7/21/2019 far 2

1/6

4) Comment on the trend in fnancial perormance with respect to turnover andproftability.

Financial Performance of Larsen and Toubro with respect to TurnoverConsidering previous fve years data o L&T its operating proft per share hasincreased rom March !"! till March !"#. $t was an increase rom "".!! ! to

"%!." rupees. uddenly in march !"4 operating proft per share or the yeardecrease by '.(*. This shows that L&T is using up there inventory to createrevenue.

Turnover is determine by the revenue generated rom operation. +rom year !"to !"# it has increased by "4.(* while rom year !"# to !"4 its operatingrevenue increase by ,.%*. This has happened because all the asset ratios such as

Total asset turnover- or/ing capital turnover- $nvested capital Turnover and01uity Turnover have increased.

Financial Performance of Larsen and Toubro with respect to Protability

$ we analyse fve year proft ater ta2 o L&T we can fnd that- 3roftability wasconstantly decreasing rom starting o the year !"! till starting o the year !"#.3roft ater Ta2 amount decreased by 4.%*. This decrease is clearly mentioned inthe fnancial report o the company that it was due to slump in themanuacturing sector in world economy. Company is again on trac/ ater !"#and its operating proft has increased by #.*.

s we analyse the report o past ( year we ound that L&T has increased its salesby reducing inventory and also the company is e2pecting proft in uture.

() $dentiy the trend o mar/et price o the share in the mar/et and give at least #reasons to 5ustiy the same. +ace 6alue o share to be mentioned.

+ace value o the L & T share is 7s .!!

L & T share price ell rom the average price o "4(."4 in March !"# to""!.%" in March !"4.+ollowing were some o the reasons behind the same

everal fnancial giants li/e 8omura and Citiban/ downgraded the rating oL&T owing to the slow moving orders. ccording to them has the ris/ to

growth as slow orders balloon. low moving order boo/ dorms ".( * o L&Tstotal order boo/. everal high value orders li/e the one rom 89$ were put onhold.

L&T issued bonus shares in ": ratios in ;uly. These bonus shares immediatelyimproved the share price by #*- only to be ollowed by a sharp all later. Thereason or the same was that the new pro5ect starts and the total pro5ectsoutstanding data were almost similar to the levels o !!4.3ro5ects underimplementation and the new pro5ect starts were going down at the same timeor the frst time since ;une ",,(.3ro5ect e2ecution rate also ell in the sametime. $n addition whenever there is a sudden increase in shares the sharevalue increases with the e2pectation o growth but alls soon ater coming interms with the actual value o the company.

7/21/2019 far 2

2/6

7/21/2019 far 2

3/6

E&'P?The intrinsic value o the option=02cess o mar/et price over the e2ercise price

o the option) is treated as discount and accounted as employee compensation costover the vesting period

Foreign $urrency Transactions?7ecorded on initial recognition in the reporting

currency- using e2change rate o the date o the transaction. t each balance sheet

date oreign currency monetary items are reported using the closing rate. perating cycle or current and non?current classifcation?perating cycle or the

business activities o the company covers the duration o the specifcpro5ectFcontractFproduct lineFservice including the deect liability pro5ect- whereverapplicable and e2tends up to the realiBation o receivables within the agreed creditperiod normally applicable to the respective line o business

$ash Flow &tatement?Cash Aow statement is prepared by segregating the cash

Aows rom operating- fnancing and investing activities. Cash Aow rom operatingactivities is reported using indirect method

') 02plain in your own words- what the Management has communicated to the

hareholders through the

7/21/2019 far 2

4/6

*lobal economic condition?The year !"#?!"4 showed slight signs o revivalo growth ater the onset o the fnancial crisis. I is introducing a gradualtaper on its stimulus and there are signs o revival even in the 0uropean Inion.9owever the emerging and the developing economies have aced challenges togrowth due to lac/ o e2ternal unding .This has been ollowed by a wea/domestic demand. ome o the reasons or this also include supply sideconstraints due to structural and policy bottlenec/s leading in turn to highinAation. >rowth in the Middle 0astern countries was also pretty low and the oilprices were high. >lobal growth is e2pected to get better with the consolidationo the developed countries.'verview of "ndian Economy?The >

7/21/2019 far 2

5/6

signifcant increase o * over the previous year.The segment recordedimproved 0@$T

7/21/2019 far 2

6/6

"T ( Technology &ervices /"T(T&0) $T&T segment recorded gross segmentrevenue o H%4"' crore or the year ended March #"- !"4 registering animpressive growth o .4* over the previous year. Most o its revenues are rominternational customers. L&T $noTech >roup recorded total income oH4# crore during the year ended March #"- !"4- registering (* growth overthe previous year.The 0@$T