Around 16 per cent of the nation's working population depends on

construction for its livelihood. The Indian construction industry employs over 3 crore people andcreates assets worth over 20,000 crore.

It contributes more than 5 per cent to the nation's GDP and 78 per cent to the gross capitalformation. Total capital expenditure of state and central govt. will be touching 8,02,087 croresin 2011-12 from 1,43,587 crores (1999-2000).

The share of the Indian construction sector In total gross capital formation (GCF) came downfrom 60 per cent in 1970-71 to 34 per cent in 1990-91. Thereafter, it increased to 48 per cent in1993-94 and stood at 44 per cent in 1999-2000. In the 21 st century, there has been an increase inthe share of the construction sector in GDP and capital formation.

GDP from Construction at factor cost (at current prices) increased to 1,74,571 crores (12.02%of the total GDP ) in 2004-05 from 1,16,238 crores (10.39% of the total GDP) in 2000-01.

The main reason for this is the increasing emphasis on involving the private sector infrastructuredevelopment through public-private partnerships and mechanisms like build-operate-transfer(BOT), private sector investment has not reached the expected levels.

The Indian construction industry comprises 200 firms in the corporate sector. In addition to thesefirms, there are about 1,20,000 class A contractors registered with various governmentconstruction bodies. There are thousands of small contractors, which compete for small jobs or

work as sub-contractors of prime or other contractors

1.3 Companys Vision and Mission

Mission

To Develop, Build and Service Physical Infrastructure for better living, work environment and

transportation.

Vision

CICI shall be a professionally managed Indian International company, committed to total client

satisfaction.

CICI shall be innovative, entrepreneurial and empowered team constantly creating value and

attaining global benchmarks.

CICI shall foster a culture of caring, trust and continuous learning while meeting expectations of

employees, stakeholders and society.


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1.4 CICI & CEC (India Division) Featured Projects

Delhi Metro Railway

Project Contract

(CC04) This project for Phase-III of Delhi MetroRail Corporation Ltd. is scheduled for completion in 2015. It includesdesign and construction of one underground station at Azadpur linked by

2.145 km twin bored tunnels with internal finished dia of 5.8 m whichare engineered through the use of two shield TBMs for the Mukundpur Yamuna Vihar corridor of the Delhi MRTS. The project also involvesCut & Cover of 690 m and an underground ramp of 365 m at Mukundpurand Shalimarbagh. This project is a joint venture between CEC and its100% subsidiary (CEC Intl Corp. India (CICI) with CEC as a lead

member. The total contract value of CC-04 is INR 4.168 billion.

Bangalore Metro Rail

Project (UG-2)This Project for Phase I of the Bangalore

Metro Rail system, awarded by Bangalore Metro Rail Corporation Ltd. isscheduled for completion in 2013 and includes design and constructionof four underground stations linked by 2.5Km of 5.8m diameter twintunnels in the underground stretch of the east-west corridors of thisBangalore MRT system. the stations are located at City Railway Station ,Central College, Vidhana Soudha and Cricket Stadium. The Project is ajoint venture between CEC, Soma, and CICI with CEC as the leadmember.Total Value of UG-2 is INR 9.95 billion .

DMRC Mass Rapid

Transport System (B-

16)

Scheduled for completion in 2010, thePhase II Contract BC-16 Project for Delhi Metro Rail Corporation Ltd.


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includes design and construction of tunnels by shield TBM (TunnelBoring Method) and stations employing the cut & cover method forunderground works between Udyog Bhawan and Green Park Stations onthe Central Secretariat - Qutub Minar Corridor of Delhi MRT.

CEC were lead Contractor in a joint venture with SOMA withresponsibility for all major works, including 4 x2 kilometer (twin)tunnelsutilizing four shield TBMs with an outer diameter of 6.25 meters andfour underground stations at Race Course, Jor Bagh, INA and AIIMS.The Works were completed in time for the Client to operate this MRTsection during the Commonwealth Games to be staged in Delhi in

October 2010. Total Value of BC-16 is INR 8.13 billion.

Outer Ring Road to

Hyderabad City

(ORR)This project will be completed in 2011

for the Hyderabad Growth Corridor Limited (a joint venture betweenHUDA and INCAP) in Hyderabad City, India from Km 11.000 to Km23.380( 13.38 Km). The project included the construction of an eight-lane access controlled expressway as the Outer Ring Road to HyderabadCity including flyovers and two major bridges. Total Value of ORR isINR 295.09 million .

HYDERABAD-

BANGALORE

NATIONAL

HIGHWAY (C12)

This project will be completed in 2010for the NHAI (National Highway Authority Of India ) in Hyderabad.This section from Km 293.4 to Km 336 of NH44 (National Highway# 44 ) comprises 42.6 km of Highway inclusive of the construction ofculverts, minor and major bridges, grade separators, rail over/underbridges, widening & rehabilitation, repair of existing bridges. bypasses,detours, service roads and reconstruction, strengthening and widening of

the existing carriageway.

HYDERABAD-

BANGALORE

NATIONAL

HIGHWAY (C13)

This project will be completed in 2010


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for the NHAI (National Highway Authority Of India ) in Hyderabad.This section from Km 336 to Km 376 of NH44 (National Highway # 44 )comprises 40 km of Highway, inclusive of construction of culverts,minor and major bridges, grade separators, rail over/under bridges,widening & rehabilitation, repair of existing bridges. bypasses, detours,

service roads and reconstruction, strengthening and widening of theexisting carriageway.

EAST- WEST

CORRIDOR In

Rajasthan (RJ7) This project was completed in 2008 forNHAI (National Highway Authority Of India ) in Rajasthan from Km253 to Km 316 of NH76 (National Highway # 76) and comprised 59.72Km of highway, inclusive of the construction of new 2/4 lane bypasses,detours, service roads and reconstruction, strengthening and widening ofthe existing carriageway. The Project was a joint venture between CECand HCC with CEC as the lead member.

Special Economic

Zone Development

Project (APACHE

SEZ)

Located in Tada Mandal, Nellore District

Andhra Pradesh, India, this project was completed by CEC in 2007 forApache Footwear India Pvt. Ltd. The work comprised all buildingsinside the Special Economic Zone including civil structural work,flooring, finishing works, utilities and accessories. Buildings wereconstructed as R.C. structures with glass, fibreglass, and brick work.

1.5 Size of Organisation

Nature of Business Service provider

Number of Employees more than 1000 people

Turnover more than US$100 million(or>Rs 400 Crore Approx.)


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1.6 Organisation Structure Of the Company

1.7 Market Share and Position Of the CompanyWithin a short span, CEC have been entrusted with the construction of high value projects

across segments like Delhi Metro, National Highways, Bridges, Urban Roads, Railways

and SEZ projects. The exponential growth in order booking to the tune of US$ 700 millionhas resulted in rapid expansion of the company in terms of human resources, equipment &

machinery. They currently have more than 800 employees with 50+ International experts

from UK, Spain, Hong Kong, Malaysia, Thailand and Taiwan to deliver International

quality standards of project execution in India.CICI works including design, stands out as

the gateway for Technological and Engineering excellence in Civil Engineering fields with


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9 offices in India, CICI is fully equipped to contribute their expertise and turn vision into

reality

1.8 The people & their level with whom you have interacted

During summer training program the researcher get to interact with Mr. Dilbag Mehra working

as a Sr. Executive and Mr. Sandesh Singh working as a Sr. Manager.

1.9 Data Collection MethodsIn this project the data has been collected through two sources:

1.91 Primary data collection:

By direct interaction with the employees of the company.

1.92 Secondary data collection:

Collection of the data from the sources such as business magazines, current annual reports,book on Financial Management by various authors.

This will include collecting data from already existing data like from Internet, official sitesof Company, Financial newspapers, journals etc.

Future Challenges

The Indian economy has witnessed considerable progress in the past few decades. Most of theinfrastructure development sectors moved forward, but not to the required extent of increasinggrowth rate up to the tune of 8 to 10 per cent. The Union Government has underlined therequirements of the construction industry.

With the present emphasis on creating physical infrastructure, massive investment is planned inthis sector. The Planning Commission has estimated that investment requirement ininfrastructure to the tune of about 14,50,000 crore or US$320 billion during the 11th Five YearPlan period.

This is a requirement of an immense magnitude. Budgetary sources cannot raise this muchresources. Public Private Partnerships (PPP) approach is best suited for finding the resources.


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Better construction management is required for optimizing resources and maximizingproductivity and efficiency.


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CHAPTER 2:SWOTANALYSIS OF THE

COMPANY


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2.0 SWOT ANALYSIS

SWOT analysis(alternatively SWOT Matrix) is a structured planning method used to evaluatethe Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a businessventure. A SWOT analysis can be carried out for a product, place, industry or person. It involvesspecifying the objective of the business venture or project and identifying the internal andexternal factors that are favorable and unfavorable to achieving that objective. The technique iscredited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI)in the 1960s and 1970s using data from Fortune 500 companies. The degree to which theinternal environment of the firm matches with the external environment is expressed by theconcept of strategic fit.

Setting the objective should be done after the SWOT analysis has been performed. This wouldallow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business or project that give it an advantage overothers

Weaknesses: are characteristics that place the team at a disadvantage relative toothers

Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or

project

Identification of SWOTs is important because they can inform later steps in planning to achievethe objective.

2.1 Porter five forces analysis

A graphical representation of Porter's Five Forces

Porter five forces analysisis a framework for industry analysis and business strategy
http://en.wikipedia.org/wiki/File:Porters_five_forces.PNG


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development. It draws upon industrial organization (IO) economics to derive five forces thatdetermine the competitive intensity and therefore attractiveness of a market. Attractiveness inthis context refers to the overall industry profitability. An "unattractive" industry is one in whichthe combination of these five forces acts to drive down overall profitability. A very unattractiveindustry would be one approaching "pure competition", in which available profits for all firms

are driven to normal profit.

Three of Porter's five forces refer to competition from external sources. The remainder areinternal threats.

Porter referred to these forces as the micro environment, to contrast it with the more generalterm macro environment. They consist of those forces close to a company that affect its abilityto serve its customers and make a profit. A change in any of the forces normally requires abusiness unit to re-assess the marketplace given the overall change in industry information. Theoverall industry attractiveness does not imply that every firm in the industry will return the sameprofitability. Firms are able to apply their core competencies, business model or network to

achieve a profit above the industry average. A clear example of this is the airline industry. As anindustry, profitability is low and yet individual companies, by applying unique business models,have been able to make a return in excess of the industry average.

Porter's five forces include - three forces from 'horizontal' competition: the threat of substituteproducts or services, the threat of established rivals, and the threat of new entrants; and twoforces from 'vertical' competition: the bargaining power of suppliers and the bargaining power ofcustomers.

2.11 Five forces

a) Threat of new entrants

s


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Swot analysis of cec india pvt Ltd

STRENGTHS

Expertise areas

Environment Projects

The company have successfully implemented projects on the basis of BOT, design-build as

S

WEAKNESS

As CECIndia Pvt

Ltd is a

Taiwan,

MNC it

faces a

drawback

of

cultural

differenc

es.

DisOpportunities

Continuous private sector housingboom will create more construction

opportunities .

Financial supports like loan andinsurance & growth in income of

people is in support of construction

industry.

Developing supply chain throughinvolvement in larger projects islikely to enhance the chances in

construction.

Threats

Long term market instability anduncertainity may damage the

opportunities and prevent the

expansion of training and

development facilities.

Current economic situation mayhave an adverse impact on

construction industry.

Lack of political willingness andsupport on promoting new

strategies.


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well as construction contracts for large scale Water & Wastewater management projects andpoised to do significantly more. Their expertise covers the following:

Sewage Collection from existing and new Towns Sewage pipe network using pipe jacking and cut & cover methods Sewage Treatment Plants Water Treatment Plants Total Water Management Solutions for Townships and SEZs

High Speed Rail

CECs experience in High Speed Rail has given us popularity at an International level. Now, weare more confident in conceptualizing, financing, EPC contracts and operations of High SpeedRailway. CEC has successfully completed Worlds largest High Speed Railway BOT project,Taiwan High Speed Rail connecting the entire Country from North to South (Western side) fromTaipei to Zuoying Stations covering 345 kms length with 8 Stations. CEC gained invaluable

experience as a Developer, EPC contractor and Operator.

CEC has a core competence in EPC contracts like Viaducts, Tunnels, Bridges, Stations andDepots for High Speed Rail projects.

Tunnels

Tunnels form an important part of Transportation systems like Highways, Expressways,MRTS, High Speed Railway, Conventional Railway and Hydro Power. CEC has in-houseexpertise in undertaking Tunnelling projects requiring Tunnel Boring Machines (TBMs), NewAustrian Tunnelling Method (NATM) or Cut & Cover Methods.

In India, Delhi Metro underground project has given us the opportunity to show our skills intunnelling and underground stations. They own four TBMs manufactured by Robbins andHerrenknecht besides Diaphragm wall equipments.

High-end Buildings

High-quality building construction found a foothold in 1958 with the 1000 beds capacityVeterans General Hospital, in Taiwan. Since then, we have successfully completed more than50 high-value buildings projects. Over a period of time, through our own Research &Development, they have developed Green Building concept covering environmentalprotection, recyclable resources and reduced disposals, energy saving of building materials

with excellent insulation, low impact to environment during construction, anti-seismic lightweight structures, modular construction for faster constructions and standardized assemblingprocedure to ensure best quality.

The village, located in the Taipei county, is a complete plan-design-build-operation project byCEC. The project has also been awarded the Building prize in 2006


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Their expertise covers the following:

Commercial Buildings Shopping Malls Office Buildings Five Star Hotels Hospitals Hall for Performing Arts Townships Housing including High-Rise Condominiums and Villas High- tech Factories

Their Approach

Their approach is to provide maximum value for money to our clients without diluting theoverall objective of the business. CICI being a socially responsible corporate, addresses Social& Environmental concerns much in advance to avoid threat to living beings. Similarly, otherissues like health & safety and quality aspects are adequately addressed to sustain in the everincreasing competitive market.

Business Principals

CICI recognizes that the aim of its corporate mission is to upgrade human livingstandards and to contribute to our society a better quality of life.

CICI is a responsible partner in our society and will apply all the core values towardsits shareholders, customers, employees, suppliers, clients, competitors, governmentalagencies and other related parties.

CICI is determined to abide towards the highest level of business integrity maintaining,supporting and promoting its legitimate business interest in compliance with the law,the interests of society and the principles of fair competition.

CICI continues to provide the finest product and services, to innovate and improve, andto maximize our profits and the potential of our human resource performance.

CICI is committed to its environmental responsibilities. CICI continues to conform tothe best practices and standards in order to reduce the adverse impact of its activitiesand products effecting our environment

Health & Safety PolicyCentral to corporate mission statement, we strive to maintain the highest standards of workingenvironment for all our Staff. They place great importance on accident prevention and we

constantly review the Health & Safety at Work (HSW) Program. They encourage all Staff towork toward achieving zero accident, zero mishap and are committed to observing thefollowing management policy.

Quality Policy


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WEAKNESS

As CEC India Pvt Ltd is a Taiwan, multinational company it faces a major drawback of cultural

difference working in India.

Distance between construction projects reduces business efficiency.

Training itself has become a challenge in todays competitive environment.

Changing skills requirements and an ageing workforce may emphasize the skills gap.


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Improvement in long-term career prospects is highly required to encourage staff retention and

new entrants.

External allocation of large contract becomes difficult.

Lack of clearly defined processes and procedures for construction and its management lead to

higher risk and uncertainty.

Huge amount of money needs to be invested in this industry.

OPPORTUNITY

Continuous private sector housing boom will create more construction opportunities.

Public sector projects through Public Private Partnerships will bring further opportunities.

Developing supply chain through involvement in large projects is likely to enhance the chances

in construction.

Renewable energy projects will offer opportunities to develop skills and capacity in new markets

for the company.More flexible training delivery techniques are now available.

Financial supports like loan and insurance and growth in income of people is in support of

construction industry.

THREAT

Long term market instability and uncertainty may damage the opportunities and prevent the

expansion of training and development facilities.

Current economic situation may have an adverse impact on construction industry.

Political and security conditions in the region and Late legislative enforcement measures arealways threats to any industry in India.

Infrastructure safety is a challenging task in construction industry.

Lack of political willingness and support on promoting new strategies.

Natural abnormal casualties such as earth quake and floods are uncertain and can prevent the

construction boom.

BEST PRACTICES FOLLOWED IN DIFFERENT FUNCTIONAL AREAS

HUMAN RESOURCE


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1.Learning and development

HR team identifies the internal subject matter experts to give training to the employee sendingemployees for higher studiesE Welcome

When employees join the company, they have to interact with functionaries in other regions whoassume that the new person in knows the internal systems. Often the new employee is unfamiliarwith the systems and is at sea. The E Welcome gateway lists certain universal systems of thecompany and helps them get familiar with such things. A stand out feature is that if thischecklist remains incomplete it sends an automatic notice to the manager responsible for theemployee.Company follows a training policy to have seven days of training every year is mandatory for allemployees, even this chairman and the directors. The company gives equal importance to softskill training. Out of box thinking is more important , the sponsored the Edward De Bonocertification of lateral thinking for two of its managerial employees, so they could teach in house. This learning creates a leadership pipeline.

2. Rewards and Recognization

1. MAD (Mutual Admiration)Is an event where every employee is given green cardboard leaves on which they scribblemessages of appreciation and pin them onto the MAD tree in the cafeteria. The leaves are a wayof reaching out to colleagues and teams who have mattered. And at the end of the week, thefoliage gets thick. Surely, the employees like being around each other.2. Smart Work and Smart Reward:It directed towards improving employees productivity. It rewards those who complete tasks infewer working hours than stipulated. The reward process is well defined and transparent. It has

helped in ensuring better work life balance.3. Promotion within

3.Compensation

1. Paternity leave2. Extra three months maternity leave at half the salary leave3. Parking allowances to those who uses parking facilities across delhi region.4. Medical coverage for its working employees .5. Equal privileges for employees across levels: employees at all levels travel in the same class,stay in similar hotels, work out of standard cubicles, log in their own leave.

4.Performance appraisal

Performance Task Force: A cross functional team constitutes 20 members and this force keepstrack of what needs to be plugged, and what seems to be working. It goes back to HR every sixmonths to deliver feedback.


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5. Leadership and Development

1. Food for thought:Inviting employees in groups to chat with Managing director over lunch in an informal

environment on various issues and topics.2. Succession planning3. Employee empowerment4. Reach out:An initiative to keep a direct link of communication to its employees, the president of thecompany meets the employees.

6. Organisation Structure

1. Flexi and Part time2. The companies allow the employees to shift jobs if they wish to, across its different functions.

3. The company created new position called Employee Engagement Manager: the major taskof the manager is to energize the workplace with fun filled events and effectivecommunication.4. People Champions: Every project team has one facilitator from the HR department. Thepeople champion takes care of any administrative need a project might have, leaving the projectmembers free to concentrate on their work.5. People Movement Management Review Committee: it ensures talented employees wereretained by reassigning them to other groups. The company also hired consultants to assist thosewho were asked to leave to find jobs in other organizations.

FINANCE

A construction firm requirements are different as they come. A good construction software willinclude modules for General Construction, Materials, Highway, Mechanical and other areas likesewer, oil pipelines etc. Audit trail, closing of books, job costing, general ledger, over/underbilling, overhead allocation, construction-specific payroll features, union reporting, certifiedPayroll reporting, payables and receivables. Many of the construction projects are executed onsite. This necessitates special features like remote access, updation, and retrieval of data.

A construction order is an ongoing project in stages and is usually executed on receipt ofpayments for each stage. A good construction management software should be able to add newsub contractor in the middle of a project being executed and maintain sub-contracts by job andsub-contract number. Generating and printing the sub-ledger, which includes not only invoicesbut also change orders, holdback amounts, amounts payable, and actual contract information foreach sub-contractor. A good construction management software can record all costs related to aparticular job or order and thus enable closer accounting control.

Querying features include inquiry by PO status, payment status, order status, job status, andmaterial receipt or dispatch status. Managing the sub contractors is a major requirement in anyconstruction project and today most construction management software include features to


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closely manage them. Inventory control software is sold as a separate software. However, aconstruction software should include inventory control with features to track material flow todifferent projects, and their status.

Project monitoring features like tracking actual cost vs budgeted cost, materialwise, jobwise,

projectwise, are standard.

CEC uses following accounting software on day to day basis :

1.SAP ERP

SAP ERP consists of several modules, including utilities for marketing and sales, field service,product design and development, production and inventory control, human resources, financeand accounting. SAP ERP collects and combines data from the separate modules to provide thecompany or organization with enterprise resource planning.

Although there can be major benefits for customers of SAP ERP, the implementation andtraining costs are expensive. Many companies experience problems when implementing SAPERP software, such as failing to specify their operation objectives, absence of a strongcommitment or positive approach to change, failing to deal with organizational differences,failing to plan the change to SAP ERP properly, inadequate testing. All these factors can meanthe difference between having a successful implementation of SAP ERP or an unsuccessful one.

If SAP ERP is implemented correctly an enterprise can go from its old calculations system to afully integrated software package. Potential benefits include efficient business process, inventoryreduction, and lead time reduction.

2.Maxwell systems pro contracter MX

Maxwell Systems ProContractorMX is a comprehensive enterprise resource planning (ERP)

system for construction companies. The accounting functions include general ledger, accounts

receivable, accounts payable, payroll, and other industry-specific modules. Maxwell Systems

ProContractorMX can also support equipment tracking, item billing, and project management.

INFORMATION TECHNOLOGY


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1. Computer-Aided Engineering

In the past twenty years, the computer has become an essential tool in engineering, design, andaccounting. The innovative designs of complicated facilities cited in the previous sections wouldbe impossible without the aid of computer based analysis tools. By using general purpose

analysis programs to test alternative designs of complex structures such as petrochemical plants,engineers are able to greatly improve initial designs. General purpose accounting systems arealso available and adopted in organizations to perform routine bookkeeping and financialaccounting chores. These applications exploit the capability for computers to perform numericalcalculations in a pre-programmed fashion rapidly, inexpensively and accurately.

Despite these advances, the computer is often used as only an incidental tool in the design,construction and project management processes. However, new capabilities, systems andapplication programs are rapidly being adopted. These are motivated in part by the remarkableimprovement in computer hardware capability, the introduction of the Internet, and anextraordinary decline in cost. New concepts in computer design and in software are also

contributing. For example, the introduction of personal computers using microcircuitry hasencouraged the adoption of interactive programs because of the low cost and considerablecapability of the computer hardware. Personal computers available for a thousand dollars in 1995have essentially the same capability as expensive mainframe computer systems of fifteen yearsearlier.

Computer graphics provide another pertinent example of a potentially revolutionary mechanismfor design and communication. Graphical representations of both the physical and work activitieson projects have been essential tools in the construction industry for decades. However, manualdrafting of blueprints, plans and other diagrams is laborious and expensive. Stand alone,computer aided drafting equipment has proved to be less expensive and fully capable of

producing the requiring drawings. More significantly, the geometric information required forproducing desired drawings might also be used as a database for computer aided design andcomputer integrated construction. Components of facilities can be represented as threedimensional computer based solid models for this purpose. Geometric information forms onlyone component of integrated design databases in which the computer can assure consistency,completeness and compliance with relevant specifications and constraints. Several approaches tointegrated computer aided engineering environments of this type have already been attempted.

Computers are also being applied more and more extensively to non-analytical and non-numerical tasks. For example, computer based specification writing assistants are used to rapidlyassemble sets of standard specifications or to insert special clauses in the documentation of

facility designs. As another example, computerized transfer of information provides a means toavoid laborious and error-prone transcription of project information. While most of thetraditional applications and research in computer aids have emphasized numerical calculations,the use of computers will rapidly shift towards the more prevalent and difficult problems ofplanning, communication, design and management.

Knowledge based systems represent a prominent example of new software approaches applicableto project management. These systems originally emerged from research in artificial intelligence


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in which human cognitive processes were modeled. In limited problem domains such asequipment configuration or process control, knowledge based systems have been demonstratedto approach or surpass the performance of human experts. The programs are marked by aseparation between the reasoning or "inference" engine program and the representation ofdomain specific knowledge. As a result, system developers need not specify complete problem

solving strategies (or algorithms) for particular problems. This characteristic of knowledge basedsystems make them particularly useful in the ill-structured domains of design and projectmanagement. Chapter 15 will discuss knowledge based systems in greater detail.

Computer program assistants will soon become ubiquitous in virtually all project managementorganizations. The challenge for managers is to use the new tools in an effective fashion.Computer intensive work environments should be structured to aid and to amplify thecapabilities of managers rather than to divert attention from real problems such as workermotivation.

Business Strategy for building use, justification, plan, economic analysis, facility

requirements, expansion/alteration consideration, site selection issues and project objectives.

Owner Philosophy with regard to reliability, maintenance, operation and design. Project Requirements for value engineering, design, existing facility, scope of work

review, schedule and budget. Site Information including applicable regulatory reporting and permits requirements. Building Programming including room by room definitions for use, finishes, interior

requirements and hvac (heating, ventilating and air conditioning). Design Parameters including all components and a constructability analysis. Equipment including inventory, locations and utility requirements.

2. PRIMAVERA

Primavera Unifier

Oracles Primavera Unifier provides a best-in-class cloud-based solution for managing projectsand facilities of any size in every vertical market. It combines rich cost management and control,document management, schedule and resource management, fund management and more withrobust market-leading business process automation capabilities tailored specifically forenterprise-grade control of capital programmes. Unifier also includes facilities and property

functionalities such as work orders, leases, space management and more to complete the facilitylifecycle. Unifiers platform optimises and integrates critical business processes, data anddocuments across the organisation. Its intuitive user interface can be tailored to your business toincrease adoption, minimise training and ultimately deliver rapid time-to-value.

INVENTORY CONTROL


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SELECTIVE INVENTORY CONTROL

Variances in the method of control from item to item based on selective basis.

The criteria used for the purpose may be cost of the item, criticality, lead time, consumption

procurement difficulties, etc.

Various classifications are employed to render selective treatment to different type of materials,each classification emphasizes on a particular aspect.

Policies of controlsFor ABC AnalysisDegree of control:- Senior level should be made responsible for regular reviewing of the A

level of items

- Attempts should made to reduce both internal & external lead time.- For B Items normal control is required- For C Items little control is required & inspection for these items should be delegated to lowerlevel managers

VED Analysis

Represents classification of items based on their criticalityClassifies items into 3 groups called Vital, Essential & Desirable

-Vital category consists of those items for want of which production would come to a halt.

- Essential group includes items whose stock outs costs is very high.

- Desirable group consists of items which do not cause any immediate loss of production.

An item may be vital for a number of reasons:If the non availability of the item can cause serious production losses.Lead time for procurementis very large.It is a non standard item & it is custom made.The sources of supply is only one & islocated far off from the buyers plant


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CHAPTER 3

DATA COLLECTION AND PRESENTATION


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Human Resources

Thrust was placed on bridging the gaps in niche areas for business growth and enhancing projectexecution capabilities through an integrated HR approach.

Strong focus was laid on talent acquisition. Customized programmes addressed skill gaps ofemployees. Workmen management centres have been set up in order to effectively manageworkmen, improve their skills and increase efficiency.

Internal control mechanisms cover all operations.

Well-documented policies and guidelines are laid down to evaluate and authorize tenders, workorders and purchase orders. A separate cell monitors and reports business processes undertakenby project locations.

Staff Benefits

All following benefits are available to the employment in the Taiwan region only. Benefits

for all other regions shall be provided specific to comply with local law and practices. Smooth capital-labor relations are crucial to company growth. From the beginning, our companyhas taken a direct, responsible approach to maximizing employee welfare, offering stafmembers a diverse selection of on-the-job skills enhancement programs and taking care of theirdaily needs. In response to changes in the environment around us, CEC has redoubled efforts inthe following areas in order to achieve the objectives of sustained operation and generatingmaximum benefits for both staff members and shareholders.

Streamlined Management SystemIn accordance with relevant regulations in the Labor Standards Law and in recognition o

changes in the business environment, the company periodically revises management regulationsas necessary to create and maintain a people-oriented management system.

Strong Staff Communication ChannelsCEC is determined to enhance the functions of internal company publications, and establish anEnterprise Information Portal (EIP) to announce and explain various company policies, systems,welfare measures and assorted events. In addition, and employee discussion boards enablethorough expression of staff opinions and views.

Group Insurance and Health Examinations

In addition to labor insurance, CEC also purchases group life insurance, accident insurance,medical insurance, and cancer insurance for all staff members. In addition, the companyconducts health examinations annually for all staff members to give our employees multiple

layers of security.Employee Dividends, Stock OptionsAs partners in our enterprise, we seek to ensure employee participation in company operationand enjoyment of the fruits of our efforts.

Enhanced Employee TrainingEach year the company allots a budget for conducting educational training for employees topromote the enhancement of their professional know-how and skills and to further individualcareer development.


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Comprehensive Retirement StructureIn accordance with the law, company allocate retirement reserve fund every month; allretirement measures are further conducted in full compliance with the regulations stipulated inthe Labor Standards Law and Labor Pension Act.

Employee Welfare Committee

An Employee Welfare Committee oversees matters concerning staff benefits and welfare,including the following: financial assistance for weddings and funerals, births, hospitalvisitations, childrens education, and special bonuses on birthdays and Taiwans three majortraditional holidays (Chinese New Year, Dragon Boat Festival, and Mid-Autumn Festival). TheCommittee also provides guidance and support to various employee clubs and sponsors companyathletic meets, an annual year-end dinner, and company trips to relieve stress and foster groupspirit. In addition, the company contributes further assistance where welfare funds stipulated bylaw are deemed insufficient.

Infrastructure Engineering

Infrastructure engineering is CECscore business.

We have maintained a register of highway, tunnel, bridge, mass rapid transit,and high-speed rail projects, solidifying our expertise on an array of complexprojects.

We have participated in numerous high profile projects at the forefront of

Taiwansnational development, from the Taipei MRT, the first two nationalfreeways, and the Taiwan High Speed Rail. All of these projects havebolstered CECsextensive capacities for introducing new benchmarks on theconstruction forefront.

On the verge of redefining our presence to meet the timely challenges of aconstruction industry undergoing transformation and revival, CEC adheresto optimum managerial methods and successful delivery of all projects.Further, we seek to actively pursue a diversity of interests that will enrichcompany strength and know-how to secure our quality reputation.

Objective of the Study


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The project is vital to me in a significant way. It does have some importance for the companytoo. From this project I have broad knowledge on different aspects of ratio analysis/financialanalysis.

of understanding financial analysis.

ny in the market.

This study is mainly conducted to analyse the performance of the company for a period of 4years from FY 2008-09 to FY 2012-2013 as revealed from the financial data of CEC Pvt Ltd.Annual reports. This indirectly will help the investor, government, employees, creditors andother stakeholders in financial forecasting and planning and also for decision making.

FINANCIAL RATIOS1. Liquidity ratios


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2. Turnover Ratios3. Leverage Ratios4. Profitability Ratios

1. Liquidity ratios: -

Liquidity Ratio refers to a class of financial metrics that is used to determine a company's ability topay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger themargin of the safety that a company possesses to cover short-term debts. Liquidity ratios are based onthe relationship between current assets the sources for meeting short-term obligation and currentliabilities. The ratios which indicate the liquidity of a firm are: -1.1. Current Ratio.1.2. Acid test Ratio.


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1.1 Current Ratio:

The current Ratio is the ratio of current liabilities it is calculated as:

Current Assets

Current ratio = - - - - - - - - - - - - - - - - - -

Current Liabilities

The current assets include cash and Bank Balance, Marketable securities, Bills, Receivable,Inventories, Loans and advances, Advance Payment and prepaid expenses.

The current liabilities include creditors, bills payable bank overdraft short-term loans,

outstanding expense & income tax payable, unclaimed divided and proposed dividend. Thecurrent ratio measures the ability of the firm to meet its current liabilities.

The current assets get converted into cash into the operational cycle of the firm and provide thefund needed to pay current liabilities.

CURRENT RATIO

Years 2011-2010 2010-

2009

2009-

2008

2008-2007 2007-2006

Currentratio

62.16 277.4 81.52 72.43 24.04


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0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2011-2010 2010-2009 2009-2008 2008-2007

Debt Equity Ratio


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1.2 QUICK RATIO:

The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best measures ofliquidity. It is figured as shown below:

QUICK RATIO = current assetsinventories

Current liabilitiesbank over draft

The Quick Ratio is a much more exacting measure than the Current Ratio. By excludinginventories, it concentrates on the really liquid assets, with value that is fairly certain. It helpsanswer the question: "If all sales revenues should disappear, could my business meet its currentobligations with the readily convertible `quick' funds on hand?" An acid-test of 1:1 is considered

satisfactory unless the majority of your "quick assets" are in accounts receivable, and the patternof accounts receivable collection lags behind the schedule for paying current liabilities.

QUICK RATIO

Years 2011-2010 2010-2009 2009-2008 2008-2007 2007-2006

Quick

Ratio

62.16 277.4 81.52 72.43 24.04

0

0.1

0.2

0.30.4

0.5

0.6

0.7

0.8

0.9

2011-2010 2010-2009 2009-2008 2008-2007

Quick Ratio


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Interpretation:

As a convention quick ratio of 1:1 is considered good. The quick ratio is showing a fall in theyear 2009-010. This is because of existence of slow paying debtors and increase of currentliabilities like interest accrued on loans. Quick ratio of the company has been very satisfactory in

the years 2009-10 and 2009-2008, also it is showing an upward graph which is also a goodindication.

2. LEVERAGE or CAPITAL STRUCTURE RATIO

These ratios refer to the use of debt finance long term solvency of the firm can be examined byusing leverage or capital ratios. The leverage ratio or capital structure ratio can be defined as thefinancial ratios which throw light on the long term solvency of a firm reflected in its ability toassure the long term creditors with regards to.1. Periodic payment of interest during the period of loan.2. Repayment of Principe on maturity or in predetermined installments at due dates.

2.1 DEBT-EQUITY RATIOThis ratio reflects the relative claims of creditors and shareholders against the assets of the firm,debt equity ratios establishment relationship between borrowed funds and owner capital tomeasure the long term financial solvency of the firm. The ratio indicates the relative proportionsof debt and equity in financing the assets of the firm. It is calculated as follows

Debt equity ratio = Debt / Equity

The debts side consist of all liabilities (that include short term and long term liabilities) of thefirm. The equity side consists of new worth (plus) preference capital. The lower the debt equity

ratio, the higher is the degree of protection enjoyed by the creditors. 33The debt equity ratio defined by the controller of capital issue, debt is defined as long term debtplus preference capital which is redeemable before 12 years and equity is defined as paid upequity capital plus preference capital which is redeemable after 12 years.

Debt-Equity Ratio

year 2011 2010 2009 2008

Debt equity

ratio

0.08 0.12 0.76 0.83


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This shows that there is a decline in the owners stake in the company

2.2 INTEREST COVERAGE RATIO

This ratio is also known as Time interested Earned ratio This ratio measures the debt servicing ofcapacity of a firm in so far as fixed interest on long term loan is concerned. Interest coverageratio determined by dividing the operating profits or earnings before interest and taxes by fixedinterest charges on loans. It is calculated as

Earnings before Interest &Taxes (EBIT)

Interest coverage Ratio = ---------------------------------------

Debt Interest

The EBIT is used in the numerator of this ratio because the ability of a firm to pay interest is notaffected by tax payment as interest on debt fund in tax deductible expenses. The ratio apparentlymeasure the margin of safety the firm enjoys with the respect to its interest burden. A highinterest coverage ratio implies that the firm can easily meet its interest burden even if EBITdecline. A low interest coverage ratio results in financial embarrassment when EBIT declines.This ratio is not appropriate measures of interest coverage because the source of interest paymentis cash flow before interest and taxes, not EBIT.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2011-2010 2010-2009 2009-2008 2008-2007

Debt Equity Ratio


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Operating Margin

year 2011 2010 2009 2008

OperatingMargin ratio 7.02 11.51 8.17 8.68

Interpretation:

In the year 2010 operating profit is higher in comparison to the year 2011 and it is due to thelow operating expenses as well as low cost of goods sold. So the operating efficiency of the firmin the year 2010 is good as compare to that of 2011.

3.2 GROSS PROFIT MARGIN

Gross profit can be defined as the difference between net sales and cost of goods sold. Grossmargin profit ratio is also known as gross margin gross profit margin ratio is calculated by

dividing gross profit by sales.

Gross profit margin ratio = gross profit/Net sales

Gross Profit = Net sales-cost of goods sold.

The gross profit margin ration shows the margin left after meeting manufacturing cost. The ratioalso measures the efficiency of production as well as pricing. The Gross profit to sales is a sign

0

1

2

3

4

5

6

2011-2010 2010-2009 2009-2008 2008-2007

Net Profit ratio


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the net profit margin of other competitors. This can be used to overtake competitors via a pricingwar. Thus,

Net profit Margin Ratio = Net Profit/Net Sales

The higher the net profit margin is, the more effective the company is at converting revenue into

actual profit. The net profit margin is a good way of comparing companies in the same industry,since such companies are generally subject to similar business conditions. However, the netprofit margins are also a good way to compare companies in different industries in order togauge which industries are relatively more profitable also called net margin.

Net Profit Margin

year 2011 2010 2009 2008Net Profit

ratio

4.37 3.74 4.81 3.48

Interpretation:The Net Profit Margin ratio graph of the company is showing lots of ups and downs in last 4years period but in 2011, there is a huge decline because of the increase of sale with fewer profitmargins.

0

1

2

3

4

5

6

2011-2010 2010-2009 2009-2008 2008-2007

Net Profit ratio


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3.4 EARNING PER SHARE

The portion of a company's profit allocated to each outstanding share of common stock. Earningsper share serve as an indicator of a company's profitability. Calculated as:

EPS = Net Profit Available To Equity-Holders

Number of Ordinary Shares Outstanding

When calculating, it is more accurate to use a weighted average number of shares outstandingover the reporting term, because the number of shares outstanding can change over time.However, data sources sometimes simplify the calculation by using the number of sharesoutstanding at the end of the period. Diluted EPS expands on basic EPS by including the sharesof convertibles or warrants outstanding in the outstanding shares number. Earnings per share aregenerally considered to be the single most important variable in determining a share's price. It isalso a major component used to calculate the price-to-earnings valuation ratio. Two companies

could generate the same EPS number, but one could do so with less equity (investment) - thatcompany would be more efficient at using its capital to generate income and, all other thingsbeing equal would be a "better" company. Investors also need to be aware of earningsmanipulation that will affect the quality of the earnings number. It is important not to rely on anyone financial measure, but to use it in conjunction with statement analysis and other measures.

Earnings Per Share (EPS)


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CEC INDIA PVT LtdProfit loss account (Rs cr

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar '0

Income:

Operating income 102.77 33.39 59.60 46.89 125.29

Expenses

Material consumed - - - - -

Manufacturing expenses - - - - -

Personnel expenses 5.96 0.34 1.23 0.37 5.17

Selling expenses 2.92 0.84 0.05 - -

Adminstrative expenses 5.75 1.72 6.01 5.03 31.29

Expenses capitalized - - - - -

Cost of sales 14.62 2.90 7.29 5.40 36.46

Operating profit 88.14 30.50 52.31 41.49 88.83

Other recurring income 1.36 0.51 1.22 3.98 10.17

Adjusted PBDIT 89.50 31.00 53.54 45.47 99.01

Financial expenses 25.37 19.96 18.20 25.44 41.02

Depreciation 0.13 0.20 0.22 0.25 0.23

Other write offs - - - 0.97 0.42

Adjusted PBT 64.01 10.85 35.12 18.81 57.34

Tax charges 2.84 2.39 -0.04 -0.14 -0.12

Adjusted PAT 61.16 8.46 35.16 18.94 57.47


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Balance sheet

Mar ' 2011 Mar ' 2010 Mar ' 2009 Mar ' 2008 Mar ' 20

Sources of funds

Owner's fund

quity share capital 364.13 331.08 264.44 158.66 158.66

hare application money - - - 40.00 -

reference share capital - - - - 18.50

eserves & surplus 5,240.44 1,308.70 104.04 174.27 146.84

oan funds

ecured loans 469.18 177.17 175.89 214.23 221.34

nsecured loans 10.00 20.00 106.76 53.72 14.93

otal 6,083.74 1,836.95 651.13 640.89 560.26

ses of funds

ixed assets

ross block 1.71 1.71 2.22 2.33 2.41

ess : revaluation reserve - - - - -

ess : accumulated depreciation 1.03 0.90 1.11 0.96 0.76

et block 0.68 0.81 1.11 1.37 1.65

apital work-in-progress - - - - -

nvestments 4,780.31 1,344.03 438.24 442.36 367.30

et current assets

urrent assets, loans & advances 1,324.06 493.89 214.40 199.92 199.61


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ess : current liabilities & provisions 21.30 1.78 2.63 2.76 8.30

otal net current assets 1,302.76 492.12 211.77 197.16 191.32

Miscellaneous expenses not written - - - - -

otal 6,083.74 1,836.95 651.13 640.89 560.26

otes:

ook value of unquoted investments 4,773.72 1,344.03 438.24 438.12 -

Market value of quoted investments 11.98 14.40 - 9.20 -

ontingent liabilities 3,132.29 834.73 260.16 122.91 -

company profile of mtnl

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