HISTORY OF MECON

MECON LIMITED (formally known as METALLURGICAL & ENGINEERING CONSULTANTS (India limited) , a government of India public sector undertaking under ministry of steel. At MECON we have all technical discipline including civil , structural , architecture , mechanical , chemical , ceramic , electrical , electronic ,and control system , instrumentation , environmental engineering , ocean engineering , power , computer etc MECON is committed to became a world class engineering and contracting company to contribute in realization of energy , oil & gas , infrastructure and metallurgical project by its professional and capable employees delivering quality service MECON continue to aspire and excel for being in the forefront for project using newer clean technology with its ability to develop technologies address issues of environment concern , assimilate technologies developed by world leader , adopt the same in specific project situation and by retaining competent , professional and motivated staff. MECON during its existence of past 48 years besides executing varied type engineering / consulting assignment, has been a pioneer in acquiring and assimilating newer technologies for various sectors of the Indian industry. MECON has collaborating agreements with leading firms from USA, Germany, France, Italy, Russia etc in various field we are quite familiar in working with collaborators who provide process know-how and basic engineering

MECON has a large set up with about 2100 strong workforce, of which about 1250 are graduate / postgraduate engineer in 39 technical disciplines. MECON has till date completed over 2500 consultancy assignments covering wide range of field and services further MECON has executed a large number of assignment on turnkey / EPC basis total value of turnkey (EPC) contracts executed by Mecon exceed rupees 20000 million. MECON having implemented the TQM philosophy in all spheres of its activities through the well laid and documented procedure Mecon review and check all design calculation , drawing , specification , data sheet , during design stage of the project quality assurance plan are prepared and finalized before starting a project we are pleased on record that mecon has already received ISO 9001 certification RWTUV of Germany and incidentally we are the first engineering and consultancy organization in India to received this accreditation. MECON limited a government of India undertaking & recipient of ISO 9001 accreditation is a multi-disciplinary designing , planning , engineering , consultancy and contracting organization with head office at ranchi and presence in all metropolises and major cities spread through India at 32 location , Mecon has a large pool of 1250 highly qualified and experience engineers , scientist , and matching infrastructure facility Mecon has undertaken over 2300 consultancy assignment & commissioning (EPC) basis totaling.

MECON is registered with various international agencies including WORLD BANK , ASIAN DEVELOPMENT BANK , AFRICAN BANK , ERDB AND UNIDO since its inception mecon played a key role in the development of steel industries in India and abroad including expansion / augmentation and development of integrated steel plants in India , Nigeria and other countries as well mecon having engineered over 30 million tonne of steel plant operating in India / abroad is well conversant for undertaking this magnitude of assignment Mecon possess adequate experience human resources ,CAD facility and organizational structure

INTRODUCTION TO THE COMPANY MECON LIMITED formely it was known as METTALURGICAL &
ENGINEERING CONSULTANTS (INDIA) LIMITED is a government of India Public Sector undertaking under Ministry of Steel. MECON LTD, established in 1959 as Hindustan Steel Limited (HSL), Is Indias frontline engineering, consultancy and contracting organization offering full range of services required for setting up of projects from Concept to Commissioning, including turnkey execution. HSL was transformed into Mecon Limited in 1973. MECON LTD is a multi disciplinary disciplinary designing, planning, engineering, consultancy and contracting organization an established engineering & contracting, ISO 9001 company employs with qualified & experienced engineers, scientists, technical & supporting staff, possesses offices. Companys corporate office at Ranchi is modern and equipped with a large computer network and laboratories for testing and making models. MECON has collaboration agreements with leading firms form the USA, Germany, France, Italy, Russia, etc in various fields. The organization is quite familiar in working with collaborators who provide process known how and basic engineering. MECON is a multi disciplinary firm with 1030 experienced and dedicated engineers, scientists and technologists, having a wide network of offices spread all over the country. Experienced in handling consultancy assignments and EPC projects. MECON LTD. Has played a significant role in the development of the Indian industry. MECON Ltd is an ISO 9001 : 2000 certified company and is registered with International financial institutions like the World Bank, Asian Development Bank, African Development Bank and has technological tie ups with worlds leading organizations MECON played a pivotal role in the development and expansion of the Iron and Steel Industry of the country.

Mecon has subsequently diversified far beyond ferrous metallurgy and consolidated its position in :

Non ferrous mettalurgy Defence Space Environment Power Petrochemical Oil/gas pipelines Infrastructure Other sectors

COMPANY PROFILE Type of company Funded Headquarter CMD Industry Capital Employed Net Profit Employees Central public sector Enterprise 1959 as Hindustan Steel Ltd Ranchi, Jharkhand A. K. Ghosh Engineering Consultancy

BUSINESS The CORE FOCUS OF Mecon is providing engineering consultancy and project management services to its client, which are basically industrial. Mecon has carved out a niche for providing its engineering services for large scale projects globally. It is serving a large number of clients in the public and the private sector. In view of the cyclic demand in the Steel Sector over the past few years. Mecon has made forays into a number of diversified sectors of the economy especially Oil and Gas, Power and Infrastructure. Business procurement in the area of Engineering Consultancy services have shown an upward trend. The company has thus laid more emphasis on its operations in this area. AREAS OF ACTIVITIES Mecon provides its services in the following areas: METALS: Iron Making Steel Making Rolling Mills Non ferrous By products and Mining Raw Materials & Mining Refactories Research & Development Beach Sand Mining

POWERS:
Thermal and Hydel Power Plant Transmission and Distribution Non-Conventional Energy Sources Energy Management and Audit RLA and RMO Studies

OIL AND GAS :

Oil and Gas pipelines Petro chemicals and Refineries CNG stations and city Gas Distributions POL Depots LPG Bulk Storage, Bottling and Transportation Off-Shore Platforms and Marine Pipelines Retail Outlets

INFRASTRUCTURES: Civil and Structural Engineering Architecture and Town Planning Road, Bridges, Highways and Fly overs Defence Related Projects Environmental Planning Hydro Engineering Information Technology

RANGE OF SERVICES: Planning, Analysis and Feasibility Reports Market Survey Site Selection Basic and Project Engineering

Construction Management EIA/EMP reports Environmental Management System ISO : 14000 ISO 9001:2000 Quality System Implementation

RANGE OF SERVICES PROJECT FORMATION 1. specialized & management services 2. planning , analysis and report 3. basic and project engineering PROJECT RELIAZATION 1. 2. 3. 4. detailed engineering construction management project management commissioning

OTHER SERVICE 1. design and supply of equipment and system 2. design development BUSINESS DIVERSIFICATION In view of all the cyclic demand / investment in the steel sector over the past several tears the company has made forays into a number of diversified sectors of the especially oil & gas , power , metal ( steel & non-steel ) , and infrastructure

MEC ON B U SIN ESS D IVER SIFIC ATION

Infras truc tur e 14% Oil & G as 12% M etal 61% P ower 13% Infras truc ture Oil & G as P ower M etal

UNDER THE DIVERSIFIED BUSINESS THE AREA OF ACTIVITIES IS: METAL 1. 2. 3. 4. 5. iron making steel making rolling mills non- ferrous by product & chemical

6. 7. 8. 9.

raw material & mining beach sand mining & mineral beneficiation refectories research & development

POWER 1. 2. 3. 4. 5. power plant- thermal & hydel transmission & distribution non- conventional energy sources energy management & audit RLA & RMU studies

OIL & GAS 1. 2. 3. 4. 5. 6. 7. Oil & gas pipeline Petro chemical & refineries CNG station & city gas distribution POL depots LPG bulk storage , handling ,holding & transportation Group gathering stations Retail outlets

INFRASRTUCTURE 1. 2. 3. 4. 5. 6. 7. 8. 9. Civil & structural engineering Architecture & town planning Port & material handling Roads ,bridges , highways & flyovers Defence sector Environmental engineering Hydro engineering MAS & information technology Health sector

RANGR OF SERVICES 1. Planning , analysis and feasibility report 2. Market survey, site selection 3. Basic & project engineering 4. Design & detailed engineering 5. Procurement & contract engineering 6. Inspection & expecting 7. Construction & management 8. Project monitoring& control 9. ELA/EMP report 10. Environmental management systems 11. Quality system implementation 12. Software design & development 13. Health studies & assets valuation 14. Restructuring & turnaround strategy 15. Residual life assessment (RLA) 16. Plant relocation & rehabilitation 17. Commissioning & post commissioning services 18. Engineering & project management on responsibility basis 19. Design & supply of equipment & system 20. EPC /turnkey execution of projects EQUIPMENT/ SYSTEM DESIGN & SUPPLY 1. 2. 3. 4. 5. 6. 7. Blast furnace Coke ovens Gas cleaning plant Basic oxygen furnace Continuous casting plant Reheating furnace Chemical & petro chemical plant total

8. Oil refining , storage & distribution system 9. Power plant 10. Hot & cold rolling mills 11. Processing lines 12. Material handling system 13. Port & harbors 14. Satellite / rocket launched pad 15. Gas storage & distribution systems 16. Air condition & ventilation system 17. Sewage & effluent treatment plant 18. Pollution control systems

SOME OF THE PRESTIGE NATIONALLY IMPORTANT PROJECT COMPLETED IN THE LAST 5 YEARS IS:

The first PSLV-C6 was successfully launched from the newly build launch pad at Satish Dhawan space centre , sriharikota (AP) on 5th May 2005 the newly build launch pad was constructed by mecon on turkey basis and mecon is responsible

for complete design . Engineering, realization, testing, and commissioning of its.

MECON has been providing consultancy services for project Sea Bird , Indian navy for creating full fledged Modern Naval Base called INS-KADAMBA with ship lift & repair/ support facilities as well as offices & residential complexes.

R&D Division of MECON , Ranchi has successfully designed, developed and demonstrated Miniaturized Solid state Cooling Unit for Defence personnel working at high ambient temperature or at desert. The Cooling unit was interested in MBT ARJUN TANK and was successfully demonstrated at CVRDE , Avadi, Chennai in the 1st week of may 2005 and the final trials was successfully conducted from 8th to 10th June at Mahajan Field Firing Range at Rajasthan ( Indo Pak Border ).

In the nutshell, the MECON Limited is a house of engineering Excellence having:

Wide network of offices.

 A unique blend of expertise in design engineering, contracting, procurement and project management services including design and supply of equipment and systems. Serving clients in both public and private sectors. Keeping abreast with latest state of art- technology.

MECON LIMITED is a multi-disciplinary designing , planning , engineering , & contracting consultancy organization and establishing engineering & contracting ISO 9001 company employs with qualified & experience engineers , scientist , technical & supporting staff , possesses 28 offices ,CAD station and others organization resources to contribute in industrialization process their outfit at corporate office in Ranchi is modern and equipped with large computers network and laboratories for testing and making models. MECON has 12 technological division , 15 engineering division , 7 special services division , 5 equipment and system design division , 28 engineering and project site offices in India to carry out specialized service in its diverse field of activities six of the regional engineering offices are connected with latest communication channels to pools their regional resources and serve the client using fast communication tools including VSAT communication facility / interest access for providing engineering services from distant location.

MECON is registered with number of multilateral funding institution and also have exposure of providing engineering and consultancy services to project in Bhutan, Bangladesh, Indonesia, and china in south east Asian region as well as in USA, Germany, Oman, UAE & Africa we take help of specialist / experts on retainer basis, transfer of know how overseas organization and training of our engineers in specific areas on case to case basis.

MECON as an organization have number of memorandum of understanding to meet the technological requirement for wide spectrum of industries and infrastructure development project our scope of service includes the entire gamut of work relating to setting up of project in green as well as in brown field from concept to commissioning.

NETWORK OF OFFICES HEAD OFFICE Ranchi Vivekananda path, Doranda OVERSEAS OFFICES Logos ,Nigeria Metallurgical & Engineering Consultancy (Nigeria) Limited

Ranchi-834002 Jharkhand OTHER OFFICES Adipur(Gujarat) Bhilai (Chhattisgarh) Borako (Jharkhand) Chennai (Tamil Nadir) Delhi(Delhi) Durgapur ( Westbengal) Jamnagar ( Gujrat) Karwar ( Karnataka) Mecheri (TamilNadu) Mundra Navi Mumbai (Maharashtra) Rourkela (Orissa) Secunderabad (Andhra Pradesh ) Tuticorin (Kerala) Vishakhapatnam (AP)

B-13, LSDPC Flats 24, Adeola Odeku Street P.O.-73001 Victoria Island, Logos , Nigeria Bangalore(Karnataka) Bhubaneshwar (Orissa) Chavara (Kerala) Cochin (Kerala) Duburi (Orissa) Jaipur (Rajasthan) Kanpur ( UP) Kolkata(West Bengal) Mangalore( Karnataka) Nagapattnam(Tamil Nadu) Neyveli (TamilNadu) Sambalpur(Orissa) Trivandrum (Kerala) Vazhakkala (Kerala)

NEED FOR THE STUDY The analysis and the interpretation of financial statement is an important accounting activity .The end-users of the business financial statement are interested in these statements primarily as an aid to determine the financial position and the result of the

operations . Since the MECON LIMITED, one of the leading company in consultancy and engineering services. Thus various transaction occur in order to maintain the financial soundness of the company , thus companys financial position is to be predicted correctly The need arise to conduct this study is to diagnose the information contained in financial statement so as to judge the profitability and financial soundness of MECON LIMITED .

OBJECTIVE OF THE STUDY To estimate the earning capacity of MECON LIMITED To gauge the financial position and financial performance of MECON LIMITED

To determine long- term liquidity of the funds as well as solvency.

To decide about the future capacity To decide about the future prospects of the firm To give some conclusion and if necessary to offer suitable suggestion for financial performance in the inadequacies highlighted by the study

LIMITATION OF THE STUDY

1. The analysis and interpretation may give the correct view about the study 2. The study is based on the data presented in the annual reports of MECON LIMITED 3. The changes in the price are not considered 4. There may be some fractional differences in calculation

SOURCES OF DATA The sources of data to conduct this study mainly includes primary data and secondary data

 PRIMARY DATA SECONDARY DATA PRIMARY DATA: Information gather through personal discussion held with the executive of finance department and through observation SECONDARY DATA : It includes data gathered from the annual reports of MECON LIMTED Data collected by referring the published reports of MECON LIMITED Article are collected from official web site of MECON LIMITED The data collected from the above sources will be processed, analyzed, interpreted and presented in the study

METHODOLOGY APPLIED

TYPES OF FINANCIAL STATEMENT ADOPTED

Following are the two types of financial statement are adopted in analyzing the firms financial position. BALANCE SHEET INCOME STATEMENT 2. TYPES OF FINANCIAL STATEMENT ANALYSIS BASED In the financial statement analysis MODUS OPERANDI OF ANALYSIS is 1 .HORIZONTAL ANALYSIS EX: 1. Comparative statement 2. Trend analysis

VERTICAL ANLYSIS EX: 1. Common size statement 2. Financial ratio

TOOLS USED:

OF

FINANCIAL

STATEMENT

ANALYSIS

Following financial analysis tools are used in order to interpret the financial position of the firm

1. RATIO ANALYSIS 2. TREND ANALYSIS 3. COMPARATIVE STATEMENT 4. COMMON SIZE STATEMENT

WORKING CAPITAL
Introduction

The term working capital literally means the capital required for day to day working in a business concern such as for purchasing raw material Working capital = current asset - current liabilities Net working capital can be positive or negative. A positive or qualitative net working capital arises when current asset exceed current liabilities Net-concept of working capital this is supported by Lincoln, Stevens, Doris and saliers. According to it the working capital refers to the difference between current asset and current liability. Gross concept of working capital This is supported by distinguished authority like Baker, Mead, Malott and field according to whom working capital refers to the firm in current assets. Current assets mean assets which can be converted into cash within an accounting year. These include cash, short term securities, debtors, bills receivable, stock etc. DEFINITION Mead, Malott and Field working capital means current assets. Bonneville. Any acquisition of funds which increases the current assets in the working capital, for they are one and the same. J.S.Mill. the sum of the current assets is the working capital of business.

TECHINQUES OF FORECASTING WORKING CAPITAL

1. Cash forecasting method

THE

In it the position of cash at the end of the period is shown after considering the receipts and payments to

make during this period. It is more or less a summary of cash book. It shows the deficiency or surplus of the cash at the definite point of time.

2. Balance-Sheet Method In it forecast is made of the various assets and liabilities of the business. The difference between assets and liabilities indicates either cash surplus or cash deficiency.

3. Adjusted Profit and loss Method Under it the forecasted profits are adjusted after adding the cash inflows and deducting the cash outflows in order to adjust the estimated profit on cash basis.

4. Percent of Sales Method It assumes that certain balance sheet items vary directly with sales. Thus the ratio of a given balance sheet item to sales remains constant. The firms needs in terms of the percentage of annual sales envisaged in each individual balance sheet items are expressed. This relationship between the sales and working capital may be expressed in the following three ways:

(i) as number of days of sales (ii) as turnover and (iii) as percentage of sales

5. Operating Cycle Method Operating cycle is the period that a business enterprise takes in converting cash back into cash. It has the following four stages: (i) The raw material and stories inventory stage; (ii) The semi- finished goods or working-in-progress stage; (iii) The finished goods inventory stage; and (iv) The accounts receivable or book debts stage. Each of the above stage is expressed in terms of number of days of relevant activity and requires a level of investment to support it. The sum total of these stage-wise investments will be the total amount of working capital of the firm.

CLASSIFICATION OF WORKING CAPITAL

(A) On the basis of concept

1. Gross Working Capital- it is represented by the total current assets. 2. Net Working Capital-it is the excess of current assets over current liabilities.

(B)

On the basis of periodicity of requirement

1. Fixed or Permanent Working CapitalIt represents the part of capital permanently locked up in the current assets to carry out the business smoothly. This investment in current assets is of the permanent nature. It increases as the size of the business expands. Examples of such investments are investments required to maintain the minimum stock of raw materials, work in progress, finished products, loose tools and equipments. It also requires minimum cash balance to be kept in reserve for the payment of wages, salaries and all other current expenditure throughout the year.

The permanent subdivided into:

fixed

working

capital

can

again

be

 Regular Working Capital It is the minimum amount of liquid capital required to keep up the circulation from the capital from cash to inventories, to receivable and again to cash. This includes sufficient minimum bank balance to discount all bills, to maintain adequate supply of raw materials etc.

Reserve Margin or Cushion Working Capital It is the excess capital over the needs or regular working capital that should be kept in reserve for contingencies that may arise at any time. These contingencies include rising prices, business depression, strikes, special operations such as experiments with new product etc.

Variable Working CapitalVariable working capital changes with the increase or decrease in the volume of business. It may also be subdivided into (a) seasonal (b) special working capital.

(a)Seasonal Variable Working Capital The working required to meet the seasonal liquidity of the business is seasonal variable working capital.

(b)Special Variable Working Capital It is that part of the variable working capital which is required for financing special operations such as extensive

marketing campaigns, experiments with products methods or production, carrying of special job etc.

or

DETERMINANTS OF WORKING CAPITAL Nature of business: Working capital requirements of a firm or company are basically influenced by the nature of business. Trading and financial firms have a very small investments in fixed asset but require a large sum of money to be invested in working capital. Some manufacturing and construction firms also have to invest substantially in working capital and a nominal account in fixed assets. The working capital requirements are nominal because they have only cash sales and supply services and not products.

Mecon is basically a service providing company so it may only need a nominal amount of working capital for carrying out its functioning. Market and demand condition: Sales of product & services are the important factor in determining the working capital needs of a firm. Generally a substantial amount of current assets have to be employed before growth takes place to support enlarge scale of operations. But the sales depend on the demand conditions. Firms may experience seasonal & cyclic fluctuations in the demand for their products & services. These business variations affect the working capital requirements of the firm, especially the temporary working capital requirements. Mecon has experienced ups and downs in the demand of its services, so it adopts different strategies for determining the working capital requirements in the boom period or during the upswing of the demand, the firm generally resort to substantial borrowing. On the other hand when there is a decline in the level of inventories then debtors will also fall. Most of the firms thus follow a policy of level of production irrespective of the seasonal changes in demand order to utilize its resources to the full extent. This is also called as variable production policy. Technology & production policy: Non-manufacturing firms, service and financial enterprises do not have a manufacturing cycle or inventory conversion cycle. A firm may adopt a variable production policy, thereby varying its production schedules in accordance with changing demands. The production policy will differ from company to company depending on the circumstances of the individual company.

Credit policy: The credit policy of the firm affects the working capital by influencing the level of debtors. A liberal credit policy without rating the credit worthiness of customers will be detrimental to the firm and create a problem. A high collection period will create a problem of : slack condition will prompt everyone of tying of large funds in debtors.