Corporate governance is a system, practices and processes which provides a framework for attaining a company’s objectives. Practically; it involves every sphere of management from action plans and internal controls of performance measurement and corporate disclosures. Companies that strive high level of corporate governance may reduce many type of risks that arise from daily operations. Such companies are able to attract investors, by better performance and results, whose investment could help finance further growth and expansion plans. For investors one of the most important aspect while making an investment decision is level of implementation of corporate governance principles (public disclosure of information, protection of shareholder rights and equal treatment of shareholders) and profitability, which ensures return on their investment. The aims of this study are to link a relationship between corporate governance and its impact on profitability of the companies. A company can increase the profitability and returns, improves its goodwill and also improves the relations with the key stakeholders such as employees, investors, company partners, customers etc through the application of the principles of corporate governance. This paper also shows the impact of corporate governance on profit with the help of case study. This case study will examine the shareholder and government related practices of Larsen & Toubro Ltd.