A STUDY ON THE FINANCIAL PERFORMANCE

OF
LARSEN & TOUBRO LIMITED
CHENNAI
Submitted in partial fulfilment for the award of Master
Degree in commerce (corporate secretaryship)
UNIVERSITY OF MADRAS
BY
J. Mohamed Afzal

REGISTER NO: 2113182085010

Under the guidance of

Dr. MOHAMED ABBAS KHAN. G, M.Com., M.Phil., Ph.D.
Assistant Professor
P.G DEPARTMENT OF CORPORATE SECRETARYSHIP
THE NEW COLLEGE (AUTONOMOUS)
CHENNAI -600014
APRIL -2023

1
 CONTENTS

Sl PARTICULARS PAGE NO.

NO.

1. INTRODUCTION LETTER 3

2. TRAINING CERTIFICATE 5

3. CERTIFICATE 7

4. ACKNOWLEDGEMENT 9

5. INTRODUCTION 11

6. COMPANY PROFILE 16

7. NATURE OF WORK DONE 30

8. RATIO ANALYSIS 42

9. CONCLUSION 74

10. ANNEXURE: 76
FINANCIAL STATEMENTS

2
INTRODUCTION LETTER

3
 THE NEW COLLEGE (AUTONOMOUS), CHENNAI – 600 014.

P.G. DEPARTMENT OF CORPORATE SECRETARYSHIP,

SHIFT-II

TO WHOM SO EVER IT MAY CONCERN

Sir,
Sub: M. Com (C.S) - Institutional Training – Reg.

In partial fulfilment of the regulations of University of Madras for the

award of Master Degree in Commerce (Corporate Secretaryship) the following
student of final year M. Com (Corporate Secretaryship) is interested to undergo
Institutional Training in your esteemed concern.

Sl No. NAME Register No

1 MOHAMED AFZAL J 2113182085010

We request you to undertake the student and provide in-service training

in Finance / HR / Secretarial Departments of your esteemed company for a
period of 45 days.

Thanking you.

Yours faithfully,

4
TRAINING CERTIFICATE

5
6
CERTIFICATE

7
 CERTIFICATE

Dr. MOHAMED ABBAS KHAN. G, M.Com., M.Phil., Ph.D.

Assistant Professor
PG Department of Corporate Secretaryship
The New College (Autonomous)
Chennai - 600014

This is to certify that Mr. J. MOHAMED AFZAL

(REG.NO 2113182085010) of II M.COM (C.S) has undergone institutional
training for the STUDY ON THE FINANCIAL PERFORMANCE OF
LARSEN & TOUBRO LIMITED for a period of 45 days from 13.12.2023 to
28.01.2023 as a partial fulfillment for the award of master degree in
(CORPORATE SECRETARYSHIP).

Signature of guide

Internal Examiner External Examiner

8
ACKNOWLEDGEMENT

9
 ACKNOWLEDGEMENT

My special thanks to my college Principal Dr. S. BASHEER AHMED M.A.,

M.Phil., B.Ed., Ph.D., for extending me moral support during the course of
this work.
I acknowledge my sincere thanks to PROF. K.S. MD. AKMAL M.Com.,
M.Phil., and HEAD OF THE DEPARTMENT and DEAN OF
CORPORATE SECRETARYSHIP for giving me the opportunity to undergo
Institutional Training which is much importance to my career, at the B.
PRABHAKAR CHARTERED ACCOUNTANT.

I extend my heartful thanks to my guide Assistant Professor

Mr. Dr. MOHAMED ABBAS KHAN. G, M.Com, M.Phil., Ph.D. for
guiding me in all areas and took pains to see to it that the project report is
properly prepared.

I am very thankful to my respectable Department professors who have

motivated and inspired me with their advices and timely help to complete this
project report.

Finally, I like to express my sincere gratitude to my Trainer B. PRABHAKAR

(CHARTERED ACCOUNTANT) who provided me with an opportunity to
work and learn about the practical aspect of the company during training period.

J. MOHAMED AFZAL

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INTRODUCTION

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 INTRODUCION

Human Resources are the set of individuals who make up the workforce of an
organization, business sector or economy. “Human capital is sometimes used
synonymously with human resources. Although human capital typically refers to a
narrower view and knowledge the individuals embody and can contribute to an
organization.
Human Resource Management is function of management concerned with hiring,
motivation and maintaining people in an organization. It focuses on people in an
organization.
Human Resource Management (HRM) is an approach to the management of people
based on four fundamental principles. First, Human Resource are the most important
organization has and their effective management is the key to its success. Second, this
success is most likely to be achieved if the personnel policies and procedures of the
enterprises are closely linked with and make a major contribution to the achievement
of corporate objectives and strategic plans. Third, the corporate culture and the
values, organizational climate and managerial behavior that from that culture will
expert a major influence on the achievement of excellences. This culture must,
therefore, be managed which means that organizational values may need to be
changed or reinforced and that continues effort, starting from the top, will be required
to get accepted and acted upon. Finally, HRM concerned with integration getting all
the members of the organization involved and working together with a sense of
common people
The Human Resources is the most important element in any organization. The
success, growth and development of organization’s depend on the quality of
workforce they possess. It is only through the human resources all other resources
are actively utilized leading to the efficient and effective running of an establishment.
The significance of human resources is gaining momentum in recent years because
of the growing global business leading to demand for quality workforces.
The Professional disciplines and business function that overseas an organizations
human resource is called Human Resources Management (HRM)
Area of HRM oversight include among many others employee recruitment and
retention, exit interviews, motivation, assignment selection, labour law compliance,
performance reviews, training and change management.

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DEFINITION OF HUMAN RESOURCE MANAGEMENT: -
According to Dale Yoder Human Resources Management as “the effective
process of planning and directing the application, development and utilization of
human resources in employment”.
Flippo defines Human Resources Management as “the personnel function that is
concerned with the procurement, development, compensation, Integration and
maintenance of personnel of an organization for the purpose of contributing towards
the accomplishment of that organization’s major goals or objective”.

FEATURES OF HUMAN RESOURCES MANAGEMENT: -

The following are the characteristics of human resource management:
i. Universally Relevant: Human Resources Management has universal
relevance. The approach and style vary depending the nature of
organizations structure and is applicable at all levels.
ii. Goal Oriented: The accomplishment of organizational goals is made
possible through best utilization of human resources in an organization.
iii. A Systematic Approach: Human Resources Management lays emphasis
on a systematic approach in managing the tasks performed by human
resources of an organization. The two sets of functions performed are
managerial and operative functions.
iv. It is all Pervasive: Wherever their existence of human resource the
effective management of the available human resources is very important
especially in functional areas.
v. It is a Continuous Process: As long as there is human resources in the
running of an organization, the activities relating to managing human
resources exists.
vi. It is Dynamic Activity: Human Resources Management is not the same as
that of other factors of productions, as they have feelings and emotions
which are to be handled with care and diligence to maximize the utilizations.
vii. It is an Integrative Tool: The main idea behind managing the human
resources is to motivate, participate and coordinate the available work force.
viii. Focuses on Development: Human Resource Management focuses on the
development of manpower through training and development programmes.
Honing of skills through training increases the effective use of the resources
procured.

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 ix. Human Resources Management is both Science as well as art: As it
relies on experiments and observations as well as effective handling of
manpower it is both science and art.
x. It is Interdisciplinary: Human Resource Management makes use of
concepts of different disciplines like sociology, psychology, economics etc.
making it interdisciplinary.
xi. It is Intangible: Human Resources Management is a tangible function
which can be measured only by results.

Functions of Human Resources Management: -

The Functions of human resource management may be classified as under

1. Managerial Functions – Planning, Organising, Directing, Controlling.
2. Operative Functions – Procurement, Development, Compensation,
Retention, Integration, Maintenance.

Managerial Functions: -

Planning – Planning is deciding in advance what to do, how to do and who is to it. It
bridges the gap between where we are and where we want to go. It helps in the
systematic operations of business. It involves determinations objectives, policies,
procedures, rules, strategies, programme and budgets. It ensures maintenance of
correct number of employees to carry out activities and also to formulate timely
employee policies.
Organising – It includes divisions of work among employees by assigning each
employees their duties delegations of authority as required and creations of
accountability to make employees responsible.
Directing – It involves issue of orders and instructions along with supervisions,
guidance and motivations to get the best out of employees. This reduces waste of
time energy and money and early attainment of organisational objectives.
Controlling – It is comparing the actuals with the standards and to check whether
activities are going on as per plan and rectify deviations. The control process includes
fixing of standards, measuring actual performance, comparing actual with standard
laid down, measuring deviations and taking corrective actions. This is made possible
through observations, supervisions, reports records and audit.

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Operating Functions: -

Procurement – Acquisition deals with job analysis, human resource planning.

Recruitment, selection, placement, transfer and promotions.
Development – Development includes performance appraisal, training, executive
development, career planning and development, organisational development.
Compensation – It deals with job evaluation wage and salary administration,
incentives, bonus, fringe benefits and social security schemes.
Retention – This is made possible through health and safety, welfare, social security,
job satisfaction and quality of work life.
Integration – It is concerned with those activities that aim to bring about
reconciliation between personal interest and organisational interest.
Maintenance – This encourages employees to work job satisfactions, reducing
labour turnover, accounting for human resources and carrying out audit and research.

Conclusion: -

However, HRM faces various challenges in today’s rapidly changing business

environment, including changing demographics, evolving technology, globalization
and increasing competition. To overcome these challenges, HRM needs to be agile,
innovations and strategic in its approach. In conclusion, HRM is a critical function
that can help organizations to achieve their goals by managing their most valuables
asset, their employees. Effective HRM can help organizations to stay competitive and
adapt to changing business environments, while also creating a positive and
environment for employees.

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COMPANY PROFILE

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17
 INTRODUCTION OF LARSEN & TOUBRO LIMITED
L&T Construction is a division of Larsen & Toubro (L&T) a major Indian
technology, engineering, construction, manufacturing and financial services
conglomerate, with global operations. L&T addresses critical needs in key sectors -
Hydrocarbon, Infrastructure, Power, Process Industries and Defense - for customers
in over 30 countries around the world. L&T is engaged in core high impact sectors of
the economy and our integrated capabilities span the entire spectrum of 'design to
deliver'. With over 8 decades of a strong, customer focused approach and a
continuous quest for world-class quality, we have unmatched expertise across
Technology, Engineering, Construction, Infrastructure Projects and Manufacturing .

HISTORY OF LARSEN AND TOUBRO LIMITED

Larsen & Toubro was founded in 1938 in Bombay (now Mumbai) by two Danish
engineers, Henning Holck-Larsen (1907 – 2003) and Soren Kristian Toubro (1906 –
1982) who landed on Indian shores representing FL Smidth & Co A/S, Copenhagen,
Denmark. The respect, trust and confidence in each other was so great that initially
the business was founded merely on an oral understanding; no written document was
filed, and it was only in end-1940 that they finally inked their partnership.

Founders of Larsen and Toubro limited

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Constructed to commemorate the 60th anniversary of L&T Construction, the
uniquely shaped corporate museum – the Henning Holck-Larsen (HHL) Centre – is
dedicated to the memory of one of L&T's founding fathers and Chairman Emeritus,
the late Henning Holck-Larsen. Recently re-designed and re- appointed, the HHL
Centre is perhaps the best example of the digital transformation witnessed across the
organization.
In an entirely digital, touch-enabled environment, visitors from across the board can
experience the organization's 8-decade-long history, its width of capabilities, the
mega, iconic infrastructure projects executed, the smartness of its systems &
processes, the people behind this success, the multiple awards won and the sterling
role that L&T Construction plays as a responsible corporate citizen.
The HHL Centre has been awarded the Public Relations Society of India (PRSI)
Golden Jubilee Award by PRSI New Delhi for live interactive and innovative PR
initiative.

BUSINESS OF LARSEN AND TOUBRO LIMITED

Our multiple businesses have distinct but complementary capabilities, addressing
different segments of infrastructure and industry. We execute projects across the
entire spectrum of infrastructure projects on a turnkey basis, with single-source
responsibility, adopting innovative design engineering, the latest construction
techniques and a global supply chain. Digitalization, mechanization and the ability to
mobilize large, skilled crews, enable us to meet stringent deadlines and rigorous
standards and deliver to speed and scale.
Larsen and Turbo Company is not only concentrating on construction of buildings but
also other particulars business such as,
1. L&T - Minerals & Metals (M&M)
2. L&T - Heavy Civil Infrastructure (HCI)
3. L&T - Water Effluent Treatment (WET)
4. L&T - Power Transmission & Distribution (PT&D)
5. L&T - Geo Structure
6. L&T - Smart World Communication (SWC)

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 LEADERSHIP PERSONS OF LARSEN & TOUBRO LIMITED
Name Designation
S N Subrahmanyan Managing Director & CEO

A M Naik Group Chairman

A Shivaram Nair Co. Secretary & Compl. Officer

Adil Siraj Zainulbhai Independent Director

D K Sen Whole Time Directors & Sr. Exe. VP

Hasit Joshipura Senior Vice President & Head

Hemant Bhargava Nominee Director

Jayant Damodar Patil Whole Time Director & Sr. Exe. VP

M Damodaran Independent Director

M M Chitale Independent Director

M V Satish Whole Time Director & Sr. Exe. VP

Narayanan Kumar Independent Director

Pramit Jhaveri Independent Director

Preetha Reddy Independent Director

R Shankar Raman Whole Time Director & Sr. Exe. VP

S V Desai Whole Time Director & Sr. Exe. VP

Sanjeev Aga Independent Director

Subramanian Sarma Whole Time Director & Sr. Exe. VP

T Madhava Das Whole Time Director & Sr. Exe. VP

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 AWARDS AND RECOGNITION OF
LARSEN & TOURBO LIMITED
• L&T ranked 2nd in Top 25 EPC Contractors 2022 in the Middle East List by Oil
& Gas Middle East
• L&T ranked 4th in the 2021 LinkedIn Top Companies list, India
• In 2021, L&T won the Innovation in on boarding at the OLX People HR
Excellence awards by The Economic Times HR World
• L&T Hydrocarbon won the Federation of Indian Petroleum Industry (FIPI)
‘Engineering Procurement Construction (EPC) - Company of the Year’ Award
for 2020
• In 1997, the Bengaluru Works division was awarded the "Best of all" Rajiv
Gandhi National Quality Award
• In 2013, L&T Power received 'Golden Peacock National Quality Award – 2012'
at the 23rd World Congress on 'Leadership & Quality of Governance'.
• L&T ranked at No.22 among World’s Best Employers and No.1 in India by
Forbes for 2018.

LISTING AND SHAREHOLDERS OF LARSEN &

TOURBO LIMITED

The equity shares of the company are listed on the Bombay Stock Exchange
(BSE) and the National Stock Exchange of India (NSE). The company's shares
constitute a part of the BSE SENSEX of the BSE as well as the NIFTY 50 index of
the NSE. Its global depository receipts (GDR) are listed on the Luxembourg Stock
Exchange and London Stock Exchange.
Shareholders
Shareholders as of 31 March 2020
Major Holder Percentage
Promoters 0.00
Institutional Investors 54.22
Government 0.38
Other Investors 24.43
Public 20.98
Total 100.00

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 EMPLOYEES OF LARSEN AND TURBO LIMITED
As on 31 January 2022, the company had 55,332 permanent employees, out of which
2,822 were women (5.29%) and 90 were employees with disabilities (0.1012%). At
the same period company had 293,662 employees on contract basis.

INTERNATIONAL MARKET OF LARSEN AND TURBO

LIMITED
L&T sharpened its focus on international markets, especially the Gulf, from 2010
onwards. Since then, from under one-tenth, international business now contributes
around one-third to both order inflow and revenue. L&T has set up a full range of
operations in the Middle East catering to the Gulf and North Africa. Many of the
projects are being undertaken through joint ventures with leading companies based in
the Gulf. L&T provides turnkey solutions across key regions: the Middle East (UAE,
Qatar, Kuwait, Oman, Saudi Arabia and Bahrain), Africa (Algeria, Kenya, Ethiopia
and Malawi) and ASEAN (Malaysia and Thailand). The range of work is wide and
varied: high-voltage substations, power transmission lines, extra-high-voltage
cabling and instrumentation and control systems.

DISINVESTMENT OF LARSEN AND TURBO LIMITED

L&T has across the decades exited from several businesses. These include:
Cement:
L&T sold its 16.5 million tonne/per year capacity cement division to UltraTech
Cement and also divested its 8.5% stake in A V Birla group company Grasim
Industries in 2004.

L&T-John Deere:
In 1992, L&T established a 50-50 joint venture with John Deere to manufacture
tractors in India, called L&T - John Deere. L&T sold their interest to John Deere in
2005.

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L&T Case:
In 1992, L&T established L&T-Case Construction with CNH Global as a 50-50 joint
venture to build backhoes. In 2011, L&T sold its share to CNH, and the company was
renamed Case New Holland Construction Equipment India.

L&T Medical Equipment Systems:

Medical equipment division, known as L&T Medical Equipment & Systems, was
established in 1987. In November 2012, L&T sold it to Skanray Technologies Pvt
Ltd.

EWAC Alloy Limited:

L&T sold its entire stake in unlisted subsidiary EWAC Alloys to UK-registered
ESAB Holdings for a total consideration of Rs.522 crore. The share purchase
agreement has been executed on 11 October 2017. The acquirer ESAB offers products
for welding and cutting process. In 2012, ESAB was acquired by Colfax Corp., a
diversified industrial manufacturing company based in the US.

L&T Kobelco Machinery Private Limited:

This was a joint venture of L&T and Kobe Steel of Japan, to manufacture internal
mixers and twin-screw roller-head extruders for the tyre industry. L&T sold its entire
51% stake in L&T Kobelco Machinery Private to its joint venture partner in the
company, Kobe Steel of Japan, for Rs.43.5 crore.

L&T Electrical and Automation Limited:

L&T was an international manufacturer of electrical and electronic products and
systems. The company manufactured custom-engineered switchboards for industrial
sectors like power, refineries, petrochemicals and cement. In the electronic segment,
L&T offered a range of metres and provides control automation systems for
industries. In May 2018, the firm signed a definitive agreement with Schneider
Electric for the strategic divestment of its electrical and automation (E&A) business
in an all-cash deal of ₹14,000 crore. The deal was completed on 31 August 2020 after
receiving the requisite regulatory approvals. L&T has said that its exit from the
electrical and automation business is a part of its strategic portfolio review process.

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 SUSTAINABLE DEVELOPMENT GOALS
The Sustainable Development Goals (SDGs) or Global Goals are a set of 17 interlinked global
goals designed to be a "blueprint to achieve a better and more sustainable future for all". The
SDGs were set up in 2015 by the United Nations General Assembly and are intended to be
achieved by 2030. The SDGs define global priorities and aspirations for 2030, with objectives
to achieve conservation, ecological balance and equality.

The following is a list of our initiatives that demonstrate L&T’s alignment with the SDGs and
our commitment towards climate change mitigation, environmental conservation and
corporate social responsibility.

A. END POVERTY IN ALL ITS FORMS: -

• Skilling programmes for youth and migrant labour enables higher wage-earning
capacity.
• Vocational, life-skills training and job placements for skilled youth, women and
differently abled.
• Encouraging entrepreneurship among youth, women and differently abled
through training and promoting Self-help groups (SHG).
• Increased agricultural income and multi-cropping due to water adequacy.
• Created agro-based livelihood, increasing household incomes.
• Formation of farmer groups and market linkages for better crop prices.

B. END HUNGER, ACHIEVE FOOD SECURITY, IMPROVE NUTRITION AND

SUSUTAINABLE AGRICULTURE: -

• Training communities in better nutrition practices.

• Promoting families to grow and use vegetables from kitchen gardens and revival
of traditional foods including millets.
• Encouraging sustainable agricultural practices by use of zero budget natural
farming, drip irrigation, indigenous pesticides, seed treatment, balanced dose of
fertilisers, discouraging plantation of water-intensive crops, and introducing
horticulture through farm field schools and demonstrations.
• Nutrition awareness campaign and counselling for women, pre-school teachers
and school children from the community.
• Addressing malnutrition among children by providing services related
to Prevention, education to mothers, early detection and treatment in ICDP areas.
• Daily distribution of multi-vitamins/milk at Anganwadis/schools.
• Livestock management and training in dairy and poultry business.
• Provide food and ration in disasters and crisis situations.
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C. ENSURE HEALTHY LIVES AND PROMOTE WELLBEING OF PEOPLE OF
ALL AGES: -

• Multi-specialty community health centres providing access to maternal, family

welfare, pediatric and general healthcare.
• Health centres offering mental health services, child guidance clinic
and counselling.
• Mobile health vans and camps for school children, women and elderly from
underprivileged communities.
• Health awareness for adolescents
• Care and counselling programmes for differently-abled children.
• Blood donation camps.
• Training of frontline healthcare workers.
• Infrastructure support to Anganwadis, PHCs and hospitals.
• Integration with national health programs.
• Health infrastructure strengthening during COVID-19.
• Welfare teams at the workplace.

D. ENSURE INCLUSIVE AND QUALITY EDUCATION, AND PROMOTE

LIFELONG LEARNING OPPORTUNITIES FOR ALL: -

• School infrastructure development for creating conducive learning environment,

including construction of school sanitation facilities.
• Making schools accessible by providing bicycles for students staying in remote tribal
areas.
• Technology enabled education (e-learning facilities) in Government schools.
• Miniature science centres and laboratories to develop interest in scientific subjects.
• Introducing and strengthening STEM (Science, Technology, Engineering and Math)
Education programme in Government schools to unlock scientific and technological
potential of children and encourage their curiosity, scientific vigour and creativity
• Teacher training programme to impart effective pedagogy.
• Enhancing curriculum and impacting classroom learning through nurturing talent.
• Promoting girl child education.
• Life skills and extra-curricular activities for overall development of students.
• Community-based learning centres with parent involvement to prevent dropouts and
prepare children for board exams.
• Specific interventions to integrate children at risk of dropping out and out of school
children into school.
• Prepare indigenous students for admission to various public schools.
• Mitigating digital divide by either providing the gadgets to the underprivileged children
or visiting students at their homes to provide study material in print form.

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E. ACHIEVE GENDER EQUALITY AND EMPOWER ALL WOMEN AND
GIRLS: -

• Making water available to doorstep and drudgery reduction activities.

• Awareness on women’s health and menstrual hygiene.
• Toilet facilities in schools for girls.
• Motivate parents to encourage girls to participate in STEM activities and exposure
visits.
• Creating livelihood opportunities and encouraging entrepreneurship.
• among women through skill development, vocational training programs and market
linkages.
• Formation of women’s Self-help Groups (SHGs), ensuring participation and decision
making in development and school management committees across villages.
• Increasing women employees in the organization.

F. ENSURE AVAILABILITY AND SUSTAINABLE WATER MANAGEMENT

AND SANITATION FOR ALL: -

• Achieving water adequacy for drinking, sanitation and agriculture through watershed
projects, as part of Integrated Community Development (ICD) programmes.
• Supplementing water bodies to increase ground water level with participation from
communities.
• Constructing water harvesting structures with contribution from the community and
ensuring their maintenance.
• Developing community-based groups like Village Development Committees, Farmers
groups for maintaining the water structures, judicial use of common water resources and
ensuring the villages remain open defecation free.
• Demonstration of rainwater harvesting system in schools and households.
• Training farmer groups in water estimation and budgeting, and to measure water levels
and in GIS based water management.
• Sanitation awareness campaigns followed with construction of Household toilets and
school toilets, to make rural India ‘open defecation-free’.
• Supporting Swachh Bharat Abhiyan.

G. ENSURE ACCESS TO AFFORDABLE, RELIABLE, SUSTAINABLE

ENERGY FOR ALL: -

• Providing solar lamps to the underprivileged communities and off-grid solar system
with back-up for communities and schools.
• Increasing renewable energy use within campuses and project sites.
• Green products and services portfolio for customers.
• Demonstration of Solar Agricultural Fences in villages.

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• Demonstration of Bio-Gas Plants.

H. PROMOTE INCLUSIVE AND SUSTAINABLE ECONOMIC GROWTH, FULL

AND PROTCTIVE EMPLOYMENT AND DECENT WORK FOR ALL:-

• Employable skill training and placements for youth from underprivileged communities,
physically and mentally challenged persons.
• Construction Skills Training Institutes for skilling youth.
• Transform fresh ITI candidates to multi-skilled workers.
• Skilling youth through training institutes.
• Certified computer courses for students.
• Television and digital media workshops for youth empowerment.
• Empowering workforce through learning, development and welfare initiatives.
• Training rural youth in ethno-veterinary care and Natural Resource Management.

I. BUILD RESILIENT INFRASTRUCTURE, PROMOTE INCLUSIVE AND

SUSTAINABLE INDUSTRIALISATION AND FOSTER INNOVATION: -

• Embolden automation with focus on application for patents/Intellectual Property Rights

(IPR) to inspire innovation.
• Resilient infrastructure creation and sustainable industrialisation for our clients, through
our offerings – green products and service portfolio.
• Focus on ‘Make in India’ initiatives to create employment opportunities and import
substitution.

J. REDUCE INEQUALITY WITHIN AND AMONG COUNTRIES: -

• Merit-based hiring with emphasis on equal opportunities.

• Established policies to empower employees irrespective of gender, age, disability, race
and religion.
• Encouraging participation of vulnerable groups like women and the deprived, in rural
development committees of developmental projects supported.
• Fairness in distribution of resources within villages under ICDP to circulate the benefit
to the most needy and vulnerable in the community.
• Prioritise needs of marginal and poor farmers in rural development programs.

K. MAKE CITIES AND HUMAN SETTLEMENTS INCLUSIVE, SAFE,

RESILIENT SUSTAINABLE: -

• Create comprehensive and smart technology solutions for critical infrastructure,

spanning airports, power plants, metro rails and IT parks.
• Offer specialised turnkey GIS-based network management solutions for city
surveillance, traffic monitoring and analysis.

27
• Road barriers and guards to control traffic areas at project sites, especially busy
junctions in the city, along with road safety awareness campaigns.
• Garden maintenance in cities and flood relief interventions.
• ICD program for water-stressed rural settlements.

L. ENSURE SUSTAINABLE CONSUMPTION AND PRODUCTION PATTERNS:-

• Implement material conservation initiatives, energy efficiency advancement projects

and sustainable production practices.
• Our cumulative energy conservation over the years is more than 128 Mn KWH.
• We proactively utilise Fly Ash, Granular Blast Furnace Slag and Crushed sand in our
construction projects and recycled steel and zinc wherever permissible.
• Discouraging plantation of water-intensive crops, use of indigenous pesticides, seed
treatment, balanced dose of fertilizers.
• Multi cropping among farmers on increase.

M. TAKE URGENT ACTION TO COMBAT CLIMATE CHANGE AND ITS

IMPACTS: -

• Climate change mitigation and adaptation initiatives: GHG intensity reduction projects,
promoting the use of renewable energy, green buildings and tree plantation.
• Measurable targets for reducing energy and carbon intensity.
• Carbon footprint mapping at the organizational level.
• Discourage overexploitation of ground water.
• Alignment with National Action Plan on Climate Change (NAPCC), Government of
India.

N. CONSERVE THE OCEAN, SEAS AND MARINE RESOURCES FOR

SUSTAINABLE DEVELOPMENT: -

• Valuate business process risk to ensure that negative impacts

are avoided/minimized/controlled.

O. PROTECT, RESTORE AND PROMOTE SUSTAINABLE USE FOR

TERRESTRIAL ECOSYSTEMS, MANAGE FORESTS, COMBAT
DESERTIFICATION, AND HALT LAND DEGRADATION AND
BIODIVERSITY LOSS: -

• Building soil conservation to prevent soil erosion in the ICD programme.

• Village level committee to regulate the use of common resources.
• Rainwater harvesting in schools and Households.
• Lake clean-up and reserve forest clean-up drives alongside de-silting of water bodies.

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• Planted 800,000+ saplings in FY21 and many fully-grown trees are nurtured across
major campuses.
• Sustaining Miyawaki forest in 6 Locations with 65,000+ saplings.
• In-house guidelines on scientific tree plantation and maintenance.
• Felicitation of guests with a Tree Certificate, instead of a floral bouquet.
• Optimising the use of natural resources.
• Afforestation by creating fast growing sustainable forest.

P. PROMOTE PEACEFULL AND INCLUSIVE SOCIETIES FOR

SUSTAINABLE DEVELOPMENT, PROVIDE ACCESS TO JUSTICE FOR
ALL AND BUILD EFFECTIVE AS WELL AS ACCOUNTABLE
INSTITUTIONS AT ALL LEVELS: -

• Village level committee and democratic process formulated for maintenance, usage and
monitoring the sustainability of ICDP interventions.
• Encourage democratic functioning and financial transparency in conduct of SHG
business.
• Associating with industry forums like.
• Confederation of Indian Industry – Centre of Excellence for Sustainable Development
(CII-CESD).
• CII – Green Business Centre (GBC) and Government bodies for promoting sustainable
development.

Q. STRENGHTHEN THE MEANS OF IMPLEMENTATION AND REVITALISE

GLOBAL ASSOCIATIONS FOR SUSTAINABLE DEVELOPMENT: -

• Collaboration and partnership with state and national Governments, NGOs and ITIs.
• In keeping with the United Nations Global Compact, and following GRI Sustainability
Reporting Standards.
• Sharing best practices with stakeholders.

29
NATURE OF WORK DONE

30
 NATURE OF WORK DONE

Stock Audits: The process of auditing is done through a set of rules and
regulations as per the companies' act 2013. It examines the financial
statementof a company to determine the prepared statements to be true and
fair in termsof company affairs.

Similarly, a stock audit is a process that refers to physical verification of

the inventory which includes evaluation of inventory items based on the
referenceof the assignment.

The stock audit process is necessary to reduce the avoidable investment

on stocks or inventory to ensure proper balance in the process. As high
levels ofstock result in overstocking which may result in the poor value
of cash flows and financial losses.

The auditor's task is to check the statements during the process of

examination. If he/she comes across with any fraud or discrepancy by the
management of thecompany, then the auditor should mention those in his
report. The auditor cannot perform an audit on assumption that management
of the company mighthave committed fraud.

The main reasons for executing the audit are to correct the discrepancies that
arepresent in the stock record when verified with the physical stock bypassing
necessary adjustment entries. Following are the reasons why it is looking
forward to performing a stock audit:

• To update the starting stock details.

• To identify the discrepancy between stock records also

known ascomputed stock and physical stock.

• To update actual physical stock as a stock record.

• To ensure proper handling of stocks

Objective:
The objective of conducting a stock audit is to ensure the security of funds
that are lent by the bank, being safe and valued correctly.

31
Inventory Audit also known as stock audit where the evaluation is done for raw
materials that gets converted to finished goods. It is important to keep the
information updated about the quantity and the quality of raw materials in stock.

Procedure of Stock Audits:

According to a stock audit process of a software, there are certain steps that
arein need to be followed, such as:

• Report Flash

• Scheduling Stock

• Location Barcoding

• Global Counting

• Scanning

• Uploading of Scans

• Variance Analysis

• Sign Off

These steps are involved in the process from the whole year, or from the
starting when stock was entered in the system. Whenever the new stock
arrives in the premises it is registered, barcoded (labelled/marked), and
entered in the system for its acquisition or use. These barcodes are now
scanned every time the item is removed from the stock for any purpose. Also,
the purpose is required to be entered in the provided field, so that to know
afterwards and verify it.

After the stock ends and new stock is demanded its variable use is analyzed
for its requisition, and this process continues.

When stock audit is performed you can verify your stock with these entries
andits consumption.

The process is very easy when you perform all the activities in regular. Just
follow all the mandatory steps from barcoding the item to scan and upload,
whenever it is shifted or consumed. It helps you in verifying the data and
detailswhen the audit is performed.

32
Importance of Stock Audits: There are several key reasons why there
is aneed to perform a stock audit, it includes:

• Identification of the slow-moving stock, deadstock, obsolete stock,

andscrap.

• Find discrepancies between recorded stocks and physical stock.

• Update the physical stock that matches the recorded stock.

• Proper preservation and handling of stocks.

The stock audit is an important factor in determining the benefits offered to an

organization. These are the benefits:

• Reduced cost and bottom-line improvement.

• Prevention of pilferage and fraud.

• Accurate information on inventory value.

• Reduced gaps in the inventory management processes.

• Special arrangements for third party opinion.

• The great control mechanism in running the business.

Stock Audit Checklist:

Inventory is one of the important field for any business where chances for
fraudare more prone. So is, its department where thefts and damages occur
more often.

That's why, it is good to have strong control over all the processes,
checklists, and regular stock audit for efficient functioning. Following is
the checklist forthe audit of Inventory.

• Stock audit software is used to keep records of inventory, mostly

it isintegrated with accounts.

• The stock evaluation process, components of cost of inventory,

method ofvaluation.

• Frequency of verifying of stock record with physical stock.

33
 • Stock related MIS format and contents.

• Physical security of Stock, CCTV, Firefighting equipment.

• Insurance of stock.

• Categorization of inventory in the high, medium, and low-value stock.

• Inventory lying with third parties.

• Old stock, expired stock, stock near expiry dates, perishable inventory.

• Inventory levels, inventory age analysis.

• Inventories having duplicate codes in software.

Conclusion:

Asset management software provides an efficient program to verify stock or

perform the internal stock audit, with the help of an application. Here are
someof the advantages of the stock audit with asset management software:

• Helps to identify the weakness in the accounting system so,

enable theofficials for improvement suggestion.

• Assures directors about smooth running business with all the

requiredinformation. Also, helps to reduce the risk of fraud and poor
accounting.

• Helps in financial benefits on how the business is running,

expectedmargins, and how they can be achieved.

• Enhance the credibility and reliability of the figures being

submitted toprospective investors.

Unit inspection: Unit inspection means ensuring that the unit to which
thebank has lent its funds is being run in a satisfactory manner. Its
scope goes beyond stock statement scrutiny or even stock inspection.
Unit inspection goes beyond arithmetical or physical correctness of the
stocks.
One of the effective tools of credit monitoring is the drill for obtaining and
scrutinizing the stock statements and conducting periodical factory /godown
inspection. Bankers can neglect these only at their peril. The main purpose
34
of the factory/godown inspection by the bankers is to ensure that the
business ofthe borrower is running without the problem. The material and
machinery, hypothecated to a bank is available and properly maintained

and any features could be identified. The inspection gives an opportunity to

study the extent of the borrower’s involvement in the business. Last but not
least to verify that the money is utilized by the borrower for the purpose bank
lent:
1. The inspecting official should study the sanction terms & conditions
before making the visit.
2. The visit should be at times without prior information to the borrower.
3. The inspecting official should take the latest stock statement with him/her
along with the details of outstanding/DP, security details, insurance detail,
and irregularities in the account if any. (Stock statements are required to
be submitted by the borrower on a weekly/fortnightly or monthly basis as
per sanction terms.).
4. In the case of Pledge form of advances (Key Cash Credit) banks will have
symbolic delivery of the inventory and banks will also be accountable for
loss if any.
5. There is a need for godown inspection even where the working capital
limitis in the form of bills finance only. This helps banks to check whether
the unit is producing bills for purchase even when the stoppage of work in
the factory or unit is closed.
6. The visiting official needs to check the following.
a) The working of factory/ business.
b) The items of security offered.
c) Bank’s hypothecation board is placed at the appropriate place.
d) Registers maintained for production, sales, goods movement, power
consumption, etc.
e) Inspections to be done regularly on advances related to inventory
financing and also block assets such as land building and machinery, etc.
7. In the case of machinery is hypothecated to the bank, inspecting officials
should ensure that old/defunct machinery is not shown to them as new
machinery.
8. Ultimately that unit/godown inspection should mainly serve the following
purposes:
9. The level of raw materials, semi-finished goods, and finished goods are
not only maintained in the record but are also physically available.
10. One bank should not finance the same security already financed by another
bank. A shortage of stock or stoppage of work is immediately noticed.
11. Drawing power being arrived only on paid stock excluding redundant or
unpaid stocks.
12. Pre-Sanction Inspection of the Unit:
The bank conducts pre-sanction inspection of the unit/factory through its
own offices or in some cases, where projects are complicated; the pre-
35
 sanction inspection is done through some well-known outside agency.
13. Field Visit:
Before the sanctioning of the project, a field visit takes places. In the field
visit, one person from the Credit Enquiry Department accompanies the

branch manager /zonal manager. The purpose of the field visit is to check
whether the address given by the borrower is correct or not? The
mentioned activity is actually carried out or not? the collateral or not? the
collateral security mentioned really exists or not? the market value of the
securities mentioned is correct or not? etc. Many issues like above are
checked in suchinspection. In addition to this, the manager and the expert
from the department also talk with the laborers, ask them several
questions, try to find if there are any problems between the labour and the
managements. Even the people around the factory are asked several
questions like, since when the factory is going on? Any problems of the
factory with the nearby society etc.
14. Inspection:
(1) Notwithstanding anything to the contrary contained in [section 235 of the
Companies Act, 1956 (1 of 1956),] the Reserve Bank at any time may, and
on being directed so to do by the Central Government shall, cause an
inspection to be made by one or more of its officers of any banking company
and its books and accounts; and the Reserve Bank shall supply to the banking
company a copy of its report on such inspection.

[(1A) (a) Notwithstanding anything to the contrary contained in any law for
the time being in force and without prejudice to the provisions of sub-
section (1),the Reserve Bank, at any time, may also cause a scrutiny to be
made by any or more of its officers, of the affairs of any banking company
and its books and accounts; and

(b) A copy of the report of the scrutiny shall be furnished to the banking
company if the banking company makes a request for the same or if any
adverseaction is contemplated against the banking company on the basis of
the scrutiny.]

(2) It shall be the duty of every Director or other officer 140[or employee]
ofthe banking company to produce to any officer making an inspection under
sub- section (1) 134[or a scrutiny under sub-section (1A)1 all such books,
accounts and other documents in his custody or power and to furnish him with
any statements and information relating to the affairs of the banking company
as the said officer may require of him within such time as the said officer may
specify.

(3) Any person making an inspection under sub-section (1) [or a scrutiny
under sub-section (1A)] may examine on oath any Director or other officer

36
[or employee] of the banking company in relation to its business, and may
administer any oath accordingly.

(4) The Reserve Bank shall, if it has been directed by the Central
Governmentto cause an inspection to be made, and may, in any other case,
report to the Central Government on any inspection [or scrutiny] made under

(5) this section, and the Central Government, if it is of opinion after

considering

the report that the affairs of the company are being conducted to the detriment
of the interests of its depositors, may, after giving such opportunity to the
banking company to make a representation in connection with the report as,
in the opinion of the Central Government, seems reasonable, by order in
writing-

(a) prohibit the banking company from receiving fresh deposits;

(b) direct the Reserve Bank to apply under section 38 for the winding up of
the banking company:

Provided that the Central Government may defer, for such period as it may
think fit, the passing of an order under this sub-section, or cancel or modify
any such order, upon such terms and conditions as it may think fit to impose.

(6) The Central Government may, after giving reasonable notice to the
banking company, publish the report submitted by the Reserve Bank or such
portion thereof as may appear necessary.

Explanation: For the purposes of this section, the expression "banking

company" shall include-

(i) in the case of a banking company incorporated outside India, all its
branches in India; and

(ii) in the case of a banking company incorporated in India-

(a) all its subsidiaries formed for the purposes of carrying on the business of
banking exclusively outside India; and

(b) all its branches whether situated in India or outside India .] 110[(6) The
powers exercisable by the Reserve Bank under this section in relation to
Regional Rural Banks may (without prejudice to the exercise of such powers
by the Reserve Bank in relation to any Regional Rural Bank whenever it
considers necessary so to do) be exercised by the National Bank in relation
to the Regional Rural Banks, and accordingly, sub-sections (1) to (5) shall
37
apply in relation to Regional Rural Banks as if every reference therein to the
Reserve Bank included also a reference to the National Bank.]

Statutory Audit: Means a type of audit mandated by the law or a statute to

make sure that the book of accounts is true and fair which is presented to the
public and regulators. If the business meets certain criteria, then the statutory
audit is mandatory. Generally, statutory audit means financial audit.

Statutory Audit Procedure

Statutory audit is required by industry regulators and government agencies.
The statutory audit procedure is varied which includes the understanding of
theoperating environment and controls of a business entity. The procedure
includes:

Understanding the Operating Environment: Learning about the industrial

guidelines and the regulation criteria, the auditor checks whether they are
ethical. Statutory audit procedure includes sending of questionnaires,
checklists, surveys and also formal notifications.

Understanding Controls: A business entity’s control of operations is learnt

by an auditor by asking the employees or even external auditors. Even reading
industry publications or previous year audit report and working papers of the
company will give operation control knowledge to the auditor.

Test Controls: In the statutory audit process, evaluation of corporate

procedures by a specialist conducting regulatory audit and also operating
mechanisms for fraud or prevention of error are included. Then they agree
with industrial practices and standard set by the regulators. Those operating
controls are adequate, performed properly and understood by all the
employees who are involved in the process and they are also checked by the
auditor.

Test Account Balances: They perform a test on account balances to check

if the financial reports are error-free and comply with the regulatory
standards, statutory principles and industry practise.

Test Account Details: The auditor then performs tests of accounts and
balances on a bank or insurance company or even the hedge fund’s account
balances to check that the audited statutory financial statements are accurate
and complete.

Internal Audit and Statutory Audit: Internal Audit is an organization or

department of people within a certain company tasked to provide unbiased
and independent reviews of the system and processes of the business
organizations. These are employed by the company to directly perform audit
38
by staying within the management and use the company standards with in-
house resources.

Statutory Audit means a type of audit mandated by the law or a statute to

make sure that the book of accounts is true and fair as presented to the public
and regulators. This is conducted as per the provisions under Companies Act
or even Tax Audit under Section 44AB of the Income Tax Act.

Internal audit and statutory audit are quite different. A statutory auditor
cannot be the internal auditor. Statutory audit is done by the practicing-
chartered accountant whereas internal audit is done by the employee of the
company. Statutory audit is done annually while an internal audit is basically
done todetect fraud or prevent errors. Internal audit and statutory audit also
differ in the basic factor that the first is appointed by the management of the
company while the latter is appointed by the shareholders of the company in
the annual general meeting.

Non-Statutory Audit: A non-statutory audit is the review and verification

process of the business of a company and it is not required by any law or
statute. The non-statutory audit is a type of audit that is performed to identify
anorganization’s weaknesses that may hamper the productivity and also the
efficiency level of the business. Statutory and non-statutory audits differ in
the very fact that one is authorized and governed by law while the other is
done voluntarily without any legal or statutory force.

Types of Statutory Audit

The two most common types of statutory audit are:

Tax Audit - It is an examination of the tax return by the Internal Revenue

Service (IRS) to verify that the income and deductions are accurate. A tax
audit is done when the IRS chooses to examine the tax return more closely
and to verify that income and deductions are accurate.

Company Audit - Under section 183(3) of the Company Act 1994, company
audit means that the balance sheet and the profit and loss account or the
income and expenditure account, or cash flow statement of a company will
be audited by the auditor of the company.

Statutory Audit - Companies and organizations perform numerous types of

audits to ensure that they are operating within the law's guidelines. While
certain audits, such as internal audits, are carried out by corporate workers,
others, such as statutory audits and GST audits, are carried out by external
entities such as chartered accountants. Some companies are required to have
external audits if they fulfill a certain condition related to annual turnover and
capital infusion.
39
What is the Purpose of a Statutory Audit?

A statutory audit is an external entity's mandated audit of a company's

financial records. This audit is required by a statute or law that oversees
the principles and ethics of a company. A statutory audit examines bank
accounts, financial statements, transactions, bookkeeping records, ledgers,
and another key

documents provided for tax purposes and government obligations in general.

However, it can also comprise documents pertaining to commercial
operations, such as invoices, purchase orders, bills, challans, and more.

Importance of Statutory Audit: All public and private limited corporations

are required by law (or stature) to conduct a statutory audit of their financial
papers and filings, according to the Companies Act 2013 and Companies
(Auditand Auditors) Rules, 2014. In fact, in the case of the statutory audit,
the business turnover and nature of the business of public and private limited
firms make no difference.

Statutory Auditing Procedures: The statutory audit procedure begins as

soon as the company is registered.

The full statutory audit method is extensive and is dependent on the

business's type.

The statutory audit procedure begins as soon as the company is registered.

The full statutory audit method is extensive and is dependent on the business's
type.

Within 30 days of the business's registration, every public and private

corporation or limited liability partnership (LLP) that fits the aforementioned
conditions should appoint an auditor.

Example of Statutory Audit: All municipalities are required by state law to

produce yearly accounts that have been duly audited by an auditor. Moreover,
the instruction includes that audited statements and reports are made
availableto the common public. The goal of this audit is to ensure that all
expenditures are legitimate and have been sanctioned and approved properly.
It makes the local government accountable for the appropriation of money.
At the same time, it double-checks that the amount disbursed at the federal or
state level reaches the lower level and that no taxpayer funds have been
misappropriated. As a result, municipalities are responsible for conducting a
statutory audit.

40
The main objectives of a statutory audit are to examine and verify these
documents of a business, which falls in the purview of statutory audit.

GST Checklist

• Output tax liability

• Input tax credit
• Reconcile taxable outward supplies (with GSTR 3B and GSTR – 1)
• Tax liability (with GSTR 3B and GSTR – 1)
• Reconcile Input Tax Credit availed

Tax Deducted at Source Checklist

• Tax payable as per challans and returns, or advance paid to vendors

• Tax Receivable (Form 26AS should match with Form 16A)
• ROC compliances, which includes Forms ADT, AOC, MGT, CRA,
INC22, DPT 3, MSME compliance form
• Dividend Distribution Tax, in case the company provides dividends
to theshareholders
• Encashment of Provident Fund, ESIC, Gratuity, Bonus and Leaves

Other Verifications

• Cash inflow and outflow (more than Rs 10,000 cash payment

is notallowed)
• Section 269ST of Income Tax Act, 1961 is not violated (the
companycannot receive cash more than Rs 2,00,000)
• PAN Card records of the payers, in case they paid Rs 50,000 or
more incash
• Loans and advances should be in accord with the Companies Act,
2013and Income-tax Act, 1961
• Verification of Section 185, 186, and 73 to 76 of Companies Act,
2013 incase of loans and advances
• Reporting of advances and loans under Section 269SS is mandatory.

41
RATIO ANALYSIS

42
 Meaning and Definition of Ratio Analysis
Ratio Analysis is a tool which involves analysing the financial statement by
calculating various ratios. It is a tool of financial statement analysis, in which
inferences are drawn based on the computation and analysis of different ratios.
According to Myers, “Ratio Analysis is a study of relationship among various
financial factors in a business”.

Objectives of Ratio Analysis

Following are the objective of ratio analysis:
(i) To simply accounting figures
(ii) To facilitate analysis of financial statements
(iii) To analyse the operational efficiency of a business
(iv) To help in budgeting and forecasting
(v) To facilitate intra firm and inter firm comparison of performance

Classification of Ratios
Ratios may be classified in the following two ways:
(i) Traditional Approach
(ii) Functional Approach

Traditional Approach
Traditional classification of ratios is done on the basis of the financial statement from
which the ratios are calculated. Under the traditional classifications, the ratios are
classified as: (i) Balance Sheet Ratios (ii) Income Statement (iii) Inter- Statement
Ratios.
(i) Balance Sheet Ratio
If both items in a ratio are from balance sheet, it is classified as Balance Sheet
Ratio.
(ii) Income Statement Ratio
If the two items in a ratio are from income statement, it is classified as
income statement ratio.
(iii) Inter-Statement Ratio
If a ratio is compared with one item from income statement and another
item from balance sheet, it is called inter-statement ratio.
43
Functional Classification
Functional classification of ratios is based on the purpose for which ratios are
computed and it is the most commonly used classification. Under the functional
classification, the ratios are classified as follows:
(i) Liquidity Ratios
(ii) Long Term Ratios
(iii) Turnover Ratios
(iv) Profitability Ratios

1. Current Ratio:
Current Ratio gives the proportion of current assets to current
liabilities of a business concern. It is computed by dividing current assets by
current liabilities. Current Ratio indicates the ability of an entity to meet its
current liabilities as and when they are due for payment. It is calculated as
follows:

Formula,

Current ratio = Current Assets / Current Liabilities

Table: Current Ratio

(In Crores)
Year 2022-21 2021-20 2020-19 2019-18 2018-17

Current 122,017.86 103,631.79 95,635.11 91,059.17 79,570.07

Assets
Current 87,567.48 70,889.17 81,380.28 70,259.35 60,357.83
Liabilities
Current 1.39 1.46 1.18 1.30 1.32
Ratio
(Proportion)

44
 Current Ratio

Current Ratio (Proportional)

1.46
1.32 1.39
1.3
1.18

2017-18 2018-19 2019 -20 2020-21 2021-22

Interpretation:
From the above chart, the Current Ratio for the Year 2017-18 is 1.32,
current ratio for the year 2018-19 is 1.30, current ratio for the year 2019- 20 is
1.18, the current ratio for the year 2020-21 is 1.46 and lastly the current ratio
for the year 2021-22 is 1.39. In this highest ratio is 1.46 in the year 2020- 21.

45
2. Liquidity/Quick Ratio:
Quick Ratio gives the proportion of quick assets to current
liabilities. It indicates whether the business concern is in a position to pay
its current liabilities as and when they became due, out of its quick assets.
Quick assets excluding inventories and prepaid expenses. It is otherwise
called liquid ratio or acid test ratio. It is calculated as follows:

Formula,

Quick ratio = Liquid Assets / Current liabilities

Table: Quick Ratio

(In Crores)
Year 2021-22 2020-21 2019-20 2018-19 2017-18

Liquid 118,635.75 100,338.32 92,350.07 87,605.99 76,077.69

Assets
Current 87,567.48 70,889.17 81,380.28 70,259.35 60,357.83
Liabilities
Liquid Ratio 1.36 1.42 1.18 1.25 1.28
(Proportion)

46
 Quick Ratio Chart

Liquid Ratio (Proportions)

1.42
1.36
1.28 1.25
1.18

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the liquid ratio of the year 2017-18 is 1.28,the liquid
ratio of the year 2018-19 is 1.25, the liquid ratio of the year 2019-20is 1.18, the
liquid ratio of the year 2020-21 is 1.42, the liquid ratio of the year 2021-22 is
1.36. In this the highest liquid ratio is 1.42 in the year 2020-21.

47
 3. Proprietary Ratio:

Proprietary Ratio gives the proportion of shareholder funds to total

assets. Proprietary Ratio above the extent to which the total assets have
been financed by the shareholders funds. It is calculated as follows:

Formula,

Proprietary ratio = Shareholders Funds / Total assets

Higher the proprietary Ratio, greater is the satisfaction for lenders and
creditors, as the firm is less dependent on external source of finance.

Table: Proprietary Ratio

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Shareholder 67,114.05 60,413.54 52,175.35 50,048.42 49,017.49
Funds
Total 168,502.28 147,952.56 141,556.59 124,659.73 115,610.02
Assets
Proprietary 0.39 0.40 0.36 0.40 0.42
Ratio
(Proportions)

48
 Proprietary Ratio Chart

Proprietary Ratio (Proportions)

0.42

0.4 0.4
0.39

0.36

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the proprietary ratio of the year 2017-18 is 0.42, the
proprietary ratio of the year 2018-19 is 0.40, the proprietary ratio of the year
2019-20 is 0.36, the proprietary ratio of the year 2020-21 is 0.40, the proprietary
ratio of the year 2021-22 is 0.39. In this the highest proprietary ratiois 0.42 in
the year 2017-18.

49
4. Debt Equity Ratio:
Debt Equity Ratio is calculated to assess the long-term solvency
position of a business concern. Debt Equity Ratio expresses the
relationship between long term debt and shareholder funds. It is computed
as follows:

Formula,

Debt Equity Ratio = Long Term Debt / Shareholders funds

Table: Debt Equity Ratio

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Long Term 12,968.41 15,868.21 7,185.71 3,772.07 5,495.16

Debt
Shareholder 67,114.05 60,413.54 52,175.35 50,048.42 49,017.49
Funds
Debt Equity 0.19 0.26 0.13 0.07 0.11
Ratio
(Proportion)

50
 Debt Equity Ratio Chart

Debt Equity Ratio (Proportions)

0.26

0.19

0.13
0.11

0.07

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above the chart, the debt equity ratio of the year 2017-18is 0.11,
the debt equity ratio of the year 2018-19 is 0.07, the debt equity ratio ofthe year
2019-20 is 0.13, the debt equity ratio of the year 2020-21 is 0.26, the debt equity
ratio of the year 2021-22 is 0.19. The highest debt equity ratio is 0.26 in the
year 2020-21.

51
 5. Capital Gearing Ratio:
Capital Gearing Ratio is the proportion of fixed income bearing
funds to equity shareholders’ funds. Fixed Income bearing funds include
fixed interest and fixed dividends bearing funds. It is calculated as
follows:

Formula,

Capital Gaining Ratio = Long Term Loans + Debentures + Preferred Share

Capital / Equity Shareholder’s Funds

Table: Capital Gearing Ratio

(In Crores)
Year 2021-22 2020-21 2019-20 2018-19 2017-18

Long Term 60,173.89 70,106.2 68,701.43 63.042.03 69,105.55

Loans +
Debentures +
Preferences
Share Capital
Equity 67,114.05 60,413.54 52,175.35 50,048.42 49,017.49
shareholders’
funds
Capital Gearing 0.89 1.16 1.31 1.25 1.40
Ratio
(Proportion)

52
 Capital Gearing Ratio Chart

Capital Gearing Ratio (Proportions)

1.4
1.25 1.31
1.16

0.89

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above the chart, the capital gearing ratio of the year 2017-18 is
1.40, the capital gearing ratio of the year 2018-19 is 1.25, the capital gearing
ratio of the year 2019-20 is 1.31, the capital gearing ratio of the year 2020-21
is 1.16, the capital gearing ratio of the year 2021-22 is 0.89.The highest capital
gearing ratio is 1.40 in the year 2017-18.

53
6. Fixed Asset Ratio:
The ratio establishes the relationship between fixed assets and long-
term funds. The objective of calculating this ratio is to ascertain the
proportion of long-term funds invested in fixed assets. The ratio
calculated as give below:

Formula,

Fixed Asset Ratio = Fixed Asset / Long Term Funds

Table: Fixed Asset Ratio

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Fixed Asset 9,695.94 8,640.71 8,637.58 9,331.00 7,593.40

Long Term 71,109.25 62,892.97 55,645.43 51,221.27 50,701.62

Funds
Fixed Asset 0.13 0.13 0.15 0.18 0.14
Ratio
(Proportion)

54
 Fixed Asset Ratio Chart

Fixed Asset Ratio (Proportions)

0.18

0.15
0.14
0.13 0.13

2017-19 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the fixed asset ratio of the year 2017-18 is 0.14, the
fixed asset ratio of the year 2018-19 is 0.18, the fixed asset ratio of the year
2019-20 is 0.15, the fixed asset ratio of the year 2020-21 is 0.13, the fixed asset
ratio of the year 2021-22 is 0.13. In this the highest ratio is 0.18 in the year
2018-19.

55
7. Overall Solvency / Total Debt Ratio:
It is a ratio which relates the total tangible assets with the total
borrowed funds. In a sense, it is the other side of the coin for proprietary
ratio.

Formula,

Solvency Ratio (or) Total Debt Ratio = Total Debt / Total Tangible Asset

Table: Total Debt Ratio Chart

(In Crores)
Year 2021-22 2020-21 2019-20 2018-19 2017-18
Total 1,23,252.58 1,31,481.16 1,39,603.09 1,25,555.17 92,246.61
Debt
Total 16,530.47 17,054.60 16,045.00 15,144.12 14,987.90
Tangible
Asset
Solvency 7.4 7.7 8.7 8.2 6.1
Ratio

56
 Solvency / Debt Ratio Chart

Solvency Ratio (Proportions)

8.7
8.2 8.7
7.7 7.4

6.1

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the solvency ratio of the year 2017-18 is 6.1,the
solvency ratio of the year 2018-19 is 8.2, the solvency ratio of the year 2019-20
is 8.7, the solvency ratio of the year 2020-21 is 7.7, the solvency ratio of the
year 2021-22 is 7.4. In this the highest solvency ratio is 8.7 in the year 2019-20.

57
8. Gross Profit Ratio:

The ratio is also known as Gross Margin or Trading Margin Ratio.

Gross profit ratio, indicates the difference between sales and direct costs.
Gross Profit Ratio explains the relationship between gross profit and net
sales.

Formula,

Gross Profit Ratio = Gross Profit / Net Sales x 100

Table: Gross Profit Chart

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Gross Profit 11,181.20 15,119.89 8,644.19 10,762.07 8,311,84
Net Sales 1,01,000.41 87,255.48 82,383.65 10,762.07 74,462.35

Gross Profit 11.0 17.3 10.4 13.1 11.1

Ratio
(Proportions)

58
 Gross Profit Ratio Chart

Profit Ratio (Proportions)

17.3

13.1
11.1 10.4 11

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the profit ratio of the year 2017-18 is 11.1, the profit
ratio of the year 2018.19 is 11.1, the profit ratio of the year 2019-20 is10.4, the
profit ratio of the year 2020-21 is 17.3, the profit ratio of the year 2021-22 is
11.0. In this the highest profit ratio is 17.3 in the year 2020-21.

59
9. Operating Profit Ratio:

It is the ratio of profit made from operating sources to the sales,

usually shown as a percentage. It shows the operational efficiency of the
firm and is a measure of the management’s efficiency in running the
routine operations of the firm.

Formula,

Operating Profit Ratio = Operating Profit / Sales x100

Table: Operating Profit Ratio

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Operating 9,055.50 7,266.15 6838.12 7,653.09 9,210.34

Profit
Sales 1,01,000.41 87,255.48 82,383.65 82,287.42 72,462.35
Operating 8.9 8.3 8.3 9.3 12.7
Profit Ratio
(Proportion)

60
 Operating Profit Ratio Chart

Operating Ratio (Proportions)

12.7

9.3
8.9
8.3 8.3

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the operating profit of the year 2017-18 is 12.7, the
operating ratio of the year 2018-19 is 9.3, the operating ratio of the year2019-20 is
8.3, the operating ratio of the year 2020-21 is 8.3, the operating ratio of the year
2021-22 is 8.9. In this the highest operating ratio 12.7 in the year 2017-18.

61
10. PBIT Margin (%):

The EBITDA margin is a measure of a company’s operating profit

as a percentage of its revenue. The acronym EBITDAA stands for
Earnings Before Interest, Taxes, Depreciation and Amortization.
Knowing the EBITDA margin allows for a comparison of one company’s
real performance to others in its industry.

Formula,

PBIT Margin = EBITDA / Total Operating Revenue

Table: PBIT Margin (%)

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

EBITDA 12,688.15 10,701.59 9,645.99 10,364.28 9313.54
Total 1,01,000.41 73,315.59 82,383.65 82,287.42 74,462.55
Operating
Revenue
PBIT 0.12 0.14 0.11 0.12 0.12
Margin
(Proportion)

62
 PBIT MARGIN (%)

PBIT Margin (Proportions)

0.14

0.12 0.12 0.12

0.11

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the PBIT Margin of the year 2017-18 is 0.12, the
PBIT Margin of the year 2018-19 is 0.12, the PBIT Margin of the year 2019- 20
is 0.11, the PBIT Margin of the year 2020-21 is 0.14, the PBIT Margin of the year
2021-22 is 0.12. In this the highest PBIT Margin is 0.14 in the year 0.14.

63
11. Owned Capital Turnover:

Owned Capital Turnover is a measure that calculates how

efficiently the company is managing the capital invested by the
shareholders in the company to generate revenues. If the ratio is high, it
shows that the company efficiently utilizes the amount of capital
invested. In contrast, if the ratio is low, it indicates that the company is
not managing its capital investment efficiently to generate the required
revenue, i.e., the company has to invest the funds appropriately to
achieve the sales target by utilizing the owner’s funds company.

Formula,

Owned Capital Turnover Ratio = Sales / Shareholders Funds

Table: Owned Capital Turnover

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Sales 1,01,000.41 73,315.59 82,383.65 82,287.42 74,462.55
Shareholders 67,114.05 60,413.54 52,175.35 82,287.42 74,462.55
Funds
Owned 1.50 1.21 1.57 1.64 1.51
Capital
Turnover
Ratio
(Proportions)

64
 Owned Capital Turnover Ratio Chart

Owned Capital Turnover Ratio

(Proportions)

1.64 1.57
1.51 1.5

1.21

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the owned capital turnover ratio of the year 2017-
18 is 1.51, the owned capital turnover ratio of the year 2018-19 is 1.64, theowned
capital turnover ratio of the year 2019-20 is 1.57, the owned capital turnover
ratio of the year 2020-21 is 1.21, the owned capital turnover ratio of the year
2021-22 is 1.50. In this the highest ratio is 1.64 in the year 2018-19.

65
12. Capital Turnover Ratio:

Managerial efficiency is also calculated by establishing the

relationship between cost of sales or sales with the amount of capital
invested in the business. Capital Turnover Ratio is calculated with the
help of the following formula,

Formula,

Capital Turnover Ratio = Sales / Capital Employed

Table: Capital Turnover Ratio

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Sales 1,01,000.41 73,315.59 82,383.65 82,287.42 74,462.55
Capital 80,934.8 77,063.39 60,176.31 54,400.38 91,252.19
Employed
Capital 1.24 0.95 1.36 1.51 0.81
Turnover
Ratio
(Proportion)

66
 Capital Turnover Ratio

Capital Turnover Ratio (Proportions)

1.51
1.51
1.36
1.24

0.95
0.81

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above given chart, the capital turnover ratio of the year 2017-18
is 0.81, the capital turnover ratio of the year 2018-19 is 1.51, the capitalturnover
ratio of the year 2019-20 is 1.36, the capital turnover ratio of the year 2020-21
is 0.95, the capital turnover ratio of the year 2021-22 is 1.24. In this thehighest
capital turnover ratio is 1.51 in the year 2018-19.

67
 13. Total Capital Turnover Ratio:

Capital turnover compares the annual sales of a business to the total

amount of its stockholders' equity. The intent is to measure the proportion
of revenue that a company can generate with a given amount of equity.
The company's total sale is the total turnover of the company in an
accounting year or of a period for which the ratio is calculated.

Formula,

Total Capital Turnover Ratio = Sales / Total Capital Employed

Table: Total Capital Turnover Ratio

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Sales 1,01,000.41 73,315.59 82,383.65 82,287.42 74,462.55

Total
Capital 1,68,502.28 1.41.952.56 1,41,556.59 1,24,659.73 1,15,610.02
Employed
Total
Capital
Turnover 0.59 0.51 0.58 0.66 0.64
Ratio
(Proportion)

68
 Total Capital Turnover Ratio

Total Capital Turnover Ratio

(Proportions)
0.66
0.64 0.66
0.58 0.59
0.51

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the total capital turnover ratio of the year 2017-18
is 0.64, the total capital turnover ratio of the year 2018-19 is 0.66, the total capital
turnover ratio of the year 2019-20 is 0.58, the total capital turnoverratio of the
year 2020-21 is 0.51, the total capital turnover ratio of the year 2021-22 is 0.59.
In this the highest total capital turnover ratio is 0.66 in the year 2018-19.

69
14. Return on Investment:

In business, your investments are the resources you put into

improving your company, like time and money. The return is the profit
you make as a result of your investments. ROI is generally defined as the
ratio of net profit over the total cost of the investment. ROI is calculated
by subtracting the initial cost of the investment from its final value, then
dividing this new number by the cost of the investment, and finally,
multiplying it by 100. ROI has a wide range of uses.

Formula,

Return On Investment = Operating Profit / Capital Employed x 100

Table: Return on Investment

(In Crores)
Year 2021-22 2020-21 2019-20 2018-19 2017-18
Operating 9,055.50 7,266.15 6,838.12 7,653.09 9,210.34
Profit
Capital 80,934.8 77,063.39 60,176.31 54,400.38 91,252.19
Employed
Return on
Investment 11.1 9.4 11.3 14.0 10.0
(Proportion)

70
 Return on Investment

Return on Investment (Proportions)

14

11.3 11.1
11.1
10 9.4

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above table, the return on investment of the year 2017-18 is 10.0,
the return on investment of the year 2018-19 is 14.0, the return on investment of
the year 2019-20 is 11.3, the return on investment of the year 2020- 21 is 9.4, the
return on investment of the year 2021-22 is 11.1. In this the highest return on
investment is 14.0 of the year 2018-19.

71
 15. Cash Position Ratio:

This ratio is also called as ‘Absolute Liquidity Ratio’ or ‘Super

Quick Ratio’. This is a variation of quick ratio. This ratio is calculated
when liquidity is highly restricted in terms of cash and cash equivalents.
This ratio measures liquidity in terms of cash and near cash items and
short- terms current liabilities. Cash position ratio is calculated with the
help of the following formula,

Formula,

Cash Position Ratio = Cash and Bank Balance + Marketable Securities / Current Liabilities

Table: Cash Position Ratio

(In Crores)

Year 2021-22 2020-21 2019-20 2018-19 2017-18

Cash and
Bank 6,498.51 + 3,763.28 + 3,938.28 + 7,619.97 + 4,317.87 +
Balance + 45,527.72 45,527.72 34,034.43 22,904.15 27,339.14
Marketable
Securities
Current 78,583.19 61,771.28 61,429.32 60,640.39 55,235.95
Liabilities
Cash
Position 0.66 0.82 0.61 0.50 0.57
Ratio
72
 Cash Position Ratio

Cash Position Ratio (Proportions)

0.82

0.66
0.57 0.61

0.5

2017-18 2018-19 2019-20 2020-21 2021-22

Interpretation:
From the above chart, the cash position ratio of the year 2017-18 is 0.57,
the cashposition ratio of the year 2018-19 is 0.50, the cash position ratio of the year
2019-20 is 0.61, the cash position ratio of the year 2020-21 is 0.82, the cash
positionof the year 2021-22 is 0.66. In this the highest cash position ratio is 0.82
in the year 2020-21.

73
CONCLUSION

74
 Conclusion:
Based on the overall study of the company’s performance and position, the project
study has been concluded as follows: In this company every individual is
committed; they plan on providing quality service to each and every
company/customer regardless of the size of the business. The company treats
everyone as individual and special.
To provide quality service the company has adopted modern technology. By
adopting modern technology, the company aims to deliver quality products and
services for an effective long-term relationship to the other company. The financial
performances show the overall performance of the company is improving and can
build a strong entity in the emerging market. The employees and the workers of the
company need to work hard to achieve their goals and meet the demand for the
people in the markets to achieve good and high amount of profit. From my research
as indicated, the sales of LARSEN AND TOUBRO LTD. has been increasing over
the years which show that the company is in a good position in the industry, thus it
can be said that LARSEN AND TOUBRO LTD. has been working towards a
progressive and healthy future.

Websites:
[1] [Online] Available: http://www.investors.larsentoubro.com/ Financials.aspx
[2] [Online] Available: http://www.investors.larsentoubro.com/
AnnualReports.aspx
[3] [Online] Available: http://www.investors.larsentoubro.com/
ManagementDiscussion.aspx
[4] [Online] Available: http://www.moneycontrol.com › MARKETS ›
Infrastructure – General
[5] [Online] Available: https://www.equitymaster.com/.../ financial.../LARSEN--
TOUBRO-LIMITED-Detailed
[6] [Online] Available: https://www.investopedia.com/terms/r/ ratioanalysis.asp

75
ANNEXURE

76
 BALANCE SHEET OF LARSEN AND TURBO LIMITED

BALANCE SHEET OF MAR 22 MAR 21 MAR 20 MAR 19 MAR 18

LARSEN & TOUBRO (in
Rs. Cr.)

12 mths 12 mths 12 mths 12 mths 12 mths

EQUITIES AND
LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 281.01 280.91 280.78 280.55 280.27

TOTAL SHARE CAPITAL 281.01 280.91 280.78 280.55 280.27

Reserves and Surplus 66,743.66 60,045.01 51,794.65 49,660.96 48,737.22

TOTAL RESERVES AND 66,743.66 60,045.01 51,794.65 49,660.96 48,737.22

SURPLUS

TOTAL SHAREHOLDERS 67,114.05 60,413.54 52,175.35 50,048.42 49,017.49

FUNDS

NON-CURRENT
LIABILITIES

Long Term Borrowings 12,968.41 15,868.21 7,185.71 3,772.07 5,495.16

Deferred Tax Liabilities [Net] 0.00 0.00 0.00 0.00 0.00

Other Long Term Liabilities 207.07 142.62 204.02 82.27 109.91

Long Term Provisions 645.27 639.02 611.23 497.62 472.87

TOTAL NON-CURRENT 13,820.75 16,649.85 8,000.96 4,351.96 6,077.94

LIABILITIES

CURRENT LIABILITIES

Short Term Borrowings 7,329.88 7,940.50 18,599.59 8,217.62 4,129.57

Trade Payables 45,385.34 37,469.80 36,629.39 36,225.03 31,097.11

77
Other Current Liabilities 32,990.78 24,158.86 24,595.91 24,333.09 24,028.93

Short Term Provisions 1,861.48 1,320.01 1,555.39 1,483.61 1,102.22

TOTAL CURRENT 87,567.48 70,889.17 81,380.28 70,259.35 60,357.83

LIABILITIES

TOTAL CAPITAL AND 168,502.28 147,952.56 141,556.59 124,659.73 115,610.02

LIABILITIES

ASSETS

NON-CURRENT ASSETS

Tangible Assets 8,328.96 7,879.58 7,266.25 7,982.02 6,272.46

Intangible Assets 194.58 55.39 83.72 228.72 193.09

Capital Work-In-Progress 571.50 236.12 796.55 567.31 452.10

Other Assets 589.64 421.61 490.40 381.26 474.98

FIXED ASSETS 9,695.94 8,640.71 8,637.58 9,331.00 7,593.40

Non-Current Investments 27,049.50 28,569.12 27,975.28 18,197.30 22,994.26

Deferred Tax Assets [Net] 1,140.30 494.00 1,428.20 841.86 400.62

Long Term Loans and 4,084.58 2,567.05 3,507.00 1,279.76 1,684.13

Advances

Other Non-Current Assets 4,514.10 4,049.89 4,373.42 3,950.64 3,367.54

TOTAL NON-CURRENT 46,484.42 44,320.77 45,921.48 33,600.56 36,039.95

ASSETS

CURRENT ASSETS

Current Investments 18,478.22 18,454.40 6,059.15 4,706.85 4,344.98

Inventories 3,132.51 2,858.56 2,769.90 3,349.24 2,500.04

Trade Receivables 36,347.35 29,948.24 27,912.96 28,212.55 24,454.24

Cash And Cash Equivalents 6,498.51 3,763.28 3,938.39 7,619.97 4,317.87

78
Short Term Loans and 249.60 434.91 515.14 1,305.94 992.34
Advances

Other Current Assets 57,311.67 48,172.40 54,439.57 45,864.62 42,960.60

TOTAL CURRENT 122,017.86 103,631.79 95,635.11 91,059.17 79,570.07

ASSETS

TOTAL ASSETS 168,502.28 147,952.56 141,556.59 124,659.73 115,610.02

OTHER ADDITIONAL
INFORMATION

CONTINGENT
LIABILITIES,
COMMITMENTS

Contingent Liabilities 67,013.79 39,458.27 52,146.93 67,808.22 46,004.04

CIF VALUE OF IMPORTS

Raw Materials 0.00 0.00 0.00 0.00 0.00

Stores, Spares And Loose 0.00 0.00 0.00 0.00 0.00

Tools

Trade/Other Goods 0.00 0.00 0.00 0.00 0.00

Capital Goods 0.00 0.00 0.00 0.00 0.00

EXPENDITURE IN
FOREIGN EXCHANGE

Expenditure In Foreign 10,383.99 5,602.50 24,947.51 20,212.38 17,699.28

Currency

REMITTANCES IN
FOREIGN CURRENCIES
FOR DIVIDENDS

Dividend Remittance In -- -- -- -- --
Foreign Currency

EARNINGS IN FOREIGN
EXCHANGE

FOB Value Of Goods -- -- -- -- --

79
Other Earnings 11,806.60 5,458.45 10,187.99 20,211.96 16,350.80

BONUS DETAILS

Bonus Equity Share Capital 244.94 244.94 244.94 244.94 244.94

NON-CURRENT
INVESTMENTS

Non-Current Investments 176,195.93 109,342.27 42,534.94 53,882.38 50,537.78

Quoted Market Value

Non-Current Investments 10,631.79 12,694.24 14,020.87 13,783.93 18,397.23

Unquoted Book Value

CURRENT
INVESTMENTS

Current Investments Quoted 10,098.38 10,145.41 4,058.33 3,063.29 3,274.18

Market Value

Current Investments Unquoted 2,418.70 8,308.99 2,000.82 1,643.56 1,070.80

Book Value

80
 ➢ PROFIT AND LOSS ACCOUNT OF LARSEN AND TURBO
LIMITED

PROFIT & LOSS ACCOUNT MAR 22 MAR 21 MAR 20 MAR 19 MAR 18

OF LARSEN & TOUBRO (in
Rs. Cr.)

12 months 12 months 12 months 12 months 12 months

INCOME

REVENUE FROM 100,383.80 72,036.49 81,617.98 81,095.90 73,495.49

OPERATIONS [GROSS]

Less: Excise/Sevice Tax/Other 0.00 0.00 0.00 0.00 149.10

Levies

REVENUE FROM 100,383.80 72,036.49 81,617.98 81,095.90 73,346.39

OPERATIONS [NET]

TOTAL OPERATING 101,000.41 73,315.59 82,383.65 82,287.42 74,462.55

REVENUES

Other Income 3,612.65 3,435.44 2,807.87 2,711.19 1,884.82

TOTAL REVENUE 104,613.06 76,751.03 85,191.52 84,998.61 76,347.37

EXPENSES

Cost Of Materials Consumed 12,590.86 5,693.94 5,486.99 5,712.54 8,092.54

Purchase Of Stock-In Trade 1,070.62 1,226.68 855.63 906.49 1,296.62

Operating And Direct Expenses 69,848.24 51,026.96 60,603.60 61,361.00 50,062.36

Changes In Inventories Of FG, -1,944.37 342.53 -64.01 -1,126.17 -962.36

WIP And Stock-In Trade

Employee Benefit Expenses 7,396.88 5,485.38 5,955.98 5,732.60 5,713.59

Finance Costs 1,754.24 2,419.55 2,266.56 1,787.62 1,432.23

Depreciation And Amortization 1,172.50 1,025.62 1,020.51 999.55 1,049.46

Expenses

81
Other Expenses 2,982.68 2,273.95 2,707.34 2,047.87 2,836.27

TOTAL EXPENSES 94,871.65 69,494.61 78,832.60 77,421.50 69,515.52

PROFIT/LOSS BEFORE 9,741.41 7,256.42 6,358.92 7,577.11 6,831.85

EXCEPTIONAL,
EXTRAORDINARY ITEMS
AND TAX

Exceptional Items 267.29 -2,818.65 626.99 1,642.35 430.53

PROFIT/LOSS BEFORE TAX 10,008.70 4,437.77 6,985.91 9,219.46 7,262.38

TAX EXPENSES-CONTINUED
OPERATIONS

Current Tax 2,405.17 1,434.27 1,525.60 2,409.73 1,974.07

Less: MAT Credit Entitlement 0.00 0.00 0.00 0.00 0.00

Deferred Tax -275.92 317.01 -564.45 -138.60 -98.99

Tax For Earlier Years 0.00 0.00 0.00 0.00 0.00

TOTAL TAX EXPENSES 2,129.25 1,751.28 961.15 2,271.13 1,875.08

PROFIT/LOSS AFTER TAX 7,879.45 2,686.49 6,024.76 6,948.33 5,387.30

AND BEFORE
EXTRAORDINARY ITEMS

PROFIT/LOSS FROM 7,879.45 2,686.49 6,024.76 6,948.33 5,387.30

CONTINUING OPERATIONS

PROFIT/LOSS FOR THE 7,879.45 11,336.97 6,679.21 7,491.39 5,387.30

PERIOD

OTHER ADDITIONAL
INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 56.09 80.74 47.59 53.43 38.46

Diluted EPS (Rs.) 56.03 80.65 47.53 53.34 38.37

VALUE OF IMPORTED AND

INDIGENIOUS RAW

82
MATERIALS STORES,
SPARES AND LOOSE TOOLS

Imported Raw Materials 0.00 0.00 0.00 0.00 0.00

Indigenous Raw Materials 0.00 0.00 0.00 0.00 0.00

STORES, SPARES AND

LOOSE TOOLS

Imported Stores and Spares 0.00 0.00 0.00 0.00 0.00

Indigenous Stores and Spares 0.00 0.00 0.00 0.00 0.00

DIVIDEND AND DIVIDEND

PERCENTAGE

Equity Share Dividend 2,528.38 2,527.66 1,403.89 0.00 0.00

Tax On Dividend 0.00 1,123.23 0.00 0.00 0.00

Equity Dividend Rate (%) 1,100.00 1,800.00 900.00 900.00 800.00

83
 CASH FLOW

CASH FLOW OF LARSEN & MAR MAR 21 MAR MAR MAR

TOUBRO (in Rs. Cr.) 22 20 19 18

12 mths 12 mths 12 mths 12 mths 12 mths

NET PROFIT/LOSS BEFORE 9,741.41 18,455.65 7,224.30 389.51 6,831.85

EXTRAORDINARY ITEMS AND
TAX

Net Cash Flow from Operating 5,998.79 8,350.79 -121.30 2,556.42 2,951.81
Activities

Net Cash Used In Investing Activities 4,525.87 -591.89 - 1,585.19 1,787.06

6,833.74

Net Cash Used From Financing - -7,851.77 7,418.62 - -

Activities 8,360.36 4,605.59 3,489.36

Foreign Exchange Gains / Losses 28.98 0.00 0.00 0.00 0.00

Adjustments On Amalgamation Merger 0.00 0.00 0.00 0.00 0.00

Demerger Others

NET INC/DEC IN CASH AND CASH 2,193.28 -92.87 463.58 -463.98 1,249.51
EQUIVALENTS

Cash And Cash Equivalents Begin of 3,524.95 3,187.28 2,723.70 3,187.75 1,938.24
Year

Cash And Cash Equivalents End of 5,718.23 3,094.41 3,187.28 2,723.77 3,187.75
Year

84
 FINANCIAL RATIOS

KEY FINANCIAL RATIOS MAR 22 MAR 21 MAR 20 MAR 19 MAR 18

OF LARSEN &
TOUBRO (in Rs. Cr.)

PER SHARE RATIOS

Basic EPS (Rs.) 56.09 80.74 47.59 53.43 38.46

Diluted EPS (Rs.) 56.03 80.65 47.53 53.34 38.37

Cash EPS (Rs.) 64.42 88.02 54.85 60.53 45.93

Book Value 477.66 430.13 371.65 356.79 349.79

[ExclRevalReserve]/Share
(Rs.)

Book Value 477.66 430.13 371.65 356.79 349.79

[InclRevalReserve]/Share
(Rs.)

Dividend / Share(Rs.) 22.00 36.00 18.00 18.00 16.00

Revenue from 718.84 521.99 586.82 586.62 531.36

Operations/Share (Rs.)

PBDIT/Share (Rs.) 90.16 76.19 68.71 73.89 66.46

PBIT/Share (Rs.) 81.82 68.89 61.44 66.76 58.97

PBT/Share (Rs.) 71.23 31.60 49.76 65.72 51.82

Net Profit/Share (Rs.) 56.08 80.72 47.58 53.41 38.44

PROFITABILITY RATIOS

PBDIT Margin (%) 12.54 14.59 11.70 12.59 12.50

PBIT Margin (%) 11.38 13.19 10.46 11.38 11.09

PBT Margin (%) 9.90 6.05 8.47 11.20 9.75

85
Net Profit Margin (%) 7.80 15.46 8.10 9.10 7.23

Return on Net worth / Equity 11.74 18.76 12.80 14.96 10.99

(%)

Return on Capital Employed 14.20 12.55 14.33 17.21 14.95

(%)

Return on Assets (%) 4.67 7.66 4.71 6.00 4.65

Total Debt/Equity (X) 0.30 0.39 0.49 0.24 0.20

Asset Turnover Ratio (%) 0.64 49.55 58.19 66.00 64.40

LIQUIDITY RATIOS

Current Ratio (X) 1.39 1.46 1.18 1.30 1.32

Quick Ratio (X) 1.36 1.42 1.14 1.25 1.28

Inventory Turnover Ratio (X) 4.20 25.65 29.74 24.57 29.78

Dividend Payout Ratio (NP) 32.08 22.29 21.01 0.00 0.00

(%)

Dividend Payout Ratio (CP) 27.93 20.44 18.23 0.00 0.00

(%)

Earnings Retention Ratio (%) 67.92 77.71 78.99 0.00 0.00

Cash Earnings Retention Ratio 72.07 79.56 81.77 0.00 0.00

(%)

VALUATION RATIOS

Enterprise Value (Cr.) 262,135.34 219,259.78 135,120.58 198,517.33 189,149.97

EV/Net Operating Revenue 2.60 2.99 1.64 2.41 2.54

(X)

EV/EBITDA (X) 20.69 20.49 14.01 19.15 20.31

Market Cap/Net Operating 2.46 2.72 1.37 2.36 2.47

Revenue (X)

Retention Ratios (%) 67.91 77.70 78.98 0.00 0.00

86
Price/BV (X) 3.70 3.30 2.17 3.88 3.75

Price/Net Operating Revenue 2.46 2.72 1.37 2.36 2.47

Earnings Yield 0.03 0.06 0.06 0.04 0.03

87