GTPL - Loss Analysis


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  • To
    Mr. Manoj Gupta. CEO.

    Dear Sir,

    Please note that this is false commitment made By Mr. Kush Kumar as he is now unable to give us payment, Please check the account status. He is like to cheat the money of our small concern. as he had asked us to give us his order percentages of 5% of the order value, Our office staffs had noted this. He had send us many orders from drive shafts to fan assy. and did not lift the materials from our works as we are not ready to pay his percentages and as we had quoted the price much cheap as advised by Mr. Kush Kumar. Also he had made False Test reports and certificates of this Gear box and valves order. He had not check the materials at our works and told us he will approve the materials on extra percentages to him and took away the materials from our concern by sending a representative Mr. Sharma as the order was on Ex-works basic.

    Please note I had lend Rs. 2 Lack amount money from the market by depositing my Fix-deposits to make out this job work. I have to pay per monthly interest of the amount. So please note that what hard time i had to face now a days.

    Since the order was on Ex-work basic why should you send us the road permit? Mr. Kush Kumar had not send us any road permit and and he is making false statement not to give us our payment as he had used this money some where else at his uses.

    Our concern is much older and till date none of our customers had cheated money or made bad remark against us like this Mr. Kush Kumar intentionally .

    He had made a cheat fund at your concern and making harassment intentionally to us.

    On this view please note the above matter and kindly send us our balance payment.

    This is for your kind information's.

    Thanks & regards,

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GTPL - Loss Analysis

  1. 1. Gactel Turnkey Projects Limited
  2. 2. Brief ProfileGactel Turnkey Projects Limited is a GammonGroup Company founded in 2006. It was constitutedto cater specifically to National and Internationalrequirements of Cooling Towers and cooling systems.The Company has the technical expertise and financialback-up by Gammon India Limited.Products of GTPLAir Cooled Condensers and Heat ExchangersFRP Package Cooling TowersIndustrial Construction and Customer ServicesPultruded FRP Cooling Towers
  3. 3. Market StructureMarket Structure is Oligopolistic since there are few majorplayers in the market providing homogenous services. Concentration ratio – 4 firm concentration ratio is more than 60%. Concentration Ratio 4 8 12 16 20 31 71.01 82.94 90.27 95.41 98.46 100 Herfindahl Index – Herfindahl Index is 0.305 Out of the 31 companies Gactel Turnkeys Limited ranks 27 in terms of sales turnover.
  4. 4. Total Revenue and Total Cost TR, TC Curve 100 88.13 84.3 80 70.32 64.32 60 TR 40 TC Net Profit 20 20.32 18.63 -1.69 -3.83 0 -6 2007 2008 2009 2010 -20Company total revenue is less than total cost for the lastthree years so company is in loss.
  5. 5. Reason for LossesP & L Statement Analysis• The revenue from the sale of goods not adequate to meetthe expenses Total Expenses as a Year TR Expenses percentage of Revenue 2008 18.69 20.58 110% 2009 64.40 81.49 126% 2010 84.38 88.50 105%• Raw Material Expenses as a percentage of Sales increaseddrastically Raw Material Raw Material Expenses Year Sales Expense as a percentage of Sales 2008 18.63 4.92 26% 2009 64.32 43.15 43% 2010 84.3 35.78 36%
  6. 6. Reason for LossesP & L Statement Analysis• The profit generation was barely enough to meet the interestburden Year PBIT Interest Paid 2008 2.69 3.59 2009 5.24 9.42 2010 7.9 10.32
  7. 7. Reason for LossesAnalysis of Cash Flow• Borrowing in 2010 was 21 times as that of 2009 Proceeds from borrowing Increase in Year (in Rs Cr) borrowing 2009 8.13 21 times 2010 169.46• Interest burden due to borrowing has also increased toRs 10.31 crore in 2010 from Rs 9.65 crore in 2009• Net Cash flow from Investing activities is -3.27 in 2009and -1.26 in 2010 which is negative
  8. 8. Reason for LossesAnalysis of Cash Flow• Net Cash Flow from Operating Activities in 2009 is -0.23 Crore that means operation is generating negative cash flow in this year• Net Cash Flow from Operating Activities in 2010 is 4.73 Crore• It can be concluded that Company is not able to generate positive cash flow on regular basis.
  9. 9. Reason for Losses Financial Ratios Analysis In Rs Crore 2008 2009 2010 Debt 89.47 80.04 71.92 Assets 128.05 123.58 85.11 Interest payments 10.32 9.42 3.59 EBIT 7.9 5.24 2.69 Debt to Asset ratio 0.7 0.65 0.85 Interest coverage 0.77 0.56 0.75
  10. 10. Reason for Losses Financial Ratios Analysis Debt to Asset ratio: This ratio measures the % of total assets financed with debt. For example, debt assets ratio of 0.85 indicates that 85% of the companys assets are financed with debt. Generally, higher debt means higher financial risk. Interest coverage ratio: This ratio measures the no. of times a companys EBIT could cover its interest payments. Higher ratio offers greater assurance that the company can service its debt from operating earnings.
  11. 11. Conclusions & SuggestionsCompany should continue its operations as there are greatopportunities for growth which is visible from the following data Year Year Growth Rate 2008 540 % 2009 245 % 2010 47 %However following points should be taken care of during operations• The company should put a check on its Expenses, as expensesalone in all these years are more than Total Revenue as explainedabove•Check on Raw Material Expenses should be put as Raw MaterialExpenses as a percentage of sales is also continuously increasing.
  12. 12. Conclusions & Suggestions• With control of expenses Net Cash Flow from operating activitieswill also improve• Aggressive sales promotions• Borrowing should be controlled in order to reduce the tax burden
  13. 13. Thank You !!!