Company Profile

L P Naval and Engineering Limited (Formerly known as Siddhi Vinayak Shipping Corporation Limited)
is engaged in the Business of Ship Building, Ship Repair, Fabrication, Heavy Engineering, Engineering
Infrastructure and services and Precision Machining. The company was incorporated in 2012 as a Ship
Building company and has in short span of time building itself as a reliable partner Manufacturing,
Engineering Services, Repair and Upgrade. The company is a part of the Diversified Laxmipati Group
which is engaged in Textiles, Real Estate, Power Sector, & Education. LP Naval and Engineering has
obtained the Industrial License from the Government of India for Manufacturing of War Ships.

The company has decided to create a modern shipbuilding and repair yard for small to medium vessels.
The MOU for the same has already been signed with the Govt. of Gujarat. The proposed Shipyard will
have state of the art manufacturing facilities including a “Ship-lift / Dry dock Facility” with a lift capacity
of 5500 tons, side transfer facilities, CNC plasma cutting machine, Bending rolls, Hydraulic press, Cold
shearing machine, Frame bending machine and steel processing machinery. The Shipyard will also have
blasting shop and fabrication shop covered bays equipped with 20T EOT Cranes. The manufacturing
process is in line with world-class standards

Key Services of the Company

1. Ship Repairs
2. Ship Building
3. General Engineering
4. Specialized in High Speed Aluminum Boats
5. Fiber Glass Yachts and Boats
 Ratio Analysis

1.Liquidity Ratio

Current ratio March 2018 March 2017

0.31 0.41

Interpretation:

The company has less amount of current assets compared to current liabilities.It’s very less than
the ideal ratio and comparing to the previous year record. The current ratio has declined from
0.41 to 0.31 crore.The reason behind this is short term borrowings has increased from 4.17 to
7.48,trade payable is also increasing. Also, compared to last year stock is higher means they are
not able to generate much more cash through selling their product due to which they have more
liability than asset or income.

Quick ratio March 2018 March 2017

0.23 0.33

Interpretation:

The quick ratio has declined from 0.33 to 0.23 and in both the year its below the ideal ratio. The
reason behind this is the company is highly relying on its inventory and other assets to pay its
short term liabilities .Short term borrowings has increased from 4.17 to 7.48. Though they have
generated more cash than previous year its too less to pay for short term liability.
 2.Solvency Ratio

Debt equity ratio March 2018 March 2017

0.77 0.39

Interpretation:

The debt equity ratio of the company is also rising from 0.39 to 0.77 , The ideal ratio is
lower or equal to 4. The reason behind the increment is the company has more borrowings and
liabilities.Trade payables are highly rising . But the shareholders fund are remained same
Though the company is obtaining higher cash it’s not able to leverage to increase equity returns.

3. Profitability ratio

Return on Asset=NP/total assets*100 (march 2018)

= -1.13/179.31*100

=-0.63

Return on Assets=0.05/156.13*100(march 2017)

=0.032

ROA March 2018 March 2017

-0.63 0.032

Interpretation:

As per the calculation the return on assets is declining to -0.63 from 0.032.The company is not
managing its assets to produce greater amount of net income. Net profit of the company went
down from 0.05 to -1.13.The money used by the company to purchase its assets are not
effectively utilized to generate profit.
 Return on Equity

March 2018 March 2017

-11.58 0.44

Interpretation:

Return on equity is totally declining and showing negative value i.e from 0.44 to -11.58. The
earning is declining from 0.05 to -1.13 which shows that the shareholders fund are not properly
utilized . The stock is not appreciated in the company . We can conclude this by looking into the
earning per share that is in negative value -1.97 in the current year.

Return on Capital Employed

March 2018 March 2017

-8.61 2.09

Interpretation:

Return on capital employed measures how company can generate profit from its capital
employed by comparing net profit to the capital employed . By the figure shown above its clearly
visible that from 2.09 to -8.61 decrement is the result of company that it is not utilizing its
capital properly.

As the company is going in huge net loss that is 11.32 crore and its current assets are too less
comparing its current liabilities that is 79.81 crore .The company is more on debt rather than
earning profit through which they are not able to pay to its shareholders.
Cash Flow analysis of the company