AN ORGANIZATIONAL STUDY ON LARSEN & TOUBRO

SHIPBUILDING BUSINESS.

A Summer Training Report submitted to SRM Institute of Science and Technology

impartial fulfilment of the requirements for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by
SANGAMITHRA S
(Reg. No.RA2252001020081)

Under the guidance of

Dr. LEKHA P MBA, NET, Ph.D.
(Faculty guide)

G S PAVANA KUMAR
(Industry Guide)

Faculty of Management
SRM Institute of Science and Technology
Chennai – 89
July 2023
 Certificate
This is to certify that the Summer Training Report entitled “AN ORGANISATIONAL
STUDY ON LARSEN & TOUBRO SHIPBUILDING BUSINESS”. in partial fulfilment
of the requirement for the award of the Degree of Master of Business Administration is a
record of original training undergone by SANGAMITHRA S (Reg. No RA2252001020081)
during the year 2023-2024 of his Faculty of Management, SRM Institute of Science and
Technology, Ramapuram Campus under my supervision and the report has not formed the
basis for the award of any Degree/Fellowship or other similar title to any candidate of any
University.

Place: Chennai Signature of Guide

Date: Dr. LEKHA P
Faculty of Management
SRM Institute of Science and Technology

Countersigned:
Head of the Department
Dr. R. Arulmoli B.E, MBA, Ph.D.
HOD – MBA

Submitted to the Faculty of Management, SRM Institute of Science and technology

(Ramapuram campus) for the examination held on_______________

INTERNAL EXAMINER EXTERNAL EXAMIER

 DECLARATION

I SANGAMITHRA S, hereby declare that the Summer Training report entitled “An
ORGANISATIONAL STUDY ON LARSEN & TOUBRO SHIPBUILDING
BUSINESS”, submitted to SRM Institute of Science and Technology in partial fulfilment
of the requirements for the award of the Degree of Masters in Business Administration is a
record of original training undergone by me during the period May – June 2023 under the
supervision and guidance Dr. LEKHA P MBA, NET, Ph.D., Assistant Professor ,Faculty of
Management, SRM Institute of Science and Technology, Ramapuram Campus and it has not
formed the basis for the award of any Degree/Fellowship or other similar title to any candidate
of any University.

Place: Chennai Signature of the student

Date:
 ACKNOWLEDGEMENT
First and foremost, I offer my sincerest gratitude to our Chancellor, SRM University, for his
academic support and the facilities provided to carry out the project work at the Institute. His
wide vision and concern for students have been inspirational.

I wish to express my profound gratitude to my venerable Chairman, SRM Group of

Institutions-Ramapuram & Trichy Campuses, who offered me such a huge opportunity,
incredible Infrastructure and other support which made the project work quite smooth.

I express my heartfelt thanks to Dr. C. Sundar, M.B.A., Ph.D., Dean (Management

Studies), SRM Institute of Science and Technology, Ramapuram, who provided all facilities
for carrying out this project.

I immensely thank to our Head of the Department Dr. R. Arulmoli, B.E, M.B.A., and Ph.D.,
Professor& Head for his cordial support, valuable information and guidance, which helped
me in completing this task through various stages.

I take this opportunity to express my profound gratitude to my guide Dr. LEKHA P MBA,
NET, Ph.D. for her exemplary guidance and the entire department of management for
monitoring and constant encouragement throughout the course of this project.

The blessing, help and guidance given by all the staff of MBA Department time to time shall
carry me a long way in the journey of life on which I am about to embark from.

I also take this opportunity to express a deep sense of gratitude to Mr G S PAVANA

KUMAR Head-Accounts and Finance department, LARSEN & TOUBRO
SHIPBUILDING BUSINESS, for his cordial support, valuable information, and guidance,
which helped me in completing this task through various stages. I owe my wholehearted
thanks and appreciation to the entire staff of the company for their cooperation and assistance
during the course of my project.

I thank God Almighty for showering his perennial blessing on me for giving me the courage
to pursue this project work successfully. I owe a lot to my parents, who encouraged and helped
me at every stage of my personal and academic life, and longed to see this achievement come
true.

SANGAMITHRA S
(Reg. No RA2252001020081)
 CONTENTS
CHAPTER TITLE PAGE NO.
INTRODUCTION
1.1 Introduction of the study 1
1.2 Objective of study 2
I 1.3 Importance of the study 2
1.4 Scope of study 2
1.5 Period of study 2
1.6 Chapterization 3
INDUSTRY AND COMPANY PROFILE
2.1 Industry Profile 4
II 2.3 Company Profile 9
2.3 Product Profile 18
2.4 Organisational chart 21
FUNCTIONING OF VARIOUS DEPARTMENTS
3.1 Production Department 22
3.2 Finance Department 30
3.3 Human Recourse Department 33
III 3.4 Procurement Department 38
3.5 Financial Statement analysis
- Balance sheet 42
- Income statement 43
- Ratio analysis 44
CONCLUSION
4.1 Findings 45
IV
4.2 SWOT Analysis 45
4.3 Conclusions 46
Reference 47
CHAPTER-I
1.1 INTRODUCTION
Internship program has become the bridge for those who want to enter to corporate
level from the college life, through internship I got to know the real working
environment that was very much different from my course study. This report was
made as a part of such a study conducted at LARSEN & TOUBRO SHIPBUILING
BUSINESS

During my internship, I got a chance to work in the department to know how they
perform. All my experience helped me realize parts like grouping work, work
environment, peering support, carried out in the organization. Thus, the internship
duration provided me with the opportunity to broaden my knowledge, acknowledge
my strengths/weakness that would be more helpful to shape up my career in the future.

Larsen & Toubro originated from a company founded in 1946 in Bombay by two
Danish engineers, Henning Holck-Larsen and Søren Kristian Toubro. The company
began as a representative of Danish manufacturers of dairy and allied equipment.
However, with the start of the Second World War in 1939 and the resulting blockade
of trade lines, the partners started a small workshop to undertake jobs and provide
service facilities. Germany's invasion of Denmark in 1940 stopped supplies of Danish
products. The war-time need to repair and refit and degauss ships offered L&T an
opportunity, and led to the formation of a new company, Hilda Ltd, to handle these
operations. L&T also started to repair and fabricate ships signaling the expansion of
the company. The sudden internment of German engineers in British India (due to
suspicions caused by the Second World War), who were to put up a soda ash plant for
the Tata’s, gave L&T a chance to enter the field of installation.

In 1946, ECC (Engineering Construction & Contracts) was incorporated by the

partners; the company at this time was focused on construction projects (Presently,
ECC is the construction division of L&T). L&T began several foreign collaborations.
By 1947, the company represented British manufacturers of equipment used to
manufacture products such as hydrogenated oils, biscuits, soaps and glass. In 1947,
the company signed an agreement with Caterpillar Tractor Company, USA, for
marketing earth moving equipment. At the end of the war, large numbers of war-

1
 surplus Caterpillar equipment were available at attractive prices, but the finances
required were beyond the capacity of the partners. This prompted them to raise
additional equity capital, and on 7 February 1946, Larsen & Toubro Private Limited
was incorporated.

1.2 OBJECTIVE

PRIMARY OBJECTIVE
An Organizational study on LARSEN & TOUBRO SHIPBUILDING BUSINESS.

SECODARY OBJECTIVES
• To study the overall working of LARSEN & TOUBRO SHIPBUILDING
BUSINESS.
• To understand the organizational structure of LARSEN & TOUBRO
SHIPBUILDING BUSINESS.
• To study the functions of different departments.
• To get an overview of manufacturing industry.

1.3 IMPORTANCE
The study helps to understand the Manufacturing industry in general; with specific
techniques, manpower management, finances and operations, distribution methods
under the identified sector.

1.4 SCOPE OF STUDY

The study focuses on understanding the macro view of the organizational structure
and working of the various departments in it. It also aims at understanding the
information flow within the sub units and how they cumulatively add up to the
organizational goal.

1.5 PERIOD OF STUDY

Summer internship was done for 6 Weeks at LARSEN & TOUBRO SHIPBUILDING
BUSINESS understanding the organizational functions and different functional
department working and coexistence in the company.

2
1.6 CHAPTERIZATION
• Chapter 1: This chapter contains, Introduction, Objective, Importance, and Period of
the study.
• Chapter 2: This chapter consists of Company and Industry Profile, Product profile.
• Chapter 3: This chapter consists of Functions of various departments of the firm.
• Chapter 4: This chapter contains the findings, suggestions and conclusion of the
study

3
CHAPTER-II
2.1 INDUSTRY PROFILE

Shipbuilding is technology driven, skill and material intensive assembly operation. Being a
labour-intensive industry, the cost of labour plays an important determinant in a country’s
competitive position vis-à-vis others. Over the years, the industry has shifted from Europe to
Japan and then to Republic of Korea and has now taken firm roots in China. The factors
governing this shift have been relatively high wage in Europe coupled with strong competitive
strength of manufacturing and steel making sectors and active state support in the leading
shipbuilding nations of East & Far East Asia. This decisive shift in shipbuilding activities
from Europe to Asia has opened up window of opportunities for Indian ship yards in both
public and private sectors. Over 90% of shipbuilding in 2018 occurred in China, the Republic
of Korea and Japan.

India has a coastline of 7,517 Kilometres with 12 Major ports and 205 notified Non-major
Ports facilitating sea-borne trade. Coastal and overseas cargo movement is affected through
ocean-going vessels. In addition, small ships/crafts also ply on inland waterways and canals.
Indian owned ships/vessels carried 7.7% of India’s overseas trade during 2018-19. India’s
emergence as a major economic power would mean greater integration in terms of trade with
the rest of the world requiring huge shipping tonnage. As on 31st March 2019, Indian shipping
tonnage was 12.78 million Gross Registered Tonnage (GRT) with 1404 ships.

With the opening of Indian economy, there has been a steady increase in handling of cargo
traffic at Indian Ports. India’s share in global exports has increased from 0.8% in 2003 to 1.7%
in 2018 (Source: World Trade Statistical Review, 2019). To sustain the momentum of foreign
trade and improve competitiveness, the country would need adequate and efficient
infrastructure in terms of ports, ships and maritime services.

At the time of independence, there were about a dozen shipyards around Kolkata and Mumbai,
which rose to around 45 shipyards in the late seventies. At present, there are 30 shipyards, out

4
of which 8 shipyards are in the public sector and the rest are in the private sector. The demand
for ships, semi-submersibles and port auxiliary vessels, new ship building as well as ship-
repair activities are projected to grow in view of rising cargo traffic from/to India in coming
years. ii the “Manufacturing Plan – Strategies for Accelerating Growth of Manufacturing in
India in the 12th Five Year Plan and Beyond” released by the erstwhile Planning Commission
lists “Ship building and Ship Repair” as one of the key sectors of strategic importance.

‘Make in India’ has been initiated to promote growth of manufacturing sector in the country
as it has higher employment multiplier effects compared to service and agriculture sectors.
An impetus on shipbuilding and ship repair industry in India is needed for the following
reasons: -

(a) The shipbuilding industry has the same impact as infrastructure sectors due to higher
multiplier effects on investment and turnover and high employment potential.

(b) The shipbuilding industry is a strategically important industry. To ensure safety of our
vast coastline, naval requirement of sophisticated and modern vessels is growing rapidly.

The Indian Ship-Building Industry can broadly be categorized into following categories: -

i. Large ocean-going vessels catering to overseas as well as coastal trade

ii. Medium size specialized vessels like Port Crafts, Fishing Trawlers, Offshore vessels,
Inland and other smaller crafts and
iii. Defence /Naval crafts and Coast Guard Vessels

There are 33 dry-docks for repairing ships in India both in public and private sector as per
data reported. These dry docks include the 9 dry docks operated by 5 major ports. The major
ports which have no dry-dock facilities are Mormugao Port, JNPT, New Mangalore, Chennai,
Kamarajar, V.O. Chidambaram and Haldia Dock Complex of Kolkata Port. Cochin Port Trust
has handed over its Dry Dock to M/s Cochin Shipyard Ltd.

5
 SHIPBUILDERS AND SHIPYARDS LOCATED IN INDIA

Name Location Type Ownership

ABG Shipyard Limited Mumbai Public ABG Group

Bharati Defence and Infrastructure
Mumbai Public
Limited
Bombay Dockyard Mumbai State-owned Government of India

Bristol Boats Kochi Private

Chowgule Shipyard - Dry-dock Ratnagiri Private Chowgule Global

Cochin Shipyard Limited Kochi State-owned Government of India

Dempo Shipbuilding & Engineering
Goa Private Dempo Group
Private Limited
Garden Reach Shipbuilders &
Kolkata State-owned Government of India
Engineers
Goa Shipyard Limited Goa State-owned Government of India

Hindustan Shipyard Limited Visakhapatnam State-owned Government of India

Kattupalli Shipyard Chennai Public L&T Shipbuilding

Mandovi Dry-docks Goa Private

Marine Operating Company Private
Goa Private MOC Shipyard, Australia
Limited
Mazagon Dock Shipbuilders
Mumbai State-owned Government of India
Limited

6
Naval Dockyard Visakhapatnam State-owned Government of India

Praga Marine Private Limited Kochi Private

Reliance Naval and Engineering
Pipavav Public Reliance Infrastructure
Limited
San Marine Kakinada Private

Sea Blue Shipyard Limited Kochi Private

SHOFT Shipyard Bharuch Private SHOFT Industries

Government of West
The Shalimar Works (1980) Limited Kolkata State-owned
Bengal
Timblo Dry-docks Private Limited Goa Private

Titagarh Marine Limited Barrackpore Public Titagarh Group

Vadyar Boats Chennai Private

SUBSIDY AND BUDGETARY SUPPORT TO INDIAN

SHIPBUILDING INDUSTRY
Government of India is supporting Indian shipbuilding industry since 1971 by various policy
measures such as pricing policy and shipbuilding subsidy policy. However, these policies
were only applicable to Central Public Sector Shipyards building commercial vessels viz.
Hindustan Shipyard Ltd., Vishakhapatnam in 1971. Later on in 1972 Cochin Shipyard was
established and the policies were applicable to them also. The policies were modified from
time to time in 1981, 1993, 1995, 1997 and 2000. In October 2002, Government of India
extended the shipbuilding subsidy scheme to all Indian shipyards including Non-Central
Public Sector Shipyards and Private Shipyards. To make existing shipbuilding scheme
applicable to all shipyards, following modifications were made:

For domestic orders obtained only through global tender process for construction of sea going
vessel as defined under section 3(41) of Merchant Shipping Act 1958, 30% on the bid price
at which the global tender was won was payable to the yard. However, the vessel was to be a
merchant vessel of minimum length of 80 metres.

For export orders obtained through global tender process or otherwise for construction of any
type/size of vessel, 30% subsidy on the bid price or reasonable price in cases of negotiated
orders, as the case may be, was payable to the yard. Price reasonableness certificate was issued
by DG (shipping) for negotiated orders.

7
The shipbuilding subsidy scheme was applicable for those shipbuilding orders whose
contracts were signed up to 14.08.2007. In Feb. 2009, the CCEA approved liquidation of xix
committed liabilities amounting to Rupees. 5152 crores for 228 vessels and for which
contracts were signed up to 14.08.2007. The following decisions were taken by CCEA

That subsidy to be released for all the cases for which contracts had been signed by
14.08.2007, as it is the committed liability of the Government of India. Subsidy will be
released as per the guidelines modified from time to time and subject to submission of
requisite documents in the format prescribed. Accordingly, budgetary provision of Rupees.
5152 crores approx. may be approved for the period 2008-09 to 2013-14.

Department of Shipping, Ministry of Shipping, Road Transport & Highways has made
budgetary provisions for all shipyards except Defence Shipyards. Ministry of Defence made
budgetary provisions for Defence shipyards under the administrative control of Ministry of
Defence.

A new scheme incorporating modified quantum and conditions for subsidy/fiscal measures
for all contracts signed after 14.08.2007 is submitted. 9.3. Modified guidelines were issued
on 29.09.2009. Till 31.03.2014, subsidy has been released for 121 vessels amounting to
Rupees. 1142 crore. Partial subsidy (10%/20%) has been released for 47 vessels. Full subsidy
has been released for 74 vessels.

8
COMPANY PROFILE:

Larsen & Toubro Ltd, commonly known as L&T, is an Indian multinational conglomerate
company, with business interests in engineering, construction, manufacturing, technology,
information technology and financial services, headquartered in Mumbai. The company is
counted among world's top five construction companies. It was founded by Henning Holck-
Larsen and Søren Kristian Toubro, who were two Danish engineers taking refuge in India.

As at March 31, 2022, the L&T Group comprises 93 subsidiaries, 5 associate companies, 27
joint ventures and 35 jointly held operations, operating across basic and heavy engineering,
construction, realty, manufacturing of capital goods, information technology, and financial
services.

Larsen & Toubro originated from a company founded in 1946 in Bombay by two Danish
engineers, Henning Holck-Larsen and Søren Kristian Toubro. The company began as a
representative of Danish manufacturers of dairy and allied equipment. However, with the start
of the Second World War in 1939 and the resulting blockade of trade lines, the partners started
a small workshop to undertake jobs and provide service facilities. Germany's invasion of
Denmark in 1940 stopped supplies of Danish products. The war-time need to repair and refit
and degauss ships offered L&T an opportunity, and led to the formation of a new company,
Hilda Ltd, to handle these operations. L&T also started to repair and fabricate ships signalling
the expansion of the company. The sudden internment of German engineers in British
India (due to suspicions caused by the Second World War), who were to put up a soda
ash plant for the Tata’s, gave L&T a chance to enter the field of installation.

9
In 1946, ECC (Engineering Construction & Contracts) was incorporated by the partners; the
company at this time was focused on construction projects (Presently, ECC is the construction
division of L&T). L&T began several foreign collaborations. By 1947, the company
represented British manufacturers of equipment used to manufacture products such
as hydrogenated oils, biscuits, soaps and glass. In 1947, the company signed an agreement
with Caterpillar Tractor Company, USA, for marketing earth moving equipment. At the end
of the war, large numbers of war-surplus Caterpillar equipment’s were available at attractive
prices, but the finances required were beyond the capacity of the partners. This prompted them
to raise additional equity capital, and on 7 February 1946, Larsen & Toubro Private Limited
was incorporated.

After India's independence in 1947, the firm set up offices in Calcutta (now Kolkata), Madras
(now Chennai) and New Delhi. In 1948, 55 acres of undeveloped marsh and jungle was
acquired in Poway, Mumbai. In December 1950, L&T became a public company with a paid-
up capital of ₹20 lakh (equivalent to ₹19 crore or US$2.4 million in 2020). The sales turnover
in that year was ₹1.09 crore (equivalent to ₹102 crore or US$13 million in 2020). In 1956, a
major part of the company's Mumbai office moved to ICI House in Ballard Estate, which
would later be purchased by the company and renamed as L&T House, its present
headquarters.

During the 1960s, ventures included UTMAL (set up in 1960), Audco India
Limited (1961), Eutectic Welding Alloys (1962) and TENGL (1963).

In 1965, the firm had been chosen as a partner for building nuclear reactors. Dr. Homi
Bhabha, then chairman of the Atomic Energy Commission (AEC) had in fact first approached
L&T in the 1950s to fabricate critical components for atomic reactors. He convinced Holck-
Larsen, a friend with whom he shared an interest in the arts that the company could do it,
indeed must do it. L&T has since contributed significantly to the Indian nuclear programme.
Holck-Larsen was once asked by a junior engineer why L&T should get into building nuclear
power plants when companies in the US and Germany were losing money on nuclear jobs. He
replied: 'Young man, India has to build nuclear power plants.

During the 1970s, L&T was contracted to work with Indian Space Research
Organisation (ISRO). Its then chairman, Vikram Sarabhai, chose L&T as manufacturing
partner. In 1972, when India launched its space programme, the firm was invited to
participate.

10
In 1976, ECC bid for a large airport project in Abu Dhabi. ECC's balance sheet, however, did
not meet the bid's financial qualification requirement. So, it was merged into L&T.

In 1985, L&T entered into a partnership with Defence Research and Development
Organisation (DRDO). L&T was not yet allowed by the government to manufacture defence
equipment but was permitted to participate in design and development programmes with
DRDO. After the design and development was done, the firm had to hand over all the
drawings to DRDO. The government would then assign the production work to a public sector
defence unit or ordnance factory for manufacture. After a series of successes and positive
policy initiatives, the firm today makes a range of weapon and missile systems, command and
control systems, engineering systems and submarines through DRDO.

STRUCUTRE
Three key products or services which L&T is engaged in are: Construction and project-related
activity; manufacturing and trading activity; and IT and engineering services L&T sold L&T
Mutual Fund to HSBC on November 26, 2022. L&T IDPL was sold to Edelweiss Alternatives
for Rs. 6,000 crores. For administrative purposes, the conglomerate has been structured into
sixteen subsidiary companies:

• L&T Construction
• L&T Hydrocarbon
• L&T Power
• L&T Mineral & Metals
• L&T Heavy Engineering
• L&T Defence
• L&T Shipbuilding
• L&T Construction & Mining Machinery
• L&T Valves
• L&T Technology Services
• L&T Metro Rail
• L&T Financial Services

11
 L&T SHIPBUILDING.

L&T’s Shipbuilding business offers end-to-end solutions for design, construction of defence
ships and refit services. The business owns and operates a Greenfield mega defence shipyard
at Kattupalli, near Chennai, located across a sprawling 980-acre complex. The Kattupalli
Shipyard is India’s largest shipyard, considering just the first phase spread across 150 acres
that has been operational for nearly a decade. The design and construction of the yard is
modelled to adapt global best practices, such as modular construction, construction under
covered shops, use of a ship-lift with dry and wet berths, etc., to enable simultaneous
construction of different classes of vessels until near completion on land, and then launching
them through the ship-lift. It is the only Indian shipyard with Industry 4.0 practices embedded,
enhancing construction efficiency, cycle time and build quality. A dedicated Warship Design
Centre at Chennai is equipped with the latest integrated 3D design, analysis and Product
Lifecycle Management tools, and interfaced with project management and ERP systems, in
line with global best practices. The Kattupalli Shipyard has been largely engaged in new
builds and refits / repairs of defence ships of the Indian Navy and Indian Coast Guard. Since
2010, the Shipbuilding business has designed and constructed 62 defence vessels and
delivered 61 of them, which include a floating dock for Indian Navy, interceptor boats and
offshore patrol vessels for the Coast Guard in record time. The unique capability of the
business to achieve on-time or ahead of contractual delivery performance in all the contracts
for defence vessels is a benchmark in the Indian shipbuilding industry. The shipyard has a
track record of delivering first-of-class vessels on / ahead of schedule and with design and
construction maturity and in-built quality. A global benchmark was attained by the Yard in
the sea acceptance trials of a 2130 MT class offshore patrol vessel by completing the entire
acceptance trials in the maiden sea sortie of the vessel to affirm its design and build quality.

12
The business does not manufacture any explosives or ammunition of any kind, including
cluster munitions or antipersonnel landmines or nuclear weapons or components for such
munitions. The business also does not customise any delivery systems for such munitions.

Business Environment
FY 2020-21 started on a challenging note, with Covid-19 pandemic triggering a series of
nation-wide lockdowns. The Government’s focus on health care and social spending coupled
with complete / partial closure of customer offices / operations resulted in disruption in
business during the early part of the year. However, in order to minimise the Covid-19 impact
on the defence sector, the MoD took several proactive steps, such as provision for contract
extension under the force majeure clause, additional time for submission of responses to EOI
/ RFI / RFP, relaxation in performance BGs, etc. The macro picture has been a mixed bag
over the recent years. On the one hand, the Government of India is taking substantive steps to
promote indigenous production by building a robust acquisition pipeline with preferential
categorisation in favour of indigenous procurement of defence systems and accelerating it
from the grant of AONs to RFPs, while, on the other hand, budget constraints have seen order
deferments. While there is a significant increase (~10% YoY) in the Defence Services Capital
budget in past two years and the same has been enhanced by 19% for FY 2021-22, there is
still a substantial gap between the Capital budget demanded by the Armed Forces and the
amount allocated. To bridge this gap, a non-lapsable Modernisation Fund for Defence and
Internal Security (MFDIS) has been given prima facie approval by the MOF. Also, the MoD
has started to demarcate funds for domestic capital procurement from FY 2020-21 onwards
(R 52,000 crore in FY 2020-21 going up to R 71,000 crore in FY 2021-22).

Major Achievements
During the year, the business has achieved multiple successes and proud moments, uniquely
reaffirming L&T’s positioning as a ‘nation-builder’ through a series of Make in-India
successes. These include:

• New benchmarks set up by work centres in terms of deliveries of OPVs, K9 Vajra-T, Combat
Engineering Systems, to name few, and maintenance of safety operations aided by
digitalisation and automation.

13
• Delivery of 45 Nos. K9 Vajra-T self-propelled howitzers during the year and completing the
contract for 100 Nos. All the howitzers were delivered ahead of schedule with zero non-
conformities.

• Successful delivery of multiple land and naval weapon launch systems, engineering systems
and missile systems to the Indian Armed forces

• Delivery of 3 interceptor boats to the Indian Coast Guard, all ahead of contracted schedule,
completing the contract of 54 Nos. Delivered OPV-6 to the Indian Coast Guard. With this,
L&T-built Coast Guard Vessels account for ~40% of Indian Coast Guard’s operational fleet.

• The R&D and Design & Engineering teams have developed a range of new technologies,
products and solutions with a focus on emerging technologies, such as unmanned systems
across domains, Augmented Reality (AR) and Virtual Reality (VR), emphasising on the
uniqueness of offerings, innovation and presence across the value chain.

Significant Initiatives
The business has identified and signed MOUs / agreements with strategic partners to enhance
business opportunities both in domestic and international markets. R&D and innovation have
been the backbone of the defence business since its inception, and the business continues to
invest in R&D to develop new-age technologies and products such as unmanned systems (all
four domains), robotics, additive manufacturing and Artificial Intelligence. The business has
been building a strong position in digital design since the mid-90s and has attained proficiency
in the elements of Industry 4.0 in its multiple R&D, Design & Engineering Centres and
Production work centres that extend from equipment and systems to the building of complete
platforms, such as warships and submarines. The major disruption caused due to the Covid-
19 pandemic-imposed restrictions was the movement of customer and third-party inspectors
at factory premises. This challenge was overcome by resorting to digital inspection for the
first time and institutionalising the same in the Indian defence industry. To achieve business
continuity and meet key deadlines, innovative digital technologies and processes were
adopted to provide through life support, training, digital Quality Assurance, trial evaluation
and acceptance.

14
Environment, Health and Safety
The safety track record across work centres, customer locations, and business partners’
premises continued to be exemplary. The business has also implemented digital workmen
safety systems, such as RFID-based tracking especially in confined spaces e.g., submarines
and warships, as well as tagging of assets for online tracking. The business continues to focus
on the triple bottom line and green initiatives. It has achieved significant y-o-y reduction in
water and energy consumption, in line with L&T’s sustainability focus. The Shipbuilding
team has received the prestigious Award of Honour 2021 from National Safety Council of
India, Tamil Nadu Chapter. The Coimbatore facility excelled in very high percentage usage
(>80%) of green energy in operations.

Human Resources
HR initiatives have been aligned to the overall business strategy by focussing on identifying
and grooming high potential talent, critical for maintaining a competitive advantage, through
various management and technology leadership programmes. The business has implemented
unique initiatives, such as Lead Next & D-mentors, for the young talent at the middle
management level. Attention to leadership and talent development continues as a business
imperative. The business has also received the HR SCORE Award 2021 conferred by FICCI
in association with IIM, Trichy. Further, with renewed emphasis, the business has embarked
upon employee engagement initiatives to retain and grow talent and continue to be an
employer of choice.

Risks and Concerns

The cyclical nature of the business affects the entire defence sector. To mitigate this risk, L&T
has developed a bouquet of products across the segment through in-house efforts. The
primarily risk for the business is ordering delays / deferment of orders due to complex MoD
processes. The second wave of Covid-19, which seems to be rapidly affecting the major
industrialised states, may once again disrupt operations. To mitigate this business risk, the
business has chalked out strategies such as concurrent execution at multiple work-centres, in-
house manufacturing of critical sub-systems and vendor consolidation into dedicated feeder
shops to address supply chain disruptions, etc. Outlook While the Covid-19 pandemic could

15
impact business in the short term, the disruption it created in the global supply chain has
further reinforced the importance of self-reliance in a strategic sector like defence. The
Government’s series of reforms in the defence sector to enhance indigenisation has been given
a further fillip through the ‘Atmanirbhar Bharat’ initiative. A separate budget for domestic
procurement and a time-bound Positive Indigenisation Initiative (import ban) for weapons /
platforms is expected to open up huge opportunities to the competent Indian industry in the
medium term. The prevailing situation at the Line of Control has catalysed the innovative
adaption of existing weapons / platforms for high-altitude operations as well as development
of indigenous weapons / platforms and has brought renewed focus on completion of trials and
accelerated induction into service. The MoD has also announced an outlay of @ 15% or ~R
10,500 crore (minimum) for capital purchases directly from the private sector in FY 2021-22
with an assurance of YoY increase. The MoD has announced significant reforms at different
levels as a part of the ‘Atmanirbhar Bharat’ and make in-India visions. At the strategic level,
the Draft Defence Production & Export Promotion Policy (DPEPP) has been published, which
clearly outlines the vision and roadmap towards achieving significant self-reliance in the
defence sector by 2025. Defence Acquisition Procedure 2020 (DAP 2020) was released by
the Indian MoD on 30th Sep. 2020. The DAP 2020 aims to accomplish industry friendly,
simplified acquisition procedures to maximise indigenisation within the acquisition timelines.
Also, the MoD will grant a level playing field in naval shipbuilding and grant escalation on
long-term contracts of tenure beyond 5 years. Strengthening the vision of ‘Atmanirbhar
Bharat’, the Indian MoD has notified a Positive Indigenisation List of 101 weapons / platforms
that are banned from being imported. The embargo on import of the listed weapons / platforms
will come into effect gradually between December 2020 and December 2025. Contracts worth
Rupees 4, 00,000 crore are expected to be placed on Indian industry within the next five to
seven years for the procurement of such systems / platforms covered in the first Indigenisation
list. A second Indigenisation list of 101 platforms / equipment and systems has been drafted
and put up for Government clearance to be issued in the near future. The Government has
announced several reforms towards commercial exploitation of opportunities in the space
sector. An autonomous regulatory body, IN-Space (Indian National Space Promotion and
Authorisation), has been created to hand-hold and promote private industry in the space
sector. The role of NSIL (New Space India Limited), a PSU under the Department of Space
(DOS), has been redefined and empowered to offload the operational activities of ISRO in
the areas of launch vehicles and satellite production as well as services through private
consortiums. L&T has been a trusted industry partner to ISRO and the Indian space sector for

16
nearly five decades and has been involved in the production of a range of hardware for all the
launch systems of ISRO, besides partnering it to develop a host of test / simulation facilities,
instrument grade sensors, as well as strategic raw material independence. The reforms
announced in the space sector will enable private sector companies – like L&T, which has
built, and enhanced their capabilities over the last few decades – to take on the complete
manufacture and integration of launch vehicles as well as satellite bus manufacturing and
associated services. Overall, with increased focus of Government on indigenisation and
impetus provided to ‘Atmanirbhar Bharat’ initiative, business opportunities are likely to
enhance in the coming years.

Change in Segment Reporting

The Military Communication Business of Defence Engineering Segment has been transferred
with effect from April 1, 2020 to Smart World and Communication business and reclassified
to the ‘Others Segment’.

17
PRODUCT PROFILE
1. DEFENCE SHIPBUILDING
L&T belongs to a niche aptly described as the 'National Sector'. The Company has a
long history of association with major national missions – supporting India's defence,
aerospace and nuclear segments.

2. OFFSHORE PATROL VESSELS

L&T Defence offers a range of Offshore Patrol Vessels (OPVs) capable of ocean
policing, control, surveillance and monitoring. They are designed to operate up to sea
state 7 and undertake helo operations, thus functioning as 'eyes in the sky'. Peacetime
capabilities include fisheries protection and monitoring, as well as operations
pertaining to anti-smuggling, anti-piracy, limited pollution response against oil spills,
and search-and-rescue operations.

18
3. INTERCEPTOR BOATS
L&T Defence's high-speed Interceptor Boat is designed to meet the stringent
requirements of defence and law enforcement agencies. These include round-the-
clock coastal patrolling, surveillance, high-speed interception and search-and-rescue
operations. Operating with twin water jet systems, this aluminium planning vessel has
excellent manoeuvrability and acceleration. The boat can survive up to sea state 6. The
boat has good sea-keeping quality and a high level of dynamic stability, even at high
speeds. The interceptor boat’s features ensure high operational availability and low
system redundancy

4. FLOATING DOCK
The Floating Dock has been designed in-house by the Design Competency Centre of
L&T Defence, which undertakes the complete cycle of concept design to production
detailing. Staffed by experienced design specialists, it is equipped with modern design
software, 3-D modelling tools and virtual reality capabilities. L&T Defence's proven
project management capabilities and state-of-the-art defence shipyard at Kattupalli,
near Chennai, are ideally suited for construction of such large platforms.

19
5. MULTI PURPOSE VESSELS
Multi-Purpose Vessels (MPVs) offered by L&T Defence can operate a range of naval
weapons and sensors, undertake maritime surveillance and patrolling, Search &
Rescue operations, Humanitarian Assistance & Disaster Relief (HADR) and work as
support platforms. The ships are also capable of launch & recovery of torpedoes,
towing of vessels, rendering limited capacity hospital services as well as providing
logistics support to island territories.

6. CADET TRAINING SHIPS

L&T Defence offers Cadet Training Ships (CTS) capable of providing comprehensive
Sea Training to Naval Cadets. The Ship can perform secondary roles as Hospital Ship,
Humanitarian Aid and Disaster Relief (HADR), Non-Combatant Evacuation
Operations (NEO) and Search & Rescue Operations (SAR). L&T Defence designs
these Ships in-house, undertaking the complete cycle from Concept Design to
Production drawings at its Warship Design Centre, staffed with experienced Design
Specialists and equipped with state-of-the-art IT infrastructure

20
 ORGANISATIONAL CHART
Chairman

Chief Executive Officer & Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

General Manager

Joint General Manager

Senior Deputy General Manager

Deputy General Manager

Assistant General Manager

Manager

Assistant Manager

Officers & Executives

Supervisors

21
CHAPTER-III
3.1 PRODUCTION DEPARTMENT

SHIPBUILDING PROCESS

1. First, the bottom of the ship is being prepared using MS Plates.

2. MS Plates is cleaned, rust paint is coated and cut into small blocks as per the design
of the ship
3. Fabrication (shape) and welding is done for the ship based on the design.
4. Keel laying formal recognition of the start of a ship's construction (bottom part of the
ship).
5. Quality check is done on the regular basis at the time of completion of each job.
6. Each job is divided to separate sub-contractor to complete job on time.
7. After completion of each job, all the block or parts are fitted to the MS Plate.
8. Outfitting jobs like building Captain room, kitchen and fitting necessary equipment.
9. After building the ship, the ship launching (dry birth to water) is conducted.
10. That’s the time where ship touches the water.
11. Leakage test is conducted.

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 12. The ship goes through many Qualities test (4-5months), at that time all the defects are
corrected.
13. Original Equipment Manufacturer (OEM) conducts the quality check from their
side by checking all the machines are fixed as per the module.
14. Then the ship goes through the first level Sea Trial by the shipbuilders.
15. Ship Travels for 20-25 nautical miles in the ocean for sea trail.
16. The performance of the ship is checked according to the owner requirement.
17. After all the quality test, Report is prepared by the manufacturer and issued to the
owner.
18. Second level Sea trail is conducted by the owner.
19. After owner’s feedback, owner has to the sign the acceptance of received bond to
acknowledge the transfer of responsibility.
20. After signing the bond, the responsibility of the vessels in on owner.

NOTE:

❖Job costing method is followed not Process costing method

❖ INCO terms: CIF condition explains that Cost of the ship includes insurance and
freight charges.
❖ Ex-works explain that after signing the acceptance of received bond, owner has to
take the full responsibility of the goods.

PRODUCTION CENTERS YARD

Activities carried out in
Sl.no Production Centres Nature of Facility
Production Centres
Plate Fabrication Shop, Plate Plate Cutting, Plate bending &
1 Steel Cutting
Stock yard (Open Area) forming

Plate Forming Shop, Plate Panel fabrication, Sub panel

2 Fabrication Preparation Shop, Unit / Block fabrication, block fabrication, Outfit
Fabrication Shop item fabrication

Assembly Shop for Ship &

3 Assembly Block / Unit Assembly
Assembly Shop for Submarine

Blasting Shop & Painting Block / Unit / Outfit items & Pipe
4 Blasting & Painting
Shop items - Blasting & Painting

23
5 Piping Pipe Shop Pipe Fabrication & Pipe Erection

Storage Facility, Electrical

Shop, Hull Outfitting Shop,
6 Outfitting Anchor Chain Cable Testing,
Warehouse Shed & Covered
Area for Subcontractors
7 Dry Berths Berthing Area in the yard
Jetties - quayside area where
vessels are moored for docking
8 Wet Berth
& undocking, loading &
unloading & other activities.
Outfitting Item fabrication,
Structural outfitting & Ship level
erection
All erection of equipment, piping
erection, outfitting erection,
Painting & Finish Painting Touch
ups
Outfit erecting, electrical work,
insulation, valve testing, machinery
commissioning, Harbour Trials /
Basin Trials & Sea Trials

9 Ship lift Ship lift Docking & Un-docking of ships

Wharf Crane in Dry Berth & Material shifting for outfitting into
10 Wharf Crane
yard area ships

Storage Facility, all shops

11 Material Handling Handling of all type of materials
and the yard

Engineering Shop for Repair,

12 Repair Hull & Outfitting Shop for Ship Ship Repair works
Repair

24
SHIPYARDS IN INDIA
1. Larsen & Toubro Shipbuilding, Kattupalli Yard, Tamil Nadu.

This mega shipyard is located at Kattupalli, about 40 km north of Chennai. The state-of-the-
art yard is equipped with automatic blasting and priming line, plasma cutting machine and
advanced hydraulic press / forming machines and large assembly workshops with heavy
material handling facilities.
The yard's build strategy maximizes pre-outfitting at the block level. Marine coating shops
and pipe shops are designed to handle the complete load of the yard. A Pipe shop, Electrical
shop and Machine shop add to productivity. Dedicated shops are available for Ship Repairs,
Refits and Mid-Life Upgrade activities.
In April 2019, the yard achieved a five-star grading from its Five Star Occupational Health
and Safety Audit conducted by the British Safety Council, making it the first Indian shipyard
to achieve the feat and positioning it amongst a select few in the world.

The first development phase, which aims to be operational by January 2012, [needs update]
will have a 12 lakh (1.2 million) TEU capacity through two 350-metre-long L-shaped berths
and a total terminal area of around 20 hectares. The berths would be operated by Philippines-
based International Container Terminal Services Inc. for 28 years. The terminal has an option
to rise to 18 lakh (1.8 million) TEU capacity during the second phase of development.

25
Mobile equipment will include two reach stackers and one empty handler.

The yard will offer 5,000 ground slots and a CFS is also planned as part of the service package.
Access to the terminal on the marine side is via a 3.5 km-long channel and port basin offering
a draft of 14 m—the draft capability is such that it provides for projected increases in Southern
Asian container trade. It also provides for the future possibility of mainline Asia–Europe
vessels making a stop in Southern India, which has been mooted as a distinct possibility by
certain analysts. Kattupalli North and South breakwaters, which together total 3.35 km, ensure
a safe harbour and uninterrupted terminal operations.

The yard has 3 rail-mounted quayside cranes (RMQCs) (arrived at the port in December 2011
from China), 15 rubber-tyres gantry cranes (RTGCs), two reach stackers and 420 reefer plug
points. On 12 April 2012, the yard received Zhen Hua 20, a heavy lift vessel, with three more
RMQCs to be installed at the second berth.

The Kattupalli yard is mainly built for making warships and to augment the existing capacity
at Hazira in Gujarat for submarines. A draft of up to 14m and a waterfront exceeding 2.2 km
makes the facility well suited to building large defence ships.

• The Integrated shipyard complex will have the required facilities.

• Commercial ship building including very large cargo carriers; specialised cargo ships
for liquid/gas transportation and cruise vessels.
• Building of Defence ships including submarines.

26
 • Off-shore platforms and floating production-cum-storage facility for oil and gas
sector.
• Refitting and re-engineering of commercial and defence ships.
• Heavy engineering fabrication and components production for ship building.
• At the yard, encompassing 1,250 acres, L&T has also commissioned facilities to build
offshore platforms, drilling rigs and FPSOs (Floating Production, Storage and
Offloading unit), besides a minor port which can handle container ships. An 18,000-
tonne ship lift is being installed at the yard.
• In the first phase, around ₹4,000 crore is being invested in the facility that will start
rolling out ships by January 2012.

2. Cochin Shipyard Limited (CSL)

Cochin Shipyard is strategically located midway on the international sea route, connecting
Europe, West Asia and the Pacific Rim. It has evolved into a builder of large size vessels in
India for the Merchant Navy and the Indian Navy. This Greenfield shipyard was incorporated
in the year 1972 under technical collaboration with M/s MHI, Japan.

During the year 2022-23 the yard completed delivery of three Tuna Long Liner Cum
Gillnetter Fishing Boats for the beneficiaries of Tamil Nadu.

The percentage shares of income earned by Cochin Shipyard Ltd. from ship building, ship
repairing and other activities during 2022-23

27
 3. HOOGHLY DOCK & PORT ENGINEERS LIMITED,
KOLKATA (HDPEL).

HDPEL, situated at Kolkata, is one of the oldest shipyards in India. It was established in 1819
in the private sector known as Hooghly Docking & Engineering Company Limited. On
merger of the Port Engineering Works with Hooghly Docking & Engineering Limited, the
Hooghly Dock & Port Engineers Limited was formed by an Act of Parliament “The Hooghly
Docking and Engineering Company Limited (Acquisition and Transfer of Undertakings) Act,
1984”.

28
The Government of India took it over to utilize the available infrastructure and augment the
ship building capacity. The nationalized company was with the M/o Industry till July 1986
and thereafter was transferred to the then M/o Surface Transport now (Ministry of Shipping).

Joint Venture of CSL (Cochin Shipyard Limited) with Hooghly Dock and Port Engineers Ltd.
(HDPEL)

The Ministry of Shipping vide Letter No. SY-11018/1/2010- HDPE dated March 29, 2017
approved the formation of joint venture partnership between Cochin Shipyard (74% stake in
equity) and HDPEL (26% stake in equity) for upgradation and modernization of shipbuilding
infrastructure at the two shipyard sites of Salkia and Nazirgunge in Kolkata.

On October 23, 2017 a joint venture company named Hooghly Cochin Shipyard Ltd. (HCSL)
has been incorporated as a subsidiary company of Cochin Shipyard. The Company executed
shareholders agreement on November 17, 2017, and concession agreement and lease
agreement were executed on January 19, 2018. The consultancy work for DPR is awarded to
M/s. KITCO.

29
 3.2 FINANCE DEPARTMENT
The finance department is first and foremost at the heart of the company. But beyond its
administrative role, it has become the key player to whom all operational departments turn
thanks to its mastery of data. In a globalized world and faced with the demands of profitability,
the finance function continues to evolve. To help companies transform and remain
competitive, the finance department is equipping itself with ever more powerful IT tools, and
is taking on the role of technology prescriber.

1. BUDGETING AND FORCASTING

A crucial role of financial management is the planning of financial activities and resources
in the organization. To this end, they use available data to understand the needs and
priorities of the establishment as well as the overall economic situation and make plans
and budgets for the same. This is an important task that helps maintain financial stability
by balancing outflow and inflow of cash.
A vital role of a finance manager is to look at what resources a firm requires for a particular
period. Planning helps to convince those who lend money that a company is capable of
managing funds well and will use it judiciously. It also allows companies to tide over
uncertainties as there will be enough funds allocated for that purpose. Such planning will
ensure growth and expansion programs. Both short-term and long-term capital
requirements are considered for this purpose.

2. TREASURY
As part of financial management functions, these officials must estimate the capital
requirements of the organization from time to time, determine the capital structure and
composition, and make the choice of source of funding for the capital needs. This ensures
that a company has enough cash flow to meet its immediate and distant needs for smooth
operation. Companies can complete day-to-day expenses and short-term
financial commitments quickly.

3. ACCOUNTS PAYABLE
Companies track accounts payables on their chart of accounts. Depending on the size of
the organization, the responsibilities for accounts payable and accounts receivable may

30
 be combined. But at larger companies, they are separate functions. Here’s an example of
an AP clerk job description:
a) Review and record invoices
b) Route invoices for approval
c) Remit payment
d) Report
e) Relationship with suppliers.

4. ACCOUNTS RECEIVABLE
The AR department within organizations ensures that the company receives payments for
the goods, services, or products and records all the transactions accordingly. In most
businesses, AR is typically executed by generating an invoice and either mailing or e-
delivering it to the customer and ensuring that the payment is received within an
established timeframe and their task includes
a. Generating invoices
b. Registering payments from customers and assigning them to open invoice
c. Monitoring payment deadlines
d. Creating and sending payment reminders

e. Record and reconcile payments

5. TAXATION
A Specially-trained group of accountants estimates the amount of taxable income that the
business is likely to generate, and periodically remits income tax payments to the
government, based on this estimated amount. The tax group also issues tax filings in a
number of other areas, such as franchise taxes, sales taxes, use taxes, and property taxes.

6. COSTING
Cost accounting is used internally by management in order to make fully informed
business decisions. Unlike financial accounting, which provides information to external
financial statement users, cost accounting is not required to adhere to set standards and
can be flexible to meet the particular needs of management. As such, cost accounting

31
cannot be used on official financial statements and is not GAAP-compliant. Cost
accounting considers all input costs associated with production, including both variable
and fixed costs.

While cost accounting is often used by management within a company to aid in decision-
making, financial accounting is what outside investors or creditors typically see. Financial
accounting presents a company's financial position and performance to external sources
through financial statements, which include information about
its revenues, expenses, assets, and liabilities. Cost accounting can be most beneficial as a
tool for management in budgeting and in setting up cost-control programs, which can
improve net margins for the company in the future.

32
3.3 HUMAN RESOURCE DEPARTMENT
HR has several important functions in the organization. These include recruitment,
performance management, learning and development.

Human Resource Management (HRM or HR) is the strategic approach to the effective
management of people in a company or organization such that they help their business gain a
competitive advantage. It is designed to maximize employee performance in service of an
employer's strategic objectives. Human resource management is primarily concerned with the
management of people within organizations, focusing on policies and systems. HR
departments are responsible for overseeing employee benefits design, employee recruitment,
training and development, performance appraisal, and reward management, such as managing
pay and benefit systems. HR also concerns itself with organizational change and industrial
relations, or the balancing of organizational practices with requirements arising from
collective bargaining and governmental laws.

The overall purpose of human resources (HR) is to ensure that the organization is able to
achieve success through people. HR professionals manage the human capital of an
organization and focus on implementing policies and processes. They can specialize in
finding, recruiting, training, and developing employees, as well as maintaining employee
relations or benefits. Training and development professionals ensure that employees are
trained and have continuous development. This is done through training programs,
performance evaluations, and reward programs. Employee relations deals with the concerns
of employees when policies are broken, such as cases involving harassment or discrimination.
Managing employee benefits includes developing compensation structures, parental leave
programs, discounts, and other benefits for employees. On the other side of the field are HR
generalists or business partners. These HR professionals could work in all areas or be labour
relations representatives working with unionized employees.

HR is a product of the human relations movement of the early 20th Century, when researchers
began documenting ways of creating business value through the strategic management of the
workforce. It was initially dominated by transactional 31 work, such as payroll and benefits
administration, but due to globalization, company consolidation, technological advances, and
further research, HR as of 2015 focuses on strategic initiatives like mergers and acquisitions,

33
talent management, succession planning, industrial and labour, and diversity and inclusion.
In the current global work environment, most companies focus on lowering employee
turnover and on retaining the talent and knowledge held by their workforce.

New hiring not only entails a high cost but also increases the risk of a new employee not being
able to adequately replace the position of the previous employee. HR departments strive to
offer benefits that will appeal to workers, thus reducing the risk of losing employee
commitment and psychological ownership.

1. HUMAN RESOURCE PLANNING

The first function of HR is all about knowing the future needs of the organization. What kind
of people does the organization need, and how many, knowing this will shape the recruitment,
selection, performance management, learning and development, and all other HR functions.
Human resources planning is similar to workforce planning. Both focus on where the
organization is today and what it needs to be successful in the future.

2. RECRUITMENT AND SELECTION

The second HR function involves attracting people to work for the organization and selecting
the best candidates. Attracting people usually starts with an employee brand. Being an
attractive employer has plenty of advantages – just as it is the other way around. With a strong
employer brand and the right sourcing strategies, the company is already halfway there. Once
candidates apply, selection is an HR instrument to pick the best qualified and highest-potential
candidates. Technological developments in recruitment have gone very fast and as a result,
there are different types of recruitment tools for each part of your recruitment funnel.

3. LEARNING AND DEVELOPMENT

Enabling employees to develop the skills they need for the future is an essential responsibility
for HR. This is also related to the first HR function we listed, in which HR bridges the gap
between the workforce today and the workforce needed in the near future. Traditionally,
organizations have a set budget for learning and development. This budget is then distributed
among its employees. In some countries, this fee is mandatory. In the UK, for example,

34
companies with an annual pay bill of more than £3 million pay a mandatory rate of 0.5%
designated for the professional education of their employees.

4. CAREER PLANNING
The fifth function of HR is career planning, guidance, and development for employees,
together also referred to as career pathing. Showing employees how their personal ambition
can align with the future of the company helps to engage and retain them. For the organization,
there are the benefits of better succession planning, higher productivity, and a stronger
employer brand. HR professionals first need to take a look at the jobs within a company. They
must then chart a course through jobs or departments meant to lead an employee to a position.
That in of itself is challenging.
Paths may require:
• Lateral moves, department transfers, or promotions

• Must develop skills and offer the employee development opportunities to gain experience

• Coaching and mentoring will help.

5. PERFORMANCE MANAGEMENT
Performance management is essential in ensuring that workers stay productive and engaged.
Good performance management involves good leadership, clear goal- setting, and open
feedback. Performance management tools include the annual performance review, in which
the employee is reviewed by his/her manager. It also includes 360degree feedback tools in
which peers, managers, subordinates, and sometimes even customers review the employee ‘s
performance. These kinds of tools can be very helpful in providing feedback. Performance
management is also an instrument to close the gap between the workforce you have today and
the one you want to have tomorrow. One of the best ways to build your future workforce is
through learning and development (L&D).

6. FUNCTION EVALUATION
Function evaluation is a more technical role of HR that involves comparing various functions
in terms of qualification, the quality, and availability of workers, job location, working times,
the economic situation, job responsibility, and how much value this job adds to the

35
organization. The idea behind function evaluation is that similar jobs should be rewarded
similarly.

7. REWARDS
Rewarding employees for their work is a function that is impossible to miss. Rewards include
salary but also growth and career opportunities, status, recognition, a good organizational
culture, and a satisfying work-life balance. The total rewards framework shows that rewards
are more than just money. They can also be relational and psychological outcomes. For
example, fantastic colleagues and meaningful work are also rewarding to employees. The
monetary reward of the job consists of financial rewards and other (secondary) benefits.
Rewards are thus much more than just financial. Here is a non-exhaustive overview of total
rewards:
• Base salary
• Performance-based-pay
• Social environment
• Job security
• Status
• Alternating work
• Autonomy
• Growth opportunities
• Feedback
• Formal and informal development opportunities

8. INDUSTRIAL RELATIONS
Another function of HR is maintaining and cultivating relationships with labour unions and
other collectives, and their members. Maintaining good relations with unions will help to spot
and resolve potential conflicts quickly and will also be beneficial in more difficult economic
times when layoffs or other actions are required.

9. EMPLOYEE PARTICIPATION AND COMMUNICATION

According to Dave Ulrich, one of the key roles of HR is to be a credible activist for the
employees. Employees need to be informed and heard on different topics that are relevant to
them. Communication relates to spreading information relevant to employees.

36
10. HEALTH AND SAFETY
HR plays an important role in creating and implementing health and safety regulations.
Making these regulations part of the company culture is one of the main functions of HR.

11. PERSONAL WELLBEING

HR has a function in assisting and taking care of employees when they run into personal
problems. Personal wellbeing is about supporting employees when things don ‘t goes as
planned. Wellbeing is often misunderstood and miscommunicated, largely because of limited
literature and its subjective nature. Employers commonly approach wellbeing as a firefighting
measure. For example, they see a dip in employee morale in the latest internal survey and HR
reacts with ad hoc wellbeing initiatives to get their numbers back up. Wellbeing shouldn’t ‘t
be a reactive measure; it should be proactive and strategically implemented. HR needs to take
steps to understand the issues faced by employees and their organization and then back it by
investing in the right areas.

12. ADMINISTRATIVE RESPONSIBILITIES

The final function of HR is its administrative responsibility. These include personnel
procedures and Human Resource Information Systems. Personnel procedures involve the
handling of promotions, relocations, discipline, performance improvement, illness,
regulations, cultural and racial diversity, unwanted intimacies, bullying, and so on.

37
3.4 PROCUREMENT DEPARTMENT
All aspects of a company’s purchasing process are referred to as procurement.
The procurement department serves its customers internally by negotiating costs with the
vendors, preparing the contracts, and issuing vendor’s purchase orders. The procurement
department functions at large companies for maintaining the financial health of the company.
Depending on the product or service, we carry over the procurement department
functions with the company. If a product is being manufactured with raw materials, then the
functions are managed by a person or procurement department. The main procurement
department function is to centralize the efficiency and compliance of the purchases done for
the company. There are three types of the procurement: direct procurement, indirect
procurement, and service procurement.
Effective procurement department helps to streamline processes, reduce raw material prices
and costs and identify better sources of supply, thus improving organizational efficiency.
Report from Florida-based Hackett Group says through the deployment of digital tools,
procurement organizations can reduce operational costs by up to 45%, achieving efficiency
levels while at the same time enabling them to improve effectiveness and customer
experience. Hence, procurement has become one of the most important functions of an
enterprise.

1. SOURCING
One of the most important procurement department functions is to purchase goods, services
or works from external sources. It plays a vital part in the company’s overall business strategy
as it requires strategic planning to acquire these things at the best possible cost. It should
procure from the right source at the right time the right quality of materials in the right
quantity.

It starts by qualifying suppliers before initiating negotiations. The collection and monitoring

of supplier data are streamlined to ensure that suppliers comply with corporate policies.

Important supplier qualification information is collected and supplier proposals are compiled

and compared. Best suppliers are selected by assessing supplier qualifications, risk factors,

and policy compliance. One of the significant factors for controlling costs is finding the best
and reliable vendor.

38
2. NEGOTIATION
Procurement department professionals with their skills to negotiate should be able to negotiate

the best deal for the company. They should procure the highest quality product from the

suppliers at the best possible price. This function is very vital for the organization`s

profitability because if purchasing costs are high, an organization can end up spending well

over half of its revenue in this area thereby affecting its bottom line. Organizations have

realized that if the purchasing decisions are effective then cost savings can be achieved. Even

the slightest decrease in purchasing costs can make a significant impact.

3. CONTRACTING
Procurement department professionals after evaluating supplier bids based on price, quality
and value, offer the contract award to the best supplier by taking into consideration the unique
business requirements of the organization which is in accordance with company standards,
industry regulations and client expectations.

4. MONITORING OF SUPPLIERS’ PERFORMANCE

Procurement department professionals must monitor contracts to ensure suppliers perform
well in terms of delivery of goods and pricing. It should generate and track purchase orders.
It should see that there is timely delivery of materials from vendors and are of expected
quality, otherwise, it would affect the complete production chain. The promised deliveries by
the vendors should be tracked to see if the invoices are approved and paid in a timely manner.
It must also keep track of all goods and services ordered and received and maintain inventory
records accurately along with details on performance, delivery, and pricing.

5. COMPLIANCE WITH BUSINESS PROTOCOLS

The procurement department must ensure that it is meeting with all company objectives and

compliance requirements. For example, in an organization, if members or staff is requesting

to purchase things like supplies, stationery or computers, then it has to look into the business

protocols for purchase and budget approval and ensure whether the items purchased are in
compliance with the organization’s purchasing policy.

39
6. COLLABORATION WITH OTHER DEPARTMENTS
All departments of an organization are generally interconnected, wherein a task is achieved

with the help of all contributing teams. In the case of the procurement department, the

procurement manager needs to understand the finance & budget controls, legal formalities,

inventory level, and production capacity of the company before making an informed decision

about the prospective vendor. Proactive collaboration with other departments on the part of

the procurement team is essential for the seamless functioning of the company

7. EFFECTIVE MONITORING OF THE PROCUREMENT TEAM

A team is as efficient as the management that monitors it. Procurement Department is one of

the crucial expenses that a company invests in that determines the profit or loss for a period.

Procuring goods over the budget level or under the fixed budget can result in a loss. Hence,

the management must monitor the functions of procurement department, where every

purchase and transaction are intensively controlled.

8. COMPETITOR ANALYSIS
The procurement team must stay abreast of the vendor management by constantly analysing

the competitors of your vendors. Competitor analysis enables the team to understand the

market scenario, quality, and price details. Procuring the best items at a competitive price is

the ultimate objective of the procurement department and it could be done with an effective
analysis of the market competitions

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PROCESS OF INVENTORY FROM PROCUREMENT
TO PROJECT.

Design Team raise the Purchase Requisite for their requirement and
pass on to procurement team.

Procurement team raise a Purchase order.

Choose the vendor and raise the quotation.

Procurement team take the responsibility of goods till it reaches the

Yard.

Goods reaches the yard, after Quality check goods moves to the
inventory.
(Inventory increases)

Goods are forwarded to the Place

Goo site as per their requirements.
3.5 (Inventory decreases)

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3.6 FINANCIAL STATEMENT ANALYSIS

BALANCE SHEET OF L&T LTD

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 INCOME STATEMENT
LARSEN & TOUBRO LIMITED
Registered Office: House, Ballard Estate, Mumbai 400 001
CIN: 1-99999MH1946PLC004768
STATEMENT OF CONSOLIDATED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2023
Crore
Quarter ended Year ended
March 31, December 31, March 31, March 31, March 31,
Particulars 2023 2022 2022 2023 2022
[Reviewed] [Reviewed] [Reviewed] [Audited] [Audited]
[Note (iv)] [Note (iv)]
1 Income:
a) Revenue from operations 58335.15 46389.72 52850.67 183340.70 156521.23
b) Other income (net) 740.91 755.03 515.59 2929.17 2267.08

Total Income 59076.06 47144.75 53366.26 186269.87 158788.31

2 Expenses:
a) Manufacturing, construction and operating expenses:
i) Cost of raw materials and components consumed 6018.27 4660.31 4987.98 18995.11 17100.84
ii) Construction materials consumed 15472.91 10413.68 13712.80 43237.35 33506.21
iii) Purchase of stock-in-trade 175.45 374.50 255.04 1052.86 1069.50
iv) Stores, spares and tools consumed 1358.52 1322.14 1174.61 4814.89 3091.07
v) Sub-contracting charges 9118.55 6483.49 9878.08 25624.45 24772.33
vi) Changes in inventories of finished goods, stock-in-trade and work-in-progress 66.37 (694.92) 185.99 (3156.64) (2076.60)
vii) other manufacturing, construction and operating expenses 5755.83 5247.95 4608.03 20020.81 16471.05
Finance cost of financial services business and finance lease activity 1521.29 1580.43 1441.83 6026.44 5952.54
b) Employee benefits expense 9981.09 9532.50 37214.11 29695.79
7965.02
c)
Sales, administration and other expenses 2033.92 2396.60 2124.61 8758.04 8733.89
d) Finance costs 813.00 802.45 705.10 3207.16 3125.70
Depreciation, amortisation, impairment and obsolescence 853.50 825.18 769.36 3502.25 2947.95
f) 47808.45 144390.27
Total Expenses 53168.70 42944.31 169296.83
1-2 5907.36 4200.44 5557.81 16973.04 14398.04
Profit before exceptional items and tax
3 Exceptional items: (91.97) (91.97) 119.70
4 Exceptional items before tax (net) [gain/(loss)] 448.35 448.35 22.77
a) Current tax (676.31) (676.31)
Deferred tax (227.96) (227.96) 22.77
Total tax expense
b) Exceptional items (net of tax) (c=a b) 135.99 135.99 96.93
c) 5907.36 4336.43 5557.81 17109.03 14494.97
5 Profit before tax (3+4
6 Tax expense:
a) Current tax 1129.75 1740.12 1711.34 5055.17 4499.40
b) Deferred tax 330.87 (469.62) (160.19) (571.01) (295.48)
Total tax expense 1460.62 1270.50 1551.15 4484.16 4203.92
7 4446.74
8 Net profit after tax (5-6) 3065.93 4006.66 12624.87 10291.05
Share in profit/(loss) after tax of joint ventures/associates (net) 11.84 (7.47) 131.81 (94.25) 128.19
9 after 4458.58 3058.46 4138.47 12530.62 10419.24
Net profit tax and share in profit/(loss) of joint ventures/associates (7+8) 3986.78 2552.92 3620.69 10470.72 8669.33
471.80 505.54 517.78 2059.90 1749.91
10 Attributable to: Owners of the Company
Non-controlling interests
a)
Other comprehensive income (OCI) (41.49) (5.80) 115.49 162.06
i) Items that will not be reclassified to profit and loss ii) Income tax relating (8.02)
b) 10.79 (0.26) (14.31) 6.79 (25.53)
to items that will not be reclassified to profit and loss 538.61 517.91 (166.57) 389.38
i) Items that will be reclassified to profit and loss ii) Income tax relating (1336.04)
(91.63) (62.84) 71.76 378.73 (87.56)
to items that will be reclassified to profit and loss 416.28 449.01 6.37 438.35
Other comprehensive income [net of tax] (a+b) 414.24 25.90 (958.54)
352.58 (754.74) 329.38
Attributable to: Owners of the Company 34.77 (19.53)
11 63.70 108.97
Non-controlling interests 3507.47 4144.84 (203.80)
Total comprehensive income (9+10) 4874.86 2967.16 3646.59 11572.08 10857.59
Attributable to: Owners of the Company 4339.36 540.31 498.25 9715.98 8998.71
12 Non-controlling interests 535.50 1856.10 1858.88
13 Paid-up equity share capital (face value of share: 2 each) Other 281.10 281.07 281.01 281.10 281.01
14 equity attributable to owners of the Company Earnings per 89044.85 82126.65
share (EPS) (not annualised):
(a) Basic EPS 28.37 18.17 25.77 74.51 61.71
(b) Diluted EPS 28.35 18.15 25.75 74.45 61.65
Notes:
(i) The Board of Directors recommended a final dividend of? 24 per equity share of face value of? 2 each
(ii) During the quarter, the Company has allotted 1, 18,063 equity shares of? 2 each fully paid-up, on exercise of stock options by employees in accordance with the Company's stock option schemes.
(iii) The Company entered into a Share Purchase Agreement dated December 16, 2022 to sell its entire shareholding in L&T Infrastructure Development Projects Limited, a joint venture, primarily engaged in the
development and operation of toll roads and power transmission assets. The sale transaction is subject to receipt of necessary approvals. Accordingly, the investment in the joint venture is classified as "Held
for Sale'
(iv) Figures for the quarter ended March 31, 2023 and March 31, 2022 represent the difference between audited figures for the financial year and the limited reviewed figures for the nine months period ended
December 31, 2022 and December 31, 2021 respectively.

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RATIO ANALYSIS TABLE

44
CHAPTER-IV
4.1 FINDINGS
➢ It has a high brand image.
➢ The investment for the business is huge and it takes a certain period to reach the Break-
Even point.
➢ They own an India’s largest Shipyard with many advanced machines to build the ship
➢ Human resource is used effectively and efficiently.
➢ Business Development teams follow many techniques to win the tenders.
➢ Company holds a better procurement team which provides the best quality materials
for the business.

4.2 SWOT ANALYSIS

STRENGTH WEAKNESS

• Owns a largest shipyard

• Focus on only Defence
• Advanced technology
customers
• Time management

OPPORTUNITY THREAT

• Expand its presence in • Changes in the prices of raw

international markets materials
• Risk of low pricing

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4.2 CONCLUSION
This internship helped me to enhance and develop my skills, abilities and knowledge.
LARSEN & TOUBRO SHIPBUILDING BUSINESS was a good place to do the internship
since it provided numerous benefits and advantages. This study was done in Finance and
Accounts department for a duration of 6 weeks.
A detailed study of LARSEN & TOUBRO SHIPBUILDING BUSINESS was conducted
which helped in a thorough understanding of a real-life organization problems and
handling of them was a new experience, learning the corporate culture and their hierarchy
made me to understand the work flow and their process well, though the given time was
not enough to gain more knowledge but within stipulated time it was a great experience
to learn in LARSEN & TOUBRO SHIPBUILDING BUSINESS which made me to gain
more knowledge on Production, Procurement and Finance departments.

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REFERENCES:
1. https://www.larsentoubro.com/
2. https://www.lntshipbuilding.com/
3. https://www.lntsustainability.com/integrated-report/
4. https://www.marineinsight.com/know-more/list-of-major-shipbuilding-companies-
around-the-globe/

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