Ayan Sur(Lanco)

8/7/2019 Ayan Sur(Lanco)

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Construction of new terminal building at VARANASI

AIRPORT

This agreement is made and executed at New Delhi on this 23rd

day of August, 2007 between Airport Authority of India as astatutory corporation incorporated under Airport Authority of India

Act, 1995 having its head office at Rajiv Gandhi Bhawan,

Safderjung Airport, and New Delhi-110003.

Airport Authority of India is desirous of getting the work

Construction of New Terminal Building at Varanasi Airport done

and invited tenders for that.

Lanco Infratech Ltd participated in the above mentioned bidding

on 29.06.2007 and that was accepted by AAI.

CONDITIONS OF CONVENANTS

The scope of contract, consideration, terms of payment,

period of completion, defects liability period, Price

adjustment, taxes whichever applicable, Insurance,

Liquidated damages and all other terms and conditions arecontained in aforesaid contract documents. The contract

shall be duly performed by Contractor strictly and faithfully

in accordance with terms of Agreement.

The agreement constitutes full & complete understanding

between parties and terms of presents. It shall supercede all

prior correspondence to the extent of inconsistency to the

terms and conditions contained in the Agreement. Any

modification of the agreement shall be effected only by a

swritten instrument signed by the authorized representatives

of both the parties.

Settlement of Disputes


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It is agreed by both of the parties that all the difference or

disputes arising out of the Agreement of touching the subject

matter of the Agreement shall be decided by process of

settlement by Dispute Resolution Mechanism and Arbitration, as

specified in CLAUSE 57 of the General Condition of the Contract atpage GCC-43 & 44 and the provision of the India Arbitration

Act.1996 shall apply and Delhi Court alone shall have exclusive

jurisdiction over the same.

Scheduled E

SlNo

.

Description Applicable to thisContract

1. Name of Work Construction of New Terminal Building atVaranasi Airport

2. Estimated Cost Rs. 6498.00 lacs3. Time allowed for execution of work 15 Months4. Accepting Authority Chairman of AAI5. Last Date of application 27-04-20076. Cost of tender documents 10000/-

7. Period of sale pf tender documents 29-05-07 to 31-05-078. Last date & time of receipt of tender

documents21-06-07 up to 15:00hrs

9. Date and time of opening of tenders 21-06-07 at 15:30 hrs10.

Earnest Money Total Rs. 89,98,000/-only in the form ofDD/BG from anyScheduled Banks butnot from any co

operative and GraminBank in favour ofAirports Authority ofIndia.

11.

Security deposit Shall bededucte@10% fromRA bills till it reaches


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5% of acceptedcontact value of work.Security deposit shallbe acceptable in the

form of BG issued bySchedule Banks only ifthe security deposit ismore than 5 lacs.

12.

Market rate percentage addition tocover overheads and profit.

10.00 percent

13.

Rates applicable CPWD, DSR-2002+30.61% for Civil worksand Market rate for

Electrical works.14.

Permissible deviation limit for anycontract item, substituted item orcontract-cum-substituted item inexcess of the original value ofitem(Applicable to LumpsumContracts,MeasurementsContracts,based on item rates andPercentage Rate Contracts)

30%

15.

Permissible deviation limit for itemsof work not already included in theContract.

30%

16.

Deviation limit for item of work belowground surface:Permissible deviation limit for anyContract item.

100%

17.

Percentage payable to covercontractors indirect expenses for

suspension exceeding thirty daysand not exceeding 3 months.

NA

18.

%age payable to cover contractorsindirect expenses for suspensionexceeding 3 days

NA

19.

Authority competent to decide ifany other cause of delay is beyond

MEMBER(P),AAI


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contractors control.20.

Authority competent to grantexytension of time.

MEMBER(P),AAIs

CPWD,DSR:

LIST OF MEMBER BANKS

1. State Bank of India2. ABN AMRO BANK N.V3. Bank of Baroda4. Canara Bank

5. CITI Bank N.A6. Corporation Bank7. Deutsche Bank AG8. HDFC Bank Ltd9. HSBC10.

ICICI Bank Ltd

11.

IDBI Ltd

12. Punjab National Bank

13.

Standard Chartered Bank

14.

State Bank of Travancore

15.

State Bank of Hyderabad

16.

Syndicate Bank

17.

Indian Bank

18.

Oriental Bank of Commerce

19.

Kotak Mahindra Bank Ltd


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Key Projects:

LANCO has constructed roads and highways across India for the National Highways Authority

of India. LANCO has won the contract for construction and operation of two road projects inKarnataka, the 81 km Bangalore-Hoskote-Mudbagal stretch on National Highway 4 and the 82km Neelamangla - Devihalli stretch on National Highway 48 on Build, Operate and Transfer(BOT) basis under the National Highways Development Project (NHDP) Phase III.

The concession agreements for the projects have been signed with the National Highways

Authority Ltd. The total project cost is estimated at Rs 1300 crores and involves six laning of16 km stretch and four laning of the remaining stretches. The concession periods are 20 and25 years for the two projects respectively, including 30 months of construction period. Thecontracts have been awarded through a competitive bidding process.s

Lanco has also won a Rs 1,000 crore contract for constructing a portion of the Aligarh to

Kanpur section of the National Highway in Uttar Pradesh. Lanco had emerged as successful

bidder for two-laning of Aligarh to Kanpur section of NH 91 from 140 km to 418.16 km on tollbasis of National Highway Authorities of India (NHAI). The project involves two-laning with

paved shoulders of existing road, repair, widening and reconstruction of 3 major and 29 minor

bridges, construction of 5 new rail over-bridges, 4 toll plazas and other wayside amenities.

The concession period for the project is 12 years including a construction period of 18 months.

Order Book, Under Construction

Construction of New Terminal Building at Biju Patnaik Airport, Bhubaneswar.

1015 MW Imported Coal based Power Project ofUdipi Power Corporation Ltd at Udupi

in Karnataka.

2 x 300 MW Coal-based Power Project ofLANCO Amarkantak Power Ltd at Pathadi nearKorba in Chhattisgarh.

2 x 35 MW Hydropower Projects ofLANCO Green Power Pvt Ltd in Himachal Pradesh.

2 x 5 MW Hydropower Projects ofVamshi Industrial Power Ltd.

4 X 125 MW Teesta VI Hydro Electric Project ofLANCO Energy Pvt Ltd in Sikkim

2 X 600 MW Thermal Power Project ofLANCO Anpara Power Ltd in Uttar Pradesh.

368 MW Kondapalli Gas Power Project

81 km Road connecting Bangalore HoskoteMudbagal in Karnataka for NHAI.

82 km Road Connecting Neelamangla-Devihalli in Karnataka for NHAI.

Construction Order for Lanco Hills.


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Construction of New Terminal Building at Varanasi Airport for Airports Authority of India.

Construction of Medical College at Srikakulam in Andhra Pradesh.

Construction of Medical College at Ongole in Andhra Pradesh.

Construction of Vedic University at Tirupati in Andhra Pradesh.

Construction of Medical College at Belgaum in Karnataka.

Lanco is executing the construction of New Terminal for Varanasi Airport for the Airports

Authority of India.

Orders Executed

Rs 293 crore Veeranam water supply transmission pipeline work in Tamil Nadu, India in a

record time using 1.7 m to 1.8 m dia pipes covering a distance of 114 km. This project wasexecuted with Punchak as a Joint Venture Partner.

Balance of Plant of 368 MW LANCO Kondapalli Power Project at Vijayawada in Andhra

Pradesh, India.

Balance of 120 MW ABAN Power Project at Karuppur village in Thiruvidaimaruthur Talukof Tanjore District, Tamil Nadu.

825 bedded Asvini Hospital for Indian. Navy at Colaba, Mumbai.

Four Laning of the National Highway 31 from Kishangunj to Islampur in West Bengal.

Vamshi Hydro power project 10 MW

Construction of 1

st

phase of 100 bed hospital, college and hostel complex etc at NationalInstitute of Unani Medicine Bangalore

Construction of Railway Offices at Koparkhairane Railway Station

Projects Under Bidding

2640 MW (4x660 MW) Babandh Power Project Orissa

Property Development

Lanco's property development is all set to change the skyline of major metros with some ofthe finest mixed property townships and realty projects incorporating state of the art featuresand amenities.

Lanco's major property development projects are:Lanco Hills

LANPRO

Lanco Ville in the IT corridor of Chennai is scheduled to commence shortly.
http://www.lancogroup.com/porpertyDevmt/Hills.htmlhttp://www.lancogroup.com/porpertyDevmt/LANPRO.htmlhttp://www.lancogroup.com/porpertyDevmt/LANPRO.htmlhttp://www.lancogroup.com/porpertyDevmt/Hills.html


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Awards

EPC-World Awards 2010for Outstanding contribution in Power & Energy sector (Generation).

8th Construction World- Annual Awards 2010for Fastest Growing Construction Company (Large Category)- 1st Rank

Lanco Infratech Ltd


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7th Construction World- Annual Awards 2009for Fastest Growing Construction Company (Large Category)- 3rd Rank

Aban Power Company Ltd

TERI Corporate Award for "EnvironmentalExcellence and Corporate Social

Responsibility" June 2009.

IKU II

IEEMA award for "Excellence in FastTrack Commissioning of Small Hydro

Projects" February 2009

PRSI Confers Golden Jubilee Award

for the Most Impressive Public Relations

Initiatives August 2008.

Clarion Power Corporation Ltd

FAPCCI Award for Excellence in

Renewable Energy 2007.

Construction World NICMAR Awards2007

for the Second Fastest Growing ConstructionCompany (Medium Category) in India.

LANCO Institute of General

Humanitarian Trust (LIGHT)TERI Award 2006-07 for Excellence in

Corporate Social Responsibility.


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PRSI National Award for House Journal

(English) - First PrizePRSI Confers Golden Jubilee Award

for the Most Impressive Public

Relations Initiatives

LANCO Infratech LimitedAward for Excellence in Bridge Engineering 1999 from the Indian Institute of BridgeEngineers.

LANCO Kondapalli Power Pvt LtdOHSAS 18001 :1999 Certification in respect of Environmental Management System by Lloyd'sRegister Quality Assurance Ltd in 2005.

National Award for Excellence in Water Management 2005 by Cll - GBC Green BusinessCentre.

Silver Award in Gas Power Sector for Outstanding Achievement in Environment Managementfor 2003-04 from Greentech Foundation.

Leadership Efforts towards Environmental Management and Sustainable Initiative among

Corporates for 2002-03 by TERI.

Best Environment Improvement Activity Award 2002 - 03 from FAPCCI.

CM Leadership and Excellence Award in Safety, Health and Environment 2002.

ABAN Power Company Ltd0HSAS 18001:1999 Certificate from TUV SUD Management Service GmbH Trading as TUVSouth Asia Pvt Ltd.

LANCO Group Corporate Communications

2007PRSI National Award for House Journal (English) - First PrizePRSI National Award for Corporate Film in English - First PrizePRSI National Award for Corporate Brochure - First Prize

2006PRSI National Award for In- House Magazine (Content and Layout)Second PrizePRSI National Award for Corporate Campaign - Second Prize


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PRSI National Award for Corporate Brochure - Second Prize

2005PRSI National Award for In-House Magazine (Content and Layout)-Third PrizePRSI State (Andhra Pradesh) Award for In- House Magazine (Content and Layout) - Second

Prize.

CSR

Objectives

To align Lanco in all itsactivities with Millenium

Development Goals and aimsand purposes of the UNGlobal Compact.

To improve human

development indices throughprojects and programmes at

local, state and nationallevels.

To internalise the

multifaceted responsibilitiesat individual and

organisational levels inaddressing poverty, climatechange and social issues.

To partner with Indian andinternational organisations

and institutions to deliveraid, assistance anddevelopmental resourceseffectively.

To nuture all the elements of

our CSR policy as a valuesystem.


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Programmes:

The endeavor of LANCO Foundation in all its activities is to achieve tangible outcomes in everysphere of Corporate Social Responsibility. The foundation has taken enlightened developmentparadigms into consideration and is aligned with Millennium Development Goals and the UN Global

Compact Charter.

Lanco Foundation focuses its activities in seven sectors, including Education Health Livelihoods Environment - Neighbourhood Community Development - Relief & Rehabilitation, and - Sports &Culture

Education Sector

In the Education sector - Lanco Foundation provides

scholarships on merit and means basis - to enrol and

complete the education at undergraduate and graduate levels.

These scholarships essentially intended to support merit

students in the neighbourhood communities of LANCO.

Lanco Foundation also conducts English for Employability

training programmes - in collaboration with the BritishCouncil - to increase employability opportunities of

undergraduate students - through undergraduate colleges.

Health Sector:

In the Health sector, Lanco Foundation provides safe

drinking water - through tube wells - support urban healthinitiatives - organise health awareness and screening camps -

including cancer awareness in rural areas in collaborationwith the Indo-American Cancer Institute & Research centre.

Livelihood Sector

In the livelihood sector, Lanco Foundation provides

employability training programmes in construction trades in

collaboration with the National Academy of Construction-like rod fixing, shuttering carpentry, masonry for school

dropouts and also conducts training programmes in other

areas like Information and Communication Technology -bedside patient care - customer relations and sales

hospitality - motor mechanics etc. in collaboration with Aide

et Action. An impressive number of over 1000youth have so far been trained and gainfully employed. Lanco Foundation also provides


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support to rural artisans - to improve their incomes through improvements in production

marketing - and cooperative functioning.

Neighbourhood Community Development Programmes:

In the neighbourhood Community development programmes,

Lanco Foundation works in villages around project sites - toimprove the quality of basic education - health services - andlivelihood opportunities.

Environment Sector

In the Environment sector, Lanco Foundation encourages

planting of trees - and organises awareness building activitiesin both rural and urban areas.

Relief & Rehabilitation sector

Under the Relief & Rehabilitation programme, Lanco

Foundation runs four Artificial Limb Fitting Centres in fourStates - and provides free aids and appliances. Over 12,000

physically challenged people have so far been benefittedfrom this programme. The Foundation also provides support

for economic rehabilitation of survivors of trafficking - in

collaboration with the International Organisation forMigration

Sports & Culture

Encouraging sports and sports events like the Olympic run -

facilitating persons participating in the Olympics - providingsports equipment to various sports academies - is anotheractivity of the Foundation.


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Projects outlook

Contents

Chapter 1: Introduction

1.1. Preface

1.2. Acknowledgement

1.3. Meaning of Project

1.4. Executive Summary

1.5. Objectives of the Project

Chapter 2: Company Profile

2.1 History ofONGC

2.2 Profile of ONGC2.3 Global Ranking

2.4 Vision and Mission of ONGC

2.5 Community Development of ONGC

2.6 Products of ONGC

2.7 Subsidiaries of ONGC

2.8 Research Methodology

Chapter 3: Working Capital Management

3.1 Meaning of Working Capital

3.2 Kinds of Working Capital

3.3 Need for Working Capital

3.4 Factors determining the Working Capital Requirements

3.5 Working Capital Cycle

3.6 Components of Working Capital

3.7 Working Capital Management in ONGC

3.8 Position of Current Assets and Current Liabilities in ONGC

3.9 Factors requiring consideration while estimating Working Capital

3.10 Swot Analysis

Chapter 4: Findings

Chapter 5: Suggestions

Chapter 6: Conclusions

Chapter 7: Bibliography

A model for working capital requirements andcorporate liquidity management


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Abstract

A significant (and positive) development in corporate financial management over

recent years has been an increased emphasis on liquidity and the management of

operating cash flows. Reasons for this increased emphasis include economic

recession, corporate restructuring activities, and the need to increase and conserve

operating cash flaws to meet higher debt service requirements or finance more

modern facilities. In the academic, as well as the professional, world old tools are

being reassessed and new tools developed to aid the treasury professional in the

efficient management of corporate cash resources. The purpose of this paper is to

integrate two tools of liquidity management; the cash conversion period and the net

liquid balance.

The Cash Conversion Period

Initially presented by Richards and Laughlin ( 1980); the cash conversion period is

now routinely discussed in most corporate finance textbooks. (See for example,

Brigham and Gapenski (1997), Moyer, McGuigan, and Kretlow (1998), and Gitman

(1998.) The cash conversion period measures the number of days between the

actual expenditure of the firm's cash for the purchase of productive resources and

the ultimate collection of cash from product sales. Incorporated within the cash

conversion period model are management issues involving the control of

inventories, the collection of receivables, and the timing of payments for productive

resources such as materials and labor. In the cash conversion model, increases in

the number of days a product remains in inventory, increases in the number of days

required to collect receivables following the point of sale, and decreases in the

number of days a firm takes to meet its trade credit obligations will increase the

firm's cash conversion period. The increased cash conversion period reflects

additional resources required in the form of working capital to maintain the firm's

operations.

A weakness of the cash conversion period model is its inability to clearly convert the

number of days in the conversion period to a dollar amount of needed working

capital. Additionally, the model does not reflect the distinction between cash sales

and credit sales. For instance, two firms may have the same receivables conversion

period but have different credit sales/total sales ratios.

In the standard cash conversion period model (all else the same) both firms would

have the.same cash conversion period. However, the firm with the lower credit

sales/total sales ratio would clearly be in a better position to meet obligations as


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they come due since a larger portion of its sales are collected sooner and with

greater certainty.

Further, the cash conversion period model does not reflect the effect of profitability

on liquidity. As the model focuses on the length of time between the expenditure of

resources to produce operating revenue and the actual receipt of the revenue, it

fails to recognize that the revenue received will exceed the expenditure by the

amount of profit earned. Since the profit represents additional resources available

to meet obligations, profitability is clearly a contributing factor to overall corporate

liquidity. As shown later, the gross profit margin and the credit sales/total sales ratio

can be incorporated into the cash conversion period model. The modified cash

conversion period can then be easily converted to dollar amount of working capital

needed to sustain the firm's operating cycle. This amount of net working capital

required for operations (NWCROP) would then serve as input in an assessment of

overall corporate liquidity.

Net Liquid Balance

Shulman and Cox (1985) and Shulman and Dambolena (1986) developed a useful

tool for liquidity analysis known as Net Liquid Balance (NLB). Essentially, the NLB

model recognizes that the firm's ability to meet its obligations as they come due is

not reflected by the firm's total working capital, but by the amount of working

capital remaining once the requirements of the firm's operating cycle are met.

Alternatively, the NLB is the difference between the firm's immediately available

cash resources and its non-operating, or negotiated, short-term debt. Empirical

tests conducted by Shulman and Dambolena indicate the NLB to be a superior

indicator of corporate liquidity when compared to more widely known indicators

such as the quick ratio. A problem with the NLB model is that the NLB is a residual

amount remaining after the working capital needed to sustain the firm's operating

cycle (NWCROP) is deducted from total working capital. Hence, a means of

estimating the amount of working capital needed to sustain the operating cycle is

needed to make liquidity analysis using NLB operational. As shown below, NWCROP

can be estimated using the modified cash conversion period model and then used

as an input to the NLB model thereby improving the effectiveness of the NLB model

in assessing corporate liquidity.

A Modified Cash Conversion Period

The traditional cash conversion period (CCP) and its components can be

presented as follows:


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(1) CCP = ICP RCP - PDP

Where: CCP = cash conversion period

ICP = inventory conversion period

RCP = receivables conversion period

PDP = payables deferral period

The modified cash conversion period (MCCP) is obtained by modifying the inventory

conversion period to incorporate the gross profit margin and the receivables

conversion period to incorporate the credit sales/total sales ratio.

The Modified Inventory Conversion Period

The Modified Cash Conversion Period and Working Capital Requirements

The MCCP/NWCROP Model: A Numerical Illustration

Exhibit 1 provides a numerical example using the MCCP/NWCROP model. Assuming

hypothetical values for the components of the traditional cash conversion period,

annual sales, gross profit margin, and the ratios of purchases and credit sales to

total sales, the MCCP and NWCROP (using both the traditional CCP and the MCCP) is

determined. Performing a sensitivity analysis of the firm's sales, gross profit margin,

and credit sales/sales ratio shows some interesting results.

Sales and Working Capital Requirements

Financial professionals and educators routinely warn of the liquidity dangers

awaiting a firm that experiences rapid sales growth without proper financial

planning and controls. The rising level of sales requires additional funding to

support the inevitable increases in inventories and receivables that accompany

growth. The positive relationship between sales and working capital requirements is

shown in Figure 1. The slopes of the lines depicting the relationship are functions of

the components of the firm's cash conversion period and modified cash conversionperiod. Figure 1 also shows the difference in working capital requirements for a

given level of sales when NWCROP is estimated using the MCCP as opposed to the

traditional CCP. Using the traditional CCP to estimate NWCROP results in the firm

overestimating its working capital requirements as sales grows. Using the data in

Exhibit l, we see that the modified CCP estimates of working capital requirements

are less than those indicated by the traditional CCP by almost 20%. Thus,


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incorporating the effects of the gross profit margin and the CS/S ratio result in a

significant difference in the estimation of working capital requirements needed to

support sales growth. For a given level of total working capital, a firm may have

more resources available for non-operating purposes than is indicated by the

traditional CCP approach. Hence, the use of the traditional CCP as a liquidityindicator may systematically underestimate the firm's true ability to meet its

obligations as they come due.

Working Capital Requirements and the CS/S Ratio

Figure 2 shows the relationship between NWCROP and the credit sales/total sales

ratio (CS/S). As the CS/S ratio increases, additional working capital is required. This

is intuitively obvious since a higher CS/S ratio results in more receivables for a given

sales level. Working Capital Requirements and Profitability

Figure 3 shows the relationship between NWCROP and the firm's gross profit

margin. As the gross profit margin increases the need for working capital to support

operations decreases. Incorporating profitability helps to make the cash conversion

period a better indicator of liquidity. The traditional CCP failed to recognize that the

cash inflow at the conclusion on the operating cycle is greater than the cash outflow

at the beginning of the cash conversion period. The incremental amount of cash

flow between the start and end of the cash conversion cycle is directly related to

profitability. The modified CCP incorporates the effect of the additional cash

resources made available by the generation of earnings from the firm's operating

cycle. Clearly, the more profitable the enterprise, the more cash resources

generated from soperations.

Corporate Liquidity, Working Capital Requirements and MCCP

The Net Liquid Balance approach to assessing corporate liquidity divides the firm's

total working capital into the portion required to sustain the firm's operations and

the firm's surplus cash resources or Net Liquid Balance (NLB). A positive value for

NLB indicates that the firm has sufficient cash resources to meet its short-term

obligations without reducing the resources allocated to the operating cycle. Anegative value for NLB indicates that the firm will have to acquire additional

working capital or reduce the resources committed to the operating cycle to meet

short-term obligations. If the components of the MCCP are considered to be at

optimal levels, reducing resources committed to the operating cycle may result in

lost sales, less operating efficiency, and/or a deterioration in relations with trade

creditors. All of these are symptoms of a firm with liquidity problems.


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Financial managers and analysts can use the NLB as a measure of the firm's current

or expected future liquidity. The level of working capital necessary to support

operations (NWCROP) can be estimated for current or expected sales levels using

optimal values for the components of MCCP. The desired level of NWCROP can then

be compared to the firm's actual net working capital. If desired NWCROP exceedsavailable working capital (NLB

Conclusion

The purpose of the paper is to integrate two tools of liquidity management; the cash

conversion period and the net liquid balance. The traditional cash conversion model

was modified to incorporate the effects of the firm's profitability and credit

sales/total sales ratio. The modified cash conversion period was then used to

estimate the working capital needed to support the firm's operating cycle

(NWCROP). The optimal level of NWCROP, when compared with available workingcapital provides an indication of the surplus or deficit position of the firm with

respect to available resources not committed to the operating cycle. A surplus or

rising amount of available resources is an indicator of adequate or improving

liquidity for the firm.

FINANCIAL STATEMENT AND THE ANALYSIS OFRATIOES


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RECOMMENDATION ON THE BASIS OF THOSEANALYSIS

BIBLIOGRAPHY

Documents

Ayan Sur(Lanco)