Guided by:

Dr. K.T.Rangamani

Prepared by:

RAHUL KUMAR RATHORE

O9MBA099
COMPANY PROFILE:
 Incorporated in the year 2005, K E C International Ltd. has its core competencies in EPC services
to the Power Transmission projects.
 
 At present the company is led by Mr. H. V. Goenka as its Chairman and Mr. Ramesh D. Chandak
as the Managing Director & CEO. The promoters hold more than 34 percent of the company's
equity while institutional investors hold about 47 percent and individuals hold approximately 13
percent.
 
 KEC's expertise lies in the domains of Design, Manufacture, supply and Construction of Turnkey
Projects of Power Transmission lines. The company is also into the execution of Railway
Electrification projects, setting up Sub-stations and power Distribution Networks, Optical Fibre
Cable installations, Turnkey Telecom Infrastructure Services and maintenance of Power
Transmission Lines.

 KEC has helped transmit power to various countries that include Argentina, Brazil, Canada, Egypt,
Ethiopia, Ghana, India, Indonesia, Iran, Iraq, Kenya, Kuwait, Lebanon, Malaysia, New Zealand,
Nepal, Nigeria, Philippines, South Africa, Sri Lanka, Saudi Arabia, Sudan, Syria, Thailand, Tunisia,
USA, UAE and Vietnam.
 
 The registered office of the company is at Mumbai (1st Floor, CEAT Mahal, 463, Dr. Annie Besant
Road, Worli) and the manufacturing facilities of the company are located at Butibori in
Maharashtra and Jhotwara in Rajasthan.

 Auditors are Deloitte, Haskins & Sells.

 The exchange rate fluctuation and delays in execution of projects due to climatic conditions in
certain countries and financing delays led to a fair degree of strain on the company's operating
efficiencies and profit as well.

Board of Directors for the year – 31 march 2009.

 Directors Name Designation
H V Goenka Ch
R D Chandak Md
S S Thakur Director
G L Mirchandani Director
D G Piramal Director
S M Kulkarni Director
A T Vaswani Director
J M Kothary Director
P A Makwana Director
V Jagannadha Rao Co. Secretary
   
   
Bankers of
KEC
International Ltd.:

     
Bank Of India
 
Abu Dhabi Commercial Bank
 
Allahabad Bank
 
Andhra Bank
 
Axis Bank Ltd.
 
Bank Of Baroda
 
Barclays Bank Plc.
 
Central Bank Of India
 
Corporation Bank
 
Dena Bank
 
Export-Import Bank Of India
 
I C I C I Bank Ltd.
 
I D B I Bank Ltd.
 
Punjab National Bank
 
Standard Chartered Bank
 
State Bank Of Bikaner & Jaipur
 
State Bank Of Hyderabad
 
State Bank Of India
 
Syndicate Bank
 

Product details
K E C International Ltd.

Product/s manufactured/traded Capacity Production Purchase qty Purchase Opening Closing Sales qty Sales value
qty value stocks qty stocks qty
/Units /Units /Units Rs. Crore /Units /Units /Units Rs. Crore

Mar 2009 (12 mths)

Towers & Structurals 151 138.91 39 284.34 4.82 6.86 182.56 3385.73
000 tonnes 000 tonnes 000 tonnes 000 tonnes 000 tonnes 000 tonnes
Scrap 0 0 0 0 0 0 0 35.23

Service Income 0 0 0 0 0 0 0 6.33

Deals where company is Acquirer      

             
Date Deal Target company Price/Cost Event Event Name  
Type Swap ratio Date  
16- Sale of
Jan-06 asset Summit Securities Ltd. 0 12-Jan-06 Board of Directors approval  
        16-Jan-06 Stock Exchange Announcement  
             
6-Aug- 0.44444444
07 Merger R P G Transmission Ltd. [Merged] 4 6-Aug-07 Board of Directors approval  
        7-Aug-07 First media announcement  
        1-Oct-07 Merger Date w.e.f  
        24-Jan-08 High Court Approval Date  
        29-Feb-08 Date of Allotment  
 High Court Directed
        2-Nov-08 Shareholders Meeting  
        2-Nov-08 Shareholder's approval  
             
7-Aug- National Information Technologies 0.13333333
07 Merger Ltd. [Merged] 3 6-Aug-07 Board of Directors approval  
        7-Aug-07 First media announcement  
        1-Oct-07 Merger Date w.e.f  
        24-Jan-08 High Court Approval Date  
        29-Feb-08 Date of Allotment  
High Court Directed
        2-Nov-08 Shareholders Meeting  
        2-Nov-08 Shareholder's approval  

Income & expenditure

Mar Mar Mar Mar
K E C International Ltd. 2006 2007 2008 2009
12
Rs. Crore 12 mths 12 mths 12 mths mths
-        
Total income 1773.52 2081.81 2868.77 3483.62
Sales 1768.79 2075.79 2853.93 3481.67
Industrial sales 1768.61 2075.68 2853.88 3481.34
Income from non-financial services 0.18 0.11 0.05 0.33
Income from financial services 4.46 5.39 12.74 1.69
Interest 4.46 1.07 0.41 1.69
Dividends 0 0 0 0
Treasury operations 0 4.32 12.33 0
Other income 0.27 0.63 1.68 0.26
Prior period income & extraordinary income 0 0 0.42 0
Change in stock 10.43 -4.83 -15.26 16.12
         
Total expenses 1734.65 1972.34 2681.35 3383.45
Raw material expenses 798.8 1003.09 1405.23 1874.41
Packaging expenses 0 0 0 0
Purchase of finished goods 179.34 53.83 125.87 284.34
Power, fuel & water charges 6.86 10.13 16.84 20.98
Compensation to employees 83.77 95.47 120.9 141.61
Indirect taxes 55.87 49.27 71.17 78.77
Royalties, technical know-how fees, etc. 0 0 0 0
Lease rent & other rent 6.9 9.66 12.63 16.31
Repairs & maintenance 4.9 6.8 11.15 12.46
Insurance premium paid 7.94 8.61 13.82 11.16
Outsourced mfg. jobs (incl. job works, etc.) 299.77 320.59 392.05 302.55
Outsourced professional jobs 9.85 12.8 11.32 12.02
Directors' fees 0.01 0.06 0.1 0.08
Selling & distribution expenses 36.86 72.56 94.91 107.21
 Travel expenses 14.21 20.5 22.85 25.96
Communication expenses 0 0 0 0
Printing & stationery expenses 0 0 0 0
Miscellaneous expenses 25.18 34.27 52.4 57.05
         
Other operational exp. of indl. enterprises 38.61 72.71 92.26 104.12
Other oper. exp. of non-fin. service enterprises 0 0 0 0
Share of loss in subsidiaries/JVs,etc. 0 0 0 0
Lease equalisation adjustment 0 0 0 0
Loss on securitisation of assets/loans 0 0 0 0
Fee based financial service expenses 32.65 49.29 45.62 56.18
Treasury operations expenses 15.25 0 0 93.73
Total provisions 0 3.69 9.48 0.17
Write-offs 0 0 0 0
Less: Expenses capitalised 0 0 1.12 2.56
Less: DRE & expenses charged to others 0 0 1.96 1.94
         
Prior period & extraordinary expenses 0.04 0.04 1.89 0.31
Interest paid 63.74 60.32 69.18 104.23
Financial charges on instruments 0 0 0 0
Expenses incurred on raising deposits/debts 0 0 0 0
Depreciation 26.94 33.43 25.07 22.75
Amortisation 0 0 0 0
Provision for direct taxes 27.16 55.22 89.69 61.55
PAT 49.3 104.64 172.16 116.29
         
PBDITA 167.14 253.61 356.1 304.82
PBDTA 103.4 193.29 286.92 200.59
PBT 76.46 159.86 261.85 177.84

         

ANALYSIS:- As we can incur from the above Profit & Loss account that there is the continuous
increase in Total Income of the company i.e. in march 2006 it was 1773.52 (Rs.In crore) which is
increased by 17.4% in March 2007 and become 2081.81 (Rs. In crore). Again it surprisingly
increased by 38% in March 2008 and become 2853.93 (Rs. In crore). But in March 2009 the
rate lags down and now there is only 21% increase occur and the total income stands at
3483.62 (Rs. In crore).
 4000
3500
3000
2500
2000 -
Total income (Rs. Crore)
1500
1000
500
0
Mar 2006 Mar 2007 Mar 2008 Mar 2009

 The increase in sales results in the subsequent increase in total income i.e. when there is
increase in sales from March 2006 to March 2007 of about 17.35%; it subsequently shows the
increase in total income.

4000

3500

3000

2500

2000 Total income ( Rs. In crore)

Sales ( Rs. In crore)
1500

1000

500

 Also there is increase in sales from March 2007 to March 2008 i.e. 37.5% and from March 2008
to March 2009 the increase rate lags and there be only an increase of 22%.

EXPENSES:
 Prior from march 2006 to march 2007 there is slight increase in total expense i.e. by 13.7% but
from march 2007 to march 2008 there was a surprising increase in total expense i.e. by 36%.
  The reason for increase in expense is due to increase in Selling and distribution expenses i.e.
by 97% from March 2006 to March 2007 and a subsequent increase in Selling and distribution
expenses i.e. by 31% from March 2007 to March 2008.
 But the period from March 2008 to march 2009 shows slight increase in Selling and
distribution expenses i.e. by 13%. Because of slight increase in sales.
 Another factor for increase in total expense is increase in Raw material expense. It is clearly
given in the P & L account that from March 2006 to March 2007 an increase of 25.6% occurs in
raw material expense. Further from March 2007 to March 2008 an increase of 40% occurs.
 And at last an increase of 34% occurs from March 2008 to March 2009.
 Even power, fuel and water charges and other operational expenditure of industry enterprise
accounts for increase in total expenditure.

4000
3000
2000
1000
0
- ) e) ) Mar 2006 12 mths
o re or o re
cr cr cr Mar 2007 12 mths
In In In
Rs. Rs. Rs. Mar 2008 12 mths
es
( s( s( Mar 2009 12 mths
ns nse nse
p e
xp
e pe
ex e ex
tal ial
s on
To ter b uti
a i
m str
w di
Ra
g&
le lin
S

Profit after tax (PAT)

 The profit after tax in March 2006 was Rs. 49.3 crore and it jumps up to 112% by March 2007
and stands at Rs.104.64 crore.
 Further there is increase of 64.5% from March 2007 to March 2008.
 But, from March 2008 to March 2009 PAT decreased by 32.5% due to decrease in sales.
 It shows that company is not in a good state now because of lack of sales.
 PAT ( Rs. In crore)
200
180
160
140
120 PAT ( Rs. In crore)
100
80
60
40
20
0

Distribution of equity holding by types of investors

(% to total)            
Mar Jun Sep Dec Mar Jun
  2008 2008 2008 2008 2009 2009
Total Shares 100 100 100 100 100 100
Promoters 41.54 41.54 41.54 41.54 41.76 41.94
Indian 41.54 41.54 41.54 41.54 41.76 41.94
Individuals & HUF            
Central & State Govt.            
Corporate Bodies 41.54 41.54 41.54 41.54 41.76 41.94
FIs & Banks            
Others            
Foreign            
Institutions            
Others            
Persons acting in concert            
Non-promoters 58.46 58.46 58.46 58.46 58.24 58.06

Institutions 42.9 43.25 43.92 42.85 42.82 44.17

Mutual Funds/UTI 23.13 22.05 24.25 30.42 31.72 32.82
Banks, FIs,Insurance Cos. 6.88 6.88 6.88 6.32 6.24 5.41
Insurance Companies 6.79 6.79 6.79 6.24 6.17 5.36
Financial Institutions &
Banks 0.09 0.09 0.09 0.08 0.07 0.05
 Central & State
Government            
FIIs 12.89 14.33 12.8 6.11 4.87 5.93
Venture Capital Funds            
Foreign Venture Capital            
Others            
Non-institutions 15.56 15.21 14.54 15.62 15.42 13.89
Corporate Bodies 4.56 3.33 2.77 3.27 3.04 2.56
Individuals 10.6 11.31 11.16 11.69 11 10.27
Nominal invest. Upto
Rs. 1 lakh 8.96 9.29 9.17 9.47 9.42 9.04
Nominal invest. Over
Rs. 1 lakh 1.64 2.02 1.99 2.22 1.58 1.23
Others 0.39 0.57 0.6 0.66 1.38 1.06
Custodians            

The information given in distribution of equity capital given from March 2008 to June 2009 is
analyzed as follows:
 It is given in the above sheet that from March 2008 to December 2008 the promoters had 41.54
% of the total equity capital.
 But by March 2009 promoters increased their stake by 0.52% even when there was the period
of market slowdown as they were quite loyal toward the company due to its past performance.
 Further there is a slight increase by 0. 43%.
 And thus it stands at 41.94%.
 Now even non promoters have 58.46% total equity capital from March 2008 to December 2008
but after that there is a nominal change occur in the percentage.
 Prior, FII were in the good position i.e. from March 2008 to September 2008 they are somewhat
around 13%. But due to recession it fall down by 52% in December 2008.
 But company again wins the trust of FII’s and there is positive increase in the percentage at the
end of June 2009.
120

100

80
Total Shares ( in % )
Promoters ( in % )
60 Non-promoters ( in % )

FIIs ( in % )
40

20

0
Mar 2008 Jun 2008 Sep 2008 Dec 2008 Mar 2009 Jun 2009

Balance sheet

K E C International Ltd. Mar 2006 Mar 2007 Mar 2008 Mar 2009
Rs. Crore (Non-Annualised) 13 mths 12 mths 12 mths 12 mths
-        
Gross fixed assets 455.87 469.92 540.19 676.82
Land & building 86.01 86.57 111.45 123.97
Plant & machinery 100.07 118.06 141.53 229.18
Transport & comm. equipment/infrastructure 12.76 11.16 13.7 15.95
Furniture,amenities & other fixed assets 3.61 4.08 6.7 7.86
Capital work-in-progress 5.96 2.29 18.9 51.38
Intangible assets 247.46 247.76 247.91 248.48
Net lease reserve adjustment 0 0 0 0
Less: Cumulative depreciation 26.88 60 89.84 122.23
Less: Arrears of depreciation 0 0 0 0
         
Net fixed assets 428.99 409.92 450.35 554.59
         
Investments 20.48 20.59 0.46 1.76
Equity shares 20.48 20.59 0.46 1.76
Others 0 0 0 0
Less: Provision for dimunition in value of
investments 0 0 0 0
         
Group companies 20.48 20.59 0.46 1.76
Non-group companies 0 0 0 0
         
Market value of quoted investments 37.49 31.52 0 0
         
Deferred tax assets 0.77 4.45 24.64 22.44
         
Current assets 1030.69 1247.78 1972.6 2537.05
Cash & bank balance 63.61 21.39 68.02 136.54
Inventories 124.9 150.56 205.33 225.78
Receivables 840.08 1073.57 1687.05 2154.17
Expenses paid in advance 2.1 2.26 12.2 20.56
         
Loans & advances 0 0 0.89 2.8
Deferred revenue expenditure 0 0 0 0
         
Total assets 1480.93 1682.74 2448.94 3118.64
         

-        
Net worth 187.19 272 495.16 558.56
Authorised capital 60 60 60 60
Issued equity capital 37.69 37.69 49.34 49.34
Paid up equity capital (net of forfeited capital) 37.69 37.69 49.34 49.34
Paid up preference capital (net of forfeited capital) 13 13 10.4 0
Reserves & surplus 136.5 221.31 435.42 509.22
Free Reserves 136.5 221.31 357.97 430.51
Security premium reserves (Net of deductions) 92.36 92.36 91.24 86.75
Other free reserves 44.14 128.95 266.73 343.76
         
Total borrowings 332.64 386.42 591.77 621.82
Bank borrowings 309.66 386.05 590.56 620.69
Short term bank borrowings 40.23 13.87 438.75 484.64
Long term bank borrowings 269.43 372.18 151.81 136.05
Secured borrowings 332.53 386.33 590.62 610.58
Unsecured borrowings 0.11 0.09 1.15 11.24
         
Current liabilities & provisions 940.21 990.84 1317.33 1886
 Sundry creditors 414.72 378.3 756.7 963.56
Interest accrued 2.1 0.9 2.52 2.1
Other current liabilities 0 0.06 0.24 0.41
Provisions 13.62 36.96 54.02 44.42
         
1480.9
Total liabilities 3 1682.74 2448.94 3118.64
ANALYSIS:
 From March 2007 to March 2008 there is an increase of about 28% is seen in land and building
and further an increase of 11% occur in land and building acquisition. This lead to increase in
fixed assets of the company by about 15% in the financial year 2007 – 2008.
 And ultimately an increase of 25% occurs in total fixed assets in the financial year 2008- 2009.
 Another reason for increase in acquisition of land and building is increase in demand of the
products manufactured by company i.e. sales is increased

4000

3500

3000

2500

2000 Gross fixed assets (Rs. Crore)

Sales (Rs. Crore )
1500

1000

500

0
 When it comes to capital in work- in- progress it shows fluctuations i.e. from March 2006 to
March 2007 it decreased by 61.5% and then surprisingly increased by 725% in the financial year
2007- 2008 and then it ultimately increased by 172%.
 In the meanwhile time assets like Plant and Machinery also shows the acceptable increase.
 Investments of the company has fallen from March 2007 to March 2008 from Rs.20.59 crore to
Rs. 0.46 crore approximately around 97% which means the company has withdrawn its
investments during the peak time and again increased its investments to Rs.1.76 crore during
March 2009 when the share prices had fallen during the recession time.
 Investments ( Rs. In crore)
25

20

15 Investments ( Rs. In crore)

10

 When it comes to current assets, Cash & Bank balance shows vast variation i.e. from March
2006 to March 2007 there is a decrease of 67%, this might be because of companies’ policy to
spend money in plant and machinery acquisition and raw material expenses.
 Further in financial year 2007-2008, as sales increase again there is a significant increase of
218% is seen in Cash and Bank balance.
 On one hand maintaining liquidity is good for the company but on the other hand, optimum
utilization can be done instead of maintaining high liquidity and thereby idle funds.
 In financial year 2007-2008, an increase of 36% is seen in inventories. It happens due to more
acquisition of raw material and finished goods.
2000
1800
1600
1400
1200 Inventories ( Rs. In crore)
1000 Raw material expenses ( Rs. In
800 crore)
600
400
200
0