A STUDY ON

FINANCIAL PERFORMANCE ANAYSIS

with reference to

M/S HINDUSTAN SHIPYARD LIMITED (HSL)

VISAKHAPATNAM

A Project report submitted for partial fulfilment for the award of the
degree of
BACHELOR OF BUSINESS ADMINSTRATION
SUBMITTED BY
MADDINENI HARSHITH Regd. No.: 122014201030
Under The Esteemed Guidance Of
CA.Manoj Kumar Sabat

GITAM SCHOOL OF BUSINESS

Visakhapatnam

(2020-2023)
 DECLARATION

I, MADDINENI HARSHITH here by declared that the project work titled

“A STUDY
ON FINACIAL PERFORMANCE ANAYSIS” with regard to the
HINDUSTAN SHIPYARD LIMITED, VISAKHAPATNAM the original work
done by me and submitted to GITAM SCHOOL OF BUSINESS, in the
partial fulfillment of requirement for the award of BACHELOR OF
BUSINESS ADMINSTRATION is an original record work done by me
under the supervision of CA.MANOJ KUMAR SABAT.

Date: Name: M.HARSHITH

Place: visakhapatnam Reg. No.: 122014201030

CERTIFICATE

This is to certify that project entitled “A STUDY ON FINACIAL

PERFORMANCE ANAYSIS” with reference to HINDUSTAN SHIPYARD
LIMITED, Visakhapatnam submitted by MADDINENI HARSHITH in partial
fulfilment for the award of the degree of BACHELOR OF BUSINESS
ADMINSTRATION, GITAM SCHOOL OF BUSINESS, is a record of
Bonafede work carried out by her under my guidance and supervision.
Date: Project Guide Place:
Visakhapatnam S.LAVANYA
ASSISTANT MANAGER
FINANCE DEPARTMENT

ACKNOWLEDGEMENT
The completion of this undertaking could not have been possible without
the participation and assistance of so many people. Their contributions are
sincerely appreciated and gratefully acknowledged.

I would like to express my sincere gratitude to Prof. S Srinivasa Murthy

Dean, Director, Institute of Public Enterprise, Hyderabad, for having given
me an opportunity to do this project.

I would like to express my deep sense of gratitude to DR. USHA NORI,

Associate Professor, Institute of Public Enterprise, Hyderabad.

I profusely thank my company guide B. Santosh Roopa, (ASSISTANT

MANAGER), Hindustan Shipyard Ltd, helping and assisting me through
her valued guidance, co-operation, and unstinted support during the
course of my project.
 Name: Maddineni Harshith

Need of the Study

• The project study is undertaken to know the financial position of

a firm for different purposes.
• To know standardized financial information for comparison.
• To evaluate current operation of Hindustan shipyard limited.
• To compare current performance with past performance.
• The study helps to know a liquidity, profitability, turnover, and
solvency position of the company.
• To analyze the long-term solvency position.
• To compare the financial performance of the Hindustan shipyard
in various year and work according to the trend.

Scope of the Study

• The scope of the study is limited to collecting financial data

published in the annual reports of the company every year. The
analysis is done to suggest the possible solutions. The study is
carried out for 5 years (2017-21).
• The study includes the ability of the firm to meet its current
obligations.
• The extent to which the firm has used its long-term solvency by
borrowing funds.
• The efficiency with which the firm is utilizing its assets in generating
the sales revenue.
• The overall operating efficiency and performance of firm.

Objective of the study

• To study and analyze the financial position of the Company through

ratio analysis.
• To analyze the profitability position of the “Hindustan shipyard
limited”.
 • To determine the long-term solvency position of “Hindustan shipyard
limited”.
• To suggest the feasible solution to improve the overall efficiency of
the” Hindustan shipyard limited”.
• To study the comparative financial statement of “Hindustan Shipyard
limited”

• The objective of the study is to find out the growth trend, Similarity
of financial performance of Hindustan Shipyard Limited.

Methodology of the study

Methodology is an intensive and purposeful search for knowledge and for
the understanding of social and physical phenomena. It is the method for
the discovery of true values in a scientific way. There are two sources of
data,

1. Primary sources and

2. Secondary sources

Primary Data

Primary data is the data that is collected for the first time through personal
experiences or evidence, particularly for research. It is also described as
raw data or first-hand information. The data is mostly collected through
observations, physical testing, mailed questionnaires, surveys, personal
interviews, case studies, and focus groups, etc.

The data collection includes Conducting personnel interviews with the

concerned officer of finance department of Hindustan Shipyard Limited.

Secondary Data

Secondary data is a second-hand data that is already collected and

recorded by some researchers for their purpose, and not for the current
research problem. It is accessible in the form of data collected from
different sources such as government publications, censuses, internal
records of the organization, books, journal articles, website, and reports,
etc.

The data collection includes:

 Collection of required data from annual reports of Hindustan Shipyard
limited. References from textbooks and journals relating to financial
management.

The information so collected from both sources will be subjected to

statistical treatment to make the study a useful one. Application of
statistical techniques helps to draw useful conclusions.

Limitations of the study

1. Lack of time is another limiting factor, i.e., the schedule period of 4

weeks is not sufficient to make the study independently regarding
Financial Performance analysis in HINDUSTAN SHIPYARD
LIMITED.
2. The busy schedule of the officials in HINDUSTAN SHIPYARD
LIMITED is limiting factor. Due to the busy schedule officials
restricted me to collect the complete information about the
organization.
3. Non-availability of confidential financial data.

4. The study is conducted in a short period, which was not detailed in

all aspects.

5. During the period of analysis, the company’s current financial

information is not available.
6. Reliability on usage of secondary data.

7. The calculated data can be compared with other shipping

companies, but it was not available.
 INDUSTRY PROFILE

The shipbuilding industry deals with the production of larger (mainly

seagoing) vessels intended for the merchant fleet (cargo or passenger
transport), the offshore energy industry or military purposes. It also
includes products and services supplied for the building, conversion, and
maintenance of these ships.

The shipbuilding industry is a dynamic and competitive sector. It is

important from both an economic and social perspective. It is also linked
to other sectors including transport, security, energy, research, and the
environment. Shipbuilding is an important and strategic industry.
Shipyards contribute significantly to regional industrial infrastructure and
national security interests (military shipbuilding).

India has 23 Shipyards, 9 are public sector undertakings (PSUs), two are
owned by state government and remaining 14 are in private sector. The
Indian shipping industry plays an important role in the Indian economy as
almost 90% of the country’s international trade is conducted by the sea.
Today, India has around 1071 ships with 722 coastal and 349 overseas
ships; Indian coastal shipping is highly fragmented.

The first ship building factory of India was established at Vishakhapatnam

in 1941. It was later, adopted by the Indian Government in 1952 and was
named as ‘Hindustan Shipyard Limited’.

Kolkata, Goa, Mumbai, and Kochi are the major ship building centres.
The Kochi Dockyard, developed in collaboration with Japan, which is the
largest and most recent Dockyard of the country, whereas the Mazagaon
Dockyard (Mumbai) builds the naval ships for the Indian Navy.

India is one of the main maritime nations of the world with 6.8 million Gross
Registered Tonnages (GRT), with rating 17th in the world.

The Shipping Corporation of India Ltd. (SCI) was formed in 1961 and in
1992; it was changed from a Private Limited Company to Public Limited
Company. In August, 2009, it conferred as ‘Navratna’ status.

Indian Maritime University (IMU) was set up in 2008 in Chennai with

campuses at Chennai, Kolkata, and Vishakhapatnam as a Central
University.
 INDIA’S SHIP-REPAIRING INDUSTRY

Indian ship repairing industry comprises of about 7 ship repair units

(SRU's), specifically Alcock Ashdown & Co. Limited, Chennai Port Trust,
Mumbai Port Trust, Hindustan Shipyard Limited (HSL), Cochin Shipyards
Limited (CSL), Garden Reach Shipbuilders (GRSE) and Mazagon Dock
Limited (MDL) who have been approved as the permanent SRU’s

MAJOR SHIPBUILDERS IN INDIA

Key Government Entities in the Indian Shipbuilding Industry:
Company Name Activities Location Revenue in
India(crore)

Cochin Shipyard Shipbuilding and Ship South India, Kerala 3669.99

repair

Hindustan Shipbuilding and Ship South India, Andhra 546.48

Shipyard repair Pradesh

Mazagon Docks Shipbuilding West India, 5289.53

Maharashtra

Goa Shipyard Shipbuilding and Ship West India, 978.76

repair and engineering Maharashtra

Garden Reach Shipbuilding and Ship East India, West 1658.79

Shipyard repair Bengal

MAIN SEGMENTS IN THE INDAIN SHIPBUILDING INDUSTRY

Shipbuilding Industry is divided into the following: - 1)
New shipbuilding yards.
2) New shipbuilding yards are mainly active in building commercial and
defense vessels.
3) Commercial vessels are primarily built for European owners, and
defense vessels are for the Indian Navy.
4) Shipyard mainly build vessels for European owners
5) Major yards are AGB Shipyard, Bharati shipyard, L&T Shipyard,
Cochin Shipyard etc.

Key Private Entities in Indian Shipbuilding Industry

Company Name Activities Location Revenue in India

ABG Shipyard Shipbuilding and West India, $2.42 million

Repair Maharashtra
Bharati Shipyard Shipbuilding and West India, $180 million
Repair Maharashtra
Pipavav Shipyard Ship Repair West India, $190 million
Maharashtra
Chowgule Shipbuilding and West India, $110 million
Shipyard Repair Maharashtra
L&T Shipyard Shipbuilding and South India, Tamil $20 billion
Repair Nadu

MAIN CENTRES OF SHIP BUILDING INDUSTRY IN INDIA

The four major ship centres in India are located at
I. Visakhapatnam
II. Kolkata
III. Kochi and
IV. Mumbai

India ranks second among the Asian Countries next only to Japan in terms
of shipping tonnage. However, her shipping fleet is much too small for her
dimensions.
MAJOR SHIPYARDS IN INDIA COCHIN SHIPYARD

Cochin Shipyard was incorporated in 1972 as a Government of India

company, with the first phase of facilities coming online in 1982. The
company has Mini ratan status. The yard has facilities to build vessels up
to 1.1 lakh tons and repair vessels up to 1.25 lakh tons, the largest such
facilities India. In August 2012, Government of India announced plans of
divestment to raise capital of Rs. 15 billion for further expansion through
an Initial public offering (IPO) towards the end of the fiscal year. However,
this did not materialize until August 2017, when the company conducted
its IPO and listed its shares on BSE and NSE. Cochin is one of the largest
shipyards in India, and is the only yard capable of building ships up to
about 1,25,000 dwt. It was established in 1972 under technical
collaboration with Mitsubishi heavy industries of Japan. The yards have
the distinction of having the international standers organization (ISO) 9001
Certification for ship building, ship repair and marine engineering training.

HINDUSTAN SHIPYARD
Founded as the Scindia Shipyard, it was built by Walchand Hirachand as
a part The Scindia Steam Navigation Company Ltd. Walchand selected
Visakhapatnam’s a suitable location for the construction of the yard and
took possession of the land in November 1940. The foundation stone for
the shipyard was laid by Dr. Rajendra Prasad on 21 June 1941, who was
at that time the Congress President.
The first ship to be constructed fully in India after independence was built
at the Scindia Shipyard and named Jal Usha. It was launched in 1948 by
Jawaharlal Nehru a ceremony.

The main features of the yard are: -

a. Three slip ways of 30,000 DWT capacity, each building dock of
80,000 DWT capacity.
b. Outfit jetty and ship Quay of 457 meters length.
c. A two –berth wet basin.
CENTRAL ISLAND (RAJA BEGAN) DOCK YARD

The central island (Raja Began) Dock yard is the Calcutta dock system.
The facility has three dry docks for construction and repair of small and
medium-size vessels. The operation has integrated facilities for hull
fabrications, casting operations, machine repair and outfitting of machinery
and equipment. The yard was established in 1972. In 2000 the net income,
which was largely from ship repair, was Rs 39 cores (us 8.3 million) It has
been recommended that the operation be privatized as quickly as possible
there being no strategic or commercial rational for public ownership.

MAZAGON DOCKS LIMITED

Mazagon Dock Shipbuilders Limited (MDL), formerly called Mazagon

Dock, is a Shipyard in Mazagaon, Mumbai. It manufactures warships and
submarines for the Indian Navy and offshore platform associated support
vessels for offshore oil drilling. It also builds tankers, cargo bulk carriers,
passenger ships and ferries. The shipyards of MDL were established in
the 18th century. Ownership of the yards passed through entities including
the Peninsular and Oriental Steam Navigation Company and the British-
India Steam Navigation Company. Eventually, 'Mazagon Dock Limited'
was registered as a public company in 1934. The shipyard was
nationalized in 1960 and is now a Public Sector Undertaking of the
Government of India.

ABG SHIPYARD GROUP

ABG Shipyard Ltd is a part of the ABG Group of companies with diversified
business interests. Established in 1985, it is headquartered in Mumbai. It
has shipbuilding operations in Surat and Dahej in Gujarat. Following its
acquisition of Western India Shipyard Limited in October 2010, it operates
a ship repair unit in Goa which is the largest ship maintenance facility in
India.
ABG became one of the largest private ship building companies in India
with a capacity to manufacture vessels up to 20 tons in weight.

BHARATHI SHIPYARD LIMITED

Bharati Shipyard Limited (BSL) was founded in 1973 in Ratnagiri,
Maharashtra by Prakash C. Kapoor and Vijay Kumar, graduates of the
Ocean Engineering & Naval Architecture program at Indian Institute of
Technology, Kharagpur, as well as colleagues at Mazagon Dock Limited.
The company went public in December 2004, with listings on the Bombay
Stock Exchange and the National Stock Exchange.
In 2005, BSL subsequently acquired a 51% stake in privately held Pinky
Shipyard Private Limited based in Goa. In 2009, BSL won majority control
of Great Offshore Limited in a bidding war with ABG Shipyard Limited. In
November 2010, BSL acquired a majority stake in South India based
Tebma Shipyards for INR 757.5 million. Bharati Shipyard is one of the two
leading shipyards in the private sector. It is engaged in the design and
construction of sea and coastal craft up to a maximum of approximately 25
meters in length.

HOOGHLY DOCK AND PORT ENGINEERS

Hooghly Dock & Port Engineers Limited (HDPEL) is a shipyard at Howrah,
India. Originally Hooghly Docking & Engineering Company Limited, it was
created in 1819. The company has two units located at Salkia and
Nazirganj on the bank of River Hooghly in the city of Howrah (in the State
of West Bengal, India). It manufactures various types of vessels, dredgers,
floating dry dock, oil pollution control vessels, passenger vessels, etc.

GOA SHIPYARD LIMITED

The Goa Shipyard (GSC) was established in 1957 as a small barge –
building yard. Today it is a completed integrated facility and participates in
the design , development construction and commissioning of a complete
range of commercial and military ships. It is also engaged in repair and
modernization. Its workforce is about 2150 persons, the yard is publicly
owned under the administrated control of Ministry of Defence.

GARDEN REACH SHIPBUILDING AND ENGINEERS

Garden Reach Shipbuilders & Engineers Ltd, abbreviated as GRSE, is one
of India's leading shipyards, located in Kolkata, West Bengal. It builds and
repairs commercial and naval vessels. Presently GRSE has also started
building export ships in a mission to expand its business. Founded in 1884
as a small privately owned company on the eastern bank of the Hooghly
River, it was renamed as Garden Reach Workshop in 1916. The company
was nationalized by the Government of India in 1960. It was awarded the
Miniratna status, with accompanying financial and operational autonomy
in September 2006. It is first Indian shipyard to build 100 warships.

WORLD SHIPBUILDING INDUSTRY IN THE 21ST CENTURY

South Korea is the World’s largest shipbuilding nation with a global market
share of 37.45% in 2011.South Korea is the global leader in the production
of advanced high-tech vessels such as cruise liners, super tankers. LNG
carriers, drill ships, and large –sized container ships. In the 3rd quarter of
2011, south, South Korea won all 18 orders for LNG carriers, 3 out of 5
drill ships and 5 out of 7 large –sized container ships.

GLOBAL LEADRERS IN SHIPBUILDING INDUSTRIES

• Hyundai Heavy Industries – South Korea
• Heavy Industry – South Korea
• Bohai Shipbuilding Heavy Industries Co. Ltd- China
• Bolunbao Shipyard –China
• Aclock Ashdown , Bhavnagar –India
• Cochin Shipyard Ltd- India
• Hakodate Dock (Hokodate )- Japan
• Imabari S.B (Saijo) – Japan
WORLD SHIP BUILDING MARKET SHARE BY COUNTRIES

COMPANY PROFILE OF Hindustan Shipyard

Limited

BASIC INFORMATION

Type Public Sector Undertaking

Industry Shipbuilding

Founded 21 June 1941

Headquarters Visakhapatnam, Andhra Pradesh

Key People Commodore Hemant Khatri

Service Ship Building, Ship repair,

Submarine Construction and
Refits
Hindustan Shipyard Ltd (HSL), set up in the year 1941, strategically
located on the East Coast of the Indian peninsula, at Visakhapatnam,
Andhra Pradesh, is the nation’s premier shipbuilding organization catering
to the needs of shipbuilding, ship repairs, submarine construction and
refits as well as design and construction of sophisticated state-of-the-art
offshore and onshore structures. Direct sea access, excellent
infrastructure, skilled work force, rich expertise garnered over the years in
building 200 vessels, refitting 5 submarines and repairing 2000 vessels of
various types enable HSL to offer competent services for the defence and
maritime sectors.

MISSION
To continuously innovate and improve upon performance for construction
and repair of ships and submarines within contractual time, cost and
quality standards meeting customer satisfaction.

VISION
To be an Internationally competitive Shipyard for construction, repair and
refitting of Ships & Submarines and achieve mini-ratna status by ensuring
higher VoP, Positive net worth and sustained profit.

OBJECTIVE

To construct and repair of Naval ships and Strategic / Conventional

submarines
To modernise the yard for efficient construction of Naval ships and
submarines
To augment technological capabilities for the design and
construction of ships and submarines
To develop the expertise and adequately skilled manpower
necessary for the anticipated future orders
To incorporate 'Best Practices' in all key activities of the yard
including production, planning, purchase, marketing, and human
resource management
To upgrade welding, cutting, plumbing, and outfitting technologies
To upgrade ERP and IT systems for efficient information
management and transparent operations
Finalisation of ToT and design collaborations for new ships and
submarine projects
Location:
Hindustan Shipyard Ltd. is in the picture’s que port city of Visakhapatnam
on the East coast of India. The shipyard is easily accessible by direct air,
sea, rail, and road connections from India and Abroad.

HISTORY

The long journey towards making ships in India started during the
preindependent years with the founding of the first green-field shipyard in
the year 1941 in the name Scindia Steam Navigation Co. Ltd by the great
industrialist and visionary Seth Walchand Hirachand which is today known
as the Hindustan Shipyard Ltd.

Walchand selected Visakhapatnam as a strategic and ideal location and

took possession of land in November 1940. The World War II was going
on and in April 1941, the Japanese bombed the town. However, Walchand
was unfettered and decided to go ahead with his plan of building a
shipbuilding industry in India. In the days when it was unthinkable of
foundation ceremony to be done by anyone other than British officials, the
truly patriotic Walchand decided to break the tradition and the foundation
stone for the shipyard was laid by Dr.Rajendra Prasad on 21 June 1941,
who was acting Congress President at that time. The first ship to be
constructed fully in India after independence was built at the Scindia
Shipyard and named Jal Usha. It was launched in 1948 by Jawaharlal
Nehru by the first Prime Minister of India, at a ceremony where the families
of Seth Walchand Hirachand, late Narottam Morarjee and Tulsidas , the
partners of Scindia Shipyard, were present along with other dignitaries and
industrialists.

Walchand died in 1953, and the Scindia Shipyard continued to

flourish under next of kinds of founders. However, later on the government
of India decided to nationalize the Scindia Shipyard, as it was a sensitive
and strategic related to defence sector of the country. After Independence,
two thirds of its holdings were acquired by Govt. of India in 1952 and
Hindustan Shipyard Ltd was incorporated on 21 Jan 1952. Balance one
third share was acquired by GOI in Jul 1961 and the Shipyard became a
fully owned Govt. of India undertaking under the administrative control of
Ministry of Shipping.

Considering the strategic requirements of the nation, the yard was brought
under the administrative control of the Ministry of Defence on 22 Feb 2010.
The Registered Office of the company is located in Visakhapatnam and
has regional offices at New Delhi.

EXISTING INFRASTRUCTURE AND FACILITIES

Sprawling in an area of 117 acres, the shipyard has an ergonomic layout

that ensures unidirectional material flow. 2000 T / month of steel can be
processed in the yard with a stockyard that can hold 30,000 tons of steel,
modern plate and section treatment plant, NC Cutting Machines, heavy
duty presses, self-elevating trucks capable of handling blocks up to 250
tons and large prefabrication shops with EOT cranes of adequate capacity.

The hull construction facilities include a fully covered Building Dock (240 x
53 M) equipped with cranes of maximum capacity of 300 T and three Slip
Ways capable of launching up to 33000 DWT. Indeed, the first ever 30000
DWT launch in India was done in 2007 in HSL. The Yard has a long
outfitting quay (460 m) of 10M clear depth equipped with self-contained
services and facilities. In addition to the existing facilities, the yard has
about 21 Acres of land (OPF Yard) and 20 Acres of land in the Colony
which can be effectively utilized for augmenting the existing facilities for
new construction projects.

SHIP REPAIRS

The Dry dock, constructed in the year 1971, is an important adjunct to the
Shipyard for undertaking repairs of ships and oil rigs. With a size of 244 x
38 M, it is capable of handling vessels up to 70,000 DWT. The Dry Dock,
the biggest and modern dock in the East Coast, with 544 meters of berths
with a depth of 10 M, has accomplished intricate repair jobs on a variety
of Naval Ships including Submarines, Merchant Ships and Oil Rigs.

SUBMARINE REFIT

HSL happens to be the only yard in India to have carried out the refits of
three classes of submarines (refit of two Egyptian submarines in 1971, refit
of F-class (INS Vagli) and EKM class (INS Sindhukirti) submarine. The
Medium Repair-cum-Modernization of Russian made INS Sindhukirti, was
successfully completed and handed over to the Navy on 26 Jun 2015. This
has earned many accolades for the shipyard.

During the refit, nearly 100 Km of cabling and 30 Km of high-pressure

piping was renewed, thereby making this the most advanced platform ever
to be undertaken in an Indian yard proving the Yard’s capability to take up
orders to construct generation next Greenfield submarines. Incidentally,
this was the only instance where retrofitting of missile system in an existing
submarine was undertaken in the country. The submarine achieved RPM
of 350 during its very first sea sortie for Full Power Trials, thus certifying
the quality of work by the yard.

Considering the expertise gained in MR of INS Sindhukirti, HSL has been

awarded for Normal Refit of INS Sindhuvir, a Kilo class submarine of the
Indian Navy at a cost of Rs 500 Cr. For this project, HSL has signed a
contract with SC Zvyozdochka shipyard, Russia on 28 Mar 17 for technical
support during NR of INS Sindhuvir at HSL. The yard has successfully
undertaken the refit of an IN Submarine with extensive work package. Post
completion of entire work package, and the mandatory trials the submarine
was delivered to Indian Navy nine days ahead of contractual delivery time.
DESIGN RESOURCES

HSL has a well-equipped Design & Drawing Office, which in the past has
developed in-house design for a number of vessels. HSL’s design
department has been recognized as in-house R&D unit by Department of
Scientific & Industrial Research (DSIR), Ministry of Science & Technology.

HSL's design capability embraces wide spectrum of general and special

purpose vessels. In anticipation of the requirement of state-of-the-art
resources for taking on the complex design support for the assured orders
for SOVs and FSS, design office has been upgraded in the recent past
with sufficient number of licenses for Aveva Marine as well as for Auto
CAD Mechanical under modernization program. With these tools, the
design office has mastered the art of producing composite drawings which
would enable adoption of integrated modular construction methodology
with a high level of pre-outfitting of blocks-modules.

TECHNOLOGY UP-GRADATION

HSL is also venturing into the latest technological upgradations available

in the market, aiming for a seamless process flow of information and to
bring in best practices adopted in other Indian and foreign shipyards. HSL
has partnered with M/s Tech Mahindra Ltd as System Integrator (SI) to
implement SAP ERP and integrate with PLM design software products.
This would be first time in any Indian Shipyard that PLM Design software
would be integrated with any ERP software. In fact, not many shipyards in
the world have this feature included in the ERP. The system is now
implemented.

SOLAR POWER SYSTEM

Achieving 100 GW solar power is part of India’s commitment before the

United Nations Framework Convention on Climate Change (UNFCCC).
Accordingly, the Government has set a target for installation of 40 GW
power grid connected solar rooftop systems in the country by 2022. To
fulfil the commitment of Government of India, Hindustan Shipyard Ltd has
taken a step by installing 2 MWp rooftop solar plant. The solar power plant
was inaugurated by Shri Pravin Kumar, IAS, Collector & District
Magistrate, Shri Mahesh Chandra Laddha, IPS, Commissioner of Police,
Shri M Hari Narayanan, IAS, Commissioner, GVMC in the presence of Shri
S K Mishra, Director, SECI, Shri Umakant Shende, COO, CleanMax Solar
and Media personnel.

The entire project including design, supply, erection, testing,

commissioning including warranty, operation & maintenance is being
undertaken by M/s Clean Max without any operation and capital
expenditure from the yard side. HSL is required to buy the generated
power from M/s Clean Max at a cost of Rs 3.939/kWh as against Rs
5.60/kWh grid power of APEPDCL. The solar plant, now the largest rooftop
solar plant in Andhra Pradesh, will help the shipyard to save Rs 48 lakh
per annum in energy costs, while also reducing its environmental footprint.
This rooftop solar plant will meet about 35% of Shipyard’s total power
consumption, with 28 lakh units of clean solar energy being generated
annually by the plant. Hindustan Shipyard Ltd, built in 1941 as India’s first
Greenfield defence shipyard, is an early adopter of rooftop solar, moving
towards a sustainable future.

Seven buildings in the Hindustan Shipyard Limited premises have been

equipped with solar panels, including the iconic blue sheds where naval
ships & submarines are built and repaired. Overall, the panels will result in
the abatement of 2300 tons of C02 per annum, for the next 25 years. This
abatement is equivalent to planting 58,000 full grown trees. While there is
no investment on the part of HSL, as per the agreement arrived at with
Clean Max, the yard has to buy power from it for 25 years. The project was
executed under the Solar Energy Corporation of India (SECI) Rooftop
Solar Scheme.

MORALE, MOTIVATION & TEAM-WORK

There is no discrimination in HSL with regard to caste, creed, minority

status, gender, religion etc., and the efforts are synergized with unanimity
and teamwork towards improvement of productivity and operational
efficiency. This has resulted in improving Rank, Revenue and Reputation
of the Shipyard. HSL prioritizes its efforts and, endeavours to comply with
all Govt. stipulations, with regard to reservation of posts for SC/ST/OBC
and as on now the compliance is more than the Govt. norms.
PRODUCT PROFILE

The product profile includes cargo liners, bulk carriers, passenger vessels,
offshore platform vessels, inshore platform vessels, survey vessel,
mooring Vessel, HSD oiler, landing ship tanks, training Ship, tugs, supply
vessels, drill ship, dredgers, oil recovery and pollution control vessel,
research vessel, floating cranes, barges etc. for varied number of
customers like Indian Navy, Indian Coast Guard, ONGC, GML, Port trusts,
DCI, SCI, Andaman & Nicobar administration etc.

QUALITY AND CERTIFICATION

HSL is the first yard in the country to obtain ISO 9001-2000 accreditation.
The yard is ISO 9001 - 2015 certified from IRQS for undertaking “Design
and Construction of all categories of Defence Ships/ Crafts/Boats,
Commercial Vessels up to 80,000 DWT and Repairs of all categories of
Ships/ Crafts/ Boats/ Rigs and allied services”.

The Quality Division of HSL has developed comprehensive ‘Quality

Management System’ which ensured successful completion of the MR of
INS Sindhuvir conforming to stringent quality norms stipulated in Russian
Repair Documents.

SKILL DEVELOPMENT

The yard’s initiatives in the field of skill development include training of

Trade, diploma & degree apprentices as well as vocational trainees. 23
engineering graduates and 14 Diploma qualified were trained in their
respective streams during the year 2019-20. ‘On job training’ and project
work was also extended to 699 students of various engineering colleges,
management institutions and marine institutes. The company also
provided training to its workmen such as fitters, welders, painters,
electricians by using in-house faculties.

SUPPORT TO ANCILLARY INDUSTRIES

In many respects, HSL has been the Mother Yard by providing the lead in
shipbuilding, Ship Repairs including off-Shore/ on-Shore platforms and
rigs and in Submarine Repairs. HSL has also been a mother yard for
training large number of young engineers and workers. HSL has thus
achieved many significant milestones earning a name for itself as a ship
builder of repute in India and abroad.
Apart from providing a good many jobs to locals, the Shipyard has been
instrumental in the rise of a large number of ancillary industries and steel
fabrication yards in and around the city and reaching as far as
Vizianagaram and Kakinada.

CORPORATE SOCIAL RESPONSIBILITY

The yard is committed to CSR activities. The Yard has identified some of
the need-based CSR initiatives for the betterment of the local people with
limited financial commitment. Activities like Swachh Bharat Campaign,
blood donation Camp, free medical camp and participation in International
coastal clean-up day have been undertaken. HSL also supports seven
educational institutions set up in the colony. As a part of Community based
project, the yard has provided a spacious area with amenities, which gives
a platform to small farmers, fishermen, traders to market their products
besides making available fresh market produce and essentials at
economical price for employees and resident of neighboring colonies/
townships

Women Empowerment:
Women empowerment is the term used to refer to the empowerment of
women in all the spheres of life e.g., education, employment, health,
safety, etc. It is fundamental to the economic and social progress of the
nation as well as that of the world. As long as gender discrimination exists,
an equated society and sustainable development cannot be achieved. It is
important to realise and understand that women in the modern era are not
only equally competent but often even ahead of men in several
socioeconomic fields, thus making their presence in the work front
extremely important.

At Hindustan Shipyard Limited, we have large number of women

employees in various cadres including officers, staff and workmen who are
contributing towards achieving the organizational goals and objectives. 5%
of the total employed at HSL are women employees and working in various
field like Design, Commercial, Planning, HR, Finance, IT etc.

The welfare of women employees is observed with utmost priority by

HSL management especially related to safety and giving opportunity.
HSL’s CONTRIBUTION IN FIGHT AGAINST COVID-19 PANDEMIC

The second wave of the COVID-19 has hit the country and the entire
country is battling against this deadly virus. In view of the surge in COVID
Cases, the entire country is united to strengthen its health infrastructure
on a war footing to battle against this pandemic. Hindustan Shipyard Ltd
(HSL), located in Visakhapatnam, has also been actively doing its bit
towards India’s anti-COVID-19 efforts. In this regard, HSL has contributed
Rs10 Lakhs from its CSR funds to DRDO (the apex defence research
organization of the country) for setting up a dedicated 500 bed COVID
hospital at Lucknow, Uttar Pradesh. Under its CSR initiatives, HSL is also
supplying oxygen filled cylinders to the designated COVID hospitals
referred by District Administration. The first lot of 50 cylinders has been
supplied to Siddhartha Hospital which is declared as a Covid-19 Hospital
by Visakhapatnam District Administration.

SWATCH BHARAT CAMPAIGN

The Company fully adheres to the Hon’ble Prime Minister’s Nationwide

Swachh Bharat Campaign with the awareness and participation by all
employees and residents of nearby area with an aim to make it a mass
awareness movement and bring about a lasting change in the mindset. A
voluntary program was initiated which invites every employee to spend at
least 02 hours a week towards cleanliness of their surroundings.

Under “Swathta hi seva” program, various cleanliness drives were

organized to sensitise employees, residents of township and people
residing in surrounding areas. Swatchata Pakhwada was conducted thrice
during the year. Various rallies, march past and mini marathons were also
conducted to spread the message for a clean and green life.

DEPARTMENTS IN HSL

The departments can be mainly categorized as follows:

I. Production Department.
II. Administration Department. III. Service
department.
 I. PRODUCTION DEPARTMENT

The production department mainly consists of the following sections:

1. Hull shop

It deals with material preparation like plates used for the

construction of ship.

2. Pre-fabrication shop

It deals with ship parts like the funnel, wheelhouse & engine
roots.

3. Erection department

Assembling the ship parts to bring the complete shape.

4. Welding department

It deals with attaching the parts to make complete ship work.

5. Black smith department

It deals with railing, leader & flooring works.

6. Steel metal department

It deals with air-conditioned works.

7. Rigging department

Holding the ship with repairs.

8. Painting department

Painting the ship with required colors.

9. Plumbing department

Plumbing works to trappers.

10. Engineering department

 Facilitating and assembling the main machine.

II. ADMINSTRATION DEPARTMENT

The administrative department consists of the following sections:

o Accounts Department. o
Personal Department. o
Internal Audit Department. o
General Department

A. Accounts Department

The following are the sections in accounts:

a. Cost Accounts
b. Bills and Insurance
c. Provident Fund
d. Salaries section

Cost accounts deals with compilation of the final accounts, budgets, and
cost report to ministry direct & indirect taxation that is central excise,
income tax and sales tax. Bills & Insurance deals with payment of bills that
is passing of bills & insurance of materials etc. pay account section deals
with the payment of wages, salaries, provident fund & gratuity & V.R & up
to 5000 only the provident fund is allowed, and the remaining goes to
Hindustan Shipyard Ltd Provident Fund Trust.

B. Personal Department

The following are the sections in personal department:

a. Staff Cell.
b. Workmen Cell.
c. Executive Cell.

Staff cell deals with the staff of 958 members and workmen 2694 and
officers on executive of 386 totally strength of HSL comes to 3589.
Acts which are present in HSL are:

Promotion, leave management, medical re-imbursements, canteen

management facilities, general administration shifts, time keeping etc.

C. Internal Audit Department

The department checks the values of inventories and bills. Different

branches of accounts are awaited annually.

D. General Department

This is responsible for procurement of the stationary and functional goods

other identical items.

III SERVICE DEPARTMENT

The Service Department consists of the following sections:

 Design office.
 Production, Planning Departments.
 Quality Control Department.
 Purchase Department.
 General Stores.
 Bond Stores.
 Clearance Department.
 Maintenance Department.
 Civil Engineering Department.
 Medical & Health Department.
 Transport Department.

“Design Office” deals with ship design and off-fit design etc. Design
office is also called Drawing Office.

“Production, Planning Department” deals with the way how to execute

the work and they design the flow charts of the works.

“Quality Control Department” deals with the certification of IRS, LRS

works relating to the ISD certification and stores is also done by this
section.
“Purchase Department” deals with purchase of all types or materials.

“General Stores” are those stores which will be coming to this store after
the inspection of material and this maintain like material receipts reports
material requisition and bin cards etc.,

“Clearance Department” deals with receipts to imported goods for

clearance.

“Maintenance Department” deals with maintenance of machinery.

“Civil Engineering Department” deals with the construction of civil works

and maintenance of colony housing estate.

“Medical and Health Department” deals with aspects like giving

medicines to the sick employees and family etc.,

“Security Department” deals only the Hindustan Shipyard Ltd security

with supervisory to safeguard the organization.
Organization Chart
FINANCIAL PERFORMANCE ANALYSIS INTRODUCTION

The term financial performance analysis is also known as analysis and

interpretation of financial statements. It refers to the process of
determining financial strength and weakness of the firm by properly
establishing relationship between the items of the balance sheet and the
profit and loss account.

"Financial analysis is a process of evaluating the relationship between

component parts of a financial statement to obtain a better understanding
of a firm's position and performance "- By Myers.

The word 'performance is derived from the word 'parfourmen' which means
'to do', 'to carry out’ or 'to render'. It refers to the act performing, execution,
accomplishment, fulfillment etc. in broader sense, performance refers to
the accomplishment of a given task measured against present standards
of accuracy, completeness, cost, and speed. In other words, it refers to the
degree to which an achievement is being or has been accomplished.

The purpose of financial analysis is to diagnose the information contained

in financial statements to judge the profitability and financial soundness of
the firm. However, both analysis and interpretation are interlinked and
complimentary to each other Analysis is useless without interpretation and
interpretation without analysis is difficult or even impossible.

Methods of financial analysis used:

The following methods of analysis are generally used-

1) Ratios analysis

2) Comparative statements

3) Trend analysis

Meaning and introduction-

1) Ratio Analysis:
To evaluate financial condition and performance of a firm, the financial
analyst needs certain tools to be applied on various financial aspects.
One of the widely used and powerful tools is ratio or index. Ratio
express the numerical relationship between two or more things.
2) Comparative statement:
The comparative financial statements are statements of the financial
position at different periods of time. The elements of financial position
are shown in a comparative form to give an idea of financial position at
two or more periods. Any statement prepared in a comparative form will
be covered in comparative statements.

3) Trend analysis:
The financial statement may be analyzed by computing trends of series
of information. This method determines the direction upwards or
downwards are involves the computation of the percentage relationship
that each statement item bears to the same item in base year.

CLASSIFCATION OF RATIOS ANALYSIS:

1) LIQUIDITY RATIOS-

Liquidity refers to the ability of a concern to meet its current obligations as

and when these become due. The short-term obligations are met by
realizing amounts from current, floating or circulating assets. The current
assets should either be liquid or near liquidity. These should be convertible
into cash for paying obligations of short-term nature. These should be
convertible into cash for paying obligations of short- term nature.

To measure the liquidity of a firm, some of the important ratios can be

discussed below:

1) Current Ratio

2) Quick or Acid Test or Liquid Ratio

3) Absolute Liquid Ratio or cash position Ratio

a) CURRENT RATIO:

Current ratio may be defined as the relationship between current assets

and current liabilities. This ratio, also known as working capital ratio. It is
calculated as:

Current Ratio= Current Assets

Current Liabilities
Current assets = Cash & Bank Balance + Stock + Debtors + Bills
Receivable + Prepaid Expenses + Investments readily convertible into
cash + Loans and Advances

Current Liabilities = Creditors + Bills Payable + Bank Overdraft +

Unclaimed dividend + Provision for Taxation + Proposed Dividend

A generally acceptable current ratio is 2:1. But whether a specific ratio is

satisfactory depends on the nature of the business and the characteristics
of its current assets and liabilities.

b) Quick Ratio: Quick ratio, also known as Acid test or liquid ratio, is a
more rigorous test of liquidity than the current ratio. The term 'liquidity'
refers to the ability of a firm to pay its short-term obligations as and
when they become due.

Quick ratio= Quick or Liquid assets

Current Liabilities

were,

Quick Assets= Current assets - Inventories

Current liabilities= Creditors for goods and services+ Short- term loans+
Bank overdraft+ Cash credit+ outstanding expenses+ Provision for
taxation+ Proposed Dividend+ Any other liabilities.

An acid test of 1:1 is considered satisfactory unless the majority of "quick

assets" are in accounts receivable, and the pattern of accounts receivable
collection lags the schedule for paying current liabilities.

c) Absolute Liquid Ratio/ Cash position Ratio:

The cash ratio measures the absolute liquidity of the business. This ratio
considers only the absolute liquidity available with the firm. This ratio is
calculated as:

Absolute liquid Ratio= Absolute Liquid assets

Current Liabilities

The absolute liquidity ratio only tests short- term liquidity in terms of cash
and marketable securities and current investments.
2. PROFITABILITY RATIOS

This type of ratio helps in measuring the ability of a company in earning

sufficient profits.

1.Gross Profit Ratios:

Gross profit ratios are calculated to represent the operating profits of an
organization after making necessary adjustments pertaining to the COGS
or cost of goods sold.

The formula used for the calculation of gross profit ratio is

Gross Profit ratio = Gross profit

Net Sales

2.Net Profit Ratio:

Net profit ratios are calculated to determine the overall profitability of an
organization after reducing both cash and non-cash expenditures. The
formula used for the calculation of net profit ratio is

Net Profit ratio = Net Profit

Net Sales

3.Operating Profit Ratio:

Operating profit ratio is used to determine the soundness of an
organization and its financial ability to repay all the short term and longterm
debt obligations.

The formula used for the calculation of operating profit ratio is

Operating Profit Ratio = Earnings

Before Interest and Taxes

Net Sales

3. SOLVENCY RATIO

Solvency ratios can be defined as a type of ratio that is used to evaluate

whether a company is solvent and well capable of paying off its debt
obligations or not.

The types of solvency ratios are:

a. Debt Equity Ratio:

The debt-equity ratio can be defined as a ratio between total debt and
shareholder’s fund. The debt-equity ratio is used to calculate the leverage
of an organization. An ideal debt-equity ratio for an organization is 2:1. The
formula for debt-equity ratio is

Debt equity ratio = Total Debts ˟ 100

Shareholders Fund

b. Interest Coverage Ratio:

The interest coverage ratio is used to determine the solvency of an
organization in the nearing time as well as how many times the profits
earned by that very organization could absorb its interest-related
expenses.
The formula used for the calculation of interest coverage ratio is

Interest Coverage ratio = Earnings Before

Interest and Taxes
Interest Expense

4. TURNOVER RATIOS

Turnover ratios are used to determine how efficiently the financial assets
and liabilities of an organization have been used for the purpose of
generating revenues.

The types of turnover ratios are: –

A. Assets Turnover Ratios:

Fixed assets turnover ratio is used to determine the efficiency of an
organization in utilizing its fixed assets for the purpose of generating
revenues.

The formula used for the determination of fixed assets turnover ratio is

Fixed assets turnover ratio = Net Sales

Average Fixed Assets

B. Inventory Turnover Ratio:

Inventory turnover ratio is used to determine the speed of a company in
converting its inventories into sales.

The formula used for calculating inventory turnover ratio is

 Inventory Turnover ratio = Cost of
Goods Sold
Average Inventories

1.LIQUIDITY OR SHORT-TERM SOLVENCY RATIO

Liquidity ratio measures the short-term solvency of the firm liquidity

ratios are

1. Current ratio or Working capital ratio

The current ratio is the ratio between the current assets and
current liabilities of a company. The current ratio is used to
indicate the liquidity of an organization in being able to meet
its debt obligations in the upcoming twelve months. A higher
current ratio will indicate that the organization is highly
capable of repaying its short-term debt obligations. It is the
ratio of current assets and current liabilities.

Current ratio = current assets X 100

current liabilities

2.Quick ratio

The quick ratio is used to ascertain information pertaining to

the capability of a company in paying off its current liabilities
on an immediate basis.

𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬
Quick ratio =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
 Quick asset = Current assets – (stock and prepared
expenses) Quick liabilities = Current liabilities –
bank overdraft
In quick ratio 1 is ideal ratio.

If quick ratio is <1 – then there is inadequate liquidity of business.

If quick ratio is >1 – it is not advisable

2. Absolute liquid ratio

𝐀𝐛𝐬𝐨𝐥𝐮𝐭𝐞 𝐥𝐢𝐪𝐮𝐢𝐝 𝐚𝐬𝐬𝐞𝐭𝐬

ALR = 𝐐𝐮𝐢𝐜𝐤 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬

2. PROFITABILITY RATIOS

This type of ratio helps in measuring the ability of a company in earning

sufficient profits.

1. Gross Profit Ratios:

Gross profit ratios are calculated to represent the operating
profits of an organization after making necessary
adjustments pertaining to the COGS or cost of goods sold.
The formula used for the calculation of gross profit ratio is
𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭
Gross Profit ratio = × 100
𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬

2. Net Profit Ratio:

 Net profit ratios are calculated to determine the overall
profitability of an organization after reducing both cash and
non-cash expenditures.
The formula used for the calculation of net profit ratio is

𝐍𝐞𝐭 𝐏𝐫𝐨𝐟𝐢𝐭
Net Profit ratio = ˟ 100
𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬

3. Operating Profit Ratio:

Operating profit ratio is used to determine the soundness of
an organization and its financial ability to repay all the short
term and long-term obligations.
The formula used for the calculation of operating profit ratio is

Operating Profit Ratio = 𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐁𝐞𝐟𝐨𝐫𝐞

𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐓𝐚𝐱𝐞𝐬 ˟ 100
𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬

4. Return on Capital Employed (ROCE):

Return on capital employed is used to determine the
profitability of an organization with respect to the capital that
is invested in the business. The formula used for the
calculation of ROCE is
𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐁𝐞𝐟𝐨𝐫𝐞 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐓𝐚𝐱𝐞𝐬

ROCE = 𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬 ˟ 100

 SOLVENCY RATIO
Solvency ratios can be defined as a type of ratio that is used to evaluate
whether a company is solvent and well capable of paying off its debt
obligations or not.
The types of solvency ratios are:

1. Debt Equity Ratio:

The debt-equity ratio can be defined as a ratio between total
debt and shareholder’s fund. The debt-equity ratio is used to
calculate the leverage of an organization. An ideal debtequity
ratio for an organization is 2:1. The formula for debt-equity
ratio is

Debt equity ratio = Total Debts ˟ 100

Shareholders Fund

2. Interest Coverage Ratio:

The interest coverage ratio is used to determine the solvency of

an organization in the nearing time as well as how many times
the profits earned by that very organization could absorb its
interest-related expenses.
The formula used for the calculation of interest coverage ratio is

𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐁𝐞𝐟𝐨𝐫𝐞 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐓𝐚𝐱𝐞𝐬

Interest Coverage ratio = 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐓𝐚𝐱𝐞𝐬 × 100

 4. TURNOVER RATIOS

Turnover ratios are used to determine how efficiently the financial assets
and liabilities of an organization have been used for the purpose of
generating revenues.
The types of turnover ratios are: –

1. Fixed Assets Turnover Ratios:

Fixed assets turnover ratio is used to determine the efficiency
of an organization in utilizing its fixed assets for the purpose
of generating revenue.

The formula used for the determination of fixed assets turnover ratio si

Fixed assets turnover ratio = Net Sales ×100

Average Fixed Assets

2. Inventory Turnover Ratio:

Inventory turnover ratio is used to determine the speed of a
company in converting its inventories into sales.
The formula used for calculating inventory turnover ratio is

Inventory Turnover ratio = Cost of Goods Sold

×100
Average Inventories

3. Receivable Turnover Ratio:

Receivable turnover ratio is used to determine the efficiency
of an organization in collecting or realizing its account
receivables.
The formula used for calculating the receivable turnover ratio is

Receivable Turnover ratio = Net Credit Sales

×100
Average Receivables
 5. EARNING RATIOS

Earnings ratio is used for the purpose of determining the returns that an
organization generates for its investors.
The types of earnings ratios are

1. Profit Earnings Ratio:

P/E ratio indicates the profit earning capacity of the
company. The formula used for the calculation of profit
earnings ratio is

Market Price per Share

Profit Earnings Ratio = ×100
Earnings per Share

2. Earnings per Share (EPS):

EPS signifies the earnings of an equity holder based on each

share. The formula used for EPS is

(Net Income – Preferred Dividends)

EPS = ×100
(Weighted Average of Outstanding Shares)

RATIO ANALYSIS OF HSL

Ratio analysis can mark how a company is performing over time, while comparing a
company to another within the same industry or sector.

While ratios offer useful insight into a company, they should be paired with other
metrics, to obtain a broader picture of a company's financial health.
To analyze the financial status and progress of HSL ratio analysis is done using the
data that was provided in the financial reports of HSL. The data below was extracted
from the balance sheet, profit, and loss ratio accounts from the financial reports. Five
years data from 2016 to 2021 was taken to calculate the ratios and analyses the data
and to interpret the performance of the company.

The ratio analysis of HSL are as follows:

1. LIQUIDITY OR SHORT-TERM SOLVENCY RATIO CURRENT RATIO

The current ratio expresses the relation between current assets and
current liabilities. Current assets may be defined as “those assets which
are easily turned into cash within an accounting period, say one year”.
The rules of thumb prescriber that at2:1 the position comfortable but the
conditions or circumstances of each business should be fact to judge this.
This ratio is an acceptable measure of short-term solvency as it indicates
the ability of the business to meet current obligation (liabilities) from the
available resources.

Calculation:

Current ratio = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡

𝑎𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

YEAR CURRENT CURRENT CURRENT CURRENT

ASSETS (Rs LIABILITIES RATIO RATIO
in lakhs) (Rs in lakhs) (times)
2016 –2017 74941.71 70138.78 1.06 106
2017 –2018 79721.73 73592.44 1.08 108

2018 –2019 108099.50 100372.04 1.07 107

2019 –2020 111592.78 103563.92 1.07 107

2020 –2021 105226.53 102410.70 1.02 102

 INTERPRETATION-

Current ratio was increase from 106% to 108% from 2016 – 17 to 2017 – 18
as both the current assets and current liabilities increase simultaneously in
result current ratio increased. But there is a decrease in cash and bank and
sundry debtors (trade receivables). To maintain the current ratio at 2:1 which
is ideal, both cash and bank and sundry debtors (trade receivables) must also
increase then the company’s ability to meet its current obligation increases.
From 2017 – 18 the current ratio decreased because of the increase in current
liability than the current assets, whereas from 2018 – 19 to 2019 – 20 the ratio
remains constant as current assets and current liabilities increased at same
amount. From 2019-20 to 2020-21 current ratio extremely got decreased as
the current assets is decreased by Rs. 6,366.25 whereas current liabilities
decreased by Rs. 1,153.22. Because of this there will be less ability of
company to meet its obligations or to pay its debts. Current ratio must be
maintained at 2:1 ratio. To increase the current ratio HSL company must
increase its current liabilities.

QUICK RATIO
 This ratio is calculated by dividing the total quick assets by total current
liabilities. In these quick assets or liquid assets i.e., cash marketable
securities and sundry debtor are expressed as a proportion of the
business to meet the current liabilities without having to wait for the
manufacturing cycle to be completed and sale to take place for inflow of
cash. Calculation:
Quick ratio = 𝐐𝐮𝐢𝐜𝐤 𝐚𝐬𝐬𝐞𝐭𝐬

˟ 100
𝐐𝐮𝐢𝐜𝐤 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬

YEAR QUICK CURRENT QUICK Quick

ASSETS LIABILITIES RATIO ratio
(Rs.in lakhs) (Rs in lakhs) (times) (%)

2016–2017 66483.97 70138.78 0.94 94

2017-2018 71946.42 73592.44 0.97 97
2018-2019 102587.65 100372.04 1.02 102
2019-2020 100003.65 103563.92 0.96 96
2020-2021 99584.63 102410.70 0.97 97

Quick Ratio
104
102
100

98

96

94

92

90
2016 – 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
Year

INTERPRETATION-

From the above graph we can interpret that from last five years from
201617 t0 2020-21 quick ratio gradually got increased until 2018 – 19 from
then it gradually decreased until 2020 -21. The quick ratio from 2016-17
to 2018-19 increased because of the inventories which are decreased in
both the years 2017-18 and 2018-19 as per the balance sheet. From
2019-20 to 2020-21 the quick ratio decreased because of the increase in
inventories and decrease in the quick assets. If current ratio is more then
there is more liquidity in company. Quick ratio is ideal at 1:1. Company’s
liquidity is at appropriate at 2018-19. In 2020-21 quick ratio decreased
because of increase in inventories. Hence next year it is better for HSL to
increase other current assets without increasing inventories.
 CASH RATIO

The cash ratio is a measurement of a company's liquidity. It specifically

calculates the ratio of a company's total cash and cash equivalents to its
current liabilities. The metric evaluates company's ability to repay its
shortterm debt with cash or near-cash resources, such as easily
marketable securities. This information is useful to creditors when they
decide how much money, if any, they would be willing to loan a company.
It also tells the ability to pay the short-term debts.

Cash ratio = 𝐂𝐚𝐬𝐡 𝐚𝐧𝐝 𝐛𝐚𝐧𝐤 ˟ 100

𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
YEAR CASH & CURRENT CASH CASH
BANK (Rs LIABILITIES RATIO RATIO
in lakhs) (Rs in lakhs) (times)
2016 – 2017 23075.45 70138.78 0.32 32
2017 – 2018 18619.06 73592.44 0.25 25
2018 – 2019 26573.70 100372.04 0.26 26
2019 – 2020 13068.21 103563.92 0.12 12
2020 – 2021 22075.98 102410.70 0.21 21
INTERPRETATION

From the above graph we can see the cash ratio is decreasing gradually
year by year. From 2016-17 to 2017-18 the cash ratio got decreased
because of the vast decrease in cash and bank balances. From 2017-18
there is an increase in cash ratio as the cash and bank balances is
increased during that period. Again, the cash ratio is increased from
201920 to 2020-21 because of the increase in the cash and bank balances
and decrease in current liabilities. Ideal ratio of cash ratio is 0.5 that is
50%. Company’s cash ratio in 2020-21 is 21% which is less than 50%. It
is suggested that HSL must maintain more cash and bank balances and
less current liabilities in upcoming years to uplift the cash ratio to 50%
 1. PROFITABILITY RATIOS

GROSS PROFIT RATIO

Gross profit ratio measures the relationship between the gross profit to net
sales and is usually represent as a percentage. Thus, it is calculated
dividing the gross profit by sales. The gross profit indicates the extent to
which selling price of goods per unit may decline without responding no
loss on operating of a firm.
As the gross profit is found by deducting cost of goods sold from net sales
higher the gross ratio better the result a low gross profit ratio generally
indicates high cost of goods sold due to unfavorable poor changing
policies, losses, sales, lower selling price excessive competition over
investment in plant and machinery.

Gross Profit ratio = 𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭 ˟ 100

𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬

YEAR GROSS NET SALES GROSS GROSS

PROFIT (Rs in (Rs in lakhs) PROFIT PROFIT
lakhs) RATIO (in RATIO %
times)

2016 – 2017 5853.51 61808.21 0.09 9

2017 – 2018 7668.75 58353.74 0.13 13
2018 – 2019 7871.06 53584.64 0.14 14
2019 – 2020 3000.83 49497.50 0.06 6
2020 – 2021 -6310.33 39326.87 -0.16 -16
 GROSS PROFIT RATIO
20

15

10

0
2016 – 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
-5

-10

-15

-20

INTERPRETATION

From the above graph from last five years i.e., 2016-17 to 2020-21 it is
shown that gross profit is gradually increased for a period of three years
and then decreased on next two years. Gross profit increased from
201617 to 2017-18 and 2018-19 to 2019-20 due to increase in gross profit
of sales. A higher percentage of gross profit margin indicates that the
gross profits earned by the company are favorable. Thus, it is favorable
for HSL up to the year 2018 – 19. Gross profit decreased from 2018-19 to
2019-20 because of the decrease in gross profit of sales. It declined to -
16% in the year 2020-21 because of the losses faced by company (in the
pandemic period). By overall comparison the ratio is not satisfactory. It is
suggested that HSL must take more orders and should increase their
sales to cover the loss and to increases gross profit in sales.
NET PROFIT RATIO

This ratio shows the earning left for shareholders (both equity and
preference) as a percentage of net sales. It measures the overall
efficiency of production, administration, selling, financing, pricing, and tax
management, jointly considered, the gross and not profit margin ratio
provide a valuable understanding of the cost and profit structure of the
firm and enable the analyst to identify the sources of business
efficiency/inefficiency.

Net Profit ratio = Net Profit × 100

Net Sales

YEAR NET PROFIT NET SALES NET NET

(Rs in (Rs in PROFIT PROFIT
lakhs) lakhs) RATIO (In
times)
2016 – 2017 5377.16 61808.21 0.0869 8.69
2017 – 2018 2099.26 58353.74 0.0359 3.59
2018 – 2019 3623.53 53584.64 0.0676 6.76
2019 – 2020 1303.18 49497.50 0.0263 2.63
2020 – 2021 -1400.57 39326.87 -0.0356 -3.56
 NET PROFIT RATIO
10

2016 – 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
-2

-4

INTERPRETATION

From the above graph it is evident that the net profit of HSL from five years
is declining. From 2019-20 it is declined to -3.56%. It is negative because
of the losses occurred in HSL during 2020-21. From overall comparison it
is not favorable condition. In the prior year’s total sales should be
increased to increase the net profit of HSL company.

OPERATING PROFIT RATIO

Operating profit is the total income a company generates from sales after
paying off all operating expenses, such as rent, employee payroll, equipment,
and inventory costs. The operating profit figure excludes gains or losses from
interest, taxes, and investments.
An operating profit ratio is calculated by dividing operating profit by total
revenue. This indicator reflects the percentage of profit a company produces
from its operations (before subtracting tax and interest)

Operating Profit Ratio = Earnings

Before Interest and Taxes × 100
Net Sales

YEAR EBIT (Rs NET SALES OPERATING

in lakhs) (Rs in PROFIT RATIO
lakhs)
2016 – 2017 5853.51 61808.21 9
2017 – 2018 7668.75 58353.74 13
2018 – 2019 7871.06 53584.64 14
2019 – 2020 3000.84 49497.50 6
2020 – 2021 6310.33 39326.87 16

OPERATING PROFIT RATIO

18

16

14

12

10

4
2016 – 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
INTERPRETATION

From the above graph it is shown that the operating profit ratio is gradually
decreasing. It only declined during the year 2019-20 because of the
decrease in EBIT and sales of the company. From overall comparison it
is satisfactory, it favorable for the company.

2. SOLVENCY RATIO

DEBT RATIO

A debt ratio greater than 1.0 (100%) tells you that a company has more
debt than assets. Meanwhile, a debt ratio of less than 100% indicates that
a company has more assets than debt. Used in conjunction with other
measures of financial health, the debt ratio can help investors determine
a company's risk level.

Debt ratio = 𝐓𝐨𝐭𝐚𝐥 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬 ˟ 100

𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭𝐬

YEAR TOTAL TOTAL SOLVENC

LIABILITIES ASSETS Y RATIO
(Rs in (Rs in lakhs)
lakhs)
2016 -2017 166923.81 91872.80 1.81
2017 –2018 169272.44 107329.03 1.57
2018 –2019 192745.71 135037.93 1.42
2019 –2020 196477.74 139715.83 0.96
2020 –2021 193587.71 134071.50 1.44

SOLVENCY RATIO
18

16

14

12

10

6
2016 - 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021

YEAR

INTERPRETATION

From the above graph it is shown that debt ratio of five years from 201617
to 2017-18 is gradually decreasing as the total assets are increasing more
than the total liabilities, except that in 2020-21 the debt ratio increased.
Debt ratio is only favorable during the period 2019-20. From overall
comparison it is not favorable for the company as the debt equity ratio
must be less than 1 or 100% i.e., company paid less number of debts.
 DEBT EQUITY RATIO

Debt equity ratio = Total Debts ˟ 100

Shareholders Fund

YEAR TOTAL DEBTS SHAREHOLDERDS DEBT

(Rs in lakhs) EQUITY (Rs in lakhs) EQUITY
RATIO
2016 - 2017 96785.03 -75051.01 -0.08

2017 –2018 95680.00 -61943.41 -1.54

2018 –2019 92373.67 -57707.00 -1.60
2019 –2020 92913.82 -56761.91 -0.40
2020 –2021 91177.01 -59516.21 -1.53

DEBT EQUITY RATIO

0
2016 - 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
-0.2

-0.4

-0.6

-0.8

-1

-1.2

-1.4

-1.6
INTERPRETATION

From the above graph the above graph it is shown that in almost all five
years the debt equity ratio is negative, and it gradually increased
negatively except in the year 2019-20, although it is in negative value it
decreased as compared to 2018-19. According to that ratio is compared
between long term debts & equity shareholder’s funds or net worth. The
net worth is negative figure as capital & reserves and surpluses less than
the past accumulated losses. So, it can be concluded that the organization
debt equity is not good.
INTEREST COVERAGE RATIO

The interest coverage ratio is a debt and profitability ratio used to

determine how easily a company can pay interest on its outstanding debt.
The interest coverage ratio is calculated by dividing a company's earnings
before interest and taxes (EBIT) by its interest expense during a given
period.
Lenders, investors, and creditors often use this formula to determine a
company's riskiness relative to its current debt or for future borrowing.

Interest Coverage ratio = 𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐁𝐞𝐟𝐨𝐫𝐞

𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐓𝐚𝐱𝐞𝐬 ˟ 100

𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐄𝐱𝐩𝐞𝐧𝐬𝐞

YEAR EBIT (Rs in INTEREST INTEREST

lakhs) EXPENSE COVERAGE
(Rs in lakhs) RATIO

2016 – 2017 5853.51 1500.37 3.58

2017 – 2018 7668.75 1572.95 1.33
2018 – 2019 7871.06 1298.89 2.78
2019 – 2020 3000.84 486.91 2.67
2020 – 2021 6310.33 546.05 2.56

INTEREST COVERAGE RATIO

4

3.5

2.5

2016 - 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
INTERPRETATION-

Interest coverage ratio indicates the extent of which earning can decline
without the firm becoming unable to meet its annual interest cost. The above
calculation shows how many times the firm could pay back its annual interest
expenses out of earning in 5 years of HSL data in the year 2016-17 interest
coverage was highest and huge downfall in 2017-18, then in 2018 to 2021 its
between 3 to 3.5 ratio.
 4. TURNOVER RATIOS

WORKING CAPITAL TURNOVER RATIO

Working capital turnover is further segregated into inventory turnover,

debtor’s turnover, creditor’s turnover.
Inventory turnover ratio is also known as stock turnover ratio establishes
the relationship between the cost of goods sold during the year and average
inventory held during the year. Working capital turnover ratio =
𝐒𝐚𝐥𝐞𝐬 × 100
𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥

YEAR SALES (Rs WORKING WORKING CAPITAL

in lakhs) CAPITAL(Rs TURNOVER RATIO
in lakhs)
2016 - 2017 62904.48 4802.93 13.9
2017 – 2018 64477.57 6129.29 10.1
2018 – 2019 59490.70 7727.46 7.69
2019 – 2020 57354.21 8028.86 7.14
2020 – 2021 47794.72 2815.83 16.9

WORKING CAPITAL TURNOVER RATIO

18

16

14

12

10

4
2016 - 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
INTERPRETATION

From the above graph we can see that working capital turnover ratio is
gradually decreasing overtime, which is not good for company, except in
2020-21 it is increased to 16.97. So, in 2020-21 there is an ability for HSL
to increase the sales by using less working capital.
 INVENTORY TURNOVER RATIO

This ratio also known as stock turnover ratio establishes the relationship
between the cost of goods sold during the year end average inventory
held during the year. It is calculated as follows
Inventory Turnover ratio = 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐆𝐨𝐨𝐝𝐬
𝐒𝐨𝐥𝐝 ˟ 100
𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐢𝐞𝐬

YEAR COST OF AVERAGE TURNOVER

GOODS INVENTORY RATIO
SOLD (Rs in lakhs)
2016 -2017 55954.70 8071.66 7.79
2017 –2018 50684.99 6589.135 9.78
2018 –2019 45713.58 8410.175 7.07
2019 –2020 46496.66 8439.245 6.79
2020 –2021 45637.20 - -

INVENTORY TURNOVER RATIO

12

10

0
2016 - 2017 2017 – 2018 2018 – 2019 2019 – 2020 2020 – 2021
 INTERPRETATION

The above table indicates the inventory turnover ratio of HSL in the year
2017- 18 the ratio is increased by 125% from 16-17 due to accurate
movement of stock. In 2018-19 the ratio is increased. In 2018-19 and
2019-20 inventory turnover ratio of HSL is decreased because of the
slow movement of stocks. By overall comparison the inventory turnover
ratio is fluctuating.

Comparative Financial Statement -

Comparative financial statements can be used by managers and
analysts. This allows clear and exhaustive analysis of the company's
performance. Comparative financial statements review the potent in its
development. This allows determining trends and forecasting changes.
Our Indian economy has a major basis on food industry. The objective of
this study is to find the current financial position Hindustan Shipyard
Limited uses the tool comparative statement analysis.
The comparative financial statement helps the analyst to compare the
performance of one firm with that of other similar firm in the industry and
compare the performance of the competitors in the line. This comparison
helps to find out the deficiency or the power of a firm and to take
necessary steps. The comparative financial statement helps to ascertain
the ‘trend’ relating to sales, cost of goods sold, operating expenses, etc.
so that a proper comparison can efficiently be made which helps the
analyst to accept the overall conduct of a firm.

ANALYSIS AND INTERPRETATIONS-

(Rs. in Lakhs)

Hindustan Shipyard Limited

Limited Comparative Balance Sheet as at 31st March 2019, 2020, and 2021
 Particulars 2018 2019 2020 2021 Absolute Change

Rs. Rs. Rs. Rs. Mar- Mar- Mar-

2019 2020 2021

Equity and
Liabilities

Shareholder's
Funds

Share capital 30,199.22 30,199.22 30,199.22 30,199.22 - - -

Reserves and (1,23,150.98) (119,527.45) (1,18,224.27) (1,19,624.84) (3623.53) (1303.18) 1400.57

Surplus

Capital Grant 31,008.35 20,000 20,000 20,000 (11008.3 - -

5)

Noncurrent
Liabilities

Long term 37,221.25 54,121.25 54,121.25 54,121.25 16900 - -

Borrowings

Other long -term 50,002.86 31,121.25 30,302.71 30,247.29 (18881.6 (818.54) 55.42
liabilities 1)

Long term Provision 8,455.89 7,181.38 8,489.86 6,808.47 (1274.51) 1308.48 (1681.39)

Current Liabilities

Borrowings 19,490.94 9,169.88 168.93 - (10321.0 (9000.95)

6)

Trade Payables 19,060.22 26,743.49 27,368.51 22,610.78 7683.27 625.02 (4757.73)

Other current 22,414.04 53,796.89 66,305.67 71,555.81 31382.85 12508.78 5250.14

liabilities

Provisions 12,627.24 10,661.78 9,720.81 8,244.11 (1965.46) (940.97) (1476.7)

Total Equity and 1,07,329.03 135,037.93 1,39,715.83 1,34,071.50 27708.9 4677.9 (5644.33)
Liabilities

Table 2: Contd.,
Assets

Non-current
Assets

Property,
Plant and
Equipment

Tangible 13,076.88 12,716.87 12,705.51 12,380.63 (360.01) (11.36) (324.88)

assets

Intangible 2.71 0.65 (2.06) - -

assets

Capital 3027.19 3,433.70 2,651.74 1,130.37 406.51 (781.96) (1521.37)

workin-
progress
Long term 7,502.20 8,186.17 7,713.30 13,591.63 683.97 (472.87) 5878.33
loans and
advances

Other non- 3,998.32 2,601.04 5,052.50 1,742.34 (1397.28) 2451.46 (2210.16)

current assets

Current
Assets

Inventories 7,745.47 5,432.80 11,387.54 5,490.95 (2312.67) 5954.74 (33860.68)

Trade 17,617.01 27,644.00 39,351.33 32,912.65 10,026.99 12777.51 (6438.56)

receivables

Cash and 18,619.06 26,573.70 13,068.21 22,075.28 7954.64 (13505.49) 9007.07

Bank
balances

Short term 5,818.84 7,615.80 12,641.65 13,175.28 1796.96 5025.85 533.63

loans and
advances

Other current 29,921.34 40,833.20 35,144.05 31,571.67 10911.86 (5689.15) (3572.38)

assets

TOTAL 107,329.03 135,037.93 139,715.83 134,071.50 27,708.59 4,677.9 (5644.33)

ASSETS
INTERPRETATION

The comparative balance sheet of Hindustan Shipyard Limited for the

period of 2018-19 and 2020-21 results that in equity and liability, in the
equity share capital have no change when compared to 2019-20 and
2020-21 hence there is no Absolute change in comparative Balance
sheet. The reserves and surplus have decreased by 3623.53Lakhs in
2019 and more decreased by 1303.18 lakhs but in year 2021 it increased
by1400.57 Lakhs. Non-current liabilities show an increase 5953.67 lakh
in year 2018 to 2019 and 1736.81 lakh decrease in year 2020-21. The
borrowing of 9,169.88 lakh in 2018 then decreased to 9,169.88 in 2019
then even more decreased to 168.93 then there is no borrowing in 2021
which is a good sign for HSL. The decrease in current liabilities indicates
current liabilities are paid within stipulated time. Non-current assets show
an increase of 668.87 lakh in the year 2018-18 and decreased by 721.92
lakhs in the year 2020-21. Current assets show an increase of 28,377.79
lakhs in 2019 and decreased in 6,366.25 lakhs in 2021.

The comparative balance sheet analysis of Hindustan Shipyard for the

period of 2018-2021 manifest that in equity and liability, share capital has
not changed. Reserves and surplus are decreasing in every come next
year.
 (Rs. in Lakhs)

Hindustan Shipyard Limited

Comparative Statement of Profit and Loss for the year ended31st March 2019, 2020, and 2021

Particulars 2018 2019 2020 2021 Absolute Change

Rs. Rs. Rs. Rs. Mar- Mar- Mar-

2020
(In Lakh) (In Lakh) (In Lakh) (In Lakh) 2019 2021

INCOME

Turnover 64,477.57 59,490.70 57,354.21 47,794.72 (4986.87) (2136.49) (9559.49)

(Revenue from
Operations)

Less: Taxes & (6,123.83) (5,906.06) (7,856.71) (8,467.85) (217.77) 1950 611.14
Duties

Net turnover 58,353.74 53,584.64 49,497.50 39,326.87 (4769.1) (4087.14) (10170.63)

Other Income 688.95 1,063.44 2,148.57 1,005.20 374.49 1085.13 (1143.37)

Total Income 59,042.69 54,648.08 51,646.07 40,332.07 (4394.61) (3002.01) (1131.4)

EXPENSES
Materials 19,794.37 15,265.35 19,244.55 16,896.49 (4529.02) 3979.2 (2348.06)
Consumed

Sub- 12,622.26 16,914.00 15,644.18 14,064.40 4291.74 (1269.82) (1579.78)

contracting
and Other
Direct
Expenses

Employee 12,948.66 11,395.39 13,088.59 11,653.57 (1553.27) 1693.2 (1435.02)

Benefits

Other 4,036.79 3,426.57 3,573.99 3,439.64 (610.22) 147.42 (134.35)

Expenses

Interest & 1,572.95 1,298.89 486.91 546.05 (274.06) (811.98) 59.14

Finance costs

Depreciation 475.59 474.50 436.82 432.35 (1.09) (37.68) 4(47)

Provisions and 61.77 (1,767.71) (3,793.38) (405.50) 1705.94 2025.67 (3387.88)

Losses (net)

Prior Period (138.45) (229.97) (36.43) 15.40 161.52 (293.54) (21.03)

income (net)

Total 51,373.94 46,777.02 48,645.24 46,642.40 (4602.92) 1868.22 (2002.84)

Expenditure
Profit before 7,668.75 7,871.06 3,000.84 (6,310.33) 202.31 (4870.22) 3309.49
Exceptional
&
Extraordinary
Items and
Tax

Exceptional 5,569.50 4,247.53 1,697.66 2,180.72 (1321.97) (2549.87) 483.06

Items -
(Income) /
Expenditure

Profit Before 2,099.25 3,623.53 1,303.18 (8,491.05) 1524.28 (2320.25) 7187.87

Extraordinary
Items and
Tax

Profit Before 2,099.25 3,623.53 1,303.18 (8,491.05) 1524.28 (2320.35) 7187.87

Tax

Profit / (Loss) 2,099.25 3,623.53 1,303.18 (1,400.57) 1524.28 (2320.35) 97.39

for the period

Earnings per 70 120 43 (46) 50 (77) 3

Equity Share

Interpretation

The comparative analysis of profit and loss account for the year ending
31st March 2019,2020 and 2021 is as exhibits that Total income has
decreased by 4,394.61 Lakhs in 2019, again decreased by 3002.01 lakhs
in the year 2020 and decreases even more in 2021 by 1,131.4. The total
expenditure decreased in 2019 by 4602.92 lakhs and increased in 2020
by 1,868.22 Lakhs and finally in year 2021 it again decreased by 2002.84
Lakhs. Profit before tax has increased by 1524.28 in 2019 then decreased
by 2320.35 lakhs in 2020 and then increased by 97.39 Lakhs in 2021.The
company face loss in the year 2021 and profit in the year 2019 and
decrease in profit in the 2020.

Trend Analysis-

Trend analysis is an analysis of the trend of the company by comparing

its financial statements to analyse the trend of the market or analysis of
the future based on past performance results, and it’s an attempt to make
the best decisions based on the results of the analysis done.

Trend analysis involves collecting the information from multiple periods

and plotting the collected information on a horizontal line to find actionable
patterns from the given information. In Finance, Trend Analysis is used for
technical analysis and accounting analysis.
Net Profit Trend Analysis-
YEAR NET PROFIT Trend Ratio (%)
(Rs in lakhs)

2017 5377.16
100

2018 2099.26
131.01

2019 3623.53
134.46

2020 1303.18
51.26

2021 -1400.57
-107.8

NET PROFIT TREND ANALYSIS

120

100

80

60

40

20

0
2017 2018 2019 2020 2021
-20

-40
YEAR

INTERPRETATION

The Net Profit trend shows drastic downfall in the year 2018 and then
gradually rises the year 2019 and then again starts to diminish in year
2020 and falls even more end up in Net loss in the year 2021 due to global
pandemic which affected everyone even HSL. They have to pay fixed cost
and overhead in the lock down period.

Gross Profit Trend Analysis –

 YEAR GROSS PROFIT Trend Ratio
(Rs in lakhs) (%)

2016 – 2017 5853.51 100

2017 – 2018 7668.75 39.04

2018 – 2019 7871.06 67.38

2019 – 2020 3000.83 24.23

2020 – 2021 -6310.33 -26.03

GROSS PROFIT TREND ANALYSIS

150

100

50

0
2017 2018 2019 2020 2021

-50
YEAR

-100

-150

INTERPRETATION

The Gross profit trend shows an increase in the year 2018 and increases
even more in the year 2019 after that it starts to diminish in the year 2020
and we see drastic downfall in the trend end up in Gross loss in the year
2021 because of the spread of COVID worldwide and the organization
has to pay their employees and works at the time of lockdown as fixed
cost and overhead.
Total Expenditure Trend analysis –
YEAR TOTAL Trend Ratio (%)
EXPENDITURE
(Rs in lakhs)

2017 58,058.75
100

2018 51,373.94
88.48

2019 46,777.02
80.56

2020 48,645.24
83.78

2021 46,642.40
80.33

TOTAL EXPENDITURE TREND ANALYSIS

120

100

80

60

40

20

0
2017 2018 2019 2020 2021
YEAR

INTERPRETATION

The Total Expenditure trend shows us Minor downfall in the year 2018-19
and minor increase in the trend can be seen the year 2020-21 but there
not much movement in the total expenditure in this 5 year of trend
analysis.
Total Income trend Analysis -
YEAR TOTAL INCOME Trend Ratio (%)
(Rs in lakhs)

2017 63,912.26 100

2018 59,042.69 92.38

2019 54,648.08 85.50

2020 51,646.07 80.80

2021 40,332.07
63.10

TOTAL INCOME TREND ANALYSIS

120

100

80

60

40

20

0
2017 2018 2019 2020 2021
YEAR

INTERPRETATION-

The Total income trend shows a continuous downfall starting from the
year 2017 to 2021. The trend tells us that total income of Hindustan
Shipyard limited is falling every year but the drastic fall in the trend can be
seen in the year 2021 because of major crane accident and spread of
COVID worldwide.
 CONCLUSION
The project report is prepared by me concludes that the
Hindustan Shipyard Limited company’s performance is not up to
mark in last 2 year 2020-21 because the main reason was the
worldwide spread of COVID pandemic and major crane accident
unfortunately occurred in the same year which can be known by
observing the downfall trend Analysis and Comparative
statement where I have analyzed and interpreted from the
collected data. The companies are running in loss for few years.
The fixed asset ratios are not satisfactory because of the
negative net worth.

The leverage ratio is also not perfect because there is no balance

in debt equity ratio. Likewise, almost all the ratios computed. So
far for the last 5 year turn out to be negative. There the company
should resort to some drastic measures to improve the Financial
Performance.

Findings:

• By analyzing the overall performance of the company short term

solvency is good and it is able to meet the short-term obligations.
 • Investment in inventory can be reduced to improve the liquidity position
of the firm.

• The company should try to enquire more contact from abroad to earn
more amount of foreign exchange.

• HSL incurred a loss on account of excess of cost of production.

• The capital is negative because of the past accumulated loss and

current losses.

Suggestions:

• The HSL should try to take more orders of shipbuilding from private
organization to earn more profit.

• Generally, in public sector undertaking things will be pending especially

related to financial matter.

• To bring more financial strength. Government should offer some stake

in HSL to private people for issue of bonds or debentures.
 • Maximum utilization of capacity is achieved like losses should reduce.

• HSL must take measures to reduce (or) decrease the overhead

expenditure.

• The organization should give priority to the safety of worker to avoid

accident-causing life and loss to the company.

• As the Shipyard has been undertaken by the Ministry of Defence they

should take steps to improve the financial position of the company.

• The shortage of funds is to be full fill by paying the amount to the

creditors.

Bibliography:

The study quotes valuable inputs authors and consists of authentic

statements and photographs.

1. FINANCIAL MANAGEMENT - NCERT

2. FINANCIAL MANAGEMENT - KALYANI
3. MANAGEMENT ACCOUNTING - KALYANI Other
sources:

• Annual reports of HSL (Hindustan Shipyard Limited)

• Information from (www.hslvizag.in)
• General Articles about the ship building industry.
• www.wikipedia.com
 ANNEXURES
Balance Sheet of Hindustan Shipyard Limited for 5
years
PROFIT AND LOSS ACCOUNT of Hindustan Shipyard
Limited for 5 years-