[1]

SUMMER INTERNSHIP PROJECT REPORT

ON

INTERARCH BUILDING PRODUCTS PVT LTD

Submitted in partial fulfillment of requirement of Bachelor of Business

Administration (B.B.A) General

BBA Vth SEMESTER (B) (E)

BATCH 2012-2015

Submitted to: Submitted by: Amit Kumar Mishra

Name of guide: Ms.Anshika Goel Name of Student: Amit Kumar Mishra

Designation: Asst. Professor Enrollment no.:09824501712

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

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iNNOVATE iNITIATE iNTEGRATE

[3]

ACKNOWLEDGEMENT

A lot of effort has gone into this training report. My thanks are due to many

people with whom I have been closely associated.

This report bears the imprint of many people. Right from the experienced staff of

Interarch Building Products Pvt Ltd., to the staff of Jagannath International

Management School, New Delhi without whose support and guidance I would

have not got the unique opportunity to successfully complete my internship in this

esteemed organization. I take this opportunity to express my deep gratitude to all

the employees of Interarch Building Products Pvt Ltd., Noida. I am gratified to

Mr. Mahesh Verma (VP, Operations) for their earnest coordination owing to

which, I had the leg-up of undertaking the internship at the prominent

organization, Interarch Building Pvt ltd. Also I am indebted for the rich guidance,

knowledge and suggestions provided by my guide, Mr. Rakeshwar Nath Mishra

(AVP, Accounts) who took sincere efforts and illustrated the financial concepts of

this organization, with his vast knowledge in the field, which helped me in

carrying out my internship. Last but not least, I also thank all those people whom

I met in the company during my internship and helped me to accomplish my

project in the most efficient and effective manner.

Date:

Place: New Delhi

Submitted by: Amit Kumar Mishra

[4]

CONTENTS

Description Page No.

Acknowledgement (i)

Contents with page no. (ii)

List of figures (iii)

Executive Summary 6

Certificate of Completion 10

Introduction to topic- Financial Analysis of Interarch Building Products 11

History 14

Board of Directors 20

Capabilities 23

Design & Engineering 25

Quality Control & Safety 26

International Standards 27

Manufacturing Facilities 28

Building Divisions 30

Project Management

Advantages

Challenges

Government Role

Principal Participants in PEB

Integrated Business Process Model

39

45

47

48

49

50

Research Methodology 52

Financial Analysis 56

Findings & Inferences 48

Recommendations and Conclusion 89

Limitations 96

Bibliography 98

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List of Figures and Charts

S No.

Description

Page no.

(1) Total Expenditure during FY 2012-2013 57

(2) Liquidity Ratio

Current/ Quick Ratio

Altman Z score

Du Pont Analysis

Accounts Receivable to Working Capital

Inventory to Working Capital

Long Term Liabilities to Working Capital

Sales to Working Capital

59

60

61

62

63

64

65

(3) Activity / Efficiency Ratio

Accounts receivable Turnover

Days Sales in Receivable

Operating Cycle Days

Sales to Assets

Depreciation Expenses to Assets

Accumulated Depreciation to Assets

Fixed Assets to Equity

Free reserves per Share

Inventory Turnover

Average Raw Materials Holdings

Operating Cash Flow to Sales

67

68

69

70

71

72

73

74

75

76

77

78

(4)

Profitability Ratio

Gross Profit

Operating Profit Margin

Rate of Return on Assets

Operating Profit per share

Return on Capital Employed

Return on Equity

79

80

81

82

83

84

(5) Coverage/ Financial leverage ratio

Debt to Assets

Debt Equity ratio

Long Term Debt Equity ratio

Debt Coverage Ratio

85

86

87

88

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EXECUTIVE SUMMARY

The project work is pursued as a part of BBA (General) Curriculum at “Jagannath

International Management School, Delhi”. It is undertaken as a traineeship at

Interarch Building Products Pvt Ltd.

In structural engineering, a pre-engineered building (PEB) is designed by a

PEB supplier or PEB manufacturer, to be fabricated using best suited inventory

of raw materials available from all sources and manufacturing methods that can

efficiently satisfy a wide range of structural and aesthetic design requirements.

Within some geographic industry sectors these building are also called Pre-

Engineered Metal Building (PEMB) or, as is becoming increasingly common due

to the reduced amount of pre-engineering involved in custom computer-aided

designs, simply Engineered Metal Building (EMB).

Historically, the primary framing structure of a pre-engineered building is an

assembly of I-shaped members, often referred as I-beams. In pre-engineered

building, the I beams used are usually formed by welding together steel plates to

form the I section. The I beams are then field-assembled (e.g. bolted

connections) to form the entire frame of the pre-engineered building. Some

manufacturers taper the framing members (varying in web depth) according to

the local loading effects. Larger plate dimensions are used in areas of higher

load effects.

Other forms of primary framing can include trusses, mill sections rather than

three-plate welded, castellated beams, etc. The choice of economic form can

vary depending on factors such as local capabilities (e.g. manufacturing,

transportation, construction) and variations in material vs. labour costs.

Typically, primary frames are 2D type frames (i.e. may be analysed using two-

dimensional techniques). Advances in computer-aided design technology,

materials and manufacturing capabilities have assisted a growth in alternate

forms of pre-engineered building such as the tension fabric building and more

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sophisticated analysis (e.g. three-dimensional) as is required by some building

codes.

Cold formed Z- and C-shaped members may be used as secondary structural

elements to fasten and support the external cladding.

Roll-formed profiled steel sheet, wood, tensioned fabric, precast concrete,

masonry block, glass curtain wall or other materials may be used for the external

cladding of the building.

In order to accurately design a pre-engineered building, engineers consider the

clear span between bearing points, bay spacing, roof slope, live loads, dead

loads, collateral loads, wind uplift, deflection criteria, internal crane system and

maximum practical size and weight of fabricated members. Historically, pre-

engineered building manufacturers have developed pre-calculated tables for

different structural elements in order to allow designers to select the most

efficient I beams size for their projects. However, the table selection procedures

are becoming rare with the evolution in computer-aided custom designs.

While pre-engineered building can be adapted to suit a wide variety of structural

applications, the greatest economy will be realized when utilising standard

details. An efficiently designed pre-engineered building can be lighter than the

conventional steel building by up to 30%. Lighter weight equates to less steel and

a potential price savings in structural framework.

Interarch Building Products Pvt Ltd commenced its operations in 1984, and

pioneered the high-end metal interior products market in India. Interarch has

been the first mover in India, right from metal ceilings, to blinds, metal roofing to

pre-engineered building.

Today, 30 years later, Interarch is a leading turnkey Pre-Engineered Steel

Construction Solution provider in India with integrated facilities for design,

manufacture, logistics, and supply and project execution capabilities for pre-

engineered steel building. Interarch holds a significant part of market share in

India for metal building systems. Interarch works in close association with

industry leaders in project development and construction, providing support to

critical industrial, commercial and infrastructure projects.

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Interarch is also the parent company of Interarch Infrastructure, a new division of

the company that caters specifically to heavy steel structure and large

infrastructure projects in the country. Interarch has been instrumental in being a

knowledge leader and industry knowledge spokesperson when it comes to steel

building manufacturing and construction and runs various mindshare

communities for the influencers in the industry.

Interarch Building Innovators and Interarch Certified Builders bring together two

critical kind of influencers and partners of the industry, providing them a

community to share ideas. While Building Innovators brings together the best

architects and engineers, as well as end users to share their expertise, the

Certified Builder program started by Interarch helps in promoting better

execution, safety and quality in construction.

Interarch is also a certified green building partner and all our products comply

with LEED and IGBC norms. Look for the I AM Green logo on our building

Today, Interarch works with industry majors to incorporate its products and

services for design and construction of new facilities. Interarch works in close

association with industry leaders in project development and construction,

providing support to critical industrial, commercial and infrastructure projects.

With its rich heritage of over twenty five years, Interarch Building Products Pvt.

Ltd. pioneered high-end metal building products in India and is proud to be the

country’s leading turnkey pre-engineered metal building Company. With its

extensive integrated design, manufacture, supply and execution capabilities,

Interarch holds a significant part of market share in India for metal building

systems. Interarch Building Products started off as a company which completely

changed the face of Indian metal interior products market with its premium quality

metal suspended ceilings. Interarch, thereafter, immediately caught hold of a

substantial market share and expanded its product range with the introduction of

window coverings under the same brand name. Pioneering engineered

TRACDEK® Metal Roofing and Cladding products and pre-engineered steel

construction solutions, Interarch has set new standards of quality, trust and

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workmanship with many large scale and one-of-a-kind projects to its credit.

Achievements

With over 25 years of experience, Interarch is the only truly Indian company in

the industry providing integrated design, engineering, manufacturing and

execution of metal building solutions to clients.

* More than 5000 projects executed in India.

* Over 3,000,000 m2 of roofing & cladding installed per year.

* Largest clear span building executed in India with more than 80 m2 of column

free space.

* Largest multi-storey pre-engineered building projects executed for Reliance

Corporate Park, Mumbai , in less than 6 months.

* Largest single contract executed for pre-engineered steel construction with

single order values exceeding USD 25 million.

* Leading preferred supplier of construction solutions to all the top automotive

industry players in India, including Tata Motors, GMI, Skoda Auto, Bajaj, Hyundai

Motors, Fiat and Honda. Completed more than 250,000 m2 of building for Tata

Motors Ace Truck’s Greenfield plant for in Rudrapur, India in less than 8 months.

* Captured more than 250,000 m2 of building for Tata Motors Nano Car Project

in Singur, Marco Polo Bus Project in Dharwad and Nagpur, India.

* First ever “Automotive Paint Shop” constructed using pre-engineered system.

* Single largest building for Fiat, with 80,000 m2 under one roof.

* Over 900 Petrol Pump Outlet Canopies executed all over India for Reliance

Petroleum.

* Largest pre-engineered building structural system for Delhi International Airport

IGI Terminal 3 with 8000 MT of Structural Steel System for the terminal building

as well as over 180,000 m2 of 7-Layer Roofing systems finished in aluminium.

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CERTIFICATE OF COMPLETION

I hereby certify that this is my original work and it has never been

submitted elsewhere.

Project Guide: Ms. Anshika Goel (By Amit Kumar Mishra)

Faculty (JIMS , New Delhi)

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CHAPTER I

INTRODUCTION TO THE TOPIC

India is growing rapidly. Surging with youthful zest and passion, India shines on

the global map. With stories of enterprise, achievement and success, Interarch is

committed to building India on a foundation of Strength, and that too at

unprecedented Speed .Providing security and Safety to over a billion Indians.

Interarch is one of India’s fastest growing building solutions companies, and is

proud to be a part of the great Indian growth story in this landscape of progress

and style. Architects, Interior Designers and Builders in India and trust Interarch’s

sustainable and ready-to-build products for industrial, commercial and residential

applications.

India’s growth is expected to improve in 2014. “India’s growth is expected to

recover from 4.4 per cent in 2013 to 5.4 per cent in 2014, supported by slightly

stronger global growth, improving export competitiveness and implementation of

recently approved investment projects”.

“A pick-up in exports in recent months and measures to curb gold imports have

contributed to lowering the current account deficit. Policy measures to bolster

capital flows have further helped reduce external vulnerabilities ”.Overall growth

is expected to firm up on policies supporting investment and a confidence boost

from recent policy actions, but will remain below trend .Consumer price inflation

is expected to remain an important challenge, but should continue to move onto

a downward trajectory.

The outlook also estimated that India’s growth rate would increase to 6.4 per cent

in 2015. In 2012, India’s growth rate stood at 4.7 percent. “For India, real GDP

growth is projected to strengthen to 5.4 per cent in 2014 and 6.4 per cent in

2015, assuming that Government efforts to revive investment growth succeed

and export growth strengthens after the recent rupee depreciation”.

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It was expected to grow at 7.6% in 2013 led by an increase in consumption in the

large middle class, a growing labor force and strong rural demand. Rural demand

and the Agriculture sector play an important role in the growth of our economy.

70% of our population lives in rural India and consumes more than 40% of

consumer products and durables. Agricultural sector continued to perform well

and contributed 13.9% to India’s GDP. Food grain production at 250 million MT

this year was the highest ever and disposable income in rural areas increased.

Government initiatives for inclusive growth an employment guarantee gave an

impetus to greater productivity, higher disposable income and spending in rural

India .The Indian industrial sector faced high input costs due to inflation and high

interest rates. Depreciation of the Indian Rupee against the US Dollar

significantly increased cost of imports and freight due to higher fuel prices. Even

in such global uncertainty and volatility, India’s strong fundamentals made her

one of the fastest growing economies in the world.

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Economic indicators show that growth in the PEB industry is expected to outpace

India’s GDP growth. The Indian PEB industry has shown a healthy growth rate of

around 10% (Y-o- Y). Currently the India industry has greater manufacturing

capability than demand. Therefore, a lot of PEB companies have decided to add

heavy structures and multi-storey building to their portfolio.

Infrastructure and construction segments are fundamental to economic

development and normally grow at twice the rate of GDP. The Indian consumer

prefers better quality building materials and needs faster construction methods

due to fast economic growth, greater disposable income and high exposure to

media. In the construction industry there is rapid migration from conventional

techniques and products. Modern products of superior quality and technology are

being adopted. They enable faster speed, greater strength and higher safety.

Interarch caters to the growing demand of the building and construction industry

with a strong portfolio of products for industrial and commercial applications.

Interarch’s pre-engineered and smart steel building provide superior design,

faster speed and a high degree of certainty for project completion. They are

replacing conventional construction methods for warehouses and factory sheds.

High performance products like access floors, polycarbonate roofing and fixing

accessories are being adopted by builders and contractors. This company offers

a range of ready-to-use high quality products and superior services for the

construction industry. Interarch is proud to be an integral part of the strong Indian

growth story.

[14]

HISTORY

Interarch Building Products Pvt Ltd. is a Private Company incorporated

On 30 November 1983. It is classified as Indian Non-Government Company and

is registered at Registrar of Companies, Delhi. Its authorized share capital is

Rs.100, 000,000 and its paid-up capital is Rs. 75,003,000.

Interarch Building Products started off as a company which completely changed

the face of Indian metal interior products market with its premium quality metal

suspended ceilings. Interarch, thereafter, immediately caught hold of a

substantial market share and expanded its product range with the introduction of

window coverings under the same brand name.

The concept of PEB is evolving from box like steel structures to aesthetically

pleasing ones. PEB offers distinct advantages such as shorter project completion

time and overall cost efficiency as compared to conventional building .Owner’s

today understand the value of early occupancy and hence initial acceptance for

PEB’s over conventional building is growing constantly.

This shift is higher in industrial applications, followed by infrastructure and

commercial structures.

Over the years there has been a visible evolution in the PEB industry. The

acceptance of pre-engineered building systems has been high in the industrial

segment especially for manufacturing applications in automobile, equipment,

consumer goods etc. While manufacturing is certainly a ‘primary demand driver’

it is closely followed by infrastructure and the commercial segment.

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Warehousing is going to create fresh business opportunities due to shortage of

‘storage facilities’ required for organized retail and agricultural applications where

equal amount of importance is being given to stocking goods without causing any

damage.

PEB designs are unique to match the operational requirements of each customer

which results in optimum usage of space. This has significant advantage for

several applications. The potential of the warehousing market has not been fully

explored as far as PEB solutions are concerned. Currently, investments are

being made in making industrial and commercial building. Once the focus shifts

to Indian infrastructure, PEB usage in those applications will go up as well.

India’s PEB industry is fairly similar to that of other countries. We are facing

challenges in conditions at construction sites. We are setting up higher safety

standards in projects undertaken by us. As a policy, we do address safety at the

same level across the globe, despite the country we are in.

Quality control is more variable in India. Cost vs. quality is not only an Indian

phenomena but a global subject. Everyone demands for best quality at the

lowest price. In this scenario, Interarch’s offers the best solution that matches our

standards at the right price. Superiority in products provides a competitive edge

and provide better quality products and services in the market. In the industry

sector Quality cannot be ignored for the sake of price.

PEB market are committed to grow engineered steel building business in India by

offering innovative engineered solutions to meet customer needs. Short term

plan is to build on construction capability, which is an area of constant challenge

and evolution as we need to maintain and advance the safety standards.

The medium- and long-term plans are actually very similar in terms of setting up

for controlled growth within the market, to expand capabilities, build on brand

name and be able to expand foot print within India, and outside as well.

Interarch manufactures metal building systems, and has worked on Tata Motors

Ltd.’s Singur factory, e-choupals and a Pune cigarette plant for diversified

conglomerate ITC Ltd, and petrol pumps for Reliance Industries Ltd. The

company currently has sites in Rudrapur, Chennai and Greater Noida. It had

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expected its turnover—an estimated Rs.500 crore, to grow to Rs.1100 crore over

three years because of the expansion. This investment is Interarch’s first step

towards listing on the bourses.

With a slew of project being announced in Gujarat, pre-engineered building

player Interarch Building Products Pvt. Ltd. is eyeing expansion of business in

the state.

Having bagged several new projects including the likes of Oswal

Industries Limited and ABB Limited in Ahmedabad and Vadodara, the company

is looking at project value worth Rs.10 crore in Gujarat. So far Interarch have

already executed 63 projects in Gujarat including 16 in Central Gujarat, 12 in

Kutch, 6 in Saurashtra and 29 in South Gujarat since 2002. However, with new

projects being bagged by Interarch in Gujarat, the company is looking at a growth

of 15 per cent in terms of turnover in the state.

In Gujarat, Interarch has been providing pre-engineered building services on a

turn-key basis to companies in sectors ranging from automotive, industrial,

logistics and warehousing, and on-road retailing to port infrastructure, power

plants and advanced steel construction solutions for major infrastructure projects.

"In terms of percentage, Gujarat is currently contributing around 4-8 per cent of

the overall business. Now that we have a regional office here in Ahmedabad and

taking into account the current growth prospects in Gujarat, we would be

targeting around 10-12 per cent of revenues from this state in the current fiscal

year. Moreover, we expect it to get increased to about consistent 15 per cent

over the next 3-5 years."

Among clients in Gujarat, Interarch has been serving the likes of General Motors,

Caparo Maruti Ltd, Amvian Automotive Pvt. Ltd, Shayburg Valves Pvt Limited

and Esteem Auto Pvt Ltd. in the auto sector. The company has also worked

extensively in manufacturing sector for companies like Garima Global Pvt Ltd,

Everest Kanto Cylinders Ltd., Asian Granito India Limited, SKF Technologies

India Ltd, Poggen-Amp Nagarsheth Powertronics Ltd, Time Technoplast Ltd,

HNG Float Glass Ltd, and Apple International in Gujarat. "When it comes to

power, Interarch has worked with Voith Siemens Ltd, Welspun Corp Limited, and

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Gujarat Industries Power Company Ltd et al. Even in textile sector also, it has

worked for Stovec Industries Ltd.,

The company's turnover for the financial year 2012-13, based on current order

book, is about Rs 500 crore, growing at 10-15 per cent annually.

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Corporate Identification Number U45201DL1983PTC017029

Name INTERARCH BUILDING

PRODUCTS PRIVATE LIMITED

RoC RoC-Delhi

Registration Number 17029

Company Category Company limited by shares

Company Sub Category Indian Non-Government Company

Class of Company Private Company

Authorized Capital (in Rs.) 100,000,000

Paid up capital (in Rs.) 75,003,000

Number of Members(Applicable only

in case of company without Share

Capital)

0

Date of Incorporation 30 November 1983

Address 1 Farm No.-8, Khasara No. 56/23/2

Address 2 Dera Mandi Road, Mandi Village,

Tehsil Mehrauli

City New Delhi

State Delhi

Country INDIA

Pin 110047

Whether listed or not Unlisted

Date of Last Annual General Meeting 30 September 2013

Date of Balance sheet 31 March 2013

Company Status (for eFiling) Active

[19]

[20]

BOARD OF DIRECTORS

Mr. Arvind Nanda is the CEO and

Founder Director of Interarch, a 500-crore, ISO 9001:1994 Company. Mr. Arvind

has built Interarch, along with his partner from a 2-employee company to a

company with over 1400 people; spread across India with manufacturing facilities

in Noida, Uttarakhand and Chennai. He exercises strong management skills and

has expertise in systems and finance issues. He has been successfully practicing

effective employee management abilities for the past 30 years.

Arvind is a product of Modern School, New Delhi and he graduated from Shri

Ram College of Commerce. He went on to do his Chartered Accountancy from

UK and has worked in UK and India before starting Interarch in 1984.

[21]

Mr.Gautam Suri is the Promoter and

Founder Director of Interarch Building Products Private Ltd, a 500-crore, ISO

9001:1994 Company, with over 1400 permanent employees. Interarch was

launched by him and Mr. Arvind in 1984 and today the company has emerged as

a pioneering pre-engineered metal building systems manufacturer facilities in

Greater Noida (UP), Pantnagar and Kicha (Uttrakhand) and Chennai.

With his professional engineering background, Mr. Gautam has led Interarch to

become a leading service and solution provider in steel construction. The

company has grown to become the largest metal building products manufacturer

in the country. The companies’ clients list includes Tata Motors, Reliance

Industries, General Motors, Bajaj, Hyundai, Fiat and Honda.

Apart from spearheading operations at Interarch, Gautam has also been a

consulting engineer for the last 35 years and has designed acoustics facilities for

over 1200 projects including several prestigious building including Vigyan

Bhawan, India Habitat Centre, Delhi Vidhan Sabha, Delhi Airport (DIAL),

Mumbai Airport (MIAL), PVR and DT Multiplex to name a few.

He is a member of various international and national industry bodies including

Acoustical Society of America, Acoustical Society of India, and various

Committees of the Bureau of Indian Standards.

Mr. Gautam is a Mechanical Engineer from the Indian Institute of Technology,

Delhi (1974 batch) and is today, one of the acclaimed acoustic consultants in

India.

[22]

Mr. Ishaan Suri heads the corporate

marketing and business process functions at Interarch. He has done his

Bachelors in Business and Economics from the London School of Economics,

UK, and has also studied at the University of Rochester, USA.

A member to the board of Directors of Interarch, Ishaan looks after the core

marketing front end for Interarch as well as business analytics, marketing

execution and corporate and marketing communications at the company.

He also has experience in technical sales and solution providing of pre-

engineered metal building systems, customer relationship management for sales

as well as large scale project management.

He directly managed projects such as Interarch's work at IGI DIAL Terminal and

also been a part client management of other large Interarch projects like

Reliance DACC Commercial Complex, as well as many industrial projects such

as Saint Gobain India Gypsum and other manufacturing facilities.

Ishaan also manages the departmental Business Processes backend and their

functions and day to day operations relating to Interarchs' ERP, CRM and SAP

ECC-R3 systems ensuring then company operations run with a smooth and

efficient function throughout our 3 manufacturing facilities, 2 engineering centres

and over 13 office locations.

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Capabilities

Interarch, with its strong presence, is India's most preferred engineering

company when it comes to the turnkey pre-engineered steel construction

solutions. This is due to several success factors including Interarch's superior

Design Centre, state-of-art manufacturing facilities, large team of trained and

dedicated workforce, secure delivery of material and project completion within

stipulated cost and time boundaries. Interarch provides complete solution for

structural systems to suit almost any kind of steel construction.

Interarch offers the assurance of being a reputed home-grown Indian company

with an excellent track record, strong financial background and a nationwide

network of distributors and builders assuring local professional support.

Interarch is committed to providing

Unmatched Strength and Simplicity

With custom designed steel building that offer structural systems made to suit

your requirements, speed of construction and cost efficiency.

An average size of a pre-engineered building project is approximately 5000 m2

and can be easily completed within 100 days from the date of finalization of

drawings.

A pre-engineered building boasts of lower costs and can be over 20% more

economical than any other conventional structure.

Quality Fabrication and Project Execution

Interarch pre-engineered building are manufactured at world-class manufacturing

units, shipped to your site and are assembled using nuts and bolts.

High Quality Design and Detailing Solutions

Each building is designed keeping in mind quality and expert detailing for every

application. Building are analysed using custom-developed tools, complete

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fabrication drawings and shop drawings generated for each

building. Interarch design is the knowledge and engineering back-end for the

manufacturing facilities, providing optimization in design to cater to the extensive

manufacturing and automated machinery, keeping in mind the time and cost

targets.

Project professionals and manufacturer-designed building

The project architect, sometimes called the Architect of Record, is typically

responsible for aspects such as aesthetic, dimensional, occupant comfort and

fire safety. When a pre-engineered building is selected for a project, the architect

accepts conditions inherent in the manufacturer's product offerings for aspects

such as materials, colours, structural form, dimensional modularity, etc. Despite

the existence of the manufacturer's standard assembly details, the architect

remains responsible to ensure that the manufacturer's product and assembly is

consistent with the building code requirements (e.g. continuity of air/vapour

retarders, insulation, rain screen; size and location of exits; fire rated assemblies)

and occupant/owner expectations.

Many jurisdictions recognize the distinction between the project engineer,

sometimes called the Engineer of Record, and the manufacturer's employee or

subcontract engineer, sometimes called a specialty engineer. The principal

differences between these two entities on a project are the limits of commercial

obligation, professional responsibility and liability.

The structural Engineer of Record is responsible to specify the design

parameters for the project (e.g. materials, loads, design standards, service limits)

and to ensure that the element and assembly designs by others are consistent in

the global context of the finished building.

The specialty engineer is responsible to design only those elements which the

manufacturer is commercially obligated to supply (e.g. by contract) and to

communicate the assembly procedures, design assumptions and responses, to

the extent that the design relies on or affects work by others, to the Engineer of

Record – usually described in the manufacturer's erection drawings and

[25]

assembly manuals. The manufacturer produces an engineered product but does

not typically provide engineering services to the project.

In the context described, the Architect and Engineer of Record are the designers

of the building and bear ultimate responsibility for the performance of the

completed work. A buyer should be aware of the project professional distinctions

when developing the project plan.

Design & Engineering

The engineering work in structural steel design includes in-depth analysis and

design of the complete structure, in addition to the preparation of construction

drawings and shop details.

Interarch is an ISO 9001 certified company by UL Inc. USA, for design and

manufacture of Pre-Engineered Steel Building Systems and Structures.

Interarch structural design team of 200 dedicated professionals and senior

structural designers, is well equipped to work in accordance with all Indian and

international codes.

State-of-art technology is used for detailed design which is at par with

international building design standards. All Interach building are designed using

the most advanced metal building software like Staad Pro, MBS and others.

All building are manufactured using the latest automated cutting and welding

equipment.

Cater to the extensive manufacturing and automated machinery, keeping in mind

the time and cost targets.

[26]

Quality Control & Safety

Quality is the hallmark of the products designed and manufactured by Interarch.

The Interarch brand is respected in the market by virtue of inherent quality,

reliability and dependability built into the products and services offered by the

company.

Interarch is an ISO 9001:2000 certified company since January 1999 by

Underwriters Laboratories Inc. USA.

Some of the quality practices followed by the company which has led to

continuous improvements in processes, procedures and products are as follows:

All products meet the national and international standard requirements.

To ensure quality, all products are passed through stringent quality checks in all

the stages of manufacturing.

An established quality management system which continuously seeks to improve

itself satisfies the relevant national and international quality management system

requirements. For e.g. BS.EN.ISO 9001:2000

Source of material is certified to ensure consistency in quality. Materials are

procured from reputed suppliers and manufacturers and full traceability is

maintained. The production team converts these in to superior products through

the use of advanced equipment and highly skilled manpower.

Well established in-house Q.A. Laboratory to ensure quality in different stages of

manufacturing. High quality welding process and technology are used.

Nondestructive testing on welding joints is carried out. Only branded and reputed

consumables are used for manufacturing.

The project quality department ensures end-to-end quality for its building during

execution and completion.

This stamp represents Interarch's commitment to quality. It is backed by years of

research and development with the most modular equipment and stringent

quality checks at each stage of production.

[27]

International Standards

Interarch's pre-engineered constructions are custom-designed solutions to meet

the needs of the customer. All building and other structures are designed and

constructed in accordance with the Indian Standards for applicable load. They

are designed and manufactured in accordance with the latest editions of the

following codes:

Low-rise Building System Manual (MBMA) - Metal Building Manufacturers

Association Inc., USA.

Manual for Steel Construction, Allowable Stress Design (AISC) - American

Institute of Steel Construction Inc., USA.

Cold-Formed Steel Design Manual (AISI) - American Iron and Steel Institute,

USA.

IS 800 : 2007 · IS 875

[28]

Manufacturing Facilities

Interarch boasts its manufacturing capacity of 1, 20,000 MTPA with 3 state of the

art facilities. The design as well as manufacturing of steel structures and sections

and roofing is ISO 9001 accredited by Underwriters Laboratories.

Unit 1: Administration and Works Greater NOIDA, Uttar Pradesh

Interarch is one of India’s largest pre-engineered building companies.

Interarch’s first manufacturing facility at Greater NOIDA, Uttar Pradesh is

one of India’s first pre-engineered building manufacturing facilities. Set up

in early 2000, Interarch Unit 1 is one of the most efficient manufacturing

facilities producing more than 30,000 MT per annum of building and

20,000 MT per annum of roofing and cladding systems.

Unit 4 (Works) Kichha, Uttarakhand

In 2008, Interarch set up Unit 4 at Kichha, Uttaranchal, which is spread over 20

acres.

[29]

BUILDING DIVISIONS

Pre-Engineered Metal Building Systems

About the Product

Interarch pre-engineered metal building are tailor-made solutions to a customer’s

needs and are custom-designed to meet exact requirements. These building are

flexible enough to suit different building dimensions; they are easily expandable,

can withstand harsh climatic conditions and come with maintenance-free

exteriors.

Pre-engineered building are suitable for both, industrial and commercial

operations. Warehouses, factories, aircraft hangars, cold storages, workshops,

stadiums, supermarkets or any high-rise building. Interarch Pre-Engineered

Metal Building Systems offer modern solutions to all building constructions along

with the benefits of superior quality, efficiency, and durability.

Design and Engineering

Advantages

Interarch pre-engineered building are

tailor-made solutions as per

customer's needs and are custom-

designed to meet exact requirements.

An Interarch building offers

Easy integration of all traditional

construction materials such as

brickwork, glazing, timber, etc.

Optimization in accordance with customer's requirements.

Addition of canopies as a direct continuation of the roofline or at a lower level

with positive or negative roof slopes.

[30]

Addition of parapets, partially or completely around the building.

Weather-tight roof and wall coverings with accessories for maintenance-free

exteriors.

Optimized design of steel thereby reducing weight, while meeting all design

requirements

Quality design, manufacturing and erection.

Engineering Strengths

Interarch's engineering strengths help convert complex and expensive

conventional steel building into simpler and economical pre-designed, pre-

engineered building without sacrificing utility and function. Interarch has, with the

use of specialized software packages and custom developed analysis,

computerized the entire engineering process.

Design calculations are comprehensive and the explanations are furnished to

enable the consultants in understanding the design of an Interarch Pre-

engineered Building.

[31]

TRACDEK® Metal Roof & Wall Systems

About the Product

In 1992, Interarch pioneered color-coated, engineered metal roof & wall systems

in India. Since then, Interarch has been the leading manufacturer and provider of

pre-engineered metal roof and wall systems that are used in some of the largest

and most pristine projects of the country.

With the most widespread network of authorized dealers, channel partners and

erectors, Interarch is the largest supplier and installer of metal roofing systems in

India.

Applications

From industrial and infrastructural projects, to commercial developments, malls,

offices and homes, Interach offers several systems for structural and

architectural roof and wall cladding applications.

Permanently coated insulated TRACDEK® metal roofing systems are used for

industrial and commercial building with durable and watertight cladding systems

in flush and profiled finishes with complementary range of accessories suitable

for the most stringent environments.

TRACDEK® roof systems can be used as single skin roof or wall cladding or can

be used in combination with advanced multi-layered insulated systems to give

optimal thermal and acoustic characteristics. They can also be combined with

other cladding systems on the inside to form a sandwich panel system.

[32]

Advantages

Interarch manufactures some of the most advanced roofing systems available in

the market, ranging from typical screw-down roofing panels to high-end standing

seam roofing systems.

Interarch is the only company of its kind in India that can produce all its roofing

systems in limitless lengths with site roll-forming capabilities for all its panels.

Long Life

TRACDEK® is manufactured in a high quality Galvalume® steel, galvanized steel

and aluminium with optional high performance organic coatings for long life, even

in coastal areas.

High strength

TRACDEK® profiles provide excellent spanning ability and remarkable recovery

after excessive load.

Economical

The long spanning ability and more coverage per unit mass permits wide support

spacing, enabling supporting structure economies.

Interarch Light Building Systems

About the Product

Interarch introduces ground-breaking building system, referred to as Light Gauge

Framing Systems. It is the ultimate union of design, materials, machinery and

manufacturing of Standard Stud and Track profiles which are produced

automatically by combining latest software and machine control system imported

from leading technological partners from abroad.

The software and machinery specifically are designed for high volume

manufacturing operations, Interarch Light is ideal for situations where speed,

reliability and flexibility are critical in delivering a project. Every output is

[33]

accurately formed, cut, punched, dimpled and individually labeled and ready for

'screw together' for assembly.

Once at the site, they can be further assembled as per architectural drawings, in

no time by simply snapping the wall frames and floor joists together and fixing

them with self-tapping screws.

Applications

Interarch Light Gauge Framing Systems (LGFS) can be used almost everywhere

and with limitless potential for any kind of shape, design and quality over

conventional system. You will find few of its application below.

Residential

Residential Bungalows

Additional floors on existing residential building

Internal partitions and walls

Rain screen facades and roof crowns of High rise RCC structures

Farm houses

Cottages

Resorts

Guest House

Low cost housing projects

[34]

Industrial & Commercial

Security Guard Cabin

Construction site offices

Industrial office blocks

Mezzanine floors in industrial building

Labor housing and colonies

Generator Rooms

Utility blocks

Retail outlets- shops & Kiosks

Construction site material warehouse (up to 8-10m span)

Administrative Block

Canteen

Advantages

Interarch Light Building system has got un-matched advantages over the

conventional construction system; few of them have been listed below for you

reference

Steel structure

Can be made according to customer plan i.e.-shape, size and design

Time saving for construction

No pollution during construction

Use of Non-toxic green material

Insulation system reduces energy consumption and acts as sound barrier from

outside

Earth Quake and wind residence

Termite proof

Water Proof, Fire proof and moisture proof

Longer life span and easy to maintain

Dismantling possibilities if required

[35]

TRAC® Suspended Ceiling Systems

About the Product

TRAC® ceiling systems set the trend and command a very high market share in

India. The TRAC® range of metal and Glass Reinforced Gypsum ceilings are

specially designed for the Indian market, taking into account of building design,

construction practices and weather conditions. INTERARCH introduced

TRAC® lineal metal ceilings in 1984.

Applications

The Right Ceiling for the Right Application

There is a TRAC® ceiling for every need. Ceilings systems are available in

gypsum, coated steel and coated aluminium. TRAC® ceilings are available in a

wide range of panel types for including lineal ceilings, clip-in or lay-in tile and

plank ceilings, and C-grid (band raster) ceilings. Metal ceilings are manufactured

in aluminium and steel with coil coated or powder coated finishes. All metal

ceilings are available in a perforated version for sound absorption, and are

designed to integrate with standard lighting fixtures, air diffusers, and partitions.

TRAC® ceilings are suitable for use in interior and exterior areas in offices,

hospitals, schools, restaurants, shops, hotels, airports and other building.

TRAC® ceilings are also suitable for industrial use and are especially suited to

aggressive environments inside factory building.

[36]

Advantages

Trac® - The Environment Friendly Ceiling

All TRAC® ceilings are

manufactured from fully

recyclable materials.

TRAC® ceilings are pre-painted

and fully pre-fabricated in the

factory. The ceiling systems are

friendly to handle, and will not

promote growth of bacteria or

fungi. TRAC® ceilings exhibit excellent corrosion resistance. They can withstand

very high humidity (up to 100%) and are suitable for use in outdoor areas.

Concealing Services

Ceilings are primarily installed to conceal services such as HVAC ducting and

lighting. The covering up of services

necessitates access to the ceiling plenum.

Accessibility to the ceiling plenum for

maintenance is the most important factor while

selecting a suspended ceiling system. All

TRAC® ceilings are designed to allow easy

access. Panels or tiles may be lifted out or

clipped off for maintenance or installation of

concealed services.

Aesthetics

[37]

Ceilings are often provided to

create attractive interiors.

TRAC® ceilings offer several

options to the designer to match

aesthetics with function.

Acoustics

Suspended acoustical ceilings serve to provide sound absorption on the most

useful surface in a room. They help in reducing reverberant sound intensity within

a room. TRAC® ceilings are the most efficient sound absorbing ceilings available

in the market today. Human activity in offices and large public spaces generates

noise resulting in reduced work efficiency. Acoustical (sound absorbing) ceiling

systems help in reducing build-up of reverberant noise because of their excellent

sound absorbing properties. This leads to a better working environment and

reduced annoyance due to high noise levels.

Fire Resistance

All TRAC® ceilings provide Class 1 Surface Spread of Flame in accordance with

BS 476-part 7 (1987). The materials are incombustible as per BS 476-part 4

(1970) and satisfy Class O as per BS 476-part 6 (1989).

[38]

Turnkey Project Management

Interarch projects operate with a team of dedicated professionals working at

various locations all over India. Interarch is India’s only provider of turnkey pre-

engineered metal building systems, offering a one-stop-shop for all projects.

Each project is completed within time and cost targets using the highest quality

and safety standards followed internationally.

Turnkey project execution improves client-contractor coordination and interface

with other site contractors, and allows Interarch to be the preferred bidder for

executing large projects as compared to any other company in the market.

Project Management at Interarch

Single-point contract responsibility.

Centralized logistics control.

Centralized site management and project control.

Highest standards in quality. Trained quality teams look after and continuously

monitor projects while they are under execution.

Zero-accident policy. Interarch’s stringent HSE regulations do not permit

opportunities for accidents at our project sites. Trained safety teams operate pan

India at all Interarch project sites, ensuring on ground safety as well as safety in

execution.

[39]

Skills & Expertise

Infrastructure Projects

In our pursuit for excellence in structural steel building solutions, Interarch caters

specially to infrastructure projects using its vast experience in design,

manufacturing and production of structural systems.

The Infrastructure Division’s lines of expertise:

Large and complex infrastructure projects

World-class airport terminals

Sea port infrastructure facilities

Large industrial projects and industrial infrastructure

Metro rail, elevated monorail terminals

Skywalks, steel bridges and flyovers

Structural steel building

High-rise building

[40]

The engineering work in structural steel design includes in-depth analysis and

design of the complete structure, in addition to the preparation of construction

drawings and shop details. Interarch structural design team uses latest designing

technologies for analysis and design software such as Staad Pro, Tekla and

others.

Interarch is an ISO 9001 certified company by UL Inc. USA, for design and

manufacturing of pre-engineered steel building systems. Interarch’s structural

design team is well equipped to work in accordance with all Indian and

international building codes.

Interarch is proud to be the only company in India with an in-house team of

project management, safety and quality engineers. With its four state-of-the-art

manufacturing facilities and proven engineering capabilities, Interarch is a strong

and technologically preferred engineering company.

Logistics & Delivery

Over the years, Interarch has successfully retained, trained and developed a

dedicated team of logistic partners. They are carefully selected based on their

overall capabilities that include vehicle fleet and support network. Quality of

trailers and transport vehicles is checked prior to every dispatch to ensure timely

delivery with minimum transit time. Customers are updated with the tracking of

vehicles in transit through daily e-mails. This is facilitated by a regular interaction

[41]

of tracking office and the vehicle drivers with the help of mobile phones and

vehicle tracking systems.

Interarch has a nation-wide network of distributors and builders assuring local

professional support. Delivery of materials in good condition is also ensured by

the use of the logistic partner network. All consignments are insured during

transit.

Customized Value Addition

Offering no less than the best, Interarch pre-engineered metal building

solutions are customized to the needs of each project requirement, be it large or

small and cater especially to the following types of construction:

Suited to large span building construction.

Modular design and building that are expandable even after completion.

Quality manufacturing and construction.

Energy efficient green building.

Quick installation of complex structures using simple ‘bolt-on’ construction.

Architectural versatility.

Ideal for fast paced projects.

Automotive factories.

Retail outlets and shopping malls.

Auditoriums and convention halls.

Multi-storey office building.

Industrial sheds and warehouses.

Petroleum outlets.

Light gauge building.

Airport terminal building.

Wide-body aircraft hangars.

India has the second fastest growing economy in the world and a lot of it, is

attributed to its construction industry which figures just next to agriculture in its

economic contribution to the nation. In its steadfast development, the

construction industry has discovered, invented and developed a number of

[42]

technologies, systems and products; one of them being the concept of Pre-

engineered Building (PEBs). As opposed to being on-site fabricated, PEBs are

delivered as a complete finished product to the site from a single supplier with a

basic structural steel framework with attached factory finished cladding and

roofing components. The structure is erected on the site by bolting the various

building components together as per specifications. PEBs are developed using

potential design software. The onset of technological advancement enabling 3d

modelling and detailing of the proposed structure and coordination has

revolutionised conventional building construction.

PEBs have hit the

construction market in a major way owing to the many benefits they possess.

They exemplify the rising global construction, technology and while they oppose

the practice of conventional building construction they simultaneously have taken

it to a higher level too. Worldwide, they are a much used concept with studies

revealing that 60% of the non-residential low-rise building in USA are pre-

engineered; for India the concept has been gaining momentum and the scope of

growth is guaranteed looking at India's huge infrastructural requirements. Studies

already validate that India has the fastest growing market in the PEB construction

segment. The scope of using PEBs ranges from showrooms, low height

commercial complexes, industrial building and workshops, stadiums, schools,

bridges, fuel stations to aircraft hangers, exhibition centres, railway stations and

metro applications. While we are still to see PEBs being used in residences in

India, one can see their optimal use in warehouses, industrial sheds, sports

facilities etc. The Delhi Airport and the metro projects of Delhi, Bengaluru and

Mumbai are also examples of PEB applications.

[43]

Interarch Building Products Pvt Ltd with headquarter in Noida is India's leading

turnkey pre-engineered metal building company and has myriad construction

solutions including advanced Pre-engineered Steel Building. Specializing in

airport roofing and ceilings for over two decades, one of their coveted projects is

DIAL Terminal 3 (Terminal 3, IGI Airport at Delhi) with a seven-layer roof installed

over 2,00,000sqm roof area covering the entire airport. On the absence of PEB's

in the residential sector in India. "In India, modular construction is still the

preferred choice over PEB systems for the residential sector which is mostly due

to lack of awareness about the benefits of PEB with the general perception being

that they are expensive. Having said that, I would also like to mention that the

PEB industry is slowly and steadily gaining its hold in the commercial /residential

sector and will certainly see widespread application soon."

TATA motors at Pantnagar (Picture courtesy: Interarch Building Products)

The PEB industry has evolved over the years. What started as a role limited to

design and manufacturing PEBs, has widened today to making firms responsible

for the erection of the structures too. Citing facts, The PEB market estimation in

India to be around Rs.4000 crores currently. "It has been growing at over 15% for

the last few years, and is expected to demonstrate a similar, if not better growth

in the years to come".

A PEB system in totality consists of a structural system, sandwich panels,

roofing, exterior facade and accessories. The PEB concept based on a proper

design usually involves a thorough project information data including complete

[44]

details like building parameters, grade of steel, secondary member details, paint

coat on steel members, welding, anchor bolts steel grade, roof & wall liner /

panel, insulation, sky light, gutters, facia, mezzanine, ridge ventilation to name a

few. Following this input, the drawings for general arrangement, Anchor Bolt &

Template Fabrication & Erection are prepared.

Advantages

Ideal for construction in remote and hilly areas, PEBs offer a complete building

system of energy efficient, optimum weight and cost customized fitted

requirement. They can be customized as per the climate/design requirements at

the site. Since only the bolting needs to be done on the site a quicker

construction speed compared to conventional construction is possible. The

flexibility of PEBs to be casted even while the foundation is being laid also leads

to saving on time. PEBs don't require curing time like concrete and mortar and

boast of an immediate occupancy. The quality of the structure being controlled in

the factory is superior to that achieved in masonry construction. The time savings

lead to cost savings too, which also get enhanced by the lower operating and

maintenance costs.

Citing cost and time as the most significant advantages of PEBs, “A PEB can be

erected considerably faster than conventional building, and at a lower

investment. This means building owners can start generating profits from their

operations in a shorter time frame. Contemporary erection practices adopted by

some PEB manufacturers, like the use of boom lifts instead of scaffolding, make

PEBs a safer option as well." From the safety point of view, steel building are

also resistant to earthquakes and cyclones.

PEBs are much lighter in weight than normal steel building owing to their high

proportion of recycled content. Interarch Building Products Pvt Ltd, though

catering to the heavy steel and industrial building market have recently

introduced a light building system that is more efficient and a lighter system of

construction catering to economical building, housing systems, light weight

homes, villas, and light weight construction in remote locations.

[45]

PEBs can also prove to be a good bet for affordable housing owing to their speed

of construction and low cost, thus helping in rural development projects in India.

Their design flexibility is also a plus with wide ranges of available wall and roof

sheeting (granite, stone cladding, brickwork, ACP's etc.) and interface details

between steel and other materials. PEBs are low maintenance structures

requiring only periodic cleaning of roofs, painting and annual washing of eave

gutters. The ease of construction makes them hassle free and bestows cleaner

sites since the self-supporting components don't require shuttering or scaffolding.

Future extensions/modifications or dismantling/relocating can be accommodated

easily. "Usually on the PEB structure, flanges or punched holes are provided so

that for addition of any future building elements, these flanges can be utilized and

welding can be avoided."

PEB system - Delhi Cargo (Picture courtesy: Interarch Building Products

Pvt Ltd)

PEBs offer large clear spans in building (up to 90m) – the reason why they are

suitable for structures like aircraft hangars and sports facilities. Unlike traditional

construction, they don't get affected by weather elements like wind, rain etc. PEB

structures are an outcome of a single responsibility as opposed to multiple

responsibilities in traditional constructions, leading to better organization and less

confusion.

[46]

Challenges

The application of PEB's is economical and speedy for low rise building only (with

the maximum eave heights ranging between 25-30 meters). Special care needs

to be given to the joining of pre-fabricated sections and to the packing of such

sections which involve huge transportation costs. There are challenges with the

joinery details which can lead to leakage. But in some cases like the ‘FM

Approved' MR-24 Standing Seam Roof System, there is one of a kind's 360o

Pittsburgh Double Lock seam which assures leak-proof performance.

Also very large prefabricated sections can only be placed on the site by making

use of cranes. A PEB structure due to its assembly of various parts requires a

painstaking attention to detailing requiring high skilled workers – the shortage of

skilled labor proving to be one of the lesser disadvantages that they have over

traditional masonry construction.

Steel has a lower fire resistance as compared to concrete and other construction

materials. It also faces issues of buckling, stability and corrosion. Indian Codes

still need to be developed which PEB manufacturers can adopt unanimously.

"Steel is a more versatile material than concrete and can cater to a wider range

of applications. However, it needs architects to visualize how to work with the

engineering and systems that allow steel to be effective. Although now most

architects in the commercial and industrial spaces are well versed with steel, the

introduction of new improved steel codes catering to pre-engineered construction

are still restrictive as they are still not utilizing the maximum efficiency of steel.

Due to the conservative criteria laid down in previous codes, the current updated

versions are also not as efficient as other steel design guidelines used around

the world.

PEBs are the fastest growing segment in the low-rise construction industry with a

substantial role in the development of infrastructure projects adds, "The major

challenge in the sector is that people are still looking at conventional method of

construction and not considering the speed & long-term benefits of metal

building. For this, we are planning to expand the marketing network and project

[47]

offices throughout the country to serve our clients in a better way."

Making the sector organized will also yield positive results. The supply in case of

PEBs has been seen to be much more than the demand since many

unorganized segments are supplying them at very low costs, compromising on

their quality and adopting codes according to their wishes.

Government's Role

The government could do well with reducing the tax on PEBs to facilitate their

easy acceptance by all. A code for PEB application becomes mandatory to

recognize the concepts of advanced steel design, which will also lead to PEB

becoming recognized as a separate entity.

Accepting that the Government is taking major steps to promote the PEB

industry, "As per the government's projection of 1$ trillion investment in

infrastructure segment during the 12th five year plan, the expected economic

growth would be approximately 8.5% which may even rise to 9%. This is surely

very crucial for the infrastructure segment as growth in the infrastructure

investment is expected with this projection of the government. Although, the

fluctuation of prices affects the availability of the capital goods, tax structures etc,

the SEZ tax benefits and excise holiday zones encourage more constructors to

invest into this sector. Closely looking at the sectors of investment pre-

engineered building will have an advantage in the construction industry."

The government should take steps like removal or minimization of excise duty

components in PEB manufacturing. "The latest budget has witnessed the

increase of excise duty from 10.3% to 12.36%. The government should notify

Industry owners and Government agencies to promote the steel building concept

especially for residential building construction. All constructions in remote areas

should be made mandatory with steel construction methodology. Benefits like

fast construction and green features in a building should be highlighted.”

Controlling of the high fluctuations on the steel prices would be good for PEB

structures.

[48]

The company's turnover for the financial year 2012-13, based on current order

book, is about Rs 500 crore, growing at 10-15 per cent annually.

Principal Categories of Participants In Pre Engineered Building

As shown in Figure, there are three categories of participants in the pre-

engineered building. The first is the supplier. This party (represented here by

Interarch Building) supplies the contractor with the building’s structural frame and

envelope. They are responsible for satisfying the codes specified by the general

contractor. The second player is the customer (the general contractor) who must

deal with the other involved parties such as the architects, the “supplier”, any

subcontractors, the final and end user, etc. The customer is responsible for the

erection of the building shell. The final category of participant is the end user.

This party purchases and takes the final custody of the completed building. This

group deals only with the contractor and also defines the facility’s functions

based in the user’s needs, wants, and abilities.

[49]

Integrated Business Process Model

The remainder of the report discusses the various activities undertaken by

Interarch in the production and provision of their products to their customers.

Each section corresponds to one of the five phases of a construction project as

defined by the Integrated Building Process Model. Within each phase, the actual

activities performed by Interarch are described.

Manage Facility

Manage facility includes all the business functions and management processes

required to support the provision of the facility, from its inception to its

completion. It captures the generic ideas and the essential functions necessary

for presenting an effective management processes. It is separated into the

following five sub functions (M1 to M5):

Establish management team

Develop work scope and needs.

Plan/ Control the work

Acquire services to provide facility

Acquire/ provide resources for facility

This function run for the duration of the facility life and represents the activities

required from the viewpoint of the facility and the user.

[50]

Plan facility

The IBPM defines “planning” as the development of the facility idea into a facility

program, a project execution plan, and site information. These plans drive te

remaining functions of Design facility, Construct facility, and Operate facility by

supplying them with some critical information. This phase is divided into the

following six Sub functions (P1 to P6):

Assign Planning team,

Study an define Needs,

Study Feasibility,

Develop Program

Develop Project Execution Program, and

Select and acquire site.

Plan facility clarifies the project requirements and the owner’s constraints as well

as provides the owner with the chance to influence the project through this

decisions at this stage. It is typically performed by the owner, but may be

performed by an external consultant depending on the nature of the facility and

owner’s experience.

Design Facility

Design facility, as identified by the Integrated Business Process Model,

comprises all the functions to define and communicate the owner’s needs to the

builder. It is broken into the following six sub functions (D1 to D6):

Understand Functional Requirements,

Explore Concepts,

Develop System’s Schematics,

Develop Design

[51]

Communicate Design to Others, and

Maintain design Information and Models.

Design is the method by which the needs, wishes, wants, and desires of the

owner are defined, quantified, qualified, and communicated to other parties.

Design must also take into account the demands society places on it. The

activities of the IBPM translate the facility program and execution plan into bid

and construction documents and operations documents which allow the facility to

meet the owner’s and society’s needs.

Construct Facility

The Integrated Business Process Model describes the Construct facility phase in

terms of the following activities (C1 to C4):

Acquire Construction Services,

Plan and Control the work,

Provide Resources, and

Build the facility

Interarch Building Products does not do any construction per se; all construction

is performed by the general contractors. This appears to be the standard in the

industry. Recently, the majority of the construction-type work performed by the

company has been that of custom work, paralleling the trend in the industry’s

design process. In fact, approximately 80% of their orders are now custom

building work showing that the industry is branching more towards the design-

build method of construction. However, there are cases where Interarch will do

some construction related to the expressed warranties the go with their product

line (typically replacements and / or repairs). These warranties cover such

performance factors as corrosion resistance of roof panels, paint systems, and

water tightness.

[52]

Operate Facility

Operate facility, as defined by the IBPM, include the following (O1 to O6):

Manage Operations,

Monitor Facility condition and Systems,

Evaluate Conditions and Detect Problems,

Develop Solutions,

Select Plan of Action, and

Implement Plan.

The Integrated Business Process model defines and described the process of

facility provision. This process is divided into five sub processes covering the

entire life cycle of the facility from initial conception through final demolition. The

five sub processes are manage, plan, design, construct, and operate the facility.

The principal function into which Interarch directs much of its time and efforts is

the design and manufacturing of their products. Interarch design process is

highly computerized and integrated manufacturing practices as group technology

and numerically controlled equipment.

[53]

[54]

RESEARCH METHODOLOGY

Primary Data

Primary research consists of a collection of original primary data collected by

the researcher. It is often undertaken after the researcher has gained some

insight into the issue by reviewing secondary research or by analysing previously

collected primary data. It can be accomplished through various methods,

including questionnaires and telephone interviews in market research,

or experiments and direct observations in the physical sciences, amongst others.

The term primary research is widely used in academic research, market

research and competitive intelligence. In the following Summer Internship

Project I had conducted primary research on Financial Analysis of Interarch

Building Products Pvt Ltd and represented the financial condition of this

company.

There are advantages and disadvantages to primary research.

Advantages:

Researcher can focus on both qualitative and quantitative issues.

Addresses specific research issues as the researcher controls the search

design to fit their needs

Great control; not only does primary research enable the marketer to focus

on specific subjects, it also enables the researcher to have a higher control

over how the information is collected. Taking this into account, the researcher

can decide on such requirements as size of project, time frame and goal.

Disadvantages:

Compared to secondary research, primary data may be very expensive in

preparing and carrying out the research. Costs can be incurred in producing

the paper for questionnaires or the equipment for an experiment of some sort.

[55]

In order to be done properly, primary data collection requires the

development and execution of a research plan. It takes longer to undertake

primary research than to acquire secondary data.

Some research projects, while potentially offering information that could

prove quite valuable, may not be within the reach of a researcher.

By the time the research is complete it may be out of date.

Low response rate has to be expected.

Secondary Data

Secondary research (also known as desk research) involves the summary,

collation and/or synthesis of existing research rather than primary research,

where data is collected from, for example, research subjects or experiments.

Care should be taken to distinguish secondary research from primary research

that uses raw secondary data sources. The key is distinction is whether the

secondary source being used has already been analysed and interpreted by the

primary authors.

The term is widely used in health research, legal research, and in market

research. The principal methodology in health secondary research is

the systematic review, commonly using meta-analytic statistical techniques,

although other methods of synthesis, like realist reviews and meta-

narratives reviews, have been developed in recent years.

In a market research context, secondary research is taken to include the re-use

by a second party of any data collected by a first party or parties.

Sometimes secondary research is required in the preliminary stages of research

to determine what is known already and what new data is required, or to inform

research design. At other times, it may be the only research technique used.

A key performance area in secondary research is the full citation of original

sources, usually in the form of a complete listing or annotated listing.

Secondary sources could include previous research reports, newspaper,

magazine and journal content, and government and NGO statistics.

[56]

Depreciation, 1.26

Finance Cost, 0.43

Cost of Erection of Builiding, 6.76

Retained Profit, 0.13

Trading Purchases, 37.4

Employee Benefit Expenses, 9.49

Raw material

Consumed, 38.26

Dividend Recd. From Current

Investment(Income), 0.028

Miscellaneous Expenses, 6.2

DETAILS OF TOTAL EXPENDITURE ON TOTAL EARNING DURING 2012-13

[57]

Detailed Financial Analysis

Liquidity Analysis

Liquidity ratios measure a company’s ability to meet its maturing short-term

obligations. In other words, can a company quickly convert its assets to cash

without a loss in value if necessary to meet its short-term obligations?

Favourable liquidity ratios are critical to a company and its creditors within a

business or industry that does not provide a steady and predictable cash flow.

They are also a key predictor of a company’s ability to make timely payments to

creditors and to continue to meet obligations to lenders when faced with an

unforeseen event.

Current Ratio

Current Assets / Current Liabilities

This ratio reflects the number of times short-term assets cover short-term

liabilities and is a fairly accurate indication of a company's ability to service its

current obligations. A higher number is preferred because it indicates a strong

ability to service short-term obligations. The composition of current assets is a

key factor in the evaluation of this ratio. Depending on the type of business or

industry, current assets may include slow-moving inventories that could

potentially affect analysis of a company's liquidity how long could it potentially

take to convert raw materials and inventory into finished products? (For this

reason, the quick ratio may be preferable to the current ratio because it

eliminates inventory and prepaid expenses from this ratio for a more accurate

gauge of a company's liquidity and ability to meet short-term obligations.)

[58]

Quick Ratio

(Cash + Marketable Securities + Trade Accounts Receivable) / Current

Liabilities

This ratio, also known as the acid test ratio, measures immediate liquidity - the

number of times cash, accounts receivable, and marketable securities cover

short-term obligations. A higher number is preferred because it suggests a

company has a strong ability to service short-term obligations. This ratio is a

more reliable variation of the Current ratio because inventory, prepaid expenses,

and other less liquid current assets are removed from the calculation.

The current ratio for Interarch Building Products is 2.2, which compared to the

baseline of 2.0 indicates the company's ability to service short-term obligations is

satisfactory. However the value of the quick ratio will provide a clearer indication

of the company's success in this area.

The quick ratio for Interarch Building Product is 1.27, which compared to the

baseline of 1.07 indicates the company's ability to service short-term obligations

is favourable.

0

0.5

1

1.5

2

2.5

CURRENT RATIO QUICK RATIO

1.93

1.10

2.0

1.07

2.2

1.27

Current Ratio / Quick ratio

2011 2012 2013

[59]

Altman Z score (A Pvt Manufacturing Firm)

((Working Capital / Total Assets) * 0.717) + ((Retained Earnings / Total

assets) * 0.847) + ((Earnings before Interest and Taxes/ Total Assets) *

3.107) + ((Total Equity / Total Liabilities * 0.42) + ((Sales / Total Assets) *

0.998)

This ratio represents a numerical ranking that predicts the potential for

bankruptcy of a manufacturing company. In general, the lower the score, the

higher the odds of bankruptcy. Companies with Z-Scores above 3 are considered

to be healthy and therefore unlikely to enter bankruptcy.

The Altman Z score for Interarch Building is 2.38 that indicates the company has

a relatively satisfactory degree of protection against bankruptcy.

2.25

2.3

2.35

2.4

2.45

2.5

2.55

2.6

2.65

2012 2013

2.61

2.38

Altman Z Score

2012 2013

[60]

DU Pont Analysis

DuPont analysis tells us that ROE is affected by three things:

-Operating efficiency, which is measured by profit margin

-Asset use efficiency, which is measured by total asset turnover

-Financial leverage, which is measured by the equity multiplier

ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) *

Equity Multiplier (Assets/Equity)

2012 2013

Profit margin=5.35 Profit margin=2.09

Total assets turnover=1.42 Total assets turnover=1.61

Equity multiplier=1.61 Equity multiplier=1.49

0

2

4

6

8

10

12

14

2012 2013

12.23

5.01

Du Pont Analysis

2012 2013

[61]

Accounts Receivable to Working Capital

Trade Accounts Receivable / (Current Assets - Current Liabilities)

This ratio measures the dependency of working capital on the collection of

receivables. A lower number for this ratio is preferred, indicating that a company

has a satisfactory level of working capital and accounts receivable makes up an

appropriate portion of current assets.

The accounts receivable to working capital ratio for Interarch Building is 0.70,

which compared to the baseline of 0.71 indicates that the company's

Performance is sufficient in this area.

0.702

0.704

0.706

0.708

0.71

0.712

0.714

0.716

2012 2013

0.7155

0.7069

Accounts Receivable to Working Capital

2012 2013

[62]

Inventory to Working Capital

Inventory / (Current Assets - Current Liabilities)

This ratio measures the dependency of working capital on inventory. A lower

number for this ratio is preferred indicating that a company has a satisfactory

level of working capital and inventory makes up a reasonable portion of current

assets.

The inventory to working capital ratio for Interarch Building Products is 0.77,

which compared to the baseline of 0.92 indicates this ratio is in line with company

goals.

0.7

0.75

0.8

0.85

0.9

0.95

2012 2013

0.9223

0.7792

Inventory to Working Capital

2012 2013

[63]

Long Term Liabilities to Working Capital

Long Term Liabilities / (Current Assets - Current Liabilities)

This ratio measures the degree to which a company's long-term debt has been

Used to replenish working capital versus fixed asset acquisition.

The long-term liabilities to working capital ratio for Interarch Building Product Pvt

ltd. is 0.011, which compared to the baseline of 0.014 indicates the value of this

ratio is meeting the company's expectations. The change in the ratio score

between both financial years is minute, this firm only has vehicle loans as long

term liabilities thus company possess a good condition.

0

0.002

0.004

0.006

0.008

0.01

0.012

0.014

2012 2013

0.014

0.011

Long Term Liabilities to Working Capital

2012 2013

[64]

Sales to Working Capital

Sales / (Current Assets - Current Liabilities)

This ratio measures a company's ability to finance current operations. Working

capital (current assets -current liabilities) is another measure of liquidity and the

ability to cover short-term obligations. This ratio relates the ability of a company

to generate sales using its working capital to determine how efficiently working

capital is being used. In general, a lower number is preferred because it indicates

a company has a satisfactory level of working capital.

The sales to working capital ratio for Interarch Building Products Pvt Ltd. is 4.50,

which compared to the baseline of 4.05 reveals the company’s growth though

exceptionally low score indicates inadequate sales level are being generated.

The company may want to make an effort to generate additional sales using the

available opportunities.

3.8

3.9

4

4.1

4.2

4.3

4.4

4.5

2012 2013

4.0523

[VALUE]

Sales to Working Capital

2012 2013

[65]

The following list includes several suggestions Interarch Building Products should

consider to improve the liquidity ratios:

Reduce days in accounts receivable to improve current assets by

evaluating accounts receivable on a more frequent basis and take a more

assertive stance in the collection of accounts receivable and delinquent

accounts.

Prepare thorough cash forecasts and evaluate the company's ability to

meet goals on a regular basis.

Consider paying off short-term obligations if the cash position of the

company is favourable.

Consider converting short-term debt to long-term debt.

Reduce levels of non-moving inventory.

Activity Ratios Analysis

Activity ratios provide a useful gauge of a company's operations by determining,

for example, the average number of days it takes to collect on customer accounts

and the average number of days to pay vendors. A key point to keep in mind

when evaluating these ratios is that seasonal fluctuations are not necessarily

reflected in the numbers that are derived from these calculations based on an

account balance on one single day.

[66]

Accounts Receivable Turnover

Sales / Trade Accounts Receivable

This ratio measures the number of times receivables turn over in a year and

reveals how successful a company is in collecting its outstanding receivables. A

higher number is preferred because it indicates a shorter time between sales and

cash collection.

The accounts receivable turnover for Interarch Building Products is 5.7, which

Compared to the baseline of 6.3. This is due to the concept of Retention of

money.

Retention is money held by the client as a safeguard against defects which may

subsequently develop and which the contractor may fail to remedy. It is usually

set at either 5-10% of the value of the works or 3 %( usually larger) contracts and

the payment for retention varies from 6 months to 12 months. Due to retention

the Accounts receivable days extends making exceptionally low ratio score in

both financial year.

5.2

5.4

5.6

5.8

6

6.2

6.4

2012 2013

5.6629

6.3606

Acccounts Receivable Turnover

2012 2013

[67]

Days Sales in Receivables

Trade Accounts Receivable / (Sales / Days)

This ratio measures the average number of days a company's receivables are

outstanding. A lower number of days is desired. An increase in the number of

days receivables are outstanding indicates an increased possibility of late

payment by customers. Companies should attempt to reduce the number of

day’s sales in receivables in order to increase cash flow. The general rule used is

that the time allowed for payment by the selling terms should not be exceeded by

more than 10 or 15 days.

The day’s sales in receivables for Interarch Building Products is 57 days that

indicates the company is not very effective in collecting outstanding receivables.

This is due to retention money which often clients holds while making the

payment for projects.

52

54

56

58

60

62

64

66

2012 2013

64.4551

57.3848

Days Sales in Receivables

2012 2013

[68]

Operating Cycle Days

(Inventory / (Cost of Sales / Days)) + (Trade Accounts Receivable / (Sales /

Days))

This ratio calculates the total conversion period for a company, or in other words,

the average number of days it takes to convert inventory into cash from sales. It

is calculated by adding together the days cost of sales in inventory to the days

sales in receivables. Evaluating this ratio can be helpful in gauging the

effectiveness of marketing, determining credit terms to extend to customers, and

collecting outstanding accounts.

The operating cycle days for Interarch Building Products is 158 days, which

compared to the baseline of 195 days indicates the company may not be

Successfully minimizing the amount of time it takes to convert products and

Services into cash. Though there is a big time growth in this firm.

0

20

40

60

80

100

120

140

160

180

200

2012 2013

195

158

Operating Cycle Days

2012 2013

[69]

[70]

Sales to Assets

Sales / Total Assets

This ratio measures a company's ability to produce sales in relation to total

assets to determine the effectiveness of the company's asset base in producing

sales. A higher number is preferred, indicating that a company is using its assets

to successfully generate sales. This ratio does not take into account the

depreciation methods employed by each company and should not be the only

measure of effectiveness of a company in this area.

Sales to assets for Intearch Building Products is 1.60, which compared to the

baseline of 1.41 indicates the company's performance in this area is lacking and

management should consider taking measures to improve this ratio.

1.3

1.35

1.4

1.45

1.5

1.55

1.6

1.65

2012 2013

1.4176

1.6093

2012 2013

[71]

Percent Depreciation Expense to Net Fixed Assets Depreciation Expense / Net Fixed Assets * 100

This ratio measures the reasonableness and consistency of a company's

depreciation expense over time.

The percent depreciation expense to fixed assets for Interarch Building Pvt Ltd.

Is 0.12%, which compared to the baseline of 0.13% indicates the value of this

ratio is meeting the company's expectations.

A high depreciation to fixed assets ratio may suggest that a business is writing

off old equipment to make way for newer ones. A high ratio may suggest that the

present fixed assets have a short useful life and, therefore, need to be replaced

quickly.

0.114

0.116

0.118

0.12

0.122

0.124

0.126

0.128

0.13

2012 2013

0.13

0.12

2012 2013

[72]

Percent Accumulated Depreciation to Fixed Assets

Accumulated Depreciation / Fixed Assets * 100

This ratio measures the cumulative percentage of productive asset costs a

company has allocated to operations.

The percent accumulated depreciation to fixed assets for Interarch Building Pvt

ltd is 0.41%, which compared to the baseline of 0.39% indicates this ratio may be

on target with company objectives. Low ratios are desirable, while an increase

to this ratio over time can be indicative of a problem. If the ratio increases over

time and is high relative to its peers, the company may have trouble generating

enough cash to purchase new equipment. If true, the company's maintenance

expense to fixed assets ratio should be analyzed to see if it's declining over time.

0.38

0.385

0.39

0.395

0.4

0.405

0.41

2012 2013

0.39

0.41

% Accumulated Depn to Fixed Assets

2012 2013

[73]

Fixed Assets to Equity

(Fixed Assets - Accumulated Depreciation) / Total Equity

This ratio measures the extent to which investors' capital was used to finance

productive assets. A lower ratio indicates a proportionally smaller investment in

fixed assets in relation to net worth, which is desired by creditors in case of

liquidation. Note that this ratio could appear deceptively low if a significant

number of a company's fixed assets are leased.

Net fixed assets to equity for Interarch Building Pvt Ltd. is 0.37, which compared

to the baseline of 0.36 indicates the company's performance is adequate in

this area.

0.354

0.356

0.358

0.36

0.362

0.364

0.366

0.368

0.37

2012 2013

0.36

0.37

Fixed Assets to Equity

2012 2013

[74]

Free Reserves per Share

(General Reserves+ Profit & Loss Balance+ Share Premium /Number of

equity shares)

The free reserves per Share for Interarch Building Products is 2086.36, which

compared to the baseline of 2361.68% is a good indication of financial health for

the company. Though it seems to be declining in 2013 FY which should be

considered by company’s Management and proper measure should be taken

against declining.

1900

1950

2000

2050

2100

2150

2200

2250

2300

2350

2400

2012 2013

2361.8

2086.36

Free Reserves Per Share

2012 2013

[75]

Inventory Turnover

Sales /Inventory

A ratio showing how many times a company's inventory is sold and replaced over

a period. A low turnover implies poor sales and, therefore, excess inventory. A

high ratio implies either strong sales or ineffective buying.

The Inventory turnover ratio for Interarch Building Products is 5.77, which

compared to the baseline of 4.39%. In general, Companies selling perishable

items have very high turnover. But this company sells non-perishable products

which doesn’t tend to deteriorate over time so this company can keep their

products in warehouse for long time.

0

1

2

3

4

5

6

2012 2013

4.39

5.77

Inventory Turnover Ratio

2012 2013

[76]

Average raw Materials Holdings

Raw material stock/ Cost of production or Cost of Goods Consumed * 365

This ratio calculates the length of time raw materials is held between purchase

and sale.

The Average Raw materials holdings for Interarch Building Products is 83.16,

which compared to the baseline of 97.18 .For Raw materials holding period

ratios, a low ratio is usually seen as a sign of good working capital management.

It is very expensive to hold inventory and thus minimum inventory holding usually

points to good practice. In FY 2013 the raw material holding period seems to be

decreasing which indicates good inventory management within the firm.

75

80

85

90

95

100

2012 2013

97.18

83.16

Average raw Materials Holdings

2012 2013

[77]

Operating Cash Flow /Sales Ratio

Operating cash flow / Sales Ratio = Operating Cash Flows / Sales Revenue

x 100%

This ratio, which is expressed as a percentage, compares a company's operating

cash flow to its net sales or revenues, which gives investors an idea of the

company's ability to turn sales into cash.

It would be worrisome to see a company's sales grow without a parallel growth in

operating cash flow. Positive and negative changes in a company's terms of sale

and/or the collection experience of its accounts receivable will show up in this

indicator.

The Operating Cash Flow / Sales Ratio for Interarch Building Products is 1.94,

which compared to the baseline of 15.9% indicates sales may not be contributing

enough to the company's bottom line. The higher this ratio is the better it is for

the company. Greater amounts of operating cash flows are always desirable.

Although there is not any standard guideline for this ratio but a consistent and/or

increasing trend in this ratio is a positive indication of good debtor’s

management.

0

2

4

6

8

10

12

14

16

2012 2013

15.9

1.94

Operating Cash Flow/ Sales Ratio

2012 2013

[78]

Profitability Ratios

Profitability ratios measure a company’s ability to use its capital or assets to

generate profits. Improving profitability is a constant challenge for all companies

and their management. Evaluating profitability ratios is a key component in

determining the success of a company. It is important to note that all profitability

ratio calculations are based on earnings before taxes.

Percent Gross Profit

((Sales - Cost of Sales) / Sales) * 100

This ratio measures the gross profit earned on sales and reports how much of

each sales dollar is available to cover operating expenses and contribute to

profits.

The percent gross profit for Interarch Building Products is 37.4%, which

compared to the baseline of 40.8% is a good indication of financial health for the

company.The average manufacturer's gross profit percentage varies between 25

percent and 35 percent Gross profit percent applies solely to the finances of a

company prior to having to factor in such variables as the taxes, employee

payments, as well as a host of other figures that differ from one store to another.

35

36

37

38

39

40

41

2012 2013

40.8

37.4

Gross Profit

2012 2013

[79]

Operating Profit Margin

Operating Profit / Net Sales * 100

This ratio measures how much profit a company makes on each sales rupees

received and how well a company could potentially deal with higher costs or

lower sales in the future.

The Operating Profit Margin for Interarch Building Products is 1.33, which

Compared to the baseline of 7.54% indicates sales may not be contributing

Enough to the company's bottom line thus needed to be considered by

Management efficiently.

0

1

2

3

4

5

6

7

2012 2013

6.15

0.75

Operating Profit Margin

2012 2013

[80]

Percent Rate of Return on Assets

Net Income after tax/ Total Assets * 100

This ratio measures how effectively a company's assets are being used to

generate profits. It is one of the most important ratios when evaluating the

success of a business. A higher number reflects a well-managed company with a

healthy return on assets. Heavily depreciated assets, a large number of

Intangible assets, or any unusual income or expenses can easily distort this

Calculation.

The percent rate of return on assets for Interarch Building Products is 0.003%,

which compared to the baseline of 0.075% indicates there is a need for

improvement in this area to ensure the company can remain competitive and

continue to operate successfully. There is a drop in Rate of Return in 2012-2013

FY.

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

2012 2013

0.075

0.003

Rate of Return on Assets

2012 2013

[81]

Operating Profit per Share

Operating Profits/ Number of Equity Shares

Operating earnings per share is defined as net operating earnings divided by the

weighted average number of fully diluted shares outstanding for the period. Per

share results referenced in the text of this press release are on a fully diluted

basis.

The Operating Profit per Share for Interarch Building Products is 75.47, which

compared to the baseline of 404.7 indicates management may not be effectively

managing the profits earned based on the owners investment in the

Company.

0

50

100

150

200

250

300

350

400

450

2012 2013

404.7

75.47

Operating Profit Per Share

2012 2013

[82]

Return on Capital Employed (ROCE)

Earnings before Interest and Tax (EBIT) / Shareholders Funds A financial ratio that measures a company's profitability and the efficiency with

which its capital is employed. A higher ROCE indicates more efficient use of

capital. ROCE should be higher than the company’s capital cost; otherwise it

indicates that the company is not employing its capital effectively and is not

generating shareholder value.

The percent rate of return on Capital Employed for Interarch Building Products is

0.03, which compared to the baseline of 0.17 indicates management may not be

effectively managing the profits earned based on the owners investment in the

company. ROCE is a useful metric for comparing profitability across companies

based on the amount of capital they use.

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

2012 2013

0.17

0.03

Return on Capital Employed

2012 2013

[83]

Percent Rate of Return on Equity

Earning after tax / Total Equity * 100

This ratio expresses the rate of return on equity capital employed and measures

the ability of a company's management to realize an adequate return on the

capital invested by the owners in a company. A higher number is preferred for

this commonly analysed ratio.

The percent rate of return on equity for Interarch Building Products is 0.5%,

which compared to the baseline of 12.21% indicates management may not be

effectively managing the profits earned based on the owners investment in the

Company. In both financial year the Nominal Value of Share is Rs.100. The

Return on Equity value seems to be falling in 2013 FY.

0

2

4

6

8

10

12

14

2012 2013

12.21

0.5

Return on Equity

2012 2013

[84]

Coverage ratios

Coverage ratios assess a company’s ability to meet its long-term obligations,

remain solvent, and avoid bankruptcy. It measures how well a company’s cash

flow covers its short-term financial obligations.

Lenders evaluate coverage ratios to determine the degree to which a company

could become vulnerable when faced with economic downturns. A company with

a high level of debt poses a higher risk to long-term creditors and investors.

Debt to Total Assets

Total Liabilities / Total Assets

This ratio measures what proportion of debt a company is carrying relative to its

assets. A ratio value greater than one indicates a company has more debt than

assets. Naturally, companies and creditors prefer a lower number.

The percent rate of return on equity for Interarch Building Products is 0.5%,

which compared to the baseline of 12.21% indicates management is effectively

managing the debts against the total assets.One shortcoming of the total debt to

0

0.005

0.01

0.015

0.02

0.025

2012 2013

0.013

0.025

Debt to Total Assets

2012 2013

[85]

total assets ratio is that it does not provide any indication of asset quality, since it

lumps all tangible and intangible assets together.

Debt Equity ratio

Long term loans or short term debts – only vehicle loans/Shareholders

Equity

A measure of a company's financial leverage calculated by dividing its total

liabilities by stockholders' equity. It indicates what proportion of equity and debt

the company is using to finance its assets.

A high debt/equity ratio generally means that a company has been aggressive in

financing its growth with debt. This can result in volatile earnings as a result of

the additional interest expense.

The Debt Equity ratio for Interarch Building Products is 0.037, which compared to

the baseline of 0.022 which is very less because Interarch have only vehicle

loans as long term debt and in short term debts it has some secured loans from

banks.This shows company has low debts thus less liabilities against its

shareholders equities.

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.04

2012 2013

0.022

0.037

Debt - Equity Ratio

2012 2013

[86]

Long term Debt Equity ratio

Long term debts/ Shareholders Equity

A ratio showing the financial leverage of a firm, calculated by dividing long-term

debt by the amount of capital available.

A variation of the traditional debt-to-equity ratio, this value computes the

proportion of a company's long-term debt compared to its available capital. By

using this ratio, investors can identify the amount of leverage utilized by a

specific company and compare it to others to help analyze the company's risk

exposure. Generally, companies that finance a greater portion of their capital via

debt are considered riskier than those with lower leverage ratios.

The Debt Equity ratio for Interarch Building Products is 0.008, which compared to

the baseline of 0.005 which is very less because Interarch have only vehicle

loans as long term debt. This ratio Score indicates this company is less riskier

With no long term obligations towards company’s capital.

0

0.001

0.002

0.003

0.004

0.005

0.006

0.007

0.008

2012 2013

0.005

0.008

Long term Debt Equity ratio

2012 2013

[87]

Debt Service Coverage Ratio

Net operating income / Total Debt Services

In corporate finance, it is the amount of cash flow available to meet annual

interest and principal payments on debt, including sinking fund payments.

A DSCR of less than 1 would mean a negative cash flow. A DSCR of less than 1,

say .95, would mean that there is only enough net operating income to cover

95% of annual debt payments.

The Debt Service Coverage ratio for Interarch Building Products is 1.94 , which

compared to the baseline of 6.29 .The fall in DCSR in 2013 depicts that there is

an decrease in net operating income.

0

1

2

3

4

5

6

7

2012 2013

6.29

1.94

Debt Coverage ratio

2012 2013

[88]

Conclusion & Recommendation

Interarch have a lot of advantages and some challenges that are being

confronted successfully. It is important to realize that in their case whatever can

be done in advance should be done in advance. Efforts should be made to

reduce the number of parts and material and use light weight elements to save

on the transportations costs. However, the most important step is to increase the

awareness amongst people so that there can be a shift from conventional

structures to PEBs. Interarch is focusing on training and development of their

partners and vendors as well – the industry is hoping to see a wider application

of PEBs.

There is no doubt looking at the way the population density particularly in metro

cities, horizontal construction has been put on restriction, and comfortably spread

out real estate is hard to find. Lack of space due to exponential rise in population

in urban areas has not only given way to taller building with more floors, but also

stresses on the fact that the construction has to be faster. The use of steel in

high-rise building comes into vogue. High rise building or multi-storey building,

built completely in steel or primarily with steel are a fairly limited in India.

Building a high rise or any multi-level building demands the use of light-weight

yet strong materials. Steel, by virtue of its high strength to weight ratio enables

[89]

large spans and light weight construction. Steel structures can have a variety of

structural forms like braced frames and moment resistant frames suitable to meet

the specific requirements of higher building. Taller building also face higher wind

loads, and hence steel being flexible, allows the building to move and deflect with

the wind forces, rather than making it rigid like concrete.

Building tall with steel also allows more floors per total height of the building. This

is due to the fact that the building structure in steel is lighter and more efficient,

and has beams and that are not required to be as deep as those of concrete to

support the floors. The ability to have lighter sections, allowing the same load

bearing capacity per floor. Pre-engineered steel systems, that are our specialty,

allow further optimization and further efficiency in steel building design. Delving

into the mechanics of high rise building construction, we see that the introduction

of hot rolled steel sections, using higher grade steel add more strength to the

building. Better steel decking as a construction material brought about a

revolution in the steel building space. Composite steel decking laid on each floor

adds ability to transfer lateral loads more effectively through the structure aiding

the structure to be stronger than conventional rigid materials. This added

strength per floor allows the overall core steel structure to be lighter and even

more efficient. High-rise frames are constructed of H-columns or box columns,

(vertical-support members) and H-beams (horizontal-support members). Cross

bracing or shear walls are used to provide a structural frame with greater lateral

rigidity in order to withstand wind stresses.

Use of steel makes it possible to create large, column-free internal spaces; thus,

these are particularly advantageous for open-plan offices and large auditoriums

and concert halls. The steel frame when compared with R.C. frame results in

sufficient extra space to accommodate all service conduits without significant

loss in head room.

Another significant aspect of pre-engineered steel building is that they are faster

to erect compared with reinforced concrete frames. The elements of framework

are pre-manufactured in the factory under effective quality control thus enabling a

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better product. The connections for each part are built in and pre-punched into

the members and hence pre-engineered design reduces time, on-site activities,

materials and labor, causing little disruption to normal life of the community,

unlike wet concrete construction process.

The availability

of the building in a shorter period of time results in economic advantages to the

owner due to shorter period of deployment of capital, without return. In

comparison with concrete construction, steel frames are significantly lighter. This

results in much reduced loads on foundations. Not to forget, the foundation of

high rise building usually consists of concrete piers, piles, or caissons that are

sunk into the ground. Subsequent alterations or strengthening of floors are

relatively easy in steel frames compared with concrete frames. The framework is

not susceptible to delays due to slow strength gain, as in concrete construction.

Although, such construction technology in India is still at a nascent stage, the

structural designs and technological development in the Indian pre-engineered

construction industry has been geared up and ready provide such building

solutions for almost 2-3 years. This form of construction will see widespread

application in high rise building, infrastructure and housing in the coming years.

This is a logical progression of the industry and India has a lot of catching up to

do. Emerging from their hiding places in concrete columns pre-engineered steel

structures (PEBs) are innovative solutions for construction projects across

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several sectors now as discovers.

As Infrastructure construction across the country is combining speed, economy,

safety, strength and aesthetics at awe inspiring levels, steel structures, until now

a primary foundation element, have risen as complete solutions in construction

projects for various structural requirements. India is growing fast as an economy

for pre-engineered building (PEBs) as it is witnessing a boom in the infrastructure

sector. Structural steel building or PEBs are addressing parameters including

finishes, environment control and life cycle with a panache derived from product

innovation and technology advancement.

Emerging as a strong alternative to conventional concrete construction methods,

PEB in India is validated by the 33% market share of PEBs in the construction

industry. While this figure is lower than some European countries, it marks India's

growing global market share at 9.5 percent -- a step ahead of China's 8.5

percent. The market demand is pegged at 425,000 TPA with a 15% growth per

annum. Current market size is around Rs.3, 500 Crore and it is expected to grow

at 10% to 15% per year. Generally, steel structures and specifically PEBs market

have, on the domestic front, surpassed the GDP from both the Indian steel

industry and the Indian construction sector. Over the next 2-3 years, the industry

is optimistic about a 15 to 20% annual growth, resulting in doubling of the market

over five years.

Strength building

With the country's five year plan catering for infrastructure addition in the form of

airports, metros and bridges sector differentiation is expected to separate

industrial building and building systems. Companies like Interarch’s have

diversified into verticals within the PEBs segment to meet sophisticated

requirements for structure. These include Design & Engineering, Manufacture

and Construction & Erection. This pattern of restructuring indicates an industry

that sees PEBs coming into its own with experiencing exponential growth with

diversification into various sectors and segment.

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Preferred alternative

While the application of PEBs has a wide potential, the concept is recognized

and preferred in the industrial construction segment. Add to that the reduced time

to completion with the benefit of quality, and there is recipe for success. "PEB is

getting its due credit as a favorable alternative construction methodology in India

today. More sectors are realizing the benefits of metal over brick and mortar. The

scope of metal/steel building is very vast for the Indian market. PEB proves to be

relevant and beneficial to several construction verticals including warehousing,

infrastructure, oil & gas refineries as well as group housing," The advantages of

having a steel structure or building over traditional concrete are far too many.

Primarily, speed and quality of construction are the top two benefits.

Steel building are fire, quake and cyclone resistant – hence from a safety and

longevity perspective, these building are timeless. Elaborating on developments,

"Interarch Building Products have evolved from a mere manufacturer of PEB to a

total solution provider for customer needs.

The company in the past few years has executed mega projects in the

automobile, general engineering, infrastructure, logistics, and various other

sectors.

"Keeping up with the market trend Interarch has already stretched its arms in

various sectors like: power plants, warehouses & industrial building, airports,

automobile, electronics, electrical, chemical, cement, FMCG, oil & gas and more.

Crossing boundaries

Coming up from roofing solutions as asbestos sheet substitutes, we are now

looking at steel structures that efficiently meet requirements of industrial and non-

residential building. As PEBs are tailor made to meet infrastructural requirements

of the client, like supplementing warehouse solutions, PEBs also offer heavy

industrial racking. Pre-engineered building is a good solution as optimization of

total structural steel weight and time is involved. The low cost involvement in

construction makes PEBs suitable for housing, defense and school building.

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Here PEBs have developed capacity to cross limitations of size.

Sharing some updates on product innovations "The innovative solutions provided

by manufacturers of steel frame multistoried building are girder slab

arrangement, slim floor system which is a space saver solution, steel Crete

system on floor to make it very light but stronger than concrete floor, cellular

beams for best service integration, composite floor system, site accommodation,

site storage and site offices with very light structural steel. Execution time is

reduced by 40% over the conventional building. The new building are designed

at grade 70 steel, which further reduces the weight. Since pre-engineered

building system is automated with high end design software like Tekla ,

AutoCAD, MBS to create a building for a specific use such as power plants,

warehouses & industrial building, airports, etc., it sets a new trend or innovation

in the infrastructure sector."

Convenience and improvement in design, finish and product range are some of

the factors encouraging projects like residential building and shopping malls to

induct the PEBs solution into the infrastructure. "As the designs are finalized

through client discussions, the final costs are worked out and mutually agreed

upon. That rules out nasty surprises midway construction. With major details

worked out, the client is also relieved of day-to-day involvement at construction

stage. All these benefits come with a quality assurance for the end product."

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Greenfield compliant

Steel, the basic material of PEBs, being very eco-friendly, allows any project high

scores on Greenfield compliancy. Design optimization ensures quantity of steel is

controlled, and the high tensile strength of the material makes the structure light.

Consequently, the foundation is more sustainable. Time saving, clean

construction sites, recyclability with low maintenance and extended life cycle of

the building are a taken. Further, PEBs allow dismantling, relocating and

expansion if the need arises. Modern insulation and ventilation methods add to

the energy conservation effort. PEBs are suitable even in ecologically sensitive

areas or geographically remote sites like hilly regions. The scope for integrating

other suitable construction materials like glass of course, really wide. Sailing on

the trend for getting certified are, among others, manufacturers like Interarch who

had earned many appreciation as well as devotion awards for its practices. Such

manufacturers are building on their strengths to offer comprehensive solutions for

LEED compliance for Green Building. The motivation to get green practices in

packaging and other aspects in a bid to get closer to green building solutions

overall is encouraging.

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Limitations (Speed Breakers)

India can present extremes in any given scenario, social or economic, is a well-

known characteristic. In the case of PEBs, this is demonstrated with the

presence of massive structures in the manufacturing and public utility areas, the

housing sector considers PEBs mostly for temporary sheds and cabins. There is

a gradual inclusion of this technology as quake resistant building code

compliances are being enforced, especially for high-rise structures. Shopping

malls and group housing show benefits from PEBs product design and

applications.

The shortage of trained or skilled workforce at the construction stage is often a

stumbling block to achieve delivery targets and finish quality. Companies vying to

maintain standards are forced to develop their own teams, especially at the

supervisory levels to ensure customer satisfaction.

Acquisition of steel, the primary raw material, often causes concern due to the

rising costs and discrepancy of taxes. Raw material costs are in upward trend

due to shortage of coal and iron ore. Government of India needs to consider

reducing the tax burden on these pre-engineered building in order to promote this

industry which has significant role in scaling up the infrastructure and also

generate employment opportunities

In an unorganized sector, the lack of standards and codes leaves the customer in

a quandary. Presently, unethical manufactures conveniently tend to mix and

match codes for individual building areas, raising doubts about the integrity of

design and the overall product. In developed country like USA, the engineers

enjoy AISC/MBMA recommendations for PEB applications, whereas in India,

PEB specific code is yet to be formulated.

As per Interarch concern, "All the building are designed according to AISC or IS

or MBMA codes as per the customers' or consultants' requirements and are

strictly in line with the standards followed in developed nations. They have to be

designed as per the project site since each location have different conditions

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Such as wind speed, seismic zone category, weather conditions, etc. These

changes the building tonnage as load conditions are taken into consideration

according to the project site and applied at the time of design stage to maintain

the stability and sustain all the natural happenings. All the leading PEB players

are planning to come out with standard design code for the industry in near

future. Even the Institute for Steel Development & Growth (INSDAG), an institute

under Government of India, is coming out with manuals on steel building, which

will further promote the usage of these in India. "We do not have a specific Indian

standard dedicated to PEB application to Cover knowledge of advanced steel

design while using HSLA steel.

The latest IS 800 – 2007 covers steel design by Limit State Method, but still

restricted to use concepts for conventional steel design. It is yet to cover the

broader spectrum of PEB application. Major players are applying these

principles, but within the domain of present the IS: 800 – 2007 code. Too often

this faces resistance/criticism from Consultants with conventional steel design

background. Web tapered members, thin plate webs, and single side welding at

flange to web junction - are still a nightmare for most of the Indian Steel design

Consultants. Bringing together the best of international experience and modifying

to suit Indian conditions is not far and that, in a market heading for exponential

growth, is relevant.

As India is being challenged by the urgent need of rapid improvement of its

infrastructure including air conditioned cool or even cold logistical and storage

building, production halls, power plants, hangars, and many more, there is a dire

need of faster and cost effective method of construction which can increase

productivity and efficiency without ignoring. And here stand the role of

prefabrication building system which is faster, highly durable, weather &

corrosion resistant and most important cost effective method of construction. It's

already making waves in various construction sectors in India as industrial

warehouses, factories, educational sector etc. and hoped that it will have

sprawling market in all other sectors including commercial to mass housing.

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Bibliography

Official Website -www.interarchbuilding.com-

NBM media- http://www.nbmcw.com/articles/peb-roofing/peb-prefab-

steel-structures/21480-tcs-campus-siruseri-chennai.html

Wikipedia-http://en.wikipedia.org/wiki/PEB_Steel

Construction Week Online- http://www.constructionweekonline.in/article-

6872-peb_players_eye_high_rise_residential_segment/

Infrastructure today-

http://infrastructuretoday.co.in/News.aspx?nId=czp/TZJBfivsXb4Ntzi7VA

Construction Mirror-http://www.constructionmirror.com/rp_int.html

Business today- http://businesstoday.intoday.in/

Economics Times- economictimes.indiatimes.com