ACKNOWLEDGEMENT My first regard is to almighty God, it was my trust and belief on him, which enable me toembark upon this task, move on the righteous path and recede the realm of facts. So success islock and hard is the key. My training place is AREVA T&D India Ltd. Naini, Allahabad,immensely helped me to utilize my knowledge practically. I express my heartfelt thanks to Mr.Manoj RAI (GENRAL MANAGER ALLAHABAD) who helped me to carry out this project.Under his Guidance and blessing I was able to fulfill the requirement of my University.I would also like to thanks Mr. Amit Srivastav (COST CONTROLLER) and Mr AnshulMehrotra (PSS DEPARTMENT) for his most precious contribution and help in this project .I am very much thankful to other staff members of “AREVA T&D NAINI “ without their help Iwould not be able to finish this project . In last I am thankful to all my friend and my parents who provide me all his experienceand encourage me constantly to complete this project. VIKASH OJHA MBA (Finance) SIMCA (ALLAHABAD)
OBJECTIVES An objective is the most important part of a summer training project report. The objectiveis the bull’s eye, which a trainer has to hit. The objective determines the path on which a trainerhas to walk on, and help him/her by not deviating from the path.The objective of this project report is to provide knowledge about “Financial ratio and workingcapital analyses” and its improvement in AREVA T&D Naini, Allahabad.The main motto of this project is solving the following purposes: • FINANCIAL RATIO • WORKING CAPITAL RATIO
COMPANY PROFILEWhat is the origin of AREVA name? AREVA was created in 2001. When it was announced, on 30th November 2000, the CEAindustries, COGEMA, Framatome ANP and FCI were to merge, a French business dailycompared the future structure of the company to “a Cistercian abbey that weds perfectsymmetry to great dignity”. This gives company the idea as they began the search for new name, of looking at alist of such edifices to see if one of their names suited their purpose. They wanted a simplename, one that phonetically pleasant and easy to pronounce and one that sounded modern asopposed to fashionable, one that stirred the imagination. Their inspiration came from the region of Avila in Northern Spain, location ofArevalo Abbey. Its name, minus one syllable, became AREVA.
AREVA, WORLDWIDEAreva is a French public multinational industrial conglomerate that deals in energy, especially innuclear power. The parent company is incorporated under French law as a société anonyme (publiccorporation). The French State owns more than 90%. Areva is just a name, inspired by ArevaloAbbey in Spain. The real name of the company is S.A. des Participations du Commissariat àAtomique.With manufacturing facilities in 43 countries and a sales network in more than 100, AREVA offerscustomers reliable technological solutions for CO2-free power generation and electricitytransmission and distribution. Areva is the world leader in nuclear power and the only company tocover all industrial activities in this field. Areva’s 65,000 employees are committed to continuousimprovement on a daily basis, making sustainable development the focal point of the group’sindustrial strategy. The company is engaged in nuclear power generation and transmission &distribution of electrical energy. It is the only company with a presence in each industrial activitylinked to nuclear energy: mining, chemistry, enrichment, combustibles, services, engineering,nuclear propulsion and reactors, treatment, recycling, stabilization, and dismantling. It is the worldleader in nuclear power and the only company to cover all industrial activities in this field. Arevaspecializes in infrastructure.AREVA, The Global specialist in energy & transport infrastructure is in the business of providingquality solutions & system design. AREVA is the government organization of France. It acquiredthe Transfer & Distribution division of ALSTOM, a private organization of France in 2004. Itacquired the Naini division of Alstom in September 2005. The organization is World leader in
energy business. It is No.1 in the entire nuclear cycle. It is No.3 in electricity transmission anddistribution. AREVA: A RECOGNIZED LEADERSHIP World leader in the energy business 1. No.1 in the entire nuclear cycle 2. No.3 in electricity transmission and distribution Company’s Mission 1. Innovate to contribute to ever cleaner, safer and economical CO2-free power generation and electricity transmission and distribution. Company’s 2011 Objectives 1. Achieve one-third of the world nuclear market and a €5Bn sales revenue 2. Deliver a double digit operating margin 3. Reach a significant position in CO2 free production systemsAreva WayThe AREVA way represents AREVA core beliefs, values and aspirations. It illustrates a visionstructure that guides the thoughts and actions of AREVA people in attaining the ultimate goal ofbecoming No.1 AREVA. It stipulates the way in which the goal is realized AREVA’s principles"Enable everyone to have access to ever cleaner, safer and cheaper energy"
HISTORY OF AREVA T&D125 YEARS OF HIGH PERFORMANCEAREVA T&D’s leading position in today’s energy market follows over 125 years of pioneeringinnovation, technological expertise and unwavering commitment to quality. From our initial
Creation in 1878 to company growing worldwide presence today, AREVA T&D has gone fromstrength to strength.1878 :Creation of Societe Alsacienne De Construction Mecanques (SACM) in France, predecessor ofAREVA T&D1918 :Creation of English Electric Company Limited (Later known as GEC) in the UK.1928 :SACM merges with Thomson-Houston, forming ALSTHOM SA.1983 :ALSTHOM SA acquiers Compagnie Electro-Mecanique(CEM).1986 :Acquisition of Sprecher and Schuh’s high and medium voltage activities.1988 :Acquisition of the Relays and instrument transformer divisions of Schlumberger Industrie.Merger with General Electric Company (GEC) to create GEC-ALSTHOM, later known asALSTOM.
1996 :Acquisition of Allgemeine Electricitats-Gesellschaft(AEG).1998 :Acquisition of CEGELEC T&D.2003 :Four joint ventures in China2004 :ALSTOM T&D joins the AREVA group, to form AREAV T&D.2006 :Acquisition of the high-voltage activity of the RITZ Group.2007 :Acquisition of Passoni & Villa, manufacturer of high voltage bushings. Acquisition of VEIPower distribution S.P.A.’s medium-voltage activities in Italy.2008 :Acquisition of the Finish company Nokian Capacitors Ltd., manufacturer of power systemcomponents, such as capacitors.
The AREVA group is organized around a Supervisory Board, an Executive Board andan Executive Committee assisted by the Corporate Departments. These bodies supervise and pilot the group operations, divided into four divisions organized as business units. With manufacturing facilities in 40 countries and a sales networkin more than 100, AREVA offers customers reliable technological solutions for CO2-free powergeneration and electricity transmission and distribution. Company is the world leader in nuclearpower and the only company to cover all industrial activities in this field. Our 58,000 employeesare committed to continuous improvement on a daily basis, making sustainable development thefocal point of the group’s industrial strategy. AREVA’s businesses help meet the 21st century’sgreatest challenges: making energy available to all, protecting the planet, and acting responsiblytowards future generations.
SIMPLIFIED LEGAL ORGANIZATION CHARTOPERATIONS:AREVA has three operation divisions:1. AREVA NC2. AREVA NP3. AREVA T&D
1- AREVA NC: World leader in the nuclear fuel cycle AREVA NC, a wholly owned subsidiaryof the AREVA group, is an industrial group active in the energy sector offering utilities all overthe world a full range of products and services for nuclear power generation. From uraniummining, conversion and enrichment through spent fuel reprocessing and recycling. AREVA NChas expertise in every business related to uranium processing (mining, conversion, enrichment,and used fuel treatment and recycling) and to nuclear facility cleanup and dismantling. With some 6000 metric tons of natural uranium production per year representing around15% of world production, AREVA NC is a world leader in natural uranium production. Societiedes Mines de Jouac operated the last uranium mine in France. The mine was shut down in 2001after the reserves were mined out. Today, AREVA NC operates mines in Niger, Canada andKazakhstan. To maintain its market position and replace its reserves, the company continues toexplore for uranium, mostly in Canada, Niger and Central Asia. Applying the know-howacquired in uranium exploration and mining, AREVA NC successfully diversified into gold, inparticular is Sudan, Australia and France. In addition, AREVA NC has an equity investment inEramet, a mining and metallurgy company nickel mines, and in Eramet’s subsidiaries Comilogand Eramet Manganese, specialized in manganese mining and transformation respectively. The group is the third ranked producer in uranium production and controls 20% of itsresources with 250000 metric tons of long term uranium resources, 80000 metric tons of mediumterm resources and140000 metric tons of reserves ready to be mined enabling it to sustain andincrease current production levels representing 14% of world production. Considering therenewed interest in nuclear power, AREVA plans to double production by 2012.
2-AREVA NP is headquartered in Paris (France) with main subsidiaries in the United States andGermany. AREVA has a 66 percent and Siemens a 34 percent stake in the company. AREVANP is an AREVA group company dedicated to the design and construction of nuclear powerplants and research reactors, engineering, instrumentation & control, modernization maintenanceand repair services, components manufacture and supply of nuclear fuel. AREVA NP has a totalworkforce of 14200 employees and is active in Eastern and Western Europe, North and SouthAmerica, Asia and Africa. As a committed leader in the development and growth of nuclear power, AREVA NPoffers experience, R&D and unparalleled innovation and expertise in engineering, major projectmanagement, fuel, equipment and services supply for all reactors technologies, primarily forPWRs and BWRs. Serving as Original Equipment Manufacturer (OEM) AREVA NP has built about 100 nuclear plants in 11 countries that provide about 30% ofthe world’s total installed power capacity and its experienced resources remain focused on thelocal needs of individual clients, wherever in the world they may be. AREVA NP’s priority it toprovide the best solutions to meet challenges faced by electrical utilities worldwide. Thecompany further improves plant performance, reduces operating costs and extends plant lifetimeand thus helps the customers power the world with safe, clean and cost-effective nuclear energy. AREVA NP Energy Business is organized into four divisions covering the nuclear powercycle and electricity transmission and distribution:• Fuel sector (AREVA Front-End Division)• Plants sector (AREVA Reactors and Services Division)
• Nuclear Services sector (AREVA Reactors and Services division)• Equipment sector (AREVA Reactors and Services division)
3-T&D DIVISION:The AREVA T&D division supplies products, systems and services for electricity transmissionand distribution. They are used to regulate, switch, transform and dispatch electric current inelectric power networks connecting the power plant to the final user. AREVA T&D products and
solutions play an essential role in electricity network reliability, quality and safety. The divisionscustomers are electric utilities as well as the oil, mining and metals, wind energy, paper andglass, transportation, and power engineering industries. This division consists of thefour following business units:(A) PRODUCTSThe Products business unit designs, manufactures and delivers a complete range of productscovering every stage of electric power transmission and distribution. The business unitsspecialized equipment is used for:• high voltage power transmission (52 kV-800 kV): conventional equipment, insulatedsubstations, instrument transformers and power transformers;• medium voltage primary and secondary power distribution (3 kV-52 kV): compact transformersubstations, distribution transformers, circuit breakers, switchgear, engine starting cells andlightning arrestors.Substation control and safety.The business unit operates production units in 25 countries on six continents. The group servesmore than 30,000 customers around the globe. The key strengths of the Products business are itsresearch and development expertise, its understanding of changing customer requirements,quality management and optimized production site operation.
(b)SYSTEMS:The Systems business unit offers turnkey projects and grid management systems. Customers turnto the Systems business unit for substation engineering experience, electric power supply systemexpertise, command of advanced technologies, and project management know-how.The business units main customers are power companies and industrial groups that use largequantities of electricity.The unit offers:• high voltage and medium voltage substations;• power electronics for direct-current substations and systems to increase existing grid capacityand quality;• operating systems for transmission and distribution networks;• electric power market management systems.The Systems business units key strengths are technology and applications expertise, particularlyin power electronics, know-how in real-time electric current management, and partnerships withsuppliers.(c)SERVICES:In addition to product-related services, the Services business unit provides network managementservices, operating support, and maintenance services to power companies. The business unitoffers medium and long-term contracts covering the entire life cycle of its customers electricpower systems. These contracts allow power companies to optimize equipment costs andperformance while ensuring operator safety.
The Services business unit offers a wide range of services:• power system engineering, consulting, training, and transmission and distribution expertise;• long-term maintenance contracts for products and substations;• repair services, spare parts and product start-up services;• electrical substation upgrading and refurbishing;• information technology support for grid management systems and safety/control products.The key strengths of the Services business unit are a keen understanding of its customers and theT&D products they use, the ability to supply products and related services, quick turnaroundtimes, and project management expertise.(d)AUTOMATION:The Automation business unit answers to demand for fully integrated energy managementnetworks. The business is built around three main activities: automation and informationsystems, automation products and application and support services. The business unit suppliesequipment and information technology systems, including computerized power managementsystems used to operate power transmission networks, determine customer needs and regulatethe flow of power from power plants to the distribution network.In particular, the business unit provides Information Systems solutions for deregulated energyindustry applications, large information technology control systems (SCADA) andtelecommunications equipment for power lines. The Automation business unit also providesequipment for power networks and substation protection, control and monitoring.
AREVA T&D INDIA LIMITEDInnovation, Growth, Leadership…AREVA T&D INDIA LIMITED is a subsidiary of AREVA, France. It came to India byacquiring the worldwide T&D sector of Alsthom, France. AREVA T&D INDIA LIMITED,formerly known as ALSTOM LIMITED was originally incorporated as General ElectricCompany of India (GECI) in 1911. GECI was amalgamated with the English Electric Companyof India (EEI) in April 1993 and the name was changed to GEC Alsthom India. The companywas promoted by GEC Alsthom, Netherlands, which has interests in GEC Alsthom Triveni. Thename of the company was changed from Alstom Limited to Areva T&D India Limited from 23rdSeptember, 2005.AREVA T&D currently employs over 4600 people in India across 16 Manufacturing Units and22 Sales Offices. The company has been a trend- setter in the field of high voltage switchgearand was the first to build the 765 KV sub- station in India with National Thermal PowerCorporation Limited (NTPC) at SIPAT, Chhattisgarh. Around 70% of power flow in India’stransmission grids is managed by AREVA T&D’s Automation solutions.Areva T&D India divides its business in verticals like, Systems, Products, Automation, andServices. • ProductsCompany’s Products segment comprises of Power Transformers, Instrument Transformers,Circuit breakers and Medium Voltage Switch Gears. The company is present in products of upto765 KV. Areva T&D mainly focuses on Medium Voltage (MV) to Extra High Voltage (EHV)products.EHV Products: 132 KV and aboveHV Products: 66 KV and Above
MV Products: 33 KV and BelowLV Products: 11 KV and Below (Not present) • SystemsUnder this segment the company undertakes turnkey projects like building substations andswitchyards. The company is also present in high-end areas like 765 KV substations, HVDCSubstations and Gas Insulated Substations. • AutomationAutomation segment comprises of hardware and software for managing energy flows from LoadDispatch Centres. It includes Supervisory Control and Data Acquisition (SCADA) used formanaging smooth energy flows from a centralized location. • ServicesThis segment comprises services for network planning and after sales services for products andsystems business.
An Integrated Offer- 4 Division To answer its customers’ needs, AREVA’s development strategy is based on a balancedpresence in Europe, North and South America and Asia. For its nuclear operations, the groupoffers its customers’ valued solutions throughout the cycle: 1. Front-End Division: This is the first division of AREVA which includes uranium ore exploration, mining, concentration, conversion and enrichment; nuclear fuel design and fabrication. 2. Reactors & Services Division: This division includes design and construction of nuclear reactors and other non co2 emitting power generation system; supply of products and services for nuclear power plant maintenance, upgrades and operations. 3. Back-End Division: This division offers solutions for the management of used fuel. It includes treatment and recycling of used fuel; cleanup of nuclear facilities; nuclear logistics. It is organized into five business units: Nuclear Site Value, Recycling, Logistics, Clean-up and Engineering. 4. Transmission & Distribution (T&D) Division: This division includes transmission and distribution operations which provide products, systems, automation and services designed to transport and distribute electricity from the power plant to the final user.
EXPANSION OF AREVA T&D INDIA LIMITEDHOSUR: The unit located at Bangalore is moved to a new site at Hosur to achieve the following objectives: To build products up to Extra High Voltage (765 kV) and Ultra High Voltage (1200 kV) for the emerging needs of India’s transmission grid. To build extra capacities to take care of both domestic and export market. . .VADODARA: AREVA T&D India has inaugurated its largest manufacturing site at Vadodara Four world class industrial units on one site Delivering extra and ultra high voltage (EHV & UHV) transformers AREVA T&D India has inaugurated four new factories at a Greenfield site in Vadodara,State of Gujarat on March 30, 2008. These four factories are amongst a total of eight advancedtechnology manufacturing facilities that are being opened by AREVA on three sites across India. Shri Narendra Modi, Chief Minister of Gujurat inaugurated the new facility, situated nearKotambi village, in Vadodara, in the presence of Mr. Philippe Guillemot, Chairman and CEO ofAREVA T&D, and other senior company representatives and customers. The four factories atVadodara together cover an industrial surface of 350,000 sqm of which more than 69,000 sqm isthe covered surface. These factories are: 1. Power Transformer factory with the largest testing capabilities in India: In addition to AREVA’s existing power transformer factory at Naini (State of Uttar Pradesh), the new factory in Vadodara will manufacture power transformers up to 1200kV AC and 800kV DC, supporting India’s growing needs in UHV AC & UHV DC network developments.
2. The second Distribution Transformer factory in India: Vadodara also manufactures Distribution Transformers, which adds additional capacity to the existing facility at Naini. This new factory will improve geographical coverage across India, ensuring the close proximity to customers. The Vadodara factory will supply oil-immersed distribution transformers up to 30MVA. 3. Primary Distribution Equipment: The Primary Distribution factory manufactures outdoor and indoor vacuum circuit breakers and air insulated switchboards up to 36kV. Modern design circuit breakers will require less welding and contain some 40% less raw materials, to help reduce CO2 emissions and electricity used during production. 4. Secondary Distribution Equipment: The Secondary Distribution factory manufactures gas insulated switchgear to 36kV for distribution networks, MXR reclosers for overhead lines, and prefabricated substations. The factories incorporate world class manufacturing equipment and facilities, latest generation high tech equipments: high speed core cutting line; semi automatic winding machines, and an impulse generator 1000. In the power transformer factory, handling facilities for weights over 500 tons are sized for the production of the largest power transformers for Ultra High Voltage applications.PADAPPAI:AREVA T&D inaugurates India’s first Gas Insulated Substation manufacturing facility atPadappai Site to also manufacture ultra high voltage (1200 kV) switchgear AREVA T&D India has inaugurated its latest state-of-the-art High Voltagemanufacturing site at Padappai, near Chennai on March 31, 2009. The new site is home to threespecific factories, manufacturing gas insulated substations, circuit breakers and disconnectingswitches. These new factories are amongst a total of eight that are being inaugurated on threesites in Vadodara, Padappai and Hosur by AREVA T&D.
At Padappai, Thiru Arcot Veeraswamy, honourable Minister for Electricity, governmentof Tamil Nadu inaugurated the new facility, during an official ceremony, which took place in thepresence of Philippe Guillemot, Chairman and CEO of AREVA T&D, together with invitedguests and customers.With its three factories, the Padappai site is AREVA T&D’s hub facility in the region for highvoltage, and fully equipped to meet India’s demand for extra and ultra high voltage equipment(up to 1200kV). It has an industrial surface of 58,000 sqm, with 20,300 sqm of coveredworkshop areas. 1. Gas Insulated Substation (GIS) factory: In line with AREVA T&D’s localization strategy to become closer to its customers, Padappai is India’s FIRST manufacturing facility for Gas Insulated Substations (GIS). AREVA T&D is the world leader in GIS, including in India. At Padappai, AREVA will manufacture GIS up to 400kV. 2. Circuit Breakers factory: The second of the Padappai factories manufactures and tests live tank circuit breakers from up to 1200kV. AREVA is already the first company to manufacture in India circuit breakers with full spring operating mechanisms and thermal blast chambers. As a global leader in the circuit breaker product segment and number one in India since 1996, AREVA T&D is bringing its advanced know-how to what will be a manufacturing centre of excellence. 3. Disconnecting Switches factory: The third factory manufactures disconnecting switches from up to 1200kV. Benefiting from AREVA T&D’s worldwide leadership position in Disconnectors, is the AREVA’s first disconnector factory in India.
HISTORY OF AREVA AT NAINI, INDIAHistory of AREVA at Naini is not so long. As AREVA has taken over Naini T&D division fromALSTOM in 27 September 2005 as well as the following division of India:• Kolkata.• Chennai. AREVA T&D NAINI WORKS The Naini site is one of AREVA T&D’s successful and highly developed powertransformer production plants. Globally, we have factories and technical centers dedicated topower transformers in nine countries spread across four continents. Incorporated in 1957, theNaini transformer factory has more than 50 years of excellent operating experience inmanufacturing power and distribution transformers. Before 23rd September 2005 it was known as Alstom Limited. It is located 12 km fromAllahabad in the state of Uttar Pradesh (about 600 kms from New Delhi & 800 kms fromKolkata). The unit is spread over a total are of 87276 meter square providing employment tonearly 700 people. The unit has the certification of IMS. The unit is engaged in the production ofpower transformers, distribution transformers and MV product lines. It is the only unit in Indiaproducing the oil base transformers. The Naini factory pioneered in the manufacture of shell typefurnace transformers in India and holds “Numero Uno” position in arc furnace duty transformers.
AREVA Naini has supplied the largest number of transformers in this category to its customersall over the countryThe range of products at Naini Works The product range includes power transformers of all types up to 400 kV class seriesand distribution transformers.• Distribution and Power Transformers up to 400 kv class• Dry type Mining Transformers• Single phase track side transformers for railways• Rectifier transformers• Shunt reactors of coreless and gapped core types• Current limiting series reactors• Sealed type air/glass cushioned transformers• Air furnace transformers• Furnace transformers for calcium carbide, Ferro silicon, Ferro manganese, Ferro chrome• Drycol breathers• On load tap changers• Radiators suitable for transformers• Auto booster transformers
At present Naini Works has the capacity to manufacture 6000 MVA Power Transformerannually.EXPORTS Zimbabwe Brazil China Myanmar Argentina Australia Bangladesh Bhutan Malaysia Nigeria Kenya Iran Columbia Croatia Greece Malawi Nepal Uganda Vietnam Canada France UK Libya Tanzania
Major Customers in India• All State Electricity Board• Power Grid Corporation of India• National Hydro Power Electric Corporation• Kolkata Electric Supply Corporation• Ahmedabad Electricity Company• New Delhi Municipal Corporation• Tata Iron and Steel Company (TISCO)• Bhilai Steel Plant• Indian Iron and Steel Company• Bharat Heavy Electricals Limited (BHEL)• Kribhco• National Fertilizers Limited• ACC• Birla Cement• Century Cement• L&T• Western Collieries• Eastern Coalfield• Santa Eastern Coalfield• Oil and Natural Gas Corporation• Indian Oil Corporation Ltd• HPCL
• Cochin Refinery• Reliance Textiles• ABB• TC Engineers• POIL• Engineers India Ltd• Indian Railways• HINDALCO• Bihar Caustic and Chemicals Limited• Ashok Leyland• Damodar Valley Project• GRIDCOMarket competitionMajor Competitors in Indiaa) ABBb) BHELc) CGLd) EMCOe) BBL
f) Siemensg) Crompton Greavesh) TELKi) L&Tj) SCHINDERk) ECEl) T&RThe power transformer-manufacturing unit at Naini works, Allahabad, India belongs to theTower Transformer Business that is a part of the power Transmission & Distribution Sector(T&D), which was part of the ALSTOM.The transformer division is further divided into two:• Power Transformers.• Distribution Transformers.
THE PRODUCT POWER TRANSFORMERS, NAINI WORKS:The Naini unit plant was set up in 1957 and today it can provide upto 400kv transformers. Atpresent, the units for power transformer in India are located at one place, Naini, Allahabad.The competitors:Some if its prominent competitors are BHEL, TELK, CGL, ABB, SIEMENS and EMCO andothers.The range:AREVA Transformer Unit at Naini offers the following rage of products:• Power transformers up to 315 MVA 3 phase & 600 MVA 3 phase bank, 400 kV class.• Single-phase trackside Transformer for Railways.• Transformers for Locomotives.• Scott connected Transformer up to 200 kV.• Rectifier Transformers.• Shunt reactors of coreless and gapped core type.• Current limiting series reactors.• Arc furnace transformers.The unit has a well-maintained private railway siding, which allows consignments weighingupto180 tones to be dispatched by Rail wagon. Road dispatches are affected through special lowbed trailers that are provided by dedicated transporters and can handle consignment weights upto 250 tones.
The efficiency of transformers is rated between 96% to 99% if the user takes the proper care, 25years is generally is the normal transformer life.The range of products at Naini WorksOther feature:At AREVA T&D India Ltd, Naini Works the goal is customer satisfaction. To give after salesservice the attention is deserves Naini units’ as a separate division staff with highly competentand experienced technical personnel supported by a countrywide network. This divisionundertakes site erection, testing, commissioning of all types of Transformers up to 400 kV class.Response within 24 hours is always the objective and the unit has established its performance inthis area of operation.
Quality assuranceThe Quality systems of AREVA T&D India Ltd, Naini works, transformer units at Naini arecertified as ISO 9001. Design Control Procedure, Contract reviews, Vendor control andincoming materials and acceptance all follows the documented system. The transformers aremanufactured in accordance with standard quality plan or the job specific quality plan approvedby the customer. To ensure the customer’s specifications are met, each order is treated as aproject and allocated to a dedicated team responsible for complete execution. Critical inspectionprocedures are applied at all stages of manufacture and detailed inspection records aremaintained. In addition, internal audits are conducted at regular intervals to ensure strictcompliance to Quality Systems.Design Activities:The computer-aided design is completely integrated in the AREVA T&D India, Ltd. NainiWorks, transformer business structure and allows exact specifications to be met. The CAD centeralso facilitates manufactured to meet delivery commitments.Advanced Computer Design & Draught employs state-of-the-art software like ‘SLIM’ forElectro-magnetic field analysis and ‘FEM’ to optimism Electrical, Mechanical & Thermalcharacteristics. This ensures on errors-free, highly reliable and economic product delivered ontime.Research & Development:One of the major challenges at AREVA T&D Naini works Research and Development where“future always means now” is reduction of losses. On-Load losses cause the efficiency of the
transformer to drop. To reduce these losses, several possibilities are examined, includingimprovement in magnetic circuits and reduction of Eddy current linked to the leakage flux. There is continuos rapport with other AREVA transformer units across the globe inorder to be a world class manufacturer and keep up-to-date With the latest technology and designpractices.
Corporate Social responsibility (CSR)In line with sustainable development commitments, the company is committed Corporate SocialResponsibility (CSR). The units of the company provide proactive support for local projects ofsocial and cultural interest, with continued active participation from employees. The units ofCompany are committed to developing harmonious relations with the stakeholders. The societalprojects include long term projects, which are initiated with the financial and organizationsupports from AREVA Foundation.Key actions undertaken during the year in line with the CSR initiatives were: (Naini units) Institutional training imparted to 320 engineering students. Knowledge management conference was conducted by Motilal Nehru National Institute of Technology (MNNIT) with plant visits and interactive session to professors and faculties of various colleges from 16 states. Support to the National Symposium on “Environment Pollution” organized aby Allahabad Agriculture Institute. Promoting local cultural activities such as Triveni Mahotsav, jhanda Diwas and Roop kahta that helped in community building. Supported the Allahabad Consumer Protection Society in their education for poor programme. Donated Desktop Computers to the Kalpana Chawla Memorial Trust, Allahabad. Contributed to and supported the National Sports Acadamy, Khel Gaon, Allahabad organizing celebration 2008.
Sustainable Development & Continuous improvement: (Naini unit) Naini unit received the Allahabad Managerial Association Excellence Award in recognition to its growing performance over the years and following exemplary managerial practices for the growth of the organization, employees and communities. Testing Transformer with working voltage class of 7500 KVA was successfully commissioned on DTI unit. The unique testing transformer reduces the test configuration changeover overtime from 2 hours to 5 minutes. Company’s philosophy on Corporate Governance Customer’ satisfaction Profitability Responsibilities Integrity Excellence Sincerity Parternership
SWOT ANALYSISSTRENGTH • HUMAN RESOURCEThe employee strength of the Company stands at around 3,500 as on December 31, 2007. Duringthe year under review, hiring quality work force and retention of talent posed a serious challengeto the Company, and this was carefully addressed. AREVA`s HR team is sufficiently geared upto meet these challenges. • TECHNOLOGICALLY STRONGAREVA is fully equipped to face the technological challenges of the T&D market and hasvarious solutions in its portfolio to address most of the segment. • BRAND VALUEThe brand value of AREVA T&D is well recognized in the market. • EXPANSIONCapacities of the manufacturing plants are being continuously increased to meet the increaseddemand of the market. • STRONG COMMUNICATION NETWORKOne-on-one meetings with the investor community and web based interactive sessions to discussthe progress and performance of the Company.
• STRONG FINANCE AND ACCOUNTING SERVICESFinance Shared Service Centre at Chennai, in each location, the accounting and controlling teamis being segregated with clearly defined responsibilities. The accounting team emphasizes strictimplementation of various accounting standards with the implementation of Internal Controls tofoster best practices. The controlling team concentrates on profit optimization actions to boostprofitability growth. Both accounting and controlling processes are aimed at becomingbenchmarks in world class finance.WEAKNESS • Even after adapting new IT enabled processes there are number of paper works carried out in AREVA which is a bottle neck in its functioning. • AREVA has heavily experienced staff but they are not well versed with IT applications. • The prime customers for the company are SEB in the MV switchgear segment. They dont pay the dues on time making the company lose interest cost on the due amount. • The production process has to wait for a number of different approvals.
OPPORTUNITY • The increasing requirement of High Voltage Substations provides a good opportunity for the growth of our Turnkey Systems, Products, Automation and Service businesses. • Power Grid is also planning to scale up the voltage level of the Transmission Network in the country to 800kV DC by 2010 and to 1200kV AC by 2012. This will provide a significant opportunity for companies engaged in the manufacture of high technology equipment. • Areva`s upcoming manufacturing facilities at Varodara, Hosur and Padappai will enable Areva to meet the needs of the growing market in the future. • Areva is the first to have launched the construction of a local manufacturing facility for High Voltage Gas Insulated Switchgears.THREATS • A delay in funding, results in a further delay in the award of projects. During the previous year, we observed a delay of several months for projects earmarked under World Bank financing. Several large 765 kV substations & HVDC are to be implemented in the 11th plan. A delay in such projects would have an impact on the planned growth of AREVA. • A rise in raw material costs, especially metals may put a strain on margins. The price of copper, the main raw material required by your Company has increased substantially during the last year.
• Accelerated Power Development and Reform Program 2 is an important investment scheduled during the 11th plan, but not cleared by the Government. This may impact the growth of the Distribution segment business.• Future IPOs of private sector power projects, if not completed on time, may affect the growth of the T&D business.• Further, any unforeseen slowdowns affecting the growth of the Indian economy, may adversely affect investments in the Power sector.
OBJECTIVES OF THE STUDYFollowing are the objectives of the present study: • To provide a financial report that gives a complete picture of the financial state of the company. • To analyze the financial statement of the company and give a proper suggestion for improvement. • Interpret the financial data. • Interpret and analyse the ratios of the company. • Interpretation and suggestion for the working capital management of the company through important ratios and graphs.RESEARCH METHODOLOGYResearch process consists of series of the action or step necessary to effectively carry outresearch and desired sequencing of these steps- - Research Design Collection of data Analysis of dataResearch design“A Research Design is the arrangement of conditions for collection and Analysis ofData in a Manner that aims to combined relevance to the research purpose witheconomy in Procedure”For the collection of data, I interviewed with the people of the organization. Before going for anyinterview with any of the in charge of different departments of the company I used to prepare alist of questions in according to fulfill my purpose of collecting data.I visited to different departments of the company to collect information, which helped me tounderstand the process and the nature of the organization.
Data collection Sources of collecting data: Company SAP Interview with Officers & Employees Purchase order Sale contract Invoices Other record files Company site Annual report 2008,2009Analysis of data For the analysis of data I used two types of tools: Financial tools Statistical toolsFinancial tools The different financial tools I have used in the project are ratios analysis, trend analysis,comparative analysis and common size analysis. With the help of these tools I analyzed differentitems of the balance sheet and profit and loss account of the company.Statistical ToolsI have used bar graphs, tables, and pie chart to show the trend of the company and to comparethe financial data.
LIMITATIONS OF THE STUDYDuring the summer training, the researcher faces many problems. Some of them, which I facedduring my summer training, are mentioned as follows: The Topic was new to me and so broad to cover all the fields in just 2-3 months. One of the constrain in the completion of project was the busy environment of theorganization. All the necessary data were not available to me due to company’s confidential matter.
FUNCTIONS OF DEPARTMENT AT AREVA T&D 1- EXCISE & SALES TAX DEPARTMENT-The LevyExcise duty is the single largest source of revenue for central government in India. Authority toimpose excise duty by government has been given by article 246 of constitution and at entry no-84 of list no i( union list) and entry no 51 of list no ii(state list).under this authority constitutionbifurcates alcoholic liquors opium and narcotics from other goods and duty is levied on theseproducts by state government called as state excise duty. Central excise is a tax on act ofmanufacture or production while sales taxis a tax on act of sale of goods. For manufacture of allthe goods duty is levied by central government called central excise.At present the rate of excise duty for most of the product is @8% + educational Cess @ 2% ofED + secondary & higher educational Cess @ 1% of ED except some items such as petroleumproducts where the rate of ED is still 14%.RegistrationEvery manufacture / First and second stage dealer of dutiable excisable goods desiring to issueCenvetable invoices is required to take a central excise registration. However if a manufacturer isSSI and his yearly clearance is less than Rs. 90 lacs then he is not require to get himselfregistered with central excise (Rule 9 of Central Excise Rules 2002).Procedure for RegistrationBefore starting production or dealership to issue cenvatable invoice, an application in prescribedformat (annexure -1) with PAN no., detail of goods to be manufactured and retail of premises hasgot to be submitted to Asstt./ Dy. Commissioner of Central Excise. A registration certificateallocating PAN based 15 digit registration no shall be issued within 7 days.Even if there is some change in information furnished or change in constitution of the firm, theregistration will not change. However the change has got to be intimated to issuing authoritywithin 30 days of the change.If the factory is required to be closed down or business is not carried, registration certificateshould be surrendered to the Superintendent of Central Excise.
The Excise duty is payable on “transaction value” which means the price actually paid orpayable for the goods, when sold , and includes in addition to the amount charged as a price, anyamount that the buyer is liable to pay to, or on behalf of, the assesses, by reason of, or inconnection with the sale, whether payable at the time of the sale or at any other time, including,but not limited to, any amount charged for, or to make provision for, advertising or publicity,marketing and selling organization expenses, storage, outward handling, servicing, warranty,commission or any other matter; but does not include the amount of duty of excise, sales tax andother taxes, if any, actually paid or actually payable on such goods.Invoice- Under rule 11 of Central Excise Rules2002, The excisable goods will generally be removedfrom a factory under cover of an INVOICE. The invoice shall be serially numbered in triplicateand shall contain the registration number, address of the concerned Central Excise Division,name of the consignee, description, classification, time and date of removal, mode of transportand vehicle registration number, rate of duty, quantity and value, of goods and the duty payablethereon.Before making use of the invoice series, in each financial year the serial numbers of the sameshall be intimated to the Superintendent of Central Excise having jurisdiction.Excise Procedure- Removal of Goods, Payment Of Duty & Assessment As per rule 6, assesses shall himself assessthe duty payable on the excisable goods and under rule 12 submit following returns:- ER-1- Monthly return to be submitted by tenth of every month for production , clearance,duty payable and duty paid for previous month( annexure-3). ER-4- Annual financial information statement to be submitted by 20th November ofevery year (Annexure-4). RR-5- Annual information regarding principle inputs to be submitted by 30th April ofevery year (Annexure-5) ER-6- Monthly return to be submitted by 10th of every month for receipt andconsumption of principle inputs for previous month. (Annexure-6)
Role of IEEMA (Indian Electrical and Electronics Manufacturer’s Association)-IEEMA issue prices of raw materials every month. The price quoted is based on the cost of rawmaterial and labor cost as on the date of quotation. In case of any change in price, then suppliergive additional bill on the name of price variation. It is a liability of customer to pay that bill. Itmay increase or decrease. In both cases details must be given. Price variation is calculatedaccording to following formulae-P=Po/100 (13+23 C/Co+28 ES/ESo+7 IS/ISo+7 IM/IMo+7 TO/TOo+15 W/Wo)Where,P= Price payable as adjusted in accordance with above formulaePo= Price QuotedCo=Average LME settlement price of copper wire bars, two months prior to the date of tenderingESo=C&F price of CRGO, one month prior to the date of tenderingISo=Wholesale price index no. for iron and steel, three months prior to the date of tenderingImo=Price of insulating material, one month prior to the date of tenderingTOo=Price of transformer oil, one month prior to the date of tenderingWo=All India average consumer price index no. for industrial workers as published by laborbureau , Ministry of Labor, Government of India, three months prior to the date of tendering
Production of Transformer Naini Unit- DISTRIBUTION TRANSFORMER(11KV-132KV) POWER TRANSFORMER(132KV-400KV)MAJOR REQUIREMENT3M MAN MACHINE MATERIALMAJOR COMPONENTS STEEL-(A)CRGO (COLD-ROLLED GRAIN ORIENTED SILICON STEEL)- CRGO is 100% importedfrom Germany, UK, US, Russia, etc..(B)MILD STEEL- Major suppliers are SAIL, TATA, ESSAR, etc. COPPER- It is good conductor of electricity , so coils of transformer are made fromcopper. Ratio of copper in transformer is 30%. Copper is purchased as raw materials and send itto sub vendors and they give it as our need. INSULATOR- Paper Oil Wood TRANSFORMER OIL BUSHING etc.In transformer paper and oil are used for insulation
MANUFACTURINGDifferent steps are involved in manufacturing are shown in this flow chart- Core cutting Coil winding Core building Dummy coil assembly Active part assembly Tanking Testing Dispatch
MANUFACTURINGManufacturing plays vital role in supply chain system. It completes with the help of many stepsand these steps are interrelated to each other. In manufacturing one step act as supplier for otherstep and other step act as customer for previous step so, manufacturing proceed in a specificmanner. Manufacturing of specific job will be completed in two to three month. Differentmanpower involves in different steps of manufacturing. Various steps of manufacturing aredescribe as follows-Core cutting and core assembly-The basic raw material is core. It is made up of Cold RolledGrain Oriented steel (CRGO), also known as lamination. CRGO purchased from A.K.SteelCorporation Butler U.S.A. Laminations are cut according to design given by customer. Thesesheets are of 0.23 to 0.35mm in thickness. These laminations are assembled in such a mannerthat there are no gaps between joints of two consecutive sheets. The entire assembly is done on aframe with the help of a tie rod and core bolts. The entire core assembly is lifted and is used;mainly Meter cut line is used for giving specific shape.Coil winding- The winding are design to ensure high short circuit withstand capability, uniformsurge voltage distribution and effective heat dissipation are critical to transformer reliability.Winding are made on layer setting winding machine vertical as well as horizontal machines areavailable. A solid cylinder former of predetermine diameter and length is used as base forwinding disc and layer winding are manufacturing according to design requirement. Completeset of low voltage, high voltage and tap winding are assembled at this stage. Moisture content ininsulating material of winding assembly is removed by oven (winding autoclave) and beforeassembly winding are individually pressed in a hydraulic press to required size.Core and coil assembly- The component produced in coil winding and core assembly stage is thentaken into core coil assembly stage. The core assembly is vertically placed with the foot platetouching a special assembly platform. The top yoke of the core is renamed and the winding areassembled with core. Special core is given to electrical connections of leads and tap changes. Allthe necessary joints are made secured by applying special patented crimping technology carriedout by trained personnel.
Vacuum drying- The active part can absorb moisture during assembly process; therefore, a finaldrying process is carried out in a completely automated vapors phase drying plant. This ensurethrough and uniform drying resulting in a clean and dry core coil assembly which ensure longtransformer life.Tanking – The core coil assembly after drying and the tank supplied by the fabricationdepartment are taken into tank up stage. C ore coil assembly is placed into tank after completetrimming and tightening procedure and properly locked up. Fitting like drain values, high voltageand low voltage bushing, conservator, oil level indicator and explosion vent are fitted on thetank.INSPECTIONBasically three types of inspection carried out by customer are as follows –Pre-inspection- Pre-inspection done, when raw material purchased from supplier or vendors.In-process inspection- This type of inspection is carried out during manufacturing or productdevelopment.Final-inspection- This type of inspection is done when product is finally developed and readyfor dispatch.TESTINGTesting laboratory Designed following the most modern concepts of high voltage technologyavailable, in the testing laboratories all transformer and reactors are subjected to the routine testsand measurement specified and accordance with IEC (International Electro-chemicalCommission) Keema, Netherlands and IS (Indian Standard) New Delhi specification. Theseroutine tests may be complemented by type and special tests, which are carried out at thecustomer’s request or as part of an internal sampling procedure to monitor quality on an ongoingbasic.Testing on reactor-Routine test for 400kv class- Resistance Measurement (winding) Magnetizing Current Insulation Resistance Value
Flash Test Partial Discharge Test Reactant Measurement Noise Level Vibration Impulse Test Switching Impulse Test Loss Measurement Test (with ten delta method) Type test- Only one method is used in type test- Temperature Rise TestSpecial tests- Zero Phase Sequence Test (relay trip) Capacitance Test & Delta Measurement Stress Measurement TestMANUFACTURING PROCESSESCORE CUTTINGThe cold rolled, grain-oriented silicon steel (GOS) lamination are cut by microprocessor-controlled slitting and cropping machines with an extremely high dimensional accuracy.CORE BUILDINGCore laminations are carefully assembled and built-up erected on a specially made core buildingplatform, avoiding any unnecessary mechanical stresses.COIL WINDINGSpiral, helical, continuous, intershielded and interleaved disc windings with multiple strands ofcopper conductors are our standard for power transformer.
ASSEMBLY & TERMINAL GEARAfter pre-assembly, the coils are lowered on to the core legs. After top-yoke filling, they areclamped using a hydraulic tool that ensures uniformly simultaneous pressure to secure thewindings. The current carrying joints are made by a fully automatic crimping machine.DRYING & IMPREGNATIONA highly efficient vapor phase drying process, which ensures complete moisture extraction withuniform heating at 120°c for 96 hrs, is used to coils and insulation components. In the presenceof vapor short circuits will happened.TANKINGDuring tanking and final pipe assembly work, bushings and coolers are fitted onto thetransformer to prepare it for testing. Specially design, sophisticated tools and handling equipmentis employed to carry out all final assembly activities.TESTINGThe factory test laboratory is fully equipped to conduct all routine and type tests as per national,international and in-house standards. On request, special tests such as Frequency Responseanalysis (FRA) can also be conducted.PACKING, DISPATCH & DELIVERINGRoad dispatches used special low-bed mechanical / hydraulic trailers provided by dedicatedtransporter to accommodate large consignments.
PURCHASE DEPARTMENT SOURCING:- Sourcing refers to “a number of procurement practices, aimed at finding, evaluating andengaging suppliers of goods and services.” Sourcing in Areva refer to the strategic planning of procurement of the material with bestquality at the best possible rates with best delivery schedules without comprising on Arevavalues and quality. BASIC FUNCTIONS Market analysis Vendor mapping Vendor evaluation Procurement Performance monitering Minimising the vender data base Strategic procurement from soc(CHINA, INDIA, COREA) Rate agreements Vendor development CHALLENGES IN SOURCING Hike in raw material price Availability issue in certain commodities like oil bushing Reduce the customer complaints Quality issues Supplier OTIF(on time in full) Inventry management
TYPES OF PURCHASE ORDER Import P.O.-deals with import Capital P.O.-capex procurement Production P.O.-deals with the bought out items in production Subcontracting P.O.-deals with the processing work on raw material Non production P.O.- deals with the genex procurementBasic terminology in purchase INCO Terms Payment terms Warranty and guarantee Lead timeEarlier designing was done manually but now, in present time it is prepared by target softwares.Designing works before releasing the tender.I S O (INTERNATIONAL SALES ORGANITION) place the Tender in marketingdepartment and marketing department send it to design department for technical analysis andsubsequent preparation of PMS ( Price Make-up Sheet )Designing will be prepared based on the following basic requirement of the customer :1:- M.V.A.(MEGA VOLTAGE AMPERE)RATING2:- VOLTAGE RATIO (220/132/11)3:- PERCENTAGE IMPENDNCE (REDUCE FAULT)(IMPENDNCE MEANCE COMBANITAION OF RESISTANCE AND INDUCTION)4:-TAPS (OLTC, OCTC)5:-CONNECTION TYPE (STAR, DELTA)
This preliminary design as per specification is completed and decides and estimates abouts 80%cost of copper and core. Overall costing depends upon the above analysis of Core and Copper.Preparation of price making sheet and guarantee technical particulars by design department , willtake from two to seven days.Complete set of Tender documents are being submitted to thecustomer for their review and analysis. If being L1, and adhering to the Technical requirement ofthe customer , order will be placed on us. Role of Design Department commences after gettingthe order. They do detail engineering and designing of the job as per the approved GTP. This isthe mutual exercise of the Electrical and the Mechanical Team. Complete drawings in turn willbe send to the customer via Marketing department for their approval/comment. If there is anycomment from the customer , then that comment will be incorporated after discussion andmutual agreement with the customer. After getting the final approval from the customer, Designdepartment releases the drawings to the purchase department for the procurement of the rawmaterial and other long lead items.Planning Department—MAIN RESPONSIBILITIES• Hands on knowledge of Planning , Commercial aspects, Material procurement coordination ,Site management issues• Erection and Commissioning of substation• Site identification and Survey.• Drawings preparation and approvals and coordination .• Forecasting of material required for project.• BOQ of line & substation.• Communicating and coordinating with client & vendors.• Invoicing of supplied material to client.• Daily progress report and gap analysis• Implementing quality and safety plan.• Knowledge of Cable Laying., termination• Statutory documentation• Plant Electrical work execution• Auditing
This position will be responsible for :Management of GIS substation orders from the date of receipt of commercially and technicallyclarified order to the date of final handover to the customer at site.1. Project ManagementSet-up project organisation (team-time-cost) and appropriate action plans. Prepare milestonesand deliverables2.Customer interfaceCommunication with the customer to clarify all technical requirements and delivery deadlinesduring contract implementation.3. Production coordinationInterface with Sourcing, SCM and Production to ensure the timely manufacturing of theequipment in order to meet the contractual deadlines4. Interface with GIS ServiceCoordinate site erection and commissioning with GIS service. Scheduling, resource planningetc.Company DescriptionAREVA T&D is one of the top three global players in Transmission and Distribution of energy.As a world leader in T&D, AREVA provides a complete range of innovative Products, Systemsand Services across whole energy value chain. AREVAs global presence is spread across 160countries with 30000 customers.AREVA T&D India is a subsidiary of AREVA T&D, France. AREVA T&D has a strongpresence in India, with a diverse range of products that include Transformers and CircuitBreakers, Switchgears, Relays and Substations. Control Panels, Vacuum Interrupters, PowerRelays. It also provides turnkey solutions like Transmission Projects, HVDC, and e-BOPprojects, FACTS, SCADA and Power Line Carrier Communication (PLCCs). The Companysautomation solutions manage approximately 70% of the load flow in the country.AREVA T&D India is one of the largest French employers in India, with more than 4,200employees across its various locations
SAP (Systems Applications and Products)SAP was founded in 1972 in Walldorf, Germany. It stands for Systems, Applications andProducts in Data Processing. Over the years, it has grown and evolved to become the worldpremier provider of client/server business solutions for which it is so well known today. TheSAP R/3 enterprise application suite for open client/server systems has established a newstandards for providing business information management solutions.SAP, started in 1972 by five former IBM employees in Mannheim, Germany, states that it is theworlds largest inter-enterprise software company and the worlds fourth-largest independentsoftware supplier, overall. The original name for SAP was German: Systeme, Anwendungen,Produkte, and German for "Systems Applications and Products." The original SAP idea was toprovide customers with the ability to interact with a common corporate database for acomprehensive range of applications. Gradually, the applications have been assembled and todaymany corporations, including IBM and Microsoft, are using SAP products to run their ownbusinesses.In 1973 the SAP R/1 solution was launched. Six years later, in 1979, SAP launched SAP R/2. In1981, SAP brought a completely re-designed solution to market. With the change from R/2 toR/3 in 1992, SAP followed the trend from mainframe computing to client-server architectures.The development of SAP internet strategy with mySAP.com redesigned the concept of businessprocesses (integration via Internet). SAP was awarded Industry Week’s Best ManagedCompanies in 1999.SAP R/3 is arranged into distinct functional modules, covering the typical functions in place inan organization. The most widely used modules are –1. Financials (FI)2. Controlling (CO)3. Human Resources (HR)4. Materials Management (MM)5. Sales & Distribution (SD) and6. Production Planning (PP)SAP R/3 is a client/server based application, utilizing a 3-tiered model. A presentation layer, orclient, interfaces with the user. The application layer houses all the business specific logic andthe database layer records and stores all the information about the system, including transactionaland configuration data. SAP R/3 functionality is structured using its own proprietary languagecalled ABAP (Advanced Business Application Programming). ABAP, or ABAP/4 is a fourth
generation language (4GL), geared towards the creation of simple, yet powerful programs. R/3also offers a complete development environment where developers can either modify existingSAP code to modify existing functionality or develop their own functions, whether reports orcomplete transactional systems within the SAP framework. Thus we deal with the various tasksand activities carried out in sales, delivery and billing. Key processes are-1. Creating Sales Orders-There are various types of orders with which I have to deal such as.a. Domestic Orderb. InterUnitc. Exportd. Price Variancee. Free of Chargef. Repairg. Spare Partsh. Debit Memo Requesti. Credit Memo Request2. Delivery- Delivery consists of four stepsa. Outbound Deliveryb. Pickingc. Packingd. Goods Issue
3. Billing- There is following types of billinga.a. Proformab. Invoicec. Cancellation Documentd. Debit Memoe. Credit MemoThere are specific transaction codes for all the above mentioned transactions such as VA01 forcreating new sales order, VL01N for outbound delivery etc.BILLS PAYABLE & RECEIVABLE-Mode of payment- Cash Cheque Letter of credit Direct paymentNote- In AREVA payment occur through letter of creditLetter of Credit- Letter of credit is most secure instrument available to international traders. It is Acommitment by a bank on behalf of the buyer that payment will be made to the exporterprovided that the terms and conditions have been met, has verified, through the presentation ofall required documents. The buyer pays its bank to render the service. It is useful when reliablecredit information about a buyer is difficult to obtain. It also protects the buyer since no paymentobligation arises until the goods have been delivered as promised.Document Collection- It is a transaction whereby the exporter interests the collection of the payment to theexporter’s bank which sends documents to importer’s bank along with instruction for payments,lading receipt, insurance, bills of entry, etc.
Types of letter of credit- Confirmed Unconfirmed Confirmed Letter-Payment beneficiary bank immediate after submission of documents to the supplier (when thereis no discrepancy in documents) Beneficiary bank send a reimbursement letter to applicant bankMemo send to applicant for acceptance .Within 7 days after issuing a memo by applicant bankwill make a payment without confirmation of applicantAfter material receiptDocument required-(a) Acceptance letter(b) Form AL(c) Original triplicate exchange control copyPAYMENT PROCEDURE –FILLING OF LETTER OF CREDIT APPLICATION FORMAPLICATIONBANK ISSUE A LETTER OF CREDIT BASED ON APPLICATIONONE COPY TO BENEFICIARY TO APPLICANT BANKBENEFICIARY BANK SENT TO SUPPLIERIF SOME AMENDMENT REQUIRE THEN SUPPLIER INFORMED IT TO APPLICANTTHE AMENDMENT LETTER SEND TO BANK AFTER AMENDMENT IT’S SENT TO BENEFICIARY BANK
PAYMENT AGAINST LETTER OF CREDIT (UNCONFIRMED)Payment against letter of creditAfter shipment of materialDocument as per letter of credit to be submitted with beneficiary bankBeneficiary bank sent it to applicant for acceptanceApplicant bank sends a memo to applicant for acceptanceAfter acceptance by applicant(original document releases to applicant by bank)Bank will remit the payment to supplier on due date and debit applicant account on due date Accounts Department(Bills Payable Process)Assume that we have already got customer orderParticulars Quantity (kg) Rate (Rs)Copper ----- ----CRGO ----- ----Transformer oil ----- ----
tank ----- ----Design DeptMaterial requirement Planning(MRP)Purchase Requisition (PR)Purchase Order (PO)Create Sourcing TeamVendorRequisition material check by the factory gate man like- purchase order no., vehicle no., goods,etc.Goods received by store departmentCheckingMIGO entry (assuming that no damage of goods and no insurance claims)Stock A/c Dr. To GR/IR (goods received / inventory received)
Checked by Quality departmentAccount departmentAvailed of CENVATBills ProcessingAccounting – GR/IR Dr To Creditor A/c (payments are made through bank)Payment EFT (Electronic fund transfer)Creditor A/c Dr. To Bank A/c(Bills Receivable process )SalesInvoiceBilling( If delivery instruction received ),6 sheets prepared- 1- Original copy (Customer copy) 2- Duplicate copy to Tranporter 3- Sales tax Department 4- A/c dept. & Excise Dept. 5- Gate Entry 6- Extra copy
Released EntryAccounts Entry – Debtors A/c Dr. To Sales A/c To ExciseDebtor AgeingCash collection instruction by Accounts Dept.
PSS History in India SDS PSS »Naini Naini, 27/07/2010
PSS activity in India 2004 : Reliance tender : 100 PSS – Concrete enclosure won 2004 : Technology transfer from STF – Mistral IND 2005 : Delivery of Reliance & BECIL. 2006 : Last delivery of Reliance and few contracts (200 K€)4 > Titre de la présentation - Date - Références 4 PSS activity in India 2006 : Building of PSS shop floor 2007 : Few orders, Concrete enclosure not adapted to the main market due to specification in steel March 2007 : Sub-PL Prefabricated Substation, action plan to build up the Indian business Dedicated team Development of a new range of product (steel enclosure) Steel enclosure launch (Indian electricity, Elecrama, ISO meeting)5 > Titre de la présentation - Date - Références 5
PSS activity in India 2008 : Official launch of the activity Full Clipper M range of product Commercial promotion Target of Tertiary and Industry segment Promotion of Clipper M in Export through Sub PL Business Dev Sales: 1250 K€6 > Titre de la présentation - Date - Références 6 PSS activity in India 2009 : Execution of big contracts, Industrialisation of the activity Growth in export order : 4,5 M€ Growth in India : 2 M€ mainly in Industry (70% MS) Deep study of the Utility segment, segment mapping and competition benchmark in Q3 New product development launch Capacity extension Sales : 8.6 M€ Hindalco, TISCO, ETDE, BHEL, BEST, Railways, Jusco, Lavasa are list of some customers.7 > Titre de la présentation - Date - Références 7
Unit key elements – PSS Unit Picture Key Data and Figures Site area - NAI: 4818 m² Built-up area: 3387 m² Production area: 2511 m² Outdoor facilities: 1430 m² Capacity : 700 PSS Sales 2009: 8.6 M€ Employees: 44 2009 PSS Indian Sales Utility Main Markets: - Industries 5% - Builders (High End) B&C Inf - Export 26% Export share 2009 : 62%, 2010 : 35% Indus 62% Other 7%8 > Titre de la présentation - Date - Références 8 Product Range India Safe and IEC type tested, adapted to all types of secondary distribution applications, in concrete, metal or GRC light concrete materials Indian special : Utility Clipper PRESTO ALTO A ALTO F ALTO D ALTO L CLIPPER C CLIPPER M MISTRAL CONCERTO ICEBERG CLIPPER MOBILE TETRIS UTILITY PSS9 > Titre de la présentation - Date - Références 9
PSS activity in India 2010 : Full offer and innovation Maintain of the position in Industry with the flexible Clipper M and high quality LV cubicles for Industry : up to 2500 KVA Breakthrough in Utility with cost effective Utility Clipper and LV boards : up to 1000 KVA Innovation with the Tower PSS designed for Utilities : up to 400 KVA Target renewable energy segment : Solar and Wind-farm with GRC Full range available for Export (Target : East Africa and South Asia) OIT : 14400 K€, Sales : 12400 K€, Contr. OI : 1200 K€10 > Titre de la présentation - Date - Références 10
MEANING OF RATIO ANALYSISMEANING:The ratio analysis is one of the most useful and common method analyzing financial statements. Ascompared to other tools of financial analysis, the ratio analysis provides very useful conclusions aboutvarious aspects of the working, like financial position, solvency, stability, liquidity and profitability of anenterprise.The term “Ratio” refers to the numerical or quantitative relationship between twoitems/variables.NATURE:Ratio analysis is a powerful tool of financial analysis. In financial analysis, a ratio is used as abenchmark. For evaluating the financial position and performance of a firm. The relationshipbetween two accounting Figures, expressed mathematically, is known as a financial ratio. Ratioshelp to summaries large quantities of financial data and to make qualitative judgment about thefirm’s financial performance.This relationship is an index or yardstick, which permits a qualitative judgment to be formedabout the firm’s ability to meet its current obligations. It measures the firm’s liquidity .Thegreater the ratio, the Greater the firm’s liquidity and vice-versa. The point to note is that a ratioreflecting a quantitative relationship helps to form a qualitative judgment. Such is the nature ofall financial ratios.
ROLE OF RATIO ANALYSIS:1: Aid in financial forecasting—Ratio analysis is very helpful in financial forecasting. Ratiosrelating to past sales, profits and financial position form the basis for setting future trends.2: Aid in comparison—With the help of ratio analysis, ideal ratio can be composed and they canbe used for comparing a firm’s progress and performance. Inter firm comparison or comparisonwith industry averages is made possible by the ratio analysis.3: Financial solvency of the firm—Ratio analysis indicates the trends in financial solvency of thefirm.Solvency has two dimensions- long-term solvency & short-term solvency. Long term solvencyrefers to the Financial viability of a firm. Short-term solvency is the liquidity position of the firm.4. Communication value—Different financial ratios communicate the strength and financialstanding of the form to the internal and external parties. They indicate the overall profitability ofthe firm.5. Other uses— Financial ratios are very helpful in the diagnosis and financial health of a firm.They highlight the liquidity, solvency, profitability and capital gearing etc. of the firm. They areuseful tool of analysis of financial performance.
USERS OF RATIO ANALYSIS1 Trade creditors are interested in firm’s ability to meet their claims over a very short period oftime.2. Suppliers of long-term debts are concerned with the firm’s long-term solvency and survival.They analyze the firm’s profitability over time, its ability to generate cash to be able to payinterest and repay principal and the relationship between various sources of funds.3. Investors, who have invested their money in the firm share , are most concerned about thefirm’s earning.4. Management of the firm would be interested in every aspect of the ratio analysis. It is theiroverall responsibility to see that the resources of the firm are used most effectively andefficiently, and that the firm’s financial condition is sound. FINANCIAL RATIOS AND UTILITYA ratio may be defined as a fixed relationship in degree or number between two numbers. In finance,ratios are used to point out relationships that are not obvious from the raw data. Some uses of ratios arefollowing: -1. To compare different companies in same industry. Ratios can highlight the factors associated with successful and unsuccessful firms. They can reveal strong firms and weak firms, overvalued undervalued firms.2. To compare different industries. Every industry has its own unique set of operating and financial characteristics. These can be identified with the help of ratios.
3. To compare performance in different time periods. Over a period of years, a firm or a industry develop certain norms That may indicate future success or failure. If relationship changes in firms data over different time periods, the ratio may provide clues and trends of future problems.INTERPRETATION OF THE RATIOS • The interpretation of ratios is an important factor. The inherent limitations of ratio analysis should be kept in mind while interpreting them. • The impact of factors such as price level changes, change in accounting policies, window dressing etc., should also be kept in mind when attempting to interpret ratios. The interpretation of ratios can be made in the following ways. 1. Single absolute ratio 2. Group of ratios 3. Historical comparison 4. Projected ratios 5. Inter-firm comparison
ADVANTAGES OF RATIO ANALYSISFor expressing trends: financial ratio are generally used to reveal from the past financialrecords the cost, sales, profits and other important factors .For setting standard : On the basis of various financial ratios of the concerned certainstandards may be established for various economics activities . for e.g. current ratio must be two, or average collection period must not be exceed 60 daysFor showing changes: Financial ratios are helped in highlighting the various changes infinancial activities during different time period . it also helps in effective communication andspeedy implementation.For effective control: Ratio analysis are used have a proper control over performance andcost. They are great assistance to locate the weak spots in the business so that management canpay attention to those spots will in time and take remedial measures.For comparing efficiency: Inter firm and intra firm comparison are made on the basis ofaccounting ratios to compare the performance of the enterprise with that of the firm and industry.By comparing the operational results during various time period of the concern , trends can beestablished for future forecasting.
LIMITATIONS OF RATIO ANALYSIS“A single ratio in itself is meaningless –it does not furnish a complete picture” KennedyAccounting ratios ignore qualitative factors : Accounting ratios are calculated fromthe figures expressed in monetary terms . the conclusions derived there from may be misleadingand confusing. Limited use of single ratio: One single ratio used without reference to other ratio may produce misleading results. While forming an opinion about the financial soundness n operating efficiency of an enterprise the combined effect of the various ratios must also be taken into account so that results are correctly interpreted. Price level changes : changes in the price level may adversely affect the comparison of figures for different years . this limitations of ratios will be much highlighted when we calculate ‘sales to fixed assets ratio’. Effect of personal ability and basis of the analyst : Ratios are based on accounting data. The analysis and interpretations are directly effected with the ability and carefulness of the analyst himself.
GUIDELINES OR PRECAUTIONS FOR USE OF RATIOS:The calculation of ratios may not be a difficult task but their use is not easy. Followingguidelines or factors may be kept in mind while interpreting various ratios are; • Accuracy of financial statements • Objective or purpose of analysis • Selection of ratios • Use of standards • Caliber of the analysis IMPORTANCE OF RATIO ANALYSIS • Aid to measure general efficiency • Aid to measure financial solvency • Aid in forecasting and planning • Facilitate decision making • Aid in corrective action • Aid in intra-firm comparison • Act as a good communication • Evaluation of efficiency • Effective tool
CLASSIFICATIONS OF RATIOSThe use of ratio analysis is not confined to financial manager only. There are different partiesinterested in the ratio analysis for knowing the financial position of a firm for different purposes.Various accounting ratios can be classified as follows: Liquidity ratio Leverage ratio Activity ratio Profitability ratioLIQUIDITY RATIOS:It is extremely essential for a form to be able to meet its obligations as they become due.Liquidity ratios measure the ability of the firm to cover its current obligations. Liquidity ratios byestablishing a relationship between cash others current assets provide a quick measure ofliquidity. A firm should ensure that it does not suffer from lack liquidity, and also that it is nottoo much liquid. The failure of a company to meet its obligations, due to lack of sufficientliquidity, will result in bad credit image, loss of creditors confidence, or even lawsuits resultingin the closure of the company. A very high degree of liquidity is also bad, as idle assets earnnothing. The firm’s funds will be unnecessarily tied up in current assets. Therefore it is necessaryto strike a proper balance between liquidity and lacks of liquidity.Important Liquidity Ratios are: a) Current Ratio b) Quick RatioCURRENT RATIOCurrent Ratio is defined as the relationship between current assets and current liabilities. Thisratio is also known as "working capital ratio". It is a measure of general liquidity and is mostwidely used to make the analysis for short term financial position or liquidity of a firm.CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITIES
The two basic components of this ratio are:1) Current Assets2) Current LiabilitiesCurrent assets include cash, marketable securities, bills receivables, sundry debtors, inventories,work in progress and prepaid expenses. Current liabilities include outstanding expenses, billspayable, sundry creditors, bank overdraft, accrued expenses, short term advances, income taxpayable, dividend payable. Year 2009 2008 2007 Current Ratio 1.342 1.307 1.368 Table 1 1.38 1.37 1.36 1.35 1.34 1.33 2009 1.32 2008 1.31 2007 1.3 1.29 1.28 1.27 CURRENT RATIO Fig 1Interpretation: A relatively high current ratio is an indication that the firm is liquid and has theability to pay its current obligations in time and when they become due. On the other hand, arelatively low current ratio represents that the liquidity position of the firm is not good and thefirm shall not be able to pay its current liabilities in time. A ratio equal to or near to the rule ofthumb 2:1 i.e current assets double the current liabilities is considered as a standard or normal orsatisfactory. We can easily see from the above diagram that in all the three years i.e. 2007, 2008and 2009, the current ratio is below ideal standard.
QUICK RATIOLiquid Ratio is also termed as "Acid Test Ratio" or "Liquid Ratio". An asset is said to be liquidif it can be converted into cash with a short period without loss of value.QUICK RATIO = LIQUID ASSETS___ CURRENT LIABILITIESThe two basic components of this ratio are:1) Liquid Assets2) Current LiabilitiesLiquid asset includes marketable securities, cash & bank, debtors and bills receivables. Year 2009 2008 2007 Liquid Ratio 1.112 1.074 1.16 Table 2 1.18 1.16 1.14 1.12 2009 1.1 2008 1.08 2007 1.06 1.04 1.02 LIQUID RATIO Fig 2Interpretation: A high ratio is an indication that the firm is liquid and has the ability to meet itscurrent or liquid liabilities in time and on the other hand a low liquidity ratio represents that thefirms liquidity position is not good. As a rule of thumb ratio of 1:1 is considered to besatisfactory.It can be interpreted from the above diagram that in all the three years i.e. 2007, 2008 and 2009,the quick ratio is above than ideal standard.
LEVERAGE RATIOThe term solvency refers to the ability of a concern to meet its long term obligation. The longterm indebtedness of a firm includes debenture holders.Financial institutions provide medium and long term loans and other creditors sale goods oninstallment basis. The long term creditors of firm are primary interested in knowing the firm’sability to pay regular interest on long-term borrowings, repayment of the principal amount at thematurity and the security of their loans.Accordingly, long term solvency ratios indicate a firm’s ability to meet the fixed interest and costand repayment schedules associated with its long-term borrowing.The following ratios serve the purpose of determining the solvency of the concern. Debt-Equity Ratio Debt to Total Fund Ratio Proprietary Ratio Fixed Assets to Proprietor’s Fund Ratio Capital Gearing RatioDEBT EQUITYRATIOThis ratio expresses the relationship between capital contributed by creditors and that contributedby owners. It expresses the degree of protection provided by the owners for the creditors. Thehigher the ratio, the greater the risk being assumed by creditors. A more highly leveragedcompany has a more limited debt capacity.DEBT EQUITY RATIO= DEBT EQUITYWhereas, Debt includes Debentures, Mortgage Loan, Bank Loan, Loan from financialinstitutions and Public Deposits etc. and Equity includes Equity Share Capital, Preference ShareCapital, Share Premium, General Reserve, Capital Reserve, Other Reserves and Credit Balanceof P&L Account.
Year 2009 2008 2007 Debt Equity Ratio 0.885 0.6471 0.1842 Table 3 1 0.9 0.8 0.7 0.6 2009 0.5 0.4 2008 0.3 2007 0.2 0.1 0 DEBT EQUITY RATIO Fig 3 Interpretation: Though the ideal standard is 2:1, in all the three year company has this ratio much below than its ideal standard which means there are very less external equity in comparison to internal equity. DEBT TO TOTAL FUND RATIO This ratio is a variation of the debt equity ratio and gives the same indication as the debt equity ratio. In this ratio, debt is expressed in relation to total funds, i.e. , both equity and debt. It is calculated as under: DEBT TO TOTAL FUND RATIO = DEBT______ EQUITY + DEBT Year 2009 2008 2007Debt To Total Fund Ratio 0.46971 0.3929 0.1556 Table 4
0.5 0.45 0.4 0.35 0.3 2009 0.25 2008 0.2 2007 0.15 0.1 0.05 0 DEBT TO TOTAL FUND RATIO Fig 4Interpretation: Generally, debt to total funds ratio of 0.67:1 is considered satisfactory. A higherratio than this is generally treated as indicator of risky financial position from the long- termpoint of view. While with the Areva this ratio is much below than ideal standards in all the threeyears i.e. 2007, 2008 and 2009.PROPRIETORY RATIOThis ratio indicates the proportion of total funds provided by owners or shareholders. It iscalculated as under:PROPRIETARY RATIO = EQUTIY____ EQUITY +DEBT Year 2009 2008 2007Proprietary Ratio 0.5302 0.607 0.8443 Table 5
0.9 0.8 0.7 0.6 0.5 2009 0.4 2008 0.3 2007 0.2 0.1 0 PROPREITARY RATIO Fig 5Interpretation: This ratio should be .33:1 or more than that. In all the three years this ratio isabove its ideal standard which means that the firm is less dependent on external sources offinance.FIXED ASSETS TO PROPRIETORS FUND RATIOThis ratio indicates the extent to which proprietors fund are sunk into the fixed assets.FIXED ASSET TO PROPRIETORS FUND RATIO = FIXED ASSET____________ PROPRIETORS FUND (i.e. NET WORTH) Year 2009 2008 2007Fixed Asset To Proprietor Fund Ratio 1.027 0.892 0.417 Table 6