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2011

Presented by :-

Faiza Shaikh - 36

Shanaz Mansuri - 26

Sabya Shaikh 38

Balram Jha - 19

L & T Financial Accounting Project

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Certificate

This is to certify that Shaikh Faiza, Shanaz Mansuri, Balram Jha,

Sabya Shaikh, are student of University of Mumbai has submitted a

project titledL&T under my guidance and supervision in connection with their

Bachelors Degree in B.A.F. (Bachelors in Accountancy and Finance)

Signature of Faculty _________________

Prof. Sadaf Maam.

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ACKNOWLEDGEMENT

For any successful work, it owes its thanks to manyHard work, knowledge, dedication & positive attitude all are

necessary to do any task successfully but one ingredient which is also

very important than others and at times more important than others iscooperation & guidance of experts and experienced person.

Firstly I would like to extend my heartfelt gratitude to Prof. Sadaf

Maam, for her guidance throughout the project. Without her support

and cooperation I would have failed in my endeavours and targets in

this project Report.

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Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 121.77 120.44 117.14 58.47 56.65

Equity Share Capital 121.77 120.44 117.14 58.47 56.65

Share Application Money 368.31 25.09 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 21,334.05 18,142.82 12,317.96 9,470.71 5,683.85Revaluation Reserves 22.13 23.29 24.59 25.90 27.93

Networth 21,846.26 18,311.64 12,459.69 9,555.08 5,768.43

Secured Loans 1,063.04 955.73 1,102.38 308.53 245.40

Unsecured Loans 6,098.07 5,845.10 5,453.65 3,275.46 1,832.35

Total Debt 7,161.11 6,800.83 6,556.03 3,583.99 2,077.75

Total Liabilities 29,007.37 25,112.47 19,015.72 13,139.07 7,846.18

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 8,897.02 7,235.78 5,575.00 4,188.91 2,876.30Less: Accum. Depreciation 2,220.82 1,727.68 1,421.39 1,242.47 1,122.83

Net Block 6,676.20 5,508.10 4,153.61 2,946.44 1,753.47

Capital Work in Progress 785.00 857.66 1,040.99 699.00 471.22

Investments 14,684.82 13,705.35 8,263.72 6,922.26 3,104.44

Inventories 1,577.15 1,415.37 5,805.05 4,305.91 3,001.14

Sundry Debtors 12,427.61 11,163.70 10,055.52 7,365.01 5,504.64

Cash and Bank Balance 1,518.98 1,104.89 693.13 779.86 993.68

Total Current Assets 15,523.74 13,683.96 16,553.70 12,450.78 9,499.46

Loans and Advances 19,499.23 12,662.55 7,198.85 3,861.10 2,449.14

Fixed Deposits 211.37 326.98 82.16 184.60 100.75

Total CA, Loans & Advances 35,234.34 26,673.49 23,834.71 16,496.48 12,049.35Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 26,139.56 19,443.77 15,211.04 11,892.75 8,362.01

Provisions 2,233.43 2,188.36 3,066.53 2,035.42 1,180.13

Total CL & Provisions 28,372.99 21,632.13 18,277.57 13,928.17 9,542.14

Net Current Assets 6,861.35 5,041.36 5,557.14 2,568.31 2,507.21

Miscellaneous Expenses 0.00 0.00 0.26 3.06 9.84

Total Assets 29,007.37 25,112.47 19,015.72 13,139.07 7,846.18

Contingent Liabilities 1,647.66 1,719.39 1,371.86 1,013.51 270.22

Book Value (Rs) 352.40 303.28 212.32 325.98 202.65

Balance Sheet of Larsen

and Toubro------------------- in Rs. Cr. -------------------

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Profit & Loss account of

Larsen and Toubro------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 44,055.55 37,187.50 34,249.85 25,280.49 17,983.37

Excise Duty 398.84 317.31 393.31 334.38 338.08

Net Sales 43,656.71 36,870.19 33,856.54 24,946.11 17,645.29

Other Income 1,781.28 2,321.67 1,612.58 616.69 459.80

Stock Adjustments 559.49 -422.99 105.11 746.17 121.76

Total Income 45,997.48 38,768.87 35,574.23 26,308.97 18,226.85

Expenditure

Raw Materials 12,372.32 9,593.53 9,316.38 8,256.46 5,320.98

Power & Fuel Cost 355.45 334.08 456.39 365.25 308.13

Employee Cost 2,884.53 2,379.14 1,998.02 1,535.44 1,258.21

Other Manufacturing Expenses 19,886.12 16,913.31 15,659.17 10,632.83 7,451.07

Selling and Admin Expenses 2,103.38 1,854.23 1,844.83 1,393.80 1,222.80

Miscellaneous Expenses 773.70 325.58 569.32 280.69 166.15

Preoperative Exp Capitalised -37.87 -36.25 -24.48 -11.42 -3.30

Total Expenses 38,337.63 31,363.62 29,819.63 22,453.05 15,724.04

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 5,878.57 5,083.58 4,142.02 3,239.23 2,043.01

PBDIT 7,659.85 7,405.25 5,754.60 3,855.92 2,502.81

Interest 1,199.23 995.37 770.00 501.83 331.46

PBDT 6,460.62 6,409.88 4,984.60 3,354.09 2,171.35

Depreciation 575.81 383.65 284.83 195.94 160.13

Other Written Off 23.41 30.95 21.16 15.66 0.00

Profit Before Tax 5,861.40 5,995.28 4,678.61 3,142.49 2,011.22

Extra-ordinary items -49.05 -45.13 -21.09 12.21 -5.34

PBT (Post Extra-ord Items) 5,812.35 5,950.15 4,657.52 3,154.70 2,005.88

Tax 1,858.47 1,577.02 1,176.19 982.05 601.87Reported Net Profit 3,957.89 4,375.52 3,481.66 2,173.42 1,403.02

Total Value Addition 25,965.31 21,770.09 20,503.25 14,196.59 10,403.06

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 882.84 752.75 614.97 495.32 368.25

Corporate Dividend Tax 112.82 110.25 101.83 76.26 53.34

Per share data (annualised)

Shares in issue (lakhs) 6,088.52 6,021.95 5,856.88 2,923.27 2,832.71

Earning Per Share (Rs) 65.01 72.66 59.45 74.35 49.53

Equity Dividend (%) 725.00 625.00 525.00 850.00 650.00

Book Value (Rs) 352.40 303.28 212.32 325.98 202.65

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Cash Flow of Larsen and

Toubro------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 5832.91 5880.67 3940.41 3155.47 2004.89

Net Cash From Operating Activities 3861.30 5482.75 1478.57 1945.24 2130.45Net Cash (used in)/from

Investing Activities-2437.98 -6071.73 -3308.53 -5241.89 -1588.17

Net Cash (used in)/from Financing

Activities-1124.84 1245.56 1640.79 3166.68 -31.05

Net (decrease)/increase In Cash and

Cash Equivalents298.48 656.58 -189.17 -129.97 511.23

Opening Cash & Cash Equivalents 1431.87 775.29 964.46 1094.43 583.20

Closing Cash & Cash Equivalents 1730.35 1431.87 775.29 964.46 1094.43

Key Financial Ratios of

Larsen and Toubro------------------- in Rs. Cr. -------------------

Mar '11

Investment Valuation Ratios

Face Value 2.00

Dividend Per Share 14.50

Operating Profit Per Share (Rs) 96.55

Net Operating Profit Per Share (Rs) 717.03

Free Reserves Per Share (Rs) 347.12

Bonus in Equity Capital 73.86

Profitability Ratios

Operating Profit Margin(%) 13.46

Profit Before Interest And Tax Margin(%) 11.82

Gross Profit Margin(%) 12.14Cash Profit Margin(%) 8.96

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Adjusted Cash Margin(%) 8.96

Net Profit Margin(%) 9.06

Adjusted Net Profit Margin(%) 9.06

Return On Capital Employed(%) 22.35

Return On Net Worth(%) 18.44

Adjusted Return on Net Worth(%) 15.94Return on Assets Excluding Revaluations 352.40

Return on Assets Including Revaluations 352.76

Return on Long Term Funds(%) 23.23

Liquidity And Solvency Ratios

Current Ratio 1.24

Quick Ratio 0.53

Debt Equity Ratio 0.33

Long Term Debt Equity Ratio 0.30

Debt Coverage Ratios

Interest Cover 10.01

Total Debt to Owners Fund 0.33Financial Charges Coverage Ratio 5.90

Financial Charges Coverage Ratio Post Tax 4.80

Management Efficiency Ratios

Inventory Turnover Ratio 29.73

Debtors Turnover Ratio 3.70

Investments Turnover Ratio 29.73

Fixed Assets Turnover Ratio 5.03

Total Assets Turnover Ratio 1.52

Asset Turnover Ratio 5.03

Average Raw Material Holding 25.77

Average Finished Goods Held 4.21

Number of Days In Working Capital 56.58

Profit & Loss Account Ratios

Material Cost Composition 28.34

Imported Composition of Raw Materials Consumed36.78

Selling Distribution Cost Composition 0.80

Expenses as Composition of Total Sales 14.58

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 25.15

Dividend Payout Ratio Cash Profit 21.84Earning Retention Ratio 70.90

Cash Earning Retention Ratio 75.24

AdjustedCash Flow Times 1.78

Earnings Per Share 65.01

Book Value 352.40

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Explanation of Ratios for the year

2011:

Face Value : Face value of each share is Rs. 2

Current ratio: It is used to appraise the ability of the company to satisfy its current debtsout of the current assets. Generally, 2 to 1 current ratio is considered the satisfactory

minimum.

Current ratio = Current Assets

Current Liabilities

Quick ratio/Acid test ratio: The quick ratio is the stringent test to liquidity. It isfounded by dividing the most liquid current assets by current liabilities. Inventory is not

included since the length of time needed to convert to cash is long. Prepaid expenses are also

not an element since they are not convertible in cash. General acceptable ratio is 1 to 1.

Quick ratio = Quick Assets

Current Liabilities

Quick assets = Current AssetsStockPrepaid expenses

Debt-to-equity ratio: It is afinancial ratioindicating the relative proportion ofshareholders' equityanddebtused to finance a company's assets. The Debt to Equity Ratio

measures how much money a company should safely be able to borrow over long periods of

time. It does this by comparing the company's total debt and dividing it by the amount of

owner's equity.

Debt to Equity Ratio = Borrowed funds

Proprietories funds

Operating profit ratio: This ratio shows the relationship between operating profit andnet sales.

Operating profit ratio = Operating profit *100

Net sales

http://en.wikipedia.org/wiki/Financial_ratiohttp://en.wikipedia.org/wiki/Financial_ratiohttp://en.wikipedia.org/wiki/Financial_ratiohttp://en.wikipedia.org/wiki/Shareholders%27_equityhttp://en.wikipedia.org/wiki/Shareholders%27_equityhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Shareholders%27_equityhttp://en.wikipedia.org/wiki/Financial_ratio

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Working capital turnover ratio: A measurement comparing the depletion ofworking capital to the generation of sales over a given period. This provides some useful

information as to how effectively a company is using its working capital to generate sales.

Working capital turnover ratio = Sales

Working Capital

Capital turnover ratio: A measure indicating how effectively investment capital is

used to produce revenues. Capital turnover is expressed as a ratio of annual sales to investedcapital.

Capital turnover ratio = Sales

Capital employed

Net profit ratio: Net profit ratio is the ratio of net profit (after taxes) to net sales. It isexpressed as percentage. The two basic components of the net profit ratio are the net profit

and sales. The net profits are obtained after deducting income-tax and, generally, non-operating expenses and incomes are excluded from the net profits for calculating this ratio.

Thus, incomes such as interest on investments outside the business, profit on sales of fixed

assets and losses on sales of fixed assets, etc are excluded.

Net profit ratio = Profit after tax * 100

Sales

Earning per share = The portion of a company's profit allocated to each outstandingshare of common stock. Earnings per share serves as an indicator of a company's

profitability.

EPS = Profit available to equity shareholders

No. of shares

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Dividend pay out ratio: The percentage of earnings paid to shareholders in dividends.The payout ratio provides an idea of how well earnings support the dividend payments. More

mature companies tend to have a higher payout ratio.

Dividend pay out ratio = DPS

EPS

Capital gearing ratio: A general term describing a financial ratio that compares someform of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial

leverage, demonstrating the degree to which a firm's activities are funded by owner's funds

versus creditor's funds. Also known as the Net Gearing Ratio.

Capital gearing ratio = PC + BF

EF

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Debt equity ratio Borrowed funds

Proprietaries funds

7161.11

21846.26

= 0.33

Operating profit ratio Operating profit

sales

5878.59 * 100

43656.71

= 13.46 %

Net profit ratio PAT * 100sales

3957.89 * 10043656.71

= 9.06

EPS Profit available to equity SH

no. of share

65.01

Dividend payout

ratio

DPS

EPS

14.50

65.01

= 0.22

Ratio Formula Remark

Current ratio

Current assets

Current liabilities

35234.34

28372.99= 1.24

Quick ratio

Quick assets

Quick liabilities

15523.74

28372.99

= 0.53

Working capital

turnover ratio

sales

working capital

43656.71

6861.35

= 6.36

Capital turnover

ratio

sales

capital employed

43656.71

28985.24

= 1.50

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Capital gearing

ratio

PC+BF

EF

7161.11

21455.82

= 0.33

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