A STUDY ON

“COMPARITIVE FINANCIAL STATEMENT ANALYSIS”

WITH REFERNCE TO

HINDUSTAN SHIPYARD LIMITED (HSL)

VISAKHAPATNAM

A PROJECT REPORT SUBMITTED TO ANDHRA UNIVERSITY, VISAKHAPATNAM IN PARTIAL

FULFILLMENT FOR THE AWARD OF THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

Submitted by

CHALLA AKHILA

Regd, No: 120138507011

Under the Esteemed Guidance of

Ms. K. Alekhya

M. B. A

DEPARTMENT OF MANAGEMENT STUDIES

Sun Institute of Toursim & Management

47-14-5, Dwarakanagar Rd, beside SBI, Dwarakanagar,
Visakhapatnam, Andhra Pradesh 530016
(2020-2023)
 DECLARATION

I, Challa Akhila, hereby declare that this project report titled a study on “COMPARATIVE
FINANCIAL STATEMENT ANALYSIS” was prepared by me during the academic year
2020- 2023 under the guidance of Ms. K. ALEKHYA submitted by me to SUN
INTERNATIONAL INTITUTE OF TOURISM AND MANAGEMENT in partial fulfilment of
BACHELOR OF BUSINESS ADMINISTRATION is of my own has not been submitted to any
other university or has not been published any time before.

Place: VISAKHAPATNAM Challa Akhila

Date: 120138507011
 ACKNOWLEDGEMENT

It's a golden opportunity to provide at "HINDUSTAN SHIPYARD LIMITED",

Visakhapatnam for me as an interim to devote my time and effort, knowledge, experience and
many of whom always remain in the background. This is the project report has helped my inter
personal skills and self-confidence to do my work individually in future.

In the preparation of report, I would like to take responsibility to acknowledgement the

following distinguished personalities who graciously allowed me to carry out the project
work successfully.

I express my heartfelt thanks to the principal Mr. GIBU GEBRIEL, SUN

INTERNATIONAL INSTITUTE OF TOURISM AND MANAGEMENT for his constant
support and encouragement in pursuing this project.

I express my deep sense of gratitude to the head of the department Mr. Prem for his
continuous support, valuable guidance and encouragement in completion of my project work.

I would like to take the pleasure of opportunity to express my heart full gratitude to Ms.
K. ALEKHYA, SUN INTERNATIONAL INSTITUTE OF TOURISM AND
MANAGEMENT who took personal interest and gave valuable suggestions to conduct the
project report in systematic way and for the project documentation of the project report to the
successful end throughout the project.

I take this opportunity to extend my profound thanks and deep sense of gratitude to
Mr. ANANAD (Finance Head), HINDUSTAN SHIPYARD LIMITED,
VISAKHAPATNAM, for allowing me to pursue a project in their prestigious organization.

I profusely thank my company guide Mrs. K. LAVANYA (DEPUTY FINANCE

MANAGER), HINDUSTAN SHIPYARD LIMITED, VISAKHAPATNAM helping and
assisting me through her valued guidance, co-operation and unstinted support during the course
of my Project.

CHALLA AKHILA
120138507011
 CONTENT

CHAPTER1:
● INTRODUCTION
⮚ Introduction of report
⮚ Need of study
⮚ Objectives of Report

CHAPTER 2:
● Body of Project Report
⮚ Company Profile
⮚ Theoretical framework of report

CHAPTER 3:
● SUMMARY
⮚ Summary of Report
⮚ Findings
⮚ Suggestions
⮚ Conclusion
 CHAPTER I

 INTRODUCTION
⮚Introduction of report
⮚Need of study
⮚Objectives of Report
 INTRODUCTION

The financial statement analysis generally involves common size analysis, ratio analysis
(liquidity, turnover, profitability, etc.), trend analysis and Industry comparative analysis. This
permits the valuation analyst to compare the subject company to other businesses in the same or
similar industry, and to discover trends affecting the company and/or the industry over time. By
comparing a company's financial statements in different time periods, the valuation expert can
view growth or decline in revenues or expenses, changes in capital structure, or other financial
trends. How the subject company compares to the industry will help with the risk assessment
and ultimately help determine the discount rate and the selection of market multiples. The term
financial analysis is also known as, analysis and interpretation of financial statements" refers to
the process of determining financial strength and weakness of the firm by establishing strategic
relationship between the items of the Balance Sheet, Profit and Loss account and other
operative data. The purpose of financial analysis is to diagnose the information contained in
financial statements so as to judge the profitability and financial soundness of the firm.
Financial statements are prepared and presented for the external users of accounting
information. As these statements are used by investors and financial analysts to examine the
firm's performance in order to make investment decisions, they should be prepared very
carefully and contain as much investment decisions; they should be prepared very carefully and
contain as much information as possible. Preparation of the financial statement is the
responsibility of top management. The financial statements are generally prepared from the
accounting records maintained by the firm.

Comparative study of financial statement is the comparison of the financial statement

of the business with the previous year's financial statements and with the performance of other
competitive enterprises, so that weaknesses may be identified and remedial measures applied.
Comparative statements can be prepared for both types of financial statements i.e., Balance
sheet as well as profit and loss account. The comparative profits and loss account will present a
review of operating activities of the business. The comparative balance shows the effect of
operations on the assets and liabilities that change in the financial position during the period
under consideration. The presentation of comparative financial statements, in annual and other
reports, enhances the usefulness of such reports and brings out more clearly the nature and
trends of current changes affecting the enterprise. While the single balance sheet represents
balances of accounts drawn at the end of an accounting period, the comparative balance sheet
represents not nearly the balance of accounts drawn on two different dates, but also the extent of
their increase or decrease between these two dates. The single balance sheet focuses on the
financial status of the concern as on a particular date, the comparative balance sheet focuses on
the changes that have taken place in one accounting period. The changes are the direct outcome
of operational activities, conversion of assets, liability and capital form into others as well as
various interactions among assets, liability and capital.

Comparative financial statement is a tool of financial analysis used to study the

magnitude and direction of changes in the financial position and performance of a firm over a
period of time. The preparation of comparative statements is based on the premise that a
statement covering a period of a number of years is more meaningful and significant than for a
single year.
 The comparative financial statements are statements of the financial position at different
periods; of time. The elements of financial position are shown in a comparative form so as to
give an idea of financial position at two or more periods. From practical point of view,
generally, two financial statements (balance sheet and income statements) are prepared in
comparative form for financial analysis purposes. Not only the comparison of the figures of two
periods but also be relationship between balance sheet and income statement enables an in depth
study of financial position and operative results.

The comparative statement may show:

(i)Absolute figures (rupee amounts).

(ii) Changes in absolute figures i.e; increase or decrease in absolute figures.
(iii) Absolute data in terms of percentages. Increase or decrease in terms of percentages.
(iv) Increase or decrease in terms of percentages.
(v) Comparisons expressed in terms of ratios.
(vi) Percentage of totals.
 NEED OF THE STUDY

 To examine the past financial data so that company performance and financial position
can be evaluated and future risks and potential can be estimated.

 It is the process of analyzing a company's financial statements for decision making

purposes.

 External stake holders use it to understand the overall health of an organization as well
as to evaluate financial performance and business value.

 Provides a comparison of an entity's financial performance over multiple periods, so that

you can determine trends.
 OBJECTIVES OF STUDY

 To study the financial statement for four years.

 To study the financial position of the company and operations of Hindustan shipyard
limited, Visakhapatnam.

 To study the growth profile of the company during the study period.

 To provide a strong theoretical framework for analysis financial statements.

 To appraise financial soundness of the company.

 To offer suggestion for improvement in the company.

 To analyze and interpret the financial statements through percentage method.

 To give better suggestions for improving the overall financial position of the
“HINDUSTAN SHIPYARD LIMITED”, VISAKHAPATAM.
 CHAPTER 2

 BODY OF PROJECT REPORT

 Company Profile
 Theoretical framework of report
 COMPANY PROFILE

INTRODUCTION

Hindustan Shipyard Limited

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

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

satisfaction.

VISION

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

OBJECTIVE

✓ To construct and repair of Naval ships and Strategic / Conventional submarines

✓ To modernize the yard for efficient construction of Naval ships and submarines

✓ To augment technological capabilities for the design and construction of ships and submarines

✓ To develop the expertise and adequately skilled manpower necessary for the anticipated
future orders

✓ To incorporate 'Best Practices' in all key activities of the yard including production, planning,
purchase, marketing and human resource management

✓ To upgrade welding, cutting, plumbing and outfitting technologies

✓ To upgrade ERP and IT systems for efficient information management and transparent
operations

✓ Finalization of ToT and design collaborations for new ships and submarine projects
LOCATION

Hindustan Shipyard Ltd. is located in the picturesque port city of Visakhapatnam on

the East coast of India. The shipyard is easily accessible by direct air, sea, rail and road
connections from India and Abroad

HISTORY

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

Walchand selected Visakhapatnam as a strategic and ideal location and took possession
of land in November 1940. The World War II was going on and in April 1941, the Japanese
bombed the town. However, Walchand was unfettered and decided to go ahead with his plan of
building a shipbuilding industry in India. In the days when it was unthinkable of foundation
ceremony to be done by anyone other than British officials, the truly patriotic Walchand
decided
to break the tradition and the foundation stone for the shipyard was laid by Dr.Rajendra Prasad
on 21 June 1941, who was acting Congress President at that time. The first ship to be
constructed fully in India after independence was built at the Scindia Shipyard and named Jal
Usha.

Walchand died in 1953, and the Scindia Shipyard continued to flourish under next of
kinds of founders. However, later on the government of India decided to nationalize the Scindia
Shipyard, as it was a sensitive and strategic related to defence sector of the country. After
Independence, two thirds of its holdings were acquired by Govt. of India in 1952 and Hindustan
Shipyard Ltd was incorporated on 21 Jan 1952. Balance one third share was acquired by GOI in
Jul 1961 and the Shipyard became a fully owned Govt. of India undertaking under the
administrative control of Ministry of Shipping.

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

CORE AREAS

The shipyard has three independent business units viz. Shipbuilding, Ship Repairs and
Submarine divisions with exclusive facilities and infrastructure.

SHIP BUILDING, INFRASTRUCTURE AND FACILITIES

Sprawling in an area of 117 acres, the shipyard has an ergonomic layout that ensures
unidirectional material flow. 2000 T / month of steel can be processed in the yard with a
stockyard that can hold 30,000 tonnes of steel, modern plate and section treatment plant, NC
Cutting Machines, heavy duty presses, self-elevating trucks capable of handling blocks up to
250 tonnes and large prefabrication shops with EOT cranes of adequate capacity. The
Shipbuilding facilities include a fully-covered Building Dock (240 x 53 M) with intermediate
gate facility capable of building vessels up to 80,000 DWT and three Slipways is capable of
launch ships upto 33000 DWT. The Yard has a long outfitting quay (460 m) of 10 M clear
depth equipped with self- contained services and facilities.
SHIP REPAIRS

Ship Repairs Complex is equipped with necessary facilities and infrastructure for
undertaking repairs of all types of ships, marine structure & offshore platforms. The Dry dock,
constructed in the year 1971, is an important adjunct to the Ship Repairs Complex for
undertaking repairs of all types of ships and oil rigs. With a size of 244 x 38 M, it is capable of
handling vessels up to 70,000 DWT. The Dry Dock, the biggest and modern dock in the East
Coast is capable of docking multiple ships. Ship Repairs Complex also has 544 meters of
waterfront with adequate draft all along and necessary carnage. Ship Repairs Complex, has
accomplished intricate repair jobs on a variety of Naval Ships, Offshore platforms, Drill Ships,
Merchant Ships and Oil Rigs. In Apr 2021, the Ship Repair division has executed repairs of two
foreign ships named ‘North Ocean LV 105’ and ‘Go-Sirius’ and earned a revenue of Rs 4.17 Cr
in foreign currency for the first time.

SUBMARINE REFITS

The shipyard has exclusive Submarine Refit facilities. HSL happens to be the only
Shipyard in India to have carried out the refits of three classes of submarines (refit of two
Egyptian submarines in 1971, refit of Foxtrot-class (INS Vagli) and EKM class (INS
Sindhukirti & INS Sindhuvir) submarines of Indian Navy.

The Medium Repair-cum-Modernisation of Russian built INS Sindhukirti was

successfully completed and handed over to the Navy on 26 Jun 2015. This has earned many
accolades for the shipyard. During the refit, nearly 100 Km of cabling and 30 Km of high
pressure piping was renewed, thereby making this the most advanced platform ever to be
undertaken in an Indian yard proving the Yard’s capability to take up orders to construct
generation next Greenfield submarines. Incidentally, this was the only instance where
retrofitting of missile system in an existing submarine was undertaken in the country. The
submarine achieved RPM of 350 during its very first sea sortie for Full Power Trials, thus
certifying the quality of work by the yard.

Considering the expertise gained in MR of INS Sindhukirti, HSL has been awarded for
Normal Refit of INS Sindhuvir, a Kilo class submarine of the Indian Navy at a cost of Rs 500
Cr. HSL, achieved another historical milestone in submarine Repair capability by completing
extensive repairs, upgrade, system integration and trials of INS Sindhuvir on 31 Jan 2020 i.e.
ahead of the contractual delivery period of 09 Feb 2020.
PRODUCT PROFILE

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

DESIGN RESOURCES

HSL has a well-equipped Design & Drawing Office, which in the past has developed
in- house design for a number of vessels. HSL’s design department has been recognized as in-
house R&D unit by Department of Scientific & Industrial Research (DSIR), Ministry of
Science & Technology. HSL's design capability embraces wide spectrum of general and special
purpose vessels. The design office has been upgraded in the recent past under modernisation
program. With this, the design office has mastered the art of producing composite drawings
which would enable adoption of integrated modular construction methodology with a high level
of pre- outfitting of blocks-modules.

TECHNOLOGY UP-GRADATION

HSL is also venturing into the latest technological up gradations available in the
market, aiming for a seamless process flow of information and to bring in best practices adopted
in other Indian and foreign shipyards. In order to be self-sufficient and continuously update
with the emerging technologies, SAP S4/HANA ERP system is being implemented in the
shipyard. The unique feature of this ERP system would be integration of Design software,
Aveva Marine including its 3D features with an embedded PLM in SAP. With the upgraded
technology, the 3D CAD data from Design Office could directly be transferred to the Plasma
cutting machine in the production floor for cutting steel.

ORDER BOOK POSITION & FUTURE ORDERS

The present Shipbuilding order book comprises of projects viz. construction of 2 Nos
Diving Support Vessels (DSV) and 1 No Floating Dock for Indian Navy.

HSL has been nominated by MoD for construction of 5 Nos Fleet Support Ships (FSS)
for Indian Navy worth Rs 17000 Cr. The shipyard has finalized M/s Anadolu Shipyard as design
collaborator and supply of Key Machinery Equipment. Technical and Commercial bid have
been submitted by HSL to IHQ MoD (Navy). The contract is expected to be signed by end of
FY 2022- 23 post price negotiations.

HSL is expecting Normal Refit (NR) of INS Sindhukirti for a duration of 24

months. The schedule for commencement of the refit is Aug 2022.

EXISTING INFRASTRUCTURE AND FACILITIES

Sprawling in an area of 117 acres, the shipyard has an ergonomic layout that ensures
unidirectional material flow. 2000 T / month of steel can be processed in the yard with a
stockyard that can hold 30,000 tonnes of steel, modern plate and section treatment plant, NC
Cutting Machines, heavy duty presses, self-elevating trucks capable of handling blocks up to
250 tonnes and large prefabrication shops with EOT cranes of adequate capacity.

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

SUPPORT TO ANCILLARY INDUSTRIES

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

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

WOMEN EMPOWERMENT

Women empowerment is the term used to refer to the empowerment of women in all the
spheres of life e.g. education, employment, health, safety, etc. It is fundamental to the economic
and social progress of the nation as well as that of the world. As long as gender discrimination
exists, an equated society and sustainable development cannot be achieved. It is important to
realize and understand that women in the modern era are not only equally competent but often
times even ahead of men in several socio-economic fields, thus making their presence in the
work front extremely important.
At Hindustan Shipyard Limited, we have a total count of 58 women employees in
various cadres including officers, staff and workmen who are contributing towards achieving
the organizational goals and objectives. 5% of the total employed at HSL are women employees
and working in various field like Design, Commercial, Planning, HR, Finance, IT etc.
The welfare of women employees is observed with utmost priority by HSL management
especially related to safety and giving opportunity. Ms Sujatha, Chief General Manager
(Finance) is one among top echelons at HSL who is the guiding force and inspiration to all
women employees.

BOARD OF DIRECTORS

• Cmde. Hemant Khatri, Chairman & Managing Director.

• Cdr. J P Gupta, IN(Retd), Director ( Corporate planning & Personnel)

• Shir.S.V. Rambabu, Director ( Finance & Commercial)

• Cmde. Kunjumon E Mathew, IN(Retd), Director (Shipbuilding)

• Cmde. Girideep Singh, IN(Retd) Director (Strategic Projects)

ORGANIZATION CHART
 THEORITICAL FRAMEWORK

What are Comparative Statements?

Comparative statements or comparative financial statements are statements of financial
position of a business at different periods. These statements help in determining the profitability
of the business by comparing financial data from two or more accounting periods.

The data from two or more periods are updated side by side, which is why it is also
known as Horizontal Analysis. The advantage of such an analysis is that it helps investors to
identify the trends of business, check a company's progress and also compare it with that of its
competitors.
The financial data will be considered to be comparative only when the same set of
accounting principles are being used for preparing the statements.

Types of Comparative Statements

There are two types of comparative statements which are as follows

1. Comparative income statement

2. Comparative balance sheet

Comparative Income Statement

Income statements provide the details about the results of the operations of the business,
and comparative income statements provide the progress made by the business over a period of
a few years. This statement also helps in ascertaining the changes that occur in each line item of
income
the statement over different periods.

The comparative income statement not only shows the operational efficiency of the business
but also helps in comparing the results with the competitors, over different time periods. This is
possible by comparing the operational data spanning multiple periods of accounting.

The following points should be studied when analyzing a comparative income statement: -

1. Compare the increase or decrease in sales with a relative increase in the cost of goods sold

2. Studying the operational profits of the business

3. Overall profitability of the business can be analyzed by an increase or decrease in the net profit
Steps in preparing a comparative income statement

The below steps are followed

1. Specify absolute figures of all the items related to the accounting period under
consideration.
2. Determine the absolute change that has occurred in the items of the income statement. It can be achieve

year values.

3. Calculate the percentage change in the items present in the current statement with respect
to previous year statements.

The format of a comparative income statement is as follows:

Comparative Balance Sheet

Comparative balance sheet analyses the assets and liabilities of business for the current
year and also compares the increase or decrease in them in relative as well as absolute
parameters.

A comparative balance sheet not only provides the state of assets and liabilities in
different time periods, but it also provides the changes that have taken place in individual assets
and liabilities over different accounting periods.

The following points should be studied when analysing a comparative balance sheet

1. The present financial and liquidity position (Study working capital)

2. The financial position of the business in

the long term

3. The profitability of the business

Steps in preparing a comparative balance sheet

The below steps can be followed

1. Determine the absolute value of assets and liabilities related to the accounting periods.

2. Determine absolute changes in the items of the balance sheet relative to the accounting
periods in question.

3. Calculate the percentage change in assets and liabilities by comparing current year values
with values of previous accounting periods.
The format of a comparative balance sheet is as follows:
 CHAPTER 3

 SUMMARY
⮚Summary of Report
⮚Findings
⮚Suggestions
⮚Conclusion
⮚Bibliography
 COMPARITIVE BALANCE SHEET OF HSL
(Table – 1)

PARTICULARS 2019 2018 INCR. / DECR. %

SOURCES OF FUND
Capital 1250000 1250000 0 0
Reserve & Surplus 7562825 744802 118023 1.59
Loan Funds
Unsecured Loans 338887 554366 -215479 -38.87
Deferred Tax liability-net 131053 124605 6448 5.17
Total 9282765 9373773 91008 -0.97
APPLICATION OF FUNDS
Fixed Assets
Gross block 12457823 11864901 592922 5
Less : Depriciation 6987974 6071511 916463 15.09
Net Block 5469849 5793390 -323541 -5.58
Capital Work in Progress 266562 256860 9702 3.78
Decommissioned Assets 389 6444 -6055 -93.96
Total 5736800 6056694 -319894 -5.28
Investment 20000 20000 0 0
Current Assets, Loans and
Advances
Inventories 322006 242847 79159 32.6
Sundry Debtors 546551 558066 -11515 -2.6
Cash and Bank Balances 4055158 3745296 309862 8.27
Other Current Assets Accrued interest 137687 114148 23539 20.62
Loan and Advances 744441 714431 30010 4.2
Total 5805834 5374788 431055 8.02
Less : Current Liabilities and
Provisions
Current Liabilities 1739788 1667919 71869 4.31
Provision 606321 514858 91463 17.76
Total 2346109 2182777 163332 7.48
Net Current Assets 3459734 3192011 267723 8.39
Inter/Intra circle Remittance 66231 105068 -38837 -36.96
Total 9282765 9373773 -91008 -0.97
 INTERPRETATION OF TABLE- 1

The comparative balance sheet of the company reveals that during 2019 there has been on
decrease in fixed assets of Rs.319894 lakh i.e.-5.28% while long term liabilities to outsiders
have relatively decrease by Rs.91008 lakh i.e.-0.97. This fact depicts the policy of the company
is to not purchase fixed assets from the long —term sources of finance there by not affecting the
working capital.

Current assets have increased by Rs. 163,332 lakh and cash bank balances also increased
Rs.309,862 i.e.,8.27%, investments not increased on the other hand there has been an increase
in inventories amount Rs.79,159 lakh i.e.,32.60%. The current liabilities have increased by Rs.
163,332 lakhs i.e., 7.84%. This further confirms that the company has revised long term
finances.

The overall financial position of the company is satisfactory.

 COMPARITIVE BALANCE SHEET OF HSL
(Table – 2)

Column1 Column2 Column3 Column4 Column5

PARTICULARS 2018 2017 INCR. / DECR. %
SOURCES OF FUND
Capital 1250000 1250000 0 0
Reserve & Surplus 7444802 6825651 619151 9.07
Loan Funds
Unsecured Loans 554366 728393 -174027 -23.89
Deferred Tax liability-net 124605 170400 -45795 -26.88
Total 9373773 8974444 399329 4.45
APPLICATION OF FUNDS
Fixed Assets
Gross block 11864901 11169203 695698 6.23
Less : Depriciation 6071511 5150354 921157 17.89
Net Block 5793390 6018849 -225459 -3.75
Capital Work in Progress 256860 382048 -125188 -32.77
Decommissioned Assets 6444 7346 -902 -12.28
Total 6056694 6408243 -351549 -5.49
Investment 20000 20000 0 0
Current Assets, Loans and Advances
Inventories 242847 278922 -36075 -12.93
Sundry Debtors 558066 630205 -72139 -11.45
Cash and Bank Balances 3745296 3057948 687348 22.48
Other Current Assets Accrued interest 114148 63627 50521 79.4
Loan and Advances 714431 923207 -208776 -22.61
Total 5374788 4953909 420879 8.5
Less : Current Liabilities and Provisions
Current Liabilities 1667919 1612324 55595 3.45
Provision 514858 888223 -373365 -42.04
Total 2182777 2500547 -317770 -12.71
Net Current Assets 3192011 2453362 738649 30.11
Inter/Intra circle Remittance 105068 92839 12229 13.17
Total 9373773 8974444 399329 4.26
 INTERPRETATION OF TABLE-2

The comparative balance sheet of the company reveals that during 2018 there has been a
decrease in fixed assets of rupees 351549 that is -5.49 % while long term liabilities to outsiders
have increased by rupees 399329 that is 4.45%. There has also been an increase of rupees
619159 lakhs that is 9.07 % in reserves and surplus of the company. Thus, the company has
used long- term resources to finance additional working capital. The current assets have
increased by rupees 420879 lakhs that is 8.50% and cash and bank balance has increased by
rupees 68734 8 lakhs on the other hand the current liabilities have increased only by rupees
55595 lakhs that is 3.45%.
Inventors have decreased from rupees 278922
lakhs to rupees 242847 lakhs that is 12.93% which shows that there have increased in demand.
It is better for business.

The overall financial position of the company is satisfactory.

 COMPARITIVE BALANCE SHEET OF HSL
(Table – 3)

PARTICULARS 2017 2016 INCR. / DECR. %

SOURCES OF FUND
Capital 1250000 1250000 0 0
Reserve & Surplus 6825651 6027911 797740 13.23
Loan Funds
Unsecured Loans 728393 822089 -93696 -11.4
Deferred Tax liability-net 170400 304402 -134002 -44.02
Total 8974444 8404402 570042 6.78
APPLICATION OF FUNDS
Fixed Assets
Gross block 11169203 10410216 75987 7.29
Less : Depriciation 5150354 4233309 917045 21.66
Net Block 6018849 6176907 -158058 -2.56
Capital Work in Progress 382048 457226 -751178 -16.44
Decommissioned Assets 7346 8045 -699 -8.69
Total 6408243 6642178 -233935 -3.52
Investment 20000 20000 0 0
Current Assets, Loans and Advances
Inventories 278922 224535 54387 24.22
Sundry Debtors 630205 663703 -33498 -5.05
Cash and Bank Balances 3057948 2193113 864835 39.43
Other Current Assets Accrued interest 63627 14368 49259 342.84
Loan and Advances 923207 752160 171047 22.74
Total 4593909 3847879 1106030 28.47
Less : Current Liabilities and Provisions
Current Liabilities 1612324 1461541 150783 10.32
Provision 888223 738616 149607 20.26
Total 2500547 2200157 300390 13.65
Net Current Assets 2453362 1647722 805640 48.89
Inter/Intra circle Remittance 92839 94502 -163 -1.76
Total 89744444 8404402 570042 6.78
 INTERPRETATION OF TABLE-3

The comparative balance sheet of the company reveals that during 2017 there has been
a decrease in fixed assets of rupees 233935 lakhs that is 3.52 % while long term liabilities to
outsiders have increased by rupees 570042 Lakhs that is 6.78 %. There has also been increased
by rupees 797740 lakhs that is 13.23% in reserve and surplus of the company. Thus, the
company has used long-term resources to finance additional working capital.

The current assets have increased by rupees 110603 lakhs that is 28.74% and cash has
increased by rupees 864835 lakhs. On the other hand, there has been increased in inventory
amounting to rupees 54387 lakhs. The current liabilities have increased only by rupees 150783
lakhs that is 10.32%. These further confirm that the company has raised long term finance even
for the current assets resulting into an improvement in the liquidity position of the company.

The overall financial position of the company is satisfactory.

 SUMMARY

HSL is Government undertaking organization. The minimum objective is to build

different types of vessels up to 30000 DWT. Though it has an advantage of being marketing
where there is no competition, it is not in a position to earn satisfactory returns. The objectives
and policies of public sector enterprise have to meet the requirement has mentioned by different
related and unrelated activities and policies of Government. So, arriving a conclusion and
giving a suggestion regarding the performance of the organization is very restive capacity.
Since the company is very old land it is not able to achieve profits. It has huge Issues
accumulated over year. The company is not in a position to pay interest on its loans and personal
interests. It has resulted in default of payment of interest and repayment of loans.

The involvement of private contracts in ship building pairing activity should be

eliminated. So that capacity utilization of the organization or yard can be incurred and
manpower can be utilized.

The company has approached Government of India for ware of loans in to equity to
decrease of overall capital got of India has favourable considered. The above and agreed for the
writing of the interest and loans of Rs.44093crores and converted loans of Rs. 12000crores in to
equity.

The company has not yet implemented the above decision of the Government in the
books of accounts. Since it it will result in book profit which automatically attracts minimum
alternative take under income tax act. The company is approaching the ministry of finance for
examination of MAT (Minimum Alternative Tax) provision HSL.

Cash inventory and other financial resources are the main constituents to determine the
working capital requirement of m/s Hindustan Shipyard Limited.

It is observed that Hindustan Shipyard limited facing a shortage if cash that is the
prime instrument for many financial transactions. The debtors are increasing every year and the
company’s net salaries are decreasing. It is not the good sign for the company as the net salaries
are decreasing and debtors are increasing. It means that the company's debt collection policy
has to be improved.

In the same manner the creditors of the company are decreasing at a greater pace. It
reflects the reducing financial strengths of Hindustan Shipyard limited. It means that the
company's goodwill with the creditors is on danger.
 FINDINGS

• The level of current assets and current liabilities are fluctuating every year.
• In the financial year 2016-17, the working capital is increased and for the remaining years the
working capital is decreased

• Due to lack of order the inventory levels are pulling down

• Hindustan shipyard limited has no funds raised on short basis they have been for long term
investment

SUGGESTIONS

• The financial condition of the company is very weak. To improve the condition some major
steps, have to be taken like restructuring of the capital, reducing the cost of production.

• To adopt the new technology, accounting standards should also be included.

• The delivery datas are delayed too much, which should be checked.

• The net working capital is decreased every year hence it should increase the current assets.

• Efforts should be made to mobilize working capital inorder to meet the working capital
requirements.

• To bring more financial strength government should offer some stake of HSL to private
people for issue of bonds or debentures.

• The company should utilize the fixed assets effectively in order to generate profits in future.

• Capital restructuring proposals are to make on a big scale.

• Maximum utilization of capacity should be achieved idle should be reduced.

• HSL has to take measures to reduce or decrease the overhead expenditure

• The company has maintained high level of cash results it may lead to the liquidity of the
company.

• In overview the Hindustan Shipyard Limited is facing lot of threats from the functions is the
financial position. So that the organization is under losses.
 CONCLUSION

Hindustan Shipyard Limited is one of the oldest & repudiated SHIPYARDS in the
country for the years of history in ship building and ship repairs & during this period, Hindustan
Shipyard Limited has built 151 ships and repaired around 2000 vessels for various clients.
Hindustan Shipyard Limited has also be another yard for training large number of young
engineers and workers. Hindustan Shipyard Limited has thus achieved significant mile stones
and earned a name for itself as a ship builder of repute both within India & abroad.

The year 2008-2009 has also been a special one for the company in many ways. The
company achieved an earning of Rs498.28 crores deposit recession and restrictions imposed on
taking fresh orders since last two years. This has been possible due to improvements in
production and resource management.

Hindustan Shipyard Limited has travelled a large way in these years, and have no doubt
that this yard will continue to make significant contribution to the shipping industry & the
nation security in these to come.

As the study was completed with a feeling of satisfaction leaving behind it can be
amicably concluded that the company's performance is good but there is always some scope of
improvement and growth.

Therefore, with due consideration to analysis, findings and suggestions the company can
achieve greater success in terms of increase in sales on profitability and continuity of
growth and build more stronger equity.

This institution has helped me to see the actual scenario in manufacturing industry. The
employees in Hindustan Shipyard Limited are very co-operative so that we can clarify
our doubts. In the Finance department of Hindustan Shipyard Limited all the officials guided me
effectively through all the functions performed by the department.
 BIBLIOGRAPHY

• Annual Reports of HSL

www.hslvizag.in
www.wikipedia.com
www.hsl.com

• Journals and Magazines.

• Hindustan Shipyard Limited administrative reports for the years

• Management Accounting By R.S.N. PILLAI, BAGAVATHI