PROJECT REPORT IN RATIOS ANAYLSIS

AN ANALYSIS OF BALANCE SHEET OF CEC INDIA PVT LTD

Submitted By: PRIYANKA NEGI MBA E3A

CHAPTER 1:PROFILE OF THE COMPANY

1.0 Profile of the company

CEC 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 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 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 Address: Registered Office Continental Engineering Construction India Pvt Ltd CEC International Corporation Pvt. Ltd 7th floor Tower B, Signature Tower Gurgaon ,India ,Tel: 91-124-4918888 G-8 3rd floor,Model Town 3 ,Delhi-110009 Tel no : 91www.cici.co.in Multinational company with operations in Taiwan, China ,Bhutan ,Bangladesh and India.

Administration Office Company website National/Multinational

1.2 Nature of the organization and its business

CEC International Corporation (INDIA) Private Limited (CICI), a wholly-owned subsidiary of CHC's Continental Engineering Corp. (CEC) established in December 2005, is a civil engineering and construction company based in Delhi. CICI commenced its operation in April 2006 when it started undertaking works to help CHCs flagship company Continental Engineering Corp execute its many projects in India. CICI has also established a significant and growing participation in the building of Indias transportation infrastructure, drawing on the vast experience and expertise of CEC. In the past few years, CICI has assisted CEC with its projects in India by providing management expertise, coordination with local authorities including tax authorities, executing the projects on a sub-contracting basis, where possible and generally providing a local Indian face to the operations of CEC. However, with the recent award of Bangalore Metro Rail Corporation Limited- 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 following outstanding companies to meet increasing market demand: Tata Group, HCC, SOMA. Ritwik Constructions, 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 creates investment opportunities across various related sectors. The construction industry has contributed 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 construction activities 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 work in the field. In 2011, there were slightly over 500 construction equipment manufacturing companies in all of India. The sector is labor-intensive and, including indirect jobs, provides employment 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-year plan, 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, design engineering and construction companies were set up in the public sector (Indian Railways Construction Limited (IRCON), National Buildings Construction Corporation (NBCC), Rail

India Transportation and Engineering Services (RITES), Engineers India Limited (EIL), etc.) and private 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 investment during 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 and creates 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 capital formation. Total capital expenditure of state and central govt. will be touching 8,02,087 crores in 2011-12 from 1,43,587 crores (1999-2000). The share of the Indian construction sector In total gross capital formation (GCF) came down from 60 per cent in 1970-71 to 34 per cent in 1990-91. Thereafter, it increased to 48 per cent in 1993-94 and stood at 44 per cent in 1999-2000. In the 21 st century, there has been an increase in the 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 infrastructure development 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 these firms, there are about 1,20,000 class A contractors registered with various government construction 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.

1.4 CICI & CEC (India Division) Featured Projects

Delhi Metro Railway Project Contract (CC04)

This project for Phase-III of Delhi Metro Rail Corporation Ltd. is scheduled for completion in 2015. It includes design and construction of one underground station at Azadpur linked by 2.145 km twin bored tunnels with internal finished dia of 5.8 m which are engineered through the use of two shield TBMs for the Mukundpur Yamuna Vihar corridor of the Delhi MRTS. The project also involves Cut & Cover of 690 m and an underground ramp of 365 m at Mukundpur and Shalimarbagh. This project is a joint venture between CEC and its 100% 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 This Project for Phase I of the Bangalore Project (UG-2) Metro Rail system, awarded by Bangalore Metro Rail Corporation Ltd. is scheduled for completion in 2013 and includes design and construction of four underground stations linked by 2.5Km of 5.8m diameter twin tunnels in the underground stretch of the east-west corridors of this Bangalore MRT system. the stations are located at City Railway Station , Central College, Vidhana Soudha and Cricket Stadium. The Project is a joint venture between CEC, Soma, and CICI with CEC as the lead member.Total Value of UG-2 is INR 9.95 billion .

DMRC Mass Rapid Transport System (B16) Scheduled for completion in 2010, the Phase II Contract BC-16 Project for Delhi Metro Rail Corporation Ltd.

includes design and construction of tunnels by shield TBM (Tunnel Boring Method) and stations employing the cut & cover method for underground works between Udyog Bhawan and Green Park Stations on the Central Secretariat - Qutub Minar Corridor of Delhi MRT. CEC were lead Contractor in a joint venture with SOMA with responsibility for all major works, including 4 x2 kilometer (twin)tunnels utilizing four shield TBMs with an outer diameter of 6.25 meters and four underground stations at Race Course, Jor Bagh, INA and AIIMS. The Works were completed in time for the Client to operate this MRT section 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 This project will be completed in 2011 (ORR) for the Hyderabad Growth Corridor Limited (a joint venture between HUDA and INCAP) in Hyderabad City, India from Km 11.000 to Km 23.380( 13.38 Km). The project included the construction of an eightlane access controlled expressway as the Outer Ring Road to Hyderabad City including flyovers and two major bridges. Total Value of ORR is INR 295.09 million .

HYDERABADBANGALORE NATIONAL HIGHWAY (C12)

This project will be completed in 2010 for 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 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 the existing carriageway.

HYDERABADBANGALORE NATIONAL HIGHWAY (C13) This project will be completed in 2010

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 the existing carriageway.

EASTWEST CORRIDOR In Rajasthan (RJ7)

This project was completed in 2008 for NHAI (National Highway Authority Of India ) in Rajasthan from Km 253 to Km 316 of NH76 (National Highway # 76) and comprised 59.72 Km of highway, inclusive of the construction of new 2/4 lane bypasses, detours, service roads and reconstruction, strengthening and widening of the existing carriageway. The Project was a joint venture between CEC and HCC with CEC as the lead member.

Special Economic Zone Development Located in Tada Mandal, Nellore District Project (APACHE Andhra Pradesh, India, this project was completed by CEC in 2007 for SEZ) Apache Footwear India Pvt. Ltd. The work comprised all buildings inside the Special Economic Zone including civil structural work, flooring, finishing works, utilities and accessories. Buildings were constructed as R.C. structures with glass, fibreglass, and brick work.

1.5 Size of Organisation

Nature of Business Number of Employees Turnover Service provider more than 1000 people more than US$100 million(or> Rs 400 Crore Approx.)

1.6 Organisation Structure Of the Company

1.7 Market Share and Position Of the Company

Within 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 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 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

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 Methods

In 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 sites of Company, Financial newspapers, journals etc.

Future Challenges
The Indian economy has witnessed considerable progress in the past few decades. Most of the infrastructure development sectors moved forward, but not to the required extent of increasing growth rate up to the tune of 8 to 10 per cent. The Union Government has underlined the requirements of the construction industry. With the present emphasis on creating physical infrastructure, massive investment is planned in this sector. The Planning Commission has estimated that investment requirement in infrastructure to the tune of about 14,50,000 crore or US$320 billion during the 11th Five Year Plan period. This is a requirement of an immense magnitude. Budgetary sources cannot raise this much resources. Public Private Partnerships (PPP) approach is best suited for finding the resources.

Better construction management is required for optimizing resources and maximizing productivity and efficiency.

CHAPTER 2:SWOT ANALYSIS OF THE COMPANY

2.0 SWOT ANALYSIS

SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited 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 the internal environment of the firm matches with the external environment is expressed by the concept of strategic fit. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business or project that give it an advantage over others Weaknesses: are characteristics that place the team at a disadvantage relative to others 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 achieve the objective.

2.1 Porter five forces analysis

A graphical representation of Porter's Five Forces

Porter five forces analysis is a framework for industry analysis and business strategy

development. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry 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 are internal threats. Porter referred to these forces as the micro environment, to contrast it with the more general term macro environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to re-assess the marketplace given the overall change in industry information. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. 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 an industry, 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 substitute products or services, the threat of established rivals, and the threat of new entrants; and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers.

2.11 Five forces

a) Threat of new entrants

S WEAKNESS As CEC India Pvt Ltd is a Taiwan, MNC it faces a drawback of cultural differenc es. Dis efficiency Threats . Longitterm market instability and Though uncertainity may damage the has been opportunities and prevent the establish of training and ed expansion 8 development facilities. years ago Current economic situation may in India have but still an adverse impact on construction industry. its not Lack of political willingness and expanded onsupport wider on promoting new scale. strategies.

Opportunities Continuous private sector housing boom will create more construction opportunities . Financial supports like loan and insurance & growth in income of people is in support of construction industry. Developing supply chain through involvement in larger projects is likely to enhance the chances in construction.

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

well as construction contracts for large scale Water & Wastewater management projects and poised 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, we are more confident in conceptualizing, financing, EPC contracts and operations of High Speed Railway. CEC has successfully completed Worlds largest High Speed R ailway BOT project, Taiwan High Speed Rail connecting the entire Country from North to South (Western side) from Taipei 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 and Depots 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-house expertise in undertaking Tunnelling projects requiring Tunnel Boring Machines (TBMs), New Austrian Tunnelling Method (NATM) or Cut & Cover Methods. In India, Delhi Metro underground project has given us the opportunity to show our skills in tunnelling and underground stations. They own four TBMs manufactured by Robbins and Herrenknecht besides Diaphragm wall equipments. High-end Buildings High-quality building construction found a foothold in 1958 with the 1000 beds capacity Veterans General Hospital, in Taiwan. Since then, we have successfully completed more than 50 high-value buildings projects. Over a period of time, through our own Research & Development, they have developed Green Building concept covering environmental protection, recyclable resources and reduced disposals, energy saving of building materials with excellent insulation, low impact to environment during construction, anti-seismic light weight structures, modular construction for faster constructions and standardized assembling procedure to ensure best quality. The village, located in the Taipei county, is a complete plan-design-build-operation project by CEC. The project has also been awarded the Building prize in 2006

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 the overall objective of the business. CICI being a socially responsible corporate, addresses Social & Environmental concerns much in advance to avoid threat to living beings. Similarly, other issues like health & safety and quality aspects are adequately addressed to sustain in the ever increasing competitive market. Business Principals

CICI recognizes that the aim of its corporate mission is to upgrade human living standards 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 towards its shareholders, customers, employees, suppliers, clients, competitors, governmental agencies 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, and to maximize our profits and the potential of our human resource performance. CICI is committed to its environmental responsibilities. CICI continues to conform to the best practices and standards in order to reduce the adverse impact of its activities and products effecting our environment

Health & Safety Policy Central to corporate mission statement, we strive to maintain the highest standards of working environment 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 to work toward achieving zero accident, zero mishap and are committed to observing the following management policy. Quality Policy

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.

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 are always 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

1.Learning

and

development

HR team identifies the internal subject matter experts to give training to the employee sending employees for higher studies E Welcome When employees join the company, they have to interact with functionaries in other regions who assume that the new person in knows the internal systems. Often the new employee is unfamiliar with the systems and is at sea. The E Welcome gateway lists certain universal systems of the company and helps them get familiar with such things. A stand out feature is that if this checklist remains incomplete it sends an automatic notice to the manager responsible for the employee. Company follows a training policy to have seven days of training every year is mandatory for all employees, even this chairman and the directors. The company gives equal importance to soft skill training. Out of box thinking is more important , the sponsored the Edward De Bono certification 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 scribble messages of appreciation and pin them onto the MAD tree in the cafeteria. The leaves are a way of reaching out to colleagues and teams who have mattered. And at the end of the week, the foliage 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 in fewer 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 leave 2. Extra three months maternity leave at half the salary leave 3. 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 keeps track of what needs to be plugged, and what seems to be working. It goes back to HR every six months to deliver feedback.

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 planning 3. Employee empowerment 4. Reach out: An initiative to keep a direct link of communication to its employees, the president of the company meets the employees. 6. Organisation Structure

1. Flexi and Part time 2. 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 task of the manager is to energize the workplace with fun filled events and effective communication. 4. People Champions: Every project team has one facilitator from the HR department. The people champion takes care of any administrative need a project might have, leaving the project members free to concentrate on their work. 5. People Movement Management Review Committee: it ensures talented employees were retained by reassigning them to other groups. The company also hired consultants to assist those who were asked to leave to find jobs in other organizations. FINANCE A construction firm requirements are different as they come. A good construction software will include modules for General Construction, Materials, Highway, Mechanical and other areas like sewer, oil pipelines etc. Audit trail, closing of books, job costing, general ledger, over/under billing, overhead allocation, construction-specific payroll features, union reporting, certified Payroll reporting, payables and receivables. Many of the construction projects are executed on site. 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 of payments for each stage. A good construction management software should be able to add new sub contractor in the middle of a project being executed and maintain sub-contracts by job and sub-contract number. Generating and printing the sub-ledger, which includes not only invoices but also change orders, holdback amounts, amounts payable, and actual contract information for each sub-contractor. A good construction management software can record all costs related to a particular job or order and thus enable closer accounting control. Querying features include inquiry by PO status, payment status, order status, job status, and material receipt or dispatch status. Managing the sub contractors is a major requirement in any construction project and today most construction management software include features to

closely manage them. Inventory control software is sold as a separate software. However, a construction software should include inventory control with features to track material flow to different 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, finance and accounting. SAP ERP collects and combines data from the separate modules to provide the company or organization with enterprise resource planning. Although there can be major benefits for customers of SAP ERP, the implementation and training costs are expensive. Many companies experience problems when implementing SAP ERP software, such as failing to specify their operation objectives, absence of a strong commitment 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 mean the 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 a fully integrated software package. Potential benefits include efficient business process, inventory reduction, 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

1. Computer-Aided Engineering
In the past twenty years, the computer has become an essential tool in engineering, design, and accounting. The innovative designs of complicated facilities cited in the previous sections would be 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 are also available and adopted in organizations to perform routine bookkeeping and financial accounting chores. These applications exploit the capability for computers to perform numerical calculations 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 and application programs are rapidly being adopted. These are motivated in part by the remarkable improvement in computer hardware capability, the introduction of the Internet, and an extraordinary decline in cost. New concepts in computer design and in software are also contributing. For example, the introduction of personal computers using microcircuitry has encouraged the adoption of interactive programs because of the low cost and considerable capability of the computer hardware. Personal computers available for a thousand dollars in 1995 have essentially the same capability as expensive mainframe computer systems of fifteen years earlier. Computer graphics provide another pertinent example of a potentially revolutionary mechanism for design and communication. Graphical representations of both the physical and work activities on projects have been essential tools in the construction industry for decades. However, manual drafting 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 for producing desired drawings might also be used as a database for computer aided design and computer integrated construction. Components of facilities can be represented as three dimensional computer based solid models for this purpose. Geometric information forms only one component of integrated design databases in which the computer can assure consistency, completeness and compliance with relevant specifications and constraints. Several approaches to integrated computer aided engineering environments of this type have already been attempted. Computers are also being applied more and more extensively to non-analytical and nonnumerical tasks. For example, computer based specification writing assistants are used to rapidly assemble 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 to avoid laborious and error-prone transcription of project information. While most of the traditional applications and research in computer aids have emphasized numerical calculations, the use of computers will rapidly shift towards the more prevalent and difficult problems of planning, communication, design and management. Knowledge based systems represent a prominent example of new software approaches applicable to project management. These systems originally emerged from research in artificial intelligence

in which human cognitive processes were modeled. In limited problem domains such as equipment configuration or process control, knowledge based systems have been demonstrated to approach or surpass the performance of human experts. The programs are marked by a separation between the reasoning or "inference" engine program and the representation of domain specific knowledge. As a result, system developers need not specify complete problem solving strategies (or algorithms) for particular problems. This characteristic of knowledge based systems make them particularly useful in the ill-structured domains of design and project management. Chapter 15 will discuss knowledge based systems in greater detail. Computer program assistants will soon become ubiquitous in virtually all project management organizations. 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 the capabilities of managers rather than to divert attention from real problems such as worker motivation. 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 projects and 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 with robust market-leading business process automation capabilities tailored specifically for enterprise-grade control of capital programmes. Unifier also includes facilities and property functionalities such as work orders, leases, space management and more to complete the facility lifecycle. Unifiers platform optimises and integrates critical business processes, data and documents across the organisation. Its intuitive user interface can be tailored to your business to increase adoption, minimise training and ultimately deliver rapid time-to-value.

INVENTORY CONTROL

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 controls For ABC Analysis Degree 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 lower level managers

VED Analysis

Represents classification of items based on their criticality Classifies 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 procurement is very large.It is a non standard item & it is custom made.The sources of supply is only one & is located far off from the buyers plant

CHAPTER 3

DATA COLLECTION AND PRESENTATION

Human Resources
Thrust was placed on bridging the gaps in niche areas for business growth and enhancing project execution capabilities through an integrated HR approach. Strong focus was laid on talent acquisition. Customized programmes addressed skill gaps of employees. Workmen management centres have been set up in order to effectively manage workmen, 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, work orders and purchase orders. A separate cell monitors and reports business processes undertaken by 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 company has taken a direct, responsible approach to maximizing employee welfare, offering staff members a diverse selection of on-the-job skills enhancement programs and taking care of their daily needs. In response to changes in the environment around us, CEC has redoubled efforts in the following areas in order to achieve the objectives of sustained operation and generating maximum benefits for both staff members and shareholders. Streamlined Management System In accordance with relevant regulations in the Labor Standards Law and in recognition of changes in the business environment, the company periodically revises management regulations as necessary to create and maintain a people-oriented management system. Strong Staff Communication Channels CEC is determined to enhance the functions of internal company publications, and establish an Enterprise Information Portal (EIP) to announce and explain various company policies, systems, welfare measures and assorted events. In addition, and employee discussion boards enable thorough 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 company conducts health examinations annually for all staff members to give our employees multiple layers of security. Employee Dividends, Stock Options As partners in our enterprise, we seek to ensure employee participation in company operation and enjoyment of the fruits of our efforts. Enhanced Employee Training Each year the company allots a budget for conducting educational training for employees to promote the enhancement of their professional know-how and skills and to further individual career development.

Comprehensive Retirement Structure In accordance with the law, company allocate retirement reserve fund every month; all retirement measures are further conducted in full compliance with the regulations stipulated in the 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, hospital visitations, childrens education, and special bonuses on birthdays and Taiwans three major traditional holidays (Chinese New Year, Dragon Boat Festival, and Mid-Autumn Festival). The Committee also provides guidance and support to various employee clubs and sponsors company athletic meets, an annual year-end dinner, and company trips to relieve stress and foster group spirit. In addition, the company contributes further assistance where welfare funds stipulated by law are deemed insufficient.

Infrastructure Engineering Infrastructure engineering is CECs core 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 complex projects. We have participated in numerous high profile projects at the forefront of Taiwans national development, from the Taipei MRT, the first two national freeways, and the Taiwan High Speed Rail. All of these projects have bolstered CECs extensive capacities for introducing new benchmarks on the construction forefront. On the verge of redefining our presence to meet the timely challenges of a construction industry undergoing transformation and revival, CEC adheres to optimum managerial methods and successful delivery of all projects. Further, we seek to actively pursue a diversity of interests that will enrich company strength and know-how to secure our quality reputation.

Objective of the Study

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

ny in the market.

This study is mainly conducted to analyse the performance of the company for a period of 4 years 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 and other stakeholders in financial forecasting and planning and also for decision making.

FINANCIAL RATIOS
1. Liquidity ratios

2. Turnover Ratios 3. Leverage Ratios 4. Profitability Ratios

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

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. The current 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 the fund needed to pay current liabilities. CURRENT RATIO Years 2011-2010 20102009 20092008 2008-2007 2007-2006

Current ratio

62.16

277.4

81.52

72.43

24.04

Debt Equity Ratio

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2011-2010 2010-2009 2009-2008 2008-2007

1.2 QUICK RATIO:

The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best measures of liquidity. It is figured as shown below: QUICK RATIO = current assets inventories Current liabilities bank over draft The Quick Ratio is a much more exacting measure than the Current Ratio. By excluding inventories, it concentrates on the really liquid assets, with value that is fairly certain. It helps answer the question: "If all sales revenues should disappear, could my business meet its current obligations 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 pattern of accounts receivable collection lags behind the schedule for paying current liabilities.

QUICK RATIO
Years Quick Ratio 2011-2010 2010-2009 2009-2008 2008-2007 2007-2006

62.16

277.4

81.52

72.43

24.04

Quick Ratio
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2011-2010 2010-2009 2009-2008 2008-2007

Interpretation:
As a convention quick ratio of 1:1 is considered good. The quick ratio is showing a fall in the year 2009-010. This is because of existence of slow paying debtors and increase of current liabilities 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 good indication.

2. LEVERAGE or CAPITAL STRUCTURE RATIO

These ratios refer to the use of debt finance long term solvency of the firm can be examined by using leverage or capital ratios. The leverage ratio or capital structure ratio can be defined as the financial ratios which throw light on the long term solvency of a firm reflected in its ability to assure 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 RATIO

This 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 to measure the long term financial solvency of the firm. The ratio indicates the relative proportions of 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 the firm. 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. 33 The debt equity ratio defined by the controller of capital issue, debt is defined as long term debt plus preference capital which is redeemable before 12 years and equity is defined as paid up equity capital plus preference capital which is redeemable after 12 years. Debt-Equity Ratio

year Debt equity ratio

2011 0.08

2010 0.12

2009 0.76

2008 0.83

Debt Equity Ratio

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2011-2010 2010-2009 2009-2008 2008-2007

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 of capacity of a firm in so far as fixed interest on long term loan is concerned. Interest coverage ratio determined by dividing the operating profits or earnings before interest and taxes by fixed interest 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 not affected by tax payment as interest on debt fund in tax deductible expenses. The ratio apparently measure the margin of safety the firm enjoys with the respect to its interest burden. A high interest coverage ratio implies that the firm can easily meet its interest burden even if EBIT decline. 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 payment is cash flow before interest and taxes, not EBIT.

With respect to coverage ratios the figures are as follows

Year Finance coverage ratio

2011 3.53

2010 1.55

2009 2.94

2008 1.79

Financial Coverage Ratio

4 3.5 3 2.5 2 1.5 1 0.5 0 2011-2010 2010-2009 2009-2008 2008-2007

Interpretation:
The interest coverage ratio is very important from lenders point of view. It gives an idea of the number of times the fixed interest charges are covered by net earnings of the firm out of which they will be paid. As finance coverage ratio is increasing it shows that company ability to meet its interest and dividend is increasing

3. PROFITABILITY RATIO
A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. Some examples of profitability ratios are profit margin, return on assets and return on equity. It is important to note that a little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios. For instances, some industries experience seasonality in their operations. The retail industry, for example, typically experiences higher revenues and earnings for the Christmas season. Therefore, it would not be too useful to compare a retailer's fourth-quarter profit margin with its first-quarter profit margin. On the other hand, comparing a retailer's fourth-quarter profit margin with the profit margin from the same period a year before would be far more informative.

3.1 OPERATING MARGIN

A ratio used to measure a company's pricing strategy and operating efficiency. Operating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. It Is Also known as "operating profit margin." Calculated as: Operating Income Operating Margin = ----------------------------------Net Sales Operating margin gives analysts an idea of how much a company makes (before interest and taxes) on each dollar of sales. When looking at operating margin to determine the quality of a company, it is best to look at the change in operating margin over time and to compare the company's yearly or quarterly figures to those of its competitors. If a company's margin is increasing, it is earning more per dollar of sales. For example, if a company has an operating margin of 12%, this means that it makes $0.12 (before interest and taxes) for every dollar of sales. Often, nonrecurring cash flows, such as cash paid out in a lawsuit settlement, are excluded from the operating margin calculation because they don't represent a company's true operating performance.

Operating Margin year Operating Margin ratio 2011 7.02 2010 11.51 2009 8.17 2008 8.68

Net Profit ratio

6 5 4 3 2 1 0 2011-2010 2010-2009 2009-2008 2008-2007

Interpretation:
In the year 2010 operating profit is higher in comparison to the year 2011 and it is due to the low operating expenses as well as low cost of goods sold. So the operating efficiency of the firm in 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. Gross margin 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 ratio also measures the efficiency of production as well as pricing. The Gross profit to sales is a sign

of good management s as it implies that the cost of production of the firm is relatively low. A high ratio may also imply of a higher sales rise without a corresponding increase in the cost of goods sold.

Gross Profit Margin

year Gross Profit ratio

2011 7.11

2010 11.62

2009 1.15

2008 9.19

Net Profit ratio

6 5 4 3 2 1 0 2011-2010 2010-2009 2009-2008 2008-2007

Interpretation: In the above calculation, the gross profit ratio of HCL Infosystems Ltd. is
decreasing from year to year. In the year 2008, there is a change (increase) in gross profit ratio of about 0.12 % from 2009. From the year 2009, the gross profit ratio starts declining. This is due to the declining in profit in comparison to Sales or due to increasing in cost.

3.3 NET PROFIT MARGIN

The Net Profit Margin Ration determines the relationship between Net profit and Net sales of business firm. This relationship is also known as net margin. This ratio shows the earning left for shareholder (both equity and preference) as percentage of Net sales. Net profit margin is calculated for making future price policy. The margin can be decreased for reducing product prices in hopes of increasing sales. After calculating the net profit margin, it can be compared to

the net profit margin of other competitors. This can be used to overtake competitors via a pricing war. 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 net profit margins are also a good way to compare companies in different industries in order to gauge which industries are relatively more profitable also called net margin.

Net Profit Margin

year Net Profit ratio

2011 4.37

2010 3.74

2009 4.81

2008 3.48

Net Profit ratio

6 5 4 3 2 1 0 2011-2010 2010-2009 2009-2008 2008-2007

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

3.4 EARNING PER SHARE

The portion of a company's profit allocated to each outstanding share of common stock. Earnings per 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 outstanding over 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 shares outstanding at the end of the period. Diluted EPS expands on basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number. Earnings per share are generally considered to be the single most important variable in determining a share's price. It is also 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) - that company would be more efficient at using its capital to generate income and, all other things being equal would be a "better" company. Investors also need to be aware of earnings manipulation that will affect the quality of the earnings number. It is important not to rely on any one financial measure, but to use it in conjunction with statement analysis and other measures.
Earnings

Per Share (EPS)

CEC INDIA PVT Ltd Profit loss account Mar ' 11 Income: Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses Adminstrative expenses Expenses capitalized Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT 5.96 2.92 5.75 14.62 88.14 1.36 89.50 25.37 0.13 64.01 2.84 61.16 0.34 0.84 1.72 2.90 30.50 0.51 31.00 19.96 0.20 10.85 2.39 8.46 1.23 0.05 6.01 7.29 52.31 1.22 53.54 18.20 0.22 35.12 -0.04 35.16 0.37 5.03 5.40 41.49 3.98 45.47 25.44 0.25 0.97 18.81 -0.14 18.94 5.17 31.29 36.46 88.83 10.17 99.01 41.02 0.23 0.42 57.34 -0.12 57.47 102.77 33.39 59.60 46.89 125.29 Mar ' 10 Mar ' 09 Mar ' 08 (Rs crore) Mar '07

Non recurring items Other non cash adjustments Reported net profit Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings

1.54 62.70 144.48 144.48

-5.58 2.88 63.17 63.17

0.39 35.55 73.97 73.97

1.76 3.68 24.38 95.68 1.55 0.20 93.93

0.16 57.62 81.45 2.41 0.31 78.74

Balance sheet Mar ' 2011 Mar ' 2010 Mar ' 2009 Mar ' 2008 Mar ' 2007 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances 1,324.06 493.89 214.40 199.92 199.61 1.71 1.03 0.68 4,780.31 1.71 0.90 0.81 1,344.03 2.22 1.11 1.11 438.24 2.33 0.96 1.37 442.36 2.41 0.76 1.65 367.30 469.18 10.00 6,083.74 177.17 20.00 1,836.95 175.89 106.76 651.13 214.23 53.72 640.89 221.34 14.93 560.26 364.13 5,240.44 331.08 1,308.70 264.44 104.04 158.66 40.00 174.27 158.66 18.50 146.84

Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities

21.30 1,302.76 6,083.74

1.78 492.12 1,836.95

2.63 211.77 651.13

2.76 197.16 640.89

8.30 191.32 560.26

4,773.72 11.98 3,132.29

1,344.03 14.40 834.73

438.24 260.16

438.12 9.20 122.91