UNIVERSITY OF PETROLEUM & ENERGY STUDIES DEHRADUN

Assignement
Larsen & Toubro Infrastructure Co. Ltd. ACCOUNTING IN LOGISTICS & SUPPLY CHAIN MANAGEMENT
Subject Code : MBLF 911 Submitted to: Dr. Sumeet Gupta Associate Professor & Head Departement of Accounting & Finance Head Centre of Infrastructure & Project Finance Submitted by: Roll No.: Name : R600213028 Mohit Sharan

MBA (LSCM) Sem. I Batch 2013-15 Last Submission Date: 30th September, 2013
Page 1 of 19

Page 2 of 19

Table of Contents
Sr. No. Description Page No.

1.

Introduction Logistics & Supply Chain Management

4-5

2.

Company Profile Larsen & Toubro Group Larsen & Toubro Infrastructure Finance Co. Ltd. Board of Directors Business/Product Line

6 - 11

3.

Financial Data Balance Sheet Statement of Profit & Loss Market Value of Company Dividend Declared

12 - 15

4.

Competitors & SWOT Analysis Competitors SWOT Analysis

16 - 17

5.

Bibliography

18 19

Page 3 of 19

Chapter 1:

Introduction Logistics Supply Chain Management Accounting

Page 4 of 19

Logistics & Supply Chain Management

Logistics:
Logistics is the management of the flow of resources between the point of origin and the point of consumption in order to meet customer requirements. The resources managed in logistics can include physical items, such as food, materials, equipment, liquids, and staff, as well as abstract items, such as time, information. According to the Council of Logistics Management, logistics includes the integrated planning, control, realization, and monitoring of all internal and network-wide material, part, and product flow, including the necessary information flow, industrial and trading companies along the complete value-added chain (and product life cycle) for the purpose of conforming to customer requirements.

Supply Chain Management:

The integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders Stock & Lambert (2001) The management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole Christopher (1998)

Accounting:
Management accounting in supply chains (or supply chain controlling, SCC) is part of the supply chain management concept. This necessitates planning, monitoring, management and information about logistics and manufacturing processes throughout the value chain. The goal of management accounting in supply chains is optimizing these processes. This strategy focuses on supporting management with financial needs and helping in reducing costs in the whole process in order to deliver the goods at an affordable rate.

Page 5 of 19

Chapter 2:

Company Profile Larsen & Toubro Group Larsen & Toubro Infrastructure Finance Co. Ltd. Company Profile Corporate Governance Boards of Directors Business/Product Line

Page 6 of 19

L&T Group of Companies - Overview

Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest and most respected companies in India's private sector. More than seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business. L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings grow significantly. It continues to grow its global footprint, with offices and manufacturing facilities in multiple countries. The company's businesses are supported by a wide marketing and distribution network, and have established a reputation for strong customer support. L&T believes that progress must be achieved in harmony with the environment. A commitment to community welfare and environmental protection are an integral part of the corporate vision. In response to changing market dynamics, L&T has gone through a phased process of redefining its organization model to facilitate growth through greater levels of empowerment. The new structure is built around multiple businesses that serve the needs of different industries. L&T Hydrocarbon L&T Heavy Engineering L&T Constructions L&T Power Electrical Automation Machinery & Industrial Products Information Technology L&T Financial Services

Page 7 of 19

Larsen & Toubro Infrastructure Finance Co. Ltd.

Company Profile
L&T Infrastructure Finance Company Ltd. is in the business of providing financial products and services to its customers engaged in infrastructure development and construction, with a focus on power, roads, telecommunications, oil and gas and ports sectors in India. L&T Infra has played a fundamental role in financing projects, funded through long term investment instruments. L&T Infra also provides customized financial solutions such as Term Loans, Mezzanine Debt, Debentures and Securitized Debt. L&T Infra, incorporated in 2006, is registered as an Non-Banking Financial Company (NBFC) under the Reserve Bank of India (RBI) Act 1934, and is among the select few financial institutions classified as an Infrastructure Finance Company (IFC). Since 2011 it has been classified as a Public Finance Institution (PFI) by the Ministry of Corporate Affairs. It was set up with an initial capital of 500 crore (US$111 million) and has expanded at a rapid rate since inception to reach an asset base of ~Rs.152 bln. (USD 2.55 bln.) L&T Infra provides a wide range of customized debt & equity products as well as Financial Advisory Services for the development of infrastructure facilities in the country with a focus on Power, Roads, Tele-communication, Oil & Gas and Port sectors. L&T Infra functions with high Corporate Governance standards and Independent Directors constituting 50% of its Board and the key committees. As a testimony to its strong credentials and sound operating performance, L&T infra enjoys AA+ credit ratings by both CARE and ICRA. L&T Infra operates from is Mumbai, Delhi, Chennai and Hyderabad centers - and is managed by a team of experienced banking professionals, under the guidance of an eminent Board drawn from both L&T and banking industry

Page 8 of 19

Corporate Governance
L&T Infra follows the highest standards of corporate governance. It is governed by an independent board that ensures separation of policy formulation and supervision from the executive management. The company is guided by committees of Independent Directors and senior representatives from the parent company L&T. Its philosophy ensures compliance with the legal and regulatory frameworks, and adherence to transparency, accountability and professionalism.

As a part of Corporate Governance process, the L&T Infra board has formed the following Committees.

Investment and Credit Committee Asset Liability Management Committee Audit Committee Risk Management Committee Management Committee H.R. & Nomination Committee

Page 9 of 19

Board of Directors

Y. M. Deosthalee Director

B. V. Bhargava Director

A. K. Jain Director

N. Sivaraman Director

S.H. Bhojani Director

Shri M Damodaran, IAS (Retd) Director

Management Team

Mr. S. K. Maheshwari MD & Chief Executive L&T Infra

Mr. R. M. Bhujang Group Head Corporate & Regulatory Affairs

Mr. Akshayaa Singh EVP Equity Business

Mr. G. Krishnamurthy EVP Corporate Business Group

Mr. Shiva Rajaraman Chief Executive - IDF & National Head Strategic Initiatives

Dhananjay Yellurkar Head of RAMG

Page 10 of 19

Business/Product Line
L&T Infrastructure Finance Co. Ltd.

Project Finance

Equity Investment

Financial Advisory Services

Infrastructure Bonds

Term Loans, Debentures, Securitized Debt, Mezzanine Debt, Convertible Debentures, Preference Shares

Equity Shares Preference Shares Hybrid Debt & Equity Instruments

Corporate & Project Advisory Services Debt Advisory & Debt Arranging Services Capital Raising Advisory & Placement Services Strategic Advisory Services

Page 11 of 19

Chapter 3:

Financial Data Balance Sheet Statement of Profit & Loss Market Value of Company Dividend Declared

Page 12 of 19

L&T Infrastructure Finance Co. Ltd Balance Sheet

Page 13 of 19

Page 14 of 19

 Market Value of Company

In the backdrop of a difficult business environment causing a slow-down in the implementation of infrastructural projects in general, the Company achieved commendable growth during 201213, highlights of which are given below: Gross Assets against grant of financial assistance grew 35% from ` 1,091,350.33 Lakhs as at March 31, 2012 to ` 1,478,643.08 Lakhs as at March 31, 2013 Total income grew by 35% from ` 118,390.83 Lakhs in 2011-12 to ` 159,977.81 Lakhs in 2012-13. Profit Before Tax (PBT) grew by 24% from` 37,815.50 Lakhs in 2011-12 to ` 46,994.42 Lakhs in 2012-13. Profit After Tax (PAT) grew by 30% from ` 26,395.12 Lakhs in 2011-12 to ` 34,421.42 Lakhs in 2012-13

Dividend Declared
During the year, Company declared an interim dividend of ` 0.24 per Equity Share. Directors considered it financially prudent in the long-term interests of the Company to reinvest the profits into the business of the Company to build a strong reserve base and grow the business of the Company. No final dividend has therefore been recommended for the year ended March 31, 2013.

Page 15 of 19

Chapter 4:

Competitors & SWOT Analysis

Competitors SWOT Analysis

Page 16 of 19

Competitors

ICICI securities HDFC Bank Karvy Investor Services Ltd. Hyderabad SBI Capital Markets Ltd Bajaj Capital Bank of Maharashtra Sharepro Services (I) Pvt. Ltd.

SWOT Analysis Larsen & Toubro Co. Ltd. Strengths Diversified Business Strong Financial Position Strong Management Opportunities International Presence Alliance with Power Sector Favorable Tax Exemptions

Weakness Decreasing book value from oil and gas sector Cash Conversion Growth in Assets overweight growth in profits

Threats Technology Risk Global Slowdown Interest Rate at Risk

Page 17 of 19

Chapter 5:

Bibliography

Page 18 of 19

BIBILOGRAPHY Sites L&T Infrastructure Finance Co. Ltd.

http://www.ltinfra.com/financial-information.aspx

L&T Co. Ltd.

http://www.larsentoubro.com/lntcorporate/common/ui_templates/homepage_news.aspx?res=P _CORP

Page 19 of 19