A Project Report Final Jat

CHAPTER 1

CROMPTON GREAVES LIMITED

1.1EXECUTIVE SUMMARY-

Crompton Greaves is a part of the Avantha Group, with a turnover, over Rs. 4200 crores. The company is India's largest private sector enterprise in the business of electrical engineering.The Group's principal activities are broadly classified into four strategic business units: Power Systems; Consumer products; Industrial Systems and Consumer Products. The Power System consists of designing, manufacturing and servicing electrical products such as Transformer, Switchgear and Turnkey Projects. Consumer Products consist of Fans, Luminaries, Light Sources and Pumps. Industrial Systems consists of manufacturing Electric Motors and Alternators, Drives. Other includes Telecommunication, Investment Activity, Generation and Distribution of electricity etc. The plants are located in Maharashtra, Goa, Tamil Nadu, Madhya Pradesh, Gujarat, Punjab and Kolkata. The Group operates in India and Internationally.Crompton Greaves is a renounce multinational company. It has four transformer manufacturing plant in India with well equipped facilities. They are respectively in Mumbai, malanpur (Gwalior) and two plants are situated in Bhopal.

I worked in finance department of malanpur Transformer division for 6 to 7 weeks. As a management trainee I analysed the financial soundness of the company. For that I analyzed three year’s financial performance on the basis of financial data which I collected from the MIS of the division and calculated various ratios to find out the financial soundness of the company.

Financial ratios are a relatively easy way to get a basic understanding of the financial health of an organisation. They range from the very simple to the complex, and the relevance of many of the ratios depends on the nature of the organisation and therefore should only be compared with similar companies.The electrical equipment sector is in the growth phase with production of motors, generators and power transformer recorded a healthy rise. The industry looks attractive due to large expansion and capex plans in power sector along with the strong growth in infrastructure sector. The industry is also witnessing huge surge in the export sale of motors and generators. The present economic scenario and upcoming budget are expected to energize the sector with the companies in the sector are growing both organically and inorganically thereby lightening the future growth of the sector. Therefore, with the enormous potential for growth in this sector, we are bullish on this sector in medium to long term while betting on the company like Crompton Greaves. It is true that the technique of ratio analysis is not a creative technique in the sense that it uses the same figure & information, which is already appearing in the financial statement. At the same time, it is true that what can be achieved by the technique of ratio analysis cannot be achieved by the mere preparation of financial statement.

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1.2 COMPANY PROFILE:-

Crompton Greaves, part of the Thapar Group, was incorporated in 1937. It is one of the largest players in India in the electrical equipment and engineering industry. The company is mainly engaged in the manufacture, distribution and sale of electrical and electronic equipment systems. The company makes a wide range of transformers, switchgear, motors, lighting products, fans, railway signalling equipment, and undertakes turnkey engineering projects. The company is organized into three business group’s viz. Power Systems, Industrial Systems, Consumer Products. In addition the company also undertakes turnkey projects from concept to commissioning. Its manufacturing plants are spread across Gujarat, Maharashtra, Goa, Madhya Pradesh and Karnataka. Apart from the local markets CG exports its products to countries, which includes the Southeast Asian and Latin American markets.

1.3 HISTORY OF CROMPTON GREAVES:-

The history of Crompton Greaves goes back to 1878 when Col. R.E.B. Crompton founded R.E.B.Crompton & Company. The company merged with F.A Parkinson in the year 1927 to form Crompton Parkinson Ltd., (CPL). Greaves Cotton and Co (GCC) was appointed as their concessionaire in India. In 1937, CPL established, it's wholly owned Indian subsidiary viz. Crompton Parkinson Works Ltd., in Bombay, along with a sales organization, Greaves Cotton & Crompton Parkinson Ltd., in collaboration with GCC. In the year 1947, with the dawn of Indian independence, the company was taken over by Lala Karamchand Thapar, an eminent Indian industrialist. Crompton Greaves is headquartered in a self-owned landmark building at Worli, Mumbai.

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1.4 Product and Service Ranges:-

1. Power system

TRANSFORMER DIVISION Power ,Industrial, Distribution transformer and Reactor Dry and mining type transformer High voltage test equipment.

SWITCH GEAR DIVISION On load tape charges EHV condenser bushing HT and EHV switch gear

LT CONTROL GEAR DIVISION Motor control gear Fuse boards,switch boards,Isolators Molded case circuits breakers Metal clad plugs, Sockets, Switches Air Circuit Breakers.

CAPACITOR HT/LT power capacitor Capacitor accessories

2. Industrial System

MOTOR DIVISION Electric Motors,AC,DC,Motors,Pump sets

PUMP DIVISIONS Domestics, Agricultural and Jet pumps Submersible

RAIL PRODUCTS Signalling Relays Point machines Solid state signalling system.

3. Consumer products

LIGHTING Fluorescent Tubes, street Lights etc. Luminaries-Domestics, Commercial, Industrial.

FAN DIVISION

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Fan, Ceiling, table, wall mounting & pedestal Exhaust Personal Fans. Coolers Kits, Heat convectors, Air purifier.

APPLIANCES DIVISION Food Processors, Mixer/Grinder, Toasters Oven, Iron, Geyser, Electric Cooker.

4. Digital

TELE COMMUNICATION Public Switching Products Private Switching Products Access Products Terminal Equipments

COMPUTER DIVISION Mini Computers, Micro processor based system Computer Software

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1.5 Customers of Crompton Greaves Ltd.

Crompton Greaves has a large customer base, consisting of State Electricity Boards, Utility companies, Railways, Government & local bodies and large companies in public as well as private sectors. Thus, it addresses customers from all the segments from households to complex industrial sectors through its comprehensive range of products and services.

Some of our prestigious customers include:

State Electricity Boards Power Grid Corporation of India

Andhrapradesh Transmission Corporation

Infosys Technologies

Kirloskar Brothers

Diesel Locomotive Works

Reliance Energy

Larsen & Toubro

Whirlpool (India)

ABB Ltd.

Mather & Platt India

Enercon (India)

Bharat Petroleum Corporation

Indian Space Research Organisation

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1.6 CROMPTON GREAVES TRANSFORMER DIVISION:-

A Crompton Greaves transformer is backed by more than four decades in designing and manufacturing of power distribution of transformers. Crompton Greaves transformers have emerge as a pioneer in transformer technology in India with many a "First in the country”, As strong in house technology cell work in close association with company’s corporate research and development center,research institutions to meet global challenges.

Latest state of art design practices with CAD system, integrated design packages covering all range and special design tools are used, keeping in mind the service reliability aspects to eliminate down time and makes maintenance free.

Crompton Greaves transformer commitment always been towards quality both for system and services and it is a matter of proud that Crompton Greaves was audited for its quality system by (bureau verities quality international) BVQI and was certified by them for ISO-9001,its quality was certified by (national accretitional council of certification bodies) NACCB of UK.Transformer division is all set to cater to most advanced market in the world. The company has 30 profit centre manufacturing projects and trading located at Mumbai, Nasik, Indore, Aurangabad, Bhopal, Bangalore and Baroda committed to indigenous technology development. The company has 3 major research centres; Electronics, power and manufacturing engineering laboratory with sophisticated facilities. The company has an excellent back-up support system in its corporate service of R&D, Market research, communication and market support.

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1.7 Plant Origin:

Switching over to a "Buyer's Market" from "Seller's Market" In 1985 and visualizing the market demand of transformers apex management of Crompton Greaves decide to set up a new plant in Malanpur, an emerging industrial area in Bhind. A backward region (industrial area) of M.P.(A.K.V.N.Industrial area) Malanpur is located near Gwalior.

Mr.K.K.Noliaria, Management Director of its parent Company CROMPTON GREAVES LIMITED, laid down the foundation stone of transformer division Malanpur on 27th April 1990.Production of Transformers in T2 division Malanpur first started in 1991.

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TRANSFORMER DIVISION GETS ISO 14001 & OHSAS18001CERTIFICATION

Today industrial competitiveness is not just measured by the ability to manufacture goods at a faster rate and at the lowest cost, but also demands a deep commitment to the safety of the environment. In May 2003, Crompton Greaves Transformer (T2) division at Malanpur focused on devising and implementing a system for environment and safety management. A core group consisting of senior personnel was formed to accelerate the process. Significant steps were taken in this direction including identification of environmental aspects, providing controls, initiating measures to mitigate risks, documenting manuals, conducting audits and more. The 5-C approach was adopted namely commitment, communication, configuration, consolidation and certification.

Through this approach, the environment management and OHSAS management system was reviewed and updated to a higher level. On September 18, 2003,the systems were formally assessed and certified by BVQI and Transformer(T2) division emerged as the first Crompton Greaves Division to achieve both Environment and OHSAS system certification. Crompton Greaves is also proud to be among the first in the electrical engineering industry to achieve this milestone.

Transformer division, as unit of CGL started its operation 52 years ago at worli Mumbai with its first supply to US army. Transformer division has produced over 100 million KVA, which are in operation and is leading manufactured having latest range in India.

Crompton Greaves is among the very few companies worldwide that designs and manufactures the widest range of power & distribution Transformers and Reactors from 160KVA to 415MVA, 500KV class to fulfil the specific demands of the power & industrial sectors and the railways. With an installed base of over 120 million KVA in Transformers, Crompton Greaves has emerged as the largest Indian supplier of a wide range of Transformers and Reactors for all critical applications. These Transformers and Reactors find use in industries such as power utilities, process industries, Railways, Mines, Electricity Boards, Industrial users etc in both the Domestic as well as Global markets.

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1.8 Company Vision:

To maintain Crompton Greaves status and ensures:- Customer satisfaction and preferences profitable growth perpetuity Shareholder satisfaction and pride Fulfilment of social obligation

Surging export through the implementation of PDCA, best practices and continuous improvement of process, which are focused on- Technology up gradation Total quality Resources productivity Cost effectiveness.

Speed and by leader creating an environment which encourages organisational learning and team effort where each individual understand his or her responsibility, makes contributions and each is recognized for the same. Enjoy his or her work and has urge to excel. Gives his or her best to achieve the shared vision.

1.9 Company Mission

To exceed the expectation of customers, shareholders, employees and associates through excellence in processes and services while carrying out business in a profitable yet socially responsible manner.

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1.10 ORGANIZATION STRUCTURE OF CROMPTON GREAVES LTD.

Chairman (Gautam Thapar)

Managing Director(Sudhir Mohan Trehan)

Regional General Manager

NORTH EAST WEST SOUTH

(SA Kane) (BS Bajwa) (AM Kamath) (KN Desai)

Organization structure Of Crompton Greaves OF T2 Division Malanpur

DGM- Mr. Rakesh Kumar

AGM- Mr. Neeraj Goyal Mr. Sushil Chand Bhatt Mr. Vivek Mittal

Senior Manager- Mr. Anurag Bhardwaj Mr. Mukesh Bhatia

Managers - Mr. Guru saran Suri Mr. Santosh Shekdhar

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1.11 ACHIEVEMENT First company to introduce an under light ceiling fan. -- year 1985

First company to introduce four blades deco fans. -- year 1985

ISO 9001:2000 Certified on 19 July 2002.

Recipient of K.L.N Award for new product development and import substitution.

Crompton Greaves Award of Excellence, first Vendor Convention, January 1996.

Crompton Greaves Green Channel Vendor Certification.

The company is also registered with the Directorate General of Supplies and Disposals, a Government purchasing agency for both fans and lighting products.

1995 The transformer division also developed a 290 MVA, 220 KV class, 3 phase generator transformer, the largest 3 phase 220 KV class generator transformer in India.

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1.12 SWOT Analysis

STRENGTH:-

Crompton has acquired super brand status. Super brand is a unique international recognition that is bestowed on brands that have emerged as icons in this category .In India, a council comprising eminent professionals from the fields of advertising, marketing, research, and media was formed to determine India’s most respected brands. Crompton is in the list of 134 selected brands .Thus as a brand Crompton is much stronger than other competitors. Crompton is a market leader with twenty percent of the market share in organized sector. It has strong engineering skills and manufacturing base.

WEAKNESSES:-

Needs to be aggressive. Crompton brands are costlier than other brands.

OPPORTUNITY:-

Crompton has an excellent brand recall. Considering their market image and market share, there are great opportunity for Crompton as compare to other competitors. It can become a renounce MNC vendor and specialized integrator.

THREAT:-

Overseas market in SAARC and Africa.

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CHAPTER- 2INTRODUCTION OF THE PROJECT

2.1 Introduction

Ratio Analysis is one of the methods of analyzing financial statements. It has been our experience that financial statements in their original form are collection of monotonous figures. The statements are detailed and do not present the required information at a glance. Accountants have to toil very hard in digging out the required information’s. Ratio Analysis is, therefore an attempt to present the information of the financial statement in simplified, systematized and summarized form accountants introduced ratio analysis to meet this end.

2.2 Ratio Analysis: Meaning

Ratio analysis measures the profitability, efficiency and financial soundness of the business. The relationship between two facts ie. gross profit and sales and current assets and current liabilities is studied and the result is presented in the form of simple ratio. Ratio Analysis is therefore a tool to present the figures of financial statement in simple, concise and intangible form. Ratio Analysis, in this way is a process of establishing meaningful relationship between two figures or set of figures of financial statements.

DEFINITION

According to Myers : Ratio Analysis is a "study of relationship among the various financial factors in a business."

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2.3 Ratio Analysis: Methods

In Ratio Analysis we can analyse the financial statements by three methods:-

I. Percentage MethodII. Rate or "So many times" MethodIII Ratio MethodThe analysis of financial statements can be presented by one of the above following methods.

I.PERCENTAGE METHOD

The relationship between two figures is presented in percentage. For example, if a sales is Rs.200000 and a gross profit is Rs.40000 the relationship can be presented as gross profit to be 20% of sales, ie.,

Gross Profit Ratio= Gross Profit*100 = 40000*100 Net sales 200000

In this way it is a common practice to present to present gross profit, Net profit, Expenses and Operating Ratio by percentage Method.

II.RATE OR "SO MANY TIMES"METHOD

According to this method one figure is expressed in term of other relative figures. In the previous example where sales is Rs.200000 and gross profit is 40000 the relationship between the two can be said as gross profit to be .20 times 1/5th of salesi.e.,40000 or sales to

200000be 5 times of gross profit.

It is customary to calculate Stock Turnover, Current and Liquid ratio according to Rate Method.

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III.RATIO METHOD The relationship between two figures is presented in ratio, such as in the above example, the ratio of gross profit to sales can be said to be 40000:2,00,000 or 1:5.in other words, the ratio between sales and gross profit may also be known as 2,00,000:40000 or 5:1.

These are three different method of ratio analysis of financial statements but they lead to be same conclusion. Either of three methods can be followed in solving questions.Ratio Analysis is therefore a tool to present the figures of financial statements in simple, concise and intangible form. Ratio analysis, in this way is a process of establishing meaningful relationship between two figures or set of figures of financial statements.

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2.4 Ratio Analysis: Objectives

According ratios are true test of the profitability efficiency and financial soundness of the company. These ratios have the following objectives:-

Measurement of the profitability Judging the operational efficiency of the management Assessing the efficiency of the business Measuring the short and long term financial position of the business Facilitating comparative analysis of the performance Indicator of true efficiency Helpful in budgeting and forecasting Helpful in simplifying accounting figures.

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2.5 Ratio Analysis: Importance

Ratio Analysis stands for the process of determining and presenting the relationship of items and groups of items in the financial statements. It is important technique of financial analysis. It is a way by which financial stability and health of a concern can be judged. The following are the main points of importance of ratio analysis-

1. Useful in Financial Position AnalysisAccounting Ratio reveals the financial position of a concern. This helps the banks, insurance companies and other financial institutions in lending and making investment decisions.

2. Useful in Simplifying Accounting FiguresAccounting Ratio simplify, summarize and systematized the accounting figures in order to make them more understandable and in lucid form. They highlight the interrelationship, which exists between various segments of the business as expressed by accounting statements. Often the figure standing alone cannot help them convey and meaning and ratios help them to relate with other figures.

3. Useful in Assessing the Operational EfficiencyAccounting ratio help to have an idea of working of a concern. The efficiency of the firms becomes evident when analysis is based on accounting ratios. They diagnose the financial health by evaluating Liquidity, Solvency, Probability etc. this help the management to assess financial requirements and capabilities of various business units.

4. Useful in Forecasting PurposeIf accounting ratios are calculated for a number of years, then a trend is established. This trend is help in setting up future plans and forecasting. For example: expenses as a percentage of sales can be easily forecasted on the basis of sales and expenses of the past years.

5. Useful in Locating the Weak Spots of the BusinessAccounting ratios are of great assistance in locating the weak spots in the business even though the overall performance may be efficient. Weakness in financial structure due to incorrect policies in the past or present are revealed through accounting ratios. For example, if a firm finds that increase in distribution expenses is more than proportionate to the result expected or achieved, it can take remedial to overcome this adverse situation.

6. Useful in Comparison of PerformanceThrough accounting ratio comparison can be made between one departments of a firm with another of the same firm in under to evaluate the performance of various departments of the firms. Manager is naturally interested in such comparison in order to know the proper and smooth functioning of such departments. Ratios also help him to make any change in the organisational structure.

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2.6 ADVANTAGES OF RATIO ANALYSIS:-

Financial ratios are essentially concerned with the identification of significant accounting data relationships, which give the decision-maker insights into the financial performance of a company. The advantages of ratio analysis can be summarized as follows:

Ratios facilitate conducting trend analysis, which is important for decision making and forecasting.

Ratio analysis helps in the assessment of the liquidity, operating efficiency, profitability and solvency of a firm.

Ratio analysis provides a basis for both intra-firm as well as inter-firm Comparisons. The comparison of actual ratios with base year ratios or standard ratios helps the

management analyze the financial performance of the firm.

2.7 LIMITATIONS OF RATIO ANALYSIS:-

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Ratio analysis has its limitations. These limitations are described below:

Information problems

Ratios require quantitative information for analysis but it is not decisive about analyticalOutput.

The figures in a set of accounts are likely to be at least several months out of Date, and so might not give a proper indication of the company’s current financial Position. Where historical cost convention is used, asset valuations in the balance sheet Could be misleading. Ratios based on this information will not be very useful for Decision-making.

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2.8 Ratio Analysis: Types (or Classification)

Ratio may be classified in number of ways keeping in view the particular purpose. Ratio indicating profitability are calculated on the basis of profit and loss account, those indicating financial position are computed on the basis of balance sheet and those which show operating efficiency or productivity or efficient use of resources are calculated on the basis of figures in the profit and loss account and the balance sheet. This classification is rather crude and unsuitable to determine the profitability and financial position of the business. To achieve this purpose effectively, ratio may be classified as:-

1) Profitability Ratio

2) Activity or Performance or Turnover Ratio

3) Financial Ratio:-

a) Liquidity or Short term financial or Solvency Ratio b) Solvency Ratio or Long term financial Ratio

1. PROFITABILITY RATIO

Profitability refers to the availability of the business to earn profit. It shows the efficiency of the business. These ratio measures the profit earning capacity of the company. Profitability has direct link with sales. This is why; we calculate these ratios on the basis of sales. Return on investment and capital is calculated on the basis of capital employed. The profitability of the business can be measured with the following ratios:-

a) Gross profit ratiob) Net profit ratio and operating profit ratioc) Expenses ratiod) Operating ratioe) Net profit to net worth ratiof) Return on investment or capital employed g) Return on equity capital (ROE)

2. ACTIVITY OR PERFORMANCE OR TURNOVER RATIO

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Turnover means 'Sales', so turnover ratios are related to sales. It is an accepted concept that sales have direct relationship with performance of the business. Higher sales means better performance, which really means better efficiency and productivity of the business, higher sales also means more production which is undoubtedly the result of best possible utilisation of physical resources ie. Material, machines and active participation of human resources. In this way the words turnover, performance and activity are synonymous. These three words carry the same sense. In other words more sales means the business is more active and has better performance.

Lesser sales show inactivity of the business. Poor performance and lesser productivity .All business activity revolve around the sales. It is the sales budget, which is prepared first of all. Production budget is made to desired quantity of goods, required for sales. Production concerns raw material, machines, tools, workers, equipments and Management.Every Company should try to multiply its sales because it is an indicator of all round development of the business. Following are some of the kinds of turnover ratios-

a) Stock or Inventory turnover ratio b) Total capital turnover ratio c) Fixed assets turnover ratio d) Working capital turnover ratio e) Debtors turnover ratio f) Creditors turnover ratio

3. FINANCIAL RATIO

These ratios are calculated to judge the financial position of a concern from long term as well as short term solvency point of view. These ratios can be divided in to broad categories-

a)Liquidity or short term financial or solvency ratio b)Solvency ratio or long term financial ratio

a)Liquidity or short term financial or solvency ratio Liquidity ratio is calculated to measure the short term financial soundness of the business. The ratios assesses the capacity of the company to repay its short-term liability. Banks and other moneylenders for short period are interested in the current assets of the company i.e. .short term financial position of the business. Following ratio are calculated to determine the liquidity or short term solvency of the company.

i. Current ratio ii. Liquid ratio

b)Solvency ratio or long term financial ratio

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Solvency means the ability of the business to repay its outside liability. This liability may be categorized short term liability and long term liabilities. Ratios concerning the short-term solvency (financial soundness) of the business have been discussed under liquidity ratios. Here the term solvency have been use to mean long-term financial position of the business. It is an accepted financial truth that the company must have sufficient long-term fund to meet its long-term liabilities. Following are some of the long-term solvency ratios-

i) Debt equity ratioii) Total debt ratioiii) Interest coverage or debt service ratio

iv) Fixed assets ratioiv) Proprietary ratiov) Solvency ratio or debts to total fund ratiovi) Capital gearing ratio

CURRENT RATIO

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This is the most widely used ratio. It is a ratio of current assets to current liabilities. It shows firms ability to cover its current liabilities with its current assets. It is expressed as follow-

Current Ratio = Current Assets Current Liabilities

Objective and Significance: Current ratio shows the short-term financial position of the business. This ratio measures the ability of the business to pay its current liabilities. The ideal current ratio is supposed to be 2:1 i.e. current assets must be twice the current liabilities. In case, this ratio is less than 2:1, the short-term financial position is not supposed to be very sound and in case, it is more than 2:1, it indicates idleness of working capital.

LIQUID RATIO

This is the ratio of liquid assets to liquid liabilities. It shows a firm's ability to meet current liabilities with its most liquid (quick) assets.1:1 is the ideal ratio for a concern. Liquid assets are those assets, which are readily, convert in to cash and include cash balance. Inventory and prepared expenses are not included because emphasis is on the ready availability of cash in case of liquid assets. This ratio is the acid test of a concern's financial soundness. It is calculated as under-

Liquid Ratio = Liquid Assets Current Liabilities

Objective and Significance:

Liquid ratio is calculated to work out the liquidity of a business. This ratio measures the ability of the business to pay its current liabilities in a real way. The ideal liquid ratio is supposed to be 1:1 i.e. liquid assets must be equal to the current liabilities. In case, this ratio is less than 1:1, it shows a very weak short-term financial position and in case, it is more than 1:1, it shows a better short-term financial position.

NET PROFIT RATIO

This ratio establishes relationship between net profit and net sales.Net profit or net income is

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the gross profit less selling, distribution and financial expenses, net profit is picked up from profit and loss account.Net profit can be calculated on the basis of following formula-

Net Profit Ratio = PBT *100 Net Sales

Objective and Significance: In order to work out overall efficiency of the concern Net Profit ratio is calculated. This ratio is helpful to determine the operational ability of the concern. While comparing the ratio to previous years’ ratios, the increment shows the efficiency of the Concern.

OPERATING RATIO

Operating ratio indicates the ratio of operational cost to sales. Operating cost consist of cost of goods sold and other operating expenses. Operating efficiency of the business will be more in case of lesser operational ratio and vice versa. The ratio can be calculated on the basis of following formula

Operating Ratio =Operating Cost *100 Net Sales

Objective and Significance: Operating Ratio is calculated in order to calculate the operating efficiency of the concern. As this ratio indicates about the percentage of operating cost to the net sales, so it is better for a concern to have this ratio in less percentage. The less percentage of cost means higher margin to earn profit.

SOLVENCY RATIO

'Solvency' means the ability of a business to repay its outside liabilities. These liabilities may

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be categories as short-term liabilities and long-term .Ratio concerning short-term liabilities has been discussed under liquidity ratio. Here the term solvency ratio has been used to mean long-term financial position of the business. It is an accepted financial truth that the company must have sufficient long-term funds to meet its long-term liabilities. Long-term funds include long-term loans and shareholders funds. Solvency ratio also measure the relationship between external andInternal equities.

Solvency Ratio = Total Liabilities Total Assets

AVERAGE INVENTORY TURNOVER RATIO

This ratio establishes relationship between costs of goods sold and average stock and reflects the speed of turning over the stock in to sales. When all the factors remain constant greater the turnover of the inventory more will be the efficiency of the management. Average inventory includes Raw materials, WIP, finish goods. This ratio measures how many times the average stock is sold during the year.

Average Inventory Turnover Ratio = Total Net sales Average Inventory

Absolute Liquid Ratio:

Absolute liquidity is represented by cash and near cash items. It is a ratio of absolute liquid assets to current liabilities. In the computation of this ratio only the absolute liquid assets are compared with the liquid liabilities. The absolute liquid assets are cash, bank and marketable securities. It is to be observed that receivables (debtors/accounts receivables and bills receivables) are eliminated from the list of liquid assets in order to obtain absolute4 liquid assets since there may be some doubt in their liquidity.

Formula of Absolute Liquid Ratio:

Absolute Liquid Ratio = Absolute Liquid Assets

Current Assets

Significance:-

This ratio gains much significance only when it is used in conjunction with the current and liquid ratios. A standard of 0.5: 1 absolute liquidity ratio is considered an acceptable norm.

That is, from the point of view of absolute liquidity, fifty cents worth of absolute liquid assets are considered sufficient for one dollar worth of liquid liabilities.

AVERAGE WORKING CAPITAL RATIO

This ratio measures the relationship between working capital and sales. This ratio shows the

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number of times the working capital result in a sale. Working capital as usual is the excess of current assets over current liabilities. Alternatively working capital may be net capital employed less net fixed assets. The following formula used to measure the ratio-

Average working capital ratio = Total net salesAverage working capital

Objective and Significance: This ratio indicates the number of times the utilisation of working capital in the process of doing business. The higher is the ratio, the lower is the investment in working capital and the greater are the profits. However, a very high turnover indicates a sign of over-trading and puts the firm in financial difficulties. A low working capital turnover ratio indicates that the working capital has not been used efficiently.

FIXED ASSETS TURNOVER RATIO

Fixed assets are used in the business for producing goods to be sold. The effective utilization of fixed assets will result in increase production and reduce cost. It also ensures whether investments in the assets have been judicious or not. Higher ratio indicates better performance. This ratio is very significant for manufacturing enterprise, where fixed assets employed are more than working capital. The following formula is used for measurementOf ratio-

Fixed assets turnover ratio = Total net sales Average fixed assets

Objective and Significance: This ratio expresses the number to times the fixed assets are being turned over in a stated period. It measures the efficiency with which fixed assets are employed. A high ratio means a high rate of efficiency of utilisation of fixed asset and low ratio means improper use of the assets.

TOTAL CAPITAL TURNOVER RATIO

This ratio ensures whether the capital employed has been effectively used or not. This is also

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the test of managerial efficiency and business performance. Higher total capital turnover ratio is always in the interest of the company. This ratio is measured on the basis of following formula-

Total capital turnover ratio = Total net sales Capital employed

Objective and Significance: The objective of capital turnover ratio is to calculate how efficiently the capital invested in the business is being used and how many times the capital is turned into sales. Higher the ratio, better the efficiency of utilisation of capital and it would lead to higher profitability.

CHAPTER-3OBJECTIVES AND METHODOLOGY

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3.1 Introduction

Well define objective form basis for any type of research project. There should be clear-cut aim for any project and this should provide an insight for the work to be carried out. Defining the objectives give more accuracy for study, this in turn, provides tangible results.

3.2 Objective of the study

The study on Ratio analysis of Crompton Greaves Limited is aimed to achieve the following objectives-

To evaluate organisational effectiveness of Crompton Greaves Limited in terms of financial position and performance.

To evaluate the profitability of the concern. To study the short term and long term solvency. Relationship in various things from unit to unit. To evaluate the liquidity position availability of the company. The study will conclude financial position and profitability of the company. What are the factors to be considered to improve its working so as to provide better

service to the consumers? How industry is useful for a common man. To outline the strength, weakness, opportunity and threats of Crompton Greaves

Limited.

3.3 Research Methodology

The research methodology can minimize the degree of uncertainty by reducing the

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probability of making wrong choice among available alternative choices. It involves selection of appropriate decision. Therefore we can decide in advance, the method to be used in research work, which may occur in the business functioning that, may affect research.

Discovery of new ideas and insight for the problem under study where greatly emphasized the design related for the purpose of the research not based on hypothesis but it exploratory the investigation is done with a view to keep it flexible so that different aspects can be consider for the problem under study, the research methodology used in the present study consist of following- 1. Types of data collected 2. Data analyzing

1. TYPES OF DATAFor the research two types of data are collected I. Primary Data II. Secondary Data

The primary data for the purpose of this study is collected from company executive officers by mean of observations, discussions etc. The secondary data are collected from company's record and information provided by management.

2. DATA ANALYSING

Analysing of data was carried out by the following steps-Step1. - Collection of raw data from company’s records and information.Step2.- Classification of dataStep3.- Analysis of dataStep4.- Graphical presentation of dataStep5. - Observation and conclusion of data.

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CHAPTER- 4DATA REPRESENTATION AND ANALYSIS

4.1 Introduction

The data collected from primary and secondary sources are tabulated separately in the form of table, bar diagrams, line diagrams and scientific analysis help in bringing about the accuracy for the study.

Reference Period

The period under the study is three accounting years from 2006-07,2007-08,and 2008-09.The accounting year i.e.(2006-07 to2008-09) is divided in to 12 periods that means one period is equal to one month and the accounting year of the company is 12 months ending 31st march. In this report accounting records have been taken on six monthly basis.

There are many ratios and it is not possible to discuss each and every ratios. Here we discussed only those ratios, which we studied in this report-

1. Current Ratio2. Liquid Ratio3. Net profit Ratio4. Operating Ratio5. Solvency Ratio6. Average Inventory Turnover Ratio7. Stock Velocity Ratio8. Average Working Capital Ratio9. Fixed Assets Turnover Ratio10. Total Capital Turnover Ratio

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CLASSIFICATION OF RATIO

RATIO ANALYSIS

Profitability Ratio Turnover Ratio Liquid Ratio Solvency ratio

- Net profit Ratio - Inventory Turnover - Current Ratio

- Operating Ratio - Working Capital Turnover Ratio - Liquid Ratio

- Fixed Asset Turnover Ratio - Capital Asset Turnover ratio - Absolute Liquid Ratio

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4.2 Key definitions

Total Assets = Net Fixed Assets +Total Current Assets

Liquid Assets = Current Assets - Total Inventory

Total Cost = Marginal Cost +Personal Cost +Processing Cost +Other Costs

Other Cost = RE+CE

RE = Regional Expenses

CE = Corporate Expenditure

Personal Cost = Wages & Benefits +Salaries & Benefits

Processing Cost = Total Variable Expenses + Total Semi variable and Fixed Expenses

CAPEX = Capital Expenditure

UEOB = UN Executed Order Booked

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4.5 INTERPRETATIONS

CURRENT RATIO

Particulars 06-07Apr-Sept

06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

Current Ratio 1.02 1.19 1.09 1.21 1.22 1.27Current Assets 3921.37 4430.31 4902.34 6706.99 8086.42 9219.95Current Liability 3862.83 3735.38 4488.93 5977.96 6642.49 7271.92

Current Ratio = Current Assets Current Liability

As the analysis of current ratio in between three years the company’s position is not quite satisfactorily. The ideal current current ratio is 2:1,but here the values are less. There is a one good sign for the company that over the period the values are increasing from 1.02 to 1.27.If we want to achieve ideal current ratio in that case we will have to lower the values of current liabilities.

33

LIQUID RATIO


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

Liquid Ratio 0.83 0.79 0.71 0.78 0.81 0.86Liquid Assets 3202.42 2934.69 3202.42 4677.17 5371.64 6284.58Current Liability 3862.83 3735.38 4488.93 5977.96 6642.49 7271.92

Liquid ratio = Liquid Assets Current Liability

The above table shows that the value of liquid ratio decreases from 0.83 to 0.71 for three consecutive period ,that is a good sign but in the last three period the values increases and rich up to 0.86.The ideal liquid ratio is 1:1,so we can say in this recessionary period this ratio is quite satisfactorily.

34

Absolute Liquid Ratio:

Particular 06-07Apr-Sept

06-07Oct-May

07-08Apr-Sept

07-08Oct-March

08-09Apr-Sept

08-09Oct-March

Absolute Liquid ratio

0.82 0.66 0.65 0.70 0.66 0.68

Liquid Asset 3202.42 2934.69 3202.42 4677.17 5371.64 6284.58

Current Assets

3921.37 4430.31 4902.34 6706.99 8086.42 9219.95

Absolute Liquid Ratio = Absolute Liquid Assets

Current Assets

This ratio gains much significance only when it is used in conjunction with the current and liquid ratio. A standard of 0.5:1 absolute liquid ratio is considered as acceptable norm. The above interpretation shows that over the period the absolute liquid ratio is getting improved, so it shows good sign for the company.

35

NET PROFIT RATIO


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

Net Profit Ratio 1.21 2.08 1.72 3.06 2.68 8.83PBT 61.98 146.17 120.79 334.08 233.63 1031.53Total Net Sales 5525.34 7041.54 7013.88 10927.68 8731.74 11686.32

Net Profit Ratio = PBT * 100 Total Net Sales

The above table shows that the value of net profit ratio is increases over the year ,this shows the companies real position and this ratio is the main indicator of company’s financial soundness.

36

OPERATING RATIO


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

Operating Ratio 49.73 115.07 45.28 93.78 39.88 102.88

Total Operating Cost

2747.97 8102.50 3175.81 10247.73 3481.96 12022.80

Total net sales 5525.34 7041.54 7013.88 10927.68 8731.74 11686.32

Operating Ratio = Total Operating Cost * 100 Total Net Sales

As the study of operating ratio the values increases year by year by the evaluation of operating cost/net sales *100.The total operating cost is equal to Marginal Cost+ Personal Cost+ Processing Cost +Other Costs and net sales always be divided which produces operating ratio. The concentration of operating ratio is all cost of material.

37

SOLVENCY RATIO


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

Solvency Ratio 0.72 0.63 0.65 0.63 0.59 0.58Liabilities 3862.83 3735.38 4488.93 5977.96 6642.49 7271.92Total assets 5397.59 5975.21 6864.56 9436.05 11270.69 12465.35

Solvency Ratio = Total Liability Total Assets

The solvency ratio is decreasing 0.72 to 0.58 in the period of 2006-09.And as we know that ideal solvency ratio is always less than one, therefore we can concluded that companies solvency position is quiet satisfactorily.

38

AVERAGE INVENTORY TURNOVER RATIO


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

Inventory Turnover Ratio

4.51 4.71 4.13 5.38 3.24 3.98

Total Net sales 5525.34 7041.88 7013.88 10927.68 8731.74 11686.32

Average Inventory 1224.19 1495.62 1699.92 2029.82 2698.11 2935.37

Inventory Turnover Ratio = Total Net Sales Average Inventory

As the analysis of inventory turnover ratio, this ratio indicates the efficiency and effectiveness of the inventory management. The highest value is 5.38 in the period of 2007-08 due to maximum net sales. But in the year 2008-09 the values are relatively less as compare to previous year.

39

AVERAGE WORKING CAPITAL RATIO


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

AWCR 94.39 10.13 16.97 14.99 6.05 6.00

TOTAL NET SALES

5525.34 7041.54 7013.88 10927.68 8731.74 11686.32

AVERAGE WC 58.54 694.93 413.41 729.03 1443.91 1948.03

Average Working Capital Ratio = Total Net sales Average Working Capital

Working Capital Ratio indicates ability of business concern in meeting its current obligation as well as its efficiency in managing current assets in generation of sales. Here the ratio are in decreasing order that is not a good sign for the company. The net sales value should always be increases so that we can get advantage in working capital ratio.

40

FIXED ASSETS TURNOVER RATIO


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

FATR 2.82 4.56 3.57 4.00 2.74 3.6Total Net Sales 5525.34 7041.54 7013.88 10927.68 8731.74 11686.32Avg fixed Assets 1962.22 1544.91 1962.22 2729.06 3184.27 3245.4

Fixed Assets Turnover Ratio = Total Net sales Average Fixed Assets

The above table depicts that the values of fixed assets turnover ratios is of variable nature which shows good sign in some period and in some period it decreases. So in this case perfect ratio can be obtained by increasing the sales.

TOTAL CAPITAL TURNOVER RATIO

41


06-07Oct-Mar

07-08Apr-Sept

07-08Oct-Mar

08-09Apr-Sept

08-09Oct-Mar

TCTR 0.60 0.33 0.49 0.53 0.31 0.38Total Net sales 5525.34 7041.54 7013.88 10927.68 8731.74 11686.32Capital Employed 9214.5 21639 14253.78 20748.54 27769.08 31160.88

Total Capital Turnover Ratio = Total Net Sales Capital Employed

This ratio is calculated to measure the efficiency or effectiveness with which a firm utilizes its resources. The values of total capital turnover ratio decreases from 0.60 to 0.38.The capital employed can be calculated as the sum of fixed assets+(current assets-current liability) ie.working capital.

CHAPTER- 5FINDINGS AND SUGGESTION FOR FUTURE RESEARCH

42

Any study can never be perfect and can be always a scope for the improvement in study of such a large organisation in just 4-6 week time. The biggest limitation factor was the limited time. These results may not be suitable for a large level. For further research the above limitation can be overcome by carrying out research on the wider basis. This will help in providing more precise information and large area for the analysis. This can benefit the major financial decision. On the basis of study of Crompton Greaves Limited following influences can be drawn regarding its financial positions. The calculation may it clear that while the firm is strong in certain area it is particularly weak in certain other areas.

AREAS OF WEEKNESS

A. Firms Current Assets are not properly used.

B. Overall cost is increasing. It means per year cost of production was increasing that is not a good sign for the company.

C. Debtors were increasing rapidly which affects the financial position of the company.

D. The Average collection period is more, which is not a good sign for the firm as it results blocking of fund.

E. The liquidity position of the company is declining.

F. Insufficient management of inventories.

G. Working capital is not properly utilised by the firm.

.AREAS OF STRENGTHS

A. The sales figures is always increasing which is quite satisfactory.B. Company has recovered profitability for a very small duration.C. Sales per employees are beneficial for the company. D. The solvency position of the company is too sound.E. Net profit ratio is good indicator of company’s financial position as it increasing over the year.F. Company has been more effective in using the investment in fixed assets to generate revenue.

CHAPTER-6 CONCLUSION:

43

Lastly I would like to conclude that these 6 to 7 weeks training will really prove helpful to my future career as it helped me to gain corporate knowledge and provide opportunity to apply my theoretical knowledge in the practical sense. As we are already aware about the fact that no study can be perfect in such a short span of time, but after analysing the company's financial position it is clear that even in recessionary period company is doing well and striving toward to achieve robust growth in near future. Crompton Greaves Limited at Malanpur is a transformer division. The staff under which i worked were of very cordial nature. They gave me proper guidance as and when required during my training period. In fact, it was a nice experience for me which will really help me in getting entered in to a renounce corporate world in near future.

44

CHAPTER-7

BIBLIOGRAPHY

1) Advanced Accountancy: S.P jain & K.L Narang2) Accountancy: S.A. Siddiqui3) MIS: Crompton Greaves4) WWW.Cgonline .com5) Business magazine

CHAPTER- 8

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS : 2006-2007 (Half Yearly: APRIL- SEPT) (Amount in Lakhs)

45

Particulars P-01 P-02 P-03 P-04 P-05 P-06 AVERAGE

Gross Sales 708.50 904.82 1294 876.78 130272. 1227.79 1052.44Net Sales 654.93 786.27 1138 762.25 1134.43 1049.45 920.89PBT 5.82 32.82 170.04 49.69 80.74 32.75 61.98Total Cost 637.23 1380.58 2332.92 3035.96 4065.37 5035.77 2747.97Debtors 2412.33 1869.33 2046.69 2027.40 2343.90 2697.88 2232.92Creditors 2632.04 2566.05 2713.38 2841.71 2601.81 2243.69 2599.78Finished Goods 112.89 357.42 133.90 65.61 141.55 90.6 150.29RM+WIP 872.92 772.07 1037.39 1225.76 11274.17 1265.09 1074.57Total Inventory 985.81 1129.49 1171.29 1291.37 1411.72 1355.45 1224.19OCA 375.91 327.18 479.81 539.32 629.94 424.38 462.76OCL 371.76 431.71 385.45 449.18 479.38 509.45 437.82Total Current Assets 3775.04 3326.69 3698.51 3861.14 4386.24 4480.60 3921.37Total Current Liability 3864.72 3965.46 3974.20 4106.86 3794.06 3471.70 3862.83Total Liquid Assets 2789.23 2197.2 2527.22 2569.77 2974.52 3125.15 3202.42Gross Fixd Assets 2520.79 2520.79 2525.84 2525.84 2525.84 2537 2611.15Net fixed Assets 1497.79 1484.92 1481 1469.63 1463.50 1460.46 1962.22Total Assets 5272.83 4811.61 5179.71 5330.77 5849.74 5941.06 5397.59Capital WIP 44.51 44.83 48.70 50.59 57.69 62.51 51.47Customer Advances 860.92 967.70 875.37 815.97 712.88 718.56 825.23UEOB 7070 8286 7800 9011 9656 9780 8601Manpower 236 266 266 265 273 272 263Working Capital -89.68 -638.77 -275.69 -245.72 592.18 1008.90 58.54Capital Employed 1408.11 846.15 1205.31 1223.91 2055.68 2475.36 1535.75Capital Expenditure 0 0.32 9.24 11.13 18.23 34.21 12.19Finished Goods Days 6 18 6 3 6 4 7.17RM+ WIP Days 44 37 49 58 55 57 50Total Inventory Days 50 55 55 61 61 61 57.17Debtors Days 75 56 59 58 64 73 64.17Creditors Days 131 121 123 130 112 95 118.67

FINANCIAL HIGHLIGHTS : 2006-2007 (Half Yearly: OCT- MARCH) (Amount in Lakhs)


46

Gross Sales 851.88 915.83 1620.72 787.81 1243.27 2530.11 1324.94Net Sales 732.89 789.34 1435.23 689.46 1091.36 2303.24 1173.59PBT 19.15 6.56 92.47 -15.52 97.93 676.41 146.17Total Cost 5677.80 6427.89 7747.24 8404.26 9375.23 10982.60 8102.50Debtors 2536.24 1822.49 2321.29 2085.23 2398.56 2734.90 2316.45Creditors 2259.74 2157.51 2422.59 2370.09 2674.12 2610.76 2415.80Finished Goods 392.82 507.47 227.63 273.10 332.72 250.75 330.75RM+WIP 1235.48 1139.16 1020.48 1323.58 1349.19 921.33 1164.87Total Inventory 1628.30 1646.63 1248.11 1596.68 1681.91 1172.08 1495.62OCA 603.26 613.28 551.99 673.17 716.61 544.68 617.17OCL 431.51 461.84 431.46 389.90 349.62 350.25 402.43Total Current Assets 4769.50 4083.20 4122.35 4356.02 4798.32 4452.44 4430.31Total Current Liability 3359.78 3387.28 3697.09 3712.55 4124.96 4130.60 3735.38Total Liquid Assets 3141.2 2436.57 2874.24 2759.34 3116.41 3280.36 2934.69Gross Fixd Assets 2537 2537 2579.94 2580.04 2580.04 2613.03 2569.84Net fixed Assets 1469.34 1475.98 1479.34 1579.44 1618.64 1646.69 1544.91Total Assets 6238.84 5559.18 5601.69 5935.46 6416.96 6099.13 5975.21Capital WIP 79.72 99.36 81.80 187.89 239.38 249.28 156.24Customer Advances 668.53 767.93 843.04 952.56 1101.22 1169.59 9175UEOB 9875 10390 9575 10214 9863 11770 10281.17Manpower 269 298 294 289 287 286 287.17Working Capital 1409.72 695.92 425.26 643.47 673.36 321.84 694.53Capital Employed 2879.06 2179.90 1904.60 2222.91 2292 10168.53 3606.5Capital Expenditure 51.42 71.06 88.44 202.63 254.12 297.01 160.78Finished Goods Days 17 23 10 12 14 10 14.33RM+ WIP Days 55 49 42 58 58 37 49.83Total Inventory Days 72 72 52 70 72 46 64Debtors Days 69 52 61 58 67 70 62.83Creditors Days 93 90 100 97 108 102 98.33



47

Gross Sales 660.11 1428.53 1510.78 639.77 1438.22 2360.32 1339.62Net Sales 580.78 1241.43 1314.11 570.20 1245.10 2062.27 1168.98PBT -38.36 121.16 120.96 -64.15 191.07 394.07 120.79Total Cost 589.93 1688.86 2828.25 3408.11 4441.98 6097.73 3175.81Debtors 2296.31 2689.36 2312.36 1706.19 1760.94 3232.65 2332.97Creditors 2417.45 2765.81 2412.73 2581.99 3201.92 3164.02 2757.32Finished Goods 78.25 154.98 250.53 698.0 518.43 165.85 311.14RM+WIP 1230.34 1530.67 1257.05 1357.08 1674.93 1282.61 1388.78Total Inventory 1308.59 1685.65 1507.58 2055.88 2193.36 1448.46 1699.92OCA 688.99 769.87 841.49 874.61 955.22 1041.31 861.92OCL 287.46 415.25 552.68 372.90 485.46 512.74 437.75Total Current Assets 4333.39 5145.99 4663.07 4637.99 4910.43 5723.16 4902.34Total Current Liability 3936.74 4312.98 4068.08 4177.16 5249.17 5189.46 4488.93

Total Liquid Assets 302.8 3460.34 3155.49 2582.11 2717.07 4274.7 3202.42Gross Fixd Assets 2668.82 2678.81 2678.81 2678.81 2678.81 2678.81 2677.15Net fixed Assets 1803.93 1836.83 1860.75 1884.97 2044.21 2342.63 1962.22Total Assets 6137.32 6982.82 6523.82 6522.96 6954.64 8065.79 6864.56Capital WIP 363.29 396.20 442.06 468.90 642.10 953.56 544.35Customer Advances 1231.83 1131.92 1102.67 1222.27 1561.79 1512.70 1293.86UEOB 13594 14351 15276 17828 18358 17307 16119Manpower 273 273 313 320 342 318 306.5Working Capital 396.65 833.01 594.99 460.83 -338.74 533.70 4131.41Capital Employed 2200.58 2669.84 2455.74 2345.80 1705.47 2876.33 2375.63Capital Expenditure 169.80 212.70 258.56 285.40 458.60 770.06 359.19Finished Goods Days 3 6 10 27 20 6 12RM+ WIP Days 51 62 47 50 64 47 53.5Total Inventory Days 54 68 57 77 84 83 71Debtors Days 56 63 54 41 43 74 55.17Creditors Days 95 102 90 94 116 115 102


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Gross Sales 1177.72 1505.25 2587.06 1159.65 1994.21 3829.76 2042.28Net Sales 1028.04 1305.15 2212.32 990.27 1767.19 3624.70 1821.28PBT 113.04 152.75 387.49 137.62 329.29 884.30 334.08Total Cost 6842.35 7932.77 9747.89 10486.90 11881.49 14594.96 61486.36Debtors 3069.17 3119.18 4146.64 4012.43 3754.79 5426.93 3921.52Creditors 3073.39 3475.15 3681.59 4125.87 4505.47 4803.06 3944.09Finished Goods 224.15 359.00 228.21 333.17 150.72 61.95 226.20RM+WIP 1739.61 1848.05 1338.32 1919.69 2618.38 1357.68 1803.62Total Inventory 1963.76 2207.05 1566.53 2252.86 2769.11 1419.63 2029.82OCA 864.37 723.16 555.28 803.45 689.30 889.73 754.22OCL 482.29 570.76 812.75 445.27 562.35 612.87 581.05Total Current Assets 5898.67 6050.58 6270.00 7070.78 7214.80 7737.13 6706.99Total Current Liability

5258.69 5603.36 5855.87 6002.65 6520.01 6627.20 5977.96

Total Liquid Assets 3934.91 3843.53 4703.47 4817.92 4445.69 6317.5 4677.17Gross Fixd Assets 2678.81 2678.81 2938.11 2993.31 2993.31 300.02 2880.40Net fixed Assets 2414.71 2528.85 2684.84 2870.79 2890.9 2984.22 2729.06Total Assets 8313.38 8579.43 8954.84 9941.57 10105.75 10721.35 9436.05Capital WIP 1040.42 1170.56 1062.17 1226.09 1261.47 1360.03 1186.79Customer Advances 1703.01 1557.45 1361.53 1431.51 1452.19 1211.27 1452.82UEOB 16980 18611 17330 20849 19780 16835 18397.5Manpower 281 324 307 325 328 0 260.83Working Capital 639.98 447.22 414.13 1068.13 694.79 1109.93 729.03Capital Employed 3054.69 2976.07 3098.97 3938.92 3585.74 4094.93 3458.09Capital Expenditure 856.92 987.06 1137.97 1357.09 1392.47 1497.74 1204.8Finished Goods Days 8 13 8 11 5 2 7.67RM+ WIP Days 65 67 46 65 86 41 61.83Total Inventory Days 73 80 54 76 92 43 69.67Debtors Days 69 67 84 80 72 98 78.33Creditors Days 109 118 123 133 135 142 126.67

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Gross Sales 106.94 2098.75 2881.65 210.50 1171.76 3204.08 1612.28Net Sales 93.82 1895.33 2557.96 180.41 1075.89 2928.34 1455.29PBT -238.96 438.76 717.10 -199.33 59.66 624.53 233.63Total Cost 297.15 1676 3449.43 3771.70 4725.16 6972.31 3481.96Debtors 4396.12 4080.57 4651.15 3572.39 3282.86 5128.83 4185.32Creditors 4218.54 4274.90 3962.16 4347.69 4769.80 4942.40 4419.25Finished Goods 298.79 111.11 65.40 322.83 472.64 208.97 246.62RM+WIP 1914.45 2018.88 1601.54 2635.01 3353.12 3285.94 2468.16Total Inventory 2213.24 2129.99 1666.94 2957.84 3825.76 3494.91 2698.11OCA 946.30 1023.61 1142.06 1253.92 1290.65 1214.85 1145.23OCL 658.78 822.66 1042.31 918.88 850.46 976.21 878.22Total Current Assets 7797.08 7236.18 7460.79 7784.99 8399.95 9839.52 8086.42Total Current Liability 6238.05 6413.89 6212.48 6312.09 6725.42 7953 6642.49Total Liquid Assets 5583.84 5106.99 5793.85 4827.15 4574.19 6344.61 5371.64Gross Fixd Assets 2998.05 2998.05 3061.88 3061.88 3061.88 3061.88 3040.60Net fixed Assets 3108.42 3202.29 3215.25 3199.10 3190.30 3190.26 3184.27Total Assets 10905.5 10438.47 10676.04 10984.09 11590.25 13029.78 11270.69Capital WIP 1501.66 1611.37 1575.14 1575.26 1583.27 1598.83 1574.26Customer Advances 1360.73 1316.33 1208.11 1045.52 1105.16 2034.39 1345.04UEOB 18996 19661 20653 20985 23324 23500 21186.5Manpower 297 352 323 343 327 337 329.83Working Capital 1559.03 822.29 1248.21 1472.90 1674.53 1886.52 1443.91Capital Employed 4667.45 4024.58 4463.46 4672 4864.83 5076.78 4628.18Capital Expenditure 141.63 249.37 276.97 277.09 285.10 300.66 255.14Finished Goods Days 9 3 2 10 14 6 7.33RM+ WIP Days 59 62 47 81 102 94 74.17Total Inventory Days 68 65 49 91 116 100 81.5Debtors Days 81 73 78 61 57 85 72.5Creditors Days 123 127 114 121 127 120 122.33

50


Particulars P-01 P-02 p P-04 P-05 P-06 AVERAGE

Gross Sales 692.87 2679.21 2311.88 151.50 3043.55 3534.60 2068.99Net Sales 608.52 2573.80 2129.73 134.55 2871.33 3368.44 1947.72PBT -123.49 354.05 110.01 -288.65 465.43 514.18 1031.53Total Cost 7545.83 9658.88 11634.00 11940.65 14294.70 17062.76 12022.80Debtors 4929.10 4822.75 4504.32 3834.14 5562.11 7168.38 5136.8Creditors 4635.59 3989.82 3827.52 3576.97 4134.47 4468.25 4105.44Finished Goods 198.02 301.69 46.94 436.17 157.32 176.64 219.46RM+WIP 3769.16 2476.64 2265.02 3025.59 3004.8 1754.2 2715.90Total Inventory 3967.18 2778.33 2311.96 3461.76 3162.12 1930.84 2935.37OCA 1248.70 1151.62 1163.87 1180.97 1106.03 1031.60 1147.13OCL 796.42 903.30 3827.52 737.31 954.41 769.37 1314.72Total Current Assets 10145.75 8753.42 7980.73 8477.39 9831.20 10131.20 9219.95Total Current Liability 7456.29 6471.09 713.81 6903.36 8046.30 7619.66 7271.92Total Liquid Assets 6178.57 5975.09 5668.77 5015.63 6669.08 8200.366 6284.58Gross Fixd Assets 3061.88 3061.88 3069.44 3069.44 3071.74 4856.49 3365.15Net fixed Assets 3203.81 3231.83 3240.29 3253.28 3252.74 3290.45 3245.4Total Assets 13349.56 11985.25 11221.02 11730.67 13083.94 13421.65 12465.35Capital WIP 1628.51 1672.13 1681.15 1709.23 1720.03 29.80 1406.81Customer Advances 2024.28 1577.97 2492.63 2589.08 2957.42 2382.04 2337.24UEOB 24889.oo 24473.00 23538.00 23977.00 22923.00 20946.00 23457.67Manpower 336 314 316 301 297 299 310.5Working Capital 2689.46 2282.33 845.92 1574.03 1784.90 2511.54 1948.03Capital Employed 5893.27 5514.16 4086.21 4827.31 5037.64 5802.29 5193.48Capital Expenditure 330.34 373.96 390.54 418.62 431.72 526.24 411.90Finished Goods Days 6 8 1 13 4 5 6.17RM+ WIP Days 112 69 63 87 82 47 76.67Total Inventory Days 118 77 64 100 86 52 82.83Debtors Days 84 78 74 66 91 119 85.33Creditors Days 118 106 99 94 109 117 107.17

51

COMPANY - CGL

SBU - Power Division

Division - Transformer 2 (Malanpur)

PROFIT & LOSS ACCOUNT

Profit & Loss Account Year 2009 Year 2008 Year 2007

INCOMEGross Sales -1827340178.28 -1609419516.22 -1121043398.63Less: Excise Duty 127277070.57 177210022.09 135229145.64Other Income -2136755.53 -1533452.05 -15518.00Interest Income -71160.00 -21818.00 TOTAL -1702271023.24 -1433764.18 -985829770.99EXPENDITUREMaterials 1093691320.41 92802938.25 709939954.04Staff & Welfare 58874290.13 53648654.56 43431593.00Manufacturing, Selling & Admn 209895991.01 121504739.27 93525746.03Diff of Ex.Duty Paid & Recovered 4358865.00 685174.91 4011163.20Interest & Commitment Charges 12532649.29 6415627.05 6113514.00Depreciation 17864084.55 10715443.91 11275862.87Impairement of Assets 0.00 0.00 0.00 TOTAL 1397217200.39 1120999026.95 868297833.14

Profit Before Exceptional Items -305053822.85 -31276537.23 -117531937.85

Exceptional Items (Net) 0.00 0.00 0.00

Profit Before Taxes -305053822.85 -312765737.23 -117531937.85Provision for TaxationCurrent Tax 0.00 0.00 0.00DeferredTax 0.00 0.00 0.00Fringe Benefit Tax 0.00 0.00 0.00Trf to Doubtful Debts Reserve 0.00 0.00 0.00

Profit After Tax -305053822.85 -312765737.23 -117531937.35

PROFIT/ LOSS CARRIED TO BALANCE SHEET

-305053822.85 -312765737.23 -117531937.85

52

Company - CGL

SBU - Power Division

Division - Transformer 2 (Malanpur)

BALANCE SHEET

BALANCE SHEET YEAR 2009 YEAR 2008 YEAR 2007

SOURCES OF FUNDS

Shareholder’s FundsShare Capital 0.00 0.00 0.00Reserves and Surplus 0.00 0.00 0.00

Loan FundsSecured Loans -2557547.60 -3132143.24 -1939865.12Unsecured Loans -12935130.62 -25784396.62 -39039046.62Deferred Tax Asset 0.00 0.00 0.00Current Account -168266074.23 4582316.08 69300017.11 TOTAL- -183758752.45 -24334223.78 27321105.37APPLICATION OF FUNDSFixed Assets 289736559.05 254966146.95 117612541.31Investments 0.00 0.00 0.00

Current Assets, Loans & AdvancesInventories 174157832.45 122832085.00 98483744.82Sundry Debtors 617568311.94 404920495.78 181933901.95Cash & Bank Balances 29405.00 80379.00 77446.00Loans & Advances 93133440.45 81140163.26 50724410.53

Less: Current Liabilities & ProvisionsLiabilities -671813943.59 -515667308.98 -358621212.13Provisions 0.00 0.00 0.00

NET CURRENT ASSET 199076016.25 821338144.06 -27401708.83

Profit & Loss Account -305053822.85 -312765737.23 -117531937.85

CAPITAL EMPLOYED 183758752.45 24334223.78 -27321106.37

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A Project Report Final Jat