Sam Sachin
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CHAPTER-I
INTRODUCTION
ENGINEERING, PROCUREMENT AND CONSTRUCTION
In an engineering, procurement and construction (EPC) contract, the EPC contractor (EPCC) agrees to deliver the keys of a commissioned plant to the owner for an agreed amount, just as a builder hands over the keys of a flat to the purchaser. The EPC way of executing a project is gaining importance worldwide. But it is also a way that needs good understanding, by the EPCC, for a profitable contract execution.
The Company's principal activities are Engineering, Procurement and Construction business. The company provides Engineering Procurement Construction business in power transmission, distribution, sub-station, railways and telecom having presence in India and Overseas. On 6th August 07 the company has merge with RPG Transmission Limited (RPGTL) and with National Information Technologies Limited (NITEL)
CHAPTER – II COMPANIES AND PRODUCT PROFILE KEC INTERNATIONAL LTD.
A TOWERING CORPORATE:KEC International Limited (KEC), part of the US$ 2.75billion RPG Group, is a leader in the domestic and global power transmission and distribution (T&D) business. Established in 1945 as Kamani Engineering Corp. Ltd. Merge in 1982 with RPG Group. It was renamed in 1984 as KEC International Ltd. One of the largest Power Transmission Engineering Procurement and Construction (EPC) companies in the world as well as One of the dominant players in SAARC (South Asian Association of Regional Corporation), Middle East, Africa & South-East Asia. KEC has made an indelible mark with its presence in over 40 countries. Through constant and continuous re-engineering. KEC has gained a position of leadership in the areas of quality, technology, capacity and capability. Till date, KEC has supplied more than 2 million metric tons of towers and has constructed over 58,000 kms. Of transmissionlines, more than enough to encircle the entire globe. KEC has continued its value chain expansion by entering into distribution and rural electrification, optical fiber cable installations, concrete spun pole manufacturing, supply of telecom towers, hotline stringing and providing services such as Satellite/GPRS surveys With specific strengths in the areas of tower design, manufacture, cross-country project management skills, KEC has been expanding its client base across the globe. KEC International is one of the largest Power Transmission EPC companies in the world. KEC has made an indelible mark on the world map by constantly and consistently re-engineering itself to retain its position of leadership in the areas of quality, technology, capacity and capability. KEC strengths lie in the areas of Design, Manufacture, supply and Construction of Turnkey Projects of Power Transmission lines of voltages up to 800 KV and in the execution of Railway Electrification projects, setting up Sub-stations and power Distribution Networks, Optical Fiber Cable (OPGW) installations, Turnkey Telecom Infrastructure Services and maintenance of Power Transmission Lines.
The KEC credo is that no project is complete till the customer is totally satisfied. KEC has successfully executed contracts from 33 KV to 800 KV in India and abroad. KEC has undertaken projects in following countries... Turnkey contracts Algeria, Bangladesh, Egypt, Ethiopia, Ghana, India, Indonesia, Iraq, Iran, Kenya, Kuwait, Lebanon, Libya, Malaysia, Nepal, Oman, Philippines, Sudan, South Africa, Sri Lanka, Saudi Arabia, Syria, Thailand, Tunisia, UAE. Supply of Towers - Argentina, Australia, Brazil, Canada, Laos, New Zealand, Nigeria, Qatar, Vietnam, USA.
RESEARCH & DEVELOPMENT: DESIGN CAPABILITIES: MANUFACTURING SKILLS:
TECHNOLOGY
FABRICATION TECHNOLOGY: GALVANIZING TECHNOLOGY:
CHAPTER – III A]
PROJECTS RELATED LITERATURE
FINANCIAL FORECASTING
B] FINANCIAL STATEMENTS: C] FINANCIAL STATEMENT ANALYSIS: D] RATIO ANALYSIS: THE CLASSIFICATION OF FINANCIAL RATIOS
S. No.
Type of Ratio
Significance
These are measures of the short-term ability 1
Liquidity Ratios
2
Profitability Ratios
3
Activity Ratios
4
Leverage Ratios
of the company to pay its debts when they come due and to meet unexpected needs for cash These indicate the company's operating success i.e. profitability These indicate how well the company’s assets are managed These indicate how much of debt has been used to finance various investment in different assets
E] CASH FLOW STATEMENT
CHAPTER - IV
OBJECTIVE OF STUDY
To understand changes in economy as same as increase in inflation rate effects on KEC & related industry. To diagnosis of financial health of the firm for the management, creditors, lending institutions and finally the investors. To evaluation of the financial performance of the company of past, present and anticipated future.
Tries to identify the firm's financial strengths and weaknesses and provides the essential foundation for financial decision making and planning. To understand the efficiency and performance of the concerned firm as a whole.
CHAPTER – V
RESEARCH METHODOLOGY
OBJECTIVE
To discuss the basic concepts of Financial Analysis To do Financial Analysis of the performance of KEC over the years with the help financial Statement Analysis.
To find out the financial strengths and weaknesses of KEC.
To understand the industry in which KEC operates
TYPES RESEARCH:
Primary research / Field Research involves the collection of primary data or information that is new. This is collected through surveys and questionnaires that are made out specifically for a purpose.
Secondary research / Desk Research involves gathering data that already exists either from internal sources of client, publication of governmental and non-governmental institutions, free access data on the internet, in professional
newspaper and in annual reports of companies and
commercial database to name but a few. In many projects, carrying out an initial desk research stage is strongly recommended to gain background knowledge to a subject as well as providing useful leads that will help to get the maximum from research budget SOURCES OF DATA COLLECTION The data relating to financial forecasting was collected from multiple sources like newspaper, books, internet sources, annual report, KEC’s database etc. These sources provided data like exchange rates, transactions done by KEC’s, information regarding various book project and capital, sales, interest rate etc. LIMITATIONS
Foremost limitation is limited time duration of project which not enough to study all financial statement analysis. This study is based on past financial data of the organization. Forecasting may not be correct due to economical changes. Organization guide had not gave enough time me during the project because of their busy schedule like TAX audit, Internal audit, Filing the Income Tax, Routing work. People may not reply if emails or letters are used. People are not providing correct data due to some regulation of the organization.
CHAPTER – VI
DATA ANALYSIS AND INTERPRETATION
A]
GROSS PROFIT MARGIN:
B]
NET PROFIT MARGIN:
C]
RETURN ON EQUITY (ROE):
D]
EARNINGS PER SHARE:
E]
BOOK VALUE PER SHARE:
F]
DIVIDEND YIELD RATIO: LIQUIDITY RATIOS:
A]
CURRENT RATIO:
B]
QUICK RATIO: LEVERAGE RATIOS: A] DEBT TO EQUITY RATIO: B] INTEREST COVERAGE RATIO: ACTIVITY RATIOS:
A] INVENTORY TURNOVER RATIO: B] FIXED ASSETS TURNOVER RATIO: C] WORKING CAPITAL TURNOVER RATIO: D] DEBTORS’ TURNOVER RATION: E] EXPORTS TO GROSS SALES:
CHAPTER – VII
Based
on
the
CONCLUSION
study
of
RPG
Transmission
industry
and
KEC
INTERNATIONAL LTD financial performance over the years, following
important points were observed about current global market scenario for the KEC INTERNATIONAL LTD. • KEC has enhancing efficiency of turning raw material into sales which affecting gross profit positively. • KEC had fully utilized efficiency in favorable condition [increasing demand] for increasing sales as same as Net profit. • Return on Equity ratio indicate that KEC management has enhancing their efficiency to fulfill responsibility very well of maximizing profit and owners welfare. • Book value of per share of KEC had increasing year to year, this sign of good performance of organization. • Current ratio and Quick ratio of KEC had indicating strong liquidity position compare to previous year. KEC’s is not more depends on debts fund, in previous year they had increase their Equity capital which help to reduce their risk during recession.
INTRODUCTION
ENGINEERING, PROCUREMENT AND CONSTRUCTION
In an engineering, procurement and construction (EPC) contract, the EPC contractor (EPCC) agrees to deliver the keys of a commissioned plant to the owner for an agreed amount, just as a builder hands over the keys of a flat to the purchaser. The EPC way of executing a project is gaining importance worldwide. But it is also a way that needs good understanding, by the EPCC, for a profitable contract execution.
The Company's principal activities are Engineering, Procurement and Construction business. The company provides Engineering Procurement Construction business in power transmission, distribution, sub-station, railways and telecom having presence in India and Overseas. On 6th August 07 the company has merge with RPG Transmission Limited (RPGTL) and with National Information Technologies Limited (NITEL)
CHAPTER – II COMPANIES AND PRODUCT PROFILE KEC INTERNATIONAL LTD.
A TOWERING CORPORATE:KEC International Limited (KEC), part of the US$ 2.75billion RPG Group, is a leader in the domestic and global power transmission and distribution (T&D) business. Established in 1945 as Kamani Engineering Corp. Ltd. Merge in 1982 with RPG Group. It was renamed in 1984 as KEC International Ltd. One of the largest Power Transmission Engineering Procurement and Construction (EPC) companies in the world as well as One of the dominant players in SAARC (South Asian Association of Regional Corporation), Middle East, Africa & South-East Asia. KEC has made an indelible mark with its presence in over 40 countries. Through constant and continuous re-engineering. KEC has gained a position of leadership in the areas of quality, technology, capacity and capability. Till date, KEC has supplied more than 2 million metric tons of towers and has constructed over 58,000 kms. Of transmissionlines, more than enough to encircle the entire globe. KEC has continued its value chain expansion by entering into distribution and rural electrification, optical fiber cable installations, concrete spun pole manufacturing, supply of telecom towers, hotline stringing and providing services such as Satellite/GPRS surveys With specific strengths in the areas of tower design, manufacture, cross-country project management skills, KEC has been expanding its client base across the globe. KEC International is one of the largest Power Transmission EPC companies in the world. KEC has made an indelible mark on the world map by constantly and consistently re-engineering itself to retain its position of leadership in the areas of quality, technology, capacity and capability. KEC strengths lie in the areas of Design, Manufacture, supply and Construction of Turnkey Projects of Power Transmission lines of voltages up to 800 KV and in the execution of Railway Electrification projects, setting up Sub-stations and power Distribution Networks, Optical Fiber Cable (OPGW) installations, Turnkey Telecom Infrastructure Services and maintenance of Power Transmission Lines.
The KEC credo is that no project is complete till the customer is totally satisfied. KEC has successfully executed contracts from 33 KV to 800 KV in India and abroad. KEC has undertaken projects in following countries... Turnkey contracts Algeria, Bangladesh, Egypt, Ethiopia, Ghana, India, Indonesia, Iraq, Iran, Kenya, Kuwait, Lebanon, Libya, Malaysia, Nepal, Oman, Philippines, Sudan, South Africa, Sri Lanka, Saudi Arabia, Syria, Thailand, Tunisia, UAE. Supply of Towers - Argentina, Australia, Brazil, Canada, Laos, New Zealand, Nigeria, Qatar, Vietnam, USA.
RESEARCH & DEVELOPMENT: DESIGN CAPABILITIES: MANUFACTURING SKILLS:
TECHNOLOGY
FABRICATION TECHNOLOGY: GALVANIZING TECHNOLOGY:
CHAPTER – III A]
PROJECTS RELATED LITERATURE
FINANCIAL FORECASTING
B] FINANCIAL STATEMENTS: C] FINANCIAL STATEMENT ANALYSIS: D] RATIO ANALYSIS: THE CLASSIFICATION OF FINANCIAL RATIOS
S. No.
Type of Ratio
Significance
These are measures of the short-term ability 1
Liquidity Ratios
2
Profitability Ratios
3
Activity Ratios
4
Leverage Ratios
of the company to pay its debts when they come due and to meet unexpected needs for cash These indicate the company's operating success i.e. profitability These indicate how well the company’s assets are managed These indicate how much of debt has been used to finance various investment in different assets
E] CASH FLOW STATEMENT
CHAPTER - IV
OBJECTIVE OF STUDY
To understand changes in economy as same as increase in inflation rate effects on KEC & related industry. To diagnosis of financial health of the firm for the management, creditors, lending institutions and finally the investors. To evaluation of the financial performance of the company of past, present and anticipated future.
Tries to identify the firm's financial strengths and weaknesses and provides the essential foundation for financial decision making and planning. To understand the efficiency and performance of the concerned firm as a whole.
CHAPTER – V
RESEARCH METHODOLOGY
OBJECTIVE
To discuss the basic concepts of Financial Analysis To do Financial Analysis of the performance of KEC over the years with the help financial Statement Analysis.
To find out the financial strengths and weaknesses of KEC.
To understand the industry in which KEC operates
TYPES RESEARCH:
Primary research / Field Research involves the collection of primary data or information that is new. This is collected through surveys and questionnaires that are made out specifically for a purpose.
Secondary research / Desk Research involves gathering data that already exists either from internal sources of client, publication of governmental and non-governmental institutions, free access data on the internet, in professional
newspaper and in annual reports of companies and
commercial database to name but a few. In many projects, carrying out an initial desk research stage is strongly recommended to gain background knowledge to a subject as well as providing useful leads that will help to get the maximum from research budget SOURCES OF DATA COLLECTION The data relating to financial forecasting was collected from multiple sources like newspaper, books, internet sources, annual report, KEC’s database etc. These sources provided data like exchange rates, transactions done by KEC’s, information regarding various book project and capital, sales, interest rate etc. LIMITATIONS
Foremost limitation is limited time duration of project which not enough to study all financial statement analysis. This study is based on past financial data of the organization. Forecasting may not be correct due to economical changes. Organization guide had not gave enough time me during the project because of their busy schedule like TAX audit, Internal audit, Filing the Income Tax, Routing work. People may not reply if emails or letters are used. People are not providing correct data due to some regulation of the organization.
CHAPTER – VI
DATA ANALYSIS AND INTERPRETATION
A]
GROSS PROFIT MARGIN:
B]
NET PROFIT MARGIN:
C]
RETURN ON EQUITY (ROE):
D]
EARNINGS PER SHARE:
E]
BOOK VALUE PER SHARE:
F]
DIVIDEND YIELD RATIO: LIQUIDITY RATIOS:
A]
CURRENT RATIO:
B]
QUICK RATIO: LEVERAGE RATIOS: A] DEBT TO EQUITY RATIO: B] INTEREST COVERAGE RATIO: ACTIVITY RATIOS:
A] INVENTORY TURNOVER RATIO: B] FIXED ASSETS TURNOVER RATIO: C] WORKING CAPITAL TURNOVER RATIO: D] DEBTORS’ TURNOVER RATION: E] EXPORTS TO GROSS SALES:
CHAPTER – VII
Based
on
the
CONCLUSION
study
of
RPG
Transmission
industry
and
KEC
INTERNATIONAL LTD financial performance over the years, following
important points were observed about current global market scenario for the KEC INTERNATIONAL LTD. • KEC has enhancing efficiency of turning raw material into sales which affecting gross profit positively. • KEC had fully utilized efficiency in favorable condition [increasing demand] for increasing sales as same as Net profit. • Return on Equity ratio indicate that KEC management has enhancing their efficiency to fulfill responsibility very well of maximizing profit and owners welfare. • Book value of per share of KEC had increasing year to year, this sign of good performance of organization. • Current ratio and Quick ratio of KEC had indicating strong liquidity position compare to previous year. KEC’s is not more depends on debts fund, in previous year they had increase their Equity capital which help to reduce their risk during recession.
