LARSEN & TOUBRO LIMITED
Regd. Office : L&T House, Ballard Estate, Mumbai 400 001
NOTICE
NOTICE IS HEREBY GIVEN THAT the Sixty-sixth Annual General
Meeting of LARSEN & TOUBRO LIMITED will be held at Birla
Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 on
Friday, August 26, 2011 at 3:00 p.m. to transact the following
business :-
1) To consider and adopt the Balance Sheet as at March 31,
2011, the Profit & Loss Account for the year ended on
that date and the Reports of the Board of Directors and
Auditors thereon;
2) To declare a dividend on equity shares;
3) To appoint a Director in place of Mr. K. Venkataramanan,
who retires by rotation and is eligible for re-appointment;
4) To appoint a Director in place of Mr. S. Rajgopal, who
retires by rotation and is eligible for re-appointment;
5) To appoint a Director in place of Mr. A. K. Jain, who retires
by rotation and is eligible for re-appointment;
6) To appoint a Director in place of Mr. S. N. Talwar, who
retires by rotation and is eligible for re-appointment;
7) To consider and, if thought fit, to pass with or without
modification(s), as an ORDINARY RESOLUTION
the
following:
“RESOLVED THAT Mr. S. N. Subrahmanyan be and is hereby
appointed as a Director retiring by rotation.”
8) To consider and, if thought fit, to pass with or without
modification(s), as an ORDINARY RESOLUTION
the
following:
“RESOLVED THAT pursuant to Section 269 and other
applicable provisions, if any, of the Companies Act, 1956,
read with Schedule XIII of the said Act, approval be and is
hereby granted to the appointment of Mr. Ravi Uppal, as
the Whole-time Director of the Company with effect from
November 1, 2010 upto and including October 31, 2015.
RESOLVED FURTHER THAT Mr. Ravi Uppal, in his capacity
as the Whole-time Director, be paid remuneration as may
be fixed by the Board, from time to time, within the limits
approved by the members as per the details given in the
explanatory statement.”
9) To consider and, if thought fit, to pass with or without
the
modification(s), as an ORDINARY RESOLUTION
following:
“RESOLVED THAT pursuant to Section 269 and other
applicable provisions, if any, of the Companies Act,
1956, read with Schedule XIII of the said Act, approval
be and is hereby granted to the appointment of Mr. S.
N. Subrahmanyan, as the Whole-time Director of the
Company with effect from July 1, 2011 upto and including
June 30, 2016.
as may be fixed by the Board, from time to time, within the
limits approved by the members as per the details given in
the explanatory statement.”
10) To consider and, if thought fit, to pass with or without
the
modification(s), as an ORDINARY RESOLUTION
following:
“RESOLVED THAT pursuant to the provisions of Sections 198,
309, 310, 311 and other applicable provisions, if any, of the
Companies Act, 1956 (including any statutory modification
or re-enactment thereof for the time being in force) read
with Schedule XIII of the said Act, approval be and is hereby
accorded to the Board of Directors (hereinafter referred
as “Board” which term shall be deemed to include any
committee thereof) to pay to the Chairman & Managing
Director, Chief Executive Officer & Managing Director, if
any, Deputy Managing Director, if any and Whole-time
Directors of the Company effective from October 1, 2011,
such remuneration comprising of salary, commission,
perquisites & allowances, as may be determined by the
Board from time to time within the maximum limits as
mentioned in the Explanatory Statement and the consent
of the Company be and is hereby also accorded to holding
an office or place of profit or continue to hold an office
or place of profit as Directors, nominated or as may be
nominated by the Company, from time to time, on the
Boards of its subsidiary/associate companies.”
11) To appoint Auditors and fix their remuneration and for
that purpose to pass with or without modification(s), as a
SPECIAL RESOLUTION the following:
“RESOLVED THAT the Company‘s Auditors, M/s Sharp &
Tannan, Chartered Accountants (ICAI Registration No.
109982W), who retire but, being eligible, offer themselves
for re-appointment, be and are hereby re-appointed as
Auditors of the Company including all its branch offices for
holding the office from the conclusion of this Meeting until
the conclusion of the next Annual General Meeting at a
remuneration of ` 90,00,000/- (Rupees Ninety Lakh Only)
exclusive of service tax, traveling and other out of pocket
expenses.”
By Order of the Board of Directors
For LARSEN & TOUBRO LIMITED
N. HARIHARAN
COMPANY SECRETARY
Mumbai, May 19, 2011
RESOLVED FURTHER THAT Mr. S. N. Subrahmanyan, in his
capacity as the Whole-time Director, be paid remuneration
Registered Office:
L&T House, Ballard Estate, Mumbai - 400 001
1
Notes:
[a] The information required to be provided under the Listing
Agreement entered into with various Stock Exchanges,
regarding the Directors who are proposed to be appointed/
re-appointed and the relative Explanatory Statement
pursuant to Section 173[2] of the Companies Act, 1956 in
respect of the business under items 7 to 11 set out above
are annexed hereto.
[b] A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED
TO APPOINT A PROXY TO ATTEND AND VOTE ON A POLL
INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A
MEMBER.
[c] The Register of Members and Transfer Books of the
Company will be closed from Friday, August 19, 2011 to
Friday, August 26, 2011 (both days inclusive).
[d] Members are requested to furnish bank details, e-mail
address, change of address etc. to Sharepro Services (India)
Private Limited at 13 AB, Samhita Warehousing Complex,
2nd floor, Sakinaka Telephone Exchange Lane, Off. Andheri
- Kurla Road, Sakinaka, Andheri (East), Mumbai - 400
072, who are the Company’s Registrar and Share Transfer
Agents so as to reach them latest by Thursday, August
18, 2011, in order to take note of the same. In respect of
members holding shares in electronic mode, the details
as would be furnished by the Depositories as at the close
of the aforesaid date will be considered by the Company.
Hence, members holding shares in demat mode should
update their records at the earliest.
[e] All documents referred to in the accompanying Notice and
the Explanatory Statement are open for inspection at the
Registered Office of the Company on all working days,
except Saturdays, between 11.00 a.m. and 1.00 p.m. up to
the date of the Annual General Meeting.
[f] Members/Proxies should bring their attendance slips duly
completed for attending the Meeting.
[g] Pursuant to Section 205A(5) of the Companies Act, 1956,
the unpaid dividends that are due for transfer to the
Investor Education and Protection Fund are as follows:
Dividend
No.
Date of
Declaration
For the year
ended
Due for
Transfer on
72
23.09.2004
31.03.2004
29.10.2011
73 (Spl.)
25.10.2004
31.03.2005
01.12.2011
Company/its Registrar, for obtaining payments thereof
atleast 20 days before they are due for transfer to the said
fund.
[h]
Investor Grievance Redressal:
The Company has designated an exclusive e-mail id viz.
igrc@larsentoubro.com to enable Investors to register their
complaints, if any.
[i] The Ministry of Corporate Affairs (MCA) has taken a “Green
Initiative in Corporate Governance” allowing paperless
compliances by Companies through electronic mode.
Companies are now permitted to send various notices /
documents to its shareholders through electronic mode
to the registered e-mail addresses of shareholders. This
move by the Ministry is welcome since it will benefit the
society at large through reduction in paper consumption
and contribution towards a Greener Environment. It will
also ensure prompt receipt of communication and avoid
loss in postal transit. Keeping in view the underlying theme
and the circular issued by MCA, we propose to send all
documents to be sent to Shareholders like General Meeting
Notices (including AGM), Audited Financial Statements,
Directors’ Report, Auditors’ Report, etc. henceforth to
the shareholders in electronic form, to the e-mail address
provided by them and made available to us by the
Depositories. Please note that these documents will also
be available on the Company’s website www.larsentoubro.
com for download by the shareholders. The physical copies
of the Annual Report will also be available at our Registered
Office in Mumbai for inspection during office hours. In case
you desire to receive the above mentioned documents in
physical form, you are requested to send an e-mail to igrc@
larsentoubro.com. Please note that you will be entitled to
be furnished free of cost, with a copy of the Balance Sheet
of the Company and all other documents required by law
to be attached thereto including the Profit & Loss Account
and Auditors’ Report, upon receipt of a requisition from
you, any time, as a member of the Company.
Members who have not registered their e-mail addresses
so far are requested to register their e-mail addresses, in
respect of electronic holdings with the Depository through
their concerned Depository Participant. Members who hold
shares in physical form are requested to register their e-mail
addresses with Sharepro Services (India) Private Limited,
Registrar and Share Transfer Agents of the Company.
EXPLANATORY STATEMENT
26.08.2005
31.03.2005
01.10.2012
25.08.2006
31.03.2006
30.09.2013
13.03.2007
31.03.2007
18.04.2014
As required by Section 173(2) of the Companies Act, 1956, the
following Explanatory Statement sets out material facts relating
to the business under Item Nos. 7 to 11 of the accompanying
Notice dated May 19, 2011.
03.07.2007
31.03.2008
08.08.2014
Item No. 7 :
24.08.2007
31.03.2007
29.09.2014
29.08.2008
31.03.2008
05.10.2015
28.08.2009
31.03.2009
04.10.2016
26.08.2010
31.03.2010
02.10.2017
Mr. S. N. Subrahmanyan was appointed as a Director with effect
from July 1, 2011, in the casual vacancy that will be caused on
account of retirement of Mr. K. V. Rangaswami on June 30,
2011. Pursuant to Section 262 of the Companies Act, 1956,
Mr. S. N. Subrahmanyan will hold the office up to the date
of the forthcoming Annual General Meeting. The Company
has received a Notice in writing from a member under the
provisions of Section 257 of the Companies Act, 1956, proposing
74
75
76 (Int.)
77 (Spl.)
78
79
80
81
Members who have not encashed their dividend warrants
pertaining to the aforesaid years may approach the
2
the candidature of Mr. S. N. Subrahmanyan for the office of a
Director.
Except Mr. S. N. Subrahmanyan none of the Directors is
concerned or interested in the resolution.
Item No. 8 :
The Board of Directors of the Company at its Meeting held on
October 18, 2010, appointed Mr. Ravi Uppal, as a Whole-time
Director of the Company with effect from November 1, 2010
upto and including October 31, 2015, subject to the approval of
the members in the Annual General Meeting.
Mr. Ravi Uppal is a Mechanical Engineer from the prestigious
Indian Institute of Technology (IIT) in Delhi and an alumnus of
Indian Institute of Management (IIM), Ahmedabad. He has also
completed his Advanced Management Program at Wharton
Business School, USA.
Before taking on his present responsibility with the L&T Group,
Mr. Uppal spent over 22 years with the ABB Group and was
their President - Global Markets and Member of the ABB Group
Executive Committee based in Switzerland.
From 2001 to 2007, Mr. Uppal was Vice Chairman & Managing
Director of ABB in India and during his tenure, the operations
saw a meteoric, seven-fold growth. Under his leadership, ABB
was placed among India’s leading Companies and won many
accolades.
Preceding this tenure with ABB, he established and developed
Volvo’s operations in India from scratch as Volvo’s Managing
Director & Country Manager, ushering in a new era and concept
of commercial transportation in the country. Prior to taking up
the Volvo challenge, Mr. Uppal served with ABB for 16 years in
several senior management capacities in India, the Middle East,
North Africa, Germany and Sweden.
Amongst the many honours he has received, Mr. Uppal was
awarded the Royal Order of the Polar Star by the King of
Sweden and named a Knight of this Order, in recognition
of his invaluable services to Sweden. He was also bestowed
the Marketing Award 2005 by the Institute of Marketing
Management, India and named among ‘India’s Best of the Best’
by the magazine ‘Smart Manager’. He has also been honoured
as a Distinguished Alumnus by IIT (Delhi).
Mr. Uppal is actively involved with several industry forums and
academic institutions. He also takes a keen interest in social and
community development initiatives.
Part III, of Schedule XIII of the Companies Act, 1956, provides
that the appointment and remuneration of Managing Directors
and Whole-time Directors in accordance with Part I and Part II
of the Schedule shall be subject to approval by resolution of the
shareholders in a General Meeting.
At the Annual General Meetings of the Company held on
September 23, 2004, and August 25, 2006, the shareholders
have fixed the maximum limits within which the Board was
delegated authority to decide the remuneration of Whole-time
Directors of the Company. Pursuant to this, the Board has fixed
the remuneration payable to Mr. Ravi Uppal during his tenure
as Whole-time Director.
shall be entitled to the following:
Salary : ` 5,50,000 (Rupees Five Lakh Fifty thousand only) per
month in the scale of ` 4,00,000 - ` 25,000 - ` 6,00,000 - ` 30,000 -
` 7,50,000, with the annual increment due on April 1 every year.
Commission : Upto 0.1% per annum of the operating net profits
after tax of the Company for and from the year 2010-11 on a
pro-rata basis and excluding profits on separation of Company’s
business, sale of Company’s stake in subsidiary and associate
companies, including Joint venture Companies.
The actual commission will be decided, based on parameters set
periodically, by the Board, which will include the performance
of the Company, the business and the individual.
Perquisites : ` 12 lakh per annum including free furnished
accommodation or upto ` 9 lakh excluding free furnished
accommodation.
The above perquisites will exclude value of Stock Option
benefits, if any, computed as per Income Tax Act/Rules, which
will be borne by the Company.
Others : Company’s contribution to retirement funds, official
use of car / driver and communication facilities for Company’s
business as per rules of the Company.
Accordingly, the Resolution at Item No. 8 is proposed for
approval of the members for appointment of Mr. Ravi Uppal, as
the Whole-time Director as contemplated by Part III of Schedule
XIII of the Companies Act, 1956, and other applicable provisions,
if any.
The agreement entered into by the Company with Mr. Ravi
Uppal, in respect of his appointment as Whole-time Director,
contains terms and conditions of his appointment including
remuneration.
The Board recommends approval of the appointment of
Mr. Ravi Uppal, as Whole-time Director of the Company.
Mr. Ravi Uppal, the Whole-time Director of the Company, being
the appointee, is interested in the proposed Resolution.
The Agreement entered into with Mr. Ravi Uppal will be open for
inspection by members at the Registered Office of the Company
on all working days [except Saturdays] between 11.00 a.m. and
1.00 p.m. up to the date of the Annual General Meeting.
This explanation together with the accompanying Notice is and
should be treated as an abstract of the terms of appointment
of Mr. Ravi Uppal, as the Whole-time Director of the Company
under Section 302 of the Companies Act, 1956.
Item No. 9 :
The Board of Directors of the Company at its Meeting held on
April 6, 2011, appointed Mr. S. N. Subrahmanyan, as a Whole-
time Director of the Company with effect from July 1, 2011
upto and including June 30, 2016, subject to the approval of the
members in the Annual General Meeting.
Mr. S. N. Subrahmanyan, 51, is a civil engineer with post
graduate qualifications in business management. He joined L&T
in 1984 starting off as project planning engineer, and was soon
handpicked for senior responsibilities.
As from November 1, 2010, during the period of this agreement
and so long as the Whole-time Director performs his services as
per the terms and conditions provided by this agreement, he
Mr. Subrahmanyan is currently Senior Vice President and
Head - Buildings & Factories and Infrastructure Independent
Companies.
3
The Buildings & Factories business has grown rapidly under Mr.
Subrahmanyan’s leadership, and has executed many prestigious
jobs such as ICICI Bank, National Stock Exchange Buildings and
Tidel Park.
Mr. Subrahmanyan’s notable achievements include playing
a pivotal role in securing and managing EPC contracts for
construction of four major international airports in India at
Bangalore, Hyderabad, Delhi and Mumbai.
Part III, of Schedule XIII of the Companies Act, 1956, provides
that the appointment and remuneration of Managing Directors
and Whole-time Directors in accordance with Part I and Part II
of the Schedule shall be subject to approval by resolution of the
shareholders in a General Meeting.
At the Annual General Meetings of the Company held on
September 23, 2004, and August 25, 2006, the shareholders
have fixed the maximum limits within which the Board was
delegated authority to decide the remuneration of Whole-time
Directors of the Company. Pursuant to this, the Board has fixed
the remuneration payable to Mr. S. N. Subrahmanyan during his
tenure as Whole-time Director.
As from July 1, 2011, during the period of this agreement and
so long as the Whole-time Director performs his services as per
the terms and conditions provided by this agreement, he shall
be entitled to the following:
Salary : ` 5,00,000 (Rupees Five Lakh only) per month in the scale
of ` 4,00,000 - ` 25,000 - ` 6,00,000 - ` 30,000 - ` 7,50,000 with
the annual increment due on April 1 every year.
Commission : Upto 0.1% per annum of the operating net profits
after tax of the Company for and from the year 2011-12 on a
pro-rata basis and excluding profits on separation of Company’s
business, sale of Company’s stake in subsidiary and associate
companies, including Joint venture Companies.
The actual commission will be decided, based on parameters set
periodically, by the Board, which will include the performance
of the Company, the business and the individual.
Perquisites : ` 12 lakh per annum including free furnished
accommodation or upto ` 9 lakh excluding free furnished
accommodation.
The above perquisites will exclude value of Stock Option
benefits, if any, computed as per Income Tax Act/Rules, which
will be borne by the Company.
Others : Company’s contribution to retirement funds, official
use of car / driver and communication facilities for Company’s
business, as per rules of the Company.
Accordingly, the Resolution at Item No. 9 is proposed for approval
of the members for appointment of Mr. S. N. Subrahmanyan, as
the Whole-time Director as contemplated by Part III of Schedule
XIII of the Companies Act, 1956, and other applicable provisions,
if any.
The agreement to be entered into by the Company with
Mr. S. N. Subrahmanyan, in respect of his appointment as
Whole-time Director, will contain the terms and conditions of
his appointment including remuneration.
The Board recommends approval of the appointment of Mr. S.
N. Subrahmanyan, as Whole-time Director of the Company.
Mr. S. N. Subrahmanyan, the proposed Whole-time Director of
the Company, being the appointee, is interested in the proposed
Resolution.
The Agreement to be entered into with Mr. S. N. Subrahmanyan
will be open for inspection by members at the Registered Office
of the Company on all working days [except Saturdays] between
11.00 a.m. and 1.00 p.m. up to the date of the Annual General
Meeting.
This explanation together with the accompanying Notice is and
should be treated as an abstract of the terms of appointment
of Mr. S. N. Subrahmanyan, as the Whole-time Director of the
Company under Section 302 of the Companies Act, 1956.
Item No. 10 :
At the Annual General Meetings of the Company held on
September 23, 2004 and August 25, 2006, the shareholders
had approved the overall limit for payment of remuneration
to Chairman & Managing Director and Whole-time Directors
of the Company within the limits and subject to the terms and
conditions set out in the resolution passed at that meeting read
with the explanatory statement.
Since then, the Company has made remarkable progress in its
various businesses, significantly increased its revenues and profits
and has considerably enhanced shareholder value. The strategic
plan for the period 2010-15 (Lakshya 2015) has identified for
each business unit strategy and strategic initiatives, including
detailed assessment of portfolios, organizational structure and
capital structure. The assessment revealed notable opportunities
across all business segments of the Company. The Company’s
plans involve growing aggressively on a large revenue base
both in domestic and international markets. All these involve
managing complexities, attracting talent
including global
talent, managing the ongoing transformation and working
out a simplified structure to manage the business/ Company to
sustain profitable growth.
Considering the above, it is proposed to revise the existing limits
of remuneration payable to Chairman & Managing Director,
Chief Executive Officer & Managing Director, if any, Deputy
Managing Director, if any and Whole-time Directors of the
Company.
The enhanced limits of remuneration will, however, continue
to be subject to the condition that the total managerial
remuneration shall not exceed 5% of the net profits of the
Company for each of the Managing/ Whole-time Directors of
the Company and 10% of the net profits of the Company for all
the Managing/Whole-time Directors of the Company.
The Board of Directors of the Company appoint/re-appoint
the Chairman & Managing Director, Chief Executive Officer
& Managing Director, if any, Deputy Managing Director, if
any and Whole-time Directors on the Board after receiving
recommendation from the Nomination and Remuneration
Committee, subject to the approval of the members in General
Meeting.
4
The Nomination and Remuneration Committee revises the
remuneration payable to the Chairman & Managing Director,
Chief Executive Officer & Managing Director, if any, Deputy
Managing Director, if any and Whole-time Directors based on
overall performance of the Company, the concerned business
and the performance of the individual Director.
In order to fix/revise appropriately the remuneration payable
to the Chairman & Managing Director, Chief Executive Officer &
Managing Director, if any, Deputy Managing Director, if any and
Whole-time Directors from time to time, the Board of Directors
recommend passing a comprehensive Resolution to authorize
the Board to approve and fix/revise suitably the remuneration
payable to the Chairman & Managing Director, Chief Executive
Officer & Managing Director, if any, Deputy Managing Director,
if any and Whole-time Directors from time to time.
Specific approval of the members will be sought for appointment/
re-appointment of the Chairman & Managing Director, Chief
Executive Officer & Managing Director, if any, Deputy Managing
Director, if any and Whole-time Directors individually in General
Meetings.
The agreement that will be entered into with the Chairman
& Managing Director, Chief Executive Officer & Managing
Director, if any, Deputy Managing Director, if any and Whole-
time Directors will contain terms & conditions as to the powers
and duties of the Chairman & Managing Director, Chief
Executive Officer & Managing Director, if any, Deputy Managing
Director, if any and Whole-time Directors, provision for earlier
determination of the appointment by either party by giving six
months notice in writing to the other party, non-participation in
any selling agency of the Company etc.
The standard terms and conditions which will be included in
the agreements that will be entered into with the Chairman
& Managing Director, Chief Executive Officer & Managing
Director, if any, Deputy Managing Director, if any and Whole-
time Directors, inter alia, will contain the following:
1.
The Chairman & Managing Director, Chief Executive
Officer & Managing Director, if any, Deputy Managing
Director, if any and Whole-time Directors shall, subject
to the supervision and control of the Board of Directors
of the Company, manage the business and affairs of the
Company.
2.
Period of Agreement: As may be determined by the Board,
but not exceeding 5 (five) years.
3. Remuneration Payable:
[a] Salary:
To be fixed by the Board in the scale of ` 16,00,000
- ` 2,00,000 - ` 28,00,000 per month for Chairman
& Managing Director, in the scale of ` 12,00,000 -
` 1,60,000 - ` 21,60,000 per month for Chief Executive
Officer & Managing Director, if any, in the scale of
` 10,00,000 - ` 1,25,000 - ` 16,25,000 per month for
Deputy Managing Director, if any and in the scale
of ` 6,50,000 - ` 75,000 - ` 10,25,000 – ` 1,00,000 –
` 15,25,000 per month for Whole-time Directors.
5
[b] Commission:
On the net profits after tax of the Company and
excluding extraordinary/ exceptional profits or losses
arising from sale of business/ assets, sale of shares in
Subsidiary & Associate Companies/ Special Purpose
Vehicles/ Joint Ventures and also from sale of strategic
investments/ adjustment in valuation of strategic
investments, to be fixed by the Board. Upto 0.30%
p.a. for Chairman & Managing Director, upto 0.25%
p.a. for Chief Executive Officer & Managing Director,
if any, Upto 0.18% p.a. for Deputy Managing Director,
if any and upto 0.15% p.a. for Whole-time Directors.
[c] Perquisites and Allowances:
[i] The Chairman & Managing Director, Chief Executive
Officer & Managing Director, if any, Deputy Managing
Director, if any and Whole-time Directors shall be
entitled to perquisites consisting of, inter alia, free
furnished accommodation (Company owned or leased/
rented) or house rent in lieu thereof, gas, electricity,
water, furnishings, medical reimbursement and leave
travel concession for self and family, club fees, medical
and personal accident insurance, benefits applicable
to other employees etc. in accordance with the rules
of the Company. The aforesaid perquisites may be in
the form of reimbursement or allowance but will be
restricted to ` 25 lakh per annum excluding perquisite
value of free furnished accommodation for Chairman &
Managing Director, up to ` 20 lakh per annum excluding
perquisite value of free furnished accommodation for
Chief Executive Officer & Managing Director, if any, up
to ` 18 lakh per annum excluding perquisite value of
free furnished accommodation for Deputy Managing
Director, if any, up to ` 15 lakh per annum excluding
perquisite value of free furnished accommodation for
Whole-time Directors. For the purpose of calculating
the above ceiling, the perquisite shall be evaluated as
per Income-tax Rules, 1962, wherever applicable.
The above perquisites will exclude value of Stock
Option benefits, if any, computed as per Income Tax
Act/Rules, which will be borne by the Company.
[ii] The Chairman & Managing Director, Chief Executive
Officer & Managing Director, if any, Deputy Managing
Director, if any and Whole-time Directors shall be
entitled to Company’s contribution to Provident Fund,
Superannuation Fund and Annuity Fund, benefits of
Gratuity and Pension Scheme for Senior Management
Staff, earned leave and encashment of earned leave
at the end of the tenure and long service awards, as
per the rules of the Company and these shall not be
included in the computation of perquisites.
[iii] Company car with driver (owned/leased or hired)
for use on Company’s business, telephone and other
communication facilities at residence, will not be
considered as perquisites.
[iv] In the event of loss or inadequacy of profits in any
financial year, the remuneration payable to the
Chairman & Managing Director, Chief Executive
Officer & Managing Director, if any, Deputy Managing
Director, if any and Whole-time Directors shall not
exceed the maximum limits prescribed under Schedule
XIII of the Companies Act, 1956.
[v] The Chairman & Managing Director, Chief Executive
Officer & Managing Director, if any, Deputy Managing
Director, if any and Whole-time Directors, so long as
they function as such, shall not be paid any sitting fees
for attending meetings of the Board of Directors or
Committees thereof.
[vi] The Company shall reimburse to the Chairman
& Managing Director, Chief Executive Officer &
Managing Director, if any, Deputy Managing Director,
if any and Whole-time Directors, entertainment,
travelling and all other expenses incurred by them for
the business of the Company.
[d] The limits stipulated herein above are the maximum
limits and the Board may, on the recommendation of the
Nomination and Remuneration Committee, pay to the
Chairman & Managing Director, Chief Executive Officer &
Managing Director, if any, Deputy Managing Director, if
any and Whole-time Directors appropriate remuneration
commensurate with their authorities and responsibilities
and revise the same from time to time within the maximum
limits stipulated by this resolution.
[e] The Board recommends passing of the Ordinary Resolution
set out at item No.10 of the Notice convening the Meeting.
Mr. A.M. Naik, the Chairman & Managing Director of the
Company, Mr. Y.M. Deosthalee, Mr. K. Venkataramanan,
Mr. V.K. Magapu, Mr. M.V. Kotwal, Mr. Ravi Uppal, Mr. S. N.
Subrahmanyan on his appointment with effect from July 1,
2011, who are the Whole-time Directors of the Company,
may be deemed to be concerned or interested in the
resolution at item No. 10 insofar as it relates to variation in
the maximum limits of remuneration applicable to them.
This explanation together with the accompanying Notice is
and should be treated as an abstract of the variation of the
terms of contracts under Section 302 of the Companies Act,
1956.
Item No. 11 :
Section 224A of the Companies Act, 1956 provides that in the
case of a company in which not less than 25% of the subscribed
share capital is held whether singly or in any combination, by:
a] a public financial institution or a Government Company or
Central Government or any State Government, or
b] any financial or other institution established by any
Provincial or State Act in which a State Government holds
not less than 51% of the subscribed share capital, or
c]
a nationalized bank or an insurance company carrying on
general insurance business;
the appointment or re-appointment at each Annual General
Meeting of an Auditor or Auditors shall be made by a Special
Resolution.
The total share capital held by public financial institutions,
nationalized banks and nationalized insurance companies is
over 25% of the subscribed share capital of the Company. It is
therefore necessary that the re-appointment of Auditors should
be made by a Special Resolution.
The Auditors, have informed us vide letter dated May 13, 2011,
that their appointment if made would be within the limits
prescribed u/s. 224(1B) of the Companies Act, 1956.
The Auditors have confirmed that they have subjected
themselves to the peer review process of Institute of Chartered
Accountants of India (ICAI) and hold valid certificate issued by
the Peer Review Board of the ICAI.
The Directors recommend the Resolution for approval of the
shareholders.
None of the Directors of the Company is concerned or interested
in the Resolution.
By Order of the Board of Directors
For LARSEN & TOUBRO LIMITED
N. HARIHARAN
COMPANY SECRETARY
Mumbai, May 19, 2011
Registered Office:
L&T House, Ballard Estate, Mumbai - 400 001
6
(ANNEXURE TO NOTICE DATED MAY 19, 2011)
DETAILS OF DIRECTORS SEEKING APPOINTMENT / RE-APPOINTMENT AT THE
FORTHCOMING ANNUAL GENERAL MEETING
(PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT)
Name of the Director
Mr. K. Venkataramanan
Mr. Ravi Uppal
Mr. S. N. Subrahmanyan
Date of Birth
December 11, 1944
May 9, 1952
March 16, 1960
Date of Appointment on
the Board
May 28, 1999
November 1, 2010
With effect from July 1, 2011
Qualifications
B. Tech. – IIT, New Delhi
B. Tech (Electrical and
Electronics), MBA - IIM, IFL
– Sweden, AMP
B.Sc., Engg. (Civil) & MBA (Finance)
Expertise
Directorships held in other
public companies including
private companies which
are subsidiaries of public
companies (excluding
foreign and private
companies)
Vast experience in Product
Engineering & Project
Management.
Vast experience in general
management in various
MNCs.
1. L&T-Valdel Engineering
Limited
2. L&T Powergen Limited
3. Nabha Power Limited
4. Raykal Aluminium
1. L&T Power Limited
2. L&T-Sargent & Lundy
Limited
3. L&T Howden Private
Limited
Company Private Limited
4. L&T-MHI Boilers Private
5. Kesun Iron And Steel
Limited
Company Private Limited
5. L&T-MHI Turbine
6. L&T Sapura Offshore
Private Limited
7. L&T Sapura Shipping
Private Limited
Member
Audit Committee
1. Nabha Power Limited
Memberships/
Chairmanships of
committees across all
companies
Generators Private
Limited
Chairman
Audit Committee
1. L&T Power Limited
Member
Audit Committee
1. L&T - Sargent & Lundy
Limited
Vast experience in Contracts &
Costing and Project Management.
-
-
Shareholding of Non-
Executive Directors
Not Applicable
Not Applicable
Not Applicable
Relationships between
directors inter-se
Nil
Nil
Nil
7
(ANNEXURE TO NOTICE DATED MAY 19, 2011)
DETAILS OF DIRECTORS SEEKING APPOINTMENT / RE-APPOINTMENT AT THE
FORTHCOMING ANNUAL GENERAL MEETING
(PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT)
Name of the Director
Mr. S. Rajgopal
Date of Birth
July 17, 1935
Mr. S. N. Talwar
November 21, 1937
Date of Appointment on
the Board
November 23, 2001
July 6, 2004
Mr. A. K. Jain
April 18, 1946
May 29, 2008
Qualifications
M.A., I.A.S. (Retd.)
Solicitor, Incorporated Law
Society; Bombay, B.Com; LLB
B. Com (Hons), MDPA, I.A.S.
(Retd.)
Has held various
important positions
with the Government of
Maharashtra and retired as
Union Cabinet Secretary,
Government of India
1. UltraTech Cement
Limited
Expertise
Directorships held in other
public companies including
private companies which
are subsidiaries of public
companies (excluding
foreign and private
companies)
Memberships/
Chairmanships of
committees across all
companies
Member
Audit Committee
1. UltraTech Cement
Limited
Shareholding of Non-
Executive Directors
Relationships between
directors inter-se
* held jointly with SUUTI
900
Nil
Vast experience in Corporate laws,
Corporate tax, Foreign Exchange
law and Commercial law
Samson Maritime Limited
1. Merck Limited
2.
3. Biocon Limited
4. Birla Sun Life Insurance
Company Limited
5. Blue Star Limited
6. Blue Star Infotech Limited
ELANTAS Beck India Limited
7.
8.
Esab India Limited
9. Greaves Cotton Limited
10. Shrenuj & Co Limited
11. Solvay Pharma India Limited
12. Sonata Software Limited
13. L&T Metro Rail (Hyderabad)
Limited
Chairman
Audit Committee
1. Blue Star Limited
2. FCI OEN Connectors Limited
3. Merck Limited
4. Samson Maritime Limited
Member
Audit Committee
1. Biocon Limited
2. Blue Star Infotech Limited
3. ELANTAS Beck India Limited
4. Greaves Cotton Limited
5. Solvay Pharma India Limited
6,000
Nil
8
Has held various important
positions with the Government
of Uttar Pradesh and
Government of India. Retired
as Secretary, Government of
India, Ministry of Finance,
Department of Disinvestment
1.
2.
ITI Limited
L&T Finance Holdings
Limited
Chairman
Shareholders’/Investors’
Grievance Committee
1.
2.
Larsen & Toubro Limited
L&T Finance Holdings
Limited
Member
Audit Committee
1.
ITI Limited
*400
Nil
m
o
c
.
s
t
n
i
r
p
p
a
s
.
w
w
w
66th Annual Report
Chairman’s Message
A. M. Naik
Chairman & Managing Director
The execution schedule of our existing
orders remained largely on track.
We also continued to gain signifi cantly
through our focus on competency,
quality assurance and delivery.
Dear Shareholders,
The macro business environment in the year under review was characterized by
uncertainty and volatility. The Company also experienced extended prospect-
to-award timelines. Nevertheless, the execution schedule of our existing orders
remained largely on track. We also continued to gain signifi cantly through our
focus on competency, quality assurance and delivery. This ensured that the
external environment did not impinge unduly on our performance, and we could
successfully navigate through the economic cross currents to convert profi table
business opportunities into contracted customer commitments.
Chairman speech p1-6.indd 1
1
1/1/2004 10:47:41 AM
Performance Overview
i. Restructuring
The Company has once again registered
impressive performance on all important
parameters during FY11. Order Infl ows
for the year, though volatile from
quarter to quarter, recorded a growth
of 15%. Revenues, driven by a robust
Order Book position in the beginning
of the year, registered a 19% growth
for the year which was commendable
considering the challenging execution
environment that all sectors witnessed
throughout the fi scal. EBITDA Margins,
by and large, held up to FY10 levels
despite higher input prices which were
mitigated through timely and cost
effi cient execution of orders on hand.
The closing Order Book position at the
end of FY11 recorded an impressive
` 130,217 crore which is in excess of
two years of backlog. Profi t after Tax
at ` 3,676 crore excluding Exceptional
and Extraordinary items, grew 15%
during the year. Robust operating
cash fl ows contributed to the healthy
fi nancial condition of the Company.
The performance of the Subsidiary &
Associate companies during the year
was also encouraging. The Group total
income for the year reached ` 52,089
crore while the Group Profi t after Tax
excluding Exceptional and Extraordinary
items,
impressive `
4,238 crore, an increase of 12% year
on year.
recorded an
I am happy to announce that the
Board has recommended an enhanced
dividend of ` 14.50 per equity share
on a face value of ` 2 per share for
the year.
Gearing for growth
The Company has taken a number of
measures during the year under review
to ensure that it accelerates its growth
forward. Major
momentum going
steps include:
2
A 5-year strategic plan for our
businesses was completed in FY11
after extensive consultations and
a detailed review of our portfolio
and organization structure. This
plan has led to an organizational
remodeling which would facilitate
growth through greater levels of
empowerment and delegation while
sharpening accountability. L&T has
accordingly been restructured into
multiple Independent Companies
L&T Parent
(ICs) within
the
Company. Although not
legal
Independent Companies
entities,
are vertically integrated business
segments with their own internal
boards which include a number
of independent directors and a
representative director from the
parent company on each IC Board.
This will allow greater independence
in functioning and provide external
and broader business perspectives
to the IC management. The new
structure has been rolled out and is
beginning to function.
ii. Business Integration
The Company is today the largest
vertically integrated EPC player in
the domestic infrastructure space.
This has been achieved over the
years through successful efforts
to encompass all value creating
and critical activities
in each
core business that it operates in.
the Company
In Hydrocarbon,
straddles
the design-fabrication-
installation value chain. In Power,
the facilities for manufacture of
supercritical boilers turbines, and
critical piping which have been
commissioned, have plugged a vital
gap in our EPC Power offerings
to customers. In addition, all the
approaching
power auxiliaries like Electrostatic
Precipitators, Axial Fans and Heaters
are
completion.
Along with other essential existing
facilities, the Company is capable of
offering comprehensive Balance of
Plant solutions to Power Generation
Infrastructure
customers.
space, the Company is one of the
largest developer-cum-EPC players
with a diverse portfolio of strategic
concessions in the areas of Roads,
Ports, Power Generation, Metro
Rail and Urban Infrastructure.
In the
iii. Capacity Expansion
next
growth wave.
The Company has added capacities
in different businesses to capture
the
In
addition to commissioning of the
manufacturing facilities for Boilers,
Turbines and other Power auxilliaries,
the Company has also expanded
its facilities in Hazira and created a
Knowledge City in Vadodara thus
integrating the total capabilities
of EPC and Manufacturing. The
manufacturing of heavy forgings
and castings at Hazira is nearing
completion. At Oman, in addition
to the Modular Fabrication Facility
for Oil & Gas structures, the new
facilities are
Heavy Engineering
now operational.
In Kattupalli,
the Shipbuilding facility and the
container port facility are getting
ready shortly.
iv. Technology
apply
successfully
The ability to understand, develop
and
new
technologies is a key differentiator of
the Company. This has contributed
to the dominant position in the
sectors that we operate in, viz,
Infrastructure, Power, Hydrocarbon,
The
Process
Switchgear.
and
Chairman speech p1-6.indd 2
1/1/2004 10:47:42 AM
Chairman speech p1-6.indd 3
1/1/2004 10:47:42 AM
scouts
actively
for
Company
technology partners in areas where
offerings to customers can be
enhanced. Engagement with these
technology majors are in the form
of Joint Ventures or technology
alliances or Process Qualifi cations
from Process Licensors. Relationships
with all existing partners have been
productive and rewarding.
v. Talent Management
recognizes
The Company
that
talent management is a constantly
evolving discipline which needs to
engage with a dynamic environment.
Built on an entrenched set of core
principles,
the Company’s HR
policies are designed to ensure
that it remains the employer of
choice. Compensation packages
have been revised to ensure that
superior resources are suffi ciently
incentivized to join and stay with
the company. The Company also
offers an unmatched canvas of
professional opportunity for growth
and development.
vi. Information Technology
The Company believes in IT as a
business enabler which can add
a cutting edge difference to its
capabilities. Business verticals run
advanced
transaction processing
backend
through
systems
integrated ERP systems that enable
online data capture and seamless
integration of functions within the
business verticals. The Company
is constantly enhancing decision
support systems that can offer
businesses further advantages in
the marketplace.
Renewable Energy
The prospects of irreversible climatic
to
change have added urgency
Chairman speech p1-6.indd 2
1/1/2004 10:47:42 AM
Chairman speech p1-6.indd 3
for
initiatives for clean and renewable
energy initiatives around the world.
The Company believes that the seeds
renewable energy
of growth
planted now will, in time, bear fruit
that will make these ventures viable.
It has embarked on multiple initiatives
including projects in Solar Photovoltaic
Power and manufacture of engineered
large size castings for critical applications
in wind power turbines. The Company
is also actively involved in setting up
of Hydro Electric Power Generating
stations both as an EPC contractor and
as a Power developer.
Sustainable Development
Sustainable development is the key
to an organization to survive and
thrive. Accordingly, we have set out
on a multi-year journey to achieve
world class sustainable development
through
conservation of natural
resources, environment protection,
employee engagement and welfare
measures that affect different parts
of society. Your Company
is one
of the 28 Indian companies whose
Sustainability Reports are available
in the public domain and is the fi rst
Indian company in the Engineering
& Construction Segment to publicly
report on its sustainability performance.
The Company has reported on all Core
Performance Indicators (49) under the
‘Global Reporting Initiative’ and the
reports have been externally assured
for authenticity of the information
presented. The last report (2010) has
been credited with a ‘GRI Checked’
Application Level A+ rating.
Economic Scenario
Indian economy and
factors
The
impacting key sectors like Infrastructure,
Power and Hydrocarbon experienced
macro headwinds during the year.
Diffi culty in land acquisition, slow pace
of granting environmental clearances,
non-allocation of fresh coal blocks
for mining, unexpected shortage of
gas production from the KG basin
gas fi elds, governance issues at the
political and bureaucratic level, high
infl ation led by food, commodity, oil
prices and increasing interest rates all
combined to slow down the pace of
project award decisions. Consequently,
Institutional Investors, both domestic
and foreign, turned bearish on the
India Infrastructure theme. There were,
however, a number of strong macro
tailwinds as well that were mitigating
the adverse situation. These include a
steady correction of the fi scal defi cit
through better-than-expected proceeds
from 3G Telecom License auction,
sustainable buoyancy in both direct
and indirect tax revenues, GDP growth
rate of around 8.5%, the consequent
increase in per capita income and
the consumption spends, a sustained
rate of domestic savings hovering
around 35% of nominal GDP and the
intention of the Government to push
for reforms. Aided by these favorable
factors, the Company expects the
growth momentum in the economy
the near
to continue
term challenges.
inspite of
Outlook
The Company believes that in the
forthcoming year, it will still continue to
bag important E&C Projects across the
sectors that it operates in and hence
further grow its Order Book position by
the end of the forthcoming year. Some
areas of opportunities are detailed
as under –
1) Infrastructure & Construction
a) Transportation Infrastructure
This area, which covers, roads,
railways (national and metro
3
1/1/2004 10:47:42 AM
for
and
ports
awards
airports
rails),
shows encouraging signs on
fronts. The pace of
some
road
NHAI
concessions
is picking up
speed. Project awards are
in areas such as
expected
Freight Corridor,
Dedicated
airport and port expansion
in different parts of
the
country. Some Tier-2 cities are
planning metro or mono rails
as the solution to urban traffi c
congestion and some airport
prospects in India and abroad
are being targeted.
b) Water
seen
serious
resources across
This area has
large
underspends in the fi rst 4 years
of the 11th Five Year plan and
is heading towards becoming
infrastructure
a
bottleneck. Apart from social
repercussions arising out of
urban water supply shortages,
large planned capacity
the
additions in the power sector
are likely to place a strain on
water
the
country. Harnessing glacial
fl ows and abundant rainfall
by reservoir building, bulk water
transmission infrastructure and
through water
purifi cation
treatment plants are increasing
opportunities that the Company
sees
future. Converting
seawater into potable water
with
plants
desalination
throws up increasing business
prospects both
in domestic
and Middle East markets.
in
Industrial
the
effl uent
treatment plants also offers
an increased market.
opportunities
form
of
in
c) Urban Building Infrastructure
The Company sees growing
business opportunities in other
parts of urban infrastructure
such as hospitality, educational
institutions
healthcare
and
facilities. Urban population
to a
pressure
multiplicity of different forms
of housing
in Tier-1 and
Tier-2 cities. The revival of the
IT sector is also opening up
increased business in IT and
Offi ce Space.
leading
is
d) Mining, Metals & Material
Handling
in
and
With the evident growth in
the mining and
industrial
components of GDP coupled
with a domestic imbalance in
the demand-supply of steel,
the Company sees abundant
mining
opportunities
equipment
capacity
addition in the metals sector.
Larger business prospects
in
is being
Material Handling
capacity
driven by power
in ports
addition,
ferrous
and expansion of
metals
non-ferrous
and
production capacities.
increase
2) Heavy Engineering
a) Heavy Industrial Equipment
The
heavy
Company’s
engineering facilities in Hazira
located in Coastal Gujarat is
widely acclaimed for its world
class design, manufacturing
capabilities
on-time
record of
track
execution
technologically complex large
sized equipment orders
for
India and
process plants
abroad. This is standing the
and
in
in
good
stead
Company
when scouting for business
in domestic and international
markets and is expected to
facilitate growth in Power and
Hydrocarbon sectors. The new
heavy engineering facility
in
Oman is strategically located
for conversion of prospects to
business in the Middle East.
b) Nuclear Power
Japan have
While the tsunami damage to
the Fukushima nuclear plants
in
triggered a
worldwide relook at the need
for nuclear power as an energy
source, it is the considered view
of the Company that this may
push back large ordering of
nuclear power capacity addition
in the world by a few years. As
far as India is concerned, the
ambitious program of ramping
up the installed base to 20GW
by 2020 and to 63GW by 2032
is likely to be on track with a
couple of years delay because of
more stringent safety measures
that will become mandatory
during construction of nuclear
power plants. The JV with
Nuclear Power Corporation of
India Ltd. is progressing and the
completion of facilities for the
forging plant is on schedule.
The Company believes
that
large scale ordering of new
facilities will happen over the
few years and your
next
Company
is well poised to
exploit this potential.
c) Defence
The Company is gearing up
to catch growth opportunities
when the Government policy
changes would allow private
4
Chairman speech p1-6.indd 4
1/1/2004 10:47:42 AM
Chairman speech p1-6.indd 5
1/1/2004 10:47:42 AM
sector participation in India’s
defence program in a signifi cant
manner. The Company
is
presently building a shipyard
at Kattupalli near Chennai for
catering to the requirements
of
Indian Navy when such
prospects materialize.
3) Thermal Power
a) Coal-based
Inspite of diffi cult hurdles
in this sector in the form of
land acquisition and getting
coal linkages, the Company is
positive on the various business
prospects
in this area. The
Company is uniquely placed to
exploit this growth opportunity
since it now offers the full range
of products and services in this
space such as turnkey power
plant construction, manufacture
of
supercritical boilers and
turbines, other critical auxiliary
equipment
such as piping,
electrostatic precipitators, axial
fans and heaters as well as
the entire range of Balance of
Plant offerings.
b) Gas-based
The
has
an
Company
established
record of
track
putting up gas-based power
plants for customers on time
and within costs. This gives a
push to the increasing market
of gas fi red power plants
that are on the anvil once
the visibility of increased gas
availability improves.
Line and Substation projects,
boosted by
its manufacturing
facility for rolling out transmission
towers. This sector has been under-
invested over the last few years
and we anticipate a healthy
rise in the award of T&D projects
that are slated to be awarded,
including a number of HSTC
(High Speed Transmission Corridors)
that are due to evacuate power
to
generating
from
end-user locations.
stations
5) Hydrocarbon
The Company has, over the years,
built an enviable reputation of
being able to deliver large complex
projects
in upstream, mid and
downstream and fertilizer sectors.
It is well placed to bag orders that
come up for awards for pipelines,
wellhead platforms and process
platforms in the upstream sector and
for refi neries and petrochemicals in
the mid and downstream sectors.
These opportunities are being
seen both in India and in the
Middle East. The Company has
3 Fabrication Facilities located at
Hazira in Gujarat, Kattupalli in Tamil
Nadu and Sohar in Oman which
enables the business to cater to
different geographies in India and
abroad. Plans for making increased
gas available
fertilizer
to
sector through policy directives is
spurring capacity expansion in this
sector where the Company has
a demonstrated track record of
executing EPC projects.
the
4) Power Transmission &
Distribution
The Company is one of the major
players in EPC sector for Transmission
6) Electrical & Electronics
This business segment witnessed
mixed fortunes during the year
under review with project awards
showing sluggishness but industrial
demand for off-the-shelf switchgear
increased
showing
products
offtake. The Company now sees
signs of stabilizing markets and
growth potential for both project
and product businesses during the
year ahead.
7) Machinery & Industrial Products
This business continued to register
all round growth during FY11
largely driven by improved demand
for valves and construction and
mining businesses.
The new plant for manufacture of
Specialized Valves in Coimbatore
which commenced operations in
FY10 has started catering to the
demands of the Power Sector.
in
the
The expanded capacity
manufacturing campus at Kansbahal
near Rourkela is now catering to
the requirements of Apron Feeders
and Wheel Loaders and the new
foundry at Coimbatore in Tamil
Nadu
is now providing Wind
Mill Castings.
During the year, the Company
divested its stake in L&T Case
Equipment Pvt. Ltd. and at the
same time acquired the stake of
its JV partners Messer Eutectic
Castolin Holding GmbH
and
Eutectic Corporation, USA in Ewac
Alloys Ltd., which offers specialized
welding
in
solutions. This
line with
its ongoing business
portfolio review.
is
8) Information Technology
Business
L&T Infotech, which suffered a
slowdown in business during the
global economic crisis, is back on
the growth path and revenues
grew by around 30% in FY11 on
a consolidated basis. The trend
5
Chairman speech p1-6.indd 4
1/1/2004 10:47:42 AM
in share of revenue has been
industry
relatively stable across
verticals,
horizontals
and geographies.
business
projects are operational and
some are under construction.
b) Power
9) Financial Services
The 2 fl agship Companies within
the Financial Services business,
viz., L&T Finance Ltd. and L&T
Infrastructure Finance Ltd., have
continued their growth trajectory.
On a combined basis, their Total
Income, Profi t after Tax and Net
Worth grew by 48%, 61% and
41% respectively aided by their
focus on Returns, Asset quality and
effi cient liability and interest cost
management. L&T
Infrastructure
Finance Ltd. also raised around
` 650 crore of retail subscription
through 2 tranches of its fi rst ever
issue of
infrastructure
bonds after getting Infrastructure
Finance Company status from the
Reserve Bank of India. Their total
asset book has grown to over
` 17,000 crore at the end of FY11
from ` 11,000 crore a year ago.
The Company believes that these
businesses will continue to grow at
an encouraging pace.
tax-free
10) Developmental Projects
Developmental Business has been
playing an increasingly strategic role
in the growth of the Company. The
Company now has a rich portfolio
of concessions and ownership
rights in areas of Roads, Power
Plants, Metro Rail, Ports and Urban
Infrastructure. A brief profi le of
each part of the total portfolio is
given as under –
a) Roads
The Company has a basket of
15 road concessions covering
5,700 lane-km. Some of these
6
The Company has a concession
for
in
coal fi red plants
Punjab and 4 concessions for
hydroelectric plants
totaling
planned generating capacity of
over 2,800 MW. Development
of these plants are in varying
stages of maturity.
c) Metro Rail
The Company bagged
the
largest Metro Rail concession
awarded in the country till date
with a total estimated project
cost in excess of ` 16,000
crore. The project has been
fi nancially closed and execution
of the different parts of the
project
is expected to start
soon. The project is expected
to be completed within the
stipulated time of 5 years from
the appointed date.
d) Ports
has
now
The Company
commissioned
its 27 Million
Tonne capacity deep water port
at Dhamra in Coastal Orissa
and expects this venture to
start contributing to revenues
in a meaningful manner from
FY12 onwards. The container
port at Kattupalli in Tamil Nadu
is expected to be commissioned
by end FY12.
11) International Business
for
International business
the
Company came down during the
global slowdown 2 years ago.
Since then, the countries where the
Company is focusing on have shown
signs of recovery and the Company
is hopeful of increased business
from those countries. The Middle
East holds ample opportunities in
the areas of Hydrocarbon, Power
Transmission & Distribution and
selective Infrastructure areas such
as roads and airports.
taking
Before concluding, I would like to
appreciate the efforts of all the
this organization
employees of
for
to
greater heights once again – this
achievement would not have been
possible without
their whole-
hearted and unstinting efforts.
the Company
I would also like to thank all my
colleagues on the Board who have
jointly steered the Company during
an uncertain period in FY11 and all
other stakeholders like shareholders,
Financial Institutions, members of
our supply chain and regulators
to
for providing
our efforts.
their support
The Company
is committed to
the pursuit of value creation
through profi table growth of its
businesses and we reaffi rm our
commitment to uphold highest
standards of governance.
Thank you,
A. M. Naik
Chairman & Managing Director
Mumbai, May 19, 2011
Chairman speech p1-6.indd 6
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Chairman speech p1-6.indd 6
1/1/2004 10:47:42 AM
STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS
Description
Profi t and Loss Account
Gross sales & service
Other income
Gross revenues
Net sales & service
PBDIT^^
Profi t before tax (excluding
extraordinary/exceptional items)
Profi t after tax (excluding
extraordinary/exceptional items)
Extraordinary items (net of tax)
Exceptional items (net of tax)
Profi t after tax (PAT)
Dividend including dividend distribution tax
Balance Sheet
Share capital
Share application money
Reserves
Net worth
Deferred tax liability (net)
Loan funds
Capital employed
Net fi xed assets
Investments
Net working capital (NWC)
Miscellaneous expenditure
(to the extent not written–off)
Ratios and statistics
PBDIT incl. other income as % of total income @
PAT excluding extraordinary/exceptional items as
% of total income $
ROCE % *
RONW % **
Gross Debt:Equity ratio
NWC as % of gross sales & service
Current ratio
Basic earnings per equity share (`) #
Book value per equity share (`) ##
No. of equity shareholders
No. of employees
` crore
2010-2011 2009-2010 2008-2009 2007-2008 2006-2007 2005-2006 2004-2005 2003-2004 2002-2003~ 2001-2002~
43886
1852
45738
43496
6817
5571
3676
71
211
3958
1030^
122
–
21724
21846
263
7161
29270
7458
14685
7128
–
36996
2385
39381
36675
5726
4806
3185
136
1055
4376
880^
120
25
18167
18312
77
6801
25190
6366
13705
5119
–
34045
1032
35077
33647
4662
3940
2709
773
–
3482
720
117
–
12343
12460
48
6556
19064
5195
8264
5605
–
25187
676
25863
24855
3403
3068
2099
–
74
2173
572
58
–
9497
9555
61
3584
13200
3645
6922
2630
3
17901
522
18423
17567
2245
1982
1385
–
18
1403
428
57
–
5711
5768
40
2078
7886
2225
3104
2547
10
14966
519
15485
14735
1480
1235
863
70
79
1012
349
27
–
4613
4640
77
1454
6171
1605
1920
2625
21
13255
732
13987
13050
1115
933
631
–
353
984
407
26
–
3343
3369
95
1859
5323
1083
961
3238
41
9807
461
10268
9561
945
769
533
–
–
533
225
25
–
2750
2775
114
1324
4213
1015
966
2185
47
9870
302
10172
9360
1047
510
433
–
–
433
211
249
–
3314
3563
841
3176
7580
4056
1160
2300
64
8167
277
8444
7726
1102
401
347
–
–
347
174
249
–
3095
3344
853
3463
7660
4264
918
2413
65
15.12
15.09
13.44
13.37
12.43
9.75
8.30
9.43
10.84
13.76
8.15
15.10
18.33
0.33:1
16.24
1.26
65.33
358.45
8,53,485
45,117
8.39
15.92
20.73
0.37:1
13.84
1.24
73.77
303.69
8,14,678
38,785
7.81
18.52
24.67
0.53:1
16.47
1.34
59.50
212.31
9,31,362
37,357
8.25
21.12
28.21
0.38:1
10.44
1.19
37.80
162.95
5,78,177
31,941
7.67
20.71
26.84
0.36:1
14.23
1.27
25.11
101.14
4,28,504
27,191
5.71
16.70
21.88
0.32:1
17.54
1.38
19.02
83.50
3,27,778
23,148
4.70
14.63
21.05
0.56:1
24.43
1.58
19.41
63.48
3,23,908
19,848
5.32
14.40
20.66
0.49:1
22.28
1.47
10.71
54.18
3,65,824
18,996
4.48
7.65
12.91
0.92:1
23.30
1.58
8.71
69.57
4,90,628
21,873
4.34
7.47
9.69
1.07:1
30.42
1.81
6.98
65.13
5,09,922
22,922
Figures for the years 2001–2002 and 2002–2003 include demerged cement business.
~
^^ Profi t before depreciation, interest and tax [PBDIT] (excluding extraordinary/exceptional items) and including other income.
^
@
$
Includes dividend distribution tax of ` 30.39 crore for FY 2010–2011 and ` 14.77 crore for FY 2009–2010, paid by direct subsidiary companies for which set off was availed
by the parent company as permitted under the Income Tax Act.
PBDIT including other income as % of total income [(PBDIT excluding extraordinary/ exceptional items)/(total income excluding extraordinary/exceptional items)].
PAT excluding extraordinary/exceptional items as % of total income [(PAT excluding extraordinary/exceptional items)/(total income excluding extraordinary/exceptional
items)].
ROCE [(PAT excluding extraordinary/exceptional items+interest–tax on interest)/(average capital employed excluding revaluation reserve and miscellaneous expenditure)].
*
** RONW [(PAT excluding extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous expenditure)].
#
Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/restructuring during
the respective years.
## After considering issue of bonus shares/restructuring during the respective years.
14
Highlights p14-15 final.indd 14
1/1/2004 11:14:16 AM
CONSOLIDATED FINANCIALS – 10 YEAR HIGHLIGHTS
Description
Profit and Loss Account
Gross sales & service
Other income
Gross revenues
Net sales & service
PBDIT^^
Profit before tax (excluding extraordinary/
exceptional items)
Profit attributable to Group shareholders (excluding
extraordinary/ exceptional items)
Extraordinary items (net of tax)
Exceptional items (net of tax and minority
interest)
Profit attributable to Group shareholders
Dividend including dividend distribution tax
Balance Sheet
Share capital
Share application money
Reserves
Net worth
Minority interest
Loan funds
Deferred payment liabilities
Deferred tax liability (net)
Capital employed
Net fixed assets
Investments
Loans & advances towards financing activities
Net working capital (NWC)
Miscellaneous expenditure
(to the extent not written–off)
Ratios and statistics
PBDIT including other income as % of total income @
PAT excluding extraordinary/exceptional items as
% of total income $
ROCE % *
RONW % **
Gross Debt: Equity ratio
Net Debt: Equity ratio
NWC as % to gross sales
Current ratio
Basic earnings per equity share (`) #
Book value per equity share (`) ##
` crore
2010–2011 2009–2010 2008–2009 2007–2008 2006–2007 2005–2006 2004–2005 2003–2004 2002–2003~ 2001–2002~
51978
1653
53631
51552
8677
6527
4238
71
147
4456
1030
122
–
24929
25051
1026
32829
4512
311
63729
28165
9216
17366
8982
–
43854
3050
46904
43514
7198
5527
3796
136
1519
5451
880
120
25
20846
20991
1087
22656
1951
153
46838
18979
9861
11176
6822
–
40608
916
41524
40187
5600
4344
3007
773
9
3789
720
117
–
13871
13988
1058
18400
1970
131
35547
15618
6805
7110
6014
–
29561
684
30245
29199
4097
20700
1071
21771
20336
3013
16747
577
17324
16500
1904
3384
2510
2304
–
21
2325
572
58
–
10773
10831
923
12120
196
122
24192
8523
5552
6161
3927
29
1810
–
430
2240
428
57
–
6865
6922
646
6200
232
107
14107
5440
2478
2410
3762
17
1472
1051
70
196
1317
349
27
–
4937
4964
107
3499
–
127
8697
2973
1676
1012
3011
25
14599
696
15295
14379
1404
1052
697
–
353
1050
407
26
–
3290
3316
105
3454
–
138
7013
2215
615
406
3736
41
11107
488
11595
10849
1271
10857
267
11124
10327
1240
921
600
–
147
747
225
25
–
2622
2647
54
2769
–
214
5684
2140
624
375
2498
47
469
380
–
–
380
211
249
–
2968
3217
50
4701
–
913
8881
5539
528
323
2392
99
9195
239
9434
8714
1341
414
290
–
–
290
174
249
–
2889
3138
44
4978
–
928
9088
5824
358
218
2613
75
16.37
16.09
13.63
13.73
14.41
11.32
9.54
11.21
11.70
14.98
7.99
12.24
18.43
1.31:1
0.86:1
17.28
1.29
73.56
410.95
8.49
13.48
21.75
1.08:1
0.51:1
15.56
1.29
91.90
348.06
7.32
14.47
24.32
1.32:1
0.84:1
14.81
1.31
64.76
238.27
7.72
16.94
26.68
1.12:1
0.57:1
13.28
1.25
40.44
184.31
8.66
20.99
30.71
0.90:1
0.44:1
18.17
1.36
40.10
121.39
6.25
17.62
25.78
0.71:1
0.49:1
17.98
1.40
24.75
89.36
4.73
14.92
23.96
1.06:1
0.89:1
25.59
1.64
20.70
62.44
5.29
14.01
21.24
1.08:1
0.76:1
22.49
1.50
15.01
51.58
3.59
7.16
12.45
1.52:1
1.27:1
22.03
1.55
7.65
61.99
3.24
6.82
9.24
1.65:1
1.53:1
28.41
1.79
5.83
60.82
Figures for the years 2001–2002 and 2002–2003 include demerged cement business.
~
^^ Profit before depreciation, interest and tax [PBDIT] (excluding extraordinary/exceptional items) and including other income.
@ PBDIT as % of total income [(PBDIT excluding extraordinary/exceptional items)/(total income excluding extraordinary/exceptional items)].
$ PAT excluding extraordinary/exceptional items as % of total Income [(PAT excluding extraordinary/exceptional items)/(total income excluding extraordinary/exceptional
items)].
* ROCE [(profit available for appropriation excluding extraordinary/exceptional items+minority interest+interest–tax on interest)/(average capital employed excluding revaluation
reserve, miscellaneous expenditure, borrowed funds of financial services business and deferred payment liabilities)].
** RONW [(profit available for appropriation excluding extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous expenditure)].
# Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/restructuring during the
respective years.
## After considering issue of bonus shares/restructuring during the respective years.
15
Highlights p14-15 final.indd 14
1/1/2004 11:14:16 AM
L&T - ORDER INFLOW
L&T - SALES
37.3
42019
9.3
36.8
30611
9.6
e
r
o
r
c
`
80000
70000
60000
50000
40000
30000
20000
10000
0
79769
69572
51621
34.8
40
30
22.9
6.8
14.7
20
8.0
8.5
10
0
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Order inflow
GDP growth
Percentage growth over previous year
e
g
a
t
n
e
c
r
e
P
e
r
o
r
c
`
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
17901
19.6
43886
50
40.7
36996
34045
25187
35.2
18.6
8.7
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Sales
Percentage growth over previous year
L&T - PBDIT AS % OF TOTAL INCOME
L&T - INTEREST COVERAGE RATIO
7000
6000
5000
4000
3000
2000
1000
0
e
r
o
r
c
`
4662
3403
13.4
13.4
2245
12.4
6817
15.1
5726
15.1
20
18
16
14
12
10
e
g
a
t
n
e
c
r
e
P
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
6678
6981
5070
7000
6000
5000
4000
3000
e
r
o
r
c
`
22.3
26.0
2831
2000
1766
10.5
10.5
9.6
1000
0
e
g
a
t
n
e
c
r
e
P
40
30
20
10
0
50
40
30
20
10
0
s
e
m
i
t
f
o
r
e
b
m
u
N
PBDIT
PBDIT as % of total income
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Total income and PBDIT exclude exceptional/extraordinary items
Average loan funds
Interest coverage ratio
L&T - PAT AND EPS
L&T - FIXED ASSET TURNOVER RATIO
5000
4000
3000
73.77
59.50
4376
65.33
3958
3482
37.80
2000
25.11
2173
1000
1403
0
75
60
45
30
15
0
`
e
r
o
r
c
`
7000
6000
5000
4000
3000
2000
1000
0
6912
5780
4420
2935
1915
9.3
8.6
7.7
6.4
6.3
50
40
30
20
10
0
s
e
m
i
t
f
o
r
e
b
m
u
N
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
PAT
EPS
Including extraordinary/exceptional items
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Average net fixed assets
Fixed asset turnover ratio
e
r
o
r
c
`
16
Graph p16-17 final.indd 16
1/1/2004 11:35:49 AM
Graph p16-17 final.indd 17
1/1/2004 11:35:49 AM
L&T - SEGMENT-WISE ORDER INFLOW 2010-2011
L&T - SEGMENT-WISE SALES 2010-2011
Machinery &
Industrial
Products
` 2869 crore
(4%)
Electrical
& Electronics
` 3261 crore
(4%)
Others
` 626 crore
(1%)
Engineering &
Construction
` 73013 crore
(91%)
Machinery &
Industrial
Products
` 2699 crore
(6%)
Electrical
& Electronics
` 2987 crore
(7%)
Others
` 650 crore
(1%)
Engineering &
Construction
` 37550 crore
(86%)
Total order inflow ` 79769 crore
Total customer sales ` 43886 crore
L&T - SEGMENT-WISE RESULT 2010-2011
L&T - SEGMENT-WISE EBITDA MARGINS*
Machinery &
Industrial
Products
` 531 crore
(9%)
Electrical
& Electronics
` 399 crore
(7%)
Others
` 118 crore
(2%)
Engineering &
Construction
` 4772 crore
(82%)
25
20
15
10
5
0
e
g
a
t
n
e
c
r
e
P
Total segment result ` 5820 crore
15.8
12.8
12.8
13.6
13.6
12.7
15.6
14.5
21.2
20.2
19.6
18.3
19.7
14.2
8.7
6.2
Engineering &
Construction
Electrical &
Electronics
Machinery &
Industrial
Products
Others
2007-2008
2008-2009
2009-2010
2010-2011
*Earnings before interest, tax, depreciation and amortisation
as percentage of gross segment revenue
L&T - SECTOR-WISE ORDER BOOK AS AT MARCH 31, 2011
L&T CONSOLIDATED SALES AND PAT
Infrastructure
` 46920 crore
(36%)
Others
` 5533 crore
(4%)
Power
` 42315 crore
(32%)
55000
45000
29561
2304
35000
25000
e
r
o
r
c
`
20700
15000
1810
5000
51978
4800
40608
43854
4238
3796
3600
3007
e
r
o
r
c
`
2400
1200
Process
` 20337 crore
(16%)
Hydrocarbon
` 15112 crore
(12%)
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
Sales
PAT
Graph p16-17 final.indd 16
1/1/2004 11:35:49 AM
Graph p16-17 final.indd 17
Total order book `130217 crore
PAT excludes extraordinary/exceptional items
17
1/1/2004 11:35:49 AM
Directors Report p23-59 final.indd 23
1/1/2004 11:28:53 AM
Directors’ Report
The Directors have pleasure in presenting their Annual Report
and Accounts for the year ended March 31, 2011.
FINANCIAL RESULTS
Profi t before depreciation and tax
Less: Depreciation and amortization
Add: Transfer from Revaluation Reserve
2010-2011
` crore
6,432.13
600.28
2009-2010
` crore
6,295.27
415.90
5,831.85
1.06
5,879.37
1.30
Profi t before Tax and extraordinary
5,832.91
5,880.67
items
Less: Provision for Tax
Profi t after Tax (before extraordinary
items)
Gain on extra-ordinary items (net of tax)
1,945.86
1,640.87
3,887.05
4,239.80
70.84
135.72
Profi t after Tax and extraordinary items
Add: Balance brought forward from
3,957.89
107.29
4,375.52
100.50
previous year
Less: Dividend paid for the previous
year (including dividend
distribution tax)
4.01
2.39
Balance available for disposal which the
directors appropriate as follows:
4,061.17
4,473.63
Debenture Redemption Reserve
Proposed Dividend
Dividend Tax
General Reserve
Balance to be carried forward
Dividend
The Directors recommend payment of
fi nal dividend of ` 14.50 per equity share
of ` 2 each on 60,88,52,126 shares
YEAR IN RETROSPECT
49.83
882.84
112.82
2,910.00
43.34
752.75
110.25
3,460.00
3,955.49
4,366.34
105.68
107.29
882.84
752.75
The gross sales and other income for the fi nancial year under
review were ` 45,738 crore as against ` 39,381 crore for
the previous fi nancial year registering an increase of 16%.
The Profi t before tax excluding extraordinary and exceptional
items was ` 5,571crore and the Profi t after tax excluding
extraordinary and exceptional items of ` 3,676 crore for the
fi nancial year under review as against ` 4,806 crore and
` 3,185 crore respectively for the previous fi nancial year,
registering an increase of 16% and 15% respectively.
DIVIDEND
The Directors recommend payment of dividend of ` 14.50
per equity share of ` 2 each.
Equity Shares that may be allotted on exercise of Options
granted under the Employee Stock Option Schemes as also
on conversion of outstanding Foreign Currency Convertible
Bonds (FCCBs) before the Book Closure for payment of
dividend will rank pari passu with the existing shares and be
entitled to receive the dividend.
DEPOSITORY SYSTEM
As the members are aware, the Company’s shares are
compulsorily tradable in electronic form. As on March 31,
2011, 96.95% of the Company’s total paid-up Capital
representing 59,02,88,225 shares are in dematerialized
form. In view of the numerous advantages offered by the
Depository system, members holding shares in physical mode
are advised to avail of the facility of dematerialization from
either of the Depositories.
CAPITAL & FINANCE
During the year under review, the Company allotted
66,56,718 equity shares upon exercise of stock options by
the eligible employees under the Employee Stock Option
Schemes.
During the year under review, the Company tied up
` 800 crore of debt, through multiple issuances of Non-
Convertible Debentures, which have maturity of 10 years
and are unsecured. Of this, ` 260 crore have been drawn in
2010-11, the balance ` 540 crore to be drawn
in
2011-12. In 2011-12, for one of the issuances, the Company
has an option to not draw ` 270 crore and prepay ` 30
crore.
The debentures were issued for general corporate purposes.
During the year under review, the Company repaid a part
of the long term foreign currency loans, equivalent to about
` 430 crore.
CAPITAL EXPENDITURE
As at March 31, 2011, the gross tangible and intangible
assets, including leased assets, stood at ` 9,770.61crore and
the net fi xed and intangible assets, including leased assets,
at ` 7,458.13 crore. Additions during the year amounted to
` 1,705.68 crore.
DEPOSITS
22 Deposits totalling ` 0.03 crore which were due for
repayment on or before March 31, 2011, were not claimed
by the depositors on that date. As on the date of this report,
deposits aggregating to ` 0.01 crore thereof have been
claimed and paid.
TRANSFER TO INVESTOR EDUCATION & PROTECTION
FUND
The Company sends letters to all shareholders whose
dividends are unclaimed so as to ensure that they receive
their rightful dues. Efforts are also made in co-ordination
with the Registrar & Share Transfer Agent to locate the
shareholders who have not claimed their dues.
Directors Report p23-59 final.indd 23
23
1/1/2004 11:28:53 AM
During the year under review, the Company has transferred a
sum of ` 70,44,129 to Investor Education & Protection Fund,
the amount which was due & payable and remained unclaimed
and unpaid for a period of seven years, as provided in
Section 205C(2) of the Companies Act, 1956. Despite the
reminder letters sent to each shareholder, this amount
remained unclaimed and hence was transferred. Cumulatively,
the amount transferred to the said Fund was ` 8,79,48,930
as on March 31, 2011.
SUBSIDIARY COMPANIES
During the year under review, the Company subscribed
to/acquired equity shares in various subsidiary companies.
These subsidiaries are either SPVs executing projects secured
through Build Operate Transfer (BOT) route, or holding
companies making investments in companies such as power
and fi nancial services. The details of investments in subsidiary
companies made during the year are as under:
11,22,51,000 equity shares of ` 10 each in L&T-MHI
Boilers Private Limited.
12,75,51,000 equity shares of ` 10 each in L&T-MHI
Turbine Generators Private Limited.
6,34,32,835 equity shares of ` 10 each in L&T Finance
Holdings Limited
(formerly L&T Capital Holdings
Limited).
50,000 equity shares of ` 10 each in L&T Solar
Limited.
3,24,00,000 equity shares of ` 10 each of L&T
Infrastructure Development Projects Limited.
114,90,00,000 equity shares of ` 10 each in L&T Power
Development Limited.
15,00,006 equity shares of ` 10 each in L&T-Gulf Private
Limited.
17,10,00,000 equity shares of ` 10 each in L&T General
Insurance Company Limited.
2,600 equity shares of ` 10 each in L&T Krishnagiri
Walajahpet Tollway Private Limited.
100 equity shares of ` 10 each in L&T Devihalli Hassan
Tollway Private Limited.
2,40,00,000 equity shares of ` 10 each in L&T Aviation
Services Private Limited.
50,10,000 equity shares of ` 10 each in L&T Howden
Private Limited.
34,40,000 equity shares of ` 10 each in L&T Metro Rail
(Hyderabad) Limited (formerly L&T Hyderabad Metro
Rail Private Limited).
9,51,38,939 equity shares of ` 10 each in L&T Sapura
Shipping Private Limited.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
24
–
–
–
–
–
–
–
6,000 equity shares of ` 10 each in L&T Sapura Offshore
Private Limited.
50,000 equity shares of ` 10 each in L&T PowerGen
Limited.
4,14,720 equity shares of ` 100 each representing
50% stake of EWAC Alloys Limited.
10,400 equity shares of ` 10 each in L&T Samakhiali
Gandhidham Tollway Private Limited.
1,53,00,000 equity shares of ` 10 each in L&T Kobelco
Machinery Private Limited.
11,10,00,000 equity shares of ` 10 each in L&T Special
Steels and Heavy Forgings Private Limited.
Further contribution in 67,69,518 partly paid-up equity
shares in L&T Infrastructure Development Projects
Limited. With this contribution, these shares have
become fully paid-up.
During the year, L&T-Sargent & Lundy Limited issued to the
Company 13,76,065 equity shares of ` 10 each as bonus
shares.
The Company transferred 6,52,65,000 equity shares of
` 10 each in L&T Halol-Shamlaji Tollway Limited to L&T
Infrastructure Development Projects Limited.
The Company transferred 6,30,15,000 equity shares of
` 10 each in L&T Ahmedabad-Maliya Tollway Limited to L&T
Infrastructure Development Projects Limited.
The Company transferred 10,000 equity shares of ` 10
each in L&T Transco Private Limited to L&T Infrastructure
Development Projects Limited.
The Company sold 500 equity shares of ` 10 each in Kesun
Iron & Steel Company Private Limited.
Three subsidiary companies had applied for strike off under
the Easy Exit Scheme, 2010 (EES 2010). We have received
communication from ROC that these companies have been
struck off the register under Section 560(5) of the Companies
Act, 1956 and they stand dissolved.
MCA, vide it’s Circular No. 2/2011 dated February 8, 2011,
has granted general exemption under Section 212(8) of the
Companies Act, 1956, for not attaching annual reports of
subsidiary companies subject to certain conditions being
fulfi lled by the Company. As required under the circular,
the Board of Directors has, at its meeting held on April 6,
2011, passed a resolution giving consent for not attaching
the Balance Sheet of the subsidiary companies. We have also
given the required information on subsidiary companies in
this Annual Report. Shareholders who wish to have a copy
of the full report and accounts of the subsidiaries will be
provided the same on receipt of a written request from them.
These documents will be put up on the Company’s Website
viz. www.larsentoubro.com and will also be available for
inspection by any shareholder at the Registered Offi ce of the
Company, on any working day during business hours.
Directors Report p23-59 final.indd 24
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Directors Report p23-59 final.indd 25
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AUDITORS’ REPORT
The Auditors’ Report to the shareholders does not contain
any qualifi cation.
DISCLOSURE OF PARTICULARS
Information as per the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, relating
to Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo is provided in Annexure ‘A’
forming part of this Report.
OTHER DISCLOSURES
The disclosures required to be made under the Securities
and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines,
1999, together with a certifi cate obtained from the Statutory
Auditors, confi rming compliance, is provided in Annexure ‘B’
forming part of this Report.
Pursuant to Clause 49 of the Listing Agreement entered
into with the Stock Exchanges, a Report on Corporate
Governance and a certifi cate obtained from the Statutory
Auditors confi rming compliance, is provided in Annexure ‘C’
forming part of this Report.
PERSONNEL
required under Section 217(2A) of
The Board of Directors wishes to express it’s appreciation
to all the employees for their outstanding contribution to
the operations of the Company during the year. The
information
the
Companies Act, 1956, and the Rules made thereunder, are
provided in Annexure forming part of the Report. In terms
of Section 219(1)(b)(iv) of the Act, the Report and Accounts
are being sent to the shareholders excluding the aforesaid
Annexure. Any shareholder interested in obtaining copy of
the same may write to the Company Secretary. None of
the employees listed in the said Annexure is related to any
Director of the Company.
CORPORATE GOVERNANCE VOLUNTARY GUIDELINES
By complying with the provisions of the Companies Act, 1956
and Clause 49 of the Listing Agreement, the Company is
complying with major clauses of the Corporate Governance
Voluntary Guidelines, 2009.
We have reported in Annexure ‘C’ to the Directors’ Report –
Corporate Governance, the extent of our compliance of the
Corporate Governance Voluntary Guidelines, 2009 under
the following heads:
1. Nomination & Remuneration Committee
2. Other Information
3. Audit Committee
4. General Shareholders’ Information
CORPORATE SOCIAL RESPONSIBILITY VOLUNTARY
GUIDELINES
MCA had released a set of guidelines on Corporate Social
Responsibility (CSR) in December 2009. The Company is
substantially complying with the guidelines laid down.
The Company has been one of the fi rst engineering and
construction companies in India to publish its report on
Corporate Sustainability.
The activities carried out by the Company as a part of its
CSR initiatives are briefl y described on pages 18 to 22
and 101 of the Annual Report. The detailed Corporate
Sustainability Report is also available on the Company’s
website www.larsentoubro.com.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors of the Company confi rms:
i.
ii.
iii.
iv.
v.
that in the preparation of the annual accounts, the
applicable Accounting Standards have been followed
and there has been no material departure;
that the selected accounting policies were applied
consistently and the Directors made judgments and
estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the
Company as at March 31, 2011 and of the profi ts of
the Company for the year ended on that date;
that proper and suffi cient care has been taken for
the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company
and for preventing and detecting fraud and other
irregularities;
that the annual accounts have been prepared on a
going concern basis; and
that the Company has adequate internal systems and
controls in place to ensure compliance of laws applicable
to the Company.
DIRECTORS
Mr. R. N. Mukhija and Mr. J. P. Nayak, Whole-time Directors
of the Company retired at close of working hours of October
23, 2010 and March 31, 2011 respectively. The Directors
record their appreciation of the valuable services rendered
by Mr. R. N. Mukhija and Mr. J. P. Nayak.
The Board has inducted Mr. Ravi Uppal and Mr. S. N.
Subrahmanyan as Whole-time Directors of the Company
w.e.f. November 1, 2010 and July 1, 2011 respectively.
Mr. S. N. Subrahmanyan has been appointed as a Director
with effect from July 1, 2011, in the casual vacancy to be
caused by retirement of Mr. K. V. Rangaswami and holds
offi ce of Director until conclusion of the ensuing Annual
Directors Report p23-59 final.indd 24
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Directors Report p23-59 final.indd 25
25
1/1/2004 11:28:53 AM
General Meeting. Mr. K. Venkataramanan, Mr. S. Rajgopal,
Mr. A. K. Jain and Mr. S. N. Talwar retire from the Board
by rotation and are eligible for re-appointment at the
forthcoming Annual General Meeting. The notice convening
the Annual General Meeting includes the proposal for re-
appointment of directors.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Consolidated
Financial Statements pursuant to Clause 32 of the Listing
Agreement entered into with the Stock Exchanges and
prepared in accordance with the Accounting Standards
prescribed by the Institute of Chartered Accountants of
India, in this regard.
The Auditors’ Report to the Shareholders does not contain
any qualifi cation.
AUDITORS
The Auditors, M/s. Sharp & Tannan (S&T), hold offi ce until
the conclusion of the ensuing Annual General Meeting
and are recommended for re-appointment. Certifi cate from
the Auditors has been received to the effect that their re-
appointment, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956.
S&T has submitted the Peer Review Certifi cate dated May 6,
2009 issued to them by Institute of Chartered Accountants
of India (ICAI).
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the Financial
Institutions, Banks, Central and State Government
authorities, Regulatory authorities, Stock Exchanges and the
stakeholders for their continued co-operation and support
to the Company. Your Directors also wish to record their
appreciation for the continued co-operation and support
received from the Joint Venture partners / Associates.
For and on behalf of the Board
A. M. Naik
Chairman & Managing Director
Mumbai, May 19, 2011
26
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Annexure ‘A’ to the Directors’
Report
(Additional information given in terms of notifi cation issued
by the Ministry of Corporate Affairs)
[A] CONSERVATION OF ENERGY:
(a) Energy Conservation measures taken:
1
Improving energy effectiveness / effi ciency of
Equipment and Systems
•
•
•
•
Installation of 1000 KVAr of Automatic Power
Factor Correction Panels for MFF-1, 2 & 3.
Introduction of double circuit
in High mast
light towers to reduce illumination and power
consumption during non-working hours.
Installation of Auto temperature controller with
the use of VFD and PID controller in HVAC of MFF
EPC Block.
Retrofi tting on 3 MT EOT crane with installation
of VFD, Fitment of variable frequency drives for
EOT cranes in 20T & 40T hoists and Long Travel
Movements at LTM, Manapakkam.
• Conversion of all the contractor welding rectifi ers
to Inverter based.
•
•
•
•
•
•
Incorporation of transparent poly carbonate sheets
at the time of design for new shops to make use
of day-light for illumination.
Replacement of CRT monitors with LCD monitors
in MFF offi ces.
Replacement of energy effi cient HPSV SON-T lamp
for open Yards in MFF-1 & 2.
Procurement of 700 MT EOT and Goliath cranes
having all motors driven through high effi cient
VFD controlling.
Reduction in use of Material handling equipment
& saving of fuel by improving overall plant layout
in MFF.
Replacement of Crawler cranes by Goliath bays in
MFF-3 improving working effi ciency and reducing
fuel consumption.
• Conducting a majority of the MFF Blasting
operation in controlled shop environment to realize
more effi cient blasting process and reduction of
diesel consumption & compressor requirements.
•
Installation of energy saver in Infotech building
and sub-station.
• Optimization of chiller utilization
in HVAC
system.
•
Installation of solar street light system in ECC
campus.
•
Replacement of package and split ac unit with
chilled water type air handling unit – for 2 x 200
kva ups room at Energy Centre.
•
Installation of solar rooftop in ECC campus.
• Use of Variable frequency drive for various
applications such as Welding Positioners, EOT
cranes, Machine tools to improve the motor
effi ciency and enhance energy saving.
•
•
•
• Use of energy saving devices like Occupancy
sensors / movement detectors in shop offi ces,
buildings, Wash rooms, unused space, etc.
Replacement of incandescent lamps with LED
lamps on shop fl oor for hand lamps and machine
lamps.
Replacement of axes feed drives and spindle drives
with latest energy effi cient drives and motors.
Replacement of Air Circulator with the latest
energy effi cient Almonard make Air Circulator.
Implementation of Infra-red heaters in place of
pipe burners for job pre and post heating.
Introduction of Thyristorised Electrical Control
system for furnaces in place of Contactor control
system.
Introduction of energy effi cient fl ux baking
ovens.
Installation of transparent sheets on roofs of
D-Building Maintenance and Stores.
Provision of Auto ON
Generator
/ OFF timer for HF
•
•
•
•
•
• Modifi cation of Automatic Film Viewer Machines
in RT dept.
Installation of Automation system in water tanks
•
• Use of Solar PV System for 2.5% of total building
load
• Coolant supply system
in drilling machines
automated giving coolant feed only during drilling
cycle.
Replacement of higher wattage HPMV overhead
lower wattage
high bay
Metal halide light fi ttings in Fabrication shop at
Kansbahal.
Installation of real time clocks for bay lights in
mould shop at LTM, Manapakkam.
light fi ttings with
•
•
•
• Optimized the operation of transformers at LTM,
Manapakkam during night hours and holidays
resulting in energy saving.
Replacement of conventional 40 watt FTL tube
light fi ttings by energy effi cient mirror optics light
fi ttings in Kansbahal Foundry offi ce.
Installation of automatic time switch for shop
lighting and street lights at Kansbahal Foundry,
Coimbatore foundry.
•
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27
1/1/2004 11:28:53 AM
•
•
Fitment of TFT monitors for all PC’s and affi xment
of low emission fi lms on glass windows to reduce
energy consumption at Coimbatore Foundry.
Reduction in daily running time of A/Cs at
Coimbatore Foundry along with switching off
lights and A/Cs during lunch breaks.
• Observed “Walk to work” day on 2nd Saturday of
every month at Kansbahal; also observed “Earth
Hour” on March 26, 2011.
• Maintained Unity Power Factor.
• Arresting air leakages resulting in 13% reduction
in compressor consumption
2
Improving energy effectiveness / effi ciency of
Manufacturing Processes
• Modifi cation of Main furnace with insulation
modules for better heat retention.
• Modifi cation of PLC programme of Homma
machine to avoid idle running of coolant motors.
•
•
•
Installation of duel fuel kit with PNG for Diesel
Fired 1250 KVA Generator.
Process improvement on manufacturing of Shell
Gasifi er Syngas Cooler Lower by eliminating full
SR and doing part SR of two parts and subsequent
Local SR after joining, thus avoiding building
of large furnace which is diffi cult to control,
less energy effi cient. This also improved the
manufacturing cycle time.
Pre-fabrication of Rapper box with refractory
fi lling in component stage, reducing cycle time
and resulting in better resource utilization.
• Development of energy effi cient square butt SAW
process for long seam and circular seam welding
in Torpedo Tubes, resulting in 80% saving in cycle
time.
• Development of automatic locking and temperature
recording mechanism for fl ux baking ovens to
ensure proper completion of baking cycle and
eliminating repairs / rework resulting from using
improperly baked fl ux.
•
•
Implementation of 3-axis CNC milling machine
with automatic profi le tracking device for clad
removal and weld edge preparation in D’end
petals.
Implementation of energy effi cient robotic welding
process for Aluminum welding in Interceptor Boat
project.
• Use of laser based tracking system for face
machining of Octagonal fl anges in End Shield
project, eliminating need of programming and
set-up time.
28
• Development of Nozzle Welder for welding of
Nozzle to Shell using energy effi cient SAW process
in Steam generator project.
• Development and implementation of on-line tilt
measurement system in T-frame (web to Flange)
welding, reducing 20% cycle time per T-frame
by eliminating manual measurement and waiting
time.
• CNC Retrofi tting of VDF Table Borer (Machine
No. 122) at Kansbahal Machine shop resulting in
increased productivity.
• Auto switch facility for all dust extraction system
at Coimbatore Foundry.
• Connection of all compressors at Coimbatore
Foundry to centralized on / off control resulting
in switch on / off of the compressors based on air
consumption.
•
•
Installation of furnaces at Coimbatore Foundry
with capture hood to avoid heat loss resulting
energy saving.
Installation of mechanical reclamation system
at Coimbatore Foundry for furan sand recovery
resulting in around 90% recovery.
(b) Additional
investments and proposals,
if
any, being implemented for reduction of
consumption of energy:
•
•
•
•
•
Replacement of Spindle motors of Kolb machines
with AC motors and VFD in place of DC motors
and drive and to avoid idle running of Coolant
motors.
PH Furnace Revamping / Modifi cation to improve
Combustion Effi ciency.
Installation of AC drives for all axes of machines
such as New Skoda, SKZ-32, MKVTL.
Implementation of Plasma Welding for Gasifi er
Transfer Duct & Inconel to reduce rework and
ensure better quality of fi nished product.
Procurement of Robotics system planned for Tube
to Tube-sheet joint welding in Steam Generator
project.
• Operation of Hydraulic motors of CNC M/c with
PLC system.
• Changing of control of Brick Furnace from Cycle
control to Firing Angle control.
•
•
•
Implementation of a vacuum clamping system for
clamping main deck with the skid in Interceptor
Boat project, eliminating need of cleat welding
and grinding.
Installation of water fl ow meters in Kansbahal
Colony quarters.
Installation of solar water heater in Transit House
at Kansbahal.
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•
•
•
•
•
Installation of power management system (SCADA)
at main sub-station at Kansbahal Works.
Installation of No-Loss drain valve at compressed
air system at Kansbahal Foundry.
Installation of Air Saving Nozzles at shop fl oor for
mould cleaning purpose at Kansbahal Foundry.
Installation of compressed air management system
at Kansbahal Foundry.
Thermal reclamation system implementation work
in progress to achieve 98% furan sand recovery at
Coimbatore Foundry
• Usage of LPG for ladle pre-heating instead of
diesel at Coimbatore Foundry.
• Mould drying oven to replace manual drying by
torches at Coimbatore Foundry.
•
Routine replacement of conventional FTL / GLS
with Cols.
(c)
Impact of measures at (a) and (b) above for
reduction of energy consumption and consequent
impact on the cost of production of goods:
•
The measures taken have resulted in savings in
cost of production, power consumption, reduction
in carbon dioxide emissions & processing time.
(d) Total Energy Consumption and Energy Consumption
per unit of production as per Form A in respect of
industries specifi ed in the Schedule:
• NOT APPLICABLE
[B] TECHNOLOGY ABSORPTION:
Efforts made in technology absorption as per Form B.
FORM B
(Disclosure of particulars with respect to
Technology Absorption)
RESEARCH AND DEVELOPMENT (R&D)
1. Specifi c areas in which R&D carried out by the
Company:
•
Chemical Engineering
Design, analysis and simulation of chemical
processes and equipment, with special emphasis
on Gas Processing applications (Gas / Liquid
Separation, Gas Dehydration and Gas Sweetening
Units); Process Gas Compressor Modules; Ammonia
and Urea Processes; Flow simulation studies for
Oil & Gas Projects; Solid handling processes in
Petrochemical applications; Refractory engineering
for chemical plant equipment; Modeling and
process simulation of fi xed bed and entrained bed
coal gasifi es; Failure analysis and troubleshooting
of various process units.
• Material Science & Corrosion Engineering
Material selection / material characterization for
equipment and systems in various Hydrocarbon
Projects; Failure Analysis studies for components
such as boiler / heater tubes, furnace coils,
coupling spacers etc., Welding of thick duplex
stainless steels components for high-pressure
Oil & Gas applications, Eco-friendly corrosion
inhibitors, Surface engineering of metals and
non-metals, Development of Composites with
functional properties, Nano-materials for strategic
applications.
•
Thermal Engineering
technique
Application of CFD
in design
optimization and troubleshooting of equipment
and systems (such as 3-Phase Separators, Flare
stacks, Riser Pipe and Cyclones); Modeling of
heat transfer mechanism in specialized application
(such as Reactor–Regenerator, Orifi ce Chamber);
Failure analysis and troubleshooting
involving
heat exchangers, boilers, heaters and furnaces;
Capability development in Once through Steam
Generator and Super Critical Boiler technology;
Dynamic simulation of captive power plant;
Low-temperature thermal desalination processes;
Furnace waste heat recovery using molten salt
system.
•
Rotating Machinery
Advanced engineering studies in Vibration and
Acoustics for machinery and piping; Stress analysis
and fatigue life assessment of specialized systems
(such as Orifi ce Chamber); Surge analysis of
piping systems subjected to thermal and acoustic
excitation; Troubleshooting of machinery vibration
problems; Failure analysis of ID fan couplings;
Performance testing and commissioning of turbo-
machinery for Hydrocarbon & Power applications;
Product development / design optimization of
Coal Pulverizes for Supercritical Boilers.
• Mechanical Engineering
Design solutions for products through advanced
Finite Element analysis; Thermal fatigue analysis of
spent catalyst stand pipe; Stress analysis of critical
items such as piping nozzles and production
manifolds for oil and gas processing applications;
Structural stress analysis for jackets and drilling rigs;
Experimental stress analysis of critical equipment
during load / pressure tests.
• Water Technologies
Technology evaluation for water, sludge and
effl uent treatment processes; Design and detailing
of water / wastewater facilities, sludge and effl uent
Directors Report p23-59 final.indd 28
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29
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treatment plants in Hydrocarbon & Power Projects,
Application of advanced treatment technologies
such as sea water / brackish water thermal
desalination, membrane bioreactor, sequential
batch reactor, up fl ow anaerobic sludge blanket
reactor etc.; Lab scale pilot plant studies for
determining characteristics and treat ability aspects
of water & wastewater; Design and execution of
complete Brackish Water Reverse Osmosis (BWRO)
facility for in-house project.
• Development of an indigenous Creep Testing
Machine of capacity 1000 ken for testing high
strength concrete.
• Development of software for simplifi ed and
economical design of piled raft foundations
suitable for high rise buildings.
• Continued Research on the application of recycled
materials in base and Sub-Base Layers for pavement
construction.
• Use of Mechanistic Design approach for Industrial
Pavements and Floors.
• Conducting study on Deep Soil Mixing techniques
for soil stabilization
• Application of Soil Modifi cation technique for
large earth fi lls.
• Designing the mix and evaluation of high strength
concrete for application in high rise towers.
• Development of concrete with no cement and
water for in situ construction.
• Development of Contiguous Flight Auger Pile
technology.
• Use of Trench Cutter Technology for Deep Vertical
Shaft.
• Use of Large Scale Precast Piling technology.
•
•
Improvement in the pile bore process by Polymer
Drilling Fluid to replace conventional Bentonite.
Improvement in Pile socketing in Rock by Rotary
Piling Machines.
• Development of Unmanned Underwater Vehicles.
• Development of Marine Propulsion Systems.
• Development of Underwater Weapon Launch
Systems
• Development of Missile Telemetry Systems.
• Development of Composite Material technology
for projects under Marine BU.
• Development of Composite Material Components
and Assemblies for BARC, NAVY & ISRO.
• Development of welding Simulation Technology.
• Development of Waste Heat Recovery Boiler for
Nitric acid plant.
• Development of Moisture Separator Reheater for
Nuclear Power Plant.
• Development of a new Coal Crusher
(Ring
Granulator model 1217 U)
• Development of a new and bigger Surface Miner
(Model KSM 403).
• Development of Rubber Processing Machinery such
as 130”/131” Vertical Chuck Loader (VCL) for OTR
Tyres, 95” Mechanical Slide Back Press with VCL,
65.5” Slide Back Hybrid Platen Tyre Cure Press
(TCP), 51” Hydraulic TCP with VCL & Segmental
Mould Operators, 68.5” Slide Back Hybrid Platen
TCP, 51” Single Cavity Mechanical TCP with VCL
and PCI, 104” TCP with Oil Hydraulic VCL.
• Design and development of new products and
product ranges of Air circuit breaker (ACB),
Moulded case circuit breaker (MCCB), Contactors,
Relays, Switch Disconnector-Fuse and Change over
devices.
• Design and development of new product ranges
of Low Voltage Power control centre (PCC) and
Motor control centre (PCC) Switchboards.
• New platform products have been developed /
introduced during the year as under:
o U-POWER Omega Air Circuit Breakers and
Matrix protection & Control units
o MO contactors up to 110 A.
o C-Line changeover switch
o
o
o
Stored energy motor operator for MCCBs`
10 kA breaking capacity in Tripper range
T-ERA Low Voltage panels for Power Control
& Motor Control centers
• M-COMP: A new product developed for complete
Solution for Motor Protection.
• Cement Automation Package.
Electronic Toll Collection.
•
2. Benefi ts derived as a result of above R&D:
• Complete process simulation, design solutions and
optimization for Hydrocarbon projects involving
Refi nery, Fertilizer, Gas Processing and Chemical
Plants. In-house expertise for complete Refractory
in high-temperature equipment for
solutions
process plants.
• Development of
in-house capability
simulation studies for Oil & Gas Projects.
in fl ow
•
/ commissioning of plants
Successful testing
and equipment in various Hydrocarbon projects,
through multi-disciplinary technology support.
• Material evaluation / characterization; selection
of alternative materials; failure analysis support;
preservation and corrosion protection of critical
30
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•
•
equipment. Development of new materials for
strategic applications.
Successful troubleshooting / design optimization
of thermal equipment and systems using advanced
CFD technique; Expertise in dynamic simulation
of captive power plant; Capability development
in newer applications such as low-temperature
thermal desalination and energy storage through
molten salt system.
Successful troubleshooting / failure analysis of
machinery for various projects; Development of
in-house expertise in advanced FEA and fatigue
analysis techniques for specialized systems (Orifi ce
Chamber / associated piping); Design upgrade and
optimization of coal pulverizers. Successful conduct
of acceptance testing of critical machinery.
• Development of in-house capability for analyzing
fl ow-induced vibration and acoustic vibration in
oil & gas piping systems subjected to transient
process conditions, including surge analysis in
thermal – fl uid systems.
•
Establishment of in-house capability in design /
analysis of complex structures and piping systems
for Oil & Gas applications, subjected to critical
operating conditions involving non-linear effects,
shock / impact, thermal fatigue and high-pressure
/ high-temperature processes.
• Development of Creep Testing Machine in-house.
• Conservation of
large quantity of natural
aggregates by the use of recycled pavement
materials.
• Use of low energy construction practices in
pavement construction.
•
•
Improvement in ground improvement techniques
in large sites.
In house testing facility created for reliable results
and timely delivery of test results for faster
construction and knowledge upgradation.
• Construction of high rise towers.
•
Introduction of Contiguous Flight Auger Pile at
1300 MW Power Plant at Rajpura, Punjab.
• Construction of Deep Vertical Shaft using Trench
Cutter Technology at New Delhi, INFRA OC-Bridges
& Metros BU.
• Use of Process Approach for Gas Terminal for
GSPC Kakinada, E&C-HCP BU for large scale
Precast Piling.
• Use of Polymer Drilling Fluid to Replace Bentonite
Drilling Mud for Bored Piling at TISCO Jamshedpur,
CMRL-Chennai, MMH&W OC and INFRA OC
•
Replacement of Tripod-Winch-Bailer with Rotary
Piling Machines for Pile socketing in Rock at
Directors Report p23-59 final.indd 30
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Directors Report p23-59 final.indd 31
CMRL-Chennai, Mumbai Monorail, Nasik Elevated
Express WayINFRA-OC.
• Development of capabilities of Deep Soil Mixing
improvement
(DSM) as an Effective Ground
Technique to replace piling.
Proposing Highway Pavement - Stage Construction
Design based on traffi c volume and design MSA as
part of value engineering in three GSRDC projects
as a part of value engineering.
Implementation of value engineering initiatives
like standardization of major / minor bridge
structures (span & cross section), pier formwork,
optimization of major bridge superstructures,
optimization of foundations resulting in both time
& cost reduction.
Indigenisation & development of products for
Indian defence and space sector.
•
•
•
• Wider
range of products
application requirements for crushing.
to meet specifi c
• Higher production and better fuel effi ciency in the
operation of bigger Surface Miner.
• Ability to offer new products for Rubber Processing
for varied requirements and positioning of our
products well against offerings by international
competitors.
Savings in Foreign Exchange
Increase in Product Range coupled with Technology
upgradations and cost reduction.
•
•
• More contemporary and competitive product
•
offering.
Boosted our capabilities to offer products against
stiff international competition.
• New platform variants
launched
to meet
requirements of market including two variants in
single phase and one variant in poly-phase.
Single phase platform was redesigned for ease of
production.
•
• MPS has initiated development activity on the eco
system required for smart meters and developed
technologies for communication of meter data
over GSM network / low range radio / power
line.
3.
Future Plan of Action:
•
•
In-house design / simulation capability of Ammonia
and Urea Processes.
Rate-based model development and simulation for
Pre-Reformer, HTER and Auto-thermal Reformer.
• Capability development in fl ow assurance studies
•
•
using OLGA software.
Residue up-gradation processes in Refi nery.
Process design capabilities in Petrochemical /
Polymer Plants.
31
1/1/2004 11:28:54 AM
Process technology for coal gasifi cation.
•
• Modularization of Process Plants.
• Carbon Capture and Sequestration techniques.
• Use of CFD techniques for performance assessment
•
of coal gasifi ers.
Solar Thermal Power Plants using paraboloid
concentrator / solar tower.
• Application of Ocean Thermal Energy Conversion
(OTEC) for power generation.
• Use of molten salt system for thermal energy
•
storage.
Steady-state and
analysis of fl uid systems.
transient
(Water Hammer)
• Advanced Finite Element Analysis (FEA) techniques
for process equipment subjected to thermal
shock.
Techniques
Reliability, Availability &
Maintainability (RAM) studies for Process Plants
and Packages.
for
•
• Development of design / analysis methodology for
•
Floating Structures using FEA.
Study on
techniques.
state-of-the art Creep Analysis
• Methodology for Limit Stage Design and Analysis
•
for Pressure Vessels.
Study on advancements in critical equipment
metallurgy (such as Ammonia Converter).
• Development of aluminium silicate nano particles.
• Carbon Fibre production technology.
• Development of composite materials for Radome.
/ analysis
• Development of
capability involving Recycle, Reuse and Zero-
discharge Technologies.
Robotics and automation for construction site.
Study on precast structural systems.
•
•
• Optimum Design of Large capacity transmission
in-house design
Towers.
• New Pavement Technology at intersections, Toll
Plaza and parking bays.
Studies on Anti-Fuel damage mixtures.
•
• Design and sensitivity analysis of Micro-Pile
systems.
• Deep excavation
system
for
infrastructure
projects.
• Development of Roller compacted concrete with
large size aggregates for hydroelectric projects.
Studies on pumpable concrete for large heights.
•
• Development of Pre stressed concrete blocksand
mortar less walls
• Alternate materials in construction.
•
Implementation of Cable Crane system for dam
concreting.
32
• Development of modular liner construction in
nuclear projects.
• Alternate methods for Marine Piling.
•
• Development of knowledge on Mechanistic
Implementation of Rigid Pavement Design.
pavement design.
• Development of new / upgraded products in
defence equipments, space equipment and Mobile
Crushing Plant product line.
• Development of Hydraulic presses for passenger
car and truck- bus tyres and development of all
electric presses for the same segment.
• Continuous
research on
Improvement and
solidifi cation characteristics in GGG 70 grade of
castings.
• Develop platform product
ranges on new
technology platform, thereby creating a technology
differentiation in the product.
Incorporate technologically cutting edge to the
product portfolio.
Through the new product ranges, new applications
will be addressed.
•
•
• New markets and geographies will be created for
•
in
the
newer business opportunities.
Participation
various national and
international Standard Organizations will ensure
that the product designs are always contemporary
and meet latest regulatory requirements.
• Development of Material Handling Package
• We have identifi ed Smart Grid as lead initiative
in Power Distribution space and following is
envisaged :
o Meter Data Acquisition System (MDAS)
o Control Systems
for Renewable Energy
Sources
•
CEFD – Centre for Excellence and future
development
CEFD was started a year back and is responsible
for developing sustainable and carbon neutral built
spaces. As a step forward in this process, CEFD is
focusing on enhancing energy effi ciency, indoor
environmental quality, occupant comfort and
climate responsiveness in the upcoming projects.
The thrust areas of CEFD are as follows:
Performance
Enhancement
in Built spaces
Assisting energy effi ciency during
design
Comfort and energy analysis of
existing and upcoming projects
Experimental testing and thermal
performance evaluation of building
envelope systems for existing
buildings
Directors Report p23-59 final.indd 32
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Directors Report p23-59 final.indd 33
1/1/2004 11:28:54 AM
Developing
new
technology
systems
Energy
effi ciency
and indoor
environmental
quality in
buildings
Life cycle
costing
Tools /
Interface
development
Developing design
guidelines for
offi ce spaces which
involves spatial
design optimization,
envelope
optimization and
material selection
for various climatic
zones
Developing energy
performance
database for various
glazing systems
which will further
be used to create a
tool for glazing and
frame selection
LCC analysis to
support selection of
building systems
HTML interface
to assist shading
design for major
Indian cities
Sustainability
Initiatives
Capacity
Building
Facilitation and coordination for
green rating
Collaborative research initiatives
with organizations like IITs, IISc, TERI
and research laboratories in US,
Canada and Europe
Knowledge enhancement programs
for various divisions of B&F (IC)
4. Expenditure on R&D:
Own Funded:
(a) Capital
(b) Recurring
(` crore)
2010-2011 2009-2010
40.72
68.26
5.56
85.98
Sub-Total
108.98
91.54
Customer Funded:
Total
Total R&D expenditure as a
percentage of total turnover
16.46
125.44
0.29%
–
91.54
0.25%
TECHNOLOGY ABSORPTION, ADAPTATION AND
INNOVATION:
1. Efforts
in brief made
towards
technology
absorption, adaptation and innovation:
•
Interaction with external agencies / technology
partners for exposure to the latest products /
designs, manufacturing technologies, processes,
analytical techniques and engineering protocols.
Directors Report p23-59 final.indd 32
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Directors Report p23-59 final.indd 33
•
•
• Active involvement with International / National
Professional Societies (such as IChemE, AIChE /
CCPS, IIChE, ICC, FRI, ASME, NACE, ASM, ASTM,
AISC, ACS, TERI, HTFS, HTRI, STLE, TSI, NAFEMS,
TSI, etc.)
Knowledge sharing through national / international
conferences, seminars and exhibitions.
Valuation, adaptation and / or modifi cation of
imported designs / technologies to suit indigenous
requirements, alternative materials / components.
Parametric studies involving theoretical models
duly validated by experimental studies at in-house
laboratories and pilot plants as well as feedback
and operating data during commissioning of
various plants and machinery.
Review of patents in relevant technology areas.
•
• Nomination of R&D engineers
to external
training programs, expert groups and technical
committees.
•
• Collaborative efforts with educational / research
institutions for research projects.
• Use of state-of-the-art equipment, instrument and
software.
• Analyzing
feedback
from users
to
improve
processes and services.
• Development and implementation of large single
in Nuclear Reactor Building
pour technology
Concreting works.
• Designing and
implementation of high-lift
formwork system with 4.8m height (as against
for Dam Pier
conventional 2.40m height)
Construction in Shrinagar HEP Project reducing
the cycle time by 30%.
• Designing and detailed use of Bridge Erection
Equipment (Launching Girder) in multiple projects
(Sahar Elevated Project & Nasik Elevated Highway
Project) resulting in savings in construction time
and cost.
• Use of alternate materials in Port Construction
such as GGBF Slag as replacement for Cement,
Dredged Sand used in Road Embankment / fi lling
works, Steel fi bers used in pavement works to
optimize thickness and Fly Ash Bricks used in place
of conventional clay bricks.
• Adaptation of previously developed technologies
for delivering products such as Winch & Mooring
System for Aerostats, Torpedo Launcher mounts,
launcher mounts & Anti-Tank
ASW Rocket
Guided Missile launchers, Heavy Weight Torpedo
Launchers, Universal Vertical Missile launchers,
Multi Barrel Rocket Launcher System.
• Development of remote welding technique for
repair on live nuclear reactor vault.
33
1/1/2004 11:28:54 AM
•
•
•
• Development of mechanization
/ welding
automation on shop fl oor for specifi c application.
•
•
Robot for welding overlay application.
Indigenisation of the Transfer Duct of Shell
Gasifi er.
• Adaptation of crushing technology for various
applications.
• Magma software for metal fl ow analysis gives
metal fl ow stream into the mould, impact of
metal fl ow, possible causes of rejection during
metal fl ow resulting minimum trial runs during
development of new items.
• ATAS
for
software
thermal analysis gives
solidifi cation behavior of metal to analyze and
ensure right composition.
Impact of Chemistry and Liquidus Temperature on
cooling characteristics in SG Iron castings.
• Wider
to meet specifi c
range of products
application requirements for crushing.
Indigenized various components
for Rubber
Processing Machinery by designing, developing
specifi cations and adapting to Indian conditions.
Establishment
and
Development Center (SDDC) at Mumbai and
Coimbatore comprising of more
than 300
engineers with diverse skill sets and expertise in
design of multi-generation platform products and
systems.
o
Switchgear Design
of
State-of-the art CAD / CAE facilities and a
well equipped test laboratory to translate
the technologies and product concepts into
product designs.
Engagement of Technology Development
Group in development and tracking of future
integrated
technologies which could be
in products, tracking and monitoring of
technologies currently in embryonic stage
to provide signifi cant opportunities in the
future.
o
• Distributed Management System
implementation of on-going job.
(DMS)
thru
2. Benefi ts derived as a result of the above efforts,
e.g., product improvement, cost reduction, product
development, import substitution, etc.:
•
Successful simulation / optimization of process
design and engineering for various Hydrocarbon
(Refi nery, Oil & Gas, Fertilizer and
projects
Chemical plants).
• Appropriate refractory design for high-temperature
•
applications.
Energy conservation using optimal heat exchanger
network analysis and confi guration.
34
•
•
Building capability for Dynamic Simulation of
Power Plants.
selection
for
characterization
Successful
of materials
critical applications and
implementation of suitable preservation / corrosion
protection techniques.
and
• Development of optimized design
for Coal
Pulverizers.
•
Establishment of in-house capability for advanced
engineering analysis
involving Modeling &
Simulation, Computational Fluid Dynamics, and
Stress Analysis through Finite Element Methods,
Vibration & Acoustics, Rotor Dynamics and
Tribology.
• Development of expertise in performance testing
of critical turbo-machinery.
•
•
Effective solutions to design / analysis problems
involving complex structures and piping systems
for offshore Oil & Gas applications.
Successful testing / commissioning of plants and
equipment in various projects, through multi-
disciplinary technology support.
• Acquisition of in-house expertise in areas such as
composite / nano materials, advanced corrosion
control methods, coating and wear protection
techniques and water treatment techniques.
•
•
•
•
•
•
•
Establishment
/ upgrade of state-of-the art
laboratory facilities for material characterization,
chemical analysis, corrosion control, vibration and
acoustics studies, experimental stress analysis etc.,
in order to provide comprehensive technology
support to business units. This has reduced the
dependence on external agencies and enabled
effective execution of projects.
Indigenization (import substitution) & development
of products for Indian Defence and Space sector
Expansion of product
opportunities.
Product improvement.
range and export
Increase in know-how within the country.
Improved material characteristics in heavy section
castings.
Reduced rejection on account of Metallurgical
Parameters.
• Optimizing the chemistry and product mix for
desired product Quality helping reduce cost.
• Development of multi generation platform
products by New Product Development groups:
o Groups develop platform product ranges on
new technology platform, thereby creating a
technology differentiation in the product and
Directors Report p23-59 final.indd 34
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lending a technologically cutting edge to the
product portfolio.
o Matrix – protection and Control units, MO
contactors and T-ERA Low Voltage panels for
Power Control & Motor Control centers are
intrinsically cost competitive products.
o
The life cycle management group keeps
existing products contemporary
through
product improvements.
o Application specifi c need is addressed by life
cycle management group by creating product
variants.
• Absorption of DMS application know-how.
3.
Information regarding technology imported during
the last 5 years
Technology Imported
Manufacturing know-how of
Cementing Unit
Year of
Import
Status
2007
Absorbed
[C] FOREIGN EXCHANGE EARNINGS AND OUTGO:
Activities relating to exports, initiatives taken
to increase exports; development of new export
markets for products and services; and export
plans.
Overview:
The Company has a diversifi ed range of products. Each
division of the Company has dedicated cells for giving
impetus to exports. The Company has offi ces abroad
and agents in various countries to boost exports. The
Company is intensifying efforts in selected countries
and exploring new markets. The Company regularly
participates in prestigious international exhibitions and
conducts market surveys and direct mail campaigns. The
Company has an international presence, with a global
spread of offi ces and joint ventures with world leaders.
Its large technology base and pool of experienced
personnel enable it to offer integrated services in world
markets.
Engineering & Construction Division (E&C):
The E&C (Projects) Division (E&C-P) has a track record
of executing a number of large size, complex projects
including in GCC region where it has established a
good presence.
E&C-P is approved & pre-qualifi ed as EPC contractor by
major International players like Petronas, PTT Exploration
& Production Company Limited (PTTEP), Shell, Exxon
Mobil, Chevron, Conoco Phillips, ADNOC, KNPC,
KOC, QP, Saudi Aramco, GASCO, ENOC, Chemanol,
BANAGAS.
Major International projects executed recently include
wellhead platform project of Maersk Oil Qatar, Gas
handling facilities for GASCO, Gas Pipeline for Qatar
Petroleum and Construction of Jet fuel Depot project
for Kuwait Aviation Fuelling Company.
The Division continues to focus on GCC countries
and in addition is looking at business opportunities in
North Africa, South East Asia and Australia. As part of
strategic plan 2015, a number of initiatives have been
taken in this regard.
Capitalizing on world class fabrication facilities at
strategically located yards & in-house engineering
capabilities, the Division is well poised to scale up
International operations.
PT&D International Business Group of the Construction
Division has played a signifi cant role in the power
evacuation, power transmission and distribution projects
across the GCC countries. Projects are executed on EPC
basis for the HV Substation / Transmission Line with
complete In-house Design, Engineering, Procurement
and Construction including Civil & MEP services.
Major areas of operation include GIS Substations-upto
400 kV, Transmission Line–upto 400 kV, underground
EHV Cabling, Electrical & Instrumentation works for
Industries / Oil and Gas Sectors. Our operations are wide
spread in GCC Countries and mainly situated in UAE,
Oman, Qatar, Kuwait & Saudi Arabia. The Company is
also exploring business opportunities in South & North
Africa.
Business Environment:
Real GDP growth in the GCC is estimated to have
rebounded to 4.8% in 2010 from 0.7% in 2009.
Sustained expansionary fi scal policies, supported by
higher oil prices, helped spur faster growth in non-oil
sectors. Although the overall market was improving,
project award decisions for most of the Transmission &
Distribution projects especially in UAE got delayed due
to certain structural changes. Dubai is still reeling under
the post-recession effect.
Business Performance:
The Postponement / delay in award of projects by
Government sector in UAE had its impact on the
company’s performance parameters in terms of order
infl ow as compared to previous year.
PT&D business reported signifi cant increase in both
revenue and profi tability. The Sales for the year is
` 3,170 crore, rose by 28% as compared to ` 2,475
crore for the previous year. Order book of the SBG as
on 31st March, 2011 is ` 3,961 crore. The Company
has drawn up ambitious plans for its emerging business
in the new geographical areas viz. Bahrain, Saudi Arabia
& African continent.
Directors Report p23-59 final.indd 34
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Directors Report p23-59 final.indd 35
35
1/1/2004 11:28:54 AM
The 2011 outlook for GCC countries remains positive
& real GDP growth is projected to accelerate to 6% in
2011 from an estimated 4.8% in 2010 as sustained
public infrastructure spending, supported by higher
oil prices, helps spur faster non-oil growth. With
oil prices expected to rise to an average of $85/b in
2011, GCC public fi nances will remain reassuringly
strong, despite increased spending. Also due to recent
geo-political disturbances witnessed in MENA region,
the government has proactively been spending more
money on improving the infrastructure facilities which
will pave way for more business opportunities. Major
government projects which are deferred in UAE / Qatar
are expected to get fi nalized in the year 2011-12.
The reinforced thrust to re-enter Saudi, Kuwait and
geographical expansion to South Africa is expected
to yield good results in the years to come. Focusing
our attention on Power Transmission Business and
penetration in to Middle East market is expected to
provide lots of opportunities to sustain the growth
momentum.
Heavy Engineering (HE):
HE has been actively pursuing with the following
customers:
• Ansaldo, ENEL, Alstom, Technicas Reunidas, MHI,
Toshiba etc for overseas orders in Power Plant.
•
Shell to get approved as Indian source for various
equipments in Refi nery & other sectors.
• Aker Solutions for Medicine Bow project in USA.
defence industry for technology tie-ups and indigenous
manufacturing.
Electrical & Electronics Business (EBG):
Electrical Standard Products (ESP) business has obtained
TSE certifi cation for its products in Turkey, identifi ed a
channel partner and has commenced supplies in the
country. ESP has entered into a new brand labeling
arrangement for Air Circuit Breakers (ACBs) & Moulded
Case Circuit Breakers (MCCBs) with NHP, Australia.
The product enhancement actions have been initiated
and supplies to NHP are expected to commence in this
fi nancial year. The business has also started offering
type tested solutions to panel builders through standard
kits to boost its international sales.
The Electrical Systems & Equipment (ESE) business
booked a major order for Ruwais Refi nery Expansion
Project in the Gulf. The business is expecting more
opportunities from the gulf region and expects to grow
in Utilities, Water projects and oil & gas segment.
TAMCO Switchgear (one of the subsidiaries of the
Company) won a major order from TNB, Malaysia for
supply of AIS, GIS & RMU. The unit also won a three
year contract from Integral Energy, Australia for 36kV,
25KA GIS and breakthrough order for 36KV, 40kA
GIS.
During the year, the Division registered a total of 151
Patent applications, 1 Trademark and 7 Designs. This
was the fourth consecutive year that the business has
fi led more than 100 Patent applications.
•
Sasol for CTL Projects worldwide.
Manufacturing & Industrial Products (MIP):
HE is looking at exploiting the good performance of
supplying Shell gasifi ers in China to expand and acquire
business of Shell gasifi cation worldwide. South America
in general & Brazil in particular is emerging as a major
market for process plant equipment. The Division has
booked orders for the supply of Reactors & Coke Drums
for North East Refi nery project of Petroleo Brasileiro S.A
– Petrobras, Brazil. Middle East & North Africa (MENA)
continues to be focus market for the Division. Orders
for supply of critical equipment to fertilizer projects
have been received from Oman and Algeria. China
continues to remain a major market for the Division’s
products.
A new territory has been opened in Vietnam for Urea
Plant and Australia for Ammonia Plant equipment.
Opportunities for export of Defence, Nuclear Power
& Aerospace equipment are being explored as well.
Orders have been received from Israeli Aerospace
Industries as key Offset Partner in the areas of Weapon
Systems, Radars and Aerospace. The Defence Business
is also interacting with major international players in the
Rubber Machinery Business Unit (LTM BU) has been
continuously working on development of new market in
exports. During the year, the Unit has been successful in
obtaining an order for prototype from a new customer
in Germany for supply of Hydraulic Tyre Curing Press.
On successful completion, LTM will supply these presses
to their plants worldwide.
During 2010-11, the physical export of Industrial
machinery from Kansbahal was ` 20.93 crore, primarily
due to good order booking in 2009-10. However, there
was a fall in Deemed Exports due to very low orders on
Pulp & Paper Machinery.
Valves business of the Company bucked the trend of
past years and with the steady increase in the oil prices,
many projects have been announced by Oil Majors,
particularly, Middle East. The business scenario in Oil &
Gas looks very positive with major investments planned
in Middle East, Australia and SE Asia, almost close to
US$ 170Bn planned in Middle East alone.
Another source of opportunity for Company is that
global oil-majors are now looking for long term
36
Directors Report p23-59 final.indd 36
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Directors Report p23-59 final.indd 37
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agreements with valve manufacturers with attractive
volumes and exclusivity for better cost control. Our
international network has been strengthened with
personnel posted in key growing markets such as China
and Middle East with additional postings planned in
Korea, South Africa and Europe.
The Company
is also focusing on Power sector
including overseas nuclear plants to offer high pressure
and custom built valves. With the manufacturing plant
at Coimbatore having obtained the N and NPT stamp
qualifi cation, the Division is well placed to address the
nuclear business abroad, especially North America.
A few initiatives detailed:
The following initiatives are being followed on a
continuous basis by the Company:
• Widening new geographical areas for augmenting
its exports.
•
Exploring
inorganic growth opportunities for
the acquisition of specialized engineering outfi ts
abroad.
• Membership of global forums like Engineering &
Construction Risk Institute (ECRI) and participating
in international seminars.
•
•
•
Implementation of internal processes towards
operational excellence and creating a lean high
performance organization.
Knowledge
platforms within the organization.
dissemination
through
various
Bringing in high caliber resources in the areas
front-end marketing, engineering, project
of
management,
contract
risk management,
administration, etc., to strengthen the overseas
operations.
• Customized Talent Management programs for
catering to the training and development needs
of employees.
Total foreign exchange used and earned:
(` crore)
2010-2011 2009-2010
Foreign Exchange earned
6,367.78
6,866.21
Foreign Exchange saved /
deemed exports
1,941.85
1,510.05
Total
8,309.63
8,376.26
Foreign Exchange used
12,401.55
9,158.88
Directors Report p23-59 final.indd 36
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37
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Annexure ‘B’ to the Directors’ Report
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(I) Employee Stock Ownership Scheme-1999-2003
A. PRE RESTRUCTURE:
ESOP SERIES
Particulars
(1)
SAR-1999
(2)
2000
(3)
2002-A
(4)
2002-B
(5)
2003-A
(6)
2003-B
(7)
(a)
Options granted
(b)
The pricing formula
39,48,800
Equity shares
37,81,100
Equity shares
37,81,660
Equity shares
67,51,000
Equity shares
57,42,500
Equity shares
The average
market price
on the Stock
Exchange,
Mumbai, on
the date of
grant i.e.,
June 1,
2000 – ` 184/-
per share.
The average
market price
on the Stock
Exchange,
Mumbai, on
the date of
grant i.e.,
April 19,
2002 – ` 172/-
per share.
The average
market price
on the Stock
Exchange,
Mumbai, on
the date of
grant , i.e.,
April 19,
2002 – ` 172/-
per share.
The average
of the two
weeks high
and low prices
of the shares
on the Stock
Exchange,
Mumbai,
preceding the
date of grant
i.e., May 23,
2003 – ` 206/-
per share.
The average
of the two
weeks high
and low prices
of the shares
on the Stock
Exchange,
Mumbai,
preceding the
date of grant
i.e., May 23,
2003 – ` 206/-
per share.
10,66,000
Stock
Appreciation
Rights (SARs)
Grant price for
the purpose of
ascertaining the
appreciation:
Average of
daily High Low
Averages of
the Company’s
Share price
on the Stock
Exchange,
Mumbai,
during the year
April 1998 –
March 1999.
This worked
out to ` 199/-
per share.
(c)
Options vested
10,60,750
38,64,050
20,67,250
20,19,830
(d)
Options exercised
2,66,500
52,415
12,750
(e)
Total number of shares
arising as a result of
exercise of Options
(Equity shares of
` 10/- each)
1,04,318
52,415
12,750
6,250
6,250
(f)
Options lapsed
5,250
1,46,025
1,25,300
1,07,375
(g)
Variation of terms of
Options
(h) Money realised by
exercise of Options
Nil
Nil
Nil
Nil
` 10,43,180/-
` 96,44,360/-
` 21,93,000/-
` 10,75,000/-
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
(i)
Total Number of
Options in force
7,94,250
SARs
37,50,360
36,43,050
36,68,035
67,51,000
57,42,500
38
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Directors Report p23-59 final.indd 39
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Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(I) Employee Stock Ownership Scheme-1999-2003
A. PRE RESTRUCTURE (contd.):
ESOP SERIES
Particulars
(1)
SAR-1999
(2)
2000
(3)
2002-A
(4)
2002-B
(5)
2003-A
(6)
2003-B
(7)
(j)
Employee-wise details of
Options granted to –
i) Senior Managerial
Personnel:
Mr. A.M. Naik
Mr. J.P. Nayak
1,25,000
2,00,000
2,00,000
2,00,000
2,00,000
2,00,000
60,000
1,00,000
1,00,000
1,20,000
1,20,000
1,20,000
Mr. Y.M. Deosthalee
60,000
1,00,000
1,00,000
1,20,000
1,20,000
1,20,000
Mr. K. Venkataramanan
60,000
1,00,000
1,00,000
1,20,000
1,20,000
1,20,000
Mr. R.N. Mukhija
30,000
60,000
85,000
80,000
85,000
85,000
Mr. V. K. Magapu
20,000
35,000
35,000
40,000
22,500
22,500
Mr. K.V. Rangaswami
16,000
25,000
25,000
27,000
17,500
17,500
Mr. M.V. Kotwal
16,500
27,000
27,000
30,000
17,500
17,500
Mr. A. Ramakrishna
80,000
1,25,000
1,25,000
90,000
60,000
Mr. P.M. Mehta
30,000
60,000
85,000
40,000
Mr. M. Karnani
40,000
42,000
-
-
-
-
-
-
-
5,37,500
8,74,000
8,82,000
8,67,000
7,62,500
7,02,500
ii) Any other employee who
None
None
None
None
None
None
receives a grant, in any one
year, of Options amounting
to 5% or more of Options
granted during that year
iii) Identifi ed employees who
were granted Options,
during any one year, equal
to or exceeding 1% of the
issued capital (excluding
outstanding warrants
and conversions) of the
Company at the time of
grant
None
None
None
None
None
None
Consequent to the demerger (sanctioned by the High Court of Judicature at Bombay on April 22, 2004) of Cement Business of the
Company and restructuring of the share capital the outstanding SARs were converted into equivalent number of Options and the total
number of Options in force as above were readjusted in proportion to the restructured equity capital i.e., one Option for an equity share
of the face value of ` 2/- for every two Options and repriced at ` 14/- per Option in respect of ESOP Series 1999, 2000, 2002-A & 2002-B
and ` 70/- per Option in respect of ESOP Series 2003-A & 2003-B.
39
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Directors Report p23-59 final.indd 38
1/1/2004 11:28:54 AM
Directors Report p23-59 final.indd 39
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(I) Employee Stock Ownership Scheme-1999-2003
B. POST RESTRUCTURE (PRE BONUS ISSUE -2006) :
ESOP SERIES
Particulars
(1)
1999
(2)
2000
(3)
2002-A
(4)
2002-B
(5)
2003-A
(6)
2003-B
(7)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(1) Options granted
(outstanding and
adjusted consequent
to restructuring of
share capital)
(2) Options granted
during:
(a) 2005-2006
(b) 1.4.2006 to
29.9.2006
(Equity shares of ` 2/-
each)
The pricing formula
(Adjusted grant price per
share)
Options vested
(adjusted on restructure)
Add: vested post
restructure
Total
Options exercised
Total number of shares
arising as a result of
exercise of Options
(Equity shares of ` 2/-
each)
Options lapsed and/or
withdrawn
Variation of terms of
Options
(h) Money realised by
exercise of Options
(i)
Total Number of Options
in force -
Vested
Unvested
Total
3,97,125
18,75,180
18,21,525
18,34,018
33,75,500
28,71,250
6,02,670
56,460
35,30,380
` 14/-
` 70/-
3,97,125
18,75,180
10,22,050
10,02,003
Nil
Nil
-
-
7,90,312
8,20,708
20,51,220
19,32,585
3,97,125
3,97,121
3,97,121
18,75,180
18,65,367
18,12,362
18,03,824
18,22,711
18,04,510
18,65,367
18,03,824
18,04,510
20,51,220
20,33,343
20,33,343
19,32,585
19,14,964
19,14,964
4
Nil
5,613
12,326
14,583
6,94,997
3,23,009
Nil
Nil
Nil
Nil
Nil
` 55,59,694/- ` 2,61,15,138/- ` 2,52,53,536/- ` 2,52,63,140/- ` 14,23,34,010/- ` 13,40,47,480/-
Nil
Nil
Nil
4,200
Nil
4,200
5,375
Nil
5,375
14,925
Nil
14,925
17,389
6,29,771
17,135
12,75,272
6,47,160
12,92,407
(j)
Employee-wise details of
Options granted
Please refer to Part A (j)
Consequent to the issue of Bonus Shares the total number of Options in force as above as at the record date for Bonus Issue i.e.,
September 29, 2006 was readjusted in number in the ratio of Bonus Issue (1:1) and the above exercise price of ` 14/- and ` 70/- was
readjusted to ` 7/- and ` 35/- respectively.
40
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Directors Report p23-59 final.indd 41
1/1/2004 11:28:54 AM
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(I) Employee Stock Ownership Scheme-1999-2003
C. POST RESTRUCTURE (POST BONUS ISSUE 2006 – PRE BONUS ISSUE 2008):
ESOP SERIES
Particulars
(1)
1999
(2)
2000
(3)
2002-A
(4)
2002-B
(5)
2003-A
(6)
2003-B
(7)
(a)
(1) Options granted (outstanding
Nil
8,400
10,750
29,850
12,94,320
25,84,814
and adjusted consequent to
Bonus Issue)
(2) Options granted post Bonus
Issue
(Equity shares of ` 2/- each)
(b)
(c)
The pricing formula
(Adjusted grant price per share )
Options vested
(adjusted on Bonus Issue)
Add: vested post Bonus Issue
Total
(d)
Options exercised
(e)
Total number of shares arising as
a result of exercise of Options*
(Equity shares of ` 2/- each)
(f)
Options lapsed
(g)
Variation of terms of Options
(h) Money realised by exercise of
Options
(i)
Total Number of Options in force -
Vested
Unvested
Total
7,18,430
33,03,244
` 7/-
` 35/-
Nil
8,400
10,750
29,850
34,778
34,270
-
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
-
-
-
12,35,430
19,90,863
8,400
10,750
29,850
12,70,208
20,25,133
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
12,52,754
19,38,270
10,000
12,45,754
18,95,270
Nil
Nil
25,840
2,12,861
Nil
Nil
` 70,000/- ` 4,36,01,390/- ` 6,63,34,450/-
8,400
Nil
10,750
Nil
19,850
Nil
15,726
81,963
Nil
10,70,150
8,400
10,750
19,850
15,726
11,52,113
(j)
*
Employee-wise details of Options
granted
Please refer to Part A (j)
During the year 2007-08 50,000 shares were allocated to employees who exercised 7,000 Options under 2003-A Series and 43,000
Options under 2003-B Series from the shares returned by former Directors in accordance with the consent terms approved by the
Hon’ble High Court of Bombay on June 14, 2007.
Consequent to the issue of Bonus Shares 2008 the total number of Options in force as above as at the record date for Bonus Issue i.e.,
October 3, 2008 was readjusted in number in the ratio of Bonus Issue (1:1) and the above exercise price of ` 7/- and ` 35/- was readjusted
to ` 3.50 and ` 17.50 respectively.
Directors Report p23-59 final.indd 40
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Directors Report p23-59 final.indd 41
41
1/1/2004 11:28:54 AM
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(I) Employee Stock Ownership Scheme-1999-2003
D. POST RESTRUCTURE (POST BONUS ISSUE 2008):
Particulars
(1)
1999
(2)
2000
(3)
2002-A
(4)
2002-B
(5)
2003-A
(6)
2003-B
(7)
ESOP SERIES
(a)
(1) Options granted (outstanding and
adjusted consequent to Bonus
Issue)
(2) Options granted post Bonus Issue
(b)
(c)
(Equity shares of ` 2/- each)
The pricing formula
(Adjusted grant price per share )
Options vested
(adjusted on Bonus Issue)
Add: vested post Bonus Issue
Total
(d)
Options exercised
(e)
Total number of shares arising as a result
of exercise of Options (Equity shares of
` 2/- each)
(f)
Options lapsed
(g)
Variation of terms of Options
(h) Money realised by exercise of Options
(i)
Total Number of Options in force -
Vested
Unvested
Total
Nil
16,800
21,500
39,700
31,452
23,04,226
5,94,800
28,99,026
` 3.50
` 17.50
Nil
-
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
16,800
21,500
39,700
31,452
1,63,926
-
-
-
-
17,89,012
16,800
21,500
39,700
31,452
19,52,938
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
18,30,362
18,30,362
1,35,784
Nil
Nil ` 3,20,31,335/-
16,800
Nil
21,500
Nil
39,700
Nill
31,452
Nil
1,02,482
8,30,398
16,800
21,500
39,700
31,452
9,32,880
(j)
Employee-wise details of Options granted
Please refer to Part A (j)
Options granted to Senior Managerial
Personnel post Bonus Issue 2008:
Mr. Ravi Uppal
-
-
-
-
-
20,000
42
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Directors Report p23-59 final.indd 43
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Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(II) Employee Stock Option Scheme - 2006
A. PRE BONUS ISSUE 2008:
Particulars
(1)
(a)
(1) Options granted (Pre Bonus Issue)
Options Outstanding and adjusted consequent
to Bonus Issue#
(2) Options granted Post Bonus Issue
(Equity shares of ` 2/- each)
(b)
The pricing formula
2006
(2)
53,35,750
1,06,71,500
6,94,270
ESOP SERIES
2006-A
(3)
-
-
29,06,240
The latest available closing price
on National Stock Exchange of
India Limited on August 31, 2006,
preceding the date of initial grant
i.e., September 1, 2006 – ` 2,404/-
per share.
The latest available closing price on
National Stock Exchange of India
Limited on June 29, 2007, preceding
the date of grant i.e., July 1, 2007
– ` 2,198/- per share (Discounted
grant price per share – ` 1,202/-).
# Consequent to the issue of Bonus Shares the total number of Options in force as at the record date for Bonus Issue i.e.,
September 29, 2006 was readjusted in number in the ratio of Bonus Issue (1:1) i.e., 1,06,71,500 Equity Shares and the above
exercise price of ` 2,404/- was readjusted to ` 1,202/-.
(c)
Options vested
(d) Options exercised
(e)
Total number of shares arising as a result of exercise
of Options (Equity shares of ` 2/- each)
(f)
Options lapsed and/or withdrawn
(g)
Variation of terms of Options
20,13,200
12,80,677
12,80,677
32,72,955
Nil
40,524
25,034
25,034
1,80,428
Nil
(h) Money realised by exercise of Options
` 153,93,73,754
` 3,00,90,868
(i)
Total Number of Options in force –
Vested
Unvested
Total
6,97,138
61,15,000
68,12,138
14,844
26,85,934
27,00,778
(j)
Employee-wise details of Options granted to –
i) Senior Managerial Personnel
ii) Any other employee who receives a grant, in
any one year, of Options amounting to 5% or
more of Options granted during that year
iii) Identifi ed employees who were granted
Options, during any one year, equal to or
exceeding 1% of the issued capital (excluding
outstanding warrants and conversions) of the
Company at the time of grant
None
None
None
Consequent to the issue of Bonus Shares 2008 the total number of Options in force as above as at the record date for Bonus Issue i.e.,
October 3, 2008 was readjusted in number in the ratio of Bonus Issue (1:1) and the above exercise price of ` 1202/- was readjusted to
` 601/-.
Directors Report p23-59 final.indd 42
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Directors Report p23-59 final.indd 43
43
1/1/2004 11:28:55 AM
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(II) Employee Stock Option Scheme - 2006
B. POST BONUS ISSUE 2008:
Particulars
(1)
2006
(2)
(a)
(1) Options granted (outstanding and adjusted
1,36,24,276
consequent to Bonus Issue)
(2) Options granted Post Bonus Issue
(Equity shares of ` 2/- each)
(b)
(c)
The pricing formula
(Adjusted grant price per share)
Options vested
(Adjusted on Bonus Issue)
Add: Vested post Bonus Issue
Total
(d) Options exercised
(e)
Total number of shares arising as a result of exercise
of Options (Equity shares of ` 2/- each)
(f)
Options lapsed and/or withdrawn
(g)
Variation of terms of Options
Nil
1,36,24,276
13,94,276
1,15,47,845
1,29,42,121
88,23,834
88,23,834
8,25,999
Nil
ESOP SERIES
` 601/-
2006-A
(3)
54,01,556
67,15,050
1,21,16,606
29,688
29,98,030
30,27,718
17,27,137
17,27,137
14,52,935
Nil
(h) Money realised by exercise of Options
` 530,31,24,234
` 103,80,09,337
(i)
Total Number of Options in force –
Vested
Unvested
Total
(j)
Employee-wise details of Options granted to –
i) Senior Managerial Personnel
ii) Any other employee who receives a grant, in
any one year, of Options amounting to 5% or
more of Options granted during that year
iii) Identifi ed employees who were granted
Options, during any one year, equal to or
exceeding 1% of the issued capital (excluding
outstanding warrants and conversions) of the
Company at the time of grant
44
37,17,133
2,57,310
39,74,443
11,80,945
77,55,589
89,36,534
None
None
None
Directors Report p23-59 final.indd 44
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Directors Report p23-59 final.indd 45
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Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
Employee Stock Ownership Scheme -1999-2003 and Employee Stock Option Scheme 2006
(k)
(l)
Diluted Earning per Share (EPS) pursuant to issue of shares on
exercise of Options calculated in accordance with Accounting
Standards (AS) 20
The difference between employee compensation cost using
intrinsic value method and the fair value of the Options and
impact of this difference on profi ts and on EPS.
(a) Diluted EPS before extraordinary items ` 63.20
(b) Diluted EPS after extraordinary items ` 64.35
Had fair value method been adopted for expensing the ESOP
compensation:
(a) the ESOP compensation charge debited
to P&L A/c
the year 2010-11 would have been higher by
for
` 43.85 crore (excluding ` 3.31 crore on account of grants to
employees of subsidiary companies).
(b) Basic EPS before extraordinary items would have decreased
from ` 64.16 per share to ` 63.68 per share.
(c) Basic EPS after extraordinary items would have decreased
from ` 65.33 per share to ` 64.85 per share.
(d) Diluted EPS before extraordinary items would have decreased
from ` 63.20 per share to ` 62.72 per share.
(e) Diluted EPS after extraordinary items would have decreased
from ` 64.35 per share to ` 63.87 per share.
(m)(i)
(a) Weighted average exercise prices of Options granted
` 555.36 per Option
during the year where exercise price is less than market
price.
(b) Weighted average exercise prices of Options granted
No such grants during the year
(m)(ii)
during the year where exercise price equals market price.
(a) Weighted average fair values of Options granted during
the year where exercise price is less than market price.
(b) Weighted average fair values of Options granted during
the year where exercise price equals market price.
(n)
Method and signifi cant assumptions used to estimate the fair
value of Options granted during the year.
(a) Method
(b) Signifi cant Assumptions
(i) Weighted average risk-free interest rate
(ii) Weighted average expected life of Options
(iii) Weighted average expected volatility
(iv) Weighted average expected dividends
(v) Weighted average market price
` 1266.10 per Option
No such grants during the year
Black–Scholes Method
7.69%
4.30 years
44.50%
` 53.72 per Option
` 1678.77 per share
AUDITORS’ CERTIFICATE ON EMPLOYEE STOCK OPTION SCHEMES
We have examined the books of account and other relevant records and based on the information and explanations given to us,
certify that in our opinion, the Company has implemented the Employees Stock Option Schemes in accordance with SEBI (Employee
Stock Option Schemes and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolutions of the Company in general meetings
held on August 26, 1999, August 22, 2003 and August 25, 2006.
Directors Report p23-59 final.indd 44
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Directors Report p23-59 final.indd 45
Mumbai, May 19, 2011
Membership No. 8820
SHARP & TANNAN
Chartered Accountants
ICAI registration no. 109982W
By the hand of
R. D. KARE
Partner
45
1/1/2004 11:28:55 AM
Annexure ‘C’ To The Directors’ Report
A. CORPORATE GOVERNANCE
Corporate Governance refers to a set of laws, regulations and good practices that enable an organization to perform
effi ciently and ethically generate long term wealth and create value for all its stakeholders. The Company believes that
sound Corporate Governance is critical for enhancing and retaining investor trust and the Company always seeks to
ensure that its performance goals are met with integrity. The Company has established systems and procedures to
ensure that its Board of Directors is well informed and well equipped to fulfi ll its overall responsibilities and to provide
management with the strategic direction needed to create long term shareholders value. The Company has always
worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on
the principles of good corporate governance viz., integrity, equity, transparency, fairness, disclosure, accountability and
commitment to values.
B. COMPANY’S CORPORATE GOVERNANCE PHILOSOPHY
The Company’s essential character revolves around values based on transparency, integrity, professionalism and
accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an ongoing
basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through
proper empowerment and motivation, fostering a healthy growth and development of human resources to take the
Company forward.
C. THE GOVERNANCE STRUCTURE
The Company has four tiers of Corporate Governance structure, viz.:
(i)
Strategic Supervision – by the Board of Directors comprising the Executive and Non-Executive Directors.
(ii) Strategy & Operational Management – by the Independent Company Boards in each Independent Company (not
legal entities) (IC) comprising of representatives from the Company Board, Senior Executives from the IC and
Independent Members.
(iii) Executive Management – by the Executive Management comprising of the CMD/Executive Directors and four
Senior Managerial Personnel and two Advisors to the Chairman.
(iv) Operational Management – by the Strategic Business Unit (SBU) Heads.
The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates
increased autonomy of businesses, performance discipline and development of business leaders, leading to increased
public confi dence.
D. ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY
a. Board of Directors (the Board):
The Directors of the Company are in a fi duciary position, empowered to oversee the management functions
with a view to ensure its effectiveness and enhancement of shareholders value. The Board reviews and approves
management’s strategic plan & business objectives and monitors the Company’s strategic direction.
b. Executive Management Committee (EMC):
The EMC plays an important role in maintaining the linkage between IC’s and the Company’s Board as well as in
realizing inter-IC synergies and cross cutting opportunities. The key responsibilities of the EMC include approval of
policies cutting across IC’s and at Corporate level such as capital investments, expansions, customer and supplier
synergy, Corporate Social Responsibility (CSR) and reviewing the consolidated fi nancials and budgets before they
are presented to the Company‘s Board.
c. Chairman & Managing Director (CMD):
The CMD is the Chief Executive Offi cer of the Company. He is the Chairman of the Board and the Executive
Management Committee. His primary role is to provide leadership to the Board and the Corporate Management
for realizing the approved strategic plan and business objectives. He presides over the Board and the Shareholders’
meetings.
46
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d. Executive Directors (ED) / Senior Management Personnel (SMP):
The Executive Directors, as members of the Board, along with the Senior Management Personnel in the Executive
Management Committee, contribute to the strategic management of the Company’s businesses within Board
approved direction and framework. They assume overall responsibility for strategic management of business and
corporate functions including its governance processes and top management effectiveness. As regards Subsidiaries,
Associates and Joint Venture Companies, they act as the custodians of the Company’s interests and are responsible
for their governance in accordance with the approved plans.
e. Non-Executive Directors (NED):
The Non-Executive Directors play a critical role in enhancing balance to the Board processes with their independent
judgment on issues of strategy, performance, resources, standards of conduct, etc., besides providing the Board
with valuable inputs.
f.
Independent Company Board (IC Board):
The Company developed its strategic plan for 2010-15 (‘Lakshya 2015’), which identifi ed various opportunity
areas for the Company to focus on, over the next fi ve years. As a part of this exercise, there was a comprehensive
detailing of the initiatives required to capture the identifi ed opportunities, as well as the capital structure and
organization required to support this.
Given the immense growth agenda ahead for all the businesses of the Company, there was a strong imperative to
restructure the Company’s organization model to enable this accelerated growth through greater empowerment
and delegation, while at the same time, maintaining suitable levels of accountability and preserving the Company‘s
core values and culture.
After studying various global and Indian best practices and taking into account the Company’s unique circumstances,
the entire Company was restructured into 10 Independent Companies (ICs) (not legal entities), with each IC having
it’s own Board. The IC Board comprises of representatives from the Company (Executive Director, Non-Executive
Director and / or Advisors), Senior Executives of the IC and Independent Members. The Independent Members are
typically industry experts, academicians, etc., identifi ed in line with the needs of the IC. The IC Board will oversee
amongst other matters, the overall business performance of the IC, strategy implementation, and the approval of
capital, revenue and manpower budgets.
E. BOARD OF DIRECTORS
a. Composition of the Board:
The Company’s policy is to have an appropriate mix of Executive & Non-Executive Directors. As on date, the Board
comprises Chairman & Managing Director, 6 Executive Directors and 9 Non-Executive Directors. The composition
of the Board is in conformity with Clause 49 of the Listing Agreement.
b. Meetings of the Board:
The Meetings of the Board are generally held at the Registered Offi ce of the Company at L&T House, Ballard
Estate, Mumbai 400 001 and also if necessary, in locations, where the Company operates. During the year under
review, 13 Meetings were held on April 1, 2010, May 17, 2010, July 27, 2010, July 31, 2010, August 1, 2010,
August 2, 2010, August 27, 2010, August 28, 2010, September 24, 2010, September 28, 2010, October 18,
2010, November 8, 2010 and January 17, 2011.
The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Chairman &
Managing Director and circulates the same in advance to the Directors. Every Director is free to suggest inclusion
of items on the agenda. The Board meets at least once every quarter inter alia to review the quarterly results.
Additional Meetings are held, when necessary. Presentations are made on business operations to the Board
by Independent Company / Business Units. The Minutes of the proceedings of the Meetings of the Board of
Directors are noted and the draft minutes are circulated amongst the Members of the Board for their perusal.
Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the
Chairman & Managing Director. The Minutes are approved by the Members of the Board at the next Meeting.
Senior Management Personnel are invited to provide additional inputs for the items being discussed by the Board
of Directors as and when necessary.
Directors Report p23-59 final.indd 46
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Directors Report p23-59 final.indd 47
47
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The following composition of the Board of Directors is as on March 31, 2011. Their attendance at the Meetings
during the year and at the last Annual General Meeting as also number of other Directorships & Memberships /
Chairmanships of Committees as on March 31, 2011 are as follows:
Name of Director
Nature of
Directorship
Meetings held
during the
year
No of Board
Meetings
attended
Attendance at
last AGM
No of other
Directorships
No. of
Committee
Membership
No. of
Committee
Chairmanship
Mr. A. M. Naik
Mr. J. P. Nayak*
Mr. Y. M. Deosthalee
Mr. K. Venkataramanan
Mr. R. N. Mukhija**
Mr. K. V. Rangaswami
Mr. V. K. Magapu
Mr. M. V. Kotwal
Mr. Ravi Uppal***
Mr. S. Rajgopal
Mr. S. N. Talwar
Mr. M. M. Chitale
Mr. Thomas Mathew T. $
Mr. N. Mohan Raj $
Mr. Subodh Bhargava
Mrs. Bhagyam Ramani @
Mr. A. K. Jain #
Mr. J. S. Bindra
CMD
ED
ED
ED
ED
ED
ED
ED
ED
NED
NED
NED
NED
NED
NED
NED
NED
NED
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
11
13
13
11
13
13
13
2
13
13
12
11
11
9
8
13
13
YES
YES
YES
YES
YES
YES
YES
YES
-
YES
YES
YES
YES
YES
YES
NO
YES
YES
3
4
9
7
-
3
1
2
5
1
14
9
5
1
10
5
2
-
0
1
2
1
-
2
2
-
1
1
6
6
1
1
5
3
1
-
1
4
2
–
-
-
-
-
1
-
4
5
-
-
3
-
2
-
*
**
ceased to be a director w.e.f. close of working hours of 31.03.2011.
ceased to be a director w.e.f. close of working hours of 23.10.2010. As on 23rd October 2010, he was a director in 2 public companies
and was a member of Shareholders’ / Investors’ Grievance Committee of the Company.
*** appointed as an ED w.e.f. 01.11.2010
$
Representing equity interest of LIC
@ Representing equity interest of GIC
#
Representing equity interest of SUUTI
CMD Chairman & Managing Director
ED Executive Director
NED Non-Executive Director
1. None of the above Directors are related inter-se.
2. None of the Directors hold the offi ce of director in more than the permissible number of companies under
the Companies Act, 1956. Also, the Committee Chairmanships / Memberships are within the limits laid down
in Clause 49 of the Listing Agreement.
c.
Information to the Board:
The Board of Directors has complete access to the information within the Company, which inter alia includes -
• Annual revenue budgets and capital expenditure plans
• Quarterly results and results of operations of Independent Companies and business segments
•
Financing plans of the Company
• Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee
• Details of any joint venture, acquisitions of companies or collaboration agreement
• Quarterly report on materially fatal or serious accidents or dangerous occurrences, any material effl uent or
pollution problems
• Any materially relevant default, if any, in fi nancial obligations to and by the Company or substantial non-
payment for goods sold or services rendered, if any
48
Directors Report p23-59 final.indd 48
1/1/2004 11:28:55 AM
Directors Report p23-59 final.indd 49
1/1/2004 11:28:55 AM
• Any issue, which involves possible public or
product liability claims of substantial nature,
including any Judgment or Order, if any,
which may have strictures on the conduct of
the Company
• Developments
resources
in
respect
of
human
• Compliance or Non-compliance of any
listing
regulatory,
requirements and investor service such as
non-payment of dividend, delay in share
transfer, etc., if any.
statutory nature or
d. Post-meeting internal communication
system:
The important decisions taken at the Board /
Committee Meetings are communicated to the
concerned departments / Independent Companies
promptly.
F.
BOARD COMMITTEES
The Board currently has 3 Committees: 1) Audit
Committee, 2) Nomination & Remuneration Committee
and 3) Shareholders’ / Investors’ Grievance Committee.
The Board is responsible for constituting, assigning and
co-opting the members of the Committees.
1) Audit Committee
i)
Terms of reference:
The role of the Audit Committee includes the
following:
• Overseeing the Company’s fi nancial
reporting process and disclosure of its
fi nancial information
•
•
•
•
•
Recommending the appointment of the
Statutory Auditors and fi xation of their
remuneration
Reviewing and discussing with the
Statutory Auditors and the
Internal
Auditor about internal control systems
the
adequacy
Reviewing
and
independence of the Internal Audit
function, and observations of
the
Internal Auditor
Reviewing major accounting policies and
practices and adoption of applicable
Accounting Standards
Reviewing major accounting entries
involving exercise of judgment by the
management
Directors Report p23-59 final.indd 48
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Directors Report p23-59 final.indd 49
• Disclosure of contingent liabilities
•
Reviewing, if necessary, the fi ndings
of any internal investigations by the
•
•
•
•
•
Internal Auditors and reporting the
matter to the Board
Reviewing
the
mechanisms of the Company
risk management
Reviewing of compliance with Listing
legal
Agreement and various other
fi nancial
requirements
statements
party
transactions
concerning
related
and
Reviewing the Quarterly and Half yearly
fi nancial results and the Annual Financial
Statements before they are submitted
to the Board of Directors
Reviewing the operations, new initiatives
and performance of
the business,
formation of committee in Independent
Companies
Looking into the reasons for substantial
defaults in payments to depositors,
debenture holders, shareholders (in case
of non-payment of declared dividends)
and creditors, if any
•
Reviewing Treasury Policies
• Approval of the appointment of the
Chief Financial Offi cer (CFO).
Minutes of the Audit Committee Meetings
are circulated to the Members of the Board
of Directors and taken note of.
ii) Composition:
The Audit Committee of the Board of Directors
was formed in 1986 and as on March
31, 2011 comprised three Non-Executive
Directors, all of whom are independent.
iii) Meetings:
The Committee met 9 times during the year
on April 22, 2010, May 17, 2010, July 27,
2010, October 18, 2010, November 27,
2010, December 17, 2010, January 17,
2011, March 10, 2011 and March 25, 2011.
The attendance of Members at the Meetings
was as follows:
Name
Status
No. of
Meetings
during
the year
No. of
Meetings
Attended
Mr. M. M. Chitale
Chairman
Mr. N. Mohan Raj
Member
Mrs. Bhagyam Ramani Member
9
9
9
9
9
9
All the members of the Audit Committee are
fi nancially literate and have accounting or
related fi nancial management expertise.
49
1/1/2004 11:28:55 AM
The Chief Financial Offi cer and the Head
of Corporate Audit Services are permanent
invitees to the Meetings of the Audit
Committee. The Company Secretary is the
Secretary to the Committee.
iv)
Internal Audit:
The Company has an internal corporate audit
team consisting of Chartered Accountants,
Engineers & system experts. Over a period
of time, the Corporate Audit department
has acquired
in-depth knowledge about
the Company, its businesses, its systems
& procedures, which knowledge is now
Internal
institutionalized. The Company’s
Audit function is ISO 9001:2008 certifi ed.
The Head of Corporate Audit Services reports
to the Chairman & Managing Director. The
is
staff of Corporate Audit department
rotated periodically.
From time to time, the Company’s systems
of
internal controls covering fi nancial,
operational, compliance, IT applications, etc.,
are reviewed by external experts. Presentations
are made to the Audit Committee on the
fi ndings of such reviews. The Minutes of the
Audit Committee are circulated to the Board
and discussed at Board meetings.
The Company’s Audit Committee,
inter
alia, reviews the adequacy of internal audit
function, reviews the internal audit reports
including those related to internal control
weaknesses and reviews the performance of
the Corporate Audit Department. The Audit
Committee is provided necessary assistance
and information to carry out their function
effectively.
2) Nomination & Remuneration Committee (N&R)
(earlier known as Nomination & Compensation
Committee)
i)
Terms of reference:
recommend
review, assess and
To
the
appointment of Executive Directors (ED) and
Non-Executive Directors (NED) and, to review
their remuneration package including their
remuneration keeping in view provisions of
Companies Act, 1956, to recommend IC
Board Composition and remuneration to
IC Members, to consider and recommend
Employee Stock Option Schemes and to
administer and superintend the same.
ii) Composition:
The Committee has been in place since
1999. As at March 31, 2011, the Committee
50
comprised 4 Non-Executive Directors and the
Chairman & Managing Director.
iii) Meetings:
The Committee met 14 times during the
year on April 1, 2010, May 17, 2010, July
27, 2010, September 16, 2010, September
19, 2010, September 24, 2010, September
28, 2010, October 18, 2010, November 8,
2010, November 23, 2010, December 23,
2010, January 5, 2011, January 17, 2011 and
March 1, 2011. The attendance of Members
at the Meetings was as follows:
Name
Status
No. of
No. of
Meetings
Meetings
during
Attended
the year
Mr. S. Rajgopal
Mr. S. N. Talwar
Chairman
Member
Mr. Subodh Bhargava Member
Mr. A. M. Naik
Member
Mr. Thomas Mathew T.* Member
14
14
14
14
14
* Inducted as member on 16.09.2010
13
14
12
14
9
iv) Board Membership Criteria:
While screening, selecting and recommending
to the Board new members, the Committee
ensures that the Board is objective, there
is absence of confl ict of interest, ensures
availability of diverse perspectives, business
experience, legal, fi nancial & other expertise,
integrity, managerial qualities, practical
wisdom, ability
read & understand
fi nancial statements, commitment to ethical
standards and values of the Company and
ensure healthy debates & sound decisions.
to
re-appointment, besides
While evaluating the suitability of a Director
for
the above
criteria, the Committee considers the past
performance, attendance & participation
in and contribution to the activities of the
Board by the Director.
The Non-Executive Directors comply with the
defi nition of Independent Director as given
under Clause 49 of the Listing Agreement.
While appointing / re-appointing any NED’s
on the Board, the Committee, considers
the criteria as laid down in the Listing
Agreement.
All the Independent Directors give a certifi cate
confi rming that they meet the “Independence
Criteria” as mentioned in Clause 49 of the
Listing Agreement.
Directors Report p23-59 final.indd 50
1/1/2004 11:28:55 AM
These certificates have been placed on the
website of the Company.
v) Remuneration Policy:
The remuneration of the Board members
is based on the Company’s size & global
presence, its economic & financial position,
industrial trends, compensation paid by
the peer companies, etc., Compensation
reflects each Board member’s responsibility
level of Board
and performance. The
compensation
is
designed to be competitive in the market for
highly qualified executives.
to Executive Directors
The Company pays remuneration to Executive
Directors by way of salary, perquisites &
retirement benefits (fixed components) &
(variable component), based
commission
on recommendation of the Nomination &
Remuneration Committee, approval of the
Board and the shareholders. The commission
is calculated with reference to net profits of
the Company in the financial year subject to
overall ceilings stipulated under Sections 198
& 309 of the Companies Act, 1956.
The NEDs are paid remuneration by way of
commission & sitting fees. The Company
pays sitting fees of ` 20,000 per meeting of
the Committee and the Board to the NEDs
for attending the meetings of the Board &
Committees. The commission is paid as per
limits approved by shareholders, subject to
a limit not exceeding 1% p.a. of the profits
of the Company (computed in accordance
with Section 309(5) of the Companies Act,
1956).
The commission to NEDs
is distributed
broadly on the basis of their attendance,
contribution at the Board, the Committee
meetings, Chairmanship of Committees etc.
In
the case of nominees of Financial
Institutions, the commission is paid to the
Financial Institutions.
As required by the provisions of Clause
49 of the Listing Agreement, the criteria
for payment to Non-Executive Directors is
made available on the investor page of our
corporate website www.larsentoubro.com
vi) Details of remuneration paid / payable
to Directors for the year ended March
31, 2011:
Directors Report p23-59 final.indd 50
1/1/2004 11:28:55 AM
(a) Executive Directors:
The details of remuneration paid /
payable to the Executive Directors is as
follows:
(`. Lakh)
Names
Salary
Per-
quisites
Retire-
ment
Benefits
Com-
mission
Total
Mr. A. M. Naik
144.00
15.00
298.37
961.09
1418.46
Mr. J. P. Nayak*
75.60#
15.00
150.16
480.55
721.31
Mr. Y. M. Deosthalee
79.20
97.63
151.13
480.55
808.51
Mr. K. Venkataramanan
75.79
97.03
150.16
480.55
803.53
Mr. R. N. Mukhija**
40.45#
54.23
51.60
271.21
417.49
Mr. K. V. Rangaswami
69.00
13.80
122.43
384.44
589.67
Mr. V. K. Magapu
69.00
12.60
122.43
384.44
588.47
Mr. M. V. Kotwal
66.00
77.83
121.62
384.44
649.89
Mr. Ravi Uppal***
27.54
8.75
48.30
151.38
235.97
retired w.e.f. the close of working hours of 31.03.2011
retired w.e.f. the close of working hours of 23.10.2010
*
**
*** appointed w.e.f. 01.11.2010
#
excludes Gratuity and Leave Encashment paid/payable on retirement
(cid:282)(cid:3) (cid:49)(cid:82)(cid:87)(cid:76)(cid:70)(cid:72)(cid:3) (cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)
(cid:87)(cid:72)(cid:85)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:82)(cid:73)(cid:3)
(cid:73)(cid:82)(cid:85)(cid:3)
appointment of Chairman & Managing
Director and other Whole-time Directors
is six months on either side.
(cid:282)(cid:3) (cid:49)(cid:82)(cid:3) (cid:86)(cid:72)(cid:89)(cid:72)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3) (cid:83)(cid:68)(cid:92)(cid:3)
(cid:76)(cid:86)(cid:3) (cid:83)(cid:68)(cid:92)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:82)(cid:81)(cid:3)
termination of appointment.
(cid:282)(cid:3) (cid:39)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:86)(cid:3) (cid:82)(cid:73)(cid:3) (cid:50)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:74)(cid:85)(cid:68)(cid:81)(cid:87)(cid:72)(cid:71)(cid:3) (cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)
(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:3) (cid:54)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3) (cid:50)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3) (cid:54)(cid:70)(cid:75)(cid:72)(cid:80)(cid:72)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3)
given in Annexure ‘B’ to the Directors’
Report
(b) Non-Executive Directors:
The details of remuneration paid /
payable to the Non-Executive Directors
is as follows:
Names
Sitting
Fees for
Board
Meeting
Sitting
Fees for
Committee
Meeting
(`. Lakh)
Com mission
Total
Mr. S. Rajgopal
Mr. S. N. Talwar
Mr. M. M. Chitale
2.60
2.60
2.40
Mr. Thomas Mathew T.
2.20*
Mr. N. Mohan Raj
Mr. Subodh Bhargava
2.20*
1.80
2.60
2.80
1.80
2.20*
1.80*
2.40
16.34
21.54
13.01
18.41
15.00
19.20
12.50*
16.90
13.53*
17.53
13.68
17.88
Mrs. Bhagyam Ramani
1.60*
1.80*
13.01*
16.41
Mr. A. K. Jain
Mr. J. S. Bindra
2.60
2.60
0.80
–
15.00*
18.40
US$ 95,000
–
* Paid to respective Institutions they represent.
51
shares and convertible
Details of
instruments held by the Non-Executive
Directors as on March 31, 2011 are as
follows:
Names
Mr. S. Rajgopal #
Mr. S. N. Talwar
Mr. M. M. Chitale
Mr. Thomas Mathew T. *
Mr. N. Mohan Raj *
Mr. Subodh Bhargava
Mrs. Bhagyam Ramani *
Mr. A. K. Jain *
Mr. J. S. Bindra
No. of
Shares
held
900
6,000
1,086
200
200
500
200
400
100
* held jointly with the Institution they
represent
# has been granted 60,000
stock
options
October 18, 2010 and January 17, 2011. The
attendance of Members at the Meetings was
as follows-
Name
Status
No. of
Meetings
during the
year
No. of
Meetings
Attended
Mr. Thomas Mathew T.*
Chairman
Mr. A. K. Jain†
Mr. J. P. Nayak
Chairman
Member
Mr. R. N. Mukhija§
Member
Mr. V. K. Magapu‡
Member
4
4
4
4
4
2
4
4
3
1
* Ceased to be member w.e.f. 27.07.2010
§ Ceased to be member w.e.f. 23.10.2010
† Mr. A. K. Jain was appointed as Chairman w.e.f. 27.07.2010.
‡
Inducted as a member on 08.11.2010
Mr. N. Hariharan, Company Secretary is the
Compliance Offi cer.
iv) Number of Requests / Complaints:
During the year under review, the Company
has resolved investor grievances expeditiously
except for the cases constrained by disputes
or legal impediments.
3) Shareholders’ / Investors’ Grievance
Committee:
i)
Terms of reference:
The terms of reference of the Shareholders’ /
Investors’ Grievance Committee are as
follows:
•
Redressal of Shareholders’ / Investors’
complaints
• Allotment,
transmission
transfer &
of Shares / Debentures or any other
securities and
issue of duplicate
certifi cates and new certifi cates on split
/ consolidation / renewal etc., as may
be referred to it by the Share Transfer
Committee.
ii) Composition:
The Committee has been in place since 2001.
As on March 31, 2011 the Shareholders’ /
Investors’ Grievance Committee comprised
of 1 Non-Executive Director and 2 Executive
Directors.
iii) Meetings:
During the year, the Committee held 4
meetings on May 17, 2010, July 27, 2010,
52
received
its Registrar’s
During the year under review, the Company
/
following
complaints from SEBI / Stock Exchanges
and queries from shareholders, which were
resolved within the time frames laid down by
SEBI.
the
Particulars
Opening
Balance
Received Resolved Pending
*
Complaints:
SEBI / Stock Exchange
NIL
106
106
NIL
Shareholder
Queries:
Dividend Related
269
7,557
7,688
138
Transmission / Transfer
Demat / Remat
31
8
1,115
1,128
666
669
18
5
*
Investor queries / complaints shown outstanding as on March
31, 2011 are less than ten days old and have been subsequently
resolved.
The Board has delegated the powers to
approve transfer of shares to a Transfer
Committee of Executives comprising of three
Senior Executives. This Committee held 49
meetings during the year and approved
the transfer of shares lodged with the
Company.
Directors Report p23-59 final.indd 52
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Directors Report p23-59 final.indd 53
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G. OTHER INFORMATION
a) Training of Directors:
All our Directors are aware and are also updated
as and when required, of their role, responsibilities
& liabilities.
b)
Information to Directors:
objectivity. Robust internal control systems and
risk management framework, review of Auditors’
performance by the Audit Committee and peer
review of the Audit fi rm, are some of the more
important factors that prevent audit failures. Mr.
R. D. Kare has signed the audit report for 2010-11
on behalf of S&T.
The Board of Directors has complete access to the
information within the Company, which inter alia,
includes items as mentioned on Pages 48 and 49
in Annexure ‘C’ to the Directors‘ Report.
Presentations are made regularly to the Board /
N&R Committee / Audit Committee (AC) (minutes
of AC & N&R Committee are circulated to the
Board), where Directors get an opportunity to
interact with senior managers. Presentations,
inter alia, cover business strategies, management
structure, HR policy, management development
and succession planning, quarterly and annual
results, budgets, treasury policy, review of Internal
Audit, risk management framework, operations of
subsidiaries and associates, etc.
Independent Directors have the freedom to interact
with the Company’s management. Interactions
happen during Board / Committee meetings,
when senior company personnel are asked to
make presentations about performance of their
Independent Company / Business Unit, to the
Board. Such interactions also happen when these
Directors meet senior management in IC meetings
and informal gatherings.
c) Risk Management Framework:
The Company has in place mechanisms to inform
Board members about the risk assessment and
minimization procedures and periodical review to
ensure that executive management controls risk
by means of a properly defi ned framework.
A detailed note on risk management is given in
the Financial Review section of Management’s
Discussion and Analysis report elsewhere in this
Report.
d) Statutory Auditors:
The Board has recommended to the shareholders,
the re-appointment of Sharp & Tannan (S&T)
as Statutory Auditors. S&T has furnished a
declaration confi rming their
independence as
well as their arm’s length relationship with the
Company, also declaring that they have not taken
up any prohibited non-audit assignments for the
Company. The Company believes that S&T, over a
period of time, has gained extensive knowledge
of the Company & its diversifi ed business, which
is essential to ensure audit quality & audit
e) Code of Conduct:
The Company has laid down a Code of Conduct
for all Board members and Senior Management
Personnel. The Code of Conduct is available on
the website of the Company www.larsentoubro.
com. The declaration of Chairman & Managing
Director is given below:
To the Shareholders of Larsen & Toubro Limited
Sub: Compliance with Code of Conduct
I hereby declare that all the Board Members and Senior
Management Personnel have affi rmed compliance
with the Code of Conduct as adopted by the Board
of Directors.
A. M. Naik
Chairman & Managing Director
Date: April 26, 2011
Place: Mumbai
f) General Body Meetings:
The last three Annual General Meetings of the
Company were held at Birla Matushri Sabhagar,
Mumbai as under:
Financial Year
Date
Time
2009-2010
August 26, 2010
3.00 p.m.
2008-2009
August 28, 2009
3.00 p.m.
2007-2008
August 29, 2008
3.00 p.m.
The following Special Resolutions were passed by
the members during the past 3 Annual General
Meetings:
Annual General Meeting held on August 26,
2010:
•
•
•
To approve payment of commission to non-
executive directors not exceeding 1% of the
net profi ts of the Company.
To approve raising of capital through QIP’s
by issue of shares / convertible debentures /
securities upto an amount of USD 600 million
or ` 2700 crore.
To approve re-appointment of Statutory
Auditors and remuneration payable to them.
Directors Report p23-59 final.indd 52
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Directors Report p23-59 final.indd 53
53
1/1/2004 11:28:56 AM
Annual General Meeting held on August 28,
2009:
•
•
To approve raising of capital through QIP’s
by issue of shares / convertible debentures /
securities upto an amount of USD 600 million
or ` 2400 crore.
To approve re-appointment of Statutory
Auditors and remuneration payable to them.
Annual General Meeting held on August 29,
2008:
•
•
To approve raising of capital through QIP’s
by issue of shares / convertible debentures /
securities upto an amount of USD 600 million
or ` 2400 crore.
To approve re-appointment of Statutory
Auditors and remuneration payable to them.
g) Postal Ballot:
No special resolution was passed through Postal
in 2010-11. None of the Businesses
Ballot
proposed to be transacted in the ensuing Annual
General Meeting
require passing a special
resolution through Postal Ballot. In April 2011,
the Company has sought shareholders’ approval
through postal ballot for transfer of the Electrical
& Automation (“E&A”) business of the Company,
to a subsidiary and / or associate company or to
any other entity.
h) Disclosures:
1. During the year, there were no transactions
of material nature with the Directors or the
Management or the subsidiaries or relatives
that had potential confl ict with the interests
of the Company.
2. Details of all related party transactions form
a part of the accounts as required under AS
18 and the same are given on pages 164 to
174 of the Annual Report.
3. The Company has followed all relevant
Accounting Standards notifi ed by
the
Standards)
(Accounting
Companies
Rules, 2011 while preparing the Financial
Statements.
4. The Company makes presentations
to
Institutional Investors & Equity Analysts on
the Company’s performance on a quarterly
basis.
5. There were no instances of non-compliance
on any matter related to the capital markets,
during the last three years.
i) Means of communication:
Financial
Results
News
Releases
Website
Corpfi ling
Quarterly & Annual Results are published
in prominent daily newspapers viz. The
Financial Express, The Hindu Business Line
& Loksatta. The results are also posted on
the Company’s website: www.larsentoubro.
com.
Offi cial news releases are sent to stock
exchanges as well as displayed on the
Company’s website: www.larsentoubro.
com.
The Company’s corporate website www.
larsentoubro.com provides comprehensive
information about its portfolio of businesses.
Section on “Investors” serves to inform and
service the Shareholders allowing them to
access information at their convenience.
Presentations made to Institutional Investors
& Equity Analysts and the shareholding
pattern of the Company on a quarterly
basis are also displayed on the website. The
entire Annual Report and Accounts of the
Company and subsidiary are available in
downloadable formats. It will also be made
available on the websites of the Stock
Exchanges.
Information to Stock Exchanges is now also
being fi led through corp-fi ling. Investors can
view this information by visiting the website
www.corpfi ling.co.in.
Annual
Report
Annual Report
is circulated to all the
members and all others like auditors, equity
analysts, etc.
Management
Discussion &
Analysis
This forms a part of the Annual Report
which is mailed to the shareholders of the
Company.
H. GENERAL SHAREHOLDERS’ INFORMATION
a) Annual General Meeting:
The Annual General Meeting of the Company has
been convened on Friday, August 26, 2011 at
Birla Matushri Sabhagar, Marine Lines, Mumbai –
400 020 at 3.00 p.m.
b) Financial calendar:
1.
Annual Results of
2010-11
2. Mailing of Annual
Reports
3.
First Quarter Results
4.
Annual General
Meeting
May 19, 2011
Third week of July,
2011
During fi rst week of
August, 2011 *
August 26, 2011
54
Directors Report p23-59 final.indd 54
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Directors Report p23-59 final.indd 55
1/1/2004 11:28:56 AM
5.
6.
Payment of Dividend
August 30, 2011
h) Stock market data for the year 2010-2011:
Second Quarter results During third week of
Month
L&T BSE Price (`)
BSE SENSEX
7.
Third Quarter results
October, 2011 *
During fourth week of
January, 2012 *
* Tentative
c) Book Closure:
The dates of Book Closure are from Friday, August
19, 2011 to Friday, August 26, 2011 (both days
inclusive) to determine the members entitled to
the dividend for 2010-2011.
2010
High
Low
Month
Close
High
Low
Month
Close
April
May
June
July
1,660.90
1,550.00
1,608.35 18,047.86 17,276.80 17,558.71
1,680.00
1,475.10
1,628.60 17,536.86 15,960.15 16,944.63
1,843.75
1,587.00
1,804.55 17,919.62 16,318.39 17,700.90
1,949.00
1,780.15
1,797.10 18,237.56 17,395.58 17,868.29
August
1,887.00
1,763.70
1,812.45 18,475.27 17,819.99 17,971.12
September
2,074.60
1,685.00
2,044.70 20,267.98 18,027.12 20,069.12
October
2,117.00
1,928.80
2,021.85 20,854.55 19,768.96 20,032.34
November
2,212.00
1,907.25
1,949.85 21,108.64 18,954.82 19,521.25
d) Listing of equity shares / shares underlying
December
2,064.00
1,918.70
1,979.05 20,552.03 19,074.57 20,509.09
GDRs on Stock Exchanges:
2011
The shares of the Company are listed on the
Bombay Stock Exchange Limited (BSE) and the
National Stock Exchange of India Limited (NSE).
GDRs are listed on Luxembourg Stock Exchange
and London Stock Exchange.
e)
Listing Fees to Stock Exchanges:
The Company has paid the Listing Fees for the
year 2011-2012 to the above Stock Exchanges.
f) Custodial Fees to Depositories:
The Company has paid custodial fees for the
year 2011-2012 to National Securities Depository
Limited (NSDL) and Central Depository Services
(India) Limited (CDSL).
g) Stock Code / Symbol:
The Company’s equity shares / GDRs are listed on
the following Stock Exchanges and admitted for
trading in London Stock Exchange:
January
1,998.10
1,555.00
1,641.15 20,664.80 18,038.48 18,327.76
February
1,723.70
1,463.05
1,528.05 18,690.97 17,295.62 17,823.40
March
1,932.95
1,503.05
1653.25 19,575.16 17,792.17 19,445.22
)
`
(
E
S
B
T
&
L
2300
2200
2100
2000
1900
1800
-
1700
1600
1500
1400
Stock Performance
L&T BSE (`)
BSE SENSEX
Apr
10
May
10
Jun
10
Sep
10
Aug
10
Dec
Jul
10
10
Daily Closing Price
Nov
10
Oct
10
Jan
11
Feb
11
Mar
11
X
E
S
N
E
S
E
S
B
23000
22000
21000
20000
19000
18000
17000
16000
15000
14000
Month
L&T NSE Price (`)
Scrip Code - 500510
2010
High
Low
Month
Close
High
NIFTY
Low
Month
Close
Bombay Stock Exchange
(BSE)
National Stock Exchange
(NSE)
ISIN Equity
Reuters RIC
Luxembourg Exchange
Stock Code
:
:
:
:
:
Scrip Code - LT
INE018A01030
LART.BO
005428157
London Exchange Stock
Code
:
LTOD
April
May
June
July
1,661.85
1,546.90
1,615.05
5,399.65
5,160.90
5,278.00
1,684.70
1,475.10
1,631.35
5,278.70
4,786.45
5,086.30
1,843.00
1,585.00
1,808.95
5,366.75
4,961.05
5,312.50
1,950.70
1,780.00
1,794.30
5,477.50
5,225.60
5,367.60
August
1,886.50
1,762.00
1,813.65
5,549.80
5,348.90
5,402.40
September
2,075.00
1,802.00
2,053.15
6,073.50
5,403.05
6,029.95
October
2,119.90
1,928.10
2,027.80
6,284.10
5,937.10
6,017.70
November
2,212.70
1,894.75
1,950.05
6,338.50
5,690.35
5,862.70
December
2,064.00
1,918.55
1,979.25
6,147.30
5,721.15
6,134.50
2011
Directors Report p23-59 final.indd 54
1/1/2004 11:28:56 AM
Directors Report p23-59 final.indd 55
The Company’s shares constitute a part of BSE 30
Index of the Bombay Stock Exchange Limited as
well as NIFTY Index of the National Stock Exchange
of India Limited.
January
1,998.00
1,572.65
1,641.10
6,181.05
5,416.65
5,505.90
February
1,725.00
1,461.00
1,527.95
5,599.25
5,177.70
5,333.25
March
1,696.55
1,502.20
1,651.90
5,872.00
5,348.20
5,833.75
55
1/1/2004 11:28:56 AM
)
`
(
E
S
N
-
T
&
L
2300
2200
2100
2000
1900
1800
1700
1600
1500
1400
Stock Performance
L&T NSE (`)
NSE NIFTY
Y
T
F
I
N
E
S
N
6500
6300
6100
5900
5700
5500
5300
5100
4900
4700
4500
Apr
10
May
10
Jun
10
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
Daily Closing Price
i)
Registrar and Share Transfer Agents (RTA):
Sharepro Services (India) Private Limited, Andheri,
Mumbai.
j)
Share Transfer System:
The share transfer activities under physical mode
are carried out by the RTA. Shares in physical
mode which are lodged for transfer are processed
and returned within the stipulated time. The share
related information is available online.
Physical shares received for dematerialization are
processed and completed within a period of 21
days from the date of receipt. Bad deliveries are
promptly returned to Depository Participants (DP’s)
under advice to the shareholders.
As required under Clause 47-C of the Listing
Agreement, a certifi cate on half yearly basis
confi rming due compliance of share transfer
formalities by the Company from Practicing
Company Secretary has been submitted to Stock
Exchanges within stipulated time.
k) Distribution of Shareholding as on March 31,
2011:
No. of Shares
Shareholders
Shareholding
Up to 500
501 – 1000
1001 – 2000
2001 – 3000
3001 – 4000
4001 – 5000
5001 – 10000
10001 and above
Number
%
Number
8,06,176
94.46
5,96,50,936
25,760
11,647
3,415
1,717
999
1,909
1,862
3.02
1.36
0.40
0.20
0.12
0.22
0.22
1,89,05,533
1,67,02,835
84,31,118
60,43,710
45,30,892
1,33,87,352
%
9.80
3.11
2.74
1.38
0.99
0.75
2.20
48,11,99,750
79.03
TOTAL
8,53,485
100.00
60,88,52,126
100.00
56
l)
Categories of Shareholders is as under:
Category
31.03.2011
31.03.2010
No. of Shares
%
No. of Shares
%
Financial Institutions
20,08,33,146
32.99
19,85,77,575
32.98
Foreign Institutional
Investors
9,24,07,708
15.18
8,69,55,554
14.44
Shares underlying GDRs
2,16,46,059
Mutual Funds
Bodies Corporate
Directors & Relatives
L&T Employees Welfare
Foundation
2,62,45,751
4,01,23,114
51,00,566
3.55
4.31
6.59
0.84
1,62,02,709
3,24,73,907
3,77,85,910
64,23,782
2.69
5.39
6.27
1.07
7,44,04,116
12.22
7,44,04,116
12.36
General Public
14,80,91,666
24.32
14,93,71,855
24.80
TOTAL
60,88,52,126
100.00
60,21,95,408
100.00
Categories of Shareholders
as on March 31, 2011
General Public
24.32%
L&T Employees
Welfare
Foundation
12.22%
Directors &
Relatives
0.84%
Bodies Corporate
6.59%
Mutual Funds
4.31%
Financial
Institutions
32.99%
Foreign
Institutional
Investors
15.18%
Shares
underlying GDRs
3.55%
m) Dematerialization of shares:
required
The Company’s Shares are
to be
compulsorily traded in the Stock Exchanges in
dematerialized form. The Company had sent letters
to shareholders holding shares in physical form
emphasizing the benefi ts of dematerialization.
The number of shares held in dematerialized and
physical mode is as under:
No. of
shares
% of total
capital
issued
56,74,85,680
93.21
2,28,02,545
3.74
1,85,63,901
3.05
60,88,52,126
100.00
Held in dematerialized
form in NSDL
Held in dematerialized
form in CDSL
Physical
Total
Directors Report p23-59 final.indd 56
1/1/2004 11:28:56 AM
Directors Report p23-59 final.indd 57
1/1/2004 11:28:56 AM
Shares held in Demat / Physical Form
as on March 31, 2011
CDSL
2,28,02,545
3.74%
Physical
1,85,63,901
3.05%
NSDL
56,74,85,680
93.21%
n) Outstanding GDRs / ADRs / Warrants or any
Convertible Instruments, conversion date and
likely impact on equity:
The outstanding GDRs are backed up by underlying
equity shares which are part of the existing paid-
up capital.
The Company has the following Foreign Currency
Convertible Bonds outstanding as on March 31,
2011:
(i)
(ii)
(iii)
(iv)
(v)
3.50% USD 200 million Foreign Currency
Convertible Bonds due 2014
Principal Value of the Bonds issued
USD 200 million
Principal Value of Bonds converted to
Equity Shares / GDR’s since issue.
NIL
Principal Value of Bonds outstanding
as at March 31, 2011
USD 200 million
Underlying Equity Shares
/ GDR’s
issued pursuant to conversion as per
(ii) above
NIL
Underlying Equity Shares / GDR’s that
may be issued pursuant to conversion
notices in respect of (iii) above
49,07,243 shares
These Convertible Bonds are
Singapore Exchange Securities Trading Limited.
listed on the
q) Plant Locations:
India
locations within
(Surat), Katupalli
The L&T Group’s facilities for design, engineering,
manufacture and modular fabrication are based
at multiple
including
Ahmednagar, Bangalore, Chennai, Coimbatore,
Faridabad, Hazira
(Ennore),
Raigad, Rourkela, Mumbai, Mysore, Pithampur,
Puducherry, Talegaon and Vadodara. L&T’s
manufacturing footprint covers the Gulf (Oman,
Saudi Arabia, Dubai), South East Asia (Malaysia,
Indonesia), China and Australia. The L&T Group
also has an extensive network of offi ces in India
and around the globe.
r) Address for correspondence:
Larsen & Toubro Limited,
L&T House, Ballard Estate,
Mumbai 400 001.
Tel. No. (022) 67525 656,
Fax No. (022) 67525 893
Shareholder correspondence may be directed to
the Company’s Registrar and Share Transfer Agent,
whose address is given below:
1. Sharepro Services (India) Private Limited
Unit : Larsen & Toubro Limited
Bldg. No.13 A B, 2nd Floor
Samhita Warehousing Complex,
Sakinaka Telephone Exchange Lane,
Off Andheri-Kurla Road, Sakinaka
Mumbai-400 072.
Tel No. : (022) 6772 0300 / 6772 0400
Fax No.: (022) 2859 1568 / 2850 8927
E-Mail : Lnt@shareproservices.com;
Sharepro@shareproservices.com
2. Sharepro Services (India) Private Limited
Unit : Larsen & Toubro Limited
912, Raheja Centre, Free Press Journal Road,
Nariman Point, Mumbai 400 021.
Tel : (022) 6613 4700
Fax : (022) 2282 5484
Directors Report p23-59 final.indd 56
1/1/2004 11:28:56 AM
Directors Report p23-59 final.indd 57
o) Listing of Debt Securities:
s)
Investor Grievances:
The
redeemable Non-Convertible debentures
issued by the Company are listed on the Wholesale
Debt Market (WDM) of National Stock Exchange
of India Limited (NSE) and / or Bombay Stock
Exchange (BSE).
p) Debenture Trustees
(for privately placed
debentures)
IDBI Trusteeship Services Limited
Ground Floor, Asian Building
17, R. Kamani Marg
Ballard Estate
Mumbai – 400 001
The Company has designated an exclusive e-mail
id viz. IGRC@LARSENTOUBRO.COM to enable
investors to register their complaints, if any. The
Company strives to reply to the complaints within
a period of 3 working days.
t) Non-mandatory requirements on Corporate
Governance recommended under the Clause
49 of the Listing Agreement:
The Company has adopted the following non-
mandatory requirements on Corporate Governance
recommended under Clause 49 of the Listing
Agreement:
57
1/1/2004 11:28:56 AM
1. A Nomination & Remuneration Committee
is in place since 1999. The Committee
comprises of four Non-Executive Directors
and the Chairman & Managing Director of
the Company.
2. Whistle Blower policy for L&T and its group
companies is in place.
3. Access to the Audit committee of the Board
is also available.
u) Securities Dealing Code:
(Prohibition of
Pursuant to the SEBI
Insider
Trading) Regulations 1992, a Securities Dealing
Code for prevention of insider trading is in place.
The objective of the Code is to prevent purchase
and / or sale of shares of the Company by an
Insider on the basis of unpublished price sensitive
information. Under this Code, Designated Persons
(Directors, Advisors, Offi cers and other concerned
employees / persons) are prevented from dealing
in the Company’s shares during the closure of
Trading Window. To deal in securities beyond
specifi ed limit, permission of Compliance Offi cer
is also required. All the Designated Employees
are also required to disclose related information
periodically as defi ned in the Code. Directors and
designated employees who buy and / or sell shares
of the Company are prohibited from entering into
an opposite transaction i.e sell or buy any shares
of the Company during the next six months
following the prior transactions. Directors and
designated employees are also prohibited from
taking positions in the derivatives segment of the
Company’ shares.
Mr. N. Hariharan, Company Secretary has been
designated as the Compliance Offi cer.
v)
ISO 9001:2008 Certifi cation:
The Company’s Secretarial Department which
provides secretarial services and investor services
for the Company and its Subsidiary and Associate
Companies is ISO 9001:2008 certifi ed.
w) Corporate Governance Award:
The Company was awarded the “National Award
For Excellence in Corporate Governance-2010”,
by the Institute of Company Secretaries of India.
x) Secretarial Audit:
As stipulated by SEBI, a Qualifi ed Practising
Company Secretary carries out Reconciliation of
Share Capital Audit to reconcile the total admitted
capital with National Securities Depository Limited
(NSDL) and Central Depository Services (India)
Limited (CDSL) and the total issued and listed
capital. This audit is carried out every quarter
and the report thereon is submitted to the Stock
Exchanges. The Audit confi rms that the total
Listed and Paid-up capital is in agreement with
the aggregate of the total number of shares in
dematerialized form and in physical form.
The secretarial department of the Company at
Mumbai & Chennai (overseeing all companies in
Infrastructure Development Projects), are manned
by competent and experienced professionals. The
Company has a system to review and audit its
secretarial and other compliances by competent
professionals, who are employees of the Company.
Appropriate actions are taken to continuously
improve the quality of compliance.
The Company also has adequate software and
systems to monitor compliance.
58
Directors Report p23-59 final.indd 58
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Directors Report p23-59 final.indd 59
1/1/2004 11:28:56 AM
Chief Executive Offi cer (CEO) and Chief Financial Offi cer (CFO) Certifi cation
To the Board of Directors of Larsen & Toubro Limited
Dear Sirs,
(Issue in accordance with provisions of Clause 49 of the Listing Agreement)
Sub: CEO / CFO Certifi cate
We have reviewed the fi nancial statements, read with the cash fl ow statement of Larsen & Toubro Limited for the year ended
March 31, 2011 and that to the best of our knowledge and belief, we state that;
(a)
(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements
that may be misleading;
(ii) These statements present a true and fair view of the Company’s affairs and are in compliance with current
accounting standards, applicable laws and regulations.
(b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which
are fraudulent, illegal or in violation of the Company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for fi nancial reporting. We have evaluated the
effectiveness of internal control systems of the Company and have disclosed to the Auditors and the Audit Committee,
defi ciencies in the design or operation of internal controls, if any, and steps taken or proposed to be taken for rectifying
these defi ciencies.
(d) We have indicated to the Auditors and the Audit Committee:
(i) Signifi cant changes in accounting policies made during the year and that the same have been disclosed suitably in
the notes to the fi nancial statements; and
(ii) that there were no Instances of signifi cant fraud of which we have become aware.
Yours sincerely,
Y. M. Deosthalee
Chief Financial Offi cer
A. M. Naik
Chairman & Managing Director
Place: Mumbai
Date: May 18, 2011
Auditors Certifi cate on Compliance of Conditions of Corporate Governance
To the members of Larsen & Toubro Limited
We have examined the compliance of conditions of corporate governance by Larsen & Toubro Limited for the year ended March
31, 2011 as stipulated in clause 49 of the Listing Agreement entered into by the Company with the stock exchanges.
The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited
to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of
corporate governance. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company.
In our opinion and to the best of our information and according to the explanation given to us, we certify that the Company
has complied in all material respects with the conditions of corporate governance as stipulated in the above mentioned
Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company nor the effi ciency or
effectiveness with which the management has conducted the affairs of the Company.
Directors Report p23-59 final.indd 58
1/1/2004 11:28:56 AM
Directors Report p23-59 final.indd 59
Mumbai, May 19, 2011
SHARP AND TANNAN
Chartered Accountants
ICAI Registration No. 109982W
by the hand of
R. D. KARE
Partner
Membership No. 8820
59
1/1/2004 11:28:56 AM
Notes
60
Note p60.indd 60
1/1/2004 10:57:56 AM
MDA p61-120.indd 61
1/1/2004 11:37:55 AM
Management Discussion & Analysis 2010-2011
Global Economic Condition
The 21st century is seeing a fundamental
reshaping of the way business, society
and governments operate. In recent
its
times, the economic crisis and
the
repercussions have accelerated
shift of economic power from the
developed to the emerging nations
and exposed a fragile world with
limited capacity to respond to systemic
risks. As a consequence, the global
economic growth has stymied and
likely to traverse in an uncertain zone
for some years to come.
Investments from developed economies
have typically fl own into emerging
markets, which offer more dramatic
growth and strong returns. However,
some of these markets are associated
with high volatility and socio-political
tensions, giving rise to new set of
investment risks. In addition, growing
consumption demand
in emerging
markets
is driving up commodity
prices, both crude oil and other raw
materials which is expected to impede
the global economic recovery in the
medium term.
It is encouraging that Infrastructure
has been the focal point of the
government’s budget proposals for
2011-2012, accounting for a record
49% of total plan allocation. In order to
strengthen public-private partnerships
it has proposed additional avenues
for fi nancing infrastructure projects.
However, the resilience of the economy
would continue to get tested in the
medium term by the challenges thrown
up by a struggling world economy and
domestic pressures of infl ation and
increasing interest rates.
resources,
The major challenges besetting the
world economy are managing the
shift in balance of power from the
developed to emerging economies,
increasing competition for securing
natural
improving
productivity in the wake of growing
skill mismatches, non-inclusive growth
in the emerging economies and above
all, a looming economic uncertainty
and
fragility. Today
the global economy is awaiting a
movement where governments defi ne
new ways of relating to each other,
operate
frameworks and
business models, while coping with the
ever-evolving challenges.
socio-political
in new
A more thoughtful analysis reveals
that global rebalancing needs to be
a long-term, collaborative process. It
must encompass those excluded from
the fruits of global prosperity and
encourage those who have prospered
to continue doing so in a sustainable
manner. The recent economic crisis and
socio-political tensions demonstrated
longer
that systemic risks can no
be tidily contained and addressed
in a single ecosystem but require
a multi-disciplinary, multi-stakeholder
effort to improve the global economic
system’s overall resilience.
Overview of Indian Economy
The
Indian economy witnessed a
higher growth in GDP of 8.5% for the
year 2010-2011 over a growth of 8%
in 2009-2010. A strong rebound in
agriculture and continued momentum
in some sectors of manufacturing and
construction enabled the economy to
achieve a higher growth in 2010-2011.
Economic growth was supported on the
demand side, by private consumption
during
the year, and accelerated
investment in the fi rst three quarters
of 2010-2011. Consumer durables,
Automobile sector and engineering
goods shored up the overall industrial
sector performance. In 2011-2012, the
projected growth rate is in the range
of 8% to 8.5%.
Aided by
its young demographic
profi le, India is regarded as one of
the youngest economies in the world
with considerable opportunities as a
consumer market and a manufacturing
hub. To achieve a sustainable growth,
the country needs to push forward
and
critical
innovative public-private partnerships
to deliver rapid and inclusive growth
and an enabling environment
for
upgrading infrastructure.
governance
reforms
Construction and turnkey projects
business scenario
registered a
industry
Construction
higher growth of 8.1% for the year
2010-2011 led by an increased level of
activity of industrial and infrastructure
construction segments. The growth
trend is likely to sustain through the
next year on the back of renewed
thrust on infrastructure. The real estate
& ITeS facility construction has gained
traction, despite stringent regulations
Increasing
and
award of public-private projects
in
Airports and Ports sectors, besides the
conventional Roads & Bridges sector
have also triggered the growth.
fi nancing
issues.
capital
is
The gross
for
formation
lower at 7.6% as
2010-2011
against 13.8% achieved in 2009-2010.
The Core
registered a
Industries
lower growth of 5.8% in 2010-2011,
largely due to supply side constraints.
The sluggish growth for the past
2-3 years
is
dampening
investment
decisions. Similarly the industrial sectors
saw an erratic growth trend during
the year, thereby delaying new capex
decisions. It is expected that with supply
side constraints easing, the confi dence
the Core Sector
fresh
the
in
Note p60.indd 60
1/1/2004 10:57:56 AM
MDA p61-120.indd 61
61
1/1/2004 11:37:55 AM
will re-emerge for undertaking fresh
capacity addition projects.
tensions, which
In
the Hydrocarbon sector, many
greenfi eld and brownfi eld projects in
all segments of industry got deferred.
Internationally the Middle East & North
Africa (MENA) region is experiencing
is
socio-political
dampening the investment climate in
the hydrocarbon and
infrastructure
sectors of the region. However, with
the hardening of the crude prices,
prospects for turnkey projects in the
Hydrocarbon sector in India and the
Middle East, have increased.
Investments
sector are
in Power
expected to be good over the next 5
years. While there is some slippage
in achieving the targeted capacity
additions during the 11th Plan, major
capacity additions in the thermal power
segment have been planned during
12th Five-year Plan, with special thrust
to super critical technology. The sector,
however, needs to tackle environmental
and social issues expeditiously, besides
tying up fuel sources so as to achieve
the targeted growth in capacity.
Business Challenges
Sustained economic growth in India
on the backdrop of slow recovery
internationally, will continue to attract
global EPC players to the country. The
emerging prospects in the Middle East
are also expected to witness intense
competition. Low cost Chinese power
plant
equipment manufacturers,
tariff protection and
armed with
shorter delivery schedules, pose a
major challenge to domestic power
equipment manufacturers. On the cost
front, input prices are expected to rise
further. The ability of businesses to handle
competition will depend upon success of
technology tie ups, pre-bid alliances, cost
leadership and execution excellence.
62
MDA p61-120.indd 62
for
infrastructure,
Order prospects
power, fertilizer, defence & aerospace,
water and railways sectors
largely
depend upon the government’s ability
implement policy decisions and
to
fi nance large scale projects. Power
projects and new projects in minerals
and metals sector face hurdles due
to issues such as land acquisition,
coal
environmental
and
clearances.
linkages
With increasing proportion of large
sized Engineering, Procurment &
(EPC) orders under
Construction
execution, meeting
stiff delivery
schedules set by demanding customers
will require smart contract management
and close project monitoring to achieve
sales targets.
The year 2010-2011 saw sustained
increase in the prices of major inputs
and raw materials. Considering the
huge need for domestic infrastructure,
there could be some imbalance in the
demand and supply scenario leading
to increasing costs and pressures on
margins.
Growth Strategies & Thrust Areas
capital,
Ensuring cost competitiveness, timely
execution of projects within cost
estimates, managing volatility, control
over working
achieving
operational effi ciency, improved supply
chain management will be the key
success factors for the projects and
product businesses to achieve the
desired growth in the medium term.
The major strategies for growth are
enumerated below:
• New business structure rollout:
The Company has
embarked
upon implementation of Lakshya
Perspective Plan for the period
2010-2015. The fi rst year of the Plan
has successfully commenced with
completion of most of the changes
in policies & processes pursuant to
formation of Independent Companies
(ICs) and the new structure is effective
April 1, 2011. The new IC structure
is expected to facilitate scalable,
high impact organisational structure
in the near future. The formation
of ICs would empower businesses
to harness sectoral opportunities,
enhance competitiveness, attract
talent, create leadership bandwidth,
increase accountability and strengthen
performance culture.
• Capacity Expansion:
Kattupalli,
and
speed up delivery.
Talegaon,
Hazira,
Coimbatore and Vadodara are the
major locations in India where the
manufacturing
fabrication
facilities are being beefed up to
capability
execution
strengthen
and
In a
major milestone,
the Company
commissioned the country’s fi rst
private sector completely integrated
facilities for the manufacture of
Super Critical Boiler and Turbine
Generators at Hazira, Gujarat in
2010-2011. In the year 2011-2012,
the manufacturing facility of Super
Critical Boiler will be operational
with full indigenisation and Turbine
manufacturing facility will achieve
60% indigenisation.
The Company has strengthened its
position as a major EPC player in
Hydrocarbon upstream sector with
the commissioning of the modular
fabrication yard at Kattupalli, Tamil
launch of
Nadu and successful
the state-of-the-art heavy-lift-cum-
pipe-lay vessel
in
2010-2011.
- LTS 3000
• International Business:
On the
international front, the
fabrication
Company’s modular
facility
been
has
commissioned and has successfully
in Oman
1/1/2004 11:37:55 AM
MDA p61-120.indd 63
1/1/2004 11:37:55 AM
its
increase
completed fabrication of one of the
heaviest jackets for a Hydrocarbon
Upstream project
in 2010-2011.
The Electrical & Automation IC has
in the output
targeted
from
production
overseas
facilities in Saudi Arabia and UAE in
2011-2012. Electrical & Automation
IC will explore new avenues in the
coming year for
leveraging the
medium voltage switchgear range of
TAMCO, Malaysia with the existing
low voltage range in the domestic
market.
strengthened
in Gulf Cooperation
• Presence
(GCC) countries will
Council
considering
be
the upcoming potential
in
infrastructure and hydrocarbon
sectors. Opportunities will be
explored with right partners for
forays into Saudi Arabia and
Qatar.
• New geographies
Independant States
like Turkey,
and Commonwealth
Burma
(CIS)
of
targeted
countries are being
in mid
tap opportunities
to
& downstream sector by the
Hydrocarbon IC. Brazil has plans
for refi nery expansion and HES
focus on developing
IC will
local partnerships to exploit this
potential.
• The subsidiary companies in China
will tap the export market for
Rubber Processing Machineries
and Valves in the Middle East
leveraging on
and Brazil by
established
the
Company’s
relationship and brand
client
image, besides
strengthening
the customer base in the local
market.
MDA p61-120.indd 62
1/1/2004 11:37:55 AM
MDA p61-120.indd 63
• Thrust Areas of Project Businesses:
key
better
The ICs in project business will
focus on expanding customer base,
strengthening business development
account
efforts,
leadership,
cost
management,
improved
utilization,
capacity
technological tie ups to acquire
capability
for high-end
projects and forays into new business
segments and geographies.
to bid
• E&C (Projects) Division has plans
capabilities
to acquire new
in areas of EPC
for Coal
Gassifi er Plants, Poly Propelene
Plants, Ammonia Plants, Rig
Refurbishments
Sub-sea
Systems. Business development
initiatives will be strengthened to
establish the IC as EPC player in
Floating Systems.
and
• Building & Factories IC and
Infrastructure
IC will enhance
engineering and design band
width to increase the proportion
of high-end Design and Build
jobs. Tie-ups are envisaged with
leading international players for
high rise construction technology
and formwork. “Green Building”
capability will be developed
futuristic market
considering
trends.
• Defence & Aerospace business
has plans to form joint ventures
with well-established international
players in its strategic areas of
interest.
• Thrust
Areas
of
Product
Businesses:
Product
businesses will work
on enhancement of operational
effi ciencies, cost competitiveness and
better supply chain management.
• Various initiatives are underway
to strengthen product range in
Electrical and Automation
IC.
The IC will promote integrated
solutions
to gain competitive
advantage.
strengthen
• The Industrial Machinery business
will
the product
range in Apron Feeders, Mobile
Crushers and Tyre Handling
systems. Initiatives are planned for
improving the capacity utilisation
and vendor development.
• Human Resource Development:
Attracting and retaining talent with
requisite competencies, especially
for the emerging businesses and
focus on training and development
improve productivity are key
to
thrust areas
to
strengthen competitive advantage.
Various initiatives have been planned
for
career planning, employee
engagement, competency building
and succession planning.
for businesses
The Company ended the year with
a healthy Order Infl ow of ` 79769
crore taking its Order Book position
to ` 130217 crore, giving good
revenue visibility in the medium term.
Accordingly, the Company is setting its
vision on a long term growth trajectory
to achieve higher
levels of value
creation to its stakeholders.
this backdrop,
In
the Company’s
business divisions and the Subsidiary
& Associate Companies
present
their operations review for the year
2010-2011.
63
1/1/2004 11:37:55 AM
Twin-tower complex at the
L&T Campus in Chennai.
Engineering, Construction & Contracts Division
electrical
Construction
Overview
Engineering,
&
Contracts Division (ECCD) undertakes
engineering, design and construction
of infrastructure, buildings, factories,
water supply and metallurgical &
material handling projects covering
civil, mechanical,
and
instrumentation engineering disciplines.
Supported by a proven track record
of over sixty-seven years, covering all
types of buildings, industrial sectors
development,
and
infrastructure
lumpsum
the Division undertakes
single-
construction with
turnkey
source responsibility. The Division has
to its credit many prestigious land-
mark constructions in the country.
The Division has secured the 34th
rank amongst the top 225 Global
Contractors
Engineering
[source:
News Record (ENR) August 30, 2010],
improving its ranking over the last
5 years from 54th rank in ENR 2006.
Business Environment
The year 2010-2011 has been quite
construction
challenging
the
for
industry as a whole. The overall Order
Inflow to the industry has been tapering
down over the last two years mainly
on account of delayed project award
with respect to Government contracts,
increasing
incidences of regulatory/
environmental issues and moderating
real estate growth.
outlook on
However, with
increasing emphasis
on infrastructure development as a
primary driver of economic growth in
the 12th Five Year Plan, such initial
delays in awarding of projects are
considered to be only transitory in
nature. Corroborating this, towards the
end of the fiscal, the Order Inflows have
started showing steady improvement.
industry, the
For the construction
primary drivers of growth
remain
robust. Business is expected to grow
steadily over time pivoting on the three
infrastructure
prime drivers viz;
development; (b) core sector capacity
enhancement; and
(c) urbanisation.
These growth drivers are irreversible
and are underpinned by India’s growing
(a)
domestic demand and the existing social
and physical ‘infrastructure deficit’.
in balance,
and
is by nature
industry
Construction
pro-cyclical with greater sensitiveness
to business cycle upturns/downturns.
the present
Keeping
economic
global
scenario, the domestic construction
sector is expected to grow in the
range of 11-13% in nominal terms in
2011-2012.
domestic
Opportunities & Challenges
The Union Budget 2011 lays greater
emphasis on infrastructure development
with huge budgetary allocation for
development expenditure. Additional
initiatives on financing of private–
projects would
public-partnership
give a fillip to faster financial closure.
More importantly, project monitoring
and delivery has been given adequate
focus. Given the huge gap between
infrastructure demand and
supply
in a rapidly growing economy like
India, all businesses relating to urban
infrastructure, power, roads & water
64
MDA p61-120.indd 65
7/2/2011 3:21:19 PM
would witness decent growth over a
sustained period. Moreover, growth in
Infrastructure sectors is relatively less
sensitive to business cycles and thus
forms a stable source of business.
of
segments
supply augmentation
With many
the
manufacturing sector functioning at
near capacity levels, there is need
for
through
additional capacity creation in core
sectors like ferrous and non-ferrous
metals & chemicals etc. Thus, need
for incremental capacity creation in
core manufacturing sector is a long
term trend in a domestic demand
based growing economy like India.
Construction
industry especially the
larger fi rms, are set to gain from this.
Rapid urbanisation, growing middle
class income levels and the changing
dimensions of urban needs would
remain the primary driver for real estate
time.
a
demand
Notwithstanding,
relative
sensitiveness of this sector to interest
cycles and income cycles, the trend is
very strong in India and would result in
enormous business opportunities for the
long
the
for
construction industry. The consequent
need to enhance urban Infrastructure
will
construction
opportunity.
further enhance
in 2010-2011,
Though real estate development in
the Middle East had considerably
slowed down
the
planned investments in infrastructure
and oil & gas would offer enormous
Division’s
the
potential
International
particularly
Business,
in Power Transmission & Distribution
and Infrastructure.
for
(ICs)
focusing
Infrastructure
ECCD is organised into Independent
Companies
specifi c
businesses namely Building & Factories
IC,
IC, Metallurgical
& Material Handling IC and Power
Transmission & Distribution IC. Railway
Infrastructure business unit of the
Company focusses on construction of
railway projects.
Buildings & Factories Independent
Company (B&F IC)
Independent
Buildings & Factories
undertakes
IC)
Company
engineering design and construction of
airports, IT offi ce spaces & institutional
(B&F
buildings, hospitals, hotels, residential
buildings and factories and cement
plants. The IC’s thrust on providing
“Concept to Commissioning” solutions
to its customers across various business
segments continues to be the key
driver
leadership
position, retaining the Key Customers
and securing major orders.
to maintain
its
Some of the major orders secured
during the year 2010-2011 include
design & construction of
station
for Hyderabad Metro,
buildings
construction of Seawoods Phase
I
complexes, construction of IT park for
TCS, MRO (Maintenance, Repair and
Overhaul) facility at Nagpur, AIIMS
hospitals at Jodhpur & Bhubaneswar,
residential buildings in Mumbai and
Delhi (IREO, M3M, Wadhwa ,Godrej,
Bengal NRI), factories (Maruti, P&G,
COD Jabalpur) and cement plants for
major industry leaders. B&F IC also
achieved a signifi cant mile stone by
securing a major airport order in the
international arena at Salalah, Oman in
consortium with Galfar Engineering &
Contracting SAOG.
MDA p61-120.indd 65
A section of the swanky new terminal at
Mumbai airport.
65
7/2/2011 3:21:19 PM
B&F IC is fully geared up on the
technology front for undertaking the
new trends in civil engineering and
construction technology like high rise
towers, green buildings, MRO facilities
and precast housing. Various initiatives
including technological tie-ups have
been implemented to improve upon
the execution/delivery capabilities of
complex and large value orders.
B&F
IC has reported a signifi cant
growth in the revenues during the
year 2010-2011. Some of the key
notable projects completed by B&F IC
include the Delhi International Airport
Terminal 3 (well before the Common
Wealth Games), Mahatma Mandir at
Gandhinagar (completed in a record
time of 182 days, which hosted the
event of Vibrant Gujarat 2011) and
Wankhede stadium project
(which
hosted Cricket World Cup fi nals 2011).
The completion of these prestigious
line,
projects within stringent time
demonstrates the B&F IC’s superior
project management/project execution
capabilities in handling large design &
build projects.
66
MDA p61-120.indd 66
The opportunities in airport expansions,
IT campus developments, upcoming
metro stations, government thrust on
hospitals and demand for affordable
expansions/
housing
additions will be key drivers for the
B&F IC’s growth. On the back drop of
a healthy order book, B&F IC is poised
to register a satisfactory growth in the
revenues during the year 2011-2012.
factory
and
Infrastructure Independent
Company (Infra IC)
construction of
Independent Company
Infrastructure
undertakes
roads
and runways, land & marine bridges,
interchanges,
elevated
elevated bridges, metros, ports, special
bridges, hydel projects, nuclear facilities
and defence projects.
corridors,
to
(cid:122) Roads: National Highway Authority
of India (NHAI) remains the main
contributor
the development
of roads in the National Highways
through Public Private Partnership
model. During
the year 2010-
2011, Infra IC secured two BOT
projects – Krishnagiri Walajahpet
Wankhede Stadium, Mumbai – iconic venue
of the cricket World Cup. L&T refurbished the
stadium and provided critical switchgear.
in Tamil Nadu and Gandhidham
Samakhiali in Gujarat. It has also
secured a project from a leading
developer for the construction of
Kandla – Mundra road. Infra IC is
also looking at the opportunities
available in international arena at
UAE, Oman, Saudi & Qatar. During
IC
the year 2010-2011,
secured two major orders namely
Al Sowah cable stayed bridge and
Sheikh Khalifa interchange in Abu
Dhabi.
Infra
(cid:122)(cid:3) Metros,
&
Ports
Special
Bridges: Presently Metro projects
in Delhi,
are underway, mainly
Chennai, Bangalore, Mumbai and
Hyderabad. During the year 2010-
2011, Infra IC secured the orders
the
of Hyderabad Metro and
underground package of Chennai
Metro. This year also witnessed
successful completion of Delhi
Metro.
segment also has
The Ports
potential with many
good
private developers
in
development of greenfi eld ports.
investing
7/2/2011 3:21:21 PM
MDA p61-120.indd 67
7/2/2011 3:21:22 PM
At present, Infra IC is constructing
L&T’s own greenfi eld port cum
shipyard project at Kattupalli near
Chennai.
in
its business.
leadership position
The thrust on Infrastructure by the
Government continues to be the key
driver.
(cid:122)(cid:3) Hydel: Hydro Power Sector has
good potential in India as renewable
source of energy. A positive trend
is noticed in 2010-2011, that a few
of the DPRs by private sector have
been submitted to central water
commission for techno commercial
Further, Government
clearance.
of India has decided to accelerate
the implementation of projects in
Bhutan through the Indo-Bhutan
co-operation agreement. All these
developments augur well for the
Hydel business.
(cid:122) Nuclear Construction: Market
opportunities are yet to unravel in
a big way in nuclear power sector.
However, Infra IC is fully geared up
to take active part in India’s Nuclear
Power Programme.
IC has started of
Infra
focussed
initiatives on cost competitiveness,
value engineering and Strategic tie-ups
which would assist the IC in reaching
is
IC
specifi c
focussed
Infra
in
clearly
capitalising the current market trend.
With
thrust on business
development, the IC is looking at
new opportunities across the various
business segments in India and on
International front. With the healthy
Order book, Infra IC is confi dent of
registering a satisfactory growth in
revenues during the year 2011-2012.
Rail Infrastructure Business
The Company established Railway
to cater
Business Unit
to
(RLBU)
the
Infrastructure
emerging Rail
in Urban Mass Transport
projects
Systems, construction of facilities for
manufacturing and maintenance of
Railway Rolling Stock and cross country
rail connectivity projects in a focused
manner. Within a short period, RLBU
has established
itself as a unique
service provider for delivering turnkey
solutions in various types of Railway
projects, particularly in the areas of
and
services
dedicated rail connectivity projects for
Core Sector infrastructure developers,
Railway Workshop modernisation/
upgradation projects and being a
Systems Integrator for Mass Transit
projects. The range of capabilities
developed
offered
include Railway Electrifi cation, Railway
Telecommunication,
Signalling
&
Infrastructure
Railway Track
construction
and
underground) and Electro-Mechanical
services at stations for Mass transit
projects. At present, RLBU is executing
the country’s fi rst Monorail Project
in Mumbai and is completing one of
the largest cast-wheel manufacturing
facility construction at Chhapra in Bihar
for Indian Railways.
elevated
laying,
(both
With the opening up of Rail Sector
to private participation, the growing
need for Rail based mass transport
systems practically in all the major
cities and defi nitive activities on the
Dedicated Fright Corridor project (the
fl agship project of Indian Railways);
RLBU sees tremendous opportunities
for expanding its portfolio of various
turnkey projects. Accordingly, it has
MDA p61-120.indd 66
7/2/2011 3:21:21 PM
MDA p61-120.indd 67
L&T constructed key sections of the
prestigious Delhi Metro.
67
7/2/2011 3:21:22 PM
built a strong engineering base at
Faridabad and is leveraging on the
Company’s construction and project
management skills in executing various
on-going projects.
Metallurgical & Material Handling
Independent Company (MMH IC)
(SAIL
The MMH IC continues to maintain
its leadership position in the fi eld of
Metallurgical & Material Handling
projects. Order Book is healthy as a
result of good order infl ow during
the year. Some of the major orders
received are: Blast Furnace (Paradeep
Iron & Steel), Blast Furnace & Sinter
- Bhilai), Continuous
Plant
Annealing Plant & Coke Oven Battery
(TATA Steel), EPC for Coal Crushing &
Screening and Raw Material Handling
System - 2 (Bhushan Steel), Pot Shells,
Super structure, Project Monitoring
Service (BALCO), Coal Handling Plant
(GMR ,Chattisgarh) Coal Handling Plant
(Elena Power Infrastructure Limited,
Amravati), Coal Handling Plant (India
bulls Real tech, Nashik).
MMH IC has proven, time and again
its execution capabilities by successfully
completing the projects ahead of time.
The Major projects completed during
the fi nancial year were Dhamra port
jointly developed by L&T and TATA,
Upgradation of Blast Furnace #2 (SAIL -
Bokaro) water supply scheme (Bisalpur
Jaipur), JBIC funded Trivandrum Water
supply scheme, Rayadurg & Hindupur
Water Supply Scheme, Under Ground
Reservoir & Booster Pumping Station
for Delhi Jal Board, Anantapur Water
Supply Scheme - Phase III, Nellore
water supply scheme.
MMH IC is currently executing Blast
Furnace & Sinter Plant for SAIL at
Bhilai and the
largest Pellet plant
for Tata Steel at Jamshedpur and
concurrently executing Thirteen Coal
handling plants, which is a landmark
achievement. Key success factors for
the IC are high customer retention,
operational effi ciency and consistent
performance.
Higher growth in the fi eld of Ferrous
& Non-ferrous, power sector and
commitment
Government
towards
spending are going
infrastructure
to be the key drivers for the MMH
68
MDA p61-120.indd 68
Blast furnace installation at Visakhapatnam.
IC during 2011-2012. Healthy order
book position gives MMH IC, better
confi dence of achieving the revenue
growth for the year 2011-2012.
Power Transmission & Distribution
Independent Company (PT&D IC)
of
Industrial
PT&D IC offers EPC solutions in the
fi eld
Electrifi cation,
Substations, Switch Yards, Transmission
Lines, Turnkey Railway Construction
and Solar power. This IC has a strong
presence both in India and the Middle
East. Despite severe competition the
IC has recorded a good growth in
Order Infl ow. Sales on the other hand
registered moderate growth due to
delay in project progress from clients,
delay in order fi nalisations and change
in order book mix tilting towards long
duration jobs.
uncertainties
The major challenges faced by the
IC are: volatility in commodity prices,
environmental
and
Initiatives
in competition.
increase
such as pre-tender tie-up, hedging
and continuous improvement in cost
competitiveness will help to overcome
the challenges.
7/2/2011 3:21:23 PM
MDA p61-120.indd 69
7/2/2011 3:21:24 PM
The
IC constantly widens vendor
base and resorts to reverse auction
for commodities to optimise the cost
is
structure. Resource optimisation
ensured
through Cluster approach
i.e. managing similar projects within a
geography/country through sharing of
resources.
Major orders during the year include
Solar orders, Ballast-less track works
for Chennai Metro, E-BoP (Electrical
Balance of Plant) for Amravati Thermal
Power Plant in Nagpur and many
Transmission Line orders in India. In the
Middle-East the IC bagged more than
a dozen substation and distribution
orders from some of the leading players
like Abu Dhabi TRANSCO, ADWEA etc.
It obtained pre-qualifi cation in countries
like UAE, Qatar, Kuwait and Northern
Africa for 220 KV substations/cabling,
Transmission Lines upto 500KV. This
would auger well for the order infl ow
in the years to come.
There are lot of positives for the PT&D
business in India and the Middle East.
In India, the Government utilities like
PGCIL, NTPC and State Electricity
Boards are likely to continue their
investments. A sizeable amount of
business is also expected from steel &
material handling projects. STUs (State
Transmission Utilities) will upgrade
their network to 400KV/ 765KV levels.
Solar Mission Phase – 2 will take off
alongwith new Solar Business driven
by Renewable Energy Certifi cate (REC)
mechanism.
from
remains
2011-2012
positive
the
for GCC
The 2011-2012 outlook
and
countries
real GDP growth of
region
is projected to accelerate to 6%
in
in
2010-2011. The growth will be sustained
through public infrastructure spending,
supported by higher oil prices and
faster non-oil growth. At the backdrop
of geopolitical disturbances witnessed
in MENA region, governments are
4.8%
proactively planning to spend more
money on improving the infrastructure
facilities which will pave way for
more Transmission & Distribution
opportunities.
Outlook
Independent Companies have
The
completed their strategic plans for the
next 5 years with a strategic growth
orientation. The thrust areas include
increasing the market share, improving
the competitiveness and expanding
the geographical reach beyond current
boundaries. However, in view of the
uncertainty in some of the countries
of interest, the businesses are carefully
monitoring the developments in the
new countries and will pitch in at an
opportune time.
Overall, the outlook for the construction
businesses remain strong given the
macro economic indicators in general
and a healthy construction order book
at the year end in particular.
MDA p61-120.indd 68
7/2/2011 3:21:23 PM
MDA p61-120.indd 69
Transmission lines at Al Ain, UAE.
69
7/2/2011 3:21:24 PM
Booster compressor platform for Oil &
Natural Gas Corporation.
Engineering & Construction (Projects) Division
Overview
Engineering & Construction Division
designs, engineers and executes world-
class projects for the hydrocarbon
sector with single-point responsibility
from front-end design through detailed
fabrication,
engineering, modular
procurement, project management,
to
construction
commissioning.
alliances
with world leaders enable the Division
to access advanced know-how and
deliver projects that meet stringent
Health, Safety & Environment, quality
requirements and time schedules.
installation,
Strategic
and
The Division has a good track record
of executing large size and complex
projects on turnkey basis in Oil & Gas,
Petroleum Refi ning, Petrochemicals,
Fertilisers
Technology
and Water
sectors.
include
Division’s major capabilities
in-house engineering, R & D centers,
engineering joint ventures with reputed
offshore
international
installation capabilities, world class
companies,
70
MDA p61-120.indd 70
fabrication facilities, experienced &
competent project execution team and
safe work culture.
Engineering & Construction Division is
organised into three Strategic Business
Groups (SBGs):
in
Upstream has successfully executed
large size projects
India, GCC
countries, Africa for elite clientele
comprising global companies such as
ONGC, GSPC, Songas, Qatar Petroleum,
Maersk Oil Qatar and Bunduq.
• Hydrocarbon Upstream
• Hydrocarbon Mid & Downstream
• Hydrocarbon
Pipelines
Construction
&
During the year Division registered a
good growth in Sales & PBIT.
Hydrocarbon Upstream (Upstream)
Hydrocarbon Upstream provides a
wide range of EPC solutions and
covers entire value chain of Oil & Gas
encompassing production, processing
and
transportation. The SBG has
established a presence in Jack-up rig
is now
refurbishment market and
looking at new build of Jack-up rigs,
Floating Production Storage & Off-
loading (FPSO) Topsides and Subsea
business.
business
opportunities
It has three fabrication facilities at
strategically
locations –
important
Hazira near Surat in Gujarat catering
to
from
West Coast of India (Mumbai High),
Kattupalli near Chennai in Tamilnadu
catering to opportunities from East
Coast (Kakinada Gas Fields, KG Basin,
South East Asia region) and Sohar
at Oman catering to opportunities
in and around MENA region. All
fabrication yards put together have
fabrication capacity of more than
100,000 MT.
During the year, the SBG expanded
Upstream capabilities by commissioning
Heavy Lift Cum Pipelay Vessel LTS 3000.
In line with Strategic Plan 2010-2015,
Upstream is targeting major projects in
International region and key business
7/2/2011 3:21:24 PM
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7/2/2011 3:21:25 PM
development personnel are appointed
and are located in these regions.
established in Sharjah (UAE) and Al
Khobar (KSA).
A major milestone for the SBG was
the engineering &
achieved with
fabrication of heaviest jacket of 13200
MT at Oman yard in record time of
ten months and achieving a smooth
load out for ONGC’s Mumbai High
North Project. Another milestone was
achieved in terms of sail out of fully
refurbished Jack-up Rig. Signifi cant
efforts were put in to develop the
yard at Kattupalli on a fast track basis
and operationalise it for fabricating
platform deck for the GSPC projects
during the year.
Hydrocarbon Mid & Downstream
(HMD)
Mid & Down Stream offers turnkey
solutions encompassing engineering
procurement,
and
commissioning (EPCC) to Petroleum
Refi ning, Petrochemicals, Fertiliser and
Onshore Gas Processing sectors.
construction
It mainly operates
from Mumbai,
Vadodara and Faridabad. As a part
of
initiative,
business development capabilities are
internationalisation
HMD has been prequalifi ed with
all major state owned oil and gas
producers in MENA and SEA regions
such as ADNOC, KNPC, KOC, QP,
Saudi Aramco, PDO, GASCO, ENOC,
Chemanol, BANAGAS and Petronas to
bid for large value EPC projects.
front HMD clientele
On domestic
includes PSU customers
IOCL,
HPCL, BPCL, CPCL, ONGC, MRPL,
OMPL, KRL, GNFC, NFL, RCF, IFFCO and
private customers like RIL and Cairn.
like
HMD has built the capabilities and
resources to execute multiple large
value complex projects simultaneously
meeting stringent safety, quality and
delivery schedules.
HMD has rich experience of project
execution with diverse technologies
like UOP, Axens, Haldor Topsoe,
Lummus, Black & Veatch,
CB&I
Ortloff, ExxonMobil, BOC Parsons,
Du Pont (Invista) and Davy Process
Technologies.
HMD has actively participated
in
almost all the fertilizer projects in
India. Through strategic alliances with
internationally renowned companies,
the Company has access to world-
class technologies offering process for
manufacture of ammonia and urea. It
has three Ammonia Plant modernisation
projects under execution which are
progressing as per schedule.
HMD has substantial experience in
executing hydrogen generation and
synthesis gas generation projects. It is
foraying into Gas processing segment
and has two projects under execution
for additional gas processing facilities
from ONGC.
successfully executed
Having
two
petrochemical projects, it is currently
executing Aromatics Complex
for
OMPL at Mangalore.
jobs completed during
Major
the
year include Sulphur Recovery Unit,
(IOCL, Gujarat), Naphtha Cracker
and Associated Units (IOCL, Panipat),
Isomerisation Unit
(IOCL,Panipat),
Lube Oil Base Stock, (HPCL, Mumbai),
(GGSRL,
Hydrogen Generation Unit
(IOCL,
Bhatinda) & DCU Heater
Gujarat)
MDA p61-120.indd 70
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MDA p61-120.indd 71
Sulphur recovery plants for Indian Oil’s
Gujarat refi nery.
71
7/2/2011 3:21:25 PM
Hydrocarbon
Pipelines (HCP)
Construction
&
HCP undertakes turnkey construction
of Refi nery, Petrochemicals, Chemical
Fertilizers, Gas Gathering
Plants,
stations, Crude Oil & Gas Terminals,
Underground cavern storage system for
LPG and Cross-country pipelines in Oil
& Gas covering civil, structural, piping,
equipment and heavy lift works.
Major capabilities include Engineering
Design & Research Centers, Heavy
Safety
Lift Competency, Health
Environment Culture and Quality
adherence.
HCP has recently executed prestigious
orders for Cairn Energy India Limited
for the development of their Oil &
Gas fi elds in Rajasthan and the cross-
country crude oil pipeline for conveying
waxy crude from Barmer, Rajasthan to
Salaya, Gujarat.
To cater to international market, it
has business development offi ces at
Sharjah and Saudi Arabia. It also has
entire set up of project execution
comprising workmen, effi cient project
& construction management systems
supported by a fl eet of key construction
equipment, including all-terrain cranes,
entire range of pipeline spreads &
earthmoving equipment.
In order to service the clients in the
MENA region more effectively the HCP
has entered into joint venture with
reputed local partners in Oman, Kuwait
and Saudi Arabia
Business Environment
Domestic market, which is a major
contributor to revenues, is increasingly
getting fl ooded with new aggressive
competitors, both Indian and foreign.
The Division is taking actions in terms
improving cost competitiveness,
of
diversifying into new geographies &
venturing into new product lines.
During the year a few orders got
deferred both on domestic as well as
on international front. The uncertainty
over gas allocation policy and subsidy
sharing has impacted the award of
major fertilizer orders in India. In Middle
East region, there is slow progress on
tendering of projects particularly on
account of recent political tensions.
However, HCP has been successful in
72
MDA p61-120.indd 72
Gas pipeline
Ras Laffan.
for Qatar Petroleum at
bagging a few orders with reputed
clients.
and
prices
During the year, there were input
costs pressures on account of rising
general
commodity
infl ationary situation. However, the
Division has been able to maintain
the operating margin through various
initiatives undertaken such as expanding
vendor base, low cost country sourcing,
frame rate agreements with suppliers,
value engineering & improved contract
management.
Signifi cant Initiatives
For sustaining growth momentum,
Strategic Plan “Lakshya 2015” has been
formulated identifying the key strategic
initiatives along with milestone driven
roadmaps.
Some of the key highlights of the year
include:
• Pre-qualifi cations
with
major
like
International customers
E&P
Saudi Aramco, Abu Dhabi Marine
Operating Company (ADMA OPCO),
Zakum Development Company
(ZADCO);
7/2/2011 3:21:29 PM
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• Appointment of
key business
development personnel in targeted
International regions;
• Tie-ups for new lines of business such as
Air Separation Units, Coal Gasifi cation
• Breakthrough
in bagging Gas
Processing & Rig Refurbishment
order in India;
• Fast Track Development of Kattupalli
Fabrication yard;
• Heavy Lift cum pipelay vessel has
been commissioned and performed
it’s maiden offshore operations for
Petronas.
Focus on operational
excellence
exercise is continuing for strengthening
proposal engineering, project execution
& controls, contract management,
asset utilisation. Besides, the Division
is
supply chain with
construction plan and optimising the
cost structure.
integrating
Moreover, the Division took some major
steps to strengthen the safety culture
across the organization and is working
with DuPont Safety Systems.
Talent management
Hydrocarbon IC has a strong resource
base of skilled and experienced people
working in various disciplines. The ability
to attract, develop and retain talent
determines the strategic capability of
organisations. A premium is placed
on how talent is sourced, selected,
trained, promoted and moved across
the organisation.
leadership
development
Various
programs have been initiated to groom
emerging leaders across various levels.
is adopted
Focused approach
to
increase employee engagement thereby
improving productivity & creating feel
good factor within the organisation.
Risk management
The Division has a matured Risk
Management Process in place with
clear policies and guidelines. Risk
Management processes are ingrained
in
the system and have become
an inherent part of our day to day
is aimed
operations. The process
Identifi cation, Assessment and
at
MDA p61-120.indd 72
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MDA p61-120.indd 73
Mitigation of risks from pre-bid to
completion of the project.
attrition,
The Division has various challenges in
the form of increasing competition,
manpower
newer
geographies, forex and commodity
price fl uctuation. The same is mitigated
through specifi c actions like appointing
local representatives in target countries,
proactive
management,
operational excellence initiatives and
employee engagement initiatives.
hedge
The Division has further strengthened
its commitment to Risk Management
processes by adoption of
Industry
best practices. Project Managers are
Induction Program
undergoing Risk
(Engineering &
conducted by ECRI
Institute) on a
Construction Risk
continuous basis to get acquainted with
Global Best Practices in Engineering &
Construction Risk Management. Risk
Management process is institutionalised
across the Division and is contributing in
enhancing/protecting operating margins.
Outlook
The world economy
is seeing a
turnaround. However, the recovery is
Jack-up drilling rig (right) for Lynemouth
Drilling, U.K. and 13,500-tonne jacket for
ONGC at L&T’s Modular Fabrication Yard in
Sohar, Oman.
73
7/2/2011 3:21:30 PM
uneven and vulnerable to downside
risks. Political uncertainties in Middle
East region have posed serious challenge
to global recovery. Fiscal defi cit position
of US & major economies in Europe
also adds up to cautious view on the
growth momentum.
economies
While developed
are
showing some sluggishness resulting in
rise in unemployment levels, emerging
economies have come back on growth
track.
High crude oil price scenario is expected
to continue in the near term. The
induction of stimulus packages into
the economy has created liquidity and
thereby leading to infl ationary pressures
and higher commodity prices.
Worldwide Oil & Gas Capex plans are
expected to remain high and are expected
to provide good prospects to the business
of the Division in 2011-2012.
Some of the key factors which will
support growth in near future are:
• Increasing brownfi eld prospects
especially in Middle East and North
Africa region
• Market for new built Jack-up Rigs
and FPSOs looking up in addition to
the refurbishment market
• Refi ning units in India are going for
downstream petrochemical units for
Value Added Products (VAP)
• Good prospects are seen in new
lines of businesses such as Gas
L&T’s heavy lift-cum-pipelay vessel installs a
jacket off Malaysia.
Processing, Poly Propylene (PP) &
Coal Gasifi cation
• “Infrastructure” status given
industry has
fertilizer
conducive
revamping & modifi cation
fertilizer plants.
environment
to
created
for
of
• With
increased
and
thrust on gas
transportation,
in cross
is
production
boost
in
country gas pipeline projects
expected
investments
On
the back of healthy order
book and good prospects during
2011-2012, the Division is expected to
achieve healthy growth in the coming
year.
74
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MDA p61-120.indd 75
7/2/2011 3:21:32 PM
Supercritical turbine under assembly at
L&T‘s Hazira campus.
EPC Power Division
Overview
The 2010-2011 has seen the emergence
of EPC Power Division as a credible player
in the power sector. This is gratifying as
the success of EPC Power is critical to
the Company’s performance. Defi nitive
steps have been taken by the Division,
whereby, the Company will be providing
equipment and services encompassing
nearly 75% to 85% in value terms of
a thermal power plant.
On January 11, 2011, the Company
dedicated its Boiler and Steam Turbine
facilities at
Generator manufacturing
Hazira, Gujarat to the nation. The facilities
have been set at an investment of nearly
` 2000 crore, to usher in a new era of
super critical technology equipment in
Indian power plants.
The year also saw substantial progress in
setting up the facilities for manufacture
of Power Auxiliaries at Hazira. The high
pressure piping fabrication facility was
commissioned and production has
commenced in March 2011.
facility
for manufacture of
The
in Hazira,
Electrostatic Precipitators
is nearing completion and
Gujarat
due for commissioning by September
2011. The joint venture with Howden,
UK for the manufacture of axial fans
and air-preheaters also made good
progress in terms of factory construction
and equipment ordering. With this EPC
Power will have in-house capabilities
to provide nearly 85% (by value) of
equipment/services required in a power
plant.
Performance Highlights
During the year, the ongoing projects
made good progress, in line with
the schedules. The Steam Turbine
Generator (STG) for Unit 1 and all the
Turbine components were delivered
at the 2x800 MW site of APPDCL,
Krishnapatnam. The 2x384 MW Gas-
based power project of GMR group at
Vemagiri near Rajahmundry, Andhra
Pradesh maintained a brisk pace of
execution and was ahead of schedule
throughout. The fi rst Gas Turbine is
MDA p61-120.indd 74
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MDA p61-120.indd 75
scheduled to be fi red in the second
quarter of 2011-2012.
Limited
Pradesh
The two BOP projects under execution
the Madhya Pradesh Power
for
Generation Company
at
Shree Singaji Thermal Power Project
and
Khandwa, Madhya
for DB Power Limited at
Janjgir-
Champa, Chhatisgarh have progressed
satisfactorily. The Boiler Foundation
at DB power site was completed
within a record time of 4 months
to help
the customer catch up
progress on the BTG scope executed
by BHEL.
Customers having experienced
the
Division’s project management and
execution capabilities have appreciated
the speed, responsiveness and dexterity
of the Division. The Division has
strived to create its own benchmarks
in setting up site infrastructure. This
coupled with its swiftness in mobilising
personnel and equipment at site have
only reinforced the confi dence reposed
by its customers.
75
7/2/2011 3:21:32 PM
Business Environment
Power continues to be a thrust area
in India due to the continuing scarcity
across several regions. Several state
owned entities and also Independent
Power Producers (IPP) have planned
new power plants as well as expansion
of existing power plants based on
thermal power, both gas and coal.
Several measures are planned by the
Government to promote investments
in the power sector.
Despite the focused approach towards
increasing
the power generation
capacity, the planned capacity additions
and expansion in the sector have not
met
target. The planned addition
as per the Eleventh Plan was about
78000 MW but the expected addition
is likely to be around 51000 MW. The
Twelfth Plan
[2012-2017] envisages
capacity addition of 105000MW in
power development with
thermal
power expected to be the biggest
benefi ciary.
The government policy of encouraging
companies in the state owned sector
76
MDA p61-120.indd 76
into
from
power
source equipment
setting up greenfi eld
JSW-Toshiba,
local
to
manufacturers has seen several players
foraying
equipment
manufacturing. Some of the players
who are already in various stages
facilities
of
BGR-Hitachi
include
and Doosan. But most of
these
facilities are expected to take time
in
L&T-MHI
combine with its lead of 2 years is
expected to enjoy the fi rst mover
advantage for some time. Government
policy of focusing more on Super-
critical technology than Sub-critical
technology gives an impetus to the
Division’s growth prospects.
commissioning.
The
Several IPP’s are also continuing to
source from Chinese suppliers despite
concerns regarding performance. This
coupled with the new capacities being
added by both new and existing
players could result
in the power
equipment market seeing overcapacity
in a few years time resulting in a
highly
environment.
Absence of
import duty on such
supplies provides the Chinese Vendors
competitive
Natural gas fi red combined cycle power
plant at Vemagiri in Andhra Pradesh
a defi nitive advantage vis-à-vis supplies
from indigenous facilities.
There has also been a tendency of IPP’s
to demand substantially smaller project
schedules primarily on account of the
quicker delivery schedules for critical
equipment being offered by Chinese
suppliers as well as the need to cash-
in on the prevailing higher merchant
power rates that could see a major
drop as power supply in the country
increases.
Some concerns prevail on the policy
front as well. Several projects have seen
delays due to concerns regarding the
environmental impact, issues relating
to land acquisition and compensation,
non-availability of fuel linkages and
water etc. Recent directives from the
Ministry of Environment & Forests
with regard to mining of coal as well
as
for environmental
clearance are likely to exacerbate the
situation. Even on the gas front, the
initial euphoria over discoveries in the
KG D6 basin has not seen translation
in the form of large investments for
commercial exploitation of the assets.
requirement
7/2/2011 3:21:34 PM
MDA p61-120.indd 77
7/2/2011 3:21:36 PM
The availability of gas for power plants
has
issue
remained a contentious
resulting in the investments in gas
based power plants not being apace
with those seen in the coal based
power plants.
These
issues relating to fuel and
environment management, need to
be viewed with a fi ve to ten year
perspective and concerted action is
required to ensure the investments
in the power sector continue if not
expand from the trend seen in past
few years.
the
target
capacity additions
If
envisaged in the 12th and 13th fi ve
year plans are to materialise, the policy
environment has to be made conducive
for investments and there has to be
clarity on all the fronts.
The emergence of several new players
in the generation as well power
equipment manufacturing space has
led to an acute shortage of skilled
human
the power
sector. In the medium to long-term,
possible technological breakthroughs
resources
for
in non-conventional power generation,
reduced availability of fossil fuels as
well as water can present considerable
risk to the company’s business.
Signifi cant Initiatives
The Division and subsidiaries under it
namely, L&T-MHI Boilers Private Limited
L&T-MHI Turbine Generators
and
Private Limited received ISO9000:2008
certifi cation during 2010-2011.
The integration of the ‘Thermal Power
Plant Construction (TPPC)’ business unit
into EPC Power brings all the power
plant construction related businesses
of the Company under one roof and
will enable the Division to have a more
cohesive approach
towards project
management.
The drive to become an integrated
player has seen the Division focus
on manufacture of various power
auxiliaries.
also
indigenisation
achieved
The Division has
its
accelerated
manufacturing
the
objective of reduction in costs and
in
facilities with
foreign currency risks that will directly
translate into better pricing.
The Division has also developed
capability in the ultra super critical
technology space and is in the process
of educating prospective customers
about the proven benefi ts from its
use.
that
Interface Engineering
involves
integration of the STG Island with the
Boiler Island and the BOP packages
in more cohesiveness.
will bring
Additionally, the involvement of MHI
in this process is expected to add
substantial value and provide traction
for emerging as a complete turnkey
solutions provider.
During the year 2010-2011, as part
of its global sourcing initiative, the
Division has expanded staff at it‘s China
offi ce for sourcing of components.
Procurement from Chinese vendors will
be explored wherever possible with the
objective of reducing the cost without
compromising on quality.
Measures have been
engineering
benchmarking
initiated
for
and
MDA p61-120.indd 76
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MDA p61-120.indd 77
L&T’s integrated capabilities cover every phase of the power value chain.
77
7/2/2011 3:21:36 PM
and
standardisation
that will
product
enhance productivity through design
optimisation
standardisation,
reduce engineering cycle time, facilitate
sourcing advantage and enhance other
project management competencies.
Concerted action through the above
measures will provide avenues for cost
reduction as well.
Human resources are an important
element and the power sector has
seen increased demand for qualifi ed
and skilled resources. With a long-
term perspective, the Division has
identifi ed training and development
as a key activity. Several programmes
are being organised in association with
the National Power Training Institute
(NPTI) for providing the people with
the necessary skills. The Division has
also appointed senior and experienced
people specifi cally for devising training
methods and conducting programmes.
the activities and processes.
all
Implementation of SAP based enterprise
software has been with a focus on
business processes rather than purely
transaction
as fi nancial accounting
software.
The endeavor to leverage on information
technology in project execution has
enabled the Division in identifying the
risks at inception, tracking the project
progress in real time among other
benefi ts.
There is a strong focus and emphasis
on contracts and risk and management.
A dedicated
team of competent
professionals has been assigned the
task of tracking and monitoring risks
arising from projects commencing from
the bid stage through execution phase
till project closure.
Outlook
L&T’s joint venture with Mitsubishi Heavy
Industries introduces world-class supercritical
technology in India.
introduced
is yet to be
due to various reasons. With more
clarity emerging on policy fronts, the
Division expects several projects to be
tendered this year both by IPP’s and
state owned entities. The policy regime
now favors establishing power plants
based on super critical technology
and sourced from indigenous facilities.
The Ultra-Super Critical Technology
which
in
India, also will provide an avenue for
innovation led growth. With most of
the manufacturing facilities already
commissioned, the Division is poised
to harvest from the project awards
expected
from both private and
key
state
differentiators of execution excellence,
technology leadership to offer energy
effi cient
effi cient
solutions will enable the Division in
continuing to envisage good market
opportunities.
resource
entities.
owned
and
Its
Emphasis has been made on use of
for almost
Information Technology
The year 2010-2011 saw slew of
power project prospects being delayed
78
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MDA p61-120.indd 79
7/2/2011 3:21:41 PM
Heavy Engineering Division
Overview
two
namely Heavy
Heavy Engineering Division is organised
Independent Companies
into
Engineering
(IC)
Independent Company
Ship
and
Building Independent Company.
Heavy Engineering
Company (HE IC)
Independent
IC manufactures and supplies
HE
custom-designed, engineered critical
equipment & systems to core sector
industries
Fertiliser, Refi nery,
Petrochemical, Chemical, Oil & Gas,
Thermal & Nuclear Power, Aerospace
and Equipment & Systems for Defence
applications.
like
The IC has manufacturing & fabrication
facilities at Mumbai, Hazira, Baroda
and Visakhapatnam. A
Strategic
Systems Complex for integration and
testing of weapon systems, sensors
and engineering systems is located at
Talegaon in Maharashtra. A Precision
Manufacturing Facility has been set
up at Coimbatore
in Tamil Nadu
to cater to the needs of precision-
machined/manufactured components
& assemblies.
Strategic
Defence Electronics Systems design
& engineering is supported through
Electronics
a dedicated
Centre
including a new product
development centre at Bengaluru.
Dedicated production engineering and
manufacturing process development
centres
support manufacturing at
each location. Detailed design and
engineering centers support Project
Management teams at all locations. The
IC has three “Technology Development
Centres” that operate from Powai – for
new product development in process
plant equipment and for strategic
equipment & systems, as well as one
focused on electronic systems/sub-
systems.
A heavy fabrication facility, set up as a
Joint Venture in Oman, manufactures a
range of equipment for the hydrocarbon
& power sector.
L&T manufactured key systems for the PSLV
launch. (Picture courtesy: ISRO)
Business Environment
The Order Infl ow and Sales during
2010-2011 were adversely impacted
due to the overall sluggish global
economic scenario in most of the
business segments of the
IC. The
deferment/cancellation of some of the
planned projects across geographies
have led to a drop in Export Orders.
trends,
the outlook
A number of domestic fertilizer projects
are awaiting the announcement of
Urea & Gas Allocation policy from
the government. China offers a major
business potential for Methanol plant
equipment. With oil prices maintaining
for
upward
coal gasifi cation equipment
looks
promising. In addition to China, there
are opportunities
like
Vietnam, Indonesia and Australia for
coal gasifi cation equipment. The IC
also sees good business opportunity in
prospective Indian CTL projects. Overall
outlook for power plant business from
Indian market
is robust. However,
competition from the Chinese and
in countries
MDA p61-120.indd 78
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MDA p61-120.indd 79
79
7/2/2011 3:21:41 PM
‘Clean Fuel’ reactors being despatched from L&T’s Hazira Works for Kuwait National Petrochemical Corporation.
Korean suppliers is putting pressure
on the pricing. Idle capacities with
competitors is putting severe pressure
on margins and terms of delivery.
The localisation policies of some of
the countries and preference to local
suppliers by some of the EPC Companies
due
socio-political compulsions
is putting the IC at a disadvantage.
Despite the intense competition, the
IC sees good prospects from revival
of overseas projects
in grassroot
refi neries and petrochemicals, as well
as in refi nery modifi cation, revamp and
upgrade at home.
to
shows great
sector
The Defence
promise in the medium to long term
– both in land and marine business
segments. The Armed Forces, as well
as the Indian Coast Guard have plans
of large scale induction, which provides
good business prospects to the IC.
Ministry of Defence (MOD) continues
showing preference for DPSUs shipyards
by
programs
leaving only auxiliary ships to open
competition. There are opportunities
to tap in Defence offset programs
nominating major
and in Communication programs of
the Army and Navy. With the fi rst
wave of Make programs and Buy &
Make Indian programs in Defence,
the IC sees major opportunities in
co-development to be followed by
co-production over long term.
Post Japan nuclear crisis the nuclear
sector is likely to see delays in new
investments and selection of suitable
sites.
Signifi cant Initiatives
In the quest for the exclusive position
in the global process plant equipment
business and for gaining an early-
the defence
mover advantage
equipment sector, the IC has embarked
upon a number of key initiatives under
a campaign titled “UDAAN” which
means fl ight or breaking free to scale
new heights.
in
Some of the major initiatives under
“UDAAN” are:
• Implementing Theory of Constraints
• Enterprise-wide Collaboration
Alignment with Strategy (ECAS)
for
• Employee Engagement
80
MDA p61-120.indd 80
• Innovation
• Sustainability
“Critical Chain Project management”
the “Theory of
methodology of
Constraints” is used for improving
execution and delivery performance.
As an initiative to improve operational
velocity, the IC has undertaken the
implementation of the Strategy and
Tactics (S&T) Tree during the year.
The IC had launched a major initiative
- “Enterprise-wide Collaboration for
Alignment with Strategy” (ECAS) -
which aims at aligning operations
to the strategy of customer intimacy
through
culture.
A number of cross-functional teams
have been working on various projects
for Organisational Excellence within a
90-day timeline.
collaborative
a
Through
the Employee Engagement
initiative, the IC seeks to get an unbiased
perception of employees on a number of
dimensions. The feedbacks shape direction
for future improvement initiatives and
helps increasing a healthy, productive, and
customer-focused work environment.
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The IC nurtures its human resources and
constantly focuses on talent acquisition
for organizational excellence. It fosters
a learning culture through training &
skill-development programs.
innovation
To continuously
seek newer and
better ways of design, manufacturing
and execution, the IC has inculcated
a culture of
through
collaboration and creative thinking.
Besides, Product Lifecycle Management
solution implemented across locations
helps improve knowledge management
and
collaborative working across
functions.
Automation of design and drawing
activities has helped considerably in
reducing cycle time of engineering
activities and improving quality of the
design process. Extensive automation
in manufacturing operations and
re-engineering of IT-enabled systems
has helped the IC to improve its
systems and processes.
The Technology Development Centres
continuously focus on new product
development and development of
improved manufacturing technology.
in
technologies
These Centres are also engaged in
joint development of new products
and
partnership
with national laboratories. Given the
business scenario, business units have
a mandate to create a pull on these
centers to grow the share of own
products in the business mix of the IC.
To consolidate all our developmental
efforts in manufacturing technology, a
centralised Manufacturing Technology
Competency Centre has been formed.
Planning Competency Centres have
been created in individual Business
Units in order to strengthen Planning,
Methods Engineering and Project
implementation.
During the year, the IC received its
maiden international patent granted in
17 European countries, while 12 patent
applications are awaiting clearance.
Ship Building Independent Company
(SB IC)
Presently, the IC has its ship building
facility operational at Hazira in Gujarat.
Construction of a new modern
Shipyard is in progress at Katupalli in
Tamilnadu. The new yard will focus
on construction and repairs/refi ts of
Defence and Specialised Commercial
Vessels.
Currently, 6 Heavy Lift/RoRo vessels are
under construction at the Hazira Yard.
4 vessels are scheduled for delivery in
2011-2012 and the balance, in the
following year.
Business Environment
The Heavy Lift sector has shown
saturation due to large number of
vessels being built in the lower segment
(up to 700 ton crane lifting capacity).
This has caused a lack of enthusiasm
among vessel owners.
is
There
intense competition from
Chinese and Korean yards putting
pressure on both delivery terms as well
as on price.
for
subsidy
The
Indian
scheme
shipbuilders expired in August 2007.
The Ship Builders Association of India
has made representations regularly
to the Government for continuation
of the subsidy scheme to render
competitiveness to the Indian shipyards.
Industry sources project that a new
MDA p61-120.indd 80
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MDA p61-120.indd 81
L&T’s ship-building facility at Hazira is geared to manufacture specialised high-tech ocean-going vessels.
81
7/2/2011 3:21:44 PM
Acronitrile reactor – one of the world‘s
in
largest – for a petrochemical plant
Thailand.
subsidy plan would be rolled out soon.
Efforts are on through various forums
to maintain the same level of subsidy
as in the earlier scheme.
Signifi cant Initiatives
The shipyard management is focusing
on establishing proper systems and
processes to increase the operational
effi ciencies and reduce cycle time to
meet customer expectations on quality
and delivery. There have been sustained
efforts to tie-up with a major global
shipyards for technology transfer. The
Company has also recruited industry
experts to train our existing staff to
enable us to achieve global standards
of quality shipbuilding.
Outlook
The HE IC sees some of the international
grassroot refi neries, gas & fertilizer
projects heading
towards fi nancial
closure, in the near future. Major
domestic upgrade & expansion projects
are also expected to be decided shortly.
South America, Europe, Middle East and
South East Asia offer good potential
for upgrade/expansion projects. The
HE IC also expects good prospects
from overseas Gas/LNG projects. The
domestic fertilizer projects are expected
to take off once the Government
announces
its new Urea and Gas
Allocation policy. Fertilizer projects are
expected in gas rich regions like Brazil,
Algeria, Vietnam, Malaysia, Indonesia
and Russia. There are prospects for
coal gasifi cation projects from China
and Australia, as well as from India.
The Japanese nuclear crisis is leading to
a thorough review of Safety Standards
in their ability to handle multiple
natural disasters simultaneously. The
Nuclear Sector Regulator is likely to
be accorded autonomy for overseeing
Safety of Nuclear Plants. As a result of
these structural changes, slowdown
of 1-2 years is expected in Nuclear
Renaissance. Site selection criteria are
likely to undergo change and will be
more rigorous as compared to past. The
HE IC is exploring new opportunities to
reduce the impact.
The SB IC envisions itself to consolidate
its position as an established platforms
builder for the Indian Navy and Coast
Guard and also enter into repairs and
refi ts. Additional focus is being given on
the Marine Equipment segment. With
the opening up of the Defence sector
and the thrust on indigenous product
development and system integration
capability, the share of private suppliers
is expected to increase. The opening of
the sector and indigenisation thrust by
the Government is driving new private
players to enter in the Defence sector.
These would, in times to come, add to
the competition in this segment. The
upcoming shipyard at Katupalli as a
deep water yard however, is expected
to give the SB IC an added advantage.
It is also working on formation of Joint
Ventures in key technology areas for
Defence applications, with
leading
technology/system providers, which
would lay the foundation for growth in
the years to come. With the economic
recessionary trend yet far from over, the
coming year is likely to be challenging.
However, the SB IC is well poised to
82
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harness the good market opportunities
in the medium to long term.
The increasing oil prices are showing
a revival in the Oil Exploration sector.
Thereby, the business prospects for
offshore supply vessels and other
support
shown an
upswing, especially from the Middle
East. In the backdrop of many large
vessels have
increase/replace
public/private sector companies planning
to
the
domestic market shows promise for the
Ship Building IC.
their fl eet,
The other sector which shows promise
is Coal, with a large number of Thermal
Power plants due to come on line in
the next fi ve years. The dependence on
imported coal is due to increase which
will require coastal vessels to tranship
from large ocean carriers. The IC also
expects a growth in medium sized
container vessels to carry between
2000-2500 TEU’s from main line ports
to feeder ports.
Overall, the Division’s both ICs envisage
in the
good market opportunities
medium to long term.
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Multi-barrel rocket launch system designed by L&T.
83
7/2/2011 3:21:46 PM
L&T’s offers India’s widest range of switchgear.
Electrical & Electronics Division
Overview
Malaysia, Indonesia and Australia.
The Division comprises Electrical &
Automation
Independent Company
and Medical Equipment & Systems
business.
in
In all, the IC has fi ve manufacturing
facilities
India and six overseas
facilities located in the Gulf region,
south-east Asia and the Asia Pacifi c.
Electrical
Independent Company (EA IC)
&
Automation
IC manufactures
switchgear
The
components and a host of electrical
and automation products. The
IC
consists of two Strategic Business
Groups - Products Group and Projects
Group. The
two business units
under Products Group are - Electrical
Standard Products (ESP) and Metering
& Protection Systems (MPS). The two
business units under Projects Group are
- Electrical Systems & Equipment (ESE)
and Control & Automation (C&A). The
Projects Group has three subsidiary
companies
- L&T Electricals Saudi
Arabia, L&T Electrical & Automation
FZE in the UAE and TAMCO Switchgear
in
with manufacturing
facilities
Business Environment
The Indian industrial manufacturing
has shown positive signs of growth
during the year with the prime drivers
being Infrastructure and Power sectors.
Private sector participation in Power
segment has been increasing from
about 11% in 2006 to 20% in 2010.
De-licensing of the power generation
sector, development of electricity
markets and the procurement of power
through competitive bidding process
by distribution companies have helped
increase private sector’s participation.
The IC benefi ted from this development
by bagging new orders and completed
last fi nancial year with a strong order
book as well as moderate growth
in the top line. A stiff competitive
environment, delay in project activities
in the
international market, rising
infl ation and the volatile commodity
market continue to pose hurdles to
higher growth for the business.
Signifi cant Initiatives
is
In order to expand its international
business, Standard Products business
unit identifi ed Turkey as a potential
‘WIN
market and participated at
Exhibition’ which
the biggest
industrial trade fair for electrical and
electronic products and solutions in
Turkey. The objective of participation was
to create awareness about L&T brand,
products and solutions and to establish
connect with prospective customers to
promote business in the new geography.
The retail channel of Standard Products
business unit, Disti Select Partners (DSPs),
showed a signifi cant growth in revenue
with its present strength of 5,000 across
the country.
Manufacturing
new
milestones during the year. Metering
business unit touched the two million
achieved
84
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mark of manufacturing energy meters,
a growth of more than 100% over
the previous year. One of the largest
selling standard products, the second
generation Moulded Case Circuit
Breaker (MCCB), DH100, also created
a record production by reaching two
millionth mark. Metering business unit
also bagged an order of supplying
7,50,000 units of meters from the
Kerala state electricity board.
Electrical Systems & Equipment unit
made a breakthrough with the Korean
EPCs
(Engineering Procurement &
Construction) and booked orders for
various packages of Ruwais Refi nery
Expansion (RRE) of Takreer in Abu
Dhabi. This business unit hopes to
consolidate its position in Abu Dhabi as
well as with Korean EPCs as a preferred
supplier.
year,
L&T Electricals
During
the
Saudi Arabia was
a
awarded
‘frame agreement’ through Bechtel
Corporation for supply of Low Voltage
Motor Control Centers (MCCs) to Saudi
Arabia Mining Company’s (MA’ADEN)
integrated aluminum ‘mine-to-metal’
project. This frame agreement will
assist the business unit for tapping
investments in non-oil projects with
EPC contractors of global repute.
Control & Automation business unit
displayed its offerings and specialised
solutions for ‘Smart Grid’ such as
Automatic Meter Reading, SCADA/
DMS
(Supervisory Control & Data
Acquisition/Distribution Management
System) solutions for Power Distribution
Companies at the ‘Smart Energy India
2011’ forum in New Delhi. Through this
forum, The Company’s offerings in the
Smart Grid space were demonstrated
and Control & Automation business
unit expects bigger opportunities in
this arena.
The IC focused on various excellence
initiatives in order to be at par with the
best companies in the industry. One of
such initiatives was to make the supply
chain leaner and agile and successful
completion of
initiative was
this
refl ected in improved order fi ll rate.
It also contributed to Infrastructure
development of Common Wealth
Games by supplying more than 500
‘U-POWER’ Air Circuit Breakers (ACBs)
along with
‘D-sine’ Moulded Case
Circuit Breakers and various other
accessories that facilitated protection
and control of electrical systems of this
mega sports event.
On the Human Resource front, the IC
continued its effort to improve upon
Leadership
employee engagement.
development
to have
continued
a focus across all the businesses.
Numerous initiatives were taken for
developing
in
young employees.
leadership qualities
New Product Development
The IC sustained its leadership position
in the domestic market through its
focus on new product Design and
Development
The new
activities.
products introduced in the last fi ve
years contributed 41% of the revenue
in 2010-2011 and has resulted into
highest percentage of New Product
Intensity. The new products introduced
during the year included Digital Panel
Meters and DIN range of Meters,
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MDA p61-120.indd 85
L&T offers custom-engineered switchboards.
85
7/2/2011 3:21:50 PM
A section of L&T’s range of electronic meters and relays.
1000 series of AC Drives, Servo and
HMI (Human Machine Interface). The
year also saw products introduced in
order to complete the range of MO
Contactors and C Line Changeover
Switches. For
international market,
a higher breaking capacity of Tripper
range was also introduced.
There was also introduction of stored
energy motor operator for Moulded
Case Circuit Breakers (MCCBs), new
range of Motor Protection
MOG
Circuit Breakers (MPCBs) and M-COMP
– a complete solution for motor
protection. During the same period,
system was
software
an
introduced for power management,
plant automation, terminal automation
and high-way traffi c management. On
Medium Voltage front, Malaysia-based
TAMCO, achieved a breakthrough
in the development of Air Insulated
Switchgear (AIS) of 40 kA family.
iVision
Intellectual Property Rights
The IC continues to add signifi cantly
the Company’s portfolio of
to
In
Intellectual
Property
Rights.
IC
the
registered a
2011-2012,
total of 151 Patent applications, 1
Trademark and 7 Designs. This was the
fourth consecutive year
the
IC has fi led more than 100 Patent
applications.
that
Process Improvement
in
IC has always believed
The
continuous process improvement for all
its operations. Having implemented SAP
ECC 6.0 across all business locations
in India, last year TAMCO Switchgear
facility in Malaysia and L&T Electrical
& Automation FZE in the UAE also
went ‘live’ on SAP ECC 6.0. The SAP
implementation will integrate various
business processes to achieve seamless
fl ow of information, avoid redundant
processes and synchronize with the
best practices across the businesses.
for process
Continuing on its LEAN manufacturing
journey
improvement
through waste reduction, the business
completed 111 projects on Value Stream
Mapping (VSM). In addition, 169 Lean
projects were completed during the
year that resulted into reduction in lead
time of various processes and reduction
in inventory. Under the Six Sigma
initiative, 52 green belts and 17 black
belts were added and 232 projects
were completed. On Value Engineering
front, the savings on account of
various value engineering projects
have added to the profi tability of the
business. All the process improvement
initiatives have also been extended to
the suppliers for improvement in the
overall value chain.
The strong commitment of the business
towards manufacturing excellence was
showcased
successfully
through a
conducted ‘Shingijutsu Kaizen’ event at
Ahmednagar Switchgear Works (ASW),
which resulted in the completion of
several improvement projects. During
the year, The IC focused on mapping
its internal processes and made several
improvements in order to be cost
competitive and more effi cient. In the
process, the IC won several awards
during the year. The Human Resources
team won Golden Peacock award for
its training and development initiatives.
The Indian Value Engineering Society
86
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(INVEST) awarded the IC the prestigious
Vasantrao Rolling trophy, recognizing
the successful deployment of Value
Engineering methodology for material
and cost saving at all levels.
Astral P, a dual display monitor based
Skyline 100 a central nurses station
and a cost effective three parameter
monitor – Astra. Electrosurgical units
also saw introduction of two new
products: Octave and VeSeal.
Medical Equipment & Systems
(MED)
Outlook
The electrical sector in India is expected
to signifi cantly grow as a result of several
Government initiatives. Allocation in
Union Budget 2011-2012 for Rural
Electrifi cation projects under Rajiv
Gandhi Grameen Vidyutikaran Yojana
(RGGVY) is expected to boost electrical
sector in the country. The Government
has also envisaged signifi cant capacity
addition to meet its mission of power to
all. These are major opportunities for the
IC and will act as drivers of growth. The
business is optimistic of robust growth
through its electrical and automation
solutions in sectors such as power,
infrastructure, oil & gas and cement in
the coming years.
On international business front, Gulf
markets are expected to be the major
Medical Equipment & Systems is a
strategic business unit offering world
class and
state-of-the-art medical
equipment to the medical fraternity.
During 2010-2011 Medical Business
saw increased acceptance for its Patient
Monitors by renowned hospitals in the
country. This business also upgraded
the
‘Pulse
Oximetry’ module and ‘Non-Invasive
Blood Pressure’ module. In June 2010
FDA conducted an inspection of the
Medical manufacturing
facility at
Mysore and 3 products of the Medical
Business were given US-FDA approval
in March 2011.
technology base
for
There was introduction of three new
products under Patient Monitors, viz. a
low cost standalone pulse oximeter –
MDA p61-120.indd 86
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MDA p61-120.indd 87
contributors. Various Oil & Gas projects
in Gulf region are showing revival and
Utility industries are coming up with
new projects. The business envisages
in Qatar for
a major opportunity
the FIFA 2022 World Cup for which
preparations will begin in this fi nancial
year.
Financial year 2011-2012 looks upbeat
with increased Government spending
in Healthcare, likely increase in number
of new medical colleges and large
hospitals expanding their operations.
Increasing presence in the low cost
segment and strengthening presence
the mid to high-end segment with
further skill building of sales and service
workforce will remain key initiatives of
this business in current fi nancial year.
Overall, EAIC & Medical business will
focus on expanding its products and
services offering in domestic market,
increasing international business and
reducing overall
level of working
capital.
Control hub of a process plant, engineered
by L&T.
87
7/2/2011 3:21:51 PM
Hydraulic tyre-curing press.
Machinery & Industrial Products Division
Overview
comprises
Machinery & Industrial Products Division
three Strategic
(MIPD)
Business Groups – Construction &
Mining Machinery, Industrial Machinery
and Industrial Products.
Construction & Mining Machinery
SBG
and
comprises
renders
This group markets and
support for Construction & Mining
Equipment
the
Construction & Mining marketing unit
(CMB), Service centers for Earthmoving
Machines. Its manufacturing JV facility
for Earthmoving Machinery is located
at Bangalore and
for
undercarriage systems of its Subsidiary
is at Talegaon.
facility
the
This
group
for Wind power and other engineering
sectors.
comprises
manufacturing campus at Rourkela
for Mineral Crushing Solutions, plants
at Chennai for manufacturing Rubber
Processing Machinery catering to tyre
industry and a newly set up Foundry at
Coimbatore.
The group also comprises facilities
under JV Company for manufacture
of Internal Mixers and Twin Screw
Roller Head Extruders (TSRs) for the
Tyre Industry, wholly owned Subsidiary
for manufacture of Plastic Processing
Machinery and a foreign subsidiary at
Qingdao, China for manufacture of
Rubber Processing Machinery, such as
Tyre Curing Press.
Industrial Products SBG
Industrial Machinery SBG
Industrial Machinery SBG consists of
Machinery for Paper and Pulp, Crushing,
Mining
Processing
Industries, Steel, Rubber & Plastic
Processing Industries and also castings
and Mineral
Industrial Products SBG consists of
businesses related to Industrial Valves,
Welding Equipment & Products and
Cutting tools. The Company‘s facility for
manufacturing Valves for Power Sector
is located at Coimbatore while the
88
MDA p61-120.indd 88
Chennai facility is under the separate
JV company. The manufacturing facility
for Welding products located in Gujarat
under a wholly owned Subsidiary is
also part of the SBG.
The Division has a separate Product
Development Center at Coimbatore
rendering Engineering and Product
Development support across all the
businesses.
Business Environment
a) Economic & Policy Environment
The Construction Equipment Industry
has shown fair amount of recovery,
largely on account of the road sector
and pick-up in general construction
activities. This has refl ected in better
performance of CMB
in the year
2010-2011 compared to the previous
year. The growth of Indian cement
industry continued with fi nalisation of
many new greenfi eld and brownfi eld
projects. There has been continued
investment in Pulp & Paper industry as
7/2/2011 3:21:54 PM
MDA p61-120.indd 89
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alone being planned. However, North
America and Europe continue to have
dearth of major projects. Despite the
higher demand in the domestic market,
overall project costs are coming down
due to competitive bids from EPCs
in Korea and China. This has made
European and American EPCs also
to cut down costs drastically and
consequently prices of valves are under
severe pressure. Global Oil majors are
also looking for long term agreements
with valve manufacturers to peg the
price levels with attractive volumes and
exclusivity for better cost control.
On Power sector front in India, many
private players have
successfully
commissioned the supercritical power
plants and confi dently going ahead
with more plants in 660MW size.
This has attracted many international
valve manufacturers to set up shop
in India. With this additional capacity
among valve manufacturers in India,
the intensity of competition is likely to
increase in power projects.
There has been excess foundry capacity
in competitive
in China
resulting
well which fetched good orders in the
year 2010-2011.
by
the
focus
favoured
Renewed
State
Governments on non-conventional
energy has
investment
in wind turbines. Automotive and
Engineering
fared better
Sectors
and showed good growth during
2010-2011. Fuelled by the increasing
demand of automobiles, the domestic
market continued on
its upsurge
in investments on Radial Passenger
car tyres and Truck & Bus Radial tyres
in the year 2010-2011. Some revival
in the international scenario was also
seen, with investments in Brazil, China
and Russia.
b) Competition and Challenges
International
Construction
Most
equipment manufacturers are present
in the Indian market on their own or in
Joint Ventures with Indian Players. CMB
continues to face close competition
from other domestic players
in
excavator market.
The business scenario in Oil & Gas
looks very positive with close to US$
in Middle East
170Bn
investments
MDA p61-120.indd 88
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MDA p61-120.indd 89
imports into India. Consequently, it is
expected that retention of customers
may become an issue on account of
price pressure.
Performance Highlights
in
in
Equipment,
CMB has maintained its leadership
the Construction and
position
exploiting
Mining
opportunities
the market. The
Company‘s foray into large-size Mining
successfully
Equipment has been
received by
the
its position
unit
is
in
the year
2010-2011, CMB entered large size
mining machinery arena by supplying
17 units of 240 Ton Komatsu Model
830E Dump Trucks to M/s Hindustan
Zinc Limited.
this market. During
the market and
strengthening
LTM Business Unit (LTM BU) undertakes
manufacture &
sale of Rubber
Processing Machinery. LTM BU was
successful in competing with the Global
competition and secured several orders
from the Domestic and International
Tyre Companies. LTM BU continues
to enjoy a majority market share in
Limestone crusher manufactured at L&T’s
Kansbahal Works, Odisha
89
7/2/2011 3:21:57 PM
the domestic market and over 10%
share in the global market for the Tyre
Curing Presses. The Foundry business
unit supplying castings for wind sector
has over 45% of the market share with
good customer acceptance.
severe
Valves business has been focusing on Oil
& Gas in the international market, both
downstream and upstream segments.
The renewed thrust in the projects
has helped the business achieve the
projected order booking by closely
working with EPCs. MRO business
has slowed down due to cost cutting
measures in refi neries/petrochemicals
competitive pressures
and
from Chinese and Koreans. The
Company‘s Valves manufacturing Unit
at Coimbatore developed a range of
Valves for the Power sector and has
commenced deliveries during this year.
With rationalised product portfolio, it
has been able to address the Power
segment requirements in India and
get breakthrough order for Ultra High
Pressure valves (above #2500 rating)
for the supercritical power plant in
India.
90
MDA p61-120.indd 90
Signifi cant Initiatives
CMB has been able to expand its
after-sales support capability through
long term full maintenance contracts
and site support agreements for its
products to help improve machine
uptime and capping operating costs
thus helping customers in improving
their competitive position. Dealers
and customers have been provided
with attractive fi nance options for
equipment
through
tie-up with major fi nanciers such as
L&T Finance and others.
others,
and
(KBL),
in Odisha,
At Kansbahal
manufacturing of stainless steel ‘SINGLE
DRUM PULPER’ was also taken up,
which will help the Company to become
a global supplier of this product. LTM
BU has completed its fi rst supply of
Automatic Tyre Handling systems to
a leading Domestic Tyre Company in
co-operation with Cimcorp, Finland.
Several new variants of Tyre Curing
presses were also developed and
supplied by LTM BU during the year
2010-2011.
valve-manufacturing
L&T’s
Coimbatore.
unit
in
The Division’s Valves manufacturing
Unit developed a range of Valves for
the Power sector and has commenced
deliveries during the year. The Unit
also became the fi rst Indian Valve
manufacturer to get the coveted ‘N’ and
‘NPT’ Stamp from ASME for supplying
to the global Nuclear Industry. During
the year, it received new approvals
from major Oil companies like ADCO,
ADMA OPCO, Saudi Electric Company
and PT Petramina.
In the year 2010-2011, the international
valves
sales network has been
strengthened with personnel posted in
key growing markets such as China and
Middle East with additional postings
planned in Korea, South Africa and
Europe. Domestic stockist network has
been reinforced with appointment of
new ones in tier-2 towns to penetrate
the market effectively. This network has
been further supported by recruiting
stockist fi eld engineers who are well
trained in products and sales process.
Efforts
towards developing new
products, such as mobile crushers &
screens, all-electric injection moulding
7/2/2011 3:21:57 PM
MDA p61-120.indd 91
7/2/2011 3:21:58 PM
tyre curing presses,
machine and
continue at Product Development
Center at Coimbatore.
present impediments in the near term
for expansion in mining equipment
demand.
Outlook
The market demand for Hydraulic
Excavators is expected to improve in
2011-2012 on account of the increase
in spending in the urban infrastructure,
roads, general construction sectors
and spending by the Government on
various infrastructure projects.
It is expected that the Mining Equipment
business will continue to see a growth
on account of investments being made
both in the public and private sectors
to augment coal production. The
demand for metals like iron ore, zinc
etc. is also expected to help growth of
this business segment. Gap between
coal demand and supply, continues
to provide a growing opportunity
for Mining Equipment. CMB is well
placed to take advantage of these
opportunities through supply of large
size Mining Equipment both to the
public and private coal producing
companies. However, environmental
issues may
and
land acquisition
The Valves business saw a return
of order booking, both from the
Hydrocarbon and Power sectors, during
the year and this augurs well for the
ensuing years.
With the implementation of the private
sector projects in many states and the
NTPC’s plan for new units there is
a good scope for Valves business in
the coming year. It is also pursuing
opportunities with
the Chinese
contractors who have secured a large
number of these projects in India.
to
continue
Demand for Industrial Machinery from
Mineral Processing and Infrastructure
show an
segments
upward trend. This should provide
good business opportunities for KBL in
Crushing & Screening segment as well
as Wheel Loaders. It is also expected
that the ‘MARC’ Contracts for Surface
Miners shall generate much
larger
business volumes in the coming years.
The Global tyre companies announced
their projects in India and a few of
them have started acquiring land and
initiated the project construction. It is
anticipated that the investment plans
of tyre majors will result in sizeable
business opportunities for equipment
suppliers. As a result, the Company
is poised to take advantage of this
situation with its plants in India and
China.
With a view of consolidating and
the Welding Products
enhancing
business, the Company bought out
the stake of its partner in EWAC Alloys
Limited which has now become a
wholly-owned subsidiary. The prospects
for this business continue to look
good. New investments in machine
tools by customers continued in 2010-
2011 adding to growth in market size
and the Cutting Tool business of the
Division is expected to register good
growth in 2011-2012 as well.
Overall,
the Division envisages a
moderate improvement in the Industrial
growth indices in the coming year and
its businesses are better equipped to
harness the market potential.
MDA p61-120.indd 90
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L&T-Komatsu’s hydraulic excavator at a granite quarry.
91
7/2/2011 3:21:58 PM
Knowledge City, Vadodara.
Integrated Engineering Services
Overview
leading-edge
Integrated Engineering Services (IES)
engineering
provides
solutions to multiple industry sectors
aerospace,
automotive,
covering
consumer
consumer
electronics,
packaged goods, marine, medical
devices,
equipment,
railways, pharmaceuticals, oil & gas,
utilities and industrial products.
off-highway
centers
engineering
It has global headquarter at Vadodara,
Gujarat and operates from dedicated
off-shore
at
Vadodara, Mysore, Mumbai, Chennai
and Bangalore
tandem with
in
onsite teams to cater to engineering
requirements of global clients, many of
them are Fortune 500 Companies. It has
more than 4,000 dedicated associates
to deliver high-quality engineering and
design solutions.
Business Environment
Over
the past decade, Global
Engineering R&D spend has been
continuous
growing
steadily and
92
MDA p61-120.indd 92
in Engineering R&D
investment
is
considered an imperative by companies,
not only to pursue innovation for new
markets and new products but also to
gain margin enhancements.
Engineering R&D has been one of the
early adopters of the “Globalisation”
phenomenon. The impact of the trend
can be felt on Engineering R&D services
market as companies are no longer
offshoring only for cost benefi ts, but
are increasingly utilising offshoring:
• to achieve fl exible resource capacity
(especially in industries with cyclical
engineering workload and short
product lifecycles)
• to reduce the ‘Time-to-Market’
• to develop localised products for
emerging markets.
Engineering R&D outsourcing to India
is increasing at fast pace and analysts
predict that this will quadruple to
$ 40-45 billion by 2020 from $8.3
billion in 2009. The major growth
in outsourcing to India is expected
from Infrastructure, Energy, Chemical,
Pharmaceutical, Consumer Electronics,
Medical Devices, Automotive, and
Aerospace domain because of the
availability
technical
workforce in India.
capable
of
Medical Devices and Aerospace are
the most prominent sectors for the
outsourcing having less competition
service providers. These
between
industries are very reluctant to open
captive units because of high cost of
operation, giving a reasonable chance
to service providers to harness the
opportunity.
signifi cant
Increasing sophistication and maturity
of Engineering R&D services industry
has meant a
change
in customer perception of service
providers. Customers have begun to
view service providers as their strategic
partners owing to greater confi dence
in their enhanced Engineering R&D
are now
capabilities. Companies
providing services from basic process
7/2/2011 3:22:01 PM
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Transforming ideas into working models through leading-edge engineering solutions for multiple industry sectors.
support to high value-added services
such as full product development.
In addition, customers have started
looking to their Indian partners to
leverage on their products.
Signifi cant Initiatives
IES has taken following major initiatives
in Medical Devices, Aerospace, and
Process Engineering (Pharmaceuticals,
Chemical, Energy, and infrastructure)
domain to tap the described opportunity
resulting
in
revenue and margin.
signifi cant
increment
• It has realigned the portfolio of the
Process Engineering Services which
will permit IES to become one-stop-
shop for the customers.
• IES has continuously explored new
customers and capture the potential
in European, African, and Asian
market.
• Action in the fi eld of branding has
improved the recognition of the L&T
IES as a brand globally.
• IES has revised its capability portfolio
with addition of new services like
Railway Engineering, Manufacturing
Engineering
Design
consultancy etc.
Services,
Through the strategic actions,
IES
continues to endorse its commitment
to customer satisfaction and achieve
fast track growth. IES has added around
1500+ new employees, 20+ clients,
and achieved signifi cant growth in the
revenue in 2010-2011.
Outlook
Slow global economic recovery along
with the tightening of outsourcing
norms, dented the growth of all sectors
in the year 2010-2011. However, even
in such a challenging environment,
IES has managed to hold its market
share and expects the momentum
to continue in the year 2011-2012.
The investment in emerging verticals
of Aerospace and Medical Devices is
expected to yield substantial results in
terms of incremental revenues from
these two verticals. Besides this, the
addition of new services and European
focused sales are also expected to be
the main drivers of growth envisaged
for the coming year.
MDA p61-120.indd 92
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93
7/2/2011 3:22:02 PM
Financial Review 2010-2011
L&T Standalone
I. ENCOURAGING PERFORMANCE AMIDST
CHALLENGES
The Company reinforced its leadership position in its various
businesses through its good sales growth, healthy order
book and improved segment EBITDA margins.
The Company secured fresh orders totaling to ` 79769
crore in the year 2010-2011, registering a growth of 14.7%
over the previous year. Slower pace of activities in certain
sectors constrained order infl ow growth to some extent.
EPC Power, Buildings & Factories, Minerals & Metals and
Power Transmission & Distribution businesses contributed
signifi cantly to the order infl ows during the year. Large
project orders above ` 500 crore each constituted 60% of
the total Order Infl ow for the year.
79769
69572
Order Inflow
100000
Compound growth of 27%
80000
60000
e
r
o
r
c
`
40000
30611
20000
51621
42019
2006-2007
2007-2008
2008-2009 2009-2010 2010-2011
The Order Book at the close of the year was ` 130217 crore.
Over the past 5 years, the compound annual growth rate of
Order Infl ow is 27% and of Order Book is 37%.
Income from Sales & Services
Gross Sales and Services revenue for the year at ` 43886
crore grew by 18.6% over 2009-2010. During the year, many
project orders advanced from initial engineering phase to
procurement and construction phase as scheduled. Execution
of Power project orders, in particular, accelerated during the
year, contributing signifi cantly to the revenue growth.
A compounded annual growth in Revenue of 25% over
the last 5 years, underscores the Company’s position of
e
r
o
r
c
`
50000
40000
30000
20000
10000
Gross Sales
Compound growth of 25%
43886
34045
36996
25187
17901
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
eminence in its various businesses and its strength to harness
opportunities offered by growing Indian economy.
Other Operational Income at ` 409 crore also grew by 14%
over the previous year.
Operating Cost and Margin Analysis
Manufacturing, Construction and Operating expenses for
the year 2010-2011 amounted to ` 33432 crore, translating
into 74.1% of the Total Income at ` 45100 crore excluding
exceptional/extraordinary items. As compared to the previous
year, these costs reduced by 110 basis points, aided by a
combination of favourable factors such as, better job mix,
judicious contract management,
improved operational
excellence etc.
The Staff Expenses for the year 2010-2011 at ` 2885 crore
increased by 21.2% as compared to the previous year,
Distribution of Total Income 2010-2011
74.1%
6.4%
4.4
%
15.1%
Mfg., Construction
& Operating Expenses
Staff Expenses
Sales, Administration
& Other Expenses
Operating Profit (PBDIT
Total Income excluding exceptional/extraordinary items)
94
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Distribution of Total Income 2009-2010
Mfg., Construction
& Operating Expenses
Staff Expenses
Sales, Administration
& Other Expenses
75.2%
6.3%
3.4
%
15.1%
Operating Profit (PBDIT)
Total Income excluding exceptional/extraordinary items)
representing 6.4% of the Total Income. There was a net
addition of 6332 employees during the year, taking the
Company’s manpower strength to 45117 as at March 31,
2011. Attraction and retention of talent for the emerging
businesses as also for the existing expanding businesses has
been one of the focus areas of the Company.
Sales and Administration expenses for 2010-2011 at ` 1966
crore represent 4.4% of Total Income recording an increase
by 100 basis points over that of the previous year, largely
due to higher provision for warranty expenses, exchange
differences due to variation and professional fees.
(PBDIT),
Interest and Tax
Profi t before Depreciation,
Income and exceptional/extraordinary
excluding Other
items for the year 2010-2011 at ` 5623 crore increased by
16.8% over the previous year. Despite hardening of input
costs during the year, the Operating Margin was 12.8%
as against 13% for the previous year. A slew of initiatives
such as deployment of risk mitigation strategies, superior
execution of projects and astute cost management have
enabled the Company to sustain its Operating Margins over
the recent years.
Depreciation & Amortisation charge
for
` 600
at
the previous
Depreciation and amortisation charge
the year
crore
2010-2011
increased by 44%
year. During
over
the
the
year,
Company
revised downward useful
life of certain
categories of fi xed assets, as mandated by
the
in higher charge
Accounting Standard 6,
of depreciation for the year. The increased depreciation
charge for 2010-2011 also refl ects the full impact of the
additions to the fi xed assets carried out in the previous year
and part impact of the additions made during the current year.
resulting
Other Income
Other Income for the year amounted to ` 1443 crore as
against ` 2025 crore for the previous year.
During the year, the Company divested its stake in L&T Case
Equipment Private Limited, an associate company and a
part stake in Kesun Iron & Steel Company Private Limited, a
subsidiary company. Other Income included an exceptional
gain of ` 238 crore on sale of these stakes. A provision was
made in the earlier years for the diminution in the value of
a strategic investment. During the year, a part of the said
provision amounting to ` 24 crore was reversed pursuant to
the divestment of a part stake in the said investment and
disclosed as an exceptional gain. Net of tax, total exceptional
gain for the year worked out to ` 211 crore.
Other gains on sale of investments included ` 69 crore
earned on sale of part investment in the equity shares of
Satyam Computer Services Limited.
Dividends from Group companies during the year amounted
to ` 231 crore as against ` 109 crore in the year 2010-2011.
Temporary surplus funds invested in low risk short term
investments earned an income of ` 164 crore.
Finance Cost
Interest expense for the year amounted to ` 647 crore as
against ` 505 crore for the previous year. The increase is
largely attributable to borrowings done in the second half
of the previous year to fund the Company’s expansion plans.
The Company managed its borrowing prudently during the
year thereby avoiding the impact of high interest rates
prevailing in the economy during most part of the year and
contained the average borrowing cost for the year ended
March 31, 2011 at 8.0% p.a.
Profi t after tax and EPS
Besides exceptional gains of ` 211 crore earned during
the year as elaborated under ‘Other Income’ above, an
extraordinary gain of ` 71 crore was recorded, representing
reversal of proportionate provision made for the diminution
in the value of investment in Satyam Computer Services
Limited, pursuant to the part sale of the said investment in
2010-2011.
Previous year PAT included extraordinary and exceptional
gains of ` 1191 crore.
Exclusive of extraordinary and exceptional items, the Profi t
after tax (PAT) at ` 3676 crore recorded a growth of 15.4%
over the previous year. Overall PAT including extraordinary
95
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MDA p61-120.indd 95
and exceptional items, for the year was ` 3958 crore vis-à-vis
` 4376 crore for the year 2009-2010.
The Earnings per Share (EPS) at ` 64.16 showed a reduction
of 10% over the previous year. However, excluding
extraordinary and exceptional gains, EPS for the year at
` 60.68 recorded a growth of 13%.
Over a period of 5 years, PAT excluding exceptional &
extraordinary items registered a compound growth of 28%
and EPS increased 2.4 times from ` 24.79 in 2006-2007 to
` 60.68 in 2010-2011.
120
115
110
105
100
s
y
a
d
f
o
r
e
b
m
u
N
112
110
107
106
103
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Days of Sales (DOS)
Profit After Tax
(excluding exceptional /extraordinary items)
4000
Compound growth of 28%
3676
3185
2709
2099
1385
e
r
o
r
c
`
3000
2000
1000
0
2006 -2007
2007 -2008
2008 -2009
2009 -2010
2010 -2011
Funds Employed and Returns
incurred ` 1673 crore towards capital
The Company
expenditure during the year. While project businesses
invested in creating additional fabrication facilities and in
adding construction equipment, the product businesses
expanded the existing production facilities at Coimbatore,
Hazira, Ahmednagar and Talegaon.
Gross working capital as at March 31, 2011 was ` 34951
crore, representing 79.6% of sales vis-à-vis 71.3% for the
previous year. The increase was mainly due to higher job work
in process, and increased advances to Group companies to
fund their growth initiatives. Net customer receivables as at
the end of the year stood at ` 12428 crore, refl ecting 103 Days
of Sales, lower than 110 Days Sales for the previous year.
Net working capital as at March 31, 2011 increased over
the previous year due to relatively lower vendor credits and
lower advances from customers.
At the Company level, investments and loans to subsidiary
and associate companies increased by ` 3074 crore. Major
in Power Development,
investments have been made
Ship Building, Power Equipment Manufacturing ventures,
Developmental Projects business and Financial Services.
Accordingly, the overall Funds Employed by the Company at
` 29271 crore as at March 31, 2011 increased by ` 4081 crore
as compared to the previous year end position.
Net Working Capital as % of Sales
Return on Net Worth & Capital Employed
(excluding exceptional/extraordianry items)
14.2
16.5
13.8
18.5
10.4
26.8
28.2
20.7
21.1
24.7
18.5
e
g
a
t
n
e
c
r
e
P
30
25
20
15
10
20.7
15.9
18.3
15.1
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
ROCE %
RONW %
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
e
g
a
t
n
e
c
r
e
P
20
10
0
96
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Economic Value Added
(excluding exceptional/extraordinary items)
890
890
591
590
503
e
r
o
r
c
`
1000
800
600
400
200
0
The overall cashfl ow position during the year refl ected a
balanced utilisation pattern. Net additional cashfl ow of
` 298 crore was generated during the year 2010-2011.
With a signifi cant increase in Net Worth, the gross Debt
Equity ratio improved from 0.37:1 as at March 31, 2010
to 0.33:1 as at March 31, 2011. After adjusting investment
in liquid funds, the Company virtually enjoys a debt-free
status.
SEGMENT WISE PERFORMANCE
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
Engineering & Construction Segment (E&C)
Return on Net Worth (RONW) for the year 2010-2011 is at
18.3% as against 20.7% for the previous year. Return on
Capital Employed (ROCE) for the year 2010-2011 at 15.1%
also shows a marginal drop over the ROCE of 15.9% for
the previous year. The relative reduction in the returns is
attributable to the investments through Group companies in
the emerging businesses and expansion of facilities that are
yet to reach peak utilization levels.
Economic Value Added from normal operations stands at a
positive ` 503 crore.
Liquidity & Gearing
Cash accruals from the operations were lower by ` 1624
crore as compared to the previous year mainly due to higher
gross working capital and relatively lower increase in the
trade payables and customer advances. The divestment
proceeds of ` 795 crore supplemented the operational
cash accruals. During the year 2010-2011, the Company
repaid some of its long term loans. In the previous year, the
Company had raised additional capital by way of Qualifi ed
Institutional Placement and also issued Foreign Currency
Convertible Bonds.
Liquidity & capital resources
Cash & Cash equivalents at the
start of year
Add: Net cash provided/(used) by:
Operating activities
Capital expenditure
Investments in group
companies
Other investing activities
Divestment proceeds
Financing Activities
` crore
2010-2011
2009-2010
1432
3861
(1673)
(2116)
556
795
(1125)
775
5485
(1572)
(2141)
(4000)
1641
1244
Cash & Cash equivalents at the
end of year
1730
1432
E&C segment recorded a good performance during the year
2010-2011 with all round growth in various operating and
fi nancial parameters, despite intense competition, spiraling
input costs, subdued tendering activity in certain sectors and
lower international prospects.
Order infl ow of the segment during the year at ` 73013
crore registered a growth of 14.3%. Orders mainly emanated
from Power, Building & Factories, Mineral & Metals, Power
Distribution & Transmission and Infrastructure businesses.
The gross revenue for the year at ` 38219 crore grew
by 18.3% over the previous year, driven by EPC Power,
Hydrocarbon and Construction businesses.
E&C Order Inflow & Gross Revenue
73013
63899
45418
35392
25257
38219
32316
28712
19489
13425
e
r
o
r
c
`
75000
60000
45000
30000
15000
0
Order Inflow
Gross Revenues
2006 -2007
2007 -2008
2008 -2009
2009 -2010
2010 -2011
Good execution coupled with prudent risk mitigation
measures enabled the segment to record EBITDA margin at
13.6% for 2010-2011. During the year, the businesses of
E&C segment carried out signifi cant capital expenditure on
capacity additions and augmentation of construction plant
& machinery. As a result, segment funds employed as at
March 31, 2011, increased by ` 1256 crore to ` 7546 crore.
97
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MDA p61-120.indd 97
E&C Segment EBITDA Margin
13.6
13.6
12.8
12.8
e
g
a
t
n
e
c
r
e
P
15
14
13
12
11
10
11.3
2006-2007 2007-2008 2008-2009 2009-2010
2010-2011
Electrical & Electronics Segment (E&E)
input costs,
Rising
intense competition and subdued
international markets posed considerable challenges for the
businesses of the segment during the year. The segment
revenue at ` 3214 crore for the year 2010-2011, registered
a modest growth of 7.6% over the previous year. The
EBITDA margin for the year was 15.6% mainly contributed
by Electrical Standard Products and Metering Protection &
Systems businesses.
The segment closing Funds Employed at ` 1186 crore,
increased by 4.8% as compared to that of previous year.
Machinery & Industrial Products Segment (MIP)
The segment revenue registered a growth of 25.8% for the
year ended March 31, 2011 over the previous year, aided
by an impressive increase in the sales recorded by Valves,
Construction & Mining Machinery and Industrial Products
businesses.
The segment margins, however, declined during 2010-2011
largely due to subdued exports of Valves and lower
proportion of sale of construction machinery spare parts.
These product lines commanded higher margins. The Net
Funds Employed in the segment at ` 470 crore showed an
E&E Segment Gross Revenues
MIP Segment Gross Revenues
3214
2987
2676
2783
2067
2793
2416
2475
2220
e
r
o
r
c
`
2900
2700
2500
2300
2100
1900
1700
1500
1843
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
E&E Segment EBITDA Margin
MIP Segment EBITDA Margin
15.9
15.8
15.6
14.5
12.7
21.2
20.2
19.6
17.5
18.3
e
g
a
t
n
e
c
r
e
P
25
20
15
10
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
e
r
o
r
c
`
3500
3000
2500
2000
1500
1000
e
g
a
t
n
e
c
r
e
P
18
16
14
12
10
98
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MDA p61-120.indd 99
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increase as compared to the previous year, largely due to
signifi cant increase in the year end working capital.
“Others” Segment
Integrated Engineering Services (IES) included as part of
the “Others” segment, showed a robust growth of 60.8%
in revenue for 2010-2011 at ` 532 crore. An improved
business condition, especially in the USA and ‘vertical’
focused business approach, enabled the segment to post
growth in its revenue. Backed by strong sales growth and
better capacity utilisation, EBITDA margin of IES at 19.7%
showed an improvement of 5.4%, as compared to the
previous year. The Net Funds Employed in the segment at
` 543 crore showed an increase of 42.2% as compared to
the previous year, largely due to the increase in the year end
working capital.
II. RISK MANAGEMENT
Business uncertainties have magnifi ed manifold in the recent
times. Sluggish world economies in the aftermath of the
fi nancial crisis, severe natural disaster, simmering civil unrest
in many parts of the globe, rising oil prices, debates over
safety standards of nuclear installations, acts of terrorism,
international sanctions on certain economies and lack of
probity in public life, are some of the factors that seem to
destabilise the very foundation on which sound business
models are built. Inherent business risks of an organisation
notwithstanding, these extrinsic developments seem to
hold the centre-stage in an organisation’s risk management
initiatives.
The Company’s business portfolio is dominated by Engineering
and Construction segment which accounts for 86% of its
total turnover. This segment’s business has its unique risk
characteristics, being a technology intensive, long-delivery
and lump-sum price denominated project activity, fraught
with unforeseen events that continually challenge its cost
and delivery commitments. Extreme volatility in forex and
commodity prices, deteriorating credit-worthiness of the
customer, delays in project execution, inability of sub-vendors
to maintain supplies of agreed quality and delivery etc. may
leave high impact on a project’s profi tability. Intensifying
competition, stringent pre-qualifi cation standards, pressure
on margins and unfavourable cash-fl ow stream in certain
projects add to the risk complexion of this business.
The Company has always been alive to these challenges and
has been able to identify, assess and effectively mitigate
the risks through a structured process of risk management.
Its project management team has the requisite expertise
and long years of experience in tracking most of these
uncertainties well ahead in time, and putting in place
appropriate mechanism for risk mitigation. To add credibility
to the risk management culture in the Company, the top
management team has been leading the process of risk
due diligence, by actively participating in the debate on risk
evaluation and mitigation.
In order to optimise management bandwidth, the Company
has progressively increased the size of orders for bidding
and execution. Backed by an effective risk management
framework, this strategy has helped the Company in
improving the profi tability of its project business, and
generating sustainable margins. Further, its presence in
almost all core sectors of the economy has had the effect of
ring-fencing it from the vagaries of downturn witnessed by
one or more of these sectors at any given point of time.
As part of an active business risk management, the Company
has continued with its investment strategy in future growth
avenues. Its investment in creating a shipbuilding-cum-port
facility as also a new yard for large modular fabrication,
putting up its heavy forging workshop, and establishing its
manufacturing bases for power auxiliaries will have its effect
in de-risking the Company by way of opening up newer
vistas of business opportunities and helping strengthen its
position of pre-eminence in the various sectors where it
operates.
International business development and execution of
projects in demanding overseas territories, have helped
the Company and its project team reach a standard of
excellence comparable to the world class. In this process,
the Company has not only been able to open up newer
pastures of business to combat the risk of sagging prospects
in some of its established markets, but it also succeeded in
establishing a higher benchmark for itself and its people.
It is, however, ever vigilant to ensure that its property and
people are safe in the various foreign jurisdictions where it
operates. A process of country clearance is followed, as a
part of risk management discipline, before venturing into
any new country for the fi rst time.
The risk management culture in the Company has got its
roots fi rmly embedded into the various facets of its business
decision-making. The risk management process has been
focusing more on risk awareness, risk reward relationships
& risk enablement and not on encouraging a culture of risk
aversion.
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Internal Controls
Due to the evolving and expanding nature of its business
activities, the Company faces new challenges of data, system
and process security, emerging out of business transactions
and processes, which are large in volume and varied in
nature. The company has an Internal Control mechanism to
facilitate formulation and revision of policies and guidelines
in order to align them with changing business needs. The
areas of internal control weakness in business and fi nancial
processes are identifi ed through a regime of routine checks
and remedial actions taken to correct the defi ciencies,
wherever noticed.
The Internal control policy is supported by other well
documented procedures and guidelines for specifi c areas of
operation. The documents typically enlist a standard operating
procedure along with responsibility and authority level matrix
to ensure effective implementation of the same.
Increasing use of information technology in transaction and
payment processing, has its associated risks of fraud. The
Company regularly reviews controls in areas of electronic
fund transfer and ensures that all the requisite controls are
built-in. Specifi c guidelines are issued mandating additional
controls to be built, wherever gaps are observed in the
process.
In order to ensure the effi cacy as well as effi ciency of the
process, the Risk Management & Internal Control processes
are periodically audited by the internal audit as well as the
statutory auditors. The Audit Committee of the Board is kept
abreast on a regular basis, about the key observations during
such audits, and follow-up measures taken.
III. FINANCIAL RISKS
a) Capital Structure, Liquidity and Interest rate risks
The Company continues to maintain a prudent capital
structure, which helps in better managing economic
risks and positioning for growth. The Company has
consciously followed a policy of moderate fi nancial
leverage, as it provides strength to the parent company
balance sheet and contributes to maintaining a healthy
credit profi le. It also provides fl exibility for future fund
raising options, which is especially important in volatile
global markets.
The Company maintains adequate
comfortable
levels of liquidity, judiciously deployed into short
term investments in line with its treasury policy.
The Company also regularly assesses and ensures other
means of sourcing liquidity, such as ready lines with the
banking system and quick access to capital markets.
The Company regularly evaluates the required levels
of liquidity in line with business needs and economic
factors. As an initiative towards managing liquidity
and interest rate risks, the Company issued innovative
debentures which tie in the interest rates but provide
funds at a future point of time. To manage interest
rate risks, the Company uses a mix of fund-raising
and investment products across maturity profi les, and
through various tools approved under a robust risk
management framework.
b) Foreign Exchange and Commodity Price Risks
The Company is exposed to changes in foreign
exchange rates and commodity prices across
its
various business segments. It also has exposures to
foreign currency denominated fi nancial assets and
liabilities. The business related fi nancial risks are to a
reasonable extent, especially in case of commodities,
managed contractually by inclusion of price pass
through or variations clauses. The Company’s loan
portfolio is managed both by choice of loan currency
and by contracting appropriate treasury products, with
a view to balancing risks while optimising borrowing
costs. Appropriate hedging tools are used under the
framework of a Board approved Risk Management
Policy. Financial risks in each business portfolio are
reviewed periodically and managed concurrently. The
process is also subject to an annual review by the Audit
Committee.
IV. LEVERAGING
IT
FOR BUSINESS BENEFITS;
OPTIMISING IT COSTS
Every business activity and process is well-supported through
appropriate Information Technology systems to increase
effi ciency and employee productivity. The investments made
consistently over the years, provide the Company with a
robust IT Infrastructure backbone supported by ERP and
other applications used in various businesses. The Information
Technology function has the twin objective of “Running IT”
at the most optimum cost with excellent support, security
and reliability and also “Leveraging IT” by development
and deployment of new solutions that provide competitive
advantage to the businesses. A number of initiatives and
projects are being executed on an on-going basis in both
these areas. Implementation of IT solutions for the new
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businesses and rolling out of existing solutions to new units/
locations have kept pace with our growth initiatives. To
facilitate better interactions, state-of-the-art Tele-presence
(video conference) rooms have been set up at major
locations, taking communication between senior executives
to a new level thereby increasing effi ciency, communication
effectiveness and saving in travel costs and time.
and project locations. “Zero Discharge approach” has been
adopted at manufacturing locations leading to reduction of
fresh water consumption at fi ve of our locations, which are
now zero discharge campuses. This was achieved through
implementation of principle 3R’s i.e. Reduce, Reuse and
Recycle. Remaining locations are progressing on the same
path.
In keeping with current trends, an enterprise social computing
portal incorporating the latest web 2.0 technologies and
concepts has been launched in the Company to enhance
communication and collaboration to tap the creativity and
innovation of the younger workforce.
Energy conservation has been identifi ed as one of the key
initiatives in L&T’s operations. Targets related to energy
conservation included:
-
Conducting energy audit at all manufacturing and
offi ce locations
to govern
The Company continues
Information
Technology function with a focus on value delivery, business
alignment, total cost of ownership, service & support and
risk management & mitigation.
its
V. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company acknowledges its responsibility of playing an
instrumental role in environment protection, and building
social equity to safeguard interests of our future generations,
which are some of the major challenges of today. It has
put in place an active organisation structure to address the
social and environmental challenges effectively and ensure
that the commitment to conduct business with an innate
sense of responsibility is disseminated at all the levels within
the Company. The emphasis is not only on increasing profi ts
but also improving the effi ciency of business processes to
minimise the environmental and social cost.
identify
The Company has a structured system
environmental and social issues at various stages of business
planning and execution so that effective mitigation plan is
developed and negative environmental and social impacts
avoided for new projects as well as for existing plants.
to
It is well appreciated in the Company that uncontrolled use
of natural resources such as water and energy will lead to
irreversible damages to the environment, affecting the well-
being of our future generations. It has accordingly undertaken
several initiatives to conserve water at its manufacturing units
- Monitoring and conserving energy
-
Developing location wise roadmap for increasing the
use of renewable energy
Process optimisation, process re-engineering, conversion
and retrofi tting of equipment, change in schedule and
rationalisation of lighting patterns were some of the energy
conservation initiatives which have been implemented at L&T’s
manufacturing locations. An energy conservation culture has
been effectively promoted among its stakeholders.
Occupational Health and Safety continues to be an
unremitting focus area. The Company’s safety strategy is
to nurture a ‘zero accident’ culture and to reinforce it with
fail-safe procedures, the best protective gear, continuous
training and vigilant inspection.
The Company’s Corporate Social Initiatives (CSI) cell works
closely with community leaders and local NGOs to assess
pressing community needs and enable in evolving long term
solutions to their needs. The CSI Cell based in Mumbai acts
as an apex body to bring in consistency and to extend as well
as expand community initiatives across various locations.
As an Engineering and Construction industry leader, the
Company is committed to conserve resources and help create
infrastructure & buildings that give better service to the users.
Collaborating with leading institutes, L&T manufactures
products that are affordable and energy intelligent, thereby
helping businesses to achieve more sustainable result.
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SUBSIDIARIES & ASSOCIATES (S&A)
PORTFOLIO:
Hi-tech, Aero, Construction Equipment and Engineering
& Construction), Energy & Petrochemicals, Banking,
Financial Services and Insurance.
Promoting
Growth
Sustained
Business
As on March 31, 2011, Larsen & Toubro Group had
118 subsidiaries, 18 associates, and 12 joint venture
companies under its belt. These Group companies broadly
operate in and focus on the following businesses:
I.
II.
Information Technology Services;
Financial Services;
III. Engineering & Construction Services;
IV. Power Equipment Manufacturing;
V.
Power Development Projects;
VI.
Infrastructure and Property Development Projects;
VII. Electrical & Electronics;
VIII. Machinery and Industrial Products;
IX.
Investments in overseas S&A companies
Some of the ventures initiated in the emerging business
sectors during last couple of years are still in formative stage
and are yet to contribute to the Group’s revenues.
For the year ended March 31, 2011, Consolidated revenue
were at ` 52089 crore after elimination of inter-company
sales at the Group level. The consolidated profi t after tax
excluding exceptional and extraordinary items at ` 4238
crore increased by 12% over the previous year.
consolidated gross Debt:Equity
at
The
March 31, 2011 was 1.31:1, as against the previous year’s
Debt:Equity ratio of 1.08:1.
ratio
as
L&T Infotech delivers business solutions to its clients,
leveraging its substantial domain experience and depth
in technologies like SAP, Oracle (including PeopleSoft/
JD Edwards/Siebel), Microsoft, EAI and DW/BI. In
addition to application development and maintenance
services (ADM), the Company offers strong capabilities
in infrastructure management (IMS), and independent
verifi cation and validation testing (IV&V) services. The
Company provides a winning edge to clients in its areas
of focus, through domain-specifi c solutions, sharp
technical skills, proven frameworks and pre-tested
solutions, that leverage its business-to-IT connect.
L&T Infotech has its presence globally in USA, Canada,
Europe, Asia, South Africa, Middle East, Australia and
New Zealand.
Business Environment
The year witnessed improved demand and signs of
recovery in major global markets, thereby provided newer
opportunities in the IT sector. The clients increased their
discretionary spending and service providers continued
to reinvent value propositions. As per NASSCOM
estimates, the Indian IT-BPO export market is expected
to grow by 16%-17% in the coming year with total IT
industry revenues are expected to touch $ 69 billion.
The IT industry continues to face challenges such as
shifting of focus of clients from basic outsourcing for
cost arbitrage, to high-end business transformational
projects, continued pressure from protectionist measures
and uncertainty & volatility in global markets.
A review of the major S&A companies is presented
below:
Operations & Performance
I.
INFORMATION TECHNOLOGY SERVICES
A. LARSEN & TOUBRO
INFOTECH LIMITED (L&T
Infotech): Subsidiary Company
Overview
L&T Infotech, a wholly owned subsidiary of L&T, is one
of the fastest growing IT Services company. Being a full-
services IT fi rm with a blue-chip client roster, it offers
comprehensive, end-to-end software solutions and
services in the industry verticals such as Manufacturing
Chemical,
Products,
(Auto,
Industrial
CPG,
•
•
total
Infotech
recorded
L&T
revenue of
` 2355 crore during the year 2010-2011 compared
in 2009-2010,
to ` 1812 crore achieved
registering an increase of 30%. In USD term, the
revenue grew by 34%. Export revenue of ` 2182
crore constituted 92.7% of the total revenue in
2010-2011 as against 92.9% (` 1683 crore) in
2009-2010
profi t
Operating
the
year was higher by 18.6% at ` 434
in
crore as against ` 366 crore recorded
(PBDIT)
during
102
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•
•
•
as
2009-2010. However, operating profi t
percentage to total income was at 18.8% in
2010-2011 as against 19.7% in 2009-2010.
The decrease was mainly due to higher on-site
operational costs
Profi t after tax at ` 313 crore grew by 11.3%
compared to 2009-2010
L&T Infotech has subsidiaries in Canada, Germany
and USA
During the year, the Company acquired transfer
agency business unit
from Citigroup Fund
Services, Canada for total cash consideration of
CAD 62.3 million (` 280.63 crore). A subsidiary
company named “L&T Infotech Financial Services
Technologies Inc.” was formed for this purpose.
This acquisition will help the group to expand its
presence in the Canadian market
Income from IT Services and Profits
2500
2000
16.0
15.4
e
r
o
r
c
`
1500
11.7
17.0
12.5
19.7
14.3
18.8
12.8
1000
500
10.5
1586
1170
1902
1914
2459
2006-2007 2007-2008
2008-2009 2009-2010
2010-2011
Income from IT Services
EBITDA Margin
PAT Margin
21
19
17
15
13
11
9
7
5
e
g
a
t
n
e
c
r
e
P
Segmental / Regional Performance: Industry-wise
split of revenues
L&T Infotech - Vertical wise Revenues 2010-2011
The export business continues to be predominantly
North America based, the contribution being 68% for
2010-2011. Europe & Asia-Pacifi c contributed 15%
and 7% respectively, while contribution of Middle East
& Africa declined to 3%. Onsite services contributed
53% to export revenues as against 49% in previous
year.
Outlook
The new opportunities unfolding in the IT sector require
the industry to focus more on innovation and newer
models of growth. The future will be centered on the
ecosystem created by the confl uence of technologies
such as virtualisation, tele-presence and machine-
to-machine communication. Technologies like cloud
computing and Software as a Service (SaaS) model will
drive the largest amount of spending in the software
industry over the next few years.
L&T Infotech has taken several initiatives to be ready for
these new opportunities:
•
•
•
•
Focus on technology footprint expansion into
Analytics, Mobile BI and DW appliances and
additional COEs for Data Architecture and DW
Appliances
Capitalise on the stimulus package provided for
IT in health insurance sector and tap the general
insurance & reinsurance market in Europe
infrastructure, cloud based
Offerings for migration and set up of enterprise
cloud
integration
services and SaaS enablement & package
implementation
Sustained efforts to reduce dependency on USA
markets with higher penetration into Nordic, Asia
Pacifi c and Gulf countries
Given the improved market conditions for IT sector and
its preparedness to harness the newer opportunities,
L&T Infotech is reasonably confi dent of sustaining the
growth momentum in the medium term.
Manufacturing
46%
Telecom
14%
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Financial Services
40%
B.
LARSEN & TOUBRO INFOTECH GMBH (L&T Infotech
GmbH): Subsidiary Company
L&T Infotech GmbH, a wholly owned subsidiary of
L&T Infotech, provides software services in Banking
Financial Services & Insurance, Manufacturing and
Product Engineering Services in Germany. During the
year 2010-2011, the Company recorded total income
of ` 57 crore as against ` 64 crore in 2009-2010. The
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7/2/2011 3:22:06 PM
decrease in revenues was mainly due to offshoring of
a large multi-year engagement being executed by the
Company as against higher onshore revenues in the
previous year. Profi t after tax was, however, higher at
` 2.01 crore as compared to ` 0.77 crore in 2009-2010.
C.
LARSEN & TOUBRO INFOTECH CANADA LIMITED
(L&T Infotech Canada): Subsidiary Company
L&T Infotech Canada, a wholly owned subsidiary of L&T
Infotech, provides software services in Financial, Insurance
and Oil & Gas Sectors in Canada. During 2010-2011,
the total income of L&T Infotech Canada amounted to
` 15 crore, as against ` 17 crore in 2009-2010. Profi t
after tax during the year was marginally lower at
` 0.23 crore as compared to ` 0.33 crore in 2009-2010
due to lower sales.
D. GDA TECHNOLOGIES INC. (GDA Tech): Subsidiary
Company
GDA Tech, a wholly owned subsidiary of L&T Infotech,
was acquired in 2007 to strengthen IT outsourcing
business in USA. The business of GDA Tech mainly
comprised of (a) Conventional Intellectual Property (IP)
and Custom Design & Manufacturing Services (CDMS)
and (b) Services business. With effect from 2010-2011,
the service business of GDA Tech was merged with L&T
Infotech as a part of the initiative to integrate GDA
operations.
During 2010-2011, the total income of GDA Tech
amounted to ` 30 crore as against ` 66 crore for the
previous year. After considering the restructuring of
business carried out in 2010-2011, on like to like basis, the
total income of IP and CDMS at ` 30 crore in 2010-2011
compares favourably with revenues of ` 21 crore from
these business segments in the previous year. Profi t after
tax was for 2010-2011 at ` 2.17 crore as compared to
` 2.49 crore recorded in 2009-2010.
F.
L&T INFOTECH FINANCIAL SERVICES TECHNOLOGIES
INC. (L&T Infotech FS): Subsidiary Company
L&T Infotech FS was formed during 2010-2011 as a
wholly owned subsidiary of L&T Infotech, for acquisition
of transfer agency business unit from Citigroup Fund
Services in Canada. The total income of the Company
after its acquisition for the quarter January-March 2011
amounted to ` 48 crore while profi t after tax was
recorded at ` 5.43 crore for the period.
II. FINANCIAL SERVICES
A. L&T FINANCE HOLDINGS LIMITED
(L&T FH):
Subsidiary Company
Overview
L&T FH, a wholly owned subsidiary of L&T, was
incorporated in 2008, with a view to consolidate L&T’s
investments in the fi nancial services business and give a
distinct identity to the business segment. It is registered
with the Reserve Bank of India as a non-banking
fi nancial company. L&T FH is the holding company
for L&T’s investments in the non-banking fi nancial
companies and mutual fund business and also a few
other strategic investments in the sector.
Operations & Performance
investments
subsidiaries
The Company’s
and strategic investments increased from ` 1629
crore as at March 31, 2010 to ` 2119 crore as at
March 31, 2011.
its
in
L&T Finance
Holdings Limited
L&T Infrastructure
Finance Company
Limited
India
Infrastructure
Developers
Limited
E.
LARSEN & TOUBRO INFOTECH LLC (L&T Infotech
LLC): Subsidiary Company
L&T Finance
Limited
L&T Infotech LLC, a wholly owned subsidiary of
L&T Infotech, operates in the United States. During
2010-2011, the total income of L&T Infotech LLC
amounted to ` 42 crore, as against ` 24 crore in
2009-2010. Profi t after tax was ` 0.19 crore as
compared to ` 0.14 crore in 2009-2010.
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L&T Investment
Management
Limited
L&T Mutual fund
Trustee Limited
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B. L&T FINANCE LIMITED (LTF): Subsidiary Company
Overview
LTF, a wholly owned subsidiary of L&T Finance Holdings
Limited, is a diversifi ed non-banking fi nancial company
with product offerings catering to various segments of
the corporate and retail sectors. LTF is also engaged in
the distribution of various fi nancial products.
LTF, with its pan India presence backed by a robust credit
appraisal, operational and credit delivery model, is well
equipped to cater to customers across the country.
Operations & Performance
LTF
recorded a
During 2010-2011,
signifi cant
improvement in all major performance parameters.
This was facilitated by the growth in India’s economy,
increased investment in infrastructure and higher rural
incomes. The positive environment for raising resources
was also a contributor to the improved performance.
The highlights of the Company’s fi nancial performance
are as below:
•
•
•
As on March 31, 2011 total assets grew to
` 10580 crore
from ` 7567 crore on
March 31, 2010, registering an increase of 40%
Total income at ` 1398 crore recorded growth
of 45% over the total income of ` 966 crore in
2009-2010
Profi t after tax during the 2010-2011 grew by
47% to ` 230 crore
Outlook
In the coming year, credit off-take is expected to be
robust with increase in GDP and continued focus of the
Government on infrastructure development. However,
continued infl ationary pressures may lead to monetary
tightening, resulting in higher interest rates and pressure
on net interest margin.
C. L&T INFRASTRUCTURE FINANCE COMPANY LIMITED
(LTIFCL): Subsidiary Company
Overview
LTIFCL, a wholly owned subsidiary of L&T Finance
Holdings Limited, is a non-banking fi nancial company
infrastructure projects,
focused on fi nancing of
across various sectors. LTIFCL leverages L&T’s domain
knowledge in the engineering and construction fi elds
to provide infrastructure fi nancing solutions through
a mix of debt, sub-debt, quasi-equity and equity
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participation. It also offers project advisory and loan
syndication services.
Operations & Performance
recorded
improved performance during
LTIFCL
2010-2011, on the strength of the growth momentum
of the Indian economy and investment fl ow into
infrastructure projects,
supported by a positive
environment for fund raising. The highlights of its
fi nancial performance are as below:
•
•
•
As on March 31, 2011, total assets grew to
` 7487
crore on
March 31, 2010, registering an increase of 76%
from ` 4249
crore
Total income at ` 704 crore recorded growth of
56% in 2010-2011
Profi t after tax during the 2010-2011 grew by
81% to ` 201 crore
Outlook
infrastructure
increased focus on
investment
The
through the public private partnership model on the
back of strong economic fundamentals would provide
the required growth impetus to LTIFCL. Notwithstanding
the growing competition, LTIFCL, with its ability to offer
timely and appropriate solutions to the customer, is
positive about its growth outlook. While infl ationary
trends may lead to tightening of credit and money
supply, it is expected that the demand for infrastructure
and Government’s focus on the sector would provide
the required drivers for continued growth.
D. L&T CAPITAL COMPANY LIMITED (LTCCL): Subsidiary
Company
Overview
LTCCL, a wholly owned subsidiary of L&T, is a portfolio
manager registered with the Securities and Exchange
Board of India, with funds over ` 1900 crore under
its management. It is also a mutual fund distributor /
advisor. LTCCL holds and monitors a signifi cant portion
of the L&T Group’s strategic investments.
Operations & Performance
Mutual fund markets did reasonably well in 2010-2011.
The improved capital market had its positive impact on
LTCCL’s income and profi ts. The Company also made
decent gains from its investment portfolio.
income
During 2010-2011, the Company’s gross
recorded at ` 29 crore, registering a jump of 43% over
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7/2/2011 3:22:06 PM
2009-2010. The profi t after tax was signifi cantly higher
at ` 21 crore, an increase of 53% over 2009-2010.
During the year 2010-2011, the Company declared an
interim dividend of ` 7.20 per share.
E. L&T GENERAL
INSURANCE COMPANY LIMITED
income for 2010-2011 at
The sales and other
` 90 crore registered a growth of 34%. Exports
accounted for 29% of the total income. Profi t after tax
registered a 10% growth at ` 14 crore for 2010-2011
as compared to 2009-2010 level of ` 13 crore.
(LTGI): Subsidiary Company
Overview
LTGI, a wholly owned subsidiary, received the license
to operate as a General Insurer from the Insurance
Regulatory and Development Authority (IRDA) on
July 9, 2010. The Company commenced commercial
operations as a General Insurer on October 1, 2010.
Operations & Performance
The operations of the Company mainly comprise Fire,
Marine, Motor, Public Liability, Group Personal Accident
and Group Health Insurance.
The Company is yet to complete one full year of
operations. However, a good beginning has been
made.
Outlook
The Indian General Insurance Industry has displayed an
impressive performance in terms of premium income in
the year 2010-2011. Health and Motor have been the
fastest growing lines of business.
Going forward, the growth momentum in the General
Insurance Industry is expected to continue. The Company
is well positioned to exploit the growth opportunities.
III. ENGINEERING & CONSTRUCTION SERVICES
Domestic Companies
A. L&T-SARGENT & LUNDY LIMITED (LTSL): Subsidiary
Company
Overview
LTSL, a company where L&T has 50% stake, renders
power plant engineering services to its customers in
India and abroad. Besides being a major provider of
integrated engineering solutions through 3D modeling,
LTSL has established itself as a global consultant backed
by a competent engineering talent pool and technology
support.
Operations & Performance
LTSL received fresh orders aggregating to ` 72 crore
during 2010-2011. Besides orders received from L&T,
LTSL also bagged orders from Sargent & Lundy LLC,
third party international and domestic customers.
106
MDA p61-120.indd 106
Outlook
LTSL will leverage the increased demand for power in
the country supported by the 11th and the 12th plan
capacity addition planned for India. LTSL also expects
a few international projects to materialise this year by
focusing on the Middle East market which is on the
recovery path. Given the good opportunities both in
India and abroad, LTSL has bright prospects in the
medium to long term.
B. L&T-CHIYODA LIMITED (LTC): Associate Company
Overview
LTC, a company where L&T has 50% stake, is an
internationally reputed design & engineering consultancy
company for hydrocarbon industry. LTC was set up in
the year 1994 as a joint venture (JV) between Chiyoda
Corporation of Japan and L&T with an equal stake. LTC
offers total engineering solution to hydrocarbon sector
and related industries including petroleum refi neries,
petrochemical units, oil and gas onshore processing
facilities, LNG/LPG plants, fertilizer plants and chemical
plants.
Operations & Performance
With a healthy order book at the beginning of the
year, the Company reported sales revenue of ` 97 crore
recording a growth of 17% over 2009-2010. Profi t
after tax for the year stood at ` 9 crore.
C. L&T-VALDEL
ENGINEERING
LIMITED
(LTV):
Subsidiary Company
Overview
LTV, a wholly owned subsidiary of L&T, provides
complete engineering solutions for upstream oil & gas
sector and offers design engineering services as well as
project management services globally.
Operations & Performance
recorded
Company
The
of
` 61 crore during the year. The order book as at
March 31, 2011 stood at ` 42 crore. Sales revenue at
` 70 crore registered a growth of 17% over the previous
infl ows
order
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year. Profi t after tax for 2010-2011 was lower at
` 6 crore as compared to ` 11 crore in 2009-2010
mainly due to increase in operation costs.
at Kattupalli, near Chennai,Tamil Nadu. The port
complex of LTSB is planned to operate on a commercial
basis with a capacity of 2 million TEUs per annum.
D. L&T-RAMBØLL CONSULTING ENGINEERS LIMITED
Operations & Performance
(LTR CE): Associate Company
Overview
LTR CE, a consultancy fi rm where L&T has 50% stake,
was established in 1998 by L&T and RAMBØLL A/S
of Denmark. The Company provides engineering
and project consultancy services for transportation
infrastructure projects relating to Ports & Marine,
Roads & Airports and Bridges & Metros sector. LTR
CE also offers consultancy services in SEZ Planning &
Environmental Engineering.
Operations & Performance
The Company has consolidated its position in the
domestic market as advisors and consultants to
developers of projects. LTR CE registered a growth
of 29% in total income for the year 2010-2011 at
` 45 crore. Profi t after tax at ` 12 crore grew by 31%
over 2009-2010.
LTSB entered into a joint venture agreement with
TIDCO to set up the port and shipyard at Kattupalli,
Tamil Nadu. LTSB has successfully acquired 1148 acres
of patta land at Kattupalli on long-term lease and has
also received the formal SEZ approval from the Ministry
of Commerce and Industry.
The construction activity at the project site is progressing
well as per schedule. Capital dredging work along the
harbour basin, started in January 2010, is nearing
completion. The Company has also obtained approval
from Directorate of Town and Country Planning,
Tamilnadu to construct building and related facilities in
shipyard and port areas.
The Company has started availing term loan funds from
consortium of bankers during the year.
G. L&T SPECIAL STEEL AND HEAVY FORGINGS PRIVATE
LIMITED (LTSHF): Subsidiary Company
E. SPECTRUM
INFOTECH PRIVATE LIMITED (SIPL):
Overview
Subsidiary Company
Overview
largely on product development
SIPL, a wholly owned subsidiary of L&T, provides
capabilities in defence electronics and systems. SIPL
concentrates
in
embedded solutions, control and signal processing
for defence sector. It has grown from designing and
development of sub-systems to a full-fl edged production
organisation delivering sub-systems.
Operations & Performance
Sales revenues at ` 26 crore during 2010-2011 grew
signifi cantly over ` 9 crore in 2009-2010. Profi t after
tax at ` 2 crore grew by 30% over the previous year.
LTSHF is a joint venture between L&T and Nuclear
Power Corporation of India Limited (NPCIL) with L&T
holding majority equity stake of 74%. The JV, formed in
July 2009, is in the process of setting up a fully integrated
special steel and heavy forgings manufacturing facility
at Hazira, Gujarat. This facility will produce heavy
forgings required for both the Hydrocarbon sector and
the Nuclear Power sector.
Operations & Performance
The construction of facilities and erection of various
plant and machinery is advancing as per schedule. The
project is expected to commence production by the
end of 2011-2012.
F. L&T SHIPBUILDING LIMITED (LTSB): Subsidiary
Company
Overview
H. L&T SAPURA OFFSHORE PRIVATE LIMITED (LTSOPL)
and L&T SAPURA SHIPPING PRIVATE LIMITED
(LTSSPL): Subsidiary Companies
L&T has identifi ed shipbuilding as a major thrust area
in the heavy engineering sector. LTSB, a wholly owned
subsidiary of L&T, has been formed for development
and operation of a Shipyard-cum-Minor Port Complex
Overview
LTSOPL and LTSSPL are joint ventures between L&T and
Nautical Power Pte Limited, Singapore, a wholly owned
subsidiary of Sapura Crest Petroleum Bhd, Malaysia for
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operation of a Heavy Lift cum Pipe Lay Vessel (HLPV)
and installation of offshore platforms and laying of pipes
and cables under the sea for the Hydrocarbon Upstream
Industry. The JV companies were formed in September
2010 with L&T holding majority of 60% equity stake in
both the companies. Heavy Lift-cum-Pipe Lay Vessel was
commissioned during the year 2010-2011.
Operations & Performance
In their fi rst year of operation, JV Companies recorded
sales of ` 251 crore and profi t after tax of ` 23 crore
for the period starting from September 2, 2010 to
March 31, 2011. LTSSPL closed the year with order
book of ` 107 crore.
International Companies
I.
LARSEN & TOUBRO ELECTROMECH LLC (L&T
Electromech): Subsidiary Company
Overview
L&T Electromech is a joint venture between L&T and
The Zubair Corporation, Oman (TZC). L&T, through its
wholly owned subsidiary L&T International FZE holds
65% and TZC holds 35% in the Company.
The Company is a leading Civil, Mechanical and
Electrical & Instrumentation Construction Company
in Oman undertaking projects
in Oil and Gas,
Refi neries, Petrochemicals, Power and Water Treatment
sectors.
Operations & Performance
During the year under review, the Company bagged
orders worth ` 514 crore against ` 390 crore in 2009,
thus registering a growth of 32%. Sales for the year
at ` 458 crore registered an impressive growth of
84% over 2009. Profi t after tax stood at ` 36 crore as
against ` 34 crore in 2009.
Outlook
Instrumentation
The Company has established itself as one of the
major construction companies providing composite
construction services in Civil, Mechanical, Electrical
in Oman. The
&
planned expenditure in the Oil & Gas sector of over
OMR 6.5 billion (equivalent to over ` 75000 crore)
during Eighth Five Year Plan by Oman Government
is encouraging for the industry in general and the
(CMEI) works
Company in particular. Considering its eminent position
in Oman, the current growth momentum is expected to
continue in the medium term.
J. L&T MODULAR FABRICATION YARD LLC, OMAN
(LTMFYL): Subsidiary Company
Overview
International FZE, holds 65%
LTMFYL is a joint venture company between Zubair
Corporation & L&T International FZE established in
Sultanate of Oman. L&T, through its wholly owned
subsidiary L&T
in
the Company. The Company has developed core
competencies in manufacture of high end equipment
like Jack-up Drill Rigs, Floating Production Storage
& Offl oading (FPSO) Vessels, Integrated Decks, Skid
Mounted Equipment, Onshore Process Modules, in
addition to fabrication of large size offshore platforms.
Operations & Performance
During the year 2010, LTMFYL’s sales revenue stood at
` 252 crore, registering impressive growth of 85% over
previous year. As a result, profi t after tax for the year
2010 also improved at ` 31 crore vis-a-vis ` 2 crore in
2009.
K. LARSEN & TOUBRO ATCO SAUDI COMPANY LLC
(L&T ATCO): Subsidiary Company
Overview
is a strategic
L&T ATCO
joint venture of L&T
International FZE and Abdulrahman Ali Al -Turki Group
of Companies (ATCO) Dammam, a renowned Saudi
conglomerate. L&T ATCO was incorporated as an In -
Kingdom Company in 2007 to take advantage of the
electro-mechanical construction opportunities arising
in the areas of Oil & Gas, Petrochemicals, Power and
Water related projects in Saudi Arabia. L&T, through its
wholly owned subsidiary L&T International FZE, holds
49% in the Company.
Operations & Performance
During 2010 the Company’s total income stood at
` 25 crore against ` 7 crore in 2009. The Company
registered a modest profi t of ` 0.09 crore as against a
loss of ` 4 crore in 2009.
Outlook
Specifi c tie-ups with prominent EPC players in the
Refi nery & Petrochemical sector and demonstration of
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on-ground resources would open up opportunities for
the Company. The recent pre-qualifi cation with large
and most prestigious customer in the Kingdom and pre
bid alliance with certain leading EPC players will benefi t
the Company to gain competitive strength and obtain
new project orders.
Operations & Performance
Sales revenue for the year 2010 stood at ` 33 crore
was lower by 41% as compared to 2009.
N. LARSEN & TOUBRO READYMIX CONCRETE
INDUSTRIES LLC (RMC LLC): Subsidiary Company
L. LARSEN & TOUBRO (OMAN) LLC (LTO): Subsidiary
Company
Overview
LTO, a joint venture with Zubair Corporation LLC,
provides engineering, construction and contracting
services for the last 15 years in Sultanate of Oman.
Its track record in civil projects has been excellent
and continues to enjoy customer preference in the
country. L&T, through its wholly owned subsidiary L&T
International FZE, holds 65% in the Company.
Operations & Performance
Overview
RMC LLC is a joint venture between Mr. Majed Al
Mehairi (51%), UAE and Larsen & Toubro International
FZE (49%), a wholly owned subsidiary of L&T.
Operations & Performance
With the construction and real estate activity slowing
down in Middle East consequent to fi nancial crisis,
the demand for ready mix concrete reduced in 2010.
Accordingly, the sales revenue at ` 57 crore was lower
by 47% as compared to 2009.
IV. POWER EQUIPMENT MANUFACTURING
A. L&T-MHI TURBINE GENERATORS PRIVATE LIMITED:
the
Infl ow
year 2010
at
for
The Order
OMR 184 million (` 2135 crore) registered a growth
of 25% over previous year. Order Book as at
December 31, 2010 stood at OMR 252 million
(` 2924 crore). The revenue at ` 1664 crore for the
year grew by 7% over 2009. Profi t after tax for the
year 2010 grew by 11% to ` 110 crore.
Outlook
The economy of Oman has stabilised and is going
through a phase of recovery. The Government of
Oman is expected to increase allocation of funds
for infrastructure development in 2011, which will
augment the opportunity landscape for the Company
in Power Transmission and Distribution, Infrastructure
and Buildings and Utilities sectors.
M. LARSEN & TOUBRO KUWAIT CONSTRUCTION
GENERAL CONTRACTING COMPANY WLL (LTKC):
Subsidiary Company
Overview
LTKC is a strategic joint venture between M/s Bader
Almulla and Brothers Company WLL, a company in
Kuwait and Larsen & Toubro International FZE. L&T,
through its wholly owned subsidiary L&T International
FZE, holds 49% in the Company. LTKC executes
construction projects in Oil & Gas and Power sectors in
the State of Kuwait.
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Subsidiary Company
Overview
L&T-MHI Turbine Generators Private Limited is a joint
venture with Mitsubishi Heavy Industries, Japan (MHI) to
manufacture super critical steam turbines & generators
(STG package). L&T holds majority share of 51% of
the equity in the Company to leverage on its EPC
capabilities in the emerging mega power sector. The
manufacturing facility at Hazira, Gujarat to produce
STG equipment of capacity ranging from 500 MW to
1000 MW has been successfully commenced during
the year.
Operations & Performance
The Company has secured fresh orders for 2 STG
packages aggregating to ` 2467 crore recording a
growth of 15% over the previous year. Consequently,
the Order Book position stood at ` 3758 crore as
on March 31, 2011. The gross sales at ` 1126 crore
registered a signifi cant growth over the sales of
` 422 crore in the previous year with 4 projects under
execution.
B. L&T-MHI BOILERS PRIVATE LIMITED: Subsidiary
Company
Overview
L&T-MHI Boilers Private Limited is a joint venture between
L&T and MHI to manufacture and supply Supercritical
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Boilers for large coal based power utilities. L&T holds
the majority equity stake of 51% in the Company. The
Company has completed its fi rst phase of setting up
the manufacturing facilities at Hazira, Gujarat. The total
capacity being installed is 4000 MW.
Operations & Performance
The Company has secured orders worth ` 6960 crore
registering a growth of 25% over the previous year. As
a result, the Order Book position as on end 2010-2011
stood at ` 11447 crore. The Company has recorded
healthy growth in gross sales at ` 1011 crore as against
` 30 crore in the previous year.
Outlook for Power Equipment Manufacturing
The Government’s focus on setting up substantial
power generation capacity in the country is the
primary growth driver for L&T’s Power Equipment
Manufacturing subsidiaries viz. L&T-MHI Boiler and L&T-
MHI Turbine which manufactures super-critical energy
effi cient and environment friendly high-end power
equipment. While super-critical
technology offers
distinct advantage to these subsidiaries, achieving cost
competitiveness presents major challenges in the wake
of competition from Chinese equipment manufacturers.
The Companies are confi dent of meeting the market
requirements and become more cost competitive in the
coming years.
V. POWER DEVELOPMENT PROJECTS
L&T POWER DEVELOPMENT LIMITED (L&T PDL):
Subsidiary Company
Overview
L&T PDL, incorporated in September 2007, is a wholly
owned subsidiary of L&T. The Company has been
formed as a power development arm of L&T with the
objective of developing, operating and maintaining
power generation projects of all types namely thermal,
hydel, nuclear and other renewable form of energy
including captive and co-generation power plants.
Operations & Performance
As of March 31, 2011, L&T PDL is developing the
following projects through its wholly owned subsidiaries
(see table below):
During the year 2010-2011, L&T PDL has reported a
total income of ` 14 crore mainly by way of project
facilitation charges, advisory service fees. Profi t after tax
stood at ` 2 crore.
Outlook
Government’s policy to encourage substantial capacity
addition provides signifi cant opportunities for private
power developers. Several large projects (including
Ultra Mega Power Projects and Case-2 Bids) are in the
Name of Project
Rajpura Thermal
Power Plant – Phase I
Rajpura Thermal
Power Plant – Phase II
Singoli-Bhatwari Hydro
Electric Project
Tagurshit Hydro
Electric Project
Capacity
(MW)
State
1400 Punjab
700 Punjab
Name of
Subsidiary
Nabha Power
Limited
Nabha Power
Limited
99 Uttarakhand L&T Uttaranchal
Hydropower Limited
60 Arunachal
Pradesh
L&T Arunachal
Hydropower Limited
Sach-Khas Hydro
Electric Project
149 Himachal
Pradesh
L&T Himachal
Hydropower Limited
Reoli-Dugli Hydro
Electric Project
420 Himachal
Pradesh
L&T Himachal
Hydropower Limited
Current Status
Financial closure achieved during 2010-
2011. Construction work is in progress.
In the initial stages of development.
Financial closure achieved during 2010-
2011. Construction work is in progress.
Detailed Project Report (DPR) is being
fi nalised. Project implementation is likely
to commence in 2011-2012.
Detailed Project Report (DPR) is under
preparation. Survey & Investigations work
is being carried out.
Project has been awarded during the year
2010-2011. Survey & Investigations work
is being carried out.
TOTAL
2828
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pipeline and shall soon come up for development by
private players. Apart from this, private players are also
developing merchant power plants considering the
continuing peak defi cit scenario in the Power sector
in India. The Company is actively pursuing all these
opportunities to establish itself amongst signifi cant
private power developers in India.
VI.
INFRASTRUCTURE AND PROPERTY DEVELOPMENT
PROJECTS
A. L&T INFRASTRUCTURE DEVELOPMENT PROJECTS
LIMITED (L&TIDPL): Subsidiary Company
Overview
L&TIDPL has been set up as an
infrastructure
development arm of the Group, where L&T has 97.65%
stake. L&TIDPL has over a period of time, built up
capabilities in identifying and developing infrastructure
projects, operation & maintenance of these projects
and providing advisory services relating to fi nancing &
engineering of the projects.
L&TIDPL portfolio is well diversifi ed with a mix of
projects under development across various sectors such
as roads & bridges, ports and urban infrastructure.
Limited to design, develop, construct, fi nance, operate
and manage a metro rail system in Hyderabad.
The total length of the three elevated corridors is
71.16 KM with 66 stations. The total concession period
is 35 years including a construction period of 5 years
with a provision to extend for a further period of 25
years. The fi nancial closure for Hyderabad Metro project
has been achieved in March 2011 in a record time of
6 months from the award of the project. It is the largest
fund tie-up in India in PPP (Public Private Partnership)
projects category till date.
During the year under review in roads and bridges space,
the Company also achieved fi nancial closure for two
road projects viz., L&T Devihalli Hassan Tollway Limited
and L&T Krishnagiri Walajahpet Tollway Limited.
Going forward, the Company is poised for quantum
growth and aims to attain a position of leadership in
creating safe and sustainable infrastructure.
Operations & Performance
L&TIDPL has reported a total income of ` 59 crore and
a profi t after tax of ` 16 crore.
The Company has during the year incorporated a
special purpose vehicle L&T Metro Rail (Hyderabad)
As of March 31, 2011, L&TIDPL’s portfolio includes
following infrastructure projects:
I. Transportation and Infrastructure
Sr. No. Major SPVs
Roads and Bridges:
L&T Panipat Elevated Corridor Limited
Narmada Infrastructure Construction Enterprise Limited
L&T Krishnagiri Thopur Toll Road Limited
L&T Western Andhra Tollways Limited
L&T Transportation Infrastructure Limited
L&T Interstate Road Corridor Limited
L&T Vadodara Bharuch Tollway Limited
L&T Samakhiali Gandhidham Tollway Private Limited
L&T Ahmedabad-Maliya Tollway Limited
L&T Krishnagiri Walajahpet Tollway Limited
L&T Halol - Shamlaji Tollway Limited
L&T Devihalli Hassan Tollway Limited
Ports:
Status
Stage
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Operational
Operational
Operational
Operational
Operational
Operational
Operational
Under Implementation
Under Implementation
Under Implementation
Under Implementation
Under Implementation
The Dhamra Port Company Limited
Joint Venture
Under Implementation
International Seaport (Haldia) Private Limited
Associate
Operational
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
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II. Urban Infrastructure
Sr. No. Major SPVs
1
2
3
4
5
6
7
8
9
10
11
L&T Urban Infrastructure Limited
L&T Tech Park Limited
L&T Infocity Limited
L&T South City Projects Limited
Hyderabad International Trade Expositions Limited
L&T Hitech City Limited
L&T Arun Excello IT SEZ Private Limited
CSJ Infrastructure Private Limited
L&T Arun Excello Commercial Projects Private Limited
L&T Bangalore Airport Hotel Limited
L&T Vision Ventures Limited
Status
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Stage
Operational
Operational
Operational
Operational
Operational
Operational
Operational
Under Implementation
Under Implementation
Under Implementation
Under Implementation
I.
TRANSPORTATION AND INFRASTRUCTURE
Financial performance summary of key operational SPVs: Roads and Bridges
A. Projects completed:
Name of Subsidiary
Project Details
Sr.
No.
1 L&T Panipat Elevated
Corridor Limited
2 Narmada Infrastructure
Construction Enterprise
Limited
3 L&T KrishnagiriThopur Toll
Road Limited
4 L&T Western Andhra
Tollways Limited
5 L&T Transportation
Infrastructure Limited
6 L&T Interstate Road
Corridor Limited
7 L&T Vadodara Bharuch
Tollway Limited
Widening of the existing Road on National
Highway No.1 (NH-1) on BOT basis.
Construction, development, operation and
maintenance of Second Two-Lane Bridge
at Zadeshwar across the Narmada River in
Gujarat on National Highway 8 (NH-8).
Widening of the existing Road from the
end of proposed Krishnagiri fl yover to
Thumpipadi on BOT basis.
Construction, development, operation and
maintenance of the road from Jadcherla
to proposed Kotakatta bypass on NH-7 in
the State of Andhra Pradesh.
Building a bypass at Coimbatore Section
of National Highway (NH-47) and
construction of additional bridge at
Athupalam on River Noyyal on BOT basis.
Construction, operation and maintenance
of the road on Palanpur Swaroopgunj
section of NH-14 in the state of Gujarat
and Rajasthan on BOT basis.
Widening the existing road of Vadodara
to Bharuch section on NH-8 in the State
of Gujarat on BOT basis.
Project
Cost*
(` crore)
422
Total Income
(` crore)
2010-2011 2009-2010
36
39
PAT/Loss)
(` crore)
2010-2011 2009-2010
(45)
(46)
142
525
373
104
555
52
81
38
36
88
53
67
32
37
89
26
23
(25)
(30)
(20)
(21)
11
13
5
8
1450
192
135
(79)
(73)
* Excludes amount payable/receivable by way of grant.
Most of the projects listed above are in the initial phase of operations with a much higher amortisation and interest
cost, resulting in losses for the year.
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B. Projects under implementation: Ports
THE DHAMRA PORT COMPANY LIMITED (DPCL):
Joint Venture
Overview
DPCL, a 50:50 joint venture between L&T IDPL and
TATA Steel has been set up to build a deep water all
weather port at Dhamra, under Build-Own-Operate-
Share-Transfer
(BOOST) model with a concession
awarded by the Government of Odisha for a period of
34 years (including period of construction).
an advantage to the mineral hinterland of north Odisha,
Jharkand, West Bengal and Chattisgarh where a large
number of steel plants and mineral based industries are
located. The project includes 62.5km rail connectivity to
the main Howrah–Chennai lines at Bhadrak.
The port is expected to become an infrastructural
hub of Eastern Coast of India by providing the
effi cient port facilities for the industrial and economic
development of
the country.
The Port commenced commercial operations on
May 6, 2011.
region and
the
Operations & Performance
Roads and bridges
With a draft of 18.5 meters, the port can accommodate
super cape size vessels up to 1,80,000 DWT. This will be
The Status of other major projects under execution is
summarised below:
Name of Subsidiary
Project Details
Sr.
No.
1 L&T Samakhiali Gandhidham
Tollway Private Limited
Six laning of Samakhiali to Gandhidham Section
of NH-8A on design, build, fi nance, operate and
transfer basis in the state of Gujarat.
Widening the existing Two-Lane Road
covering Ahmedabad, Viramgam Maliya
section in Gujarat, to Four-Lane Road along
with the divided Carriageway facility.
Project Status
Project
cost*
(` crore)
1300 Toll operations started for existing four
lanes in 2010-2011. Widening of four
lanes to six lanes will commence in
August 2011.
1497 Toll operation is expected to start in
April 2012.
2
3
4
5
6
7
L&T Ahmedabad -
Maliya Tollway Limited
(formerly known as L&T
Ahmedabad - Maliya
Tollway Private Limited)
L&T Krishnagiri
Walajahpet Tollway
Limited
L&T Halol - Shamlaji
Tollway Limited
(formerly known as L&T
Halol - Shamlaji Tollway
Private Limited)
L&T Devihalli Hassan
Tollway Limited
Chennai Tada Tollway
Limited
L&T Rajkot - Vadinar
Tollway Limited
Design, construction, development, fi nance,
operation and maintenance of the road
from Krishnagiri to Walajahpet on NH-46
in the state of Tamil Nadu.
1370 Financial closure completed during the
year. Toll operation for the existing four
lanes & construction of four lanes to six
lanes is expected to start in the 1st half
of 2011-2012.
Widening of existing Two-Lane Road,
covering Halol-Godhra-Shamlaji
section
in Gujarat to Four-Lane Road along with
divided Carriageway facility.
1305 Construction of Two-Lane to Four-
lane is expected to be completed in
2011-2012. Toll operation shall begin
after the completion of construction.
Design, construction, development, fi nance,
operation and maintenance of the road
from Devihalli to Hassan on NH-48 in the
state of Karnataka.
494 Financial closure completed during the
year. Toll collection is expected to start
after the completion of construction in
2013-2014.
Six-laning of Chennai – Tada section of
NH-5 from km 11.00 to 54.40 (Length-
43.40 Km) in the state of Tamilnadu as BOT
(TOLL) on DBFO pattern.
848 Toll operations started for the existing
four lane and construction of four lane
to six lane is going on and is expected
to be completed in 2011-2012.
Widening of existing Two-Lane Road,
covering Rajkot-Jamnagar-Vadinar section
in Gujarat, to Four-Lane Road along with
the divided Carriageway facility.
1096 Construction of Two-Lane to four-
lane is expected to be completed in
2011-2012.
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* Excludes amount payable by way of grant.
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II. URBAN INFRASTRUCTURE
L&T Urban Infrastructure Limited, a subsidiary of
L&TIDPL, houses the property development and urban
infrastructure project development business.
L&T URBAN INFRASTRUCTURE LIMITED (L&TUIL):
Subsidiary Company
Overview
L&T UIL, the real estate arm of L&T Infrastructure
Development Projects Limited, has built a balanced
portfolio of Urban Infrastructure related projects in
IT/ITES, commercial, hospitality and residential sectors
over the past 5 years.
It has operational/under
construction projects in Chennai, Hyderabad, Bangalore,
Vijayawada and Chandigarh. L&T through its subsidiary
L&T IDPL holds 75% in the Company.
Operations & Performance
L&T UIL has its portfolio investment of over ` 600 crore
as at March 31, 2011, bulk of which is in the commercial
& IT/ITES sector. The Company earned total income of
` 50.44 crore which includes project facilitation and
advisory service fees of ` 42 crore. Profi t after tax stood
at ` 34.68 crore for the year 2010-2011.
The ongoing projects under the residential sector are
Serene County at Hyderabad, Eden Park at Siruseri,
Chennai and Estancia Residential at GST Road,
Chennai. While Serene County, at Hyderabad has
successfully sold about 80% of its development, Eden
Park at Chennai is progressing very well with a good
number of bookings and sale having commenced
during the Q4 of 2010-2011. The Company has revised
the development agreement of residential project
“Prithvi” at Sriperambudur, Tamilnadu and the project
is expected to be completed by 2013-2014. The total
space developed so far under this sector is about 30
lakh sq. ft.
Under hospitality segment, the fi rst phase of hotel
project at Bangalore is under advanced stage of
construction and is expected to go on stream by end
of August 2011. The mixed development project at
Chandigarh is on schedule and has achieved bookings
of 76% for retail space and 40% for offi ce complex.
The project is expected to become partially operational
in 2012-2013.
As part of the portfolio review policy, L&T UIL continued
with strategic divestments, in projects which attain a
mature stage. During 2010-2011, L&T UIL divested its
stake in Cyber Park Development and Construction
Limited, Bangalore. The stake held by L&T Infocity in its
subsidiary at Sri Lanka has been divested.
Financial performance summary of key operational SPVs: (Urban Infrastructure)
A. Projects completed
Name of Subsidiary
Project Details
Sr.
No.
1
L&T Tech Park Limited
2
L&T Infocity Limited
The Company has been formed to set up an
IT SEZ within the Infopark, at Kochi, Kerala,
as a co-developer.
Phase I of the project, with a built up area
of 3.86 lakh sq. ft. has been completed &
almost fully occupied. Phase II of the project,
with a built up area of 4.40 lakh sq. ft. is
expected to commence in 2011-2012.
The Company focuses on (i) Operating and
maintaining the multi-tenanted IT Parks (ii)
Operating the Built to Suit IT facilities (iii)
Facility Management and (iv) Development
and Sale of Residential Units
in Mega
Residential Project ‘Serene County’.
Total Income
(` crore)
PAT/(Loss)
(` crore)
2010-2011 2009-2010 2010-2011 2009-2010
20
11
5
(4)
329
206
140
57
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Sr.
No.
3
Name of Subsidiary
Project Details
Total Income
(` crore)
PAT/(Loss)
(` crore)
L&T South City Projects
Limited
The Company is developing a township
consisting of residential complex, school,
public health centre, shopping complex etc.,
over 87 acres of land situated at Siruseri
Village, Chenglepet District. Phase I consisting
of 4 towers has been completed. The overall
project including all phases is expected to be
completed by 2016.
132
1
13
(1)
4
Hyderabad International
Trade Expositions
Limited
The Company has developed a modern
trade exposition center on a 52 acre plot at
Cyberabad, Hyderabad.
5
L&T Hitech City Limited
The Company fl oated by L&T Infocity Limited,
in partnership with APIIC, to set up an IT SEZ
at Vijayawada and has already constructed
1.50 lakh sq.ft IT space.
16
12
3
0.07
0.69
0.23
(8)
(1)
6
L&T Arun Excello IT SEZ
Private Limited
been
formed
The Companyhas
for
developing an IT SEZ at Vallanchery on GST
Road, Chennai. The Company has already
completed 3.6 lakh sq.ft of offi ce space for
IT/ITES.
B. Major projects under implementation (Urban Infrastructure)
1
1
(22)
(3)
Sr.
No.
1
2
3
Name of Subsidiary
Project Details
Project Status
CSJ Infrastructure
Private Limited
is
Company
The
for
development of commercial complexes in
Chandigarh.
formed
The project is under implementation and is expected
to commence commercial operations by June 2012.
L&T Bangalore Airport
Hotel Limited
The Company is fl oated to undertake
construction & operation of business class
hotel with a total of 321 rooms.
advanced
is under
stages of
The project
implementation. Phase I comprising of 158 rooms is
expected to be completed by August 2011. Additional
land for further phases is yet to be allotted.
L&T Vision Ventures
Limited
The Company is fl oated to undertake
development of a residential township at
Vishakhapatanam.
Land allotment pending from Vishakhapatanam
Urban Development Authority (VUDA)
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MDA p61-120.indd 115
VII. ELECTRICAL & ELECTRONICS
A. TAMCO GROUP OF COMPANIES: Subsidiary
Companies
Overview
TAMCO Group companies operating from Malaysia,
Indonesia and Australia are wholly owned subsidiaries
International FZE. During the year, the
of L&T
management decided to sell off TAMCO’s loss-making
China operations and consequently, in February 2011,
L&T International FZE sold its shares in TAMCO Shanghai
Switchgear Company Ltd. to a Chinese company.
TAMCO Malaysia has strengthened its brand equity for
Medium Voltage (MV) switchgear both in domestic and
overseas market. It has a wide market share in Dubai,
Qatar, Oman and other GCC countries.
115
7/2/2011 3:22:07 PM
Operations & Performance
Operations & Performance
the
year
ended
December
During
2010,
TAMCO group has secured orders amounting to
` 685 crore as against ` 651 crore in 2009. Group
sales for 2010 stood at ` 635 crore as against
` 707 crore for previous year. Profi t after tax of
TAMCO group of companies stood at ` 81 crore in
2010 as against ` 79 crore in 2009. The reduction
in sales is mainly attributed to the slow off-take
of orders from Middle East and Gulf market. Sales
in Australia increased from ` 60 crore in 2009 to
` 80 crore in 2010 while the revenue in Indonesia
increased from ` 16 crore in 2009 to ` 23 crore in
2010.
Outlook
Malaysian economy shows signs of recovery and the
GDP is expected to grow at 6%. The market is also
expanding in Australia as major Utility companies have
registered TAMCO as their suppliers for MV products.
The Company intends to penetrate new markets
in South East Asia, North Africa, East Africa & UK
and develop new products through its Research and
Development activities. The Company intends to invest
` 30 crore towards development of new products for
the year 2011 in order to expand its market reach.
TAMCO products have been introduced in the Indian
market. Localisation of its product range coupled with
L&T’s low voltage range would provide ample market
potential.
B.
L&T ELECTRICALS SAUDI ARABIA COMPANY
LIMITED, LLC (LTESA): Subsidiary Company
Overview
through
LTESA is a joint venture between L&T and Yusuf
Bin Ahmed Kanoo Group, KSA with its headquarters
at Dammam in the Eastern province of Saudi Arabia.
its wholly owned subsidiary L&T
L&T,
International FZE, holds 75% equity stake in the
Company, which caters to the customers in and
around Saudi Arabia. The Company offers complete
range of electrical systems and switchgear components
in the Gulf market in Low and Medium Voltage
categories,
Substations,
Pre-Fabricated/Packaged
Variable Frequency Drive panels and Automation
systems etc.
116
MDA p61-120.indd 116
The order infl ow for the year ended December 2010
stood at ` 129 crore as against ` 37 crore in 2009,
some of which were received during the last quarter
of 2010. Sales for the year was lower at ` 30 crore as
compared to ` 56 crore for the previous year due to
slowdown in the local market where many projects got
stalled and decisions on order fi nalisation were put on
hold till the later part of 2010.
Outlook
LTESA has successfully customised MV Panels and Ring
Main Units to suit local requirements which will enable
business with Saudi Electricity Company (SEC) and
SEC-approved contractors. With the oil prices fi rming
up and demand rising, the Company expects new
opportunities for major Oil & Gas projects. LTESA has
entered into a frame agreement with Bechtel- Ma’aden
for Motor Control Centre.
C.
L&T ELECTRICAL & AUTOMATION FZE (LTEAFZE):
Subsidiary Company
Overview
LTEAFZE, established in 2008 and operating from its
own Integration Centre, at Jebel Ali Free Zone in United
Arab Emirates (UAE), is a wholly owned subsidiary of
L&T International FZE.
The Company provides Integrated Control Solutions
to Industry verticals like Oil & Gas, Water & Waste
Water, Power and
in Middle East,
Africa and CIS markets with expertise in Automation,
Telecommunication,
Instrumentation
segments.
Electrical &
Infrastructure
Operations & Performance
The order infl ow for the year ended December 2010
stood at ` 118 crore as against ` 92 crore in 2009.
Sales for the year was lower at ` 116 crore as
compared to ` 123 crore for the previous year due to
slowdown in the Middle East market in early 2010.
Profi t after tax was maintained ` 18 crore for the
year.
Outlook
The Oil & Gas, Utility and Infrastructure segments are
showing signs of revival in Saudi Arabia, UAE, Qatar
and Kuwait markets with signifi cant
investments
announced over next 3-5 years. With major customer
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7/2/2011 3:22:07 PM
approvals in place, this business is focusing to provide
Turnkey Automation, Telecommunication & Electrical
services to Engineering Procurement & Construction
(EPC) companies and to end-users for brown fi eld
projects.
D. LARSEN & TOUBRO (WUXI) ELECTRIC COMPANY
LIMITED (LTW): Subsidiary Company
Overview
LTW is a wholly owned subsidiary of L&T International
FZE. It is located at Wuxi in the Jiangsu province of
People’s Republic of China. The factory was established
in 2006 with manufacturing facilities, quality control
and testing equipment. LTW supports L&T activities
related to brand labeling of U-Power Air Circuit
Breakers (ACBs) and D-Sine Moulded Case Circuit
Breaker (MCCB) range.
Operations & Performance
For the fi nancial year 2010, revenue was ` 39 crore
against ` 31 crore for 2009. Profi t after tax was
` 2 crore for FY 2010 against ` 0.18 crore for 2009.
Due to the economic slowdown, projects were either
delayed or cancelled leading to only marginal increase
in sales and profi ts.
Outlook
in
the
LV switchgear business in China continues to move
upwards
chain, with Government
focus on infrastructure, utilities and industries. However,
heavy competition in this segment from the low cost players
is impacting the performance of the Company adversely.
value
VIII. MACHINERY & INDUSTRIAL PRODUCTS
Domestic Companies
A. TRACTOR ENGINEERS LIMITED (TENGL) : Subsidiary
Company
Overview
TENGL is a wholly owned subsidiary of L&T principally
engaged in manufacture of undercarriage systems for
excavators, crawler tractors, bull dozers etc.
Operations & Performance
for
income
Sales and other
the fi nancial year
2010-2011 were ` 172 crore as against ` 140 crore
for the previous year. Profi t after taxes for the year was
` 9 crore as against ` 1 crore for previous year.
MDA p61-120.indd 116
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MDA p61-120.indd 117
Outlook
Indian Hydraulic Excavator (HEX) market is showing
remarkable improvements. In the year 2010-2011,
total number of Hydraulic Excavators sold was approx.
12,355 nos. as against 9,882 in 2009-2010. In the
year 2011-2012 the Company expects to maintain its
market share so as to achieve healthy growth in the
years to come.
B.
L&T PLASTICS MACHINERY LIMITED
Subsidiary Company
(LTPML):
Overview
LTPML is a wholly owned subsidiary of L&T. The
Company is in the business of manufacture of Injection
Moulding Machines (IMMs) for the plastics industry.
The Company’s products fi nd applications in diverse
industries like automobiles, electrical goods, packaging,
personal care products, writing instruments and white
goods.
Operations & Performance
There has been substantial addition of capacities in
industries of end-users such as automobiles, packaging,
writing instruments and electrical. Order Infl ow, hence
registered an increase of 47% in comparison to previous
year.
The Company reported a good performance for the
year ended March 31, 2011. Gross sales & income
at ` 210 crore for 2010-2011, registered a growth
of 47% over 2009-2010. Due to improved capacity
utilisation, the profi t after tax for 2010-2011 increased
to ` 18 crore, as against profi t of ` 6 crore for
2009-2010.
In manufacturing operations, sustained efforts were
taken throughout the year in areas such as manpower
optimisation, reduction in energy consumption and
better management of working capital,
thereby
delivering excellent results for the year.
The Company received prestigious India Manufacturing
Excellence Award 2010 in Gold category from The
Economic Times in partnership with Frost & Sullivan.
Outlook
The Company is expected to continue its growth
momentum during the year 2011-2012. The demand
for plastic products is also expected to grow in the near
future leading to better prospects for the Company’s
machines in the domestic market.
117
7/2/2011 3:22:07 PM
C. EWAC ALLOYS LIMITED
(EWAC): Subsidiary
Operations & Performance
Company
Overview
EWAC was a 50:50 joint venture with L&T and Messer
Eutectic + Castolin Group of Germany. During the
year, L&T has acquired the entire shareholding of the
JV partner, as a result, the Company became a wholly
owned subsidiary.
Operations & Performance
EWAC is a market leader in the business of Maintenance
& Repairs, Welding & Welding solutions for conservation
of global metal resources. The principal products
and services comprise Maintenance & Repair (M&R)
consumables, specifi cation grade electrodes, fl ux-cored
welding wires, wear plates/parts, welding & cutting
equipment, Tero Cote Lab services etc. L&T markets
EWAC’s products in India through a strong network of
stockists.
EWAC reported a gross sales of ` 189 crore in
2010-2011 against ` 143 crore in 2009-2010. Profi t
after tax is ` 27 crore vis-à-vis ` 24 crore for the
previous year.
Share of trading products, which yield relatively
lower margins, has gone up from 38% to 49% in
2010-2011.
Outlook
With the positive outlook on the industry and Indian
its good
economy, EWAC expects
performance in the year 2011-2012.
to continue
D. L&T KOMATSU
LIMITED
(LTK): Associate
Company
Overview
LTK is a 50:50 joint venture between L&T and Komatsu
Asia Pacifi c Pte. Ltd., Singapore, a wholly owned
subsidiary of Komatsu Limited,
Japan. Komatsu
group is world’s largest manufacturer of Hydraulic
Excavators and has manufacturing and marketing
the
LTK
facilities worldwide.
manufacture of Hydraulic Excavators and other
associated hydraulic components. L&T markets and
provides after sales support for Hydraulic Excavators
manufactured by LTK.
is engaged
in
During the year 2010-2011, LTK posted gross sales
of ` 1491 crore registering 24% growth. Profi t after
tax at ` 61 crore, however, declined marginally due to
signifi cant increase in component costs, arising out of
steep appreciation in Japanese Yen and steel price hikes
during the year.
Due to intense competition, it was not possible to pass-
on cost increases to customers fully. The Company
was able to maintain market share in spite of intense
competition from existing players and new entrants.
Outlook
With the Indian economy on growth path, the outlook
for Hydraulic Excavator market is very positive. Based
on current economic activity, the market is expected to
grow signifi cantly on the back of infrastructure projects
taking off in 2011-2012.
E. AUDCO INDIA LIMITED (AIL): Associate Company
Overview
AIL is a joint venture with equal equity holding by
L&T and Flowserve Corporation, USA. AIL is a leading
manufacturer of Industrial Valves.
AIL caters to all major industries viz Refi neries &
Pipelines, Power, Offshore Platforms, Petrochemicals,
Chemicals, Fertilisers, Food & Pharma, etc.
AIL Valves are approved by international Oil majors such
as Shell, Chevron, EXXON, Aramco, PDO, ADCO, which
helps in participating in their worldwide projects. Apart
from Indian Oil majors and various other industrial
segment approvals, AIL also has a unique advantage of
Indian Nuclear Industry approval.
Operations & Performance
The Company reported improvement in performance
for the year. AIL posted gross sales of ` 479 crore
in 2010-2011 as against ` 386 crore in 2009-2010,
registering a growth of 24% over the previous year.
Profi t after tax stood at ` 33 crore as compared to
` 32 crore in 2009-2010.
Outlook
With a healthy Order Book position as on
March 31, 2011, AIL expects a satisfactory performance
in the year ahead.
118
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F. L&T KOBELCO MACHINERY PRIVATE LIMITED:
Outlook
Subsidiary Company
Overview
The Company has been incorporated as a 51:49 joint
venture between L&T and Kobe Steel, Ltd. of Japan
for the manufacture of Internal Mixers and Twin
Screw Roller Extruders (TSR) for rubber processing for
the Tyre Industry. Construction of the manufacturing
facility is in progress at Kanchipuram, Tamilnadu
and
is expected to become operational during
2011-2012.
Outlook
The demand for the rubber processing machines is
dependent on the fortunes of the Tyre Industry, which
in turn, is dependent on automotive and mobile
equipment markets. Both these markets are currently
growing at over 20% per annum and most tyre
manufacturers are setting up new tyre manufacturing
facilities, thus facilitating demand for mixers and TSRs.
With limited players in the market producing these
machines, the growth opportunities for the Company
are good.
International Companies
G. LARSEN &
TOUBRO
RUBBER
MACHINERY COMPANY LIMITED (LT QINGDAO):
Subsidiary Company
(QINGDAO)
Overview
LT QINGDAO is a wholly owned subsidiary of L&T
International FZE, set up in Jiaonan, Qingdao, People‘s
Republic of China. LT QINGDAO develops and supplies
Tyre Curing Presses and other Rubber Processing
Machinery on par with the quality of products being
supplied by L&T to its global clients.
Operations & Performance
During the year 2010 LT QINGDAO recorded sales of
` 70 crore as against ` 51 crore in the previous year.
Profi t after tax was ` 1 crore. During the year 2010,
the Company was successful in securing signifi cant
orders from tyre majors in People‘s Republic of China
as well as from Pirelli for delivery to its plants in South
America.
MDA p61-120.indd 118
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MDA p61-120.indd 119
The Company has a healthy order book at the end of
the year and has plans to further enhance volumes in
the year 2011.
H. LARSEN & TOUBRO (JIANGSU) VALVE COMPANY
LIMITED (LTJVCL): Subsidiary Company
Overview
LTJVCL is a wholly owned subsidiary of L&T International
FZE, set up in Yancheng City, People‘s Republic of China.
LTJVCL manufactures a range of Valves for global markets.
Operations & Performance
The Company’s revenue for the year 2010 stood at
` 33 crore vis-à-vis ` 28 crore in the year 2009.
Outlook
With the accreditation in the prospects of refi ning
sector, backed by healthy order book of over
` 50 crore, the outlook for the Company is positive.
I.
LARSEN & TOUBRO LLC, HOUSTON, USA (L&T LLC):
Subsidiary Company
Overview
L&T LLC, a wholly owned subsidiary of L&T, is based in
Houston, USA and represents L&T for sale of industrial
valves in the North American market.
Operations & Performance
the
the year 2010
During
revenue was
` 34 crore as against ` 60 crore in 2009. The Company
decided to gradually scale down the operations in view
of the lower volumes & high cost of operations.
total
IX.
INVESTMENTS IN OVERSEAS S&A COMPANIES
LARSEN & TOUBRO INTERNATIONAL FZE (LTIFZE):
Subsidiary Company
Overview
LTIFZE, a wholly owned subsidiary of L&T, has been
incorporated in the Hamriyah Free Zone, Sharjah as
a Free Zone Establishment (FZE). LTIFZE is a holding
company of most of L&T‘s investments in overseas
companies. The Company is also providing support to
L&T and its group companies in the Middle and Far
East by acquiring and hiring plant, machinery & other
equipment for project business.
119
7/2/2011 3:22:07 PM
Operations & Performance
The value of
in various S&A
investments made
Companies thru’ LTIFZE is ` 594 crore. Sales and
other income earned during the year was ` 50 crore.
The income mainly comprised of revenue from hire of
plant & machinery and dividend income from investments
in subsidiary companies. Profi t after tax stood at
` 26 crore.
COUNTRY-WISE INVESTMENTS IN SUBSIDIARY, ASSOCIATE COMPANIES AND JOINT VENTURES BY LTIFZE
T
S
A
E
E
L
D
D
M
I
(cid:173)
(cid:176)
(cid:176)
(cid:176)
(cid:174)
(cid:176)
(cid:176)
(cid:176)
(cid:175)(cid:3)(cid:3)
UAE
SAUDI
OMAN
KUWAIT
QATAR
IRAN
AFRICA
CHINA
LARSEN & TOUBRO INTERNATIONAL FZE
(Wholly owned subsidiary of L&T)
LARSEN &TOUBRO
READYMIX
CONCRETE
INDUSTRIES LLC
L&T ELECTRICAL
AUTOMATION FZE
OFFSHORE
INTERNATIONAL
FZC
PATHWAYS FZE
L&T CAMP
FACILITIES LLC
LARSEN &
TOUBRO SAUDI
ARABIA LLC
L&T ELECTRICALS
SAUDI ARABIA
CO.LTD, LLC
LARSEN &
TOUBRO ATCO
SAUDI LLC
LARSEN & TOUBRO
(OMAN) LLC
LARSEN & TOUBRO
ELECTROMECH
LLC
LARSEN & TOUBRO
MODULAR
FABRICATION YARD LLC
LARSEN & TOUBRO
HEAVY
ENGINEERING LLC
L&T KUWAIT
CONSTRUCTION GENERAL
CONTRACTING CO. WLL
LARSEN & TOUBRO
QATAR LLC
LARSEN & TOUBRO
QATAR & HBK
CONTRACTING LLC
INDIRAN ENGINEERING
PROJECTS AND SYSTEM
L&T OVERSEAS
PROJECT
NIGERIA LTD
LARSEN & TOUBRO T&D SA
(PROPRIETORY) LTD.
LARSEN & TOUBRO
(JIANGSU)
VALVE CO. LTD.
LARSEN & TOUBRO
(WUXI) ELECTRIC
CO. LTD.
LARSEN & TOUBRO
(QINGDAO) RUBBER
MACHINERY CO. LTD
QINGDAO LARSEN &
TOUBRO TRADING
CO. LTD
MALAYSIA
TAMCO SWITHGEAR,
(MALAYSIA) SDN BHD
LARSEN & TOUBRO
(EAST ASIA) SDN. BHD.
INDONESIA
PT TAMCO,
INDONESIA
AUSTRALIA
BRAZIL
TAMCO ELECTRICAL
INDUSTRIES,
AUSTRALIA PTY LTD
LARSEN & TOUBRO
CONSULTORIA E
PROJETO LTDA
120
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Auditors Report p121-123.indd 121
7/2/2011 3:22:54 PM
Auditors’ report to the members of Larsen & Toubro Limited
We have audited the attached Balance Sheet of Larsen & Toubro Limited as at March 31, 2011 and also the Profi t and Loss Account and the
Cash Flow Statement of the Company for the year ended on that date annexed thereto. These fi nancial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these fi nancial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes
examining on test basis, evidence supporting the amounts and disclosures in fi nancial statements. An audit also includes assessing the
accounting principles used and signifi cant estimates made by management, as well as evaluating the overall fi nancial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In accordance with the provisions of section 227 of the Companies Act, 1956, we report that:
(1) As required by the Companies (Auditor’s Report) Order, 2003, issued by the central government of India under sub-section (4A) of
section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters
specifi ed in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report that:
(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
(2)
(b)
(c)
(d)
purposes of our audit;
in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our
examination of those books;
the Balance Sheet, Profi t and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books
of account;
in our opinion, the Balance Sheet, Profi t and Loss Account and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; and
(e) on the basis of written representations received from directors as on March 31, 2011, and taken on record by the board of
directors, we report that none of the directors is disqualifi ed as on March 31, 2011 from being appointed as a director in terms
of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the
signifi cant accounting policies in schedule Q and the notes appearing thereon, give the information required by the Companies Act, 1956,
in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
1)
2)
3)
in the case of the Balance Sheet, of the state of the affairs of the Company as at March 31, 2011;
in the case of the Profi t and Loss Account, of the profi t of the Company for the year ended on that date; and
in the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date.
Mumbai, May 19, 2011
Annexure to the Auditors’ report
(Referred to paragraph (1) of our report of even date)
SHARP & TANNAN
Chartered Accountants
ICAI Registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
1
(a)
The Company is maintaining proper records to show full particulars including quantitative details and situation of all fi xed
assets.
(b) We are informed that the Company has formulated a programme of physical verifi cation of all the fi xed assets over a period of
three years which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly,
the physical verifi cation of the fi xed assets have been carried out by management during the year and no material discrepancies
were noticed on such verifi cation.
The Company has not disposed off any substantial part of its fi xed assets so as to affect its going concern status.
(c)
(a) As explained to us, inventories have been physically verifi ed by management at reasonable intervals during the year. In our
2
opinion, the frequency of such verifi cation is reasonable.
(b) As per the information given to us, the procedures of physical verifi cation of inventory followed by management are, in our
(c)
opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.
The Company is maintaining proper records of inventory. The discrepancies noticed on verifi cation between the physical stocks
and the book records were not material.
121
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Auditors Report p121-123.indd 121
3
4
5
6
(a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured,
to companies, fi rms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.
Accordingly, paragraphs 4(iii)(b), (c) and (d) of the Order are not applicable.
(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured
from companies, fi rms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.
Accordingly, paragraphs 4(iii)(f) and (g) of the Order are not applicable.
In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the purchase of inventory, fi xed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses
in the aforesaid internal control systems.
(a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements
that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been entered.
(b)
In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such
contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the
value of rupees fi ve lakhs in respect of any party during the year, have been made at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
The Company had accepted deposits from the public and in our opinion and according to the information and explanations given
to us, the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA and the relevant provisions of
the Companies Act, 1956 and rules framed thereunder, where applicable, have been complied with. We are informed that no order
has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other
tribunal. As of the date of the balance sheet, the Company has no fi xed deposits other than unpaid matured deposits.
7
In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.
8 We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules prescribed by the
central government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of electronic
products viz. industrial electronics including all control instrumentation and automation equipment and are of the opinion that prima
facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been
examined by us.
9
(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the
Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection
fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material
statutory dues as applicable with the appropriate authorities. According to the information and explanations given to us, there
were no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state
insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues outstanding as
at March 31, 2011 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of
sales tax, excise duty, service tax, customs duty and income tax as at March 31, 2011 which have not been deposited on account
of a dispute pending are as under:
Nature of the disputed dues
Amount
` crore*
Period to which the amount relates
Forum where disputes
are pending
Non-submission of forms, dispute regarding rate of tax and
other matters
Non-submission of forms, disallowance of deemed inter-state
sales, classifi cation dispute and other matters
Non-submission of forms, additional demand for pending
forms, rate of tax dispute, disallowance of branch transfer,
transit sale, export claim disallowance and other matters
Non-submission of forms, disallowance of transit sales,
classifi cation dispute and other matters
Non-submission of forms, additional demand for pending
forms, disallowance of inter-state sales and other matters
Non-submission of forms, dispute related to sales in transit and
other matters
Non-submission of forms, inter-state sales, sub-contractors
turnover, rate dispute, disallowance under composition scheme
and other matters
Inter-state sales, classifi cation dispute and disallowance of
deemed sales in course of imports and taxability of sub-
contractors turnover
Taxability of sub-contractor turnover, rate of tax for declared
goods and inter-state sales
1.37
1996-1997 to 2005-2006
Commercial Tax Offi cer
141.51
33.61
1991-1992 to 1994-1995,1997-1998,
1999-2000 to 2007-2008 and 2009-2010
1989-1990 and 1993-1994 to 2010-2011
Assistant Commissioner
(Appeals)
Deputy Commissioner
(Appeals)
10.27
2.85
19.95
65.28
1993-1994, 1994-1995, 1997-1998 to
2007-2008 and 2009-2010
1991-1992, 1992-1993, 1996-1997 and
2000-2001 to 2006-2007
2003-2004 to 2007-2008
Joint Commissioner
(Appeals)
Additional Commissioner
(Appeals)
Commissioner (Appeals)
1987-1988 to 1996-1997, 1998-1999 to
2003-2004 and 2005-2006
Sales Tax Tribunal
495.03
1987-1988 to 2006-2007
High Court
2.35
1991-1992, 1995-1996, 1997-1998 and
1999-2000 to 2004-2005
Supreme Court
Name of the
statute
Central Sales Tax
Act, Local Sales
Tax Acts and
Works Contract
Tax Act
122
Auditors Report p121-123.indd 122
7/2/2011 3:22:54 PM
Auditors Report p121-123.indd 123
7/2/2011 3:22:54 PM
Name of the
statute
The Central Excise
Act,1944, Service
Tax under Finance
Act, 1994 and
Customs Act,
1962
Income-tax Act,
1961
Nature of the disputed dues
Demand for custom duty for fuel, software and on export
under rebate
Classifi cation dispute, exemptions denied, valuation disputes
and other matters
Dispute on site mix concrete and PSC grinder
Valuation dispute and disallowance of cenvat against service
tax on freight onward
Demand of service tax including penalty and interest on
lumpsum turnkey jobs and demand of penalty on late
payment of service tax
Export rebate claim, service tax on commercial construction
service
Dispute regarding tax not deducted on purchase of software
Dispute regarding tax deducted at source at lower rate on
maintenance charges
Difference in rate of tax deducted at source
* Net of pre-deposit paid in getting the stay/appeal admitted.
Amount
` crore*
Period to which the amount relates
0.70
2006-2007 to 2008-2009
Forum where disputes
are pending
Commissioner (Appeals)
40.71
0.27
219.96
1991-1992, 2001-2002, 2003-2004 to
2006-2007, 2008-2009 and 2009-2010
1997-1998
1997-1998, 2003-2004 to 2010-2011
CESTAT
Supreme Court
Commissioner (Appeals)
124.19
2002-2003 to 2006-2007
CESTAT
0.07
2003-2004
High Court
0.52
0.03
2006-2007 to 2009-2010
2005-2006
1.90
2007-2008 and 2008-2009
Assessing Offi cer
Commissioner (Appeals)
Director of Income Tax
(International Taxation)
10 The Company has no accumulated losses as at March 31, 2011 and it has not incurred cash losses in the fi nancial year
ended on that date or in the immediately preceding fi nancial year.
11 According to the records of the Company examined by us and the information and explanations given to us, the
Company has not defaulted in repayment of dues to any fi nancial institution or bank or debenture holders as at the
Balance Sheet date.
12 According to the information and explanations given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other securities.
13 The provisions of any special statute applicable to chit fund/nidhi/mutual benefi t fund/societies are not applicable to the
14
15
16
Company.
In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader
in securities. The Company has invested surplus funds in marketable securities and mutual funds. According to the
information and explanations given to us, proper records have been maintained of the transactions and contracts and
timely entries have been made therein. The investments in marketable securities and mutual funds have been held by
the Company in its own name.
In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees
given by the Company for loans taken by subsidiary companies from banks or fi nancial institutions are not prima facie
prejudicial to the interests of the Company.
In our opinion and according to the information and explanations given to us, on an overall basis the term loans have
been applied for the purposes for which they were obtained.
17 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short term basis have been used for long term investments.
18 The Company has not made any preferential allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956 during the year.
19 According to the information and explanations given to us and the records examined by us, security or charge has been
created in respect of the debentures issued.
20 The Company has not raised any money by public issues during the year.
21 During the course of our examination of the books and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, and according to the information and explanations given to us, we have
neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by management.
Mumbai, May 19, 2011
SHARP & TANNAN
Chartered Accountants
ICAI Registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
123
Auditors Report p121-123.indd 122
7/2/2011 3:22:54 PM
Auditors Report p121-123.indd 123
7/2/2011 3:22:54 PM
Balance Sheet as at March 31, 2011
Schedule
As at 31-3-2011
` crore
` crore
As at 31-3-2010
` crore
` crore
SOURCES OF FUNDS:
SHAREHOLDERS' FUNDS:
Share capital
Employee stock options application money
Reserves and surplus
Employee stock options outstanding
(previous year: ` 566.23 crore)
Less: Deferred employee compensation expense
(previous year: ` 282.34 crore)
LOAN FUNDS:
Secured loans
Unsecured loans
Deferred tax liabilities [Note no.23]
TOTAL
APPLICATION OF FUNDS:
Fixed assets:
Tangible assets:
Gross block
Less: Depreciation and impairment
Net block
Less: Lease adjustment
Capital work-in-progress
Intangible assets:
Gross block
Less: Amortisation
Net block
Capital work-in-progress
Investments
Deferred tax assets [Note no.23]
Current assets, loans and advances:
Inventories
Sundry debtors
Cash and bank balances
Other current assets
Loans and advances
Less: Current liabilities and provisions:
Liabilities
Provisions
A
B
C
D
E(i)
E(ii)
F
G
H
I
Net current assets
TOTAL
CONTINGENT LIABILITIES
SIGNIFICANT ACCOUNTING POLICIES
(For notes forming part of the accounts see page nos.152 to 187)
J
Q
805.82
437.51
121.77
–
21356.18
368.31
1063.04
6098.07
8675.87
2220.82
6455.05
3.07
6451.98
785.00
280.80
88.59
192.21
28.94
1577.15
12427.61
1730.35
11027.34
8188.69
34951.14
25589.82
2233.43
27823.25
120.44
25.09
17882.22
283.89
21846.26
18311.64
7161.11
549.74
29557.11
6800.83
389.27
25501.74
955.73
5845.10
7093.10
1724.61
5368.49
3.07
5365.42
857.66
7236.98
6223.08
221.15
14684.82
286.27
142.68
13705.35
311.88
196.99
70.85
126.14
16.54
1415.37
11158.35
1431.87
6353.22
6036.45
26395.26
19090.47
2186.04
21276.51
7127.89
29557.11
5118.75
25501.74
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
124
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
Accounts p124-187.indd 124
7/2/2011 3:23:28 PM
Accounts p124-187.indd 125
7/2/2011 3:23:28 PM
Profi t and Loss Account for the year ended March 31, 2011
2010-2011
Schedule
` crore
` crore
2009-2010
` crore
` crore
INCOME:
Sales & service (gross)
Less: Excise duty
Sales & service (net)
Other operational income
Other income
EXPENDITURE:
Manufacturing, construction and operating expenses
Staff expenses
Sales, administration and other expenses
Interest expenses and brokerage
Depreciation and obsolescence of tangible assets [Note nos.11 and 13(a)]
Amortisation of intangible assets [Note no.13(b)]
K
L(i)
L(ii)
M
N
O
P
Less: Overheads charged to fi xed assets
Profi t before transfer from revaluation reserve
Add: Transfer from revaluation reserve
Profi t before taxes before extraordinary items
Provision for current taxes [Note no.22]
Provision for deferred tax [Note no.23]
Profi t after taxes before extraordinary items
Gain/(loss) on extraordinary items (net of tax) [Note no.9]
Profi t after taxes after extraordinary items
Add: Balance brought forward from previous year
Less: Dividend paid for previous year
Additional tax on dividend paid for previous year
Profi t available for appropriation
Less: Transfer to general reserve
Transfer to debenture redemption reserve
Profi t available for distribution
Proposed dividend
Additional tax on dividend
Balance carried to Balance Sheet
Basic earnings per equity share before
extraordinary items (`)
Diluted earnings per equity share before
extraordinary items (`)
Basic earnings per equity share after
[Note no.24]
extraordinary items (`)
Diluted earnings per equity share after
extraordinary items (`)
Face value per equity share (`)
SIGNIFICANT ACCOUNTING POLICIES
(For notes forming part of the accounts see page nos.152 to 187)
Q
43886.17
390.24
36995.93
320.78
43495.93
408.98
1443.13
45348.04
36675.15
359.65
2024.96
39059.76
33431.62
2884.53
1990.26
647.37
576.87
23.41
39554.06
37.87
28537.41
2379.14
1378.88
505.31
384.95
30.95
33216.64
36.25
39516.19
5831.85
1.06
5832.91
1778.86
167.00
1644.25
(3.38)
100.50
2.04
0.35
107.29
3.44
0.57
1945.86
3887.05
70.84
3957.89
103.28
4061.17
2910.00
49.83
1101.34
882.84
112.82
105.68
64.16
63.20
65.33
64.35
2.00
33180.39
5879.37
1.30
5880.67
1640.87
4239.80
135.72
4375.52
98.11
4473.63
3460.00
43.34
970.29
752.75
110.25
107.29
71.49
70.15
73.77
72.39
2.00
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
Accounts p124-187.indd 124
7/2/2011 3:23:28 PM
Accounts p124-187.indd 125
125
7/2/2011 3:23:28 PM
Cash Flow Statement for the year ended March 31, 2011
A.
B.
C.
Cash fl ow from operating activities:
Profi t before tax (excluding extraordinary items)
Adjustments for:
Dividend received
Depreciation (including obsolescence) and amortisation
Exchange difference on items grouped under fi nancing activity
Interest expense
Interest income
Profi t on sale of fi xed assets (net)
Profi t on sale of investments (net)
Employee stock option–discount forming part of staff expenses
Provision/(reversal) for diminution in value of investments
Operating profi t before working capital changes
Adjustments for:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
Decrease in miscellaneous expenditure
Increase/(decrease) in trade payables and customer advances
Cash (used in)/generated from operations
Direct taxes refund/(paid)–net
Net cash (used in)/from operating activities
Cash fl ow from investing activities:
Purchase of fi xed assets
Sale of fi xed assets
Investment in subsidiaries, associates and joint ventures
Divestment of stake in subsidiaries, associates and joint ventures
Purchase of long term investments
Sale of long term investments
(Purchase)/sale of current investments (net)
Loans/deposits made with subsidiaries, associates companies and third parties (net)
Advance towards equity commitment
Interest received
Dividend received from subsidiaries
Dividend received from other investments
Cash (used in)/from investing activities (before extraordinary items)
Extraordinary items
Cash received (net of expenses) on sale/transfer of Petroleum Dispensing Pumps & Systems business
Net cash (used in)/from investing activities (after extraordinary items)
Cash fl ow from fi nancing activities:
Proceeds from fresh issue of share capital including shares under ESOP schemes
Proceeds from long term borrowings
Repayment of long term borrowings
(Repayments)/proceeds from other borrowings (net)
Loans from subsidiary and associate companies (net of repayments)
Dividends paid
Additional tax on dividend
Interest paid (including cash fl ows from interest rate swaps)
Net cash (used in)/from fi nancing activities
Net (decrease)/increase in cash and cash equivalents (A + B + C)
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
2010-2011
` crore
5832.91
(394.24)
599.22
130.73
647.37
(336.00)
(143.47)
(357.68)
173.44
(10.24)
6142.04
(6888.68)
(161.78)
–
6773.22
5864.80
(2003.50)
3861.30
(1672.74)
125.91
(2116.33)
469.05
–
319.19
717.21
(837.99)
(122.88)
279.55
187.35
206.89
(2444.79)
6.81
(2437.98)
347.25
1067.41
(1228.89)
(29.88)
170.00
(756.19)
(110.82)
(583.72)
(1124.84)
298.48
1431.87
1730.35
2009-2010
` crore
5880.67
(387.03)
414.60
(19.39)
505.31
(128.39)
(4.02)
(1254.44)
162.98
47.10
5217.39
(2945.58)
34.47
0.26
4697.83
7004.37
(1519.28)
5485.09
(1571.89)
12.13
(2140.62)
130.34
(488.06)
1381.89
(3043.22)
(494.74)
(478.46)
104.80
88.91
298.12
(6200.80)
129.07
(6071.73)
2132.74
1255.88
(587.91)
(326.76)
20.00
(617.01)
(102.18)
(531.54)
1243.22
656.58
775.29
1431.87
Notes:
1.
2.
3.
4.
5.
Cash fl ow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: “Cash Flow Statements” as specifi ed
in the Companies (Accounting Standards) Rules, 2006.
Purchase of fi xed assets includes movement of capital work-in-progress during the year.
Cash and cash equivalents at the end of the year represent cash and bank balances and include unrealised loss of ` 1.88 crore (previous year
unrealised loss of ` 12.14 crore) on account of translation of foreign currency bank and cash balances.”
For cash and cash equivalents not available for immediate use as on the Balance Sheet date, see note no. 5(b) of notes forming part of accounts.
Previous year’s fi gures have been regrouped/reclassifi ed wherever applicable.
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
126
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
Accounts p124-187.indd 126
7/2/2011 3:23:28 PM
Accounts p124-187.indd 127
7/2/2011 3:23:28 PM
Schedules forming part of the Accounts
Schedule A
Share capital:
Authorised:
1,62,50,00,000 equity shares of ` 2 each
(previous year: 1,62,50,00,000 equity shares of ` 2 each)
Issued:
60,88,52,126 equity shares of ` 2 each
(previous year: 60,21,95,408 equity shares of ` 2 each)
Subscribed and paid up:
60,88,52,126 equity shares of ` 2 each [Note no.1]
(previous year: 60,21,95,408 equity shares of ` 2 each)
Schedule B
Reserves and surplus:
Revaluation reserve:
As per last Balance Sheet
Less: On assets sold or obsoleted during the year
Less: Transferred to Profi t and Loss Account
Capital reserve
Debenture redemption reserve:
As per last Balance Sheet
Add: Transferred from Profi t and Loss Account
Securities premium account:
As per last Balance Sheet
Addition during the year
Less: Share/bond issue expenses (net of tax)
Reversal of expenses debited in previous year
Foreign projects reserve:
As per last Balance Sheet
Less: Transferred to general reserve
Housing projects reserve:
As per last Balance Sheet
Less: Transferred to general reserve
Carried forward
As at 31-3-2011
` crore
As at 31-3-2010
` crore
325.00
325.00
121.77
120.44
121.77
121.77
120.44
120.44
As at 31-3-2011
` crore
` crore
As at 31-3-2010
` crore
` crore
23.29
0.10
1.06
86.68
49.83
6402.64
477.42
6880.06
1.68
(0.99)
–
–
–
–
22.13
10.52
24.59
–
1.30
43.34
43.34
23.29
10.52
136.51
86.68
4199.29
2249.19
6448.48
45.84
–
6879.37
6402.64
–
–
7048.53
7.83
7.83
1.73
1.73
–
–
6523.13
127
Accounts p124-187.indd 126
7/2/2011 3:23:28 PM
Accounts p124-187.indd 127
7/2/2011 3:23:28 PM
Schedules forming part of the Accounts (contd.)
Schedule B (contd.)
Brought forward
Hedging reserve (net of tax)
As per last Balance Sheet
Addition/(deduction) during the year (net)
General reserve:
As per last Balance Sheet
Add: Transferred from:
Foreign projects reserve
Housing projects reserve
Profi t and Loss Account
Profi t and Loss Account
Schedule C
Secured loans:
Redeemable non-convertible fi xed rate debentures
Loans from banks:
Working capital borrowing facilities
Other loans
Schedule D
Unsecured loans:
Redeemable non-convertible fi xed rate debentures
3.50% Foreign currency convertible bonds
Loans from subsidiary companies
Short term loans and advances:
From banks
Lease fi nance
Sales tax deferment loan
From others
Other loans and advances:
From banks
Lease fi nance
Sales tax deferment loan
128
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
7048.53
6523.13
(50.57)
63.15
52.75
12.58
7769.66
7.83
1.73
3460.00
12.58
40.17
11239.22
–
–
2910.00
14149.22
105.68
21356.18
11239.22
107.29
17882.22
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
900.00
900.00
163.04
–
49.83
5.90
163.04
1063.04
55.73
955.73
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
544.19
28.49
28.35
–
3789.79
72.58
38.37
510.00
891.90
194.40
250.00
898.00
24.40
639.14
24.34
27.23
25.00
601.03
715.71
3789.02
101.06
66.91
3900.74
6098.07
3956.99
5845.10
Accounts p124-187.indd 128
7/2/2011 3:23:28 PM
Accounts p124-187.indd 129
7/2/2011 3:23:29 PM
Schedules forming part of the Accounts (contd.)
Schedule E(i)
Fixed assets-Tangible:
Particulars
As at
1-4-2010 Additions Deductions
As at
31-3-2011
Up to
31-3-2010
For the
year Deductions
Up to
31-3-2011
As at
31-3-2011
As at
31-3-2011
As at
31-3-2010
Cost/valuation
Depreciation
Impairment
Book value
` crore
OWNED ASSETS:
Land–freehold
Ships
Buildings
Railway sidings
Plant and machinery
Furniture and fi xtures
Vehicles
Aircraft
Owned assets leased out:
Buildings
Plant and machinery
Lease adjustment
380.44
20.42
0.58
400.28
–
–
71.46
–
–
71.46
7.51
5.02
–
–
–
12.53
1500.73
533.28
5.49
2028.52
220.64
33.36
2.22
251.78
0.25
–
–
0.25
0.25
–
–
0.25
4592.28 1049.94
59.98
5582.24
1314.46
483.99
50.84
1747.61
178.29
30.56
14.82
194.03
84.93
16.23
139.76
41.76
8.14
173.38
52.41
17.37
10.62
44.29
27.44
–
–
–
–
–
–
10.62
5.52
0.80
4.09
–
–
40.20
27.44
–
5.83
10.39
–
0.63
0.26
–
14.16
5.13
–
87.00
64.65
6.32
2.36
4.10
–
–
10.65
6.93 #
–
–
–
–
–
–
–
–
–
–
–
400.28
380.44
58.93
63.95
1776.74
1280.09
–
–
3834.63
3277.82
107.03
108.73
4.30
36.10
9.86
(3.07)
93.36
87.35
5.10
38.46
10.12
(3.07)
Owned assets (sub total-A)
6945.56 1675.96
93.10
8528.42
1701.94
557.66
74.71
2184.89
6.93
6333.53
5233.62
LEASED ASSETS:
Assets taken on fi nance lease:
Plant and machinery
Vehicles
145.52
2.02
Asset taken on lease (sub total-B)
147.54
–
–
–
0.09
145.43
14.54
13.17
0.09
27.62
–
2.02
1.20
0.18
0.09
147.45
15.74
13.35
–
0.09
1.38
29.00
Total (A+B)
Previous year
7093.10 1675.96
93.19
8675.87
1717.68
571.01
74.80
2213.89
5434.18 1750.14
91.22
7093.10
1411.39
377.54
71.25
1717.68
Add: Capital work-in-progress
# Impairment upto 31-3-2010 ` 6.93 crore, during the year ` nil.
–
–
–
6.93
6.93
117.81
130.98
0.64
0.82
118.45
131.80
6451.98
5365.42
785.00
857.66
7236.98
6223.08
Schedule E(ii)
Fixed assets-Intangible:
Particulars
Land–leasehold
Specialised softwares
Lumpsum fees for technical knowhow
TOTAL
Previous year
Add: Capital work-in-progress
Accounts p124-187.indd 128
7/2/2011 3:23:28 PM
Accounts p124-187.indd 129
Cost/valuation
Additions Deductions
As at
31-3-2011
Up to
31-3-2010
Amortisation
For the
year Deductions
` crore
Book value
Up to
31-3-2011
As at
31-3-2011
As at
31-3-2010
33.19
54.39
2.40
89.98
0.02
4.64
1.51
6.17
121.71
144.77
14.32
280.80
3.37
54.46
13.02
70.85
1.26
21.76
0.39
23.41
–
4.63
117.08
72.06
11.90
72.71
2.42
85.17
40.56
0.41
88.59
192.21
126.14
4.16
1.51
5.67
As at
1-4-2010
88.54
95.02
13.43
196.99
156.32
60.19
19.52
196.99
54.79
30.95
14.89
70.85
28.94
16.54
221.15
142.68
129
7/2/2011 3:23:29 PM
Schedules forming part of the Accounts (contd.)
Schedule E (contd.)
Notes:
Schedule E(i)-Tangible assets:
1
2
3
4
5
6
7
Cost/valuation of freehold land includes ` 43.49 crore for which conveyance is yet to be completed.
Cost/valuation of buildings includes ownership accommodation:
(i)
(a)
in various co-operative societies and apartments and shop-owners associations: ` 91.37 crore, including 2340 shares of
` 50 each, 227 shares of ` 100 each and 1 share of ` 250 each.
in proposed co-operative societies ` 20.68 crore.
(b)
of ` 4.39 crore in respect of which the deed of conveyance is yet to be executed.
(ii)
(iii) of ` 8.45 crore representing undivided share in properties at a certain locations.
Additions during the year and capital work-in-progress include ` 28.10 crore (previous year ` 27.72 crore) being borrowing cost
capitalised in accordance with Accounting Standard (AS) 16 on “Borrowing Costs” as specifi ed in the Companies (Accounting
Standards) Rules, 2006
Depreciation for the year includes obsolescence ` 5.86 crore (previous year ` 7.41 crore)
Capital work-in-progress includes advances ` 48.09 crore (previous year ` 74.82 crore)
The Company had revalued as at October 1, 1984 some of its land, buildings, plant and machinery and railway sidings at replacement/
market value which resulted in a net increase of ` 108.05 crore.
Own assets given on operating lease have been presented separately in the schedule as per Accounting Standard (AS) 19.
Schedule E(ii)-Intangible assets:
1
Cost/valuation of leasehold land includes:
(i)
` 2.63 crore for land taken at Mysore on lease from KIADB vide agreement dated May 5, 2006. The lease agreement is for a
period of 6 years with extension of 3 years, at the end of which sale deed would be executed, on fulfi lment of certain conditions
by the Company.
(ii) ` 18.57 crore in respect of which lease agreements are yet to be executed.
Note for E(i) and E(ii):
Out of its freehold/lease hold land at Hazira, the Company has given certain portion of land for the use to its subsidiary companies.
The necessary approvals required in this respect from the Government of Gujarat/Gujarat industrial Development Corporation are being
obtained.
Schedule F
Investments (at cost unless otherwise specifi ed):
(A) Long term investments:
(i)
Subsidiary companies:
(a)
Fully paid equity shares
(b) Partly paid equity shares
(c) Application money for equity shares
(ii) Trade investments:
(a) Fully paid equity shares in associate companies
(b) Fully paid equity shares in other companies
(iii) Other fully paid equity shares
Carried forward
130
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
7089.32
-
-
7089.32
66.35
-
66.35
190.29
4098.70
0.68
1014.00
5113.38
78.39
-
78.39
440.29
7345.96
7345.96
5632.06
5632.06
Accounts p124-187.indd 130
7/2/2011 3:23:29 PM
Accounts p124-187.indd 131
7/2/2011 3:23:29 PM
Schedules forming part of the Accounts (contd.)
Schedule F (contd,)
Brought forward
(B) Current investments:
(i)
Subsidiary companies:
Debentures
(ii) Others:
(a) Government and trust securities
(b) Bonds
(c) Certifi cate of deposits
(d) Collateralized borrowing and lending obligation
(e) Commercial paper
(f) Debentures
(g) Mutual funds
(C)
Investment in integrated joint ventures
Details of quoted/unquoted investments:
Particulars
Quoted investments
Book value
Market value
Unquoted investments
Book value
Details of investments:
Particulars
All unquoted unless otherwise specifi ed
A) Long term investments:
(i) Subsidiary companies:
(a) Fully paid equity shares:
Bhilai Power Supply Company Limited
EWAC Alloys Limited
(prior to December 14, 2010, associate company)
Hi–Tech Rock Products & Aggregates Limited
Kesun Iron & Steel Company Private Limited
(formerly known as L&T Engserve Private Limited)
L&T–Gulf Private Limited
L&T Ahmedabad–Maliya Tollway Limited.[` 1000]
(formerly known as L&T Ahmedabad–Maliya Tollway
Private Limited)
L&T Aviation Services Private Limited
L&T Capital Company Limited
Carried forward
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
7345.96
5632.06
402.77
512.48
4.79
3360.97
199.79
92.72
347.69
2362.77
6881.21
235.44
534.51
150.41
478.44
-
-
777.17
5788.56
7729.09
7283.98
54.88
14684.82
7964.53
108.76
13705.35
As at 31-3-2011
` crore
As at 31-3-2010
` crore
1454.02
1422.26
13230.80
2133.81
2234.41
11571.54
Number of units
As at
1–4–2010
Purchased/
subscribed/addition
during the year
Sold/deduction
during the year
As at
31–3–2011
As at
31–3–2011
` crore
As at
31–3–2010
` crore
Face value
per unit
``
10
100
10
10
49,950
–
50,000
10,000
–
8,29,440
–
–
49,950
8,29,440
0.05
150.24
–
–
–
500
50,000
9,500
10
10
25,00,010
6,30,15,100
15,00,006
–
–
6,30,15,000
40,00,016
100
10
10
–
2,20,00,000
2,40,00,000
–
– 2,40,00,000
– 2,20,00,000
0.05
0.01
4.00
–
24.00
22.00
200.35
0.05
–
0.05
0.01
2.50
63.02
–
22.00
87.63
131
Accounts p124-187.indd 130
7/2/2011 3:23:29 PM
Accounts p124-187.indd 131
7/2/2011 3:23:29 PM
Schedules forming part of the Accounts (contd.)
Schedule F–Details of investments (contd.)
Particulars
(a) Fully paid equity shares: (contd.)
Brought forward
L&T Finance Holdings Limited
(formerly known as L&T Capital Holdings Limited)
L&T Chennai-TADA Tollway Limited
[` 1000 (previous year ` 1000)]
L&T Concrete Private Limited*
L&T Devihalli Hassan Tollway Limited
[` 1000 (previous year ` nil)]
L&T EmSyS Private Limited [` nil (previous year ` 1)]*
L&T General Insurance Company Limited
L&T Halol–Shamlaji Tollway Limited [` 1000] (formerly
known as L&T Halol-Shamlaji Tollway Private Limited)
L&T Howden Private Limited
L&T Metro Rail (Hyderabad) Limited (formerly known as
L&T Hyderabad Metro Rail Private Limited)
L&T Infra & Property Development Private Limited*
L&T Infrastructure Development Projects Limited
L&T Kobelco Machinery Private Limited
L&T Krishnagiri Walajahpet Tollway Limited
[` 26000 (previous year ` nil)]
L&T-MHI Boilers Private Limited
L&T-MHI Turbine Generators Private Limited
L&T Natural Resources Limited
L&T Power Development Limited
L&T Power Limited
L&T Powergen Limited
L&T Rajkot-Vadinar Tollway Limited (formerly known as
L&T Rajkot-Vadinar Tollway Private Limited)
L&T Realty Private Limited
L&T Samakhiali Gandhidham Tollway Private Limited
L&T Sapura Offshore Private Limited
L&T Sapura Shipping Private Limited
L&T Seawoods Private Limited
L&T Shipbuilding Limited
L&T Solar Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T Electricals and Automation Limited (formerly known
as L&T Strategic Management Limited)
L&T Transco Private Limited
L&T Transportation Infrastructure Limited
L&T Western India Tollbridge Limited
L&T Plastics Machinery Limited
L&T-Sargent & Lundy Limited [addition during the year is
on account of bonus allotment]
L&T Technologies Limited
L&T–Valdel Engineering Limited
Larsen & Toubro Infotech Limited
Larsen & Toubro International FZE
Larsen & Toubro LLC
Narmada Infrastructure Construction Enterprise Limited
PNG Tollway Limited
(Formerly known as PNG Tollway Private Limited)
Raykal Aluminum Company Private Limited
Spectrum Infotech Private Limited
Tractor Engineers Limited
Total [A]–(i)–(a)
Carried forward
* Company dissolved during the year
132
Number of units
As at
1–4–2010
Purchased/
subscribed/addition
during the year
Sold/deduction
during the year
As at
31–3–2011
Face value
per unit
`
10
1,35,35,91,386
6,34,32,835
– 1,41,70,24,221
As at
31–3–2011
` crore
200.35
1778.59
As at
31–3–2010
` crore
87.63
1353.59
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
5
Dhs 5,50,500
USD 1
10
10
100
10,000
–
–
–
100
–
10,000
–
100
–
100
10,000
2,90,00,000
6,52,65,100
–
17,10,00,000
–
10,000
–
6,52,65,000
–
20,00,00,000
100
–
–
10,000
20,42,81,352
–
–
–
–
50,000
18,10,00,000
15,34,92,000
–
5,50,15,100
4,71,60,700
2,600
–
–
10,000
50,000
–
11,10,00,000
50,000
10,000
1,08,64,000
1,39,50,007
1,60,00,000
27,52,129
50,000
11,79,000
3,22,50,000
1,829
50,000
1,26,48,507
2,19,83,000
50,10,000
34,40,000
–
3,91,69,518
1,53,00,000
2,600
11,22,51,000
12,75,51,000
–
1,14,90,00,000
–
50,000
–
–
10,400
6,000
9,51,38,939
–
–
50,000
11,10,00,000
–
–
–
–
–
13,76,065
–
–
–
–
–
–
–
–
–
–
–
–
50,10,000
34,40,000
10,000
–
–
–
–
24,34,50,870
1,53,00,000
2,600
11,22,51,000
–
12,75,51,000
–
–
50,000
– 1,33,00,00,000
15,34,92,000
–
50,000
–
5,50,15,100
–
–
–
–
–
–
–
–
–
–
4,71,60,700
13,000
6,000
9,51,38,939
10,000
50,000
50,000
22,20,00,000
50,000
10,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,08,64,000
1,39,50,007
1,60,00,000
41,28,194
50,000
11,79,000
3,22,50,000
1,829
50,000
1,26,48,507
2,19,83,000
40,000
4,40,000
68,000
10
10
1,000
40,000
4,40,000
68,000
–
–
–
–
200.00
–
5.01
3.44
–
1356.81
15.30
–
112.25
127.55
0.05
1330.00
153.49
0.05
55.02
47.16
0.01
0.01
95.14
0.01
0.05
0.05
222.00
0.05
–
10.86
13.95
13.00
1.53
0.05
23.89
134.25
1147.40
0.23
12.65
21.98
0.04
6.80
0.30
7089.32
7089.32
–
0.01
–
–
29.00
65.27
–
–
0.01
628.42
–
–
–
–
0.05
181.00
153.49
–
55.02
47.16
–
–
–
0.01
0.05
–
111.00
0.05
0.01
10.86
13.95
13.00
1.53
0.05
23.89
134.25
1147.40
0.23
12.65
21.98
0.04
6.80
0.30
4098.70
4098.70
Accounts p124-187.indd 132
7/2/2011 3:23:29 PM
Accounts p124-187.indd 133
7/2/2011 3:23:30 PM
Schedules forming part of the Accounts (contd.)
Schedule F–Details of investments (contd.)
Particulars
Brought forward
(b) Partly paid equity shares:
L&T Infrastructure Development Projects Limited
Fully paid up as on 31-3-2011
(` (( 1 per share paid up as on 31-3-2010)
Total [A]–(i)–(b)
(c) Application money for equity shares:
L&T Power Development Limited
(73,90,00,000 shares allotted during the year)
L&T Finance Holdings Limited
(formerly known as L&T Capital Holdings Limited)
(4,10,44,776 shares allotted during the year)
Total [A]–(i)–(c)
Subsidiary companies–total
(ii) Trade Investments
(a) Fully paid equity shares in associate companies:
Audco India Limited
EWAC Alloys Limited
(subsidiary company w.e.f. December 14, 2010)
Gujarat Leather Industries Limited
International Seaport Dredging Limited
(classifi ed as fully paid equity shares in other
companies w.e.f. February 21, 2011)
L&T–Case Equipment Private Limited
L&T–Chiyoda Limited
L&T–Komatsu Limited
L&T–Ramboll Consulting Engineers Limited
Less: Provision for diminution in value
Total [A]–(ii)–(a)
(b) Fully paid equity shares in other companies
International Seaport Dredging Limited
(prior to February 21, 2011, associate company)
Less: Provision for diminution in value
Total [A]–(ii)–(b)
Trade investments– total
(iii) Other fully paid equity shares:
Satyam Computer Services Limited (quoted)
Tidel Park Limited
Utmal Multi purpose Service Co–operative Society Limited
(B Class) ` 30,000 (previous year ` 30,000)
Other fully paid equity shares–total
Long term investments–total–(A)
(B) Current investments:
(i) Subsidiary companies:
(a) Debentures:
L&T Finance Limited–10.24% Secured Redeemable
Non convertible Debentures, 2019 (quoted)
L&T Infrastructure Finance Company Limited
7.5% Secured Redeemable Non convertible
Debentures, 2012 (quoted)
L&T Infrastructure Finance Company Limited
8.91% Secured Redeemable Non convertible
Debentures, 2018 (quoted)
Less: Provision for diminution in value
Total [B]–(i)–(a)
Subsidiary companies–current investments–total
Accounts p124-187.indd 132
7/2/2011 3:23:29 PM
Number of units
As at
1–4–2010
Purchased/
subscribed/addition
during the year
Sold/deduction
during the year
As at
31–3–2011
Face value
per unit
`
10
67,69,518
–
–
–
–
100
100
10
10,000
7,81,630
4,14,720
7,35,000
39,927
10
10
10
10
1,20,05,000
45,00,000
6,00,00,000
18,00,000
–
–
–
–
–
–
–
–
–
–
–
67,69,518
–
–
–
–
–
–
4,14,720
–
39,927
7,81,630
–
7,35,000
–
1,20,05,000
–
–
–
–
45,00,000
6,00,00,000
18,00,000
10,000
–
15,899
–
15,899
15.90
As at
31–3–2011
` crore
7089.32
As at
31–3–2010
` crore
4098.70
–
–
–
–
0.68
0.68
739.00
275.00
–
7089.32
1014.00
5113.38
0.05
–
0.56
–
–
4.50
60.00
1.80
66.91
0.56
66.35
0.05
0.04
0.56
39.93
12.00
4.50
60.00
1.80
118.88
40.49
78.39
–
–
–
–
78.39
436.29
4.00
–
440.29
5632.06
3,08,80,009
–
–
2,30,09,291
40,00,000
300
15.90
15.90
–
66.35
186.29
4.00
–
190.29
7345.96
–
–
–
3,69,770
36.98
2,000
200.00
36.98
200.00
1,750
174.85
–
411.83
9.06
402.77
402.77
236.98
1.54
235.44
235.44
133
2
10
100
5,38,89,300
40,00,000
300
`
1,000
3,69,770
10,00,000
2,000
–
–
–
–
–
10,00,000
–
1,750
Schedules forming part of the Accounts (contd.)
Schedule F–Details of investments (contd.)
Particulars
(ii) Others:
(a) Government and trust securities:
7.32% Government of India bond 2014 (quoted)
6.49% Government of India bond 2015 (quoted)
6.35% Government of India bond 2020 (quoted)
7.94% Government of India bond 2021 (quoted)
8.20% Government of India bond 2022 (quoted)
8.26% Government of India bond 2027 (quoted)
8.28% Government of India bond 2032 (quoted)
Less: Provision for diminution in value
Total [B]–(ii)–(a)
(b) Bonds:
Number of units
As at
1–4–2010
Purchased/
subscribed/addition
during the year
Sold/deduction
during the year
As at
31–3–2011
Face value
per unit
`
As at
31–3–2011
` crore
As at
31–3–2010
` crore
100
100
100
100
100
100
100
2,50,00,000
25,00,000
50,00,000
2,15,00,000
–
–
–
–
–
–
–
1,90,00,000
40,00,000
25,00,000
2,50,00,000
25,00,000
–
–
–
–
–
–
–
50,00,000
2,15,00,000
1,90,00,000
40,00,000
25,00,000
8.45% Indian Railway Finance Corporation 2018 (quoted)
8.46% Indian Railway Finance Corporation 2014 (quoted)
8.55% Indian Railway Finance Corporation 2019 (quoted)
8.00% Indian Overseas Bank 2016 bonds (quoted)
6.85 % India Infrastructure Finance Company Limited
10,00,000
10,00,000
10,00,000
10,00,000
1,00,000
2014 (quoted)
8.65% Rural Electrifi cation Corporation Limited Bonds
10,00,000
2019 (quoted)
10.85% Rural Electrifi cation Corporation Limited Bonds
10,00,000
2018 (quoted)
10.85% Rural Electrifi cation Corporation Limited Bonds
10,00,000
2018 (quoted)
Less: Provision for diminution in value
Total [B]–(ii)–(b)
(c) Certifi cate of deposits:
9.88% Bank of India, 13 June 2011
10.00% Canara Bank, 6 June 2011
10.03% Canara Bank, 15 June 2011
10.05% Canara Bank, 15 June 2011
6.01% Canara Bank, 3 December 2010
6.77% Canara Bank, 24 June 2011
7.57% Canara Bank, 24 June 2011
7.78% Canara Bank, 7 April 2011
9.44% Canara Bank, 23 December 2011
9.55% Central Bank of India, 6 June 2011
9.35% IDBI Bank, 10 June 2011
7.64% Oriental Bank of Commerce, 12 August 2011
5.83% Punjab National Bank, 15 October 2010
8.35% Punjab National Bank, 12 April 2011
9.60% Punjab National Bank, 27 June 2011
9.70% Punjab National Bank, 11 November 2011
5.73% State Bank of Bikaner & Jaipur, 15 October 2010
9.39% State Bank of Bikaner & Jaipur, 21 December 2011
6.84% State Bank of Hyderabad, 4 July 2011
6.98% State Bank of Hyderabad, 18 July 2011
10.05% State Bank of Mysore, 6 May 2011
9.39% State Bank of Mysore, 21 December 2011
10.05% State Bank of Patiala, 13 May 2011
6.00% State Bank of Patiala, 20 April 2010
Carried forward
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
500
100
50
50
2,500
200
290
50
–
–
–
–
20,000
–
–
–
–
–
–
–
5,000
–
–
–
10,000
–
–
–
–
–
–
2,500
–
–
–
–
–
–
–
–
2,500
2,500
30,000
20,000
–
10,000
2,500
10,000
20,000
30,000
2,500
10,000
–
20,000
20,000
10,000
–
7,500
10,000
20,000
20,000
10,000
18,000
–
500
100
50
–
2,500
200
290
50
–
–
–
–
20,000
–
–
–
–
–
–
–
5,000
–
–
–
10,000
–
–
–
–
–
–
2,500
–
–
–
50
–
–
–
–
2,500
2,500
30,000
20,000
–
10,000
2,500
10,000
20,000
30,000
2,500
10,000
–
20,000
20,000
10,000
–
7,500
10,000
20,000
20,000
10,000
18,000
–
134
–
–
44.97
217.40
189.94
40.10
24.95
517.36
4.88
512.48
–
–
–
4.90
–
–
–
–
4.90
0.11
4.79
24.50
24.54
293.78
195.85
–
93.66
23.45
95.99
182.75
294.83
24.55
92.90
–
193.32
195.43
92.70
–
68.58
93.61
186.98
198.04
91.44
177.89
–
2644.79
251.88
24.06
44.97
217.40
–
–
–
538.31
3.80
534.51
50.02
10.09
5.00
4.90
25.00
19.96
31.25
5.68
151.90
1.49
150.41
–
–
–
–
192.12
–
–
–
–
–
–
–
48.45
–
–
–
96.97
–
–
–
–
–
–
24.92
362.46
Accounts p124-187.indd 134
7/2/2011 3:23:30 PM
Accounts p124-187.indd 135
7/2/2011 3:23:30 PM
Schedules forming part of the Accounts (contd.)
Schedule F–Details of investments (contd.)
Number of units
As at
1–4–2010
Purchased/
subscribed/addition
during the year
Sold/deduction
during the year
As at
31–3–2011
Particulars
(c) Certifi cate of deposits: (Contd.)
Braught forward
5.75% State Bank of Patiala, 15 October 2010
5.87% State Bank of Patiala, 16 November 2010
6.98% State Bank of Patiala, 14 July 2011
9.39% State Bank of Patiala, 14 December 2011
5.87% State Bank of Travancore, 8 November 2010
6.71% State Bank of Travancore, 27 May 2011
9.79% Syndicate Bank, 20 June 1011
10.10% UCO Bank, 9 May 2011
6.83% UCO Bank, 23 June 2011
9.60% UCO Bank, 24 June 2011
Face value
per unit
`
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
Less: Provision for diminution in value
Total [B]–(ii)–(c)
(d) Collateralized borrowing and lending obligation
NA
Total [B]–(ii)–(d)
(e) Commercial paper
7.25% HDFC 15 July 2011
Less: Provision for diminution in value
Total [B]–(ii)–(e)
(f) Debentures:
ETHL Communication Holding Limited
9.25% Non convertible Debentures, 2011 (quoted)
IDFC Limited
7.53% Non convertible Debentures, 2012 (quoted)
Tata Chemicals Limited–10% Unsecured Non Convertible
Redeemable Debentures 2019 (quoted)
:
5,00,000
10,00,000
10,00,000
10,00,000
Tata Steel Limited–11.8% Non convertible Debentures,
10,00,000
Perpetual (quoted)
5,000
2,500
–
–
4,500
–
–
–
–
–
NA
–
5,900
2,000
790
–
–
–
20,000
10,000
–
10,000
7,500
8,500
10,000
10,000
5,000
2,500
–
–
4,500
–
–
–
–
–
–
–
20,000
10,000
–
10,000
7,500
8,500
10,000
10,000
NA
NA
NA
2,000
–
2,000
As at
31–3–2011
` crore
As at
31–3–2010
` crore
2644.79
–
–
187.14
91.61
–
94.17
73.41
84.07
93.69
97.81
3366.69
5.72
3360.97
199.79
199.79
93.33
0.61
92.72
362.46
48.47
24.09
–
–
43.42
–
–
–
–
–
478.44
–
478.44
–
–
–
–
–
–
–
–
1,500
5,900
–
–
498.17
–
790
–
2,000
200.00
200.00
–
–
79.00
1,500
152.62
–
Less: Provision for diminution in value
Total [B]–(ii)–(f)
(g) Mutual funds:
AIG India Treasury Fund–Super Institutonal Plan–Daily
Divdend Reinvestment
Birla Sun Life Cash Plus–Institutional Premium Plan–Daily
Dividend Reinvestment
Birla Sun Life Fixed Term Plan–Series CO–Growth
Birla Sun Life Floating Rate Fund–Long Term Plan–
Institutional Plan–Weekly Dividend Reinvestment
Birla Sun Life Short Term FMP–Series 5–Dividend
Birla Sun Life Short Term FMP–Series 4–Dividend Payout
Birla Sun Life Short Term Fund–Institutitional Plan–Daily
Dividend Reinvestment
10
10
10
10
10
10
10
71,26,406
39,933
71,66,339
7,48,64,285
3,75,09,82,595
3,82,58,46,880
–
–
–
54,94,77,461
1,00,00,000
1,31,23,89,132
–
1,86,18,66,593
1,00,00,000
–
–
–
3,81,94,429
2,50,00,000
7,50,87,786
37,24,59,019
–
–
41,06,53,448
2,50,00,000
7,50,87,786
–
Birla Sunlife Saving Fund–Institutional Plan–Daily Dividend
10
39,13,57,919
89,11,41,468
1,28,24,99,387
Reinvestment
Birla Sunlife Short Term Opportunities Fund–Weekly
10
20,13,38,055
20,97,604
20,34,35,659
Dividend Reinvestment
Canara Robeco Treasury Advantage Super Institutional
10
32,55,068
4,03,58,824
4,36,13,892
–
–
–
Plan–Daily Dividend Reinvestment
DSP Black Rock FMP 13 M Series 2–Growth
DSP Blackrock Floating Rate Fund– Institutional
Plan–Dividend
10
1,000
3,00,00,000
69,805
3,00,00,000
–
3,00,00,000
69,805
3,00,00,000
–
DSP Blackrock FMP–3 M–Series 27–Dividend Payout
DWS Fixed Term Fund–Series 67–Growth
DWS Insta Cash Plus Fund–Super Institutional Plan–Daily
10
10
100
–
6,00,00,000
9,97,08,648
5,00,08,302
5,99,99,999
3,60,20,57,548
–
5,99,99,999
3,70,17,66,196
5,00,08,302
6,00,00,000
–
Dividend Reinvestment
Carried forward
352.62
4.93
347.69
–
–
10.00
–
25.00
75.09
–
–
–
–
32.26
–
50.01
63.93
–
777.17
–
777.17
7.13
75.01
–
551.18
–
–
38.22
391.62
201.38
4.04
30.00
7.07
–
60.00
100.01
256.29
1465.66
135
Accounts p124-187.indd 134
7/2/2011 3:23:30 PM
Accounts p124-187.indd 135
7/2/2011 3:23:30 PM
Schedules forming part of the Accounts (contd.)
Schedule F–Details of investments (contd.)
Particulars
(g) Mutual funds (contd.):
Brought forward
DWS Insta Cash Plus Fund–Regular Bonus– Growth
DWS Money Plus Advantage–Institutional Plan Monthly
Dividend
DWS Treasury Fund–Cash Plan–Daily Dividend
Reinvestment
DWS Treasury Fund–Investment Institutional Plan– Daily
Dividend Reinvestment
HDFC Arbitrage Fund Whole Plan–Growth
HDFC Gold Exchange Traded Fund
HSBC Fixed Term Series 79–Growth
ICICI Prudential Medium Term Plan–Premium Plus–
Monthly Dividend Reinvestment
ICICI Prudential Banking & PSU Debt Fund–Daily Dividend
Reinvestment
ICICI Prudential Equity & Derivatives–Income Optimiser
Fund
ICICI Prudential FMP Series 51 –14 Month Plan D–Growth
ICICI Prudential FMP Series 51–13 Months Plan C–Growth
ICICI Prudential Gold Exchange Traded Fund
ICICI Prudential Liquid–Super Institutional Plan–Growth
ICICI Prudential Ultra Short Term Plan– Super Premium–
Daily Dividend Reinvestment
IDFC Fixed Maturity Plan–Quaterly Series 62–Dividend
IDFC FMP–Yearly Series 32–Quaterly Dividend
Reinvestment
JM Arbitrage Advantage Fund–Dividend Plan
JP Morgan India FMP 400D Series 1–Growth
Kotak Equity Arbitrage Fund–Dividend Reinvestmentment
Kotak FMP 370 Days Series 2–Growth
Kotak FMP 370 Days Series 8–Dividend Payout
Kotak FMP 370 Days Series 9–Growth
Kotak Quarterly Interval Plan–Series 1– Dividend
Reinvestment
Number of units
As at
1–4–2010
Purchased/
subscribed/addition
during the year
Sold/deduction
during the year
As at
31–3–2011
Face value
per unit
`
`
10
10
10
10
10
100
10
10
10
10
10
10
100
100
100
10
10
10
10
10
10
10
10
10
–
9,78,13,877
5,08,81,925
19,71,558
4,20,16,454
9,97,85,435
88,65,471
–
76,63,670
37,94,65,841
38,71,29,511
1,00,07,495
10,07,51,384
11,07,58,879
–
–
21,17,36,183
–
–
5,02,99,416
–
5,55,454
1,00,00,000
8,34,514
21,17,36,183
2,77,727
–
5,11,33,930
–
2,77,727
1,00,00,000
–
9,99,79,586
7,97,772
10,07,77,358
4,86,62,869
3,00,00,000
3,00,00,000
–
–
50,10,48,335
–
4,86,62,869
3,00,00,000
3,00,00,000
2,40,000
12,55,11,806
17,69,69,098
3,00,00,000
3,00,00,000
–
12,19,71,659
67,80,17,433
3,00,00,000
3,00,00,000
2,40,000
35,40,147
–
–
–
5,00,00,000
2,50,00,000
–
–
5,00,00,000
2,50,00,000
12,32,56,832
–
7,36,25,737
3,00,00,000
–
–
5,00,04,539
–
2,00,00,000
2,99,113
3,00,00,000
2,00,00,000
10,00,00,000
5,85,818
12,32,56,832
–
7,39,24,850
3,00,00,000
–
5,00,00,000
5,05,90,357
–
2,00,00,000
–
3,00,00,000
2,00,00,000
5,00,00,000
–
–
–
As at
31–3–2011
` crore
As at
31–3–2010
` crore
256.29
8.71
–
1465.66
–
104.19
–
–
–
57.52
10.00
–
–
–
32.11
32.04
49.72
51.29
–
50.00
25.00
–
20.00
–
31.95
20.00
51.15
–
7.70
10.05
246.74
–
–
50.35
100.20
50.41
30.00
30.00
–
–
502.10
–
–
125.44
–
78.70
30.00
–
–
50.00
Kotak Quarterly Interval Plan–Series 6–Dividend
10
10,05,51,763
5,68,757
10,11,20,520
–
–
100.55
Reinvestment
Kotak Quarterly Interval Plan–Series 9–Dividend
10
–
4,99,96,035
–
4,99,96,035
50.00
–
Reinvestment
Kotak Quarterly Interval Plan– Series 8–Dividend
10
6,74,55,437
8,36,329
6,82,91,766
–
–
67.46
Reinvestment
L&T Freedom Income–STP–Institutional Plan–Cum–Org
L&T FMP Series 12–Plan 15 M–March 10–I Growth
L&T FMP–II (January 15 M A)–Growth
L&T FMP–II (January 90 D A)–Dividend Payout
L&T FMP–III–(February 90 D A)–Dividend Payout
L&T FMP–III (January 369 D A)–Growth
L&T FMP–III (March 90 D A)–Dividend Payout
L&T FMP–III (March 90 D B)–Dividend Payout
L&T FMP–III (March 366D A)–Growth
L&T FMP Series 12 (91D) March 10–I– Dividend Payout
L&T FMP Series 12 (91D) March 10–II–Dividend Payout
L&T Freedom Income–STP–Institutional Plan–Daily
Dividend Reinvestment
10
10
10
10
10
10
10
10
10
10
10
10
–
2,00,00,000
–
–
–
–
–
–
–
2,00,00,000
1,50,00,000
78,04,98,941
99,17,12,774
2,00,00,000
1,00,00,000
2,00,00,000
2,50,00,000
1,50,00,000
1,00,00,000
1,00,00,000
1,00,00,000
–
–
5,32,54,51,708
52,01,09,458
2,00,00,000
–
–
–
–
–
–
–
2,00,00,000
1,50,00,000
6,10,59,50,649
47,16,03,316
2,00,00,000
1,00,00,000
2,00,00,000
2,50,00,000
1,50,00,000
1,00,00,000
1,00,00,000
1,00,00,000
–
–
–
741.11
21.39
10.00
20.00
25.00
15.00
10.00
10.00
10.00
–
–
–
–
20.00
–
–
–
–
–
–
–
20.00
15.00
792.61
L&T Liquid Fund–Institutional Plan–Daily Dividend
10
2,37,27,105
4,13,66,85,232
4,16,04,12,337
–
–
24.00
Reinvestment
L&T Liquid Fund–Super Institutional Plan– Growth
Carried forward
10
–
91,66,23,957
65,63,56,402
26,02,67,555
350.00
1958.28
–
3921.16
136
Accounts p124-187.indd 136
7/2/2011 3:23:31 PM
Accounts p124-187.indd 137
7/2/2011 3:23:31 PM
Schedules forming part of the Accounts (contd.)
Schedule F–Details of investments (contd.)
Particulars
(g) Mutual funds (contd.):
Brought forward
L&T Select Income Fund–Flexi Debt–Institutional
Plan–Growth
L&T Select Income Fund–Flexi Debt–Institutional
Plan–Dividend Reinvestment
LIC Nomura Income Plus Fund–Dividend
LIC Nomura Liquid Fund–Dividend Plan
Principal Floating Rate Fund–FMP–Institutional Plan–Daily
Dividend Reinvestment
Religare Arbitrage Fund–Dividend Reinvestment
Religare FMP–Series II–Plan A–Growth
Religare FMP–Series II–Plan C (15months)–Growth
Religare FMP–Series V–Plan A (368 Days)–Growth
Religare Liquid Fund–Super Institutional Plan–Daily
Dividend Reinvestment
SBI Arbitrage Opportunities Fund–Dividend
SBI Magnum Insta Cash Fund–Daily Dividend
Reinvestment
SBI Premier Liquid Fund–Super Institutional Plan–Growth
SBI SHDF–Ultra Short Term–Institutional Plan–Daily
Dividend Reinvestment (` 9)
Sundaram BNP Paribas Ultra Short Term–Super
Institutional Plan–Daily Dividend Reinvestment
Tata Fixed Income Portfolio Fund–B3–Institutional
Plan–Quaterly Dividend Reiinvest
Tata FMP–Series 30 Scheme A–Growth
Templeton Floating Rate Income Fund–Long Term–Super
Institutional Plan
Face value
per unit
`
10
10
10
10
10
10
10
10
10
10
10
10
10
Number of units
As at
1–4–2010
Purchased/
subscribed/addition
during the year
Sold/deduction
during the year
As at
31–3–2011
`
–
9,23,13,089
–
9,23,13,089
As at
31–3–2011
` crore
As at
31–3–2010
` crore
1958.28
100.00
3921.16
–
9,10,00,633
60,22,30,532
69,32,31,165
24,30,99,359
30,69,42,841
91,27,439
2,38,86,66,040
2,63,17,65,399
10,05,03,70,022 10,35,73,12,863
7,81,34,091
6,90,06,652
–
–
–
–
10
10
10
10
1,000
5,10,25,136
5,00,03,770
6,00,05,126
–
8,19,57,460
–
5,00,03,770
6,00,05,126
1,00,00,000
4,08,26,74,594
5,10,25,136
5,00,03,770
6,00,05,126
–
4,16,46,32,054
–
5,00,03,770
6,00,05,126
1,00,00,000
–
2,35,70,345
4,47,80,156
–
79,97,58,964
2,35,70,345
84,45,39,120
–
–
–
–
–
–
–
53.69
63.92
10.00
–
–
–
–
5,04,29,934
52,78,97,596
63,99,44,964
49,54,61,867
69,03,74,897
3,24,35,729
1
50.00
–
4,70,00,834
20,23,71,043
24,93,71,877
3,00,00,000
3,87,600
3,03,87,600
–
–
–
–
–
1,54,99,942
10,00,00,000
2,01,43,085
5,00,00,000
3,56,43,027
5,00,00,000
–
50.69
–
91.29
243.10
337.03
9.14
52.21
50.00
60.01
–
82.01
25.58
75.01
–
50.46
47.17
30.00
–
15.50
UTI FIIF–Series 2–Quaterly Interval Plan-V–Instituional
10
10,05,71,481
5,54,945
10,11,26,426
6,00,00,000
3,03,84,668
9,03,84,668
–
–
–
–
100.57
60.00
Plan–Dividend
UTI Fixed Income Interval Fund–Monthly Interval Plan-
II–Dividend Reinvestment
UTI Fixed Income Interval–Quaterly Interval-VII–Dividend
Reinvestment
10
10
–
7,62,03,054
–
7,62,03,054
76.21
–
UTI Money Market–Institutional Plan–Daily Dividend
1,000
4,98,368
1,52,83,422
1,57,81,790
Reinvestment
UTI Short Term Income–Retail–Dividend Reinvestment
UTI Short Term Income Fund Institutional Plan–Income
10
10
7,40,89,726
9,94,04,567
2,51,595
7,97,938
7,43,41,321
10,02,02,505
Option–Reinvestment
UTI–Floating Rate Fund–Short Term Plan (Dividend
1,000
30,47,712
40,55,645
71,03,357
–
–
–
–
Option)–Reinvestment
Less: Provision for diminution in value
Total [B]–(ii)–(g)
Others–Current Investments–total
Current investments–total–(B)
(C) Investment in integrated joint ventures
Desbuild-L&T Joint Venture
HCC-L&T Purulia Joint Venture
International Metro Civil Contractors Joint Venture
L&T-Eastern Joint Venture
L&T-AM Tapovan Joint Venture
L&T-Hochtief Seabird Joint Venture
L&T-Sanghai Urban Corporation Group Joint Venture
Metro Tunneling Group
Investment in integrated joint venture–Total–(C)
Total investment (A+B+C)
`
–
–
–
–
2362.79
0.02
2362.77
6881.21
7283.98
0.05
1.57
9.68
10.45
–
14.83
7.23
11.07
54.88
50.01
88.01
100.00
305.01
5793.27
4.71
5788.56
7729.09
7964.53
0.05
1.68
8.91
14.97
62.03
12.17
5.39
3.56
108.76
14684.82
13705.35
137
Accounts p124-187.indd 136
7/2/2011 3:23:31 PM
Accounts p124-187.indd 137
7/2/2011 3:23:31 PM
Schedules forming part of the Accounts (contd.)
Details of investments purchased and sold during the year
Particulars
Government and trust securities:
7.02% Government of India bond 2016 (quoted)
7.8% Government of India bond 2020 (quoted)
Bonds
Tata Sons Limited 9.9% NCD 18 March 2016
Certifi cate of Deposit
Canara Bank 5.60% 7 October 2010
Canara Bank 5.68% 7 October 2010
IDBI 9.25% 12 November 2010
Punjab National Bank 5.75% 15 October 2010
State Bank of Bikaner & Jaipur 5.60% 15 October 2010
State Bank of Hyderabad 5.50% 17 September 2010
State Bank of Mysore 5.57% 24 September 2010
State Bank of Mysore 5.65% 20 October 2010
State Bank of Travancore 5.5% 17 September 2010
State Bank of Travancore 5.5% 27 September 2010
Commercial Paper
7.25% HDFC CP 9 November 2010
7.25% HDFC CP 5 January 2011
7.25% HDFC CP 20 January 2011
Mutual funds
Axis Liquid Fund–Institutional Plan–Growth
Baroda Pioneer Liquid Fund–Institutional Plan–Daily Dividend Reinvestment
Baroda Pioneer Treasury Advantage Fund–Institutional Plan–Daily Dividend Reinvestment
Birla Mutual Fund–Floater–Short Term–Growth Option
Birla Sun Life Cash Plus– Institutional Premium Plan–Growth
Birla Sun Life Floating Rate Fund–LTP–Institutional Plan Growth
Birla Sun Life Short Term FMP–Series 3–Dividend Payout
Birla Sunlife Cash Manager–Institutional Plan–Dividend Reinvestment
Birla Sunlife Dynamic Bond Fund–Retail–Monthly Dividend Reinvestment
Birla Sunlife Medium Term Plan Fortnightly Dividend Reinvestment
Birla Sunlife Ultra Short Term– Institutional Plan –Growth
BNP Paribas Money Plus–Institutional Plan–Daily Dividend Reinvestment
BNP Paribas Overnight Fund–Institutional Plan–Growth
BNP Paribas Overnight Fund–Institutional Plan–Daily Dividend Reinvestment
Canara Robeco Interval Scheme–Series 2–Quaterly Plan 2
Canara Robeco Liquid–Super Institutional Plan–Growth
Canara Robeco Liquid–Super Institutional Plan–Daily Dividend Reinvestment
DSP Blackrock Floating Rate Fund–Institutional Plan–Daily Dividend Reinvestment
DSP Blackrock FMP–3M Series 23–Dividend Payout
DSP Blackrock Liquidity Fund–Institutional Plan–Daily Dividend Reinvestment
DSP Blackrock Liquidity Fund–Institutional Plan–Growth
DSP Blackrock Money Manager Fund–Institutional Plan–Daily Dividend Reinvestment
DWS Cash Opportunities Fund Institutional Plan–Daily Dividend Reinvestment
DWS Insta Cash Plus Fund–Super Institutional Plan–Growth
DWS Treasury Fund–Cash–Institutional Plan–Growth
DWS Treasury Fund–Investment Institutional Plan–Monthly Dividend
DWS Treasury Fund Investment–Institutional Plan–Growth
DWS Ultra Short Term Fund–Institutional Plan Dividend
Fidelity Cash Fund–Super Institutional Plan–Growth
Fidelity Cash Fund Super Institutional Plan Daily Dividend Reinvestment
HDFC Cash Management Fund–Savings Plan–Daily Dividend Reinvestment
HDFC Cash Managment Fund–Treasury Advantage Plan–Wholesale–Daily Dividend
HDFC FRIF STF
HDFC Liquid Fund Premium Plan–Dividend Daily Reinvestment
HDFC Cash Management Fund–Savings Plan–Growth
HDFC Mutual Fund–Liquid Fund–Premium Plus Plan–Growth
HDFC Short Term Opportunities Fund Dividend Payout
HSBC Floating Rate–Long Term Plan–Institutional Plan–Growth
ICICI Interval Fund Monthly Interval Plan I–Institutional Plan
ICICI Interval Fund Monthly Interval Plan V–Institutional Plan
ICICI Prudential Blended Plan B Institutional–Daily Dividend Reinvestment
ICICI Prudential Flexible Income Plan–Premium–Daily Dividend
138
Face value
` per unit
Nos.
Cost
` crore
100
100
6,00,00,000
5,00,00,000
581.46
509.03
10,00,000
750
75.00
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
1,00,000
5,00,000
5,00,000
5,00,000
1,000
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
1,000
10
1,000
1,000
1,000
10
100
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
100
5,000
5,000
10,000
5,000
5,000
2,500
2,500
5,000
2,500
2,500
49.01
48.99
99.65
48.94
48.97
24.59
24.57
48.90
24.59
24.55
1,000
2,000
5,000
49.86
97.26
242.21
15,33,034
47,87,67,310
24,93,76,281
21,55,81,136
84,18,05,691
6,91,93,302
5,00,00,000
1,16,26,63,297
9,73,03,131
2,55,19,888
17,42,20,037
23,55,59,577
65,35,24,672
1,37,56,64,068
2,50,00,000
2,10,55,890
19,90,29,281
1,00,190
5,00,00,000
1,48,02,010
58,42,589
48,53,462
11,03,37,292
1,62,10,691
1,86,14,868
5,03,04,737
4,65,06,250
96,71,64,700
12,80,60,406
5,37,96,873
14,10,38,418
31,62,77,421
1,12,86,52,867
1,69,35,64,041
10,28,01,991
10,21,48,186
10,00,00,000
1,65,60,130
3,01,33,731
3,01,19,095
5,12,59,981
6,12,17,035
165.00
479.07
249.60
280.00
1308.00
79.22
50.00
1163.01
101.95
25.86
200.00
235.66
975.00
1376.08
25.00
25.00
200.12
10.02
50.00
1480.67
812.00
485.73
110.61
205.71
20.00
50.30
50.48
968.90
170.00
55.03
150.01
317.27
1137.78
2076.28
210.00
200.00
100.00
25.00
30.13
30.12
51.28
647.28
Accounts p124-187.indd 138
7/2/2011 3:23:31 PM
Accounts p124-187.indd 139
7/2/2011 3:23:31 PM
Schedules forming part of the Accounts (contd.)
Details of investments purchased and sold during the year (contd.)
Particulars
Face value
` per unit
Nos.
Cost
` crore
Mutual funds (contd.)
ICICI Prudential Liquid–Super Institutional Plan Daily Dividend
IDBI Liquid Fund–Growth Option
IDBI Ultra Short Term Fund–Growth
IDFC Cash Fund–Plan C–Super Institutional Plan–Growth
IDFC Cash Fund–Super Institutional Plan–C–Daily Dividend Reinvestment
IDFC FMP–Monthly Series 27
IDFC FMP–Quarterly Series 61–Dividend
IDFC Money Manager Fund–TP–Super Institutional Plan C–Daily Dividend
IDFC Money Manager–Investment Plan B–Daily Dividend Reinvestment
IDFC Savings Advantage Fund–Daily Dividend Reinvestment
IDFC Savings Advantage Fund–Monthly Dividend
IDFC Ultra Short Term Fund–Daily Dividend Reinvestment
IDFC Ultra Short Term Fund–Monthly Dividend
JM High Liquid–Super Institutional Plan–Daily Dividend Reinvestment
JM Money Manager Fund–Super Plus Plan–Daily Dividend Reinvestment
JP Morgan India Liquid Fund–Super Institutional Plan–Daily Dividend Reinvestment
JP Morgan India Liquid Fund–Super Institutional Plan–Growth
JP Morgan India Treasury Fund–Super Institutional–Daily Dividend Reinvestment
Kotak Flexi Debt Fund–Institutional Plan–Daily Dividend Reinvestment
Kotak Floater Long Term–Daily Dividend Reinvestment
Kotak Floater –Short Term–Dividend–Daily Dividend Reinvestment
Kotak Floater–Short Term–Growth
Kotak Liquid–Institutional Premium Plan–Daily Dividend Reinvestment
Kotak Quarterly Interval Plan Series 7–Dividend Reinvestment
L&T Floating Rate Fund–Daily Dividend Reinvestment
L&T FMP-II (December 91 D A) Dividend Payout
LIC Nomura Liquid Fund–Growth
LIC Nomura Savings Plus Fund–Daily Dividend Reinvestment
LIC Nomura MF Interval Fund–series 1–monthly Plan Dividend Reinvestment
Principal Cash Management Fund–Daily Dividend Reinvestment
Principal Cash Management Fund–Growth
Reliance Liquid Fund–Cash Plan–Growth
Reliance Liquid Fund–TP–Institutional Plan–Growth
Reliance Liquidity Fund–Daily Dividend Reinvestment
Reliance Liquidity Fund–Growth
Reliance Money Manager Institutional Option Daily Dividend Reinvestment
Reliance Monthly Interval Fund Series I Institutional Dividend Plan
Reliance Monthly Interval Fund Series II Institutional Dividend
Reliance Quarterly Interval Fund Series II Dividend Payout
Religare Credit Opportunities–Monthly Dividend
Religare FMP–Series IV–Plan A
Religare Liquid Fund–Super Institutional Plan–Growth
Religare Ultra Short Term Fund–Institutional Daily Dividend Reinvestment
Religare Ultra Short Term–Institutional Plan–Growth
SBI Premier Liquid Fund–Super Institutional Plan–Daily Dividend Reinvestment
SBI SDFS–180 Days Series 11–Quaterly Dividend Payout
SBI SDFS 90 Days–36–Dividend
Sundaram BNP Money Fund–Super Institutional–Daily Dividend Reinvestment
Sundaram BNP Paribas Flexible–Short Term–Weekly Dividend Reinvestment
Tata Fixed Income Portfolio Fund Scheme A2 Institutional Plan
Tata Floater Fund–Daily Dividend Reinvestment
Tata Liquid SHIP– Growth
Tata Liquid SHIP –Daily Dividend Reinvestment
Taurus Liquid Fund–Super Institutional Plan–Growth
Templeton India Treasury Management Account–Super Institutional Plan–Growth
Templeton India Treasury Management Account–Liquid Plan–Daily Dividend Reinvestment
Templeton India Ultra Short Bond Fund–Super Institutional Dividend
UTI–Liquid Fund–Cash Plan–Institutional Plan–Daily Dividend Reinvestment
UTI Dynamic Bond Fund–Dividend Reinvestment
UTI Fixed Income Interval Fund–Quarterly Plan Series III–Institutional Dividend Plan–Reinvestment
UTI Fixed Income Interval Fund–Monthly Interval Plan-I–Institutional Dividend Plan–Reinvestment
UTI Liquid Fund–Cash Plan–Institutional Plan–Growth
UTI Money Market–Institutional Plan–Growth
UTI Treasury Advantage Fund–Institutional Plan–Daily Dividend Reinvestment
100
1,000
10
10
10
10
10
10
10
1,000
1,000
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
1,000
10
10
10
10
10
1,000
10
10
10
10
10
10
10
10
10
1,000
1,000
1,000
1,000
1,000
10
1,000
10
10
10
1,000
1,000
1,000
19,86,78,683
1,90,545
1,45,86,332
72,61,35,264
1,17,16,16,379
5,00,00,000
5,01,19,434
20,09,60,511
10,04,87,929
20,23,134
5,04,418
20,23,91,766
20,40,73,413
7,48,85,784
12,48,15,990
9,10,81,34,524
12,71,55,802
2,30,58,89,730
85,21,89,491
26,61,45,812
1,85,16,73,541
67,81,39,951
3,84,03,99,232
5,12,81,391
1,13,79,47,833
3,00,00,000
12,60,18,039
70,21,303
5,02,47,247
14,10,09,119
5,92,46,935
29,71,64,216
18,22,70,679
1,45,51,33,728
17,50,08,063
49,29,272
15,06,09,804
5,03,36,609
4,99,78,509
19,99,91,793
5,00,00,000
20,33,04,838
1,29,24,86,444
7,53,65,333
80,57,12,778
30,00,352
2,60,68,880
21,89,37,741
19,37,22,719
3,01,10,078
11,03,22,763
16,69,550
6,73,336
9,07,676
67,36,515
2,05,82,482
76,48,47,038
85,61,865
3,08,32,169
5,13,39,184
2,53,19,824
6,32,202
9,14,286
94,13,992
1987.23
20.00
15.00
858.68
1171.91
50.00
50.12
200.99
100.64
202.36
50.85
202.64
205.03
75.01
124.88
9115.33
160.00
2307.94
856.24
268.27
1873.19
1076.00
4696.08
51.28
1179.48
30.00
225.00
7.02
50.25
141.02
90.00
470.00
430.00
1455.87
254.35
493.60
150.65
50.35
50.00
200.71
50.00
785.02
1294.68
100.00
808.33
3.00
26.07
221.02
201.99
30.11
110.72
300.00
75.04
95.00
974.00
2059.63
765.73
872.84
30.93
51.34
25.32
100.88
100.00
941.60
139
Accounts p124-187.indd 138
7/2/2011 3:23:31 PM
Accounts p124-187.indd 139
7/2/2011 3:23:31 PM
Schedules forming part of the Accounts (contd.)
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
Schedule G
Current assets, loans and advances:
Current assets:
Inventories:
Stock-in-trade and manufacturing work-in-progress:
(at cost or net realisable value whichever is lower)
Stock-in-trade:
Raw materials
Components
Construction materials
Stores, spare parts and loose tools
Finished goods
Manufacturing work-in-progress
Sundry debtors:
Unsecured:
Debts outstanding for more than 6 months
Considered good
Considered doubtful
Other Debts:
Considered good
Less: Provision for doubtful debts
Cash and bank balances:
Cash on hand
Cheques on hand
Balances with scheduled banks:
on current accounts
on fi xed deposits including interest accrued thereon
on margin money deposit accounts
Balances with non-scheduled banks [Note no.5(a)]
320.87
278.72
40.75
95.12
460.88
1196.34
380.81
2777.11
461.01
3238.12
9650.50
12888.62
461.01
1.92
375.34
627.83
199.39
11.98
513.89
276.71
310.52
27.12
120.77
325.30
1060.42
354.95
1577.15
1415.37
2696.92
465.15
3162.07
8461.43
11623.50
465.15
12427.61
11158.35
2.12
245.46
463.56
325.26
1.72
393.75
Other current assets:
Interest accrued on investments
Due from customers (Construction and project related activity)
101.60
10925.74
45.15
6308.07
1730.35
1431.87
11027.34
6353.22
Loans and advances:
Secured, considered good:
Loans against mortgage of house property
14.08
16.80
Unsecured:
Considered good:
Subsidiary companies:
Loans [Note no.18]
Advances towards equity commitment
Inter-Corporate deposits [Note no.18]
Others
Associate/Joint venture companies :
Advances recoverable
Inter–corporate deposits [Note no.18]
Advances recoverable in cash or in kind [Note no.17]
Balance with customs,port trust,etc.
Considered doubtful:
Deferred credit against sale of ships
Advances recoverable in cash or in kind
Less: Provision for doubtful loans and advances
451.69
1709.63
1142.99
1372.44
13.08
179.41
3262.08
43.29
18.55
129.72
8336.96
148.27
452.38
1587.41
447.72
775.18
9.17
–
2714.09
33.70
18.67
108.58
6163.70
127.25
8188.69
34951.14
6036.45
26395.26
140
Accounts p124-187.indd 140
7/2/2011 3:23:32 PM
Accounts p124-187.indd 141
7/2/2011 3:23:32 PM
Schedules forming part of the Accounts (contd.)
Schedule H
Current liabilities:
Acceptances
Sundry creditors:
Due to: Subsidiary companies
Micro and small enterprises [Note no.35]
Others
Due to customers (construction and project related acitivity)
Advances from customers
Items covered by investor education and protection fund [Note no.38]
Unpaid dividend
Unpaid matured deposits
Interest accrued on bonds
Due to directors
Interest accrued but not due on loans
Schedule I
Provisions:
Current taxes [Net of payments made ` 1605.31 crore
(previous year: ` 1128.15 crore)]
Proposed dividend
Additional tax on dividend
Gratuity
Compensated absences
Employee pension schemes
Post-retirement medical benefi t plan
Long service awards
Other provisions (AS-29 related) [Note no.25]
Schedule J
Contingent liabilities:
(a) Claims against the company not acknowledged as debts
(b) Sales-tax liability that may arise in respect of matters in appeal
(c) Excise duty/service tax liability that may arise in respect of matters
(d)
in appeal/challenged by the company in writ
Income-tax liability (including penalty) that may arise in respect of
which the company is in appeal
(e) Corporate guarantees given on behalf of subsidiary companies
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
165.38
40.50
467.43
28.74
13036.49
16.15
0.03
–
204.27
22.07
9318.37
12.79
0.04
0.01
9544.71
2334.07
7065.39
12.84
45.19
47.77
19090.47
13532.66
2158.08
9609.26
16.18
39.47
68.79
25589.82
As at 31-3-2011
As at 31-3-2010
` crore
85.54
882.84
112.82
0.84
334.84
162.14
91.31
3.12
559.98
` crore
407.75
752.75
110.25
0.50
296.67
135.61
78.99
5.73
397.79
2233.43
2186.04
As at 31-3-2011
As at 31-3-2010
` crore
263.47
194.31
11.95
1.95
775.66
` crore
158.21
158.78
10.28
8.45
805.38
Notes:
1. The Company does not expect any reimbursements in respect of the above contingent liabilities.
2.
3.
It is not practicable to estimate the timing of cash outfl ows, if any, in respect of matters at (a) to (d) above pending resolution of the
arbitration/appellate proceedings.
In respect of matters at (e), the cash outfl ows, if any, could generally occur during the next three years, being the period over
which the validity of the guarantees extends except in a few cases where the cash outfl ows, if any, could occur any time during the
subsistence of the borrowing to which the guarantees relate.
Accounts p124-187.indd 140
7/2/2011 3:23:32 PM
Accounts p124-187.indd 141
141
7/2/2011 3:23:32 PM
Schedules forming part of the Accounts (contd.)
Schedule K
Sales & service:
Manufacturing, trading and property development activity
Construction and project related activity
Servicing
Commission
Engineering and service fees
Schedule L (i)
Other operational income:
Income from hire of plant and machinery
Technical fees
Company’s share in profi t of integrated joint ventures [Note no.16(b)]
Lease rentals
Profi t on sale of fi xed assets (net)
Income from services to the group companies
Provision for foreseeable losses no longer required (net)
Miscellaneous income
Unclaimed credit balances
Schedule L (ii)
Other income:
Interest income:
Interest received on inter-corporate deposits, from subsidiary and
associate companies, customers and others
[Tax deducted at source ` 6.34 crore (previous year: ` 5.03
crore)]
Income from long term investments:
Interest on bonds and government securities
[Tax deducted at source ` nil (previous year: ` nil)]
Income from current investments:
Interest on bonds, government securities and other investments
[Tax deducted at source ` nil (previous year: ` nil)]
Dividend income:
From long term investments:
Subsidiary companies
Trade investments
Other investments
From current investments
Profi t on sale of investment:
Profi t on sale of long term investment (net)
Profi t on sale of current investment (net)
Profi t on sale of fi xed assets (net)
Lease rental
Provision for diminution in value of invesments no longer required (net)
Miscellaneous income
Unclaimed credit balances
142
2010-2011
` crore
6064.48
36819.91
277.08
186.99
537.71
43886.17
2010-2011
` crore
0.14
46.23
10.40
2.20
19.05
52.95
8.61
236.15
33.25
408.98
2009-2010
` crore
4975.39
31252.17
254.64
153.16
360.57
36995.93
2009-2010
` crore
1.93
62.26
7.84
2.28
0.43
66.26
–
198.22
20.43
359.65
2010-2011
2009-2010
` crore
` crore
` crore
` crore
65.35
25.20
–
270.65
187.35
42.06
1.22
230.63
163.61
306.60
51.08
0.02
103.17
336.00
128.39
88.91
19.01
1.20
109.12
277.91
394.24
387.03
1205.62
48.82
357.68
124.42
24.86
10.24
195.20
0.49
1443.13
1254.44
3.59
24.73
-
226.69
0.09
2024.96
Accounts p124-187.indd 142
7/2/2011 3:23:32 PM
Accounts p124-187.indd 143
7/2/2011 3:23:32 PM
Schedules forming part of the Accounts (contd.)
Schedule M
Manufacturing, construction and operating expenses:
Materials consumed:
Raw materials and components
Construction materials
Less: Scrap sales
Purchase of trading goods
(Increase)/decrease in stocks:
Closing stock:
Finished goods
Work-in-progress
Less: Opening stock:
Finished goods
Work-in-progress
Value of materials,tools,and work-in-progress transferred on sale of
undertaking
Sub-contracting charges
Stores, spares and tools [Note no.11]
Other manufacturing, construction and operating expenses:
Excise duty
Power and fuel
Royalty and technical know-how fees
Packing and forwarding
Hire charges–plant & machinery and others
Engineering, technical and consultancy fees
Insurance
Rent
Rates and taxes
Travelling and conveyance
Repairs to plant and machinery
Repairs to buildings
General repairs and maintenance
Bank guarantee charges
Other expenses
2010-2011
2009-2010
` crore
` crore
` crore
` crore
8946.44
9702.11
18648.55
70.06
6888.38
7458.01
14346.39
61.12
18578.49
2064.98
14285.27
1574.28
460.88
1472.38
1933.26
325.30
1048.47
1373.77
8.60
355.45
9.57
173.26
451.71
703.43
160.44
138.12
67.64
396.40
54.80
14.99
135.26
74.12
241.02
(559.49)
-
9175.19
1187.64
422.99
(20.45)
8721.10
1052.26
325.30
1048.47
1373.77
342.54
1454.22
1796.76
(3.47)
334.08
2.54
124.28
358.19
523.19
162.78
159.23
46.62
316.37
39.12
5.50
119.03
111.71
202.79
2984.81
33431.62
2501.96
28537.41
143
Accounts p124-187.indd 142
7/2/2011 3:23:32 PM
Accounts p124-187.indd 143
7/2/2011 3:23:32 PM
Schedules forming part of the Accounts (contd.)
Schedule N
Staff expenses:
Salaries, wages and bonus
Contribution to and provision for:
2010-2011
2009-2010
` crore
` crore
` crore
` crore
2346.43
1922.50
Provident funds and pension fund
Superannuation/employee pension schemes [Including provision
` 17.08 crore (previous year: reversal of provision ` 2.75 crore)]
Gratuity funds [including provision ` 0.34 crore (previous year:
92.98
67.62
29.50
reversal of provision ` 0.02 crore)]
77.94
42.47
47.51
Welfare and other expenses
Schedule O
Sales, administration and other expenses:
Power and fuel
Packing and forwarding
Professional fees
Insurance
Rent
Rates and taxes
Travelling and conveyance
Repairs to buildings
General repairs and maintenance
Directors’ fees
Telephone, postage and telegrams
Advertising and publicity
Stationery and printing
Commission:
Distributors and agents
Others
Bank charges
Miscellaneous expenses
Bad debts and advances written off
Less:Provision for doubtful debts and advances written back
Company’s share in loss of integrated joint ventures [Note no.16(b)]
Discount on sales
Provision for doubtful debts and advances (net)
Provision for foreseeable losses on construction contracts (net)
Provision for diminution in value of investments (net)
Other provisions [Note no.25]
Schedule P
Interest expenses & brokerage:
Debentures and fi xed loans
Others
144
190.10
348.00
2884.53
167.92
288.72
2379.14
2010-2011
2009-2010
` crore
` crore
` crore
` crore
28.77
37.27
132.82
97.50
37.36
134.08
140.73
15.22
83.40
31.62
173.40
13.68
127.70
0.37
71.28
78.47
33.60
66.04
26.03
434.09
35.32
68.62
71.84
114.38
-
-
233.03
1990.26
2010-2011
` crore
429.09
218.28
647.37
27.89
45.66
61.12
27.60
31.28
116.45
106.96
12.03
77.96
28.93
135.63
12.08
98.78
0.18
65.51
58.39
32.52
73.55
20.65
209.21
33.52
8.18
57.83
114.55
13.31
47.10
24.28
1378.88
2009-2010
` crore
352.73
152.58
505.31
Accounts p124-187.indd 144
7/2/2011 3:23:32 PM
Accounts p124-187.indd 145
7/2/2011 3:23:33 PM
Schedules forming part of the Accounts (contd.)
Schedule Q
Signifi cant Accounting Policies
1.
Basis of accounting
The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted
accounting principles [“GAAP”] except for the revaluation of certain fi xed assets in compliance with the provisions of the Companies
Act, 1956 and the Accounting Standards as specifi ed in the Companies (Accounting Standards) Rules 2006 prescribed by the Central
Government.
The preparation of fi nancial statements in conformity with GAAP requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and
the disclosures relating to contingent liabilities as of the date of the fi nancial statements. Examples of such estimates include the useful
lives of tangible and intangible fi xed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefi t
plans, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.
2.
Revenue recognition
Revenue is recognised based on nature of activity when consideration can be reasonably measured and there exists reasonable certainty
of its recovery.
a)
Sales & Service
i)
ii)
iii)
iv)
Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever
applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers, are not taken into
account.
Revenue from sale of goods is recognised when the substantial risks and rewards of ownership are transferred to the buyer
under the terms of the contract.
Revenue from property development activity is recognised when all signifi cant risks and rewards of ownership in the land
and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from
the customer exists.
Revenue from construction /project related activity and contracts for supply/commissioning of complex plant and equipment
is recognised as follows:
a)
b)
c)
Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as
agreed with the customer.
Fixed price contracts received up to March 31, 2003: Contract revenue is recognised by applying percentage of
completion to the contract value. Percentage of completion is determined as follows:
(i)
(ii)
in the case of item rate contracts, as a proportion of the progress billing to contract value; and
in the case of other contracts, as a proportion of the cost incurred-to-date to the total estimated cost
Fixed price contracts received on or after April 1, 2003: Contract revenue represents the cost of work performed on
the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is
determined as a proportion of cost of work performed to-date to the total estimated contract costs.
Government subsidy related to customer contracts is recognised as revenue from operations in the Profi t and Loss
Account, on a prudent basis, in proportion to work completed when there is reasonable assurance that the conditions
for the grant of subsidy will be fulfi lled.
Expected loss, if any, on the construction/project related activity is recognised as an expense in the period in which
it is foreseen, irrespective of the stage of completion of the contract. While determining the amount of foreseeable
loss, all elements of costs and related incidental income not included in contract revenue is taken into consideration.
Construction and project related work-in-progress is refl ected at cost till such time the outcome of the job cannot be
ascertained reliably and at realisable value thereafter.
v)
Revenues from construction/project related activity and contracts executed in joint ventures under work-sharing arrangement
[being jointly controlled operations, in terms of Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint
Ventures”], are recognised on the same basis as similar contracts independently executed by the Company.
vi)
Revenue from service related activities is recognised using the proportionate completion method.
vii) Commission income is recognised as and when the terms of the contract are fulfi lled.
viii) Revenue from engineering and service fees is recognised as per the terms of the contract.
b)
Profi t/loss on contracts executed by integrated joint ventures under profi t-sharing arrangement [being jointly controlled entities,
in terms of Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures”] is accounted as and when the same
is determined by the joint venture. Revenue from services rendered to such joint ventures is accounted on accrual basis.
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145
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Schedules forming part of the Accounts (contd.)
Schedule Q (contd.)
c) Other operational income represents income earned from the activities incidental to the business and is recognised when the
d)
e)
f)
right to receive the income is established as per the terms of the contract.
Interest income is accrued at applicable interest rate.
Dividend income is accounted when the right to receive the same is established. Dividends declared by subsidiary companies
after the date of the Company’s Balance Sheet are also recognised if they are in respect of accounting periods which closed on
or before the date of the Company’s Balance Sheet.
Other Government grants, which are revenue in nature and are intended to compensate the related costs, are recognised as
income in the profi t and loss account to match such costs, as and when incurred.
g) Other items of income are accounted as and when the right to receive arises.
3.
Extraordinary and exceptional items
Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are
classifi ed as extraordinary items. Specifi c disclosure of such events/transactions is made in the fi nancial statements. Similarly, any
external event beyond the control of the Company, signifi cantly impacting income or expense, is also treated as extraordinary item
and disclosed as such.
On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company,
is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classifi ed as an
exceptional item and accordingly disclosed in the notes to accounts [Note no.10].
4.
Research and development
a)
Revenue expenditure on research is expensed under respective heads of account in the period in which it is incurred.
b) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
i)
ii)
iii)
iv)
v)
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The Company has intention to complete the intangible asset and use or sell it;
The Company has ability to use or sell the intangible asset;
The manner in which the probable future economic benefi ts will be generated including the existence of a market for
output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;
The availability of adequate technical, fi nancial and other resources to complete the development and to use or sell the
intangible asset; and
The Company has ability to measure the expenditure attributable to the intangible asset during its development reliably.
vi)
The development expenditure capitalised as intangible asset is amortised over its useful life.
Other development costs that do not meet above criteria are expensed in the period in which they are incurred.
Capital expenditure on research and development is classifi ed under tangible/intangible assets and depreciated on the same basis
as other fi xed assets.
c)
5.
Employee benefi ts
Short term employee benefi ts
All employee benefi ts falling due wholly within twelve months of rendering the service are classifi ed as short term employee
benefi ts. The benefi ts like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are
recognised in the period in which the employee renders the related service.
Post-employment benefi ts
i)
Defi ned contribution plans: The Company’s superannuation scheme, state governed provident fund scheme, employee
state insurance scheme and employee pension scheme are defi ned contribution plans. The contribution paid/payable under
the schemes is recognised during the period in which the employee renders the related service.
Defi ned benefi t plans: The employees gratuity fund schemes, post-retirement medical care scheme, pension scheme and
provident fund scheme managed by trust are the Company’s defi ned benefi t plans. Wherever applicable, the present value
of the obligation under such defi ned benefi t plans is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise to additional unit of employee benefi t entitlement
and measures each unit separately to build up the fi nal obligation.
The obligation is measured at the present value of the estimated future cash fl ows. The discount rate used for determining
the present value of the obligation under defi ned benefi t plans, is based on the market yield on government securities of a
maturity period equivalent to the weighted average maturity profi le of the related obligations at the balance sheet date.
Actuarial gains and losses are recognised immediately in the Profi t & Loss Account.
ii)
The interest element implicit in the actuarial valuation of defi ned benefi t plans is classifi ed under interest expense and
balance charge is recognised as employee benefi ts in the Profi t and Loss Account.
a)
b)
146
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Schedules forming part of the Accounts (contd.)
Schedule Q (contd.)
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defi ned benefi t
plans to recognise the obligation on the net basis.
Gains or losses on the curtailment or settlement of any defi ned benefi t plan are recognised when the curtailment or
settlement occurs. Past service cost is recognised as expense on a straight-line basis over the average period until the
benefi ts become vested.
Long term employee benefi ts
The obligation for long term employee benefi ts such as long term compensated absences, long service award etc is recognised
in the similar manner as in the case of defi ned benefi t plans as mentioned in (b)(ii) above.
Termination benefi ts
Termination benefi ts such as compensation under voluntary retirement cum pension scheme is amortised over a defi ned period.
The defi ned period of amortisation is fi ve years or the period till March 31, 2010, whichever is earlier.
c)
d)
6.
Fixed assets
Fixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation, accumulated amortisation
and cumulative impairment and those which were revalued as on October 1,1984 are stated at the values determined by the valuers
less accumulated depreciation, accumulated amortisation and cumulative impairment. Assets acquired on hire purchase basis are stated
at their cash values. Specifi c know-how fees paid, if any, relating to plant and machinery is treated as part of cost thereof.
Administrative and other general overhead expenses that are specifi cally attributable to construction or acquisition of fi xed assets or
bringing the fi xed assets to working condition are allocated and capitalised as a part of the cost of the fi xed assets.
Own manufactured assets are capitalised at cost including an appropriate share of overheads.
(Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions infra.)
7.
Leases
a)
b)
Lease transactions entered into prior to April 1, 2001:
Assets leased out are stated at original cost. Lease equalisation adjustment is the difference between capital recovery included in
the lease rentals and depreciation provided in the books.
Lease rentals in respect of assets acquired under leases are charged to Profi t and Loss Account.
Lease transactions entered into on or after April 1, 2001:
Finance leases:
i)
Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classifi ed as
fi nance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value
of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each
period.
Assets given under a fi nance lease are recognised as a receivable at an amount equal to the net investment in the lease.
Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in
the lease.
Initial direct costs relating to assets given on fi nance leases are charged to Profi t and Loss Account.
ii)
iii)
Operating leases:
i)
Assets acquired on leases where a signifi cant portion of the risks and rewards of ownership are retained by the lessor are
classifi ed as operating leases. Lease rentals are charged to the Profi t and Loss Account on accrual basis.
Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease
term.
ii)
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Accounts p124-187.indd 147
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(Also refer to policy on depreciation, infra)
8. Depreciation
a)
Owned assets
i)
Revalued Assets:
Depreciation is provided on straight line method on the values and at the rates given by the valuers. The difference
between depreciation provided on revalued amount and on historical cost is transferred from revaluation reserve to Profi t
and Loss Account.
Assets carried at historical cost:
Depreciation on assets carried at historical cost is provided on the written down value basis on assets acquired up to March
31, 1968 (at the rates prescribed under Schedule XIV to the Companies Act, 1956) and on straight line method on assets
acquired subsequently (at the rates prevailing at the time of their acquisition on assets acquired up to September 30, 1987
ii)
Schedules forming part of the Accounts (contd.)
Schedule Q (contd.)
and at the rates prescribed under Schedule XIV to the Companies Act, 1956 on assets acquired after that date). However,
in respect of the following asset categories, the depreciation is provided at higher rates in line with their estimated useful
life..
Category of asset
Furniture and fi xtures
Rate of Depreciation (% p.a.)
10.00
Plant and machinery:
i)
Offi ce Equipment
a) Multifunctional devices (fax machine/scanner/printers), desktop, inkjet/
ii)
e)
laserjet printers, switches (audio/ video) and projectors
Others
Cranes below 100 ton capacity used for construction activity
b)
Plant and machinery general
a)
b) Minor plant & machinery of construction activity
Heavy lift equipment of construction activity
c)
Earthmoving, tunnelling & transmission line equipment (other than
d)
employed in heavy construction work)
Equipment used in construction industry for concreting, road making,
crushing, piling, pipeline laying, welding etc.
DG sets above 30 kva
Erection winches above 2 tons
Strand Jack system, theodolite, total station etc. used in construction
industry
Specialised machine tools, dies, jigs, fi xtures, gauges for electrical
business
Desktops and laptops given to employees under the Company’s scheme
Other laptops
f)
g)
h)
j)
k)
i)
iii) Air conditioning and refrigeration equipment
iv)
Motor cars
Laboratory and canteen equipment
25.00
6.67
6.67
20.00
5.00
10.00
8.33
8.33
8.33
8.33
20.00
33.33
25.00
8.33
12.50
14.14
iii) Depreciation for additions to/deductions from, owned assets is calculated pro rata from/to the month of additions/
deductions. Extra shift depreciation is provided on a location basis.
iv) Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of
the asset is allocated over its remaining useful life.
b)
Leased assets
i)
Lease transactions entered into prior to April 1, 2001:
Lease charge comprising statutory depreciation and lease equalisation charge is provided for assets given on lease over the
primary period of the lease equal to recovery of net investment in the lease. Accordingly, while the statutory depreciation
on such assets is provided for on straight line method as per Schedule XIV to the Companies Act, 1956, the difference is
adjusted through lease equalisation and lease adjustment account.
ii)
Lease transactions entered into on or after April 1, 2001:
Assets acquired under fi nance leases are depreciated on a straight line basis over the lease term. Where there is reasonable
certainty that the Company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated
at the rates prescribed under Schedule XIV to the Companies Act, 1956 or at the higher rates adopted by the Company
for similar assets.
9.
Intangible assets and amortisation
Intangible assets are recognised when it is probable that the future economic benefi ts that are attributable to the asset will fl ow to
the enterprise and the cost of the asset can be measured reliably. Intangible assets are amortised as follows:
Leasehold land: over the period of lease.
Specialised software: over a period of six years.
a)
b)
148
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Schedules forming part of the Accounts (contd.)
Schedule Q (contd.)
c)
Lump sum fees for technical know-how: over a period of six years in case of foreign technology and three years in the case of
indigenous technology.
d) Development costs for new products: over a period of fi ve years.
Administrative and other general overhead expenses that are specifi cally attributable to acquisition of intangible assets are allocated
and capitalised as a part of the cost of the intangible assets.
Amortisation on impaired assets is provided by adjusting the amortisation charges in the remaining periods so as to allocate the asset’s
revised carrying amount over its remaining useful life.
10.
Impairment of assets
the provision for impairment loss, if any; and
the reversal of impairment loss recognised in previous periods, if any,
As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine:
a)
b)
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
a)
b)
in the case of an individual asset, at the higher of the net selling price and the value in use;
in the case of a cash generating unit (a group of assets that generates identifi ed, independent cash fl ows), at the higher of the
cash generating unit’s net selling price and the value in use.
(Value in use is determined as the present value of estimated future cash fl ows from the continuing use of an asset and from its
disposal at the end of its useful life.)
11.
Investments
Long term investments including interests in incorporated jointly controlled entities, are carried at cost, after providing for any diminution
in value, if such diminution is ”other than temporary” in nature. Current investments are carried at lower of cost and fair value. The
determination of carrying amount of such investments is done on the basis of weighted average cost of each individual investment.
Investments in integrated joint ventures are carried at cost net of adjustments for Company’s share in profi ts or losses as recognised.
12.
Inventories
Inventories are valued after providing for obsolescence, as under:
a)
Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net
realisable value.
b) Manufacturing work-in-progress at lower of cost including related overheads or net realisable value.
In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs.
Finished goods at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/
payable on such goods.
Property development land at lower of cost or net realisable value.
c)
d)
13. Securities premium account
The difference between the market value and the consideration received in respect of shares issued pursuant to Stock
Appreciation Rights Scheme.
The discount allowed, if any, in respect of shares allotted pursuant to Stock Options Scheme.
Securities premium includes:
i)
a)
b)
ii)
The following expenses are written off against securities premium account:
i)
ii)
iii)
Expenses incurred on issue of shares.
Expenses (net of tax) incurred on issue of debentures/bonds.
Premium (net of tax) on redemption of debentures/bonds.
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Accounts p124-187.indd 149
14. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost
of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires
a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the
period in which they are incurred.
15. Employee stock ownership schemes
In respect of stock options granted pursuant to the Company’s Stock Options Scheme, the intrinsic value of the options (excess of
market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation cost
over the vesting period.
149
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Schedules forming part of the Accounts (contd.)
Schedule Q (contd.)
16. Foreign currency transactions, foreign operations, forward contracts and derivatives
a)
b)
c)
d)
e)
f)
g)
The reporting currency of the Company is Indian rupee.
Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of
the transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary
items, carried at historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the
transaction.
Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date
at the closing rate are:
i)
adjusted in the cost of fi xed assets specifi cally fi nanced by the borrowings contracted up to March 31, 2004 to which the
exchange differences relate
adjusted in the cost of fi xed assets specifi cally fi nanced by borrowings contracted between the period April 1, 2004 to
March 31, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India
recognised as income or expense in the period in which they arise, in cases other than (i) and (ii) above.
iii)
Financial statements of foreign operations comprising jobs contracted prior to April 1, 2004, are translated as follows:
i)
ii)
Closing inventories at rates prevailing at the end of the year
Fixed assets as at April 1, 1991 at rates prevailing at the end of the year in which the additions were made. Subsequent
additions are at rates prevailing on the dates of the additions. Depreciation is accounted at the same rate at which the
assets are translated.
ii)
iii) Other assets and liabilities at rates prevailing at the end of the year.
iv) Net revenues at the average rate for the year.
Financial statements of foreign operations comprising jobs contracted on or after April 1, 2004, are treated as integral operations
and translated as in the same manner as foreign currency transactions, as described above. Exchange differences arising on such
translation are recognised as income or expense of the period in which they arise.
Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted fi rm commitments or highly
probable forecast transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting Standard
(AS) 11[“The Effects of Changes in Foreign Exchange Rates”]. Exchange differences arising on such contracts are recognised in
the period in which they arise.
Gains and losses arising on account of roll over/cancellation of forward contracts are recognised as income/expense of the period
in which such roll over/cancellation takes place.
All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on unexecuted fi rm
commitments and highly probable forecast transactions, are recognised in the fi nancial statements at fair value as on the Balance
Sheet date, in pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008
on accounting of derivatives. The Company has adopted Accounting Standard (AS) 30 [“Financial Instruments: Recognition and
Measurement”] for accounting of such derivative contracts, not covered under Accounting Standard (AS) 11 [“The Effects of
Changes in Foreign Exchange Rates”], as mandated by the ICAI in the aforesaid announcement.
Accordingly, the resultant gains or losses on fair valuation/settlement of the derivative contracts covered under Accounting
Standard (AS) 30 [“Financial Instruments: Recognition and Measurement”] are recognised in the Profi t and Loss Account or
Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge is effective, the gains or losses
are recognised in the “Hedging Reserve” which forms part of “Reserves and Surplus” in the Balance Sheet, while the same is
recognised in the Profi t and Loss Account where the hedge is ineffective.The amount recognised in the “Hedging Reserve” is
transferred to Profi t and Loss Account in the period in which the underlying hedged item affects the Profi t and Loss Account.
The premium paid/received on a foreign currency forward contract is accounted as expense/income over the period of the
contract.
17. Segment accounting
a)
Segment accounting policies
Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specifi c accounting
policies have been followed for segment reporting:
i)
Segment revenue includes sales and other income directly identifi able with/allocable to the segment including inter segment
revenue.
Expenses that are directly identifi able with/allocable to segments are considered for determining the segment result.
Expenses which relate to the Company as a whole and not allocable to segments are included under “unallocable corporate
expenditure.”
Income which relates to the Company as a whole and not allocable to segments is included in “unallocable corporate
income”.
ii)
iii)
150
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Schedules forming part of the Accounts (contd.)
Schedule Q (contd.)
iv)
v)
Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profi t before tax of the
Company.
Segment assets and liabilities include those directly identifi able with the respective segments. Unallocable corporate
assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any
segment.
b)
Inter-segment transfer pricing
Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed
between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.
18. Taxes on income
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act 1961, and based on the expected outcome of assessments/appeals.
Deferred tax is recognised on timing differences between the income accounted in fi nancial statements and the taxable income for
the year, and quantifi ed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets relating to unabsorbed depreciation/business losses /losses under the head “capital gains“ are recognised and
carried forward to the extent there is virtual certainty that suffi cient future taxable income will be available against which such deferred
tax assets can be realised.
Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that suffi cient future
taxable income will be available against which such deferred tax assets can be realised.
19. Accounting for interests in joint ventures
Interests in joint ventures are accounted as follows:
Type of joint venture
Accounting treatment
Jointly controlled operations Company’s share of revenues, common expenses, assets and liabilities are included in revenues,
Jointly controlled assets
Jointly controlled entities
Integrated joint ventures:
(i)
expenses,assets and liabilities respectively.
Share of the assets, according to nature of the assets, and share of the Liabilities are shown as part
of gross block and liabilities respectively. Share of expenses incurred on maintenance of the assets is
accounted as expense. Monetary benefi ts, if any, from use of the assets are refl ected as income.
(a)
(b)
(ii)
Company’s share in profi ts or losses of integrated joint ventures is accounted on
determination of the profi ts or losses by the joint ventures.
Investments in integrated joint ventures are carried at cost net of Company’s share in
recognised profi ts or losses.
Incorporated jointly controlled entities:
(i)
Income on investments in incorporated jointly controlled entities is recognised when the
right to receive the same is established.
Investment in such joint ventures is carried at cost after providing for any diminution in
value which is other than temporary in nature.
(ii)
Joint venture interests accounted as above, other than investments in incorporated jointly controlled entities, are included in the
segments to which they relate.
20. Provisions, contingent liabilities and contingent assets
the Company has a present obligation as a result of a past event;
a probable outfl ow of resources is expected to settle the obligation; and
the amount of the obligation can be reliably estimated.
Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if
a)
b)
c)
Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the
reimbursement will be received.
Contingent liability is disclosed in case of
a)
a present obligation arising from past events, when it is not probable that an outfl ow of resources will be required to settle the
obligation;
a present obligation arising from past events, when no reliable estimate is possible; and
a possible obligation arising from past events where the probability of outfl ow of resources is not remote.
b)
c)
Contingent assets are neither recognised, nor disclosed.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
Accounts p124-187.indd 150
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Accounts p124-187.indd 151
151
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Notes forming part of Accounts
1.
a) Of the equity shares of ` 2 each comprised in the subscribed and paid-up capital of the Company:
i)
ii)
iii)
9,19,943 (previous year: 9,19,943) equity shares were allotted as fully paid up, pursuant to contracts, without payment
being received in cash.
44,96,76,280 (previous year: 44,96,76,280) equity shares were issued as bonus shares by way of capitalisation of general
reserve: ` 2.35 crore (previous year: ` 2.35 crore), securities premium: ` 87.47 crore (previous year: ` 87.47 crore) and
capital redemption reserve: ` 0.12 crore (previous year: ` 0.12 crore).
2,67,45,064 (previous year: 2,00,88,346) equity shares were allotted as fully paid up on exercise of grants under Employees
Stock Ownership Schemes.
b) Options outstanding as at the end of the year on un-issued share capital:
Particulars
Employee stock options granted and outstanding #
Number of equity shares
to be issued as fully paid
As at 31-3-2011
As at 31-3-2010
1,39,53,309
1,75,51,015
3.5% 5 years & 1 day, US$ denominated Foreign Currency Convertible Bonds
49,07,243
49,07,243
# The number of options have been adjusted consequent to bonus issue wherever applicable.
c)
The Directors recommend payment of fi nal dividend of ` 14.50 per equity share of ` 2 each on the number of shares outstanding
as on the record date. Provision for fi nal dividend has been made in the books of account for 60,88,52,126 shares outstanding
as at March 31, 2011 amounting to ` 882.84 crore.
2.
Stock option schemes
a)
The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility
criteria. The options are vested equally over a period of 4 years [5 years in the case of Series 2006(A)], subject to the discretion
of the management and fulfi lment of certain conditions.
The details of the grants under the aforesaid schemes under various series are summarised below:
b)
1
2
3
4
5
6
7
8
Sr.
No.
Series reference
Grant price `
Grant dates
2000
2002 (A)
2002 (B)
2003 ( A)
2003(B)
2006
2006(A)
2010-2011
2009-2010
2010-2011
2009-2010
2010-2011
2009-2010
2010-2011
2009-2010
2010-2011
2009-2010
2010-2011
2009-2010
2010-2011
2009-2010
3.50
3.50
3.50
3.50
3.50
3.50
17.50
17.50
17.50
17.50
601.00
601.00
601.00
601.00
1-6-2000
19-4-2002
19-4-2002
Vesting commences on
1-6-2001
19-4-2003
19-4-2003
23-5-2003
onwards
23-5-2004
onwards
23-5-2003
onwards
23-5-2004
onwards
1-9-2006
onwards
1-9-2007
onwards
1-7-2007
onwards
1-7-2008
onwards
Options granted and outstanding at
16800
16800
21500
21500
39700
39700
31452
31452
1124980
1959888
8839975
13324860
7476608
5895175
the beginning of the year
Options lapsed/withdrawn during
the year
Options granted during the year
Options exercised during the year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
33250
51622
227758
336341
686201
633070
276700
164300
–
–
3260665
2808090
435550
947586
4637774
4148544
1114538
593587
Options granted and outstanding at
16800
16800
21500
21500
39700
39700
31452
31452
932880
1124980
3974443
8839975
8936534
7476608
the end of the year
of which –
Options vested
Options yet to vest
16800
16800
21500
21500
39700
39700
31452
31452
–
–
–
–
–
–
–
–
102482
830398
85644
3717133
1039336
257310
4759655
4080320
1180945
7755589
769990
6706618
c)
During the year, the Company has recovered ` 17.93 crore (previous year: ` 3.60 crore) from its subsidiary companies towards
the stock options granted to their employees, pursuant to the employee stock option schemes.
d) The shares allotted during the year under the Company’s ESOP scheme includes 4,68,856 number of shares in respect of stock
options exercised during the year 2009-2010
3.
a) Working capital facilities from banks including cash credits, demand loans, bank guarantees and letters of credit are secured by
hypothecation of inventories, book debts and receivables. The total charge on these assets is ` 1385.12 crore as on March 31,
2011.
b) Other secured loans from banks represent loans amounting to ` nil (previous year: ` 5.90 crore) availed under bill discounting
facility and are secured against specifi c receivables.
152
Accounts p124-187.indd 152
7/2/2011 3:23:33 PM
Accounts p124-187.indd 153
7/2/2011 3:23:34 PM
Notes forming part of Accounts (contd.)
4.
Terms of redemption of debentures
(a)
Secured redeemable non-convertible fi xed rate debentures (privately placed):
Sr.
no.
1
Face value per
debenture (`.)
Date of
allotment
10,00,000
December 5,
2008
Amount
` crore
500
2
10,00,000
January 5,
2009
Total
400
900
Interest
Redeemable at face value
11.45% p.a.
payable annually
9.15% p.a.
payable annually
At the end of 10th year from the date of
allotment. The Company has call option to
redeem debentures at the end of 5th year
from the date of allotment.
At the end of 10th year from the date of
allotment.
Security: The debentures are secured by way of a fi rst charge having pari passu rights on the immovable property at certain
locations and a part of a movable property of a business division, both present and future.
b) Unsecured redeemable non-convertible fi xed rate debentures (privately placed):
Sr.
no.
1
Face value per
debenture (`)
10,00,000
10,00,000
Date of
allotment
January 21,
2009
April 13, 2010
Amount
` crore
250
200
2
3
10,00,000
May 11, 2010
30
[10% issued
upfront, balance
90% to be issued
on May 11, 2011]
4
10,00,000
May 26, 2010
30
[10% issued
upfront, balance
90% to be issued
on May 26, 2011]
510
Total
Interest
Redeemable at face value
9.20% p.a.
payable annually
8.80% p.a.
payable annually
8.75% p.a.
payable for 1st
year
9.15% p.a.
payable annually
thereafter
8.65% p.a.
payable for 1st
year
8.95% p.a.
payable annually
thereafter
At the end of 3rd year from the date of
allotment.
At the end of 10th year from the date of
allotment.
At the end of 10th year from the date of
allotment.
At the end of 10th year from the date of
allotment.
The Company has the option to call
(prepay) the debentures outstanding at the
end of 1st year from the date of allotment
and not to issue the remaining 90%.
5.
a)
Balances with non-scheduled banks represent the balances with Indian banks classifi ed as non-scheduled banks by the Reserve
Bank of India and with all overseas branches of foreign banks. The balances with non-scheduled banks held in:
Particulars
i)
Current accounts
ABN AMRO Bank, The Netherlands
Abu Dhabi Commercial Bank, Abu Dhabi
Abu Dhabi Commercial Bank, UAE
Abu Dhabi Islamic Bank , UAE
Arab Bank PLC, Amman
Arab Bank PLC, Bahrain
Arab Bank PLC, Jordan
Arab Bank PLC, Doha
Arab Bank PLC, UAE
Bank of Muscat
Carried forward
As at
31-3-2011
As at
31-3-2010
` crore
Maximum amount outstanding
at any time during
2010-2011
2009-2010
0.79
1.43
0.18
–
0.26
2.79
–
19.52
0.14
142.44
167.55
0.16
7.38
0.53
0.16
0.03
10.91
0.03
7.81
5.39
0.02
32.42
2.33
7.38
0.53
0.16
0.26
10.91
0.03
34.75
24.16
212.69
2.20
7.38
5.36
0.37
0.11
25.09
3.39
85.82
51.10
0.04
153
Accounts p124-187.indd 152
7/2/2011 3:23:33 PM
Accounts p124-187.indd 153
7/2/2011 3:23:34 PM
Notes forming part of Accounts (contd.)
i)
ii)
iii)
Particulars
Current accounts (contd.)
Brought forward
Bank of Baroda (Kenya) Limited, Kenya
Bank of Bhutan
Bank of Commerce & Development, Libya
BNP Paribas–UAE
BNP Paribas–Qatar
Citibank, France
Citibank, USA
Citibank, London
Citibank N A Sharjah
Danske Bank, Denmark
Deutsche Bank, Germany
Deutsche Bank, Singapore
Doha Bank - Qatar
Emirates Bank International PJSC
First Gulf Bank - UAE
Handels Bank, Sweden
Hongkong & Shanghai Banking Corporation (RMD), China
Hongkong & Shanghai Banking Corporation (USD), China
HSBC Bank Middle East Limited, Abu Dhabi
HSBC Bank Middle East Limited, Dubai
HSBC Bank, Qatar
HSBC Bank, UK
HSBC Bank, UAE
Mashreq Bank, Dubai
Mashreq Bank, UAE
Mizuho Bank, Japan
National Bank of Kuwait, Kuwait
Nepal Investment Bank Limited, Nepal
Rafi dian Bank, Iraq
Standard Chartered Bank, Malaysia
Standard Chartered Bank, Qatar
Union National Bank, Abu Dhabi
ICICI Bank, Canada
ICICI Bank Eurasia, Moscow
Total (i)
Call deposits
Mashreq Bank, Dubai
Total (ii)
Fixed deposits
Arab Bank, Doha
Arab Bank, UAE
Doha Bank - Qatar
First Gulf Bank - UAE
HSBC Bank Middle East Limited, Abu Dhabi
HSBC Bank UAE
Mashreq Bank, Dubai
Total (iii)
Total (i)+(ii)+(iii)
As at
31-3-2011
As at
31-3-2010
` crore
Maximum amount outstanding
at any time during
2010-2011
2009-2010
167.55
–
20.10
0.42
0.01
0.06
0.73
6.02
0.20
0.05
0.82
1.84
0.01
0.23
0.22
14.75
1.72
0.05
0.02
9.91
–
4.82
2.98
1.64
94.08
1.19
3.08
2.88
0.14
8.25
0.10
2.08
0.39
1.21
0.03
347.58
0.69
0.69
–
–
56.34
109.28
–
–
–
165.62
513.89
32.42
–
34.30
0.40
–
–
0.38
20.32
0.23
–
0.48
–
0.01
–
0.75
–
0.81
0.01
0.01
17.23
0.01
6.82
2.32
1.63
15.47
1.31
2.15
1.88
0.14
8.25
0.61
6.30
0.17
0.97
0.05
155.43
0.69
0.69
116.76
24.45
–
–
2.29
48.90
45.23
237.63
393.75
–
37.00
0.44
0.01
0.06
4.61
47.22
0.23
0.15
4.57
9.35
0.01
30.79
1.77
14.75
3.24
0.09
0.16
23.96
0.01
83.86
33.85
43.12
94.08
9.94
7.05
29.78
0.14
8.25
1.92
11.42
5.69
3.91
0.10
0.28
57.41
0.40
–
–
1.37
98.8
0.23
–
3.65
–
0.01
–
18.99
–
1.34
0.22
0.94
29.70
21.98
75.10
4.85
33.91
17.73
27.71
7.91
24.87
0.14
10.42
3.91
15.94
0.27
1.12
0.43
0.69
0.69
116.76
24.45
319.85
109.28
2.29
48.90
45.23
121.56
24.45
–
–
22.54
71.44
45.23
154
Accounts p124-187.indd 154
7/2/2011 3:23:34 PM
Accounts p124-187.indd 155
7/2/2011 3:23:34 PM
Notes forming part of Accounts (contd.)
b) Call deposit with Mashreq Bank, Dubai, UAE, of ` 0.69 crore is subject to an escrow arrangement duly approved by the Reserve
Bank of India, whereby the proceeds of the deposit, together with interest thereon, would be applied towards full and fi nal
settlement of loan taken from Rafi dian Bank, Iraq, which is included under unsecured loans.
6.
Loans and advances include:
a)
Rent deposit with whole-time directors: ` 0.03 crore (previous year: ` 0.03 crore). The maximum amount outstanding at any
time during the year: ` 0.03 crore (previous year: ` 0.03 crore).
b) Amount, including interest accrued, due from the managing director and whole-time directors in respect of housing loan:
` 0.34 crore (previous year: ` 0.61 crore). Maximum amount outstanding at any time during the year: ` 0.61 crore (previous year:
` 0.63 crore).
7.
Sales and service include ` 352.04 crore (previous year: ` 118.06 crore) for price variations net of liquidated damages in terms of
contracts with the customers and shipbuilding subsidy ` 32.16 crore (previous year: ` 56.80 crore).
8.
Disclosures pursuant to Accounting Standard (AS) 7 (Revised) “Construction Contracts”:
Particulars
i)
ii)
iii)
iv)
Contract revenue recognised for the fi nancial year
Aggregate amount of contract costs incurred and recognised profi ts (Less recognised losses)
as at end of the fi nancial year for all contracts in progress as at that date
Amount of customer advances outstanding for contracts in progress as at end of the fi nancial
year
Retention amounts due from customers for contracts in progress as at end of the fi nancial
year
2010-2011
36819.91
88512.36
` crore
2009-2010
31252.17
71270.55
9013.79
6626.24
3481.26
2352.94
9.
Extraordinary item during the year represents proportionate reversal of ` 70.84 crore (previous year: ` 62.55 crore), out of the provision
made in earlier years in respect of the Company’s investment in shares of Satyam Computer Services Limited (SCSL), pursuant to sale
of a part of its holding in SCSL during the year.
10. Other income for the year ended March 31, 2011 includes the following items of exceptional nature [accounting policy no.3]:
a)
Profi t of ` 25.00 crore on sale of the Company’s part stake in Kesun Iron & Steel Company Private Limited, a subsidiary of the
Company to a strategic partner.
b) Gain of ` 213.04 crore on sale of the Company’s entire stake in L&T-Case Equipment Private Limited, an associate company.
c)
Part reversal of provision of ` 24.03 crore made in the earlier years for diminution in the value of investment in the International
Seaport Dredging Limited, pursuant to divestment of the Company’s part stake in the said company.
11. The cost of specialised machine tools including jigs, fi xtures, dyes, gauges and moulds used in the production in Electrical and
Electronics business was expensed out in earlier years. These items of plant & machinery have a useful life of 5 years. During the year,
the cost of such tools, where useful life has not expired, has been capitalized. The amount expensed out in earlier years in respect
of such tools has been reversed during the year and accordingly, the expense under “Stores, spares and tools” is lower by ` 77.32
crore. Similarly, the cumulative depreciation based on useful life of such tools has been provided in the books during the year and as
a result, the depreciation for the year is higher by ` 51.08 crore.
12. The expenditure on research and development activities, as certifi ed by the management, is ` 108.98 crore (previous year: ` 91.54
crore). This includes capital expenditure
(a) on tangible assets of ` 16.67 crore (previous year: ` 5.56 crore);
(b) on intangible assets being expenditure on new product development of ` 22.72 crore (previous year: ` nil) [accounting policy
no.4(b)]; and
(c) on other intangible assets of ` 1.33 crore (previous year: ` nil).
In addition, the Company has carried out work of a developmental nature of ` 16.46 crore (previous year: ` nil) which is partially/fully
paid for by the customers.
13. a)
The useful life of certain tangible assets was revised downward during the year as mandated by Accounting Standard (AS) 6
“Depreciation Accounting” and permitted by Schedule XIV of Companies Act. Consequently, depreciation rates have been
revised upward resulting in additional charge of depreciation of ` 43.00 crore. As a result, profi t before tax for the year is lower
to that extent. [accounting policy no.8a(ii)]
b)
The Company has reviewed the useful life of certain intangible assets during the year. Consequently, amortisation rates have
been revised resulting in lower charge of amortisation of ` 3.69 crore. As a result, profi t before tax for the year is higher to that
extent. (accounting policy no.9)
Accounts p124-187.indd 154
7/2/2011 3:23:34 PM
Accounts p124-187.indd 155
155
7/2/2011 3:23:34 PM
Notes forming part of Accounts (contd.)
14. Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benefi ts”.
i.
Defi ned contribution plans: [accounting policy no.5b(i)]
Amount of ` 91.25 crore (previous year ` 70.03 crore) is recognised as an expense and included in “Staff Expenses” (Schedule
N) in the Profi t and Loss Account.
ii.
Defi ned benefi t plans: [accounting policy no.5b(ii)]
a)
The amounts recognised in Balance Sheet are as follows:
Gratuity plan
Post-retirement
medical benefi t plan
Company pension
plan
Trust-managed
provident fund plan
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
` crore
Particulars
A)
Present value of defi ned benefi t
obligation
–
–
Wholly funded
Wholly unfunded
335.49
319.91
–
0.84
0.50
336.33
320.41
–
80.28
80.28
–
1.29
–
–
1396.21
1199.77
162.89
136.47
–
–
162.89
136.47
1396.21
1199.77
–
0.75
–
1369.08
1186.01
0.86
–
–
92.92
92.92
–
1.61
Less: Fair value of plan assets
308.38
279.30
Less: Unrecognised past service costs
–
–
Amount to be recognised as
liability or (asset)
B)
Amounts refl ected in the Balance Sheet
27.95
41.11
91.31
78.99
162.14
135.61
27.13
13.76
Liabilities
Assets
27.95
41.11
91.31
78.99
162.14
135.61
29.56
18.02
–
–
–
–
–
–
–
–
Net liability/(asset)
27.95
41.11
91.31
78.99
162.14
135.61
29.56#
18.02#
b)
The amounts recognised in Profi t and Loss Account are as follows:
Particulars
Current service cost
Interest cost
Actuarial losses/(gains)
Past service cost
Actuarial gain/(loss) not recognised in
books
1
2
3
4
5
6
Expected (return) on plan assets
(19.70)
(17.93)
Gratuity plan
Post-retirement
medical benefi t plan
Company pension
plan
Trust-managed
provident fund plan
2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010
` crore
21.37
24.27
19.22
20.85
1.20
0.38
–
27.52
29.50
(1.98)
27.52
24.18
19.19
–
–
41.33
47.51
(6.18)
41.33
20.14
4.74
6.66
–
4.43
0.51
–
16.34
11.24
5.10
16.34
–
4.39
5.74
–
1.52
0.14
–
11.79
11.87
(0.08)
11.79
–
3.60
11.08
–
3.81
74.18$
61.85$
11.90
117.57
91.17
–
(117.57)
(91.17)
16.15
(28.60)
11.42
21.47
0.11
0.11
–
–
–
30.94
21.50
–
(12.78)
0.67
9.44
(13.45)
(1.83)
83.77
74.18
9.59
30.94
(12.78)
83.77
–
–
106.15
(21.47)
61.85
61.85
–
61.85
69.70
Total (1 to 6)
I
II
Amount included in “staff expenses”
Amount included as part of “Interest”
Total (I + II)
Actual return on plan assets
156
Accounts p124-187.indd 156
7/2/2011 3:23:34 PM
Accounts p124-187.indd 157
7/2/2011 3:23:34 PM
Notes forming part of Accounts (contd.)
c)
The changes in the present value of defi ned benefi t obligation representing reconciliation of opening and closing balances
thereof are as follows:
Particulars
Opening balance of the present value of
defi ned benefi t obligation
Add: Current service cost
Add: Interest cost
Add: Contribution by plan participants
Employer
Employee
i)
ii)
iii)
Add/(less):
Actuarial losses/(gains)
Less: Benefi ts paid
Add: Past service cost
Closing balance of the present value of
defi ned benefi t obligation
Gratuity plan
Post-retirement
medical benefi t plan
Company pension
plan
Trust-managed
provident fund plan
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
` crore
320.41
272.93
21.37
24.27
19.22
20.85
–
–
–
–
5.68
(34.05)
0.38
21.40
(17.09)
–
80.28
4.74
6.66
–
–
–
4.43
(4.02)
0.83
72.40
136.47
152.78
1199.77
1001.10
4.39
5.74
3.60
11.08
3.81
11.90
74.18$
117.57
61.85$
91.17
–
–
–
1.52
(3.77)
–
–
–
–
16.15
(4.41)
–
–
–
–
(28.60)
–
–
135.30
103.97
–
–
–
–
(3.42)
(130.61)
(58.32)
–
–
–
336.33
320.41
92.92
80.28
162.89
136.47
1396.21
1199.77
Transfer-in/(out)
(1.73)~
3.10~
d)
Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as
follows:
Particulars
Opening balance of the fair value of the plan assets
Add: Expected Return on Plan Assets*
Add/(Less): Actuarial gains/(losses)
Add: Contribution by the employer
Add/(less) : Transfer in/(out)
Add: Contribution by Plan participants
Less: Benefi ts paid
Closing balance of the plan assets
Gratuity plan
` crore
Trust-managed
provident fund plan
As at
As at
As at
As at
31-3-2011
279.30
31-3-2010
244.71
31-3-2011
1186.01
31-3-2010
1017.06
19.70
4.48
41.31
(2.36)
–
(34.05)
308.38
17.93
2.21
28.57
–
2.97##
(17.09)
279.30
117.57
(11.42)
74.46
–
133.07
(130.61)
1369.08
91.17
(21.47)
55.13
–
102.44
(58.32)
1186.01
Note: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts
based on their value at the time of redemption, assuming a constant rate of return to maturity.
*
#
$
~
Basis used to determine the overall expected return:
The trust formed by the Company manages the investments of provident funds and gratuity fund. Expected return on plan
assets is determined based on the assessment made at the beginning of the year on the return expected on its existing
portfolio, along with the estimated increment to the plan assets and expected yield on the respective assets in the portfolio
during the year. Refer note no. 14(ii)(f)(7) below.
The Company expects to fund ` 27.11 crore (previous year: ` 40.61 crore) towards its gratuity plan and ` 78.63 crore
(previous year: ` 65.56 crore) towards its trust-managed provident fund plan during the year 2011-2012.
Employer’s and employees’ contribution (net) for March is paid in April.
Employer’s contribution to provident fund
Amount transferred (to)/from subsidiary & Associate companies and transferred out on sale of business undertakings (net)
` (1.73) crore (previous year ` 3.10 crore)
## Amount transferred from subsidiary companies–` 2.97 crore
157
7/2/2011 3:23:34 PM
Accounts p124-187.indd 156
7/2/2011 3:23:34 PM
Accounts p124-187.indd 157
Notes forming part of Accounts (contd.)
e)
The major categories of plan assets as a percentage of total plan assets are as follows:
Particulars
Government of India securities
State government securities
Corporate bonds
Equity shares of listed companies
Fixed deposits under special deposit scheme framed by
central government for provident funds
Insurer managed funds
Public sector unit bonds
Others
Gratuity plan
Trust-managed
provident fund plan
As at
As at
As at
As at
31-3-2011
31-3-2010
31-3-2011
31-3-2010
34%
10%
13%
2%
9%
1%
28%
3%
28%
13%
6%
3%
12%
1%
33%
4%
24%
12%
7%
–
19%
–
38%
–
23%
12%
6%
–
23%
–
36%
–
f)
Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):
1 Discount rate:
a) Gratuity plan
b) Company pension plan
c)
Post-retirement medical benefi t plan
2
Expected return on plan assets:
3 Annual increase in healthcare costs (see note below)
4
Salary Growth rate:
a) Gratuity plan
b) Company pension plan
5
Attrition Rate:
As at
As at
31-3-2011
31-3-2010
8.11%
8.11%
8.11%
7.50%
5.00%
5.00%
6.00%
8.01%
8.01%
8.01%
7.50%
5.00%
6.00%
7.00%
a)
For post-retirement medical benefi t plan & Company pension plan, the attrition rate varies from 2% to 8%
(previous year: 2% to 8%) for various age groups.
b)
For gratuity plan the attrition rate varies from 1% to 6% (previous year: 1% to 7%) for various age groups.
6
7
8
9
The estimates of future salary increases, considered in actuarial valuation, take into account infl ation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest
income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is
recognised immediately in the Profi t and Loss Account as actuarial losses.
The obligation of the Company under the post-retirement medical benefi t plan is limited to the overall ceiling limits.
At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to
increase at 5% p.a.
A one percentage point change in assumed healthcare cost trend rates would have the following effects on the
aggregate of the service cost and interest cost and defi ned benefi t obligation:
Particulars
Effect of 1% increase
2010-2011
2009-2010
Effect of 1% decrease
2010-2011
2009-2010
Effect on the aggregate of the service cost and
interest cost
Effect on defi ned benefi t obligation
1.49
8.94
0.88
5.59
(2.02)
(7.00)
(1.37)
(4.56)
` crore
158
Accounts p124-187.indd 158
7/2/2011 3:23:35 PM
Accounts p124-187.indd 159
7/2/2011 3:23:35 PM
Notes forming part of Accounts (contd.)
g)
The amounts pertaining to defi ned benefi t plans are as follows:
Particulars
As at
31-3-2011
As at
31-3-2010
As at
31-3-2009
As at
31-3-2008
As at
31-3-2007
` crore
1
Post-retirement medical benefi t plan (unfunded)
Defi ned benefi t obligation
Experience adjustment plan liabilities
91.31
7.91
78.99
5.73
70.97
1.13
56.67
2.66
46.36
–
2
Gratuity plan (funded/unfunded)
Defi ned benefi t obligation
336.33
320.41
272.93
231.02
203.45
Plan assets
Surplus/(defi cit)
308.38
279.30
244.71
203.42
152.93
(27.95)
(41.11)
(28.22)
(27.60)
(50.52)
Experience adjustment plan liabilities
Experience adjustment plan assets
30.00
4.48
30.67
2.21
8.38
13.13
16.44
6.25
25.84
(2.91)
3
Post-retirement pension plan (unfunded)
Defi ned benefi t obligation
162.14
135.61
151.80
151.35
118.56
Experience adjustment plan liabilities
17.46
(4.11)
(6.89)
26.87
–
4
Trust managed provident fund plan (funded)
Defi ned benefi t obligation
1396.21
1199.77
1001.10
903.75
827.24
Plan assets
Surplus/(defi cit)
1369.08
1186.01
1017.06
904.29
839.86
(27.13)
(13.76)
15.96
0.54
12.62
h) General descriptions of defi ned benefi t plans:
1. Gratuity plan:
The Company operates gratuity plan through a trust wherein every employee is entitled to the benefi t equivalent to
fi fteen days salary last drawn for each completed year of service. The same is payable on termination of service or
retirement whichever is earlier. The benefi t vests after fi ve years of continuous service. The company’s scheme is more
favourable as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan,
which is not material is unfunded and managed within the Company.
2.
Post-retirement medical care plan:
The Post-retirement medical benefi t plan provides for reimbursement of health care costs to certain categories of
employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the
employee at the time of retirement.
3.
Company’s pension plan:
In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement
pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends
on the cadre of the employee at the time of retirement.
4.
Trust managed provident fund plan:
The Company manages provident fund plan through a provident fund trust for its employees which is permitted
under the Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and
employees and guarantees interest at the rate notifi ed by the provident fund authority. The contribution by employer
and employee together with interest are payable at the time of separation from service or retirement whichever is
earlier. The benefi t under this plan vests immediately on rendering of service.
15 Uncalled liability on shares partly paid is ` nil net of advance paid against equity commitment (previous year: ` 36.62 crore).
Accounts p124-187.indd 158
7/2/2011 3:23:35 PM
Accounts p124-187.indd 159
159
7/2/2011 3:23:35 PM
Notes forming part of Accounts (contd.)
16 Disclosures in respect of joint ventures
a)
List of joint ventures
Sr.
no.
Name of joint venture
Description of interest/
(description of job)
Proportion
of ownership
interest
Country of
residence
1
2
3
4
5
6
7
8
9
L&T-Hochtief Seabird Joint
Venture
Integrated joint venture (Construction of breakwater
at Karwar)
International Metro Civil
Contractors
Integrated joint venture (Construction of Delhi
metro corridor phase I tunnel project)
HCC-L&T Purulia Joint Venture
Integrated joint venture (Construction of pumped
storage project)
Desbuild-L&T Joint Venture
Integrated joint venture (Renovation of US
consulate, Chennai)
Bauer-L&T Diaphragm Wall
Joint Venture
Integrated joint venture (Construction of diaphragm
wall for International Metro Civil Contractors)
L&T-AM Tapovan Joint
Venture
Integrated joint venture (Construction of head race
tunnel for Tapovan Vishnugad hydroelectric project
at Chamoli, Uttaranchal)
L&T-SUCG Joint Venture
Jointly controlled entity (Construction of twin tunnel
between IGI airport and sector 21 for DMRC)
L&T-Eastern Joint Venture
Metro Tunnelling Group
Jointly controlled entity (Construction and
maintenance of 295 residential units at Dubai)
Integrated joint venture (Construction of Delhi
metro corridor-phase II tunnel project)
10 Metro Tunnelling Chennai
L&T–SUCG Joint Venture
Integrated joint venture (Construction of UG Station
at Nehru Park, KMC and Pachiyappas College and
associated tunnels for CMRL)
11
L&T-KBL (UJV) Hyderabad
12
L&T-HCC Joint Venture
Jointly controlled operation (Investigation, design,
supply and erection for lift irrigation system)
Jointly controlled operation (Four laning and
strengthening of existing two lane sections from
240 Km to 320 Km on NH2)
Patel-L&T Consortium
Jointly controlled operation (Hydroelectric project)
13
14
16
17
18
L&T-SVEC Joint Venture
15
L&T-KBL-MAYTAS UJV
Consortium of Global
Industries Offshore LLC, USA
and L&T
Consortium of Toyo
Engineering Company and
L&T
Jointly controlled operation (Lift irrigation project at
Hyderabad)
Jointly controlled operation (Transmission of 735
mId treated water associated with all civil, electrical
& mechanical work at Hyderabad)
Jointly controlled operation (Execution of pipeline
replacement project of ONGC)
Jointly controlled operation (Execution of naphtha
cracker associated unit for IOCL, Panipat)
L&T and Scomi Engineering
BHD. Joint Venture
Jointly controlled operations (Implementation of
monorail system in Mumbai)
0.90
0.26
0.43
0.49
0.50
0.65
0.51
0.65
0.26
0.75
–
–
–
–
–
–
–
–
India
India
India
India
India
India
India
UAE
India
India
India
India
India
India
India
India
India
India
Country of incorporation is not applicable for the above joint ventures as these are unincorporated joint ventures.
160
Accounts p124-187.indd 160
7/2/2011 3:23:35 PM
Accounts p124-187.indd 161
7/2/2011 3:23:35 PM
Notes forming part of Accounts (contd.)
b)
Financial interest in jointly controlled entities
Sr.
no.
Name of Integrated joint ventures/
jointly controlled entities
Company’s share
As at March 31, 2011
For the Year 2010-2011
Assets
Liabilities
Income
Expenses
Tax
` crore
1
2
3
4
5
6
7
8
9
L&T-Hochtief Seabird Joint Venture
International Metro Civil Contractors
HCC-L&T Purulia Joint Venture
Desbuild-L&T Joint Venture
15.21
(12.54)
13.39
(12.60)
5.52
(6.07)
0.34
(0.34)
0.38
(0.38)
3.71
(3.70)
3.95
(4.39)
0.28
(0.28)
–
(–)
0.51
(0.06)
0.75
(0.05)
–
(–) ^^^
Bauer-L&T Diaphragm Wall Joint Venture
– $
(–) $#$
–
(–) $#
Larsen & Toubro Limited–Shapoorji
Pallonji & Company Limited Joint Venture
(Ebene Cybercity)
Larsen & Toubro Limited–Shapoorji
Pallonji & Company Limited Joint Venture
(Les Pailles Exhibition Centre)
L&T-AM Tapovan JV
Metro Tunnelling Group
10
L&T–Eastern Joint Venture
11
L&T–SUCG Joint Venture
12 Metro Tunnelling Chennai L&T–Shanghai
Urban Corporation Group Joint Venture
Total
Share of net assets/profi t after tax in
jointly controlled entities
–
(–)
–
(–)
164.21
(139.06)
9.16
(14.81)
29.66
(34.61)
14.43
(20.69)
27.70
(–)
253.48
(217.92)
–
(–)
–
(–)
161.20
(201.10)
20.22
(18.38)
40.10
(49.58)
21.66
(26.07)
27.70
(–)
305.34
(326.68)
51.86
(108.76)
–
(–)
–
(0.03)
–
(–)
2.80
(91.60)
14.63
(24.72)
37.79
(84.50)
7.38
(72.92)
–
(–)
63.86
(273.88)
(58.22)
(-0.34)
0.01
(–) ***
0.25
(0.05)
0.03
(0.02)
– @
(–) %
– ^
(–)
–
(–) $$$
–
(–) ##
– #
(–)
0.22
(–) %%
–
(–) %^
–
(–)
–
(-0.52)
–
(–) @@@
–
(0.33)
67.83
(99.45)
1.88
(22.30)
41.36
(81.09)
4.96
(69.30)
– ~
(–)
116.34
(272.21)
– *
(–)
4.61
(0.83)
–
(–)
0.91
(1.36)
–
(–)
5.74
(2.01)
Amounts less than ` 0.01 crore:
Current Year: $ ` 38500, @ ` 8320, ^ ` 45589, ~ ` 73808, # ` 22454, * ` 73340
Previous Year: $#$ (` 44014), $# (` 43259), ^^^(` -28538), ***(` -70945), %(` 9406), $$$ (` 19635), @@@ (` 552), ## (` 21922), %% (` 86783), %^ (` 109)
Notes:
i.
ii.
iii.
Figures in brackets relate to previous year.
Contingent liabilities, if any, incurred in relation to interests in joint ventures as at March 31, 2011: ` nil (previous year: ` nil);
and share in contingent liabilities incurred jointly with other ventures as at March 31, 2011: ` nil (previous year: ` nil).
Share in contingent liabilities of joint ventures themselves for which the Company is contingently liable as on March 31,
2011: ` 95.97 crore (previous year: ` 88.78 crore).
Accounts p124-187.indd 160
7/2/2011 3:23:35 PM
Accounts p124-187.indd 161
iv. Contingent liabilities in respect of liabilities of other ventures of joint ventures as at March 31, 2011: ` nil (previous year: ` nil).
Capital commitments, if any, in relation to interests in joint ventures as at March 31, 2011: ` nil (previous year: ` nil).
v.
17
Loans and advances include ` 100 crore (previous year: ` 136 crore) under “advances recoverable in cash or in kind” towards interest
free loan to L&T Employees Welfare Foundation Trust to part-fi nance its acquisition of equity shares in the Company held by Grasim
Industries Limited and its subsidiary. The loan is repayable in 9 years commencing from May 2005 with a minimum repayment of
` 25 crore in a year.
161
7/2/2011 3:23:35 PM
Notes forming part of Accounts (contd.)
18
Particulars in respect of loans and advances in the nature of loans as required by the listing agreement:
Name of the company/fi rm/director
(a)
Loans and advances in the nature of loans given to
subsidiaries:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Larsen & Toubro Infotech Limited
India Infrastructure Developers Limited
Bhilai Power Supply Company Limited
Tractor Engineers Limited
L&T Finance Limited
International Seaport Dredging Private Limited
L&T Capital Company Limited
L&T Seawoods Private Limited
L&T Infrastructure Development Projects Limited
L&T-MHI Boilers Private Limited
L&T Infrastructure Finance Company Limited
L&T Realty Private Limited
L&T Arun Excello IT SEZ Private Limited
L&T Arun Excello Commercial Projects Private Limited
L&T Power Limited
L&T Finance Holding Limited
L&T Shipbuilding Limited
L&T Special Steels & Heavy Forgings Private Limited
L&T Transportation Infrastructure Limited
L&T Uttaranchal Hydropower Limited
Nabha Power Limited
Narmada Infrastructure Construction Enterprise
Limited
Balance as at
Maximum outstanding during
31-3-2011
31-3-2010
2010-2011
2009-2010
` crore
100.00
–
7.19
49.00
–
–
–
125.02
7.19
29.00
–
–
103.50
124.19
–
240.00
–
152.58
292.00
145.00
25.00
–
356.00
74.41
–
–
50.00
–
–
–
–
–
152.58
292.00
145.10
25.02
–
–
–
–
–
–
–
–
100.00
125.02
7.19
66.00
1700.00
–
510.50
–
240.00
–
390.00
292.00
145.10
25.02
152.15
356.00
74.41
50.00
150.00
50.00
291.18
50.00
–
125.02
7.19
72.85
–
11.83
1533.12
589.94
80.00
165.00
152.87
292.00
145.10
25.02
–
–
–
–
–
–
–
–
Total
1594.68
900.10
(b)
Loans and advances in the nature of loans given to
associates:
1
L&T-Case Equipment Private Limited
Total
(c)
Loans and advances in the nature of loans where
repayment schedule is not specifi ed/is beyond 7 years:
Bhilai Power Supply Company Limited
L&T Capital Company Limited
L&T Shipbuilding Limited
1
2
3
Total
(d)
Loans and advances in the nature of loans where interest is
not charged or charged below bank rate:
Bhilai Power Supply Company Limited
Tractor Engineers Limited
L&T Capital Company Limited
L&T Realty Private Limited
1
2
3
4
Total
–
–
7.19
–
74.41
81.60
7.19
49.00
103.50
292.00
451.69
–
–
7.19
–
–
7.19
7.19
29.00
124.19
292.00
452.38
–
5.00
7.19
–
74.41
7.19
66.00
510.50
292.00
7.19
770.81
–
7.19
72.85
1533.12
292.00
Note: Loans to employees (including directors) under various schemes of the Company (such as housing loan, furniture loan, education
loan, etc) have been considered to be outside the purview of disclosure requirements.
162
Accounts p124-187.indd 162
7/2/2011 3:23:35 PM
Accounts p124-187.indd 163
7/2/2011 3:23:35 PM
Notes forming part of Accounts (contd.)
19
Segment reporting:
a)
Information about business segments (information provided in respect of revenue items for the year ended March 31, 2011 and
in respect of assets/liabilities as at March 31, 2011–denoted as “CY” below, previous year denoted as “PY”)
i)
Primary segments (business segments):
` crore
Particulars
Engineering &
construction
Electrical &
electronics
Machinery &
industrial products
Others
Elimination
Total
CY
PY
CY
PY
CY
PY
CY
PY
CY
PY
CY
PY
37911.63 31988.44
3001.09
2829.29
2722.01
2173.29
660.42
364.56
–
– 44295.15 37355.58
307.08
327.33
212.83
157.25
71.10
46.24
–
–
(591.01)
(530.82)
–
–
38218.71 32315.77
3213.92
2986.54
2793.11
2219.53
660.42
364.56
(591.01)
(530.82) 44295.15 37355.58
4772.17
4095.01
399.43
394.19
530.47
451.90
118.01
44.34
–
–
5820.08
4985.44
Revenue–including excise duty
External
Inter-segment
Total revenue
Result
Segment result
Less: inter-segment margins on
capital jobs
Unallocated corporate income/
(expenditure) (net)
Operating profi t (PBIT)
Interest expense
Interest income
Profi t before tax (PBT)
Provision for current tax
Provision for deferred tax
Profi t after tax
(before extraordinary items)
Profi t from extraordinary items
Profi t after tax
(after extraordinary items)
Other information
Segment assets
Unallocable corporate assets
Total assets
12.39
58.35
5807.69
4927.09
336.59
1330.50
6144.28
6257.59
(647.37)
(505.31)
336.00
128.39
5832.91
5880.67
1778.86
1644.25
167.00
(3.38)
3887.05
4239.80
70.84
135.72
3957.89
4375.52
35655.58 27246.32
21724.78 19531.93
57380.36 46778.25
25910.19 19218.46
9623.91
9248.15
35534.10 28466.61
163
7/2/2011 3:23:35 PM
31369.48 23732.74
2159.75
1939.41
1447.92
1081.95
678.43
492.22
Segment liabilities
23823.00 17442.07
973.57
807.65
977.69
857.95
135.93
110.79
Unallocable corporate liabilities
Total liabilities
Capital expenditure
1327.64
901.95
169.20
140.73
28.76
213.27
25.89
6.36
Depreciation (including
obsolescence and
amortisation) included in
segment expense
Non-cash expenses other than
depreciation included in
segment expense
418.33
302.11
102.95
39.24
33.40
19.57
11.82
7.48
143.51
89.12
9.02
10.16
6.60
7.83
5.42
7.26
Accounts p124-187.indd 162
7/2/2011 3:23:35 PM
Accounts p124-187.indd 163
Notes forming part of Accounts (contd.)
(ii)
Secondary segments (geographical segments):
Particulars
Domestic
Overseas
Total
CY
PY
CY
PY
CY
PY
External revenue by location of customers
39633.75
30923.22
4661.40
6432.36
44295.15
37355.58
Carrying amount of segment assets by location
of assets
32582.68
24223.86
3072.90
3022.46
35655.58
27246.32
Cost incurred on acquisition of tangible and
intangible fi xed assets
1524.05
1125.20
27.44
137.11
1551.49
1262.31
` crore
b)
Segment reporting: segment identifi cation, reportable segments and defi nition of each reportable segment:
i)
Primary/secondary segment reporting format:
[a]
[b]
The risk-return profi le of the Company’s business is determined predominantly by the nature of its products and
services. Accordingly, the business segments constitute the primary segments for disclosure of segment information.
In respect of secondary segment information, the Company has identifi ed its geographical segments as (i) domestic
and (ii) overseas. The secondary segment information has been disclosed accordingly.
ii)
Segment identifi cation:
Business segments have been identifi ed on the basis of the nature of products/services, the risk-return profi le of individual
businesses, the organisational structure and the internal reporting system of the Company.
iii)
Reportable segments:
Reportable segments have been identifi ed as per the criteria specifi ed in Accounting Standard (AS) 17 “Segment Reporting”
issued by the Institute of Chartered Accountants of India.
iv)
Segment composition:
•
•
Engineering & Construction Segment comprises execution of engineering and construction projects in India/
abroad to provide solutions in civil, mechanical, electrical and instrumentation engineering (on turnkey basis or
otherwise) to core/infrastructure sectors including railways, shipbuilding and supply of complex plant and equipment
to core sectors. The segment capabilities include basic/detailed engineering, equipment fabrication/supply, erection &
commissioning, procurement/construction and project management.
Electrical & Electronics Segment comprises manufacture and sale of low and medium voltage switchgear
components, custom-built switchboards, custom built low and medium voltage switchboards, electronic energy
meters/protection (relays) systems, control & automation products, medical equipment and petrol dispensing pumps
& systems [up to the date of sale in previous year].
• Machinery & Industrial Products Segment comprises manufacture and sale of industrial machinery & equipment,
manufacture and marketing of industrial valves, construction equipment and welding/industrial products.
•
Others include property development and integrated engineering services.
20. Disclosure of related parties/related party transactions:
i.
List of related parties over which control exists and status of transactions entered during the year
Sr.
no.
1
2
3
4
5
6
7
8
9
10
11
Name of the related party
Relationship
Ewac Alloys Limited @@
HI Tech Rock Products & Aggregates Limited
L&T Capital Company Limited
L&T Concrete Private Limited $$$
L&T EmSyS Private Limited $
L&T General Insurance Company Limited
L&T Infra & Property Development Private Limited $$
L&T Natural Resources Limited
L&T Plastics Machinery Limited
L&T Power Development Limited
L&T Power Limited
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
164
Transaction entered
during the year
(Yes/No)
Yes
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Accounts p124-187.indd 164
7/2/2011 3:23:36 PM
Accounts p124-187.indd 165
7/2/2011 3:23:36 PM
Notes forming part of Accounts (contd.)
Sr.
no.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Name of the related party
Relationship
L&T Powergen Limited
L&T Rajkot-Vadinar Tollway Limited (formerly known as L&T
Wholly owned Subsidiary
Wholly owned Subsidiary
Rajkot-Vadinar Tollway Private Limited)
L&T Realty Private Limited
L&T Seawoods Private Limited
L&T Shipbuilding Limited
L&T Solar Limited
L&T Electricals and Automation Limited (formerly known as
L&T Strategic Management Limited)
L&T Technologies Limited
L&T-Valdel Engineering Limited
Larsen & Toubro Infotech Limited
Larsen & Toubro International FZE
Larsen & Toubro LLC
Spectrum Infotech Private Limited
Tractor Engineers Limited
L&T Aviation Services Private Limited
L&T Western India Tollbridge Limited
Bhilai Power Supply Company Limited
Kesun Iron & Steel Company Private Limited (formerly L&T
Engserve Private Limited)
L&T-MHI Boilers Private Limited
L&T Finance Holdings Limited (formerly known as L&T Capital
Holdings Limited)
L&T Howden Private Limited
L&T Infrastructure Development Projects Limited
L&T Kobelco Machinery Private Limited
L&T- MHI Turbine Generators Private Limited
L&T Sapura Offshore Private Limited
L&T Sapura Shipping Private Limited
L&T Special Steels & Heavy Forgings Private Limited
L&T-Gulf Private Limited
L&T-Sargent & Lundy Limited
PNG Tollway Limited (formerly known as PNG Tollway Private
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Subsidiary *
Limited)
Raykal Aluminium Company Private Limited
India Infrastructure Developers Limited
L&T Finance Limited
L&T Infrastructure Finance Company Limited
L&T Investment Management Limited
L&T Mutual Fund Trustee Limited
L&T Asset Management Company Limited
L&T Real Estate India Fund
L&T Trustee Company Private Limited
Lotus infrastructure Investments Limited
42
43
44
45
46
47
48
49
50
51
52 Mango Investments Limited
Peacock Investments Limited
53
Chennai Vision Developers Private Limited
54
L&T Realty FZE
55
L&T Arunachal Hydropower Limited
56
L&T Himachal Hydropower Limited
57
L&T Uttaranchal Hydropower Limited
58
Nabha Power Limited
59
L&T Infotech Financial Services Technologies Inc.
60
Larsen & Toubro Infotech,GmbH
61
Larsen & Toubro Infotech LLC
62
Subsidiary *
Wholly owned Subsidiary of L&T Finance Holdings Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
Wholly owned Subsidiary of L&T Finance Limited
Wholly owned Subsidiary of L&T Finance Limited
Wholly owned Subsidiary of L&T Capital Company Limited
Wholly owned Subsidiary of L&T Capital Company Limited
Wholly owned Subsidiary of L&T Capital Company Limited
Wholly owned Subsidiary of L&T Capital Company Limited
Wholly owned Subsidiary of L&T Capital Company Limited
Wholly owned Subsidiary of L&T Capital Company Limited
Wholly owned Subsidiary of L&T Realty Private Limited
Wholly owned Subsidiary of L&T Realty Private Limited
Wholly owned Subsidiary of L&T Power Development Limited
Wholly owned Subsidiary of L&T Power Development Limited
Wholly owned Subsidiary of L&T Power Development Limited
Wholly owned Subsidiary of L&T Power Development Limited
Wholly owned Subsidiary of Larsen & Toubro Infotech Limited
Wholly owned Subsidiary of Larsen & Toubro Infotech Limited
Wholly owned Subsidiary of Larsen & Toubro Infotech Limited
Transaction entered
during the year
(Yes/No)
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
No
Yes
Yes
Yes
Yes
No
Yes
No
165
7/2/2011 3:23:36 PM
Accounts p124-187.indd 164
7/2/2011 3:23:36 PM
Accounts p124-187.indd 165
Notes forming part of Accounts (contd.)
Sr.
no.
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
Name of the related party
Relationship
Larsen & Toubro Infotech Canada Limited
GDA Technologies Inc.
GDA Technologies Limited
L&T Electrical & Automation FZE
L&T Overseas Projects Nigeria Limited
Larsen & Toubro (Jiangsu) Valve Company Limited
Larsen & Toubro (Wuxi) Electric Company Limited
Larsen & Toubro Consultoria E Projeto Ltda.
Larsen & Toubro Saudi Arabia LLC
Larsen & Toubro (Qingdao) Rubber Machinery Company Limited
Pathways FZE
PT Tamco Indonesia
Tamco Electrical Industries Australia Pty Limited
Tamco Shanghai Switchgear Company Limited ***
Tamco Switchgear (Malaysia) SDN BHD
L&T Electricals Saudi Arabia Company Limited, LLC
L&T Modular Fabrication Yard LLC
Larsen & Toubro (Oman) LLC
Larsen & Toubro Electromech LLC
Larsen & Toubro Heavy Engineering LLC
Larsen & Toubro T&D SA (PTY) LTD
Offshore International FZC ****
Larsen & Toubro (East Asia) SDN.BHD
Larsen & Toubro ATCO Saudi LLC
Larsen & Toubro Kuwait Construction General Contracting
Company, WLL
Larsen & Toubro Qatar LLC
Larsen & Toubro Readymix Concrete Industries LLC
Qingdao Larsen & Toubro Trading Company Limited
Wholly owned Subsidiary of Larsen & Toubro Infotech Limited
Wholly owned Subsidiary of Larsen & Toubro Infotech Limited
Wholly owned Subsidiary of GDA Technologies Inc.
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Subsidiary of Larsen & Toubro International FZE #
Subsidiary of Larsen & Toubro International FZE #
Subsidiary of Larsen & Toubro International FZE #
Subsidiary of Larsen & Toubro International FZE #
Subsidiary of Larsen & Toubro International FZE #
Subsidiary of Larsen & Toubro International FZE #
Subsidiary of Larsen & Toubro International FZE #
Subsidiary of Larsen & Toubro International FZE ##
Subsidiary of Larsen & Toubro International FZE ##
Subsidiary of Larsen & Toubro International FZE ##
Subsidiary of Larsen & Toubro International FZE ##
Subsidiary of Larsen & Toubro International FZE ##
Wholly owned Subsidiary of Larsen & Toubro (Qingdao) Rubber Machinery
Company Limited
International Seaports (India) Private Limited
L&T Ahmedabad-Maliya Tollway Limited (formerly known as L&T
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Subsidiary of L&T Infrastructure Development Projects Limited
Ahmedabad-Maliya Tollway Private Limited)
L&T Devihalli Hassan Tollway Limited
L&T Halol-Shamlaji Tollway Limited (formerly known as L&T
Subsidiary of L&T Infrastructure Development Projects Limited
Subsidiary of L&T Infrastructure Development Projects Limited
Halol-Shamlaji Tollway Private Limited)
L&T Interstate Road Corridor Limited
L&T Krishnagiri Thopur Toll Road Limited
L&T Krishnagiri Walajahpet Tollway Limited
L&T Metro Rail (Hyderabad) Limited
L&T Panipat Elevated Corridor Limited
L&T Port Kachchigarh Limited (formerly known as L&T Port
Sutrapada Limited)
L&T Transco Private Limited
L&T Transportation Infrastructure Limited
L&T Vadodara Bharuch Tollway Limited
L&T Western Andhra Tollways Limited
Narmada Infrastructure Construction Enterprise Limited
L&T Infrastructure Development Projects Lanka (Private) Limited
L&T Urban Infrastructure Limited
CSJ Infrastructure Private Limited
Cyber Park Development & Construction Limited @
L&T Arun Excello Commercial Projects Private Limited
L&T Arun Excello IT SEZ Private Limited
L&T Bangalore Airport Hotel Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Subsidiary of L&T Infrastructure Development Projects Limited #
Subsidiary of L&T Infrastructure Development Projects Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Transaction entered
during the year
(Yes/No)
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
166
Accounts p124-187.indd 166
7/2/2011 3:23:36 PM
Accounts p124-187.indd 167
7/2/2011 3:23:36 PM
Notes forming part of Accounts (contd.)
Sr.
no.
113
114
115
116
117
118
119
120
121
122
123
124
125
*
#
##
@@
@
$
$$
$$$
$$$$
**
***
****
Name of the related party
Relationship
L&T Infocity Limited
L&T South City Projects Limited
L&T Tech Park Limited
L&T Vision Ventures Limited
Hyderabad International Trade Expositions Limited
L&T Hitech City Limited
L&T Infocity Lanka Private Limited **
Andhra Pradesh Expositions Private Limited $$$$
L&T Chennai–Tada Tollway Limited
L&T Samakhiali Gandhidham Tollway Private Limited
Sutrapada SEZ Developers Limited
Sutrapada Shipyard Limited
L&T Siruseri Property Developers Limited
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Urban Infrastructure Limited #
Subsidiary of L&T Infocity Limited #
Subsidiary of L&T Infocity Limited #
Subsidiary of L&T Infocity Limited #
Wholly owned Subsidiary of Hyderabad International Trade Expositions
Limited
Subsidiary of L&T Transco Private Limited
Wholly owned Subsidiary of L&T Transco Private Limited
Wholly owned Subsidiary of L&T Transco Private Limited
Wholly owned Subsidiary of L&T Transco Private Limited
Wholly owned Subsidiary of L&T South City Projects Limited
Transaction entered
during the year
(Yes/No)
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Yes
No
No
No
The Company holds more than one-half in nominal value of the equity share capital.
The Company, together with its subsidiaries, holds more than one-half in nominal value of the equity share capital.
The Company, together with its subsidiaries controls the composition of the Board of Directors.
Associate became Subsidiary w.e.f. December 14, 2010
The Parent Company has sold its stake w.e.f. December 29, 2010
The Company is liquidated and its name is struck off from the register of ROC u/s 560(5) of the Companies Act 1956 w.e.f. February 11, 2011
The Company is under the process of liquidation and its name is struck off from the register of ROC u/s 560(5) of the Companies Act 1956 on April 16, 2011
The Company is liquidated and its name is struck off from the register of ROC u/s 560(5) of the Companies Act 1956 w.e.f. March 16, 2011
The Company is liquidated and its name is struck off from the register of ROC u/s 560(5) of the Companies Act 1956 w.e.f. February 5, 2011
The Parent Company has disposed its stake w.e.f. April 6, 2010
The Parent Company has disposed its stake w.e.f. February 16, 2011
The Company is under liquidation pursuant to shareholder’s approval dated April 26, 2011
ii
(a) Names of the associates and joint ventures with whom transactions were carried out during the year:
Associate companies:
1
3
5
7
9
Audco India Limited
L&T-Chiyoda Limited
L&T-Ramboll Consulting Engineers Limited
JSK Electricals Private Limited
2
4
6
8
EWAC Alloys Limited @@
L&T-Komatsu Limited
L&T-Case Equipment Private Limited ^^
Feedback Ventures Private Limited
L&T Arun Excello Realty Private Limited
10 Magtorq Private Limited
11
Salzer Electronics Limited
Joint ventures (other than associates):
1
3
5
7
9
International Metro Civil Contractors
Metro Tunneling Chennai L&T SUCG Joint Venture
Metro Tunneling Group
Desbuild-L&T Joint Venture
2
4
6
8
Bauer-L&T Diaphragm Wall Joint Venture
L&T-Eastern Joint Venture
L&T Hochtief Seabird Joint Venture
L&T-SUCG Joint Venture
L&T-AM Tapovan Joint Venture
10
HCC-L&T Purulia Joint Venture
11
The Dhamra Port Company Limited
@@
^^
Associate became Subsidiary w.e.f. December 14, 2010
The Company has sold its stake on March 31, 2011
Accounts p124-187.indd 166
7/2/2011 3:23:36 PM
Accounts p124-187.indd 167
167
7/2/2011 3:23:36 PM
Notes forming part of Accounts (contd.)
ii
(b) Names of the Key management personnel and their relatives with whom transactions were carried out during the year:
Key management personnel & their relatives:
1
Mr. A. M. Naik (Chairman & Managing Director)
2 Mr. J. P. Nayak (whole-time director)
Mrs. Neeta J. Nayak (wife)
Mr. Nitin Nayak (son)
3
5
7
9
Mr. Y. M. Deosthalee (whole-time director)
4 Mr. K. Venkataramanan (whole-time director)
Mr. R. N. Mukhija (whole-time director) ^
6 Mr. K. V. Rangaswami (whole-time director)
Mrs. Jyothi Venkataramanan (wife)
Ms. Debika Ajmani (daughter)
Ms. Radhika Mukhija (daughter)
Mr. V. K. Magapu (whole-time director)
8 Mr. M. V. Kotwal (whole-time director)
Mr. Ravi Uppal (whole-time director) ~
^
~
Up to October 23, 2010
W.e.f. November 1, 2010
iii. Disclosure of related party transactions:
Sr.
no.
Nature of transaction/relationship/major parties
1
Purchase of goods & services (including commission paid)
2010-2011
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
` crore
Subsidiaries, including:
2330.09
719.72
L&T-MHI Boilers Private Limited
L&T Modular Fabrication Yard LLC
L&T-MHI Turbine Generators Private Limited
Associates & joint ventures, including:
727.63
Audco India Limited
EWAC Alloys Limited
Salzer Electronics Limited
Total
2
Sale of goods/contract revenue & services
Subsidiaries, including:
L&T Shipbuilding Limited
L&T Ahmedabad-Maliya Tollway Limited (formerly
known as L&T Ahmedabad-Maliya Tollway Private
Limited)
L&T Halol-Shamlaji Tollway Limited (formerly known
as L&T Halol-Shamlaji Tollway Private Limited)
Nabha Power Limited
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
3
Purchase/lease of fi xed assets
Subsidiaries, including:
L&T Shipbuilding Limited
Larsen & Toubro International FZE
Associates & joint ventures, including:
L&T-Case Equipment Private Limited
Audco India Limited
Total
3057.72
3824.61
221.53
4046.14
63.59
3.98
67.57
382.69
235.12
1126.48
426.72
79.08
108.71
806.43
537.19
453.61
436.01
218.84
50.25
6.55
3.81
–
–
–
426.75
331.62
115.94
136.43
259.29
–
156.92
–
539.19
–
108.00
–
58.40
695.53
1415.25
1569.31
597.52
2166.83
109.30
76.08
185.38
168
Accounts p124-187.indd 168
7/2/2011 3:23:36 PM
Accounts p124-187.indd 169
7/2/2011 3:23:37 PM
Notes forming part of Accounts (contd.)
Sr.
no.
Nature of transaction/relationship/major parties
4
Sale of fi xed assets
Subsidiaries, including:
L&T Shipbuilding Limited
Kesun Iron & Steel Company Private Limited
(formerly known as L&T Engserve Private Limited)
Associates & joint ventures, including:
Audco India Limited
Total
5
Subscription to equity and preference shares (including
application money paid and investment in joint ventures)
Subsidiaries, including:
L&T Power Development Limited
L&T Finance Holding Limited
(formerly known as L&T Capital Holding Limited)
L&T General Insurance Company Limited
L&T Special Steels and Heavy Forgings Private Limited
2010-2011
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
` crore
2.95
0.32
3.27
2.67
–
0.31
0.88
–
0.88
1091.50
1957.14
410.00
150.00
171.00
111.00
Associates & joint ventures, including:
12.78
13.10
International Seaport Dredging Limited
L&T-Eastern Joint Venture
Metro Tunneling Group
L&T-Hochtief Seabird Joint Venture
L&T-SUCG Joint Venture
Total
6
Purchase of investments from
Subsidiaries including:
L&T Capital Company Limited
L&T Power Limited
Total
7
Conversion of preference shares into equity shares
Associate:
International Seaport Dredging Limited
Total
8
Sale of investments to
Subsidiaries, including:
L&T Infrastructure Development Projects Limited
L&T Finance Holding Limited
(formerly known as L&T Capital Holding Limited)
L&T Capital Company Limited
Total
9
Buy back of shares by
Subsidiary:
L&T-Valdel Engineering Limited
Associate:
Audco India Limited
Total
–
–
7.51
2.66
1.84
490.65
153.10
–
1970.24
7.86
7.86
9.42
9.42
1104.28
643.75
643.75
–
–
618.41
25.36
128.30
–
490.11
–
–
618.41
–
–
–
25.36
2.10
27.23
29.33
–
0.79
–
834.00
550.00
–
–
10.00
3.03
–
–
–
7.81
–
9.42
–
25.36
–
2.10
27.23
169
Accounts p124-187.indd 168
7/2/2011 3:23:36 PM
Accounts p124-187.indd 169
7/2/2011 3:23:37 PM
Notes forming part of Accounts (contd.)
Sr.
no.
Nature of transaction/relationship/major parties
` crore
2010-2011
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
10
Receiving of services from
Subsidiaries, including:
Larsen & Toubro Infotech Limited
L&T-Valdel Engineering Limited
Associates & joint ventures, including:
L&T-Chiyoda Limited
Total
11
Resettlement expenses paid to
Subsidiary:
Tractor Engineers Limited
Total
12
Rent paid, including lease rentals under leasing/hire purchase
arrangements including loss sharing on equipment fi nance
Subsidiaries, including:
L&T Finance Limited
Larsen & Toubro Infotech Limited
PNG Tollway Limited
(formerly known as PNG Tollway Private Limited)
L&T Infocity Limited
57.47
0.61
58.08
–
–
8.85
Associates & joint ventures, including:
0.96
EWAC Alloys Limited
L&T-Komatsu Limited
L&T-Chiyoda Limited
Key management personnel
Relatives of key management personnel
Total
13 Charges for deputation of employees to related parties
Subsidiaries, including:
Offshore International FZC
L&T-Valdel Enginnering Limited
L&T Shipbuilding Limited
0.06
0.24
10.11
66.54
Associates & joint ventures, including:
56.58
EWAC Alloys Limited
L&T-Case Equipment Private Limited
Audco India Limited
L&T-Komatsu Limited
L&T-Chiyoda Limited
44.66
–
0.61
–
5.28
–
1.68
1.24
0.22
0.74
–
–
9.26
14.00
–
9.36
11.85
6.78
22.03
53.59
3.72
57.31
7.00
7.00
18.03
1.17
0.06
0.24
19.50
40.48
26.85
35.47
7.60
3.71
7.00
13.58
2.99
–
–
0.17
0.72
0.28
7.84
4.88
7.18
2.78
5.60
8.32
4.16
4.75
Total
123.12
67.33
170
Accounts p124-187.indd 170
7/2/2011 3:23:37 PM
Accounts p124-187.indd 171
7/2/2011 3:23:37 PM
Notes forming part of Accounts (contd.)
Sr.
no.
Nature of transaction/relationship/major parties
14 Dividend received
Subsidiaries, including:
Larsen & Toubro Infotech Limited
Associates & joint ventures, including:
L&T-Komatsu Limited
EWAC Alloys Limited
Audco India Limited
L&T-Case Equipment Private Limited
Voith Paper Technology (India) Limited
2010-2011
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
` crore
88.91
19.01
187.35
42.06
151.58
14.40
13.06
8.60
6.00
–
Total
229.41
107.92
15 Commission received, including those under agency
arrangements
Subsidiaries, including:
L&T (Qingdao) Rubber Machinery Company Limited
EWAC Alloys Limited
Tractor Engineers Limited
L&T-Plastics Machinery Limited
Associates & joint ventures, including:
L&T-Komatsu Limited
Total
16
Rent received, overheads recovered and miscellaneous
income
Subsidiaries, including:
Larsen & Toubro Infotech Limited
Larsen & Toubro (Oman) LLC
Associates & joint ventures, including:
L&T-Case Equipment Private Limited
L&T-Chiyoda Limited
EWAC Alloys Limited
Total
17
Interest received from
Subsidiaries, including:
L&T Infrastructure Finance Company Limited
L&T-MHI Boilers Private Limited
L&T Arun Excello IT SEZ Private Limited
L&T Finance Limited
Associates & joint ventures, including:
The Dhamra Port Company Limited
International Seaport Dredging Limited
L&T-AM Tapovan Joint Venture
Key management personnel
Total
18
Interest paid to
Subsidiaries, including:
L&T Finance Limited
L&T-MHI Boilers Private Limited
Associate:
Audco India Limited
Total
1.39
3.26
0.85
0.32
0.23
–
157.05
68.51
32.52
3.00
3.47
1.09
41.64
–
13.78
13.49
0.71
–
1.57
24.95
7.75
14.61
157.05
158.44
181.29
8.71
190.00
88.66
2.28
0.03
90.97
37.24
14.61
51.85
115.96
119.22
197.22
24.22
221.44
10.75
0.80
0.03
11.58
24.70
12.96
37.66
80.11
4.20
4.56
6.30
–
3.95
0.46
–
–
2.69
115.17
47.04
31.44
2.85
6.65
8.54
2.87
1.86
–
–
–
0.79
–
21.94
–
12.96
171
Accounts p124-187.indd 170
7/2/2011 3:23:37 PM
Accounts p124-187.indd 171
7/2/2011 3:23:37 PM
Notes forming part of Accounts (contd.)
Sr.
no.
Nature of transaction/relationship/major parties
19
Payment of salaries/perquisites
Key management personnel:
2010-2011
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
` crore
70.00
68.65
A.M. Naik
J. P. Nayak
Y.M. Deosthalee
K. Venkataramanan
R.N. Mukhija
K.V. Rangaswami
V.K. Magapu
M.V. Kotwal
Ravi Uppal
14.18
7.21
8.09
8.04
11.84
5.90
5.88
6.50
2.36
Total
70.00
68.65
“Major parties” denote entities who account for 10% or more of the aggregate for that category of transaction during
respective period.
iv. Amount due to/from related parties
15.30
7.76
8.70
8.65
8.60
6.33
6.32
6.99
–
` crore
Sr.
no.
Nature of transaction/relationship/major parties
1
Accounts receivable
Subsidiaries, including:
As at 31-3-2011
As at 31-3-2010
Amount
Amounts for
major parties
Amount
Amounts for
major parties
577.77
497.54
L&T Shipbuilding Limited
L&T Chennai-Tada Tollway Limited
L&T Halol-Shamlaji Tollway Limited (formerly known
as L&T Halol-Shamlaji Tollway Private Limited)
CSJ Infrastructure Private Limited
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
2
Accounts payable (including acceptance & interest accrued)
Subsidiaries, including:
L&T-MHI Turbine Generators Private Limited
L&T Sapura Offshore Private Limited
L&T Modular Fabrication Yard LLC
Larsen & Toubro Infotech Limited
L&T Finance Limited
Associates & joint ventures, including:
Audco India Limited
Total
3
Investment in Debt Securities
Subsidiaries, including:
L&T Infrastructure Finance Company Limited
L&T Finance Limited
98.98
83.00
73.28
67.46
102.08
167.63
74.60
52.11
–
–
264.37
374.85
–
180.30
–
–
–
87.92
–
–
21.83
21.41
35.43
306.97
200.00
36.98
98.88
596.42
204.71
360.95
565.66
236.98
105.74
683.51
468.11
302.99
771.10
411.83
Total
411.83
236.98
172
Accounts p124-187.indd 172
7/2/2011 3:23:37 PM
Accounts p124-187.indd 173
7/2/2011 3:23:38 PM
Notes forming part of Accounts (contd.)
Sr.
no.
4
Nature of transaction/relationship/major parties
Loans & advances recoverable
Subsidiaries, including:
L&T Finance Holdings Limited
(formerly known as L&T Capital Holdings Limited)
L&T-MHI Boilers Private Limited
L&T Realty Private Limited
L&T-MHI Turbine Generators Private Limited
Associates & joint ventures, including:
The Dhamra Port Company Limited
L&T-AM Tapovan Joint Venture
Audco India Limited
L&T-Ramboll Consulting Engineers Limited
L&T-Chiyoda Limited
Key management personnel
Relatives of key management personnel
Total
5
Advances against equity contribution
Subsidiaries, including:
L&T Shipbuilding Limited
L&T Seawoods Private Limited
As at 31-3-2011
As at 31-3-2010
Amount
Amounts for
major parties
Amount
Amounts for
major parties
` crore
3009.44
1675.28
356.00
672.57
–
465.87
140.14
40.43
–
–
–
623.08
881.05
11.78
0.64
0.12
1687.82
1587.41
194.52
0.37
0.12
3204.45
1709.63
Total
1709.63
1587.41
6
Unsecured loans (including lease fi nance)
Subsidiaries, including:
L&T Finance Limited
L&T-MHI Turbine Generators Private Limited
L&T-MHI Boilers Private Limited
295.47
149.76
101.07
100.00
90.00
Total
295.47
149.76
7
Advances received in the capacity of supplier of goods/
services classifi ed as “advances from customers” in the
Balance Sheet
Subsidiaries, including:
1856.19
811.82
Nabha Power Limited
L&T Metro Rail (Hyderabad) Limited
L&T Shipbuilding Limited
L&T Halol-Shamlaji Tollway Limited (formerly known
as L&T Halol-Shamlaji Tollway Private Limited)
L&T Ahmedabad-Maliya Tollway Limited (formerly
known as L&T Ahmedabad-Maliya Tollway Private
Limited)
PNG Tollway Limited
(formerly known as PNG Tollway Private Limited)
Associates:
L&T Arun Excello Realty Private Limited
Total
–
1856.19
1055.99
300.00
–
–
–
–
–
0.10
811.92
–
282.22
292.01
329.26
–
–
1.62
1.61
4.10
623.08
858.25
125.36
–
20.00
185.82
–
115.87
106.73
97.60
79.33
0.10
173
Accounts p124-187.indd 172
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Accounts p124-187.indd 173
7/2/2011 3:23:38 PM
Notes forming part of Accounts (contd.)
Nature of transaction/relationship/major parties
Amount
Amounts for
major parties
Amount
Amounts for
major parties
As at 31-3-2011
As at 31-3-2010
` crore
Sr.
no.
8
Due to whole time directors
Key management personnel:
37.97
44.29
A.M. Naik
J. P. Nayak
Y.M. Deosthalee
K. Venkataramanan
R.N. Mukhija
K.V. Rangaswami
V.K. Magapu
M.V. Kotwal
Ravi Uppal
9.12
4.81
4.56
4.55
2.47
3.65
3.65
3.65
1.51
10.55
5.27
5.27
5.27
5.27
4.22
4.22
4.22
–
Total
37.97
44.29
“Major parties” denote entities who account for 10% or more of the aggregate for that category of transaction during
respective period.
v.
Notes to related party transactions:
a)
b)
The Company has a sole selling agreement with L&T-Komatsu Limited (LTK), an associate company, valid for the period of 5
years from October 16, 2006 in line with Government of India (GOI) approval letter dated May 28, 2007. The appointment
shall be in effect as long as the joint venture agreement between the parent Company and M/s Komatsu Asia Pacifi c Pte.
Limited, Singapore (which is a subsidiary of Komatsu Limited, Japan) remains in force, subject to approval of GOI, under
section 294 AA of the Companies Act, 1956. As per the terms of the agreement, the Company is the exclusive agent of
L&T-Komatsu Limited to market LTK machines and provide product support. Pursuant to the aforesaid agreement, LTK is
required to pay commission to the Company at specifi ed rates on the sales effected by the Company.
The Company has renewed the selling agency agreement from October 1, 2003 with EWAC Alloys Limited (EWAC), a
wholly owned subsidiary company (an associate till December 13, 2010). The agreement shall remain valid until either
party gives 12 months’ prior written notice to the other for termination. As per the terms of the agreement, the Company
is the selling agent authorised to purchase and resale EWAC products in accordance with the prices and other conditions
stipulated in the agreement.
c)
The Company had a selling agency agreement till August 31, 2009, with L&T-Plastics Machinery Limited, a wholly owned
subsidiary. Pursuant to the aforesaid agreement, L&T-Plastics Machinery Limited was required to pay commission to the
Company at specifi ed rates on sales effected by the Company till the aforesaid date.
Note: The fi nancial impact of the agreements mentioned at (a) to (c) above has been included in/disclosed vide note no.18(iii)
supra.
21
Leases:
Where the Company is a lessee:
a)
Finance leases:
i.
[a] Assets acquired on fi nance lease mainly comprise plant and machinery, vehicles and personal computers. The leases
have a primary period, which is fi xed and non-cancellable. In the case of vehicles, the Company has an option
to renew the lease for a secondary period. The agreements provide for revision of lease rentals in the event of
changes in (a) taxes, if any, leviable on the lease rentals (b) rates of depreciation under the Income Tax Act, 1961
and (c) change in the lessor’s cost of borrowings. There are no exceptional/restrictive covenants in the lease
agreements.
174
Accounts p124-187.indd 174
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Accounts p124-187.indd 175
7/2/2011 3:23:38 PM
Notes forming part of Accounts (contd.)
[b]
The minimum lease rentals and the present value of minimum lease payments in respect of assets acquired under
fi nance leases are as follows:
Particulars
` crore
Minimum lease payments
Present value of
minimum lease payments
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
1 Payable not later than 1 year
2 Payable later than 1 year and not later than 5 years
3 Payable later than 5 years
42.69
85.32
–
42.69
128.00
–
28.49
72.58
–
24.34
101.06
–
Total
128.01
170.69
101.07
125.40
Less: Future fi nance charges
26.94
45.29
Present value of minimum lease payable
101.07
125.40
ii.
Contingent rent recognised/(adjusted) in the Profi t and Loss Account in respect of fi nance leases: ` nil (previous year:
` nil)
b) Operating leases:
i.
The Company has taken various commercial premises and plant and machinery under cancellable operating leases. These
lease agreements are normally renewed on expiry.
ii.
[a]
The Company has taken certain assets like cars, technology assets, etc. on non-cancellable operating leases, the
future minimum lease payments in respect of which are as follows:
Particulars
1 Payable not later than 1 year
2 Payable later than 1 year and not later than 5 years
3 Payable later than 5 years
Total
` crore
Minimum lease payments
As at
31-3-2011
As at
31-3-2010
3.97
0.43
–
4.40
6.58
2.98
–
9.56
[b]
The lease agreements provide for an option to the Company to renew the lease period at the end of the non-
cancellable period. There are no exceptional/restrictive covenants in the lease agreements.
iii.
Lease rental expense in respect of operating leases: ` 81.86 crore (previous year: ` 85.97 crore).
iv. Contingent rent recognised in the Profi t and Loss Account: ` 0.03 crore (previous year: ` 0.04 crore).
22
(a) Provision for current tax includes:
i.
ii.
iii.
iv.
Provision for wealth tax ` 2.28 crore (previous year: ` 2.70 crore).
` 87.39 crore being provision for income tax in respect of earlier years (previous year: ` 133.29 crore).
` 3.58 crore in respect of income tax payable outside India (previous year: ` 10.02 crore).
Reversal of excess provision for tax on fringe benefi ts ` nil (previous year ` 10.01 crore) pertaining to earlier years.
(b) Tax effect of ` 0.62 crore (previous year: ` 6.57 crore) is on account of debenture issue expenses which has been credited to
securities premium account.
Accounts p124-187.indd 174
7/2/2011 3:23:38 PM
Accounts p124-187.indd 175
175
7/2/2011 3:23:38 PM
Notes forming part of Accounts (contd.)
23. Major components of deferred tax liabilities and deferred tax assets:
Particulars
Deferred tax liabilities:
Deferred tax
liabilities/
(assets)
As at
31-3-2010
Charge/
(credit) to
Profi t & loss
account
Charge/
(credit) to
Hedging
reserve
` crore
Deferred tax
liabilities/
(assets)
As at
31-3-2011
Difference between book and tax depreciation
326.20
149.23
–
475.43
Gain on derivative transactions to be offered for tax purposes in
the year of transfer to Profi t and Loss Account
Disputed statutory liabilities paid and claimed as deduction for
tax purposes but not debited to Profi t and Loss Account
Other items giving rise to timing differences
Total
Deferred tax (assets):
32.48
30.59
–
389.27
–
(7.13)
25.35
8.60
9.77
–
–
167.60
(7.13)
39.19
9.77
549.74
Provision for doubtful debts and advances debited to Profi t and
Loss Account
(177.78)
(1.68)
–
(179.46)
Loss on derivative transactions to be claimed for tax purposes in
the year of transfer to Profi t and Loss Account
(26.21)
–
26.21
–
Unpaid statutory liabilities/provision for compensated absences
debited to Profi t and Loss Account
Other items giving rise to timing differences
Total
Net deferred tax liability/(assets)
Previous year
(88.27)
(19.62)
(311.88)
77.39
48.47
(4.66)
5.74
(0.60)
167.00
(3.38)
–
–
26.21
19.08
32.30
(92.93)
(13.88)
(286.27)
263.47
77.39
24 Basic and diluted earnings per share [EPS] computed in accordance with Accounting Standard (AS) 20 “Earnings per Share”.
Particulars
Before extraordinary items
After extraordinary items
2010-2011
2009-2010
2010-2011
2009-2010
Basic
Profi t after tax as per accounts (` crore)
Weighted average number of shares outstanding
Basic EPS (`)
Diluted
Profi t after tax as per accounts (` crore)
Weighted average number of shares outstanding
Add: Weighted average number of potential equity
shares on account of employee stock options
Weighted average number of shares outstanding for
diluted EPS
A
B
A/B
A
B
C
3887.05
4239.80
3957.89
4375.52
60,57,99,369
59,31,01,390
60,57,99,369
59,31,01,390
64.16
71.49
65.33
73.77
3887.05
4239.80
3957.89
4375.52
60,57,99,369
59,31,01,390
60,57,99,369
59,31,01,390
92,49,776
1,13,27,980
92,49,776
1,13,27,980
D=B+C 61,50,49,145
60,44,29,370
61,50,49,145
60,44,29,370
Diluted EPS (`)
Face value per share (`)
A/D
63.20
2
70.15
2
64.35
2
72.39
2
Note: Potential equity shares that could arise on conversion of FCCBs are not resulting into dilution of EPS. Hence, they have not
been considered in working of diluted EPS in accordance with AS 20.
176
Accounts p124-187.indd 176
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Accounts p124-187.indd 177
7/2/2011 3:23:38 PM
Notes forming part of Accounts (contd.)
25 Disclosures required by Accounting Standard (AS) 29 “Provisions, Contingent Liabilities and Contingent Assets”:
a) Movement in provisions:
Class of Provisions
Particulars
Product
warranties
Excise
duty
Sales
tax
Litigation
related
obliga-
tions
Contractual
rectifi cation
cost-
construction
contracts
` crore
Others
Total
Balance as at 1-4-2010
Additional provision during the year
Provision reversed during the year
Balance as at 31-3-2011 (4=1+2-3)
10.05
4.65
4.73
9.97
–
45.33
0.69
–
7.59
2.18
0.69
50.74
8.24
0.69
–
8.93
203.02
302.76
69.01
436.77
131.15
–
397.79
316.38
78.27 #
154.19
52.88
559.98
Sr.
no
1
2
3
4
#
includes an amount ` 70.84 crore being proportionate reversal of an extraordinary item included in opening provision.
[reference note no.9]
b)
Nature of provisions:
i.
ii.
iii.
Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace
the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2011 represents
the amount of the expected cost of meeting such obligations of rectifi cation/replacement. The timing of the outfl ows is
expected to be within a period of two years from the date of Balance Sheet.
Provision for sales tax represents mainly the differential sales tax liability on account of non-collection of declaration forms
for the period prior to 5 years.
Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in
appeal.
iv. Contractual rectifi cation cost represents the estimated cost the Company is likely to incur during defect liability period as
per the contract obligations in respect of completed construction contracts accounted under AS 7 (Revised) “Construction
Contracts”.
v.
Others represent residual provision in respect of Company’s investment in shares of Satyam Computer Services Limited.
c)
Disclosure in respect of contingent liabilities is given as part of Schedule J to the Balance Sheet.
26 An amount of ` 22.73 crore (net gain) [previous year: ` 70.93 crore (net loss)] has been accounted under respective revenue heads in
the Profi t and Loss Account towards exchange difference arising on foreign currency transactions and forward contracts covered under
Accounting Standard (AS) 11 “The Effects of Changes in Foreign Exchange Rates”.
27
In line with the Company’s risk management policy, the various fi nancial risks mainly relating to changes in the exchange rates, interest
rates and commodity prices are hedged by using a combination of forward contracts, swaps and other derivative contracts, besides
the natural hedges.
a)
The particulars of derivative contracts entered into for hedging purposes outstanding as at March 31, 2011 are as under:
Category of derivative instruments
i
For hedging foreign currency risks
a)
b)
Forward contracts for receivables including fi rm commitments and highly
probable forecasted transactions
Forward contracts for payables including fi rm commitments and highly probable
forecasted transactions
c) Currency swaps
d) Option contracts
ii
For hedging commodity price risks
Commodity futures
` crore
Amount of exposures hedged
As at
As at
31-3-2011
31-3-2010
9319.77
7696.47
9152.22
5296.41
54.37
6495.92
5475.93
75.30
58.25
34.38
Accounts p124-187.indd 176
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Accounts p124-187.indd 177
177
7/2/2011 3:23:38 PM
Notes forming part of Accounts (contd.)
b) Unhedged foreign currency exposures as at March 31, 2011 are as under:
Unhedged foreign currency exposures
i
ii
Receivables, including fi rm commitments and highly probable forecasted transactions
Payables, including fi rm commitments and highly probable forecasted transactions
As at
31-3-2011
21426.49
21680.21
` crore
As at
31-3-2010
19889.41
15670.82
28
Estimated amount of contracts remaining to be executed on capital account (net of advances) ` 400.32 crore (previous year: ` 577.89
crore).
29 Managerial remuneration
a) Managing and whole-time directors’ remuneration:
Particulars
Salary
Perquisites
Commission
Contribution to Provident/Superannuation Fund
Total
Note: The above fi gures do not include contribution to gratuity fund, pension scheme and provision for compensated absences,
2010-2011
14.13
3.92
39.79
12.16
70.00
` crore
2009-2010
6.22
4.50
44.29
13.64
68.65
since the same is provided on an actuarial basis for the Company as a whole.
b) Managerial remuneration and computation of net profi t under section 349 of the Companies Act, 1956
Particulars
Profi t before tax and before extraordinary items as per Profi t and Loss Account
Add: Managing and whole-time directors’ remuneration and commission
Commission paid to non-executive directors
Directors’ fees
Depreciation, obsolescence and amortisation charged to the Accounts
Less: transfer from revaluation reserve
Provision for doubtful debts and advances (net)
Less: Provisions written-back
600.28
1.06
114.38
97.50
Less: Profi t on sale of fi xed assets as per Profi t and Loss Account (net)
Profi t on sale of long-term investments as per Profi t and Loss Account (net)
Reversal of provision for foreseeable losses on construction contracts, as no
longer required
Reversal of provision for diminution in value of investments, as no longer
required
Depreciation, obsolescence and amortisation as per Section 350 of the
Companies Act, 1956 (net)
Net Profi t as per Section 198 of the Companies Act, 1956
Maximum permissible remuneration to whole-time directors under Section 198
of the Companies Act, 1956 @ 10 % of the profi ts computed above
Restricted as per service agreements to
Maximum permissible managerial remuneration to non-executive directors
under Section 198 of the Companies Act, 1956 @ 1 %
178
2010-2011
` crore
5832.91
70.00
1.50
0.37
599.22
16.88
143.47
306.60
8.61
10.24
599.22
687.97
6520.88
1068.14
5452.74
545.27
70.00
54.53
Accounts p124-187.indd 178
7/2/2011 3:23:38 PM
Accounts p124-187.indd 179
7/2/2011 3:23:39 PM
Notes forming part of Accounts (contd.)
c) Miscellaneous expenses include provision of ` 1.50 crore (previous year: ` 0.90 crore) towards commission payable to non-executive
directors of the Company, within the overall limit approved by the shareholders at the Annual General Meeting held on August
26, 2010.
30 Auditors’ remuneration (excluding service tax) and expenses charged to the accounts:
` crore
Particulars
Audit fees
Certifi cation work
Tax audit fees
Expenses reimbursed
Note: The above fi gures exclude fees paid for QIP and FCCB issue amounting to ` nil (previous year: ` 0.09 crore) charged to securities
2010-2011
0.90
1.56
0.22
0.11
2009-2010
0.68
1.11
0.21
0.15
premium account during the year.
31 Value of imports (on C.I.F. basis):
Raw materials
Components and spare parts
Spare parts for sale
Capital goods
32
Expenditure in foreign currency:
On overseas contracts
Royalty and technical know-how fees
Interest
Professional/consultation fees
Other matters
33 Dividends remitted in foreign currency:
Particulars
Particulars
2010-2011
1009.05
3524.02
360.52
641.61
2010-2011
2306.87
28.21
66.23
92.59
4346.69
` crore
2009-2010
1053.88
3135.21
229.15
479.13
` crore
2009-2010
2488.84
3.17
81.32
170.45
1498.84
` crore
Particulars
2010-2011
2009-2010
Dividend for the year ended March 31, 2010 to:
i.
9 non-resident shareholders on 15,700 shares held by them (previous year: 15,700 shares)
~ on 2-9-2010
ii. Custodian of global depositary receipts on 2,05,90,403 shares (previous year: 1,79,77,754
0.02
25.74
shares) ~ on 2-9-2010
34
Earnings in foreign exchange:
0.01
18.88
` crore
Particulars
2010-2011
2009-2010
Export of goods [including ` 545.45 crore on FOB basis (previous year: ` 507.90 crore)]
Construction and project related activities
Export of services
Commission
Interest and dividend received
Other receipts
555.34
5041.82
554.49
29.39
1.93
184.81
510.14
5914.57
368.70
33.64
0.22
38.94
179
Accounts p124-187.indd 178
7/2/2011 3:23:38 PM
Accounts p124-187.indd 179
7/2/2011 3:23:39 PM
Notes forming part of Accounts (contd.)
35
The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act]
as at March 31, 2011. The disclosure pursuant to the said Act is as under:
Principal amount due to suppliers under MSMED Act, 2006
Particulars
Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid
Payment made to suppliers (other than interest) beyond the appointed day during the year
Interest paid to suppliers under MSMED Act (other than Section 16)
Interest paid to suppliers under MSMED Act (Section 16)
Interest due and payable towards suppliers under MSMED Act for payments already made
Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act
` crore
2010-2011
2009-2010
28.25
0.16
41.68
–
0.69
0.33
0.49
21.57
0.28
35.36
–
0.29
0.22
0.50
Note: The information has been given in respect of such vendors to the extent they could be identifi ed as “Micro and Small”
enterprises on the basis of information available with the Company.
36
The Company has given, inter alia, the following undertakings in respect of its investments:
a.
Jointly with L&T Infrastructure Development Projects Limited (a subsidiary of the Company), to the term lenders of its subsidiary
companies L&T Transportation Infrastructure Limited (LTTIL):
i.
ii.
not to reduce their joint shareholding in LTTIL below 51% until the fi nancial assistance received from the term lenders is
repaid in full by LTTIL and
to jointly meet the shortfall in the working capital requirements of LTTIL until the fi nancial assistance received from the term
lenders is repaid in full by LTTIL.
b.
c.
d.
e.
f.
In terms of Company’s concession agreement with Government of India and Government of Gujarat, not to change the control
over L&T Western India Tollbridge Limited (a subsidiary of the Company) during the period of the agreement.
To the debenture holders of L&T Infrastructure Development Projects Limited (a subsidiary of the Company) and to the lenders
of its subsidiaries L&T Panipat Elevated Corridor Private Limited and L&T Krishnagiri Thopur Toll Road Limited, not to dilute
Company’s shareholding below 51%.
To the lender of Offshore International FZC (a subsidiary of Larsen & Toubro International FZE), not to pledge or reduce the
Company’s shareholding in L&T International FZE (a subsidiary of the Company) below 100% of the issued and allotted share
capital.
To National Highway Authority of India, to hold minimum 26% stake in L&T Samakhiali Gandhidham Tollway Private Limited till
180 days from the date of concession agreement. However, the Company has decided to hold this stake for a period of 2 years
after the construction period.
To National Highway Authority of India, to hold minimum 26% stake in PNG Tollway Limited (formerly known as PNG Tollway
Private Limited) till the commercial operations date.
g.
To Gujarat State Road Development Corporation Limited:
(i)
to hold in L&T Ahmedabad-Maliya Tollway Limited (formerly known as L&T Ahmedabad-Maliya Tollway Private Limited)
and in L&T Halol-Shamlaji Tollway Limited (formerly known as L&T Halol-Shamlaji Tollway Private Limited) alongwith L&T
Infrastructure Development Projects Limited:
•
•
•
100% stake during the construction period;
51% stake for 5 years from the date of commercial operation or end of construction of the project, whichever is
later; and
51% stake during operational period.
(ii)
not to divest the stake in L&T Infrastructure Development Projects Limited until the aforesaid undertakings are valid.
h.
To Gujarat State Road Development Corporation Limited, to hold in L&T Rajkot-Vadinar Tollway Limited (formerly known as L&T
Rajkot-Vadinar Tollway Private Limited):
•
•
•
100% stake during the construction period;
51% stake for 5 years from the date of commercial operation or end of construction of the project, whichever is later;
and
51% stake during operational period.
i.
To the lenders of L&T Ahmedabad-Maliya Tollway Limited (formerly known as L&T Ahmedabad-Maliya Tollway Private Limited)
(a subsidiary of the Company), not to divest control directly or indirectly without the prior approval of the lenders or Gujarat
State Road Development Corporation Limited.
180
Accounts p124-187.indd 180
7/2/2011 3:23:39 PM
Accounts p124-187.indd 181
7/2/2011 3:23:39 PM
Notes forming part of Accounts (contd.)
j.
k.
l.
m.
To the lenders of L&T Rajkot-Vadinar Tollway Limited (formerly known as L&T Rajkot-Vadinar Tollway Private Limited) (a subsidiary
of the Company), not to divest control without the prior approval of the lenders or Gujarat State Road Development Corporation
Limited.
Jointly with L&T-MHI Turbine Generators Private Limited (a subsidiary of the Company) and Mitsubishi Heavy Industries Limited (JV
partners in L&T-MHI Turbine Generators Private Limited), to Andhra Pradesh Power Development Company Limited (APPDCL) to
render unconditional and irrevocable fi nancial support for the successful execution of APPDCL 2x800 MW Power Project–Steam
Turbine Generator Package Tender, near Krishnapatnam, Nellore District, Andhra Pradesh.
To City and Industrial Development Corporation of Maharashtra Limited (CIDCO) that it shall continue to hold not less than 51%
stake in L&T Seawood Private limited (LTSPL) until CIDCO execute the lease deed for land in favour of LTSPL.
To National Highway Authority of India, to hold together with its associates in L&T Devihalli Hassan Tollway Limited, minimum
51% equity stake for a period of 2 years after construction period.
n.
To National Highway Authority of India, to hold together with its associates in L&T Krishnagiri Walajahpet Tollway Limited:
•
•
•
minimum 51% equity stake during the construction period;
minimum 33% stake for 3 years from project completion date; and
minimum 26% or such lower stake as may be permitted by National Highway Authority of India during remaining
concession period.
o. To the lenders of PNG Tollway Limited (formerly known as PNG Tollway Private Limited), to hold minimum 51% equity stake in
PNG Tollway Limited, until fi nal settlement date.
p.
q.
r.
s.
t.
u.
To the security trustee of the lenders of L&T Sapura Shipping Private Limited, not to sell or transfer equity stake without prior
approval.
To hold 15,899 shares comprising 9.85% of the issued capital of International Seaport Dredging Limited till January 24, 2016.
To the security trustee of the lenders of L&T Metro Rail (Hyderabad) Limited, to hold and maintain along with L&T Infrastructure
Development Projects Limited (a subsidiary of the Company) at least 51% stake till fi nal settlement date.
To hold certain minimum stake in its subsidiary companies namely, L&T–MHI Boilers Private Limited and L&T–MHI Turbine
Generators Private Limited. These undertakings have been given to the customers/potential customers of the Company, as also
those of L&T–MHI Boilers Private Limited. The undertakings will remain valid till the end of defect liability period or till such period
as prescribed in the related bid documents/contracts.
To the lenders of L&T Aviation Services Private Limited, to hold majority equity stake in L&T Aviation Services Private Limited, until
any amount is outstanding under buyers credit facility.
To the lenders of L&T Seawoods Private Limited, to maintain a minimum 51% stake in L&T Seawoods Private Limited, until any
amount is outstanding under banking credit facilities.
37 During the year, the Company transferred at book value the equity investments held by it in the following companies to its subsidiary
L&T Infrastructure Development Projects Limited:
Name of the Company
Details of investment
No. of equity
shares
Face value
Book value
per share
L&T Ahmedabad-Maliya Tollway Limited (formerly known as L&T
6,30,15,000
Ahmedabad-Maliya Tollway Private Limited)
L&T Halol-Shamlaji Tollway Limited (formerly known as L&T Halol-Shamlaji
6,52,65,000
Tollway Private Limited)
L&T Transco Private Limited
10,000
`
10
10
10
` crore
63.02
65.27
0.01
Sr.
no.
1
2
3
38
There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2011.
39 According to the Company, construction is a service activity and therefore, the same is covered under para 3(ii)(c) of Part II of
Schedule VI of the Companies Act, 1956.
Accounts p124-187.indd 180
7/2/2011 3:23:39 PM
Accounts p124-187.indd 181
181
7/2/2011 3:23:39 PM
Notes forming part of Accounts (contd.)
40 Details of sales, raw materials and components consumed, capacities & production, inventories and purchase of trading goods:
a)
Sales:
Class of goods
Unit
Earthmoving and agricultural machinery and spares
Welding alloys & accessories
Industrial machinery
Nuclear purpose equipment, de-aerators, ultra high
pressure vessels including multiwall vessels, high
pressure heat exchangers and high pressure heaters
in aggregate
Plant & equipment and modules for nuclear power
projects, heavy water projects, nuclear and space
research and allied projects, including items for
Chemical, Oil & Gas, etc. industries
Powder metallurgy and industrial products
Industrial electronic control panels
Valves and accessories
Chemical plant & machinery, including pharmaceutical,
dyestuff, distillery, brewery and solvent extraction
plants, evaporator and crystallizer plants and pollution
control equipment in aggregate
Switchgear, all types
Electro surgical unit and accessories
2010-2011
2009-2010
Quantity
Value
Quantity
Value
` crore
646.22
235.81
` crore
503.90
206.39
Tonnes
25,305
395.68
13,940
350.03
Tonnes
74
25.86
146
25.20
Tonnes
38,680
2392.23
19,936
3607.98
145.54
80.79
571.25
106.70
86.88
410.39
Tonnes
19,892
561.66
12,500
2167.04
1232.67
4.95
-
1160.32
5.70
20.77
1,835
Petrol dispensing and metering pumps*
Nos
-
Ship auxiliaries and components of mechanised sailing
vessels
Tonnes
44
16.11
117
30.18
Complete cement making machinery, including rotary
kilns and fl uxo packers in aggregate
Transmission line tower
Steel structural fabrication
Rubber processing machinery and accessories
Ultrasound equipment and accessories
Patient monitoring system and accessories
Electricity meters
Design, development and manufacturing of airborne
assemblies, system and equipment for Aircrafts,
Helicopters & uninhabited aerial vehicles and
equipments for the aviation sector
Commercial ships
Defence equipment, all types
Others
Total
Tonnes
Tonnes
Nos
13,180
1,295
-
73.56
23.02
9,913
4,884
82.90
57.63
45.48
295
296.51
319
245.97
4.13
73.32
275.48
9.47
54.99
212.12
Nos
Nos
1,130
–
3.97
–
617
50.70
1
126.51
249.28
1966.66
9274.70@
183.84
1897.63
11648.72@
@
*
includes ` 3210.22 crore of construction & project related activity (previous year: ` 6673.33 crore).
Petrol dispensing and metering pumps business was divested during the previous year.
182
Accounts p124-187.indd 182
7/2/2011 3:23:39 PM
Accounts p124-187.indd 183
7/2/2011 3:23:39 PM
Notes forming part of Accounts (contd.)
b)
Raw materials and components consumed:
i)
Class of goods:
Particular
Unit
2010-2011
2009-2010
Quantity
Value
Quantity
Value
` crore
` crore
Steel
Tonnes
36,252
174.75
45,955
167.10
Metres
12,48,735
51.72
92,4421
43.03
Sq. mtrs
53,47,529
333.61
57,68,806
348.15
Nos/Sets
21,07,248
487.67
41,80,651
1333.13
Non-ferrous metals
Tonnes
Metres
2,564
102.31
2,517
85.84
6,12,620
0.75
11,71,084
Sq. mtrs
11,281
3.18
5,995
Nos
Tonnes
41,761
20.39
1,61,469
484
5.03
432
1856.07
1609.28
517.16
5.44
2.59
88.69
3.97
659.97
1141.45
469.71
177.74
210.65
236.71
6.50
2920.80
442.77
8946.44
185.87
24.84
766.98
1350.97
6888.38
Bakelite
Nuclear equipment components, including items
for oil & gas industries, etc. in aggregate
Chemical plant components
Switchgear components
Electronic devices, test & measuring instruments
and industrial electronic control panel
components
Metering & protection systems and medical
equipment and components
Industrial machinery components
Power plant & machinery components
Others
TOTAL
Accounts p124-187.indd 182
7/2/2011 3:23:39 PM
Accounts p124-187.indd 183
ii) Classifi cation of goods:
Particular
Imported (including through canalising agencies)
Indigenous
TOTAL
2010-2011
2009-2010
% to total
consumption
Value
% to total
consumption
` crore
3290.64
5655.80
37
63
54
46
Value
` crore
3735.72
3152.66
100
8946.44
100
6888.38
183
7/2/2011 3:23:39 PM
Notes forming part of Accounts (contd.)
c)
Capacities & production:
Class of goods
Scrapper, bulldozer, ripper and loader attachments
Unit
Nos
Road rollers, hot mix plants and other road construction and bridge
Nos
construction machinery
Chemical plant and machinery, including pharmaceutical, dyestuff,
distillery, brewery and solvent extraction plants, evaporator and
crystalliser plants and pollution control equipment in aggregate
Equipment for food processing industry
Tonnes
Tonnes
Complete cement making machinery, including rotary kilns and
Nos
fl uxo packers in aggregate
Sugarcane and beet diffusion, beet preparation and beet pulp
Nos
dehydration plants
Nuclear purpose equipment, de–aerators, ultra high pressure
Tonnes
vessels, vessels including multiwall vessels, high pressure heat
exchangers and high pressure heaters in aggregate
Plant and equipment and modules for nuclear power projects, heavy
water projects, nuclear and space research and allied projects,
including items for chemical, oil and gas, etc. industries
Complete high speed bottling plants
Pulp and paper making plants
Suspended particles drying plants
Containers for liquefi ed gases and chemicals
Steel plant valves
Tonnes
Nos
Tonnes
Nos
Nos
Nos
Ship auxiliaries and components of mechanised sailing vessels
Tonnes
Rubber processing machinery
Switchgear, all types
Miscellaneous electrical items
Petrol dispensing and metering pumps ##
Nos
Nos
Nos
Nos
Press tools, jigs, fi xtures, dyes for pressure castings, moulds for
` Lakh /Nos
plastic injection and bakelite
Licensed
capacity
250
(250)
150
(150)
6,067
(6,067)
65
(65)
2
(2)
2
(2)
5,000
(5,000)
10,000
(10,000)
6
(6)
2,000
(2,000)
6
(6)
Installed
capacity
250
(250)
150
(150)
6,067
(6,067)
65
(65)
2
(2)
2
(2)
3,950
(3,950)
10,000
(10,000)
6
(6)
800
(800)
6
(6)
Not applicable*
(Not applicable)*
1,000 tonnes
carrying capacity
(1,000 tonnes
carrying capacity)
40
(40)
1,000
(1,000)
109
(109)
49,52,750$
(49,52,750)$
10,49,100
(10,49,100)
–
(34,800)
` 730 lakh@
(` 730 lakh)@
40
(40)
1,000
(1,000)
600
(400)
49,52,750
(49,52,750)
10,39,100
(10,39,100)
–
(10,800)
` 730 lakh
(` 730 lakh)
Actual
production
35
(–)
–
(–)
21,140
(12,347)
–
(–)
–
(Parts for 3 plants)
–
(–)
74
(146)
38,680#
(19,936)#
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
44
(117)
276
(334)
99,40,276
(86,04,157)
–
(–)
–
(1,819)
484 nos
(490 nos)
184
Accounts p124-187.indd 184
7/2/2011 3:23:39 PM
Accounts p124-187.indd 185
7/2/2011 3:23:40 PM
Notes forming part of Accounts (contd.)
Class of goods
Industrial machinery
Industrial electronic control panels
Electro surgical unit and accessories
Ultrasound equipment and accessories
Patient monitoring system and accessories
Relays
Electricity meters
Transmission line tower
Steel structural fabrication
Steel re–rolling
Defence equipment , all types
Parts for aircraft and other metal products
Unit
Tonnes
Nos
Nos
Nos
Nos
Nos
Nos
Tonnes
Metric Tonnes
Tonnes
Nos
Nos.
Parts and accessories for prime movers, boilers, steam generating
Nos
plants and nuclear reactor
Design, development and manufacture of airborne assemblies,
systems and equipment for aircrafts, helicopters and
uninhabitated arial vehicles and equipment for the aviation
sector
Commercial Ships
Nos.
Nos
Licensed
capacity
42,000
(12,000)
2,500
(2,500)
Not applicable*
(Not applicable)*
Not applicable*
(Not applicable)*
Not applicable*
(Not applicable)*
Not applicable*
(Not applicable)*
Not applicable*
(Not applicable)*
95,000
(95,000)
12,000
(12,000)
40,000
(40,000)
3,871
(3,871)
1,00,000
(1,00,000)
25,000
(25,000)
Installed
capacity
42,000
(12,000)
2,500
(2,500)
2,500
(2,500)
1,000
(1,000)
10,000
(10,000)
45,000
(30,000)
Actual
production
25,305
(13,940)
1,100
(1,412)
479
(648)
118
(220)
9,782
(10,298)
43,558
(30,909)
32,64,000
(26,40,000)
29,47,840
(20,38,391)
95,000
(95,000)
12,000
(12,000)
40,000
(40,000)
91,016
(97,723)
41,898
(28,528)
34,885
(45,589)
3,871
(3,871)
1,495 parts thereof
(1,658 parts thereof)
1,00,000
(1,00,000)
35,000
(25,000)
–
(5)
16
(–)
1,130
(617)
–
(1)
–
(–)
2
(2)
Accounts p124-187.indd 184
7/2/2011 3:23:39 PM
Accounts p124-187.indd 185
185
7/2/2011 3:23:40 PM
Figures in brackets pertain to previous year.
*
Licensing not applicable and installed capacity is based on one of the following:
1.
2.
3.
4.
Entrepreneur’s memoranda fi led with Government of India, Ministry of Industry, New Delhi;
Registration with the Director General of Technical Development;
Approval obtained from the Government of India, Ministry of Industry, New Delhi;
Agreement with Government of India, Ministry of Petroleum & Natural Gas.
@ Excludes ` 200 lakh in respect of memorandum no.1322/SIA/IMO/92 dated 27.03.1992 of which capacity of ` 75 lakh has
$
been installed.
Excludes 6,96,250 nos. in respect of memoranda nos.924/SIA/IMO/91 and 922/SIA/IMO/91 dated 11.09.1991 of which
capacity of 4,96,250 nos. has been installed.
Includes production from external sources.
#
## Petroleum dispensing pumps and systems business was divested during the previous year.
Notes forming part of Accounts (contd.)
d)
Inventories:
Class of goods
Unit
As at 31-3-2011
As at 31-3-2010
As at 31-3-2009
Quantity
Value
Quantity
Value
Quantity
Value
Switchgear, all types
Patient monitoring systems and accessories
Industrial electronic control panels
Spares for earthmoving and agricultural
machinery
Ultrasound equipment and accessories
Powder metallurgy and industrial products
Petrol dispensing and metering pumps
Nos
-
Valves and accessories
Earthmoving machinery, including
bulldozers, dumpers, scrappers, loaders,
vibratory compactors and drag lines
(excluding walking drag lines)
Welding alloys and accessories
Others
Total
e)
Purchases of trading goods:
` crore
240.78
3.12
3.69
88.00
0.80
8.72
-
38.47
19.88
17.59
39.83
460.88
` crore
136.51
3.95
6.81
60.99
1.89
9.34
-
3.05
21.59
13.96
67.21
325.30
-
184
` crore
132.66
5.08
-
74.91
5.90
10.29
2.28
5.82
25.14
14.61
65.85
342.54
` crore
Class of goods
2010-2011
2009-2010
Earthmoving and agricultural machinery and spares
Welding alloys and accessories
Valves and accessories
Electronic, medical & other instruments, accessories and spares
Powder metallurgy and industrial products
Others
Total
Notes:
446.79
150.29
433.05
715.00
90.04
229.81
329.30
130.12
313.46
676.03
65.86
59.51
2064.98
1574.28
(a)
(b)
The installed capacities are as certifi ed by managing/whole-time directors, on which the auditors have placed reliance.
In terms of note 3 to para 3 of Part II of Schedule VI, items like spare parts and accessories are given without quantities in
respect of sales, purchases and stocks.
(c) Quantitative fi gures for sales are after exclusion of inter-divisional transfers, capitalisation/captive consumption, samples,
etc.
41
Figures for the previous year have been regrouped/reclassifi ed wherever necessary.
186
Accounts p124-187.indd 186
7/2/2011 3:23:40 PM
Accounts p124-187.indd 187
7/2/2011 3:23:40 PM
Notes forming part of Accounts (contd.)
42 Balance Sheet abstract and Company’s general business profi le
I
Registration details
CIN
L 9 9 9 9 9 M H 1 9 4 6 P L C 0 0 4 7 6 8
Registration no.
1 1 - 0 4 7 6 8
Balance Sheet date
3 1
0 3
2 0 1 1
II
Capital raised during the year (Amount in ` thousands) @
Public issue
Bonus issue
N I
N I
L
L
State code
1 1
Rights issue
Private placement
N I
L
@ The Company raised capital during the year by way of allotment of shares under Employee Stock Ownership Schemes
amounting to ` 13313 thousands
III
Position of mobilisation and deployment of funds (Amount in ` thousands)
Sources of funds
Total liabilities
2 9 5 5 7 1 0 1 5
Paid-up capital
1 2 1 7 7 0 4
* Including employees stock options ` 3683108 thousands.
Secured loans
1 0 6 3 0 3 9 5
Deferred tax liabilities
5 4 9 7 3 8 2
Application of funds
Net tangible and intangible fi xed assets
7 4 5 8 1 2 5 9
Net current assets
7 1 2 7 8 7 9 6
Misc. expenditure
N I
Performance of Company (amount in ` thousands)
L
IV
Turnover (including other income)
4 5 4 3 0 4 5 8 9
Profi t/loss before tax before extraordinary item @
+ -
+
5 8 3 2 9 0 9 8
+ -
+
Total assets
2 9 5 5 7 1 0 1 5
Reserves & surplus *
2 1 7 2 4 4 8 2 8
Unsecured loan
6 0 9 8 0 7 0 6
Investments
1 4 6 8 4 8 2 2 5
Deferred tax assets
2 8 6 2 7 3 5
Accumulated losses
N I
L
Total expenditure
3 9 5 9 7 5 4 9 1
Profi t/loss after tax @ $
3 9 5 7 8 8 8 7
@ Includes Company’s share in loss of Integrated Joint Ventures ` 582275 thousands.
$ includes extraordinary item ` 708404 thousands [net of tax] (refer note no.9)
Basic earnings per share in ` #
Dividend rate %
6 5 . 3 3
7 2 5
# Basic earnings per share before extraordinary item ` 64.16
Generic names of three principal products/services of the Company (as per monetary terms)
V
Item code no. (ITC code)
N A
Product description
Construction related activity
Item code no. (ITC code)
N A
Product description
Project related activity
Item code no. (ITC code)
Product description
8 4 7 9 8 9 . 0 2
Plant and equipment and modules for nuclear power projects, heavy water projects, nuclear and
space reaserch and allied projects including items for Chemical, Oil and Gas, etc. industries
Signatures to schedules A to Q and notes
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
187
7/2/2011 3:23:40 PM
Accounts p124-187.indd 186
7/2/2011 3:23:40 PM
Accounts p124-187.indd 187
Consolidated Financial Statements 2010-2011
Auditors’ report to the Board of Directors of Larsen & Toubro Limited on
consolidated fi nancial statements
We have examined the attached Consolidated Balance Sheet of Larsen & Toubro Limited and its subsidiaries, associates and
joint ventures (the L&T Group) as at March 31, 2011 and also the Consolidated Profi t and Loss Account and the Consolidated
Cash Flow Statement for the year ended on that date, annexed thereto. These fi nancial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these fi nancial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are prepared, in all
material respects, in accordance with an identifi ed fi nancial reporting framework and are free of material misstatements.
An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the fi nancial statements.
An audit also includes assessing the accounting principles used and signifi cant estimates made by management, as well as
evaluating the overall fi nancial statements. We believe that our audit provides a reasonable basis for our opinion.
In respect of the fi nancial statements of a subsidiary, we carried out the audit jointly with other auditor. The details of assets
and revenues in respect of the subsidiary to the extent to which they are refl ected in the consolidated fi nancial statements
are given below:
Jointly audited:
Indian subsidiary
` crore
Total assets
132.87
` crore
Total revenues
4.15
In respect of the fi nancial statements of certain subsidiaries, associates and joint ventures, we did not carry out the audit.
These fi nancial statements have been audited/reviewed by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included in respect of the subsidiaries, associates and joint ventures is based
solely on the reports of the other auditors. The details of assets and revenues in respect of these subsidiaries and joint
ventures and the net carrying cost of investment and current year/period share of profi t or loss in respect of these associates,
to the extent to which they are refl ected in the consolidated fi nancial statements are given below:
Audited by other auditors:
A
B
C
Indian subsidiaries
Foreign subsidiaries
Joint ventures
` crore
Total assets
14289.98
1935.45
1647.05
` crore
Total revenues
1436.29
3819.03
22.70
Net carrying cost of
investment
Current year/period
share of profi t or (loss)
D
Associates
68.88
3.73
We further report that in respect of certain subsidiaries, associates and joint ventures, we did not carry out the audit. These
fi nancial statements have been certifi ed by management and have been furnished to us, and in our opinion, insofar as it
relates to the amounts included in respect of the subsidiaries, associates and joint ventures, are based solely on these certifi ed
fi nancial statements.
Since, the fi nancial statements for the fi nancial year ended March 31, 2011, which were compiled by management of
these companies, were not audited, any adjustments to their balances could have consequential effects on the attached
consolidated fi nancial statements. However, the size of these subsidiaries, associates and joint ventures, in the consolidated
position is not signifi cant in relative terms. The details of assets and revenues in respect of these subsidiaries and joint
188
Cons p188-241.indd 188
7/2/2011 3:24:14 PM
Cons p188-241.indd 189
7/2/2011 3:24:14 PM
ventures and the net carrying cost of investment and current year/period share of profi t or loss in respect of these associates,
to the extent to which they are refl ected in the consolidated fi nancial statements are given below:
Certifi ed by management:
A
B
C
Indian subsidiary
Foreign subsidiary
Joint ventures
` crore
Total assets
–
4.92
40.20
` crore
Total revenues
17.30
–
37.81
Net carrying cost of
investment
Current year/period
share of profi t or (loss)
D
Associates
58.32
26.38
We report that, the consolidated fi nancial statements have been prepared by the Company in accordance with the
requirements of the Accounting Standard (AS) 21, ‘Consolidated Financial Statements’, (AS) 23, ‘Accounting for Investments
in Associates in Consolidated Financial Statements’ and (AS) 27, ‘Financial Reporting of Interests in Joint Ventures’ notifi ed
by the Companies (Accounting Standards) Rules, 2006 and on the basis of the separate audited/certifi ed fi nancial statements
of the L&T Group included in the consolidated fi nancial statements.
We report that on the basis of the information and according to the explanations given to us, and on the consideration of
the separate audit report on individual audited fi nancial statements of the L&T Group, we are of the opinion that the said
consolidated fi nancial statements, read together with signifi cant accounting policies in schedule Q and notes appearing
thereon, give a true and fair view in conformity with the accounting principles generally accepted in India:
a)
b)
c)
in the case of the Consolidated Balance Sheet, of the state of affairs of the L&T Group as at March 31, 2011;
in the case of the Consolidated Profi t and Loss Account of the consolidated results of operations of the L&T Group for
the year ended on that date; and
in the case of the Consolidated Cash Flow Statement, of the consolidated cash fl ows of the L&T Group for the year
ended on that date.
Mumbai, May 19, 2011
SHARP & TANNAN
Chartered Accountants
ICAI Registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Cons p188-241.indd 188
7/2/2011 3:24:14 PM
Cons p188-241.indd 189
189
7/2/2011 3:24:14 PM
Consolidated Balance Sheet as at March 31, 2011
Schedule
As at 31-3-2011
` crore
` crore
As at 31-3-2010
` crore
` crore
SOURCES OF FUNDS:
SHAREHOLDERS' FUNDS:
Share capital
Employee stock options application money
Reserves and surplus
Employee stock options outstanding
(previous year: ` 610.30 crore)
Less: Deferred employee compensation expense
(previous year: ` 285.94 crore)
Minority interest
LOAN FUNDS:
Secured loans
Unsecured loans
Deferred payment liabilities [Note no.35]
Deferred tax liabilities [Note no.27]
TOTAL
APPLICATION OF FUNDS:
Fixed assets:
Tangible assets:
Gross block
Less: Depreciation and impairment
Net block
Less: Lease adjustment
Capital work-in-progress
Intangible assets:
Gross block
Less: Amortisation and impairment
Net block
Capital work-in-progress
Fixed assets held for sale
(at lower of cost or estimated realisable value)
Investments
Deferred tax assets [Note no.27]
Loans and advances towards fi nancing activities
Current assets, loans and advances:
Inventories
Sundry debtors
Cash and bank balances
Other current assets
Loans and advances
Less: Current liabilities and provisions:
Liabilities
Provisions
A
B
C
D
E(i)
E(ii)
F
G(i)
G(ii)
H
I
861.41
447.56
121.77
–
24514.93
120.44
25.09
20521.37
413.85
324.36
25050.55
1026.00
32828.53
4511.66
696.76
64113.50
20991.26
1087.25
22656.06
1951.26
508.45
47194.28
14169.42
8486.64
10957.95
2762.84
8195.11
239.36
7955.75
4114.68
15957.33
12070.43
12206.38
–
9215.80
385.83
17366.44
6908.43
0.08
9860.86
355.42
11176.81
5150.09
745.41
4404.68
2503.75
2446.14
12522.63
3321.59
6949.62
4869.81
30109.79
20822.82
2464.72
23287.54
23448.98
9379.55
14141.71
3466.52
10675.19
239.36
10435.83
5521.50
6379.91
1191.58
5188.33
7018.05
3040.27
14480.16
3645.44
12109.92
6170.17
39445.96
28051.65
2412.59
30464.24
Net current assets
TOTAL
CONTINGENT LIABILITIES
SIGNIFICANT ACCOUNTING POLICIES
(For notes forming part of the consolidated accounts see page nos 213 to 241)
J
Q
8981.72
64113.50
6822.25
47194.28
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
190
Cons p188-241.indd 190
7/2/2011 3:24:14 PM
Cons p188-241.indd 191
7/2/2011 3:24:14 PM
Consolidated Profi t and Loss Account for the year ended March 31, 2011
2010-2011
2009-2010
Schedule
` crore
` crore
` crore
` crore
INCOME:
Sales & service (gross)
Less: Excise duty
Sales & service (net)
Other operational income
Other income
EXPENDITURE:
Manufacturing, construction and operating expenses
Staff expenses
Sales, administration and other expenses
Interest expenses and brokerage
Depreciation, impairment and obsolescence of tangible assets [Note nos.18 and 19(a)]
Amortisation and impairment of intangible assets [Note no.19(b)]
Less: Overheads charged to fi xed assets
Profi t before transfer from revaluation reserve
Add: Transfer from revaluation reserve
Profi t before taxes before extraordinary items
Provision for current taxes [Note no.26]
Provision for deferred tax [Note no.27]
K
L(i)
L(ii)
M
N
O
P
Profi t after tax before extraordinary items
Less: Additional tax on dividend distributed/proposed by subsidiary companies
Add: Share in profi t/(loss) (net) of associate companies
Less: Minority interest in income
Profi t after minority interest before extraordinary items
Gain on extraordinary items (net of tax) [Note no.14]
Profi t attributable to Group shareholders
Less: Dividend paid for the previous year
Additional tax on dividend paid for previous year
Profi t available for appropriation
Less: Transfer to debenture redemption reserve
Transfer to reserve u/s 45 IC of the RBI Act, 1934
Transfer to tonnage tax reserve
Transfer to reserve u/s 36(1)(viii) of the Income Tax Act, 1961
Profi t available for distribution
Proposed dividend
Additional tax on dividend
Balance carried to Balance Sheet
Basic earnings per equity share before extraordinary items (`)
Diluted earnings per equity share before extraordinary items (`)
Basic earnings per equity share after extraordinary items (`)
Diluted earnings per equity share after extraordinary items (`)
Face value per equity share (`)
SIGNIFICANT ACCOUNTING POLICIES
(For notes forming part of the consolidated accounts see page nos. 213 to 241)
[Note no.23]
Q
51978.47
426.44
43854.24
340.66
51552.03
537.11
1115.32
53204.46
43513.58
456.22
2593.71
46563.51
37540.89
3801.95
3055.31
830.86
866.25
453.66
46548.92
75.61
32340.02
3065.41
2193.51
691.92
640.51
340.11
39271.48
52.02
46473.31
6731.15
1.06
6732.21
2207.71
140.19
2039.77
(2.37)
2.04
0.35
3.44
0.57
2347.90
4384.31
7.49
4376.82
87.07
4463.89
78.56
4385.33
70.84
4456.17
4.01
4452.16
269.83
86.53
4.48
11.65
4079.67
882.84
143.21
3053.62
72.39
71.30
73.56
72.45
2.00
39219.46
7344.05
1.30
7345.35
2037.40
5307.95
1.35
5306.60
105.95
5412.55
97.53
5315.02
135.72
5450.74
2.39
5448.35
143.34
55.34
–
6.08
5243.59
752.75
125.02
4365.82
89.61
87.92
91.90
90.16
2.00
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
Cons p188-241.indd 190
7/2/2011 3:24:14 PM
Cons p188-241.indd 191
191
7/2/2011 3:24:14 PM
Consolidated Cash Flow Statement for the year ended March 31, 2011
A.
B.
C.
Cash fl ow from operating activities:
Profi t before tax (excluding minority interest and extraordinary items)
Adjustments for:
Dividend received
Depreciation (including obsolescence), amortisation and impairment
Exchange difference on items grouped under fi nancing/investing activity
Interest expense
Interest income
(Profi t)/loss on sale of fi xed assets (net)
(Profi t)/loss on sale of investments (net)
Employee stock option - discount forming part of staff expenses
Provision/(reversal) for diminution in value of investments
Operating profi t before working capital changes
Adjustments for:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in miscellaneous expenditure
Increase/(decrease) in trade payables and customer advances
Cash generated from operations before fi nancing activities
(Increase)/decrease in loans and advances towards fi nancing activities
Cash generated from operations
Direct taxes refund/(paid) (net)
Net cash (used in)/from operating activities
Cash fl ow from investing activities:
Purchase of fi xed assets
Sale of fi xed assets
Purchase of long term investments
Sale of long term investments
Purchase/sale of current investments (net)
Loans/deposits made with associates companies and third parties (net)
Advance towards equity commitment
Interest received
Dividend received from associates
Dividend received from other investments
Consideration received on disposal of subsidiaries
Consideration paid on acquisition of subsidiaries
Cash & cash equivalents acquired pursuant to acquisition of subsidiaries
Cash & cash equivalents discharged pursuant to disposal of subsidiaries
Cash (used in)/from investing activities (before extraordinary items)
Extraordinary items:
Cash received (net of expenses) on sale/transfer of Petrol Dispensing Pumps & Systems
Net cash (used in)/from investing activities (after extraordinary items)
Cash fl ow from fi nancing activities:
Proceeds from issue of share capital
Proceeds from long term borrowings
Repayment of long term borrowings
(Repayments)/proceeds from other borrowings (net)
Payment (to)/from minority interest
Loans from associate/joint venture companies (net of repayments)
Dividends paid
Additional tax on dividend
Interest paid (including cash fl ows on account of interest rate swaps)
Net cash (used in)/from fi nancing activities
Net (decrease)/increase in cash and cash equivalents (A + B + C)
Cash and cash equivalents at beginning of the year
Less: Cash and bank balance transferred on subsidiary becoming an associate
Cash and cash equivalents at end of the year
2010-2011
` crore
6732.21
(230.62)
1318.85
138.12
830.86
(304.64)
(260.16)
(327.79)
196.26
(7.83)
8085.26
(7872.50)
(416.99)
-
7478.45
7274.22
(6189.63)
1084.59
(2671.33)
(1586.74)
(7337.29)
443.14
(559.84)
600.10
973.48
(145.16)
0.01
190.10
44.67
230.62
21.01
(430.83)
11.46
(5.87)
(5964.40)
6.81
(5957.59)
347.25
14460.61
(5061.09)
415.02
(119.32)
0.02
(756.19)
(153.21)
(1264.91)
7868.18
323.85
3321.59
-
3645.44
2009-2010
` crore
7345.35
(297.48)
979.32
(60.52)
691.92
(136.58)
(9.84)
(1999.77)
170.31
21.61
6704.32
(3483.59)
564.57
0.28
4153.85
7939.43
(4066.87)
3872.56
(1754.72)
2117.84
(4428.99)
59.71
(109.45)
2318.67
(3269.67)
(113.84)
(0.93)
101.93
20.28
297.48
48.47
(79.18)
32.06
(2.65)
(5126.11)
129.07
(4997.04)
2132.74
8657.42
(3909.07)
(438.54)
11.44
(20.02)
(617.01)
(104.86)
(942.05)
4770.05
1890.85
1459.04
(28.30)
3321.59
Notes:
1. Cash fl ow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 : “Cash Flow Statements” as specifi ed in the Companies (Accounting
Standards) Rules, 2006.
2. Purchase of fi xed assets includes movement of capital work-in-progress during the year.
3. Cash and cash equivalents at the end of the year represent cash and bank balances and include unrealised loss of ` 5.18 crore (previous year unrealised loss of ` 25.92 crore) on
account of translation of foreign currency bank balances.
4. For cash and cash equivalents not available for immediate use as on the Balance Sheet date, please refer Note no. 12 of Notes forming part of consolidated accounts.
5. Previous year’s fi gures have been regrouped/reclassifi ed wherever applicable.
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
192
Cons p188-241.indd 192
7/2/2011 3:24:15 PM
Cons p188-241.indd 193
7/2/2011 3:24:15 PM
Schedules forming part of the Consolidated Accounts
Schedule A
Share capital:
Authorised:
1,62,50,00,000 equity shares of ` 2 each
(Previous year: 1,62,50,00,000 equity shares of ` 2 each)
Issued:
60,88,52,126 equity shares of ` 2 each
(previous year: 60,21,95,408 equity shares of ` 2 each)
Subscribed and paid up:
60,88,52,126 equity shares of ` 2 each [Note no.6]
(previous year: 60,21,95,408 equity shares of ` 2 each)
Schedule B
Reserves and surplus:
Revaluation reserve:
As per last Balance Sheet
Less: On assets sold or obsoleted during the year
Less: Transferred to Profi t and Loss Account
Capital redemption reserve:
As per last Balance Sheet
Add: Transferred from retained earnings
Capital reserve:
As per last Balance Sheet
Addition during the year
Capital reserve on consolidation:
As per last Balance Sheet
Addition during the year
Deduction during the year
Reserve u/s 45 IC of the RBI Act, 1934:
As per last Balance Sheet
Add: Transferred from Profi t and Loss Account
Debenture redemption reserve:
As per last Balance Sheet
Add: Trasferred from Profi t and Loss account
Securities premium account:
As per last Balance Sheet
Addition during the year
Less: Share/bond issue expenses (net of tax)
Reversal of expenses debited in previous year
Carried forward
As at 31-3-2011
` crore
As at 31-3-2010
` crore
325.00
121.77
121.77
121.77
325.00
120.44
120.44
120.44
As at 31-3-2011
` crore
As at 31-3-2010
` crore
` crore
` crore
30.81
0.10
1.06
3.27
–
46.61
0.05
14.24
0.09
0.02
166.36
86.53
186.68
269.83
6402.64
477.42
6880.06
1.68
(0.99)
29.65
3.27
46.66
32.11
–
1.30
3.14
0.13
46.61
–
15.70
1.04
2.50
30.81
3.27
46.61
14.31
14.24
252.89
111.02
55.34
43.34
143.34
166.36
456.51
186.68
4199.29
2249.19
6448.48
45.84
–
6879.37
7682.66
6402.64
6850.61
193
Cons p188-241.indd 192
7/2/2011 3:24:15 PM
Cons p188-241.indd 193
7/2/2011 3:24:15 PM
Schedules forming part of the Consolidated Accounts (contd.)
Schedule B (contd.)
Brought forward
Foreign projects reserve:
As per last Balance Sheet
Less: Transferred to retained earnings
Housing projects reserve:
As per last Balance Sheet
Less: Transferred to retained earnings
Tonnage tax reserve:
As per last Balance Sheet
Add: Transferred from Profi t and Loss Account
Less: Transferred to retained earnings
Foreign currency translation reserve:
As per last Balance Sheet
Addition/(deduction) during the year
Reserve u/s 36(1)(viii) of Income tax Act, 1961:
As per last Balance Sheet
Add: Transferred from Profi t and Loss Account
Hedging reserve (net of tax):
As per last Balance Sheet
Addition during the year (net)
Retained earnings:
As per last Balance Sheet
Add/(Less): Transferred from/(to):
Foreign projects reserve
Housing projects reserve
Tonnage tax reserve
Capital redemption reserve
Profi t and Loss Account
Schedule C
Secured loans:
Redeemable non-covertible fi xed rate debentures
Redeemable non-covertible fl oating rate debentures
Loans from banks:
Working capital borrowing facilities
Other loans
Interest accrued and due
Loans from fi nancial institutions
194
Cons p188-241.indd 194
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
7682.66
6850.61
–
–
–
–
–
4.48
–
37.05
45.06
9.88
11.65
(54.66)
46.70
13678.49
–
–
–
–
3053.62
–
–
4.48
82.11
21.53
7.83
7.83
1.73
1.73
2.09
–
2.09
112.68
(75.63)
3.80
6.08
(282.40)
227.74
–
–
–
37.05
9.88
(7.96)
(54.66)
9301.15
7.83
1.73
2.09
(0.13)
4365.82
16732.11
24514.93
13678.49
20521.37
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
4714.38
250.00
3848.02
350.00
923.35
17084.65
–
635.56
8945.55
0.15
18008.00
476.60
23448.98
9581.26
390.14
14169.42
7/2/2011 3:24:15 PM
Cons p188-241.indd 195
7/2/2011 3:24:15 PM
Schedules forming part of the Consolidated Accounts (contd.)
Schedule D
Unsecured loans:
3.50% Foreign currency convertible bonds
Redeemable non-covertible fi xed rate debentures
Short term loans and advances:
From banks
From others
Lease fi nance
Sales tax deferment loan
Commercial paper
Other loans and advances:
From banks
Lease fi nance
Sales tax deferment loan
From others
Schedule E(i)
Fixed Assets–Tangible:
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
891.90
585.00
898.00
325.00
1691.14
19.08
0.28
28.35
1334.51
4659.99
0.69
38.37
130.24
1321.74
166.93
0.18
27.23
1405.00
3073.36
2921.08
4214.83
0.40
66.91
60.42
4829.29
9379.55
4342.56
8486.64
` crore
Transfer on
business
combination
As at
1–4–2010
Cost/valuation
Foreign
currency
Additions
fl uctuation Deductions
As at
31–3–2011
Up to
31–3–2010
Transfer on
business
combination
Depreciation
Impairment
Book value
Foreign
currency
fl uctuation Deductions
Up to
31–3–2011
As at
31–3–2011
As at
31–3–2011
As at
31–3–2010
Particulars
OWNED ASSETS:
Land–freehold
Ships
Buildings
Railway sidings
Plant and machinery
Furniture and fi xtures
Vehicles
Aircraft
Owned assets given on
operating Lease:
Plant and machinery
Buildings
Vehicles
Lease adjustment
Owned assets (sub total-A)
LEASED ASSETS:
Assets taken under fi nance
lease:
Plant and machinery
Vehicles
Assets taken under fi nance
lease (sub total-B)
Total (A+B)
Previous year
Add: Capital work-in-progress
1218.25
71.46
1966.18
0.25
6017.93
372.72
230.06
10.62
569.75
351.98
144.93
–
–
7.26
–
33.12
1.48
0.33
–
47.60
718.70
742.84
–
1746.45
89.67
69.65
58.20
–
–
–
44.44
93.94
44.85
0.45
–
3.43
–
7.91
0.51
0.04
–
–
1.26
–
122.57
–
20.34
–
134.26
23.11
28.89
–
1143.73
790.16
2699.37
0.25
7671.15
441.27
271.19
68.82
–
7.51
268.86
0.25
1866.72
176.03
107.52
5.52
–
–
3.94
–
15.32
1.25
0.03
–
For the
year
–
30.09
56.48
–
639.27
44.68
36.40
2.43
21.52
142.14
35.45
592.67
305.04
154.33
234.66
31.19
52.57
–
–
–
20.89
8.79
22.91
–
–
0.57
–
4.81
0.34
0.01
–
–
0.11
–
–
–
3.35
–
90.97
18.52
25.70
–
10.46
13.38
22.17
–
37.60
326.50
0.25
2435.15
203.78
118.26
7.95
245.09
26.71
53.31
10954.13
42.19
3656.34
13.60
528.28
14137.98
2750.83
20.54
861.94
5.84
184.55
3454.60
2.91
0.91
3.82
–
–
–
–
–
–
–
–
–
0.09
–
0.09
2.82
0.91
3.73
2.90
0.91
3.81
–
–
–
–
–
–
–
–
–
0.09
–
0.09
2.81
0.91
3.72
10957.95
9125.33
42.19
3.19
3656.34
2480.37
13.60
(75.61)
528.37
575.33
14141.71
10957.95
2754.64
2331.09
20.54
1.66
861.94
631.19
5.84
(17.65)
184.64
191.65
3458.32
2754.64
–
–
0.70
–
0.49
0.08
–
–
1143.73
752.56
2372.17
–
5235.51
237.41
152.93
60.87
1218.25
63.95
1696.62
–
4150.72
196.61
122.54
5.10
6.93
–
–
–
8.20#
340.65
278.33
101.02
(239.36)
10435.82
328.16
320.79
92.36
(239.36)
7955.74
–
–
–
8.20
8.20
0.01
–
0.01
0.01
–
0.01
10435.83
7955.75
5521.50
15957.33
4114.68
12070.43
195
7/2/2011 3:24:15 PM
Cons p188-241.indd 194
7/2/2011 3:24:15 PM
Cons p188-241.indd 195
# Impairment upto 31–3–2011 ` 8.20 crore, during the year ` Nil
.
Schedules forming part of the Consolidated Accounts (contd.)
Schedule E (contd.)
Schedule E(ii)
Fixed Assets-Intangible:
Particulars
Transfer on
business
combination
As at
1-4-2010
Cost/valuation
Foreign
currency
Additions
fl uctuation Deductions
Goodwill on consolidation
Land-leasehold
683.79
464.56
0.10
52.62
Specialised softwares
246.21
147.17
141.63
Lumpsum fees for technical
knowhow
38.06
-
8.54
Toll collection rights
3714.47
-
172.58
-
95.25
3.00
-
-
-
Customer contracts and
relationship
Trade marks
Total
Previous year
Add: Capital work-in-progress
As at
31-3-2011
Up to
31-3-2010
Transfer on
business
combination
For the
year
Foreign
currency
fl uctuation Deductions
-
646.27
16.63
10.50
1336.19
113.77
-
98.34
Amortisation
Impairment
Book value
` crore
Up to
31-3-2011
As at
31-3-2011
As at
31-3-2011
As at
31-3-2010
212.45
41.29
1082.45
528.02
19.18
210.20
22.99
680.09
2.38
3.00
-
-
-
-
-
-
463.73
450.50
320.15
22.17
91.75
18.14
3206.96
3316.27
92.87
–
-
-
3.19
0.02
0.04
0.05
-
-
-
2.85
2.04
4.24
1.51
-
-
-
0.58
0.12
0.07
-
-
-
34.95
482.91
14.06
4.78
1.51
530.35
154.46
45.16
19.92
-
-
-
3887.05
398.20
95.25
-
3.00
3.00
0.03
0.01
-
-
–
-
7.11
59.93
4.53
281.89
2.38
-
5150.09
242.52
1021.64
17.40
51.74
6379.91
703.41
0.04
454.18
3.30
10.64
1150.29
41.29 #
5188.33
4404.68
3336.55
1.38
1870.84
12.73
71.41
5150.09
429.52
1.03
339.32
(0.71)
65.75
703.41
42.00
7018.05
2503.75
12206.38
6908.43
# Impairment upto 31-3-2011 ` 41.29 crore, amount written off during the year ` 0.71 crore.
Notes:
1
Cost/Valuation of:
(i)
(ii)
Freehold land includes ` 43.49 crore (previous year ` 0.14 crore) for which conveyance is yet to be completed.
Leasehold land includes:
(a)
` 2.63 crore for land taken at Mysore on lease from KIADB vide agreement dated May 5, 2006. The lease agreement is for a period of six
years, with extension of 3 years, at the end of which Sale Deed would be executed, on fulfi llment of certain conditions by the Company.
` 15.25 crore for land taken at Nagpur on Lease from Maharashtra Airport Development Company Limited for a period of 99 years with
effect from June 1, 2008 vide agreement dated June 20, 2008 for developing IT Infrastructure facilities.
` 126.18 crore added during the year in respect of which lease agreements are yet to be executed.
(b)
(c)
2
3
4
5
6
7
8
9
Cost/Valuation of Buildings includes ownership accommodation:
(i)
in various co-operative societies and apartments and shop-owners’ associations: ` 131.36 crore, including 2435 shares of ` 50 each, 232 shares
of ` 100 each and 1 share of ` 250 each.
in proposed co-operative societies ` 20.68 crore.
of ` 4.39 crore in respect of which the deed of conveyance is yet to be executed.
of ` 8.48 crore representing undivided share in a property at a certain location.
(ii)
(iii)
(iv)
Cost/Valuation of Buildings includes ` 46.70 crore for building constructed on lease hold land 90.36 acres (20 acres since surrendered) on a 66 years lease
agreement entered with National Academy of Construction (NAC) dated October 1, 2005, yet to be registered with appropriate authority.
Additions during the year and capital work-in-progress include ` 582.65 crore (previous year: ` 305.45 crore) being borrowing cost capitalised in
accordance with Accounting Standard (AS) 16 on “Borrowing Costs”
Depreciation for the year on tangible assets include obsolescence ` 9.56 crore (previous year: ` 10.01 crore) and Rs. Nil (previous year: ` 0.48 crore) on
account of impairment loss.
Capital work-in-progress - tangible assets includes advances ` 194.15 crore (previous year: ` 124.98 crore) Capital work-in-progress - intangible assets
includes advance ` 56.97 crore (previous year: ` 58.05 crore) and ` 0.92 crore (previous year: ` 0.92 crore) on account of exploration and evaluation of
potential mineral reserves.
The Company had revalued as at October 1, 1984 some of its land, buildings, plant and machinery and railway sidings at replacement/market value which
resulted in a net increase of ` 108.05 crore.
One of the subsidiaries has revalued land in the fi nancial year 2008-09, based on an estimated market valuation recommended by an external valuer as
at March 31, 2008 which resulted in a net increase of ` 24.69 crore.
Owned assets given on operating lease have been presented separately under tangible assets schedule as per Accounting Standard (AS) 19 on
“Leases”.
10 Deduction in respect of freehold land in a subsidiary represents an amount of ` 114.05 crore transferred to inventory pertaining to offi ce space intended
for sale.
196
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule F
Investments (at cost, unless otherwise specifi ed):
Long term investments:
Government and trust securities
Investment in associates: [see note below]
Fully paid equity shares of associate companies
Add/(deduct):
Accumulated share in profi t/(loss) of the associate companies
at the beginning of the year
Adjustment pursuant to subsidiary becoming an associate
Adjustment pursuant to associate becoming an subsidiary
Adjustment pursuant to dilution/divestment of stake and
buy-back in associates
Add/(deduct):
Share in profi t/(loss) (net) of associate companies
– current year
Commitment to fresh infusion of equity
Dividend received from associate companies during the year
Unrealised profi ts in respect of transactions with
associate companies
Provision for diminution in value
Debentures
Other fully paid equity shares
Other fully paid preference shares
Bonds
Mutual Funds
Current investments:
Government and trust securities (previous year ` 538.32 crore)
Less: Provision for diminution in value
(previous year ` 3.81 crore)
Other fully paid equity shares (previous year ` 4.60 crore)
Less: Provision for diminution in value
(previous year ` 0.11 crore)
Bonds (previous year ` 151.90 crore)
Less: Provision for diminution in value
(previous year ` 1.49 crore)
Debentures (previous year ` 777.17 crore)
Less: Provision for diminution in value (previous year ` Nil)
Mutual funds (previous year ` 6619.47 crore)
Less: Provision for diminution in value
(previous year ` 4.71 crore)
531.84
4.88
0.62
0.50
4.90
0.11
352.62
4.93
3159.63
0.02
Certifi cate of deposits (previous year ` 478.44 crore)
Less: Provision for diminution in value (previous year ` Nil)
3366.69
5.72
Collateralized borrowing and lending obligation
Commercial Paper (previous year ` Nil)
Less: Provision for diminution in value (previous year ` Nil)
93.33
0.61
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
41.03
0.50
453.72
49.97
562.41
225.00
181.02
10.00
1523.15
166.86
366.92
–
(25.38)
(33.51)
474.89
87.07
3.21
(44.67)
(66.22)
(0.56)
526.96
0.12
4.79
347.69
3159.61
3360.97
199.79
92.72
506.01
–
794.57
–
–
–
1301.08
227.73
317.85
(27.37)
(9.23)
508.98
105.95
3.21
(20.28)
(74.36)
(17.49)
534.51
4.49
150.41
777.17
6614.76
478.44
–
–
Note : Investments in associates include goodwill of ` 28.57 crore (previous year ` 31.52 crore), net of cumulative amortisation of ` 14.69
crore (previous year ` 10.40 crore) and is net of capital reserve of ` 0.25 crore (previous year ` 0.26 crore).
7692.65
9215.80
8559.78
9860.86
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Schedules forming part of the Consolidated Accounts (contd.)
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
Schedule G(i)
Loans and advances towards fi nancing activities:
Secured loans:
Considered good:
Loans against pledge of shares and securities
Infrastructure and other loans
Debentures
Considered doubtful:
Infrastructure and other loans
Less: Provision for non performing assets
Less: Provision for standard assets
Unsecured loans:
Considered good:
Bills discounted
Other loans
Considered doubtful:
Other loans
Less: Provision for non performing assets
Less: Provision for standard assets
Schedule G(ii)
Current assets, loans and advances:
Current assets:
Inventories:
Stock-in-trade, manufacturing work-in-progress and stock on hire:
(at cost or net realisable value whichever is lower)
Stock-in-trade
Raw materials
Components
Construction materials
Stores, spare parts and loose tools
Finished goods
Property development land
Completed property
Manufacturing work-in-progress
Stock on hire
Carried forward
198
788.50
13789.77
865.79
27.98
15472.04
27.98
49.75
267.35
1710.46
56.27
2034.08
56.27
5.68
483.90
9165.38
67.00
37.39
9753.67
37.39
25.16
15394.31
9691.12
184.31
1301.38
1.35
1487.04
1.35
–
1972.13
17366.44
1485.69
11176.81
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
593.78
422.19
227.82
102.61
531.44
400.24
53.41
2331.49
708.78
-
397.80
340.35
122.89
130.23
399.85
417.10
130.08
1938.30
506.72
1.12
3040.27
3040.27
2446.14
2446.14
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule G(ii) (contd.)
Brought forward
Sundry Debtors
Secured:
Debts outstanding for more than 6 months
Considered good
Considered doubtful
Other debts:
Considered good
Less: Provision for doubtful debts
Unsecured:
Debts outstanding for more than 6 months
Considered good
Considered doubtful
Other debts:
Considered good
Less: Provision for doubtful debts
Cash and bank balances:
Cash on hand
Cheques on hand
Balances with scheduled banks:
on current accounts
on fi xed deposits including interest accrued thereon
on margin money deposit accounts
Balances with non-scheduled banks [Note no.12]
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
3040.27
2446.14
177.43
38.16
215.59
25.96
241.55
38.16
203.39
3627.24
544.52
4171.76
10649.53
14821.29
544.52
14276.77
9.48
403.30
1173.70
1249.68
12.11
797.17
10.29
41.21
51.50
159.83
211.33
41.21
170.12
3094.12
517.10
3611.22
9258.39
12869.61
517.10
12352.51
14480.16
12522.63
9.39
249.04
935.41
1484.32
2.36
641.07
45.51
6845.68
58.43
3321.59
Other current assets:
Interest accrued on investments
Due from customers (Construction and project related activity)
Others
86.68
11891.44
131.80
3645.44
Loans and advances:
Secured, considered good:
Loans against mortgage of house property
14.29
17.12
12109.92
6949.62
Unsecured:
Considered good:
Associate/Joint venture companies:
Advances recoverable
Inter-corporate deposits
Advances towards equity commitment
Inter-corporate deposits
Advances recoverable in cash or in kind [Note no.17]
Balance with customs, port trust, etc.
Lease receivables
Considered doubtful:
Deferred credit against sale of ships
Advances recoverable in cash or in kind
Less: Provision for doubtful loans and advances
16.43
179.41
0.92
-
5909.59
48.27
1.26
18.55
129.72
6318.44
148.27
11.07
-
0.93
3.60
4796.00
39.24
1.85
18.67
116.01
5004.49
134.68
6170.17
39445.96
4869.81
30109.79
199
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule H
Current liabilities:
Acceptances
Sundry creditors:
As at 31-3-2011
As at 31-3-2010
` crore
` crore
` crore
` crore
165.38
40.50
Due to: Micro and small enterprises
Others [Note no.11]
35.59
16447.96
24.51
11231.33
Due to customers (construction and project related activity)
Advances from customers
Items covered by investor education and protection fund [Note no.38]
Unpaid dividend
Unpaid matured deposits
Interest accrued on bonds
Due to directors
Interest accrued but not due on loans
Schedule I
Provisions:
Current taxes [Net of payment made ` 2029.18 crore
(previous year: ` 1356.76 crore)]
Proposed dividend
Additional tax on dividend
Gratuity
Compensated absences
Employee pension schemes
Post-retirement medical benefi t plan
Long service awards
Reserve for Unexpired Risks
Other provisions (AS-29 related) [Note no.24]
Schedule J
Contingent liabilities:
(a) Claims against the Company not acknowledged as debts
(b) Sales-tax liability that may arise in respect of matters in appeal
(c) Excise duty/service tax liability that may arise in respect of matters
in appeal/challenged by the Company in WRIT
(d) Customs duty demands against which the Group has fi led appeals
(e)
before appellate authorities which are pending disposal
Income-tax liability (including interest and penalty) that may arise in
respect of which the Company is in appeal
16.15
0.07
–
16483.55
2503.60
8632.20
16.22
39.47
211.23
28051.65
12.79
0.09
0.01
11255.84
2499.89
6835.46
12.89
45.19
133.05
20822.82
As at 31-3-2011
As at 31-3-2010
` crore
104.14
882.84
124.43
27.61
400.85
162.14
95.99
3.32
8.78
602.49
` crore
592.65
752.75
126.37
20.04
354.15
135.61
82.55
5.80
-
394.80
2412.59
2464.72
As at 31-3-2011
As at 31-3-2010
` crore
335.13
213.28
25.91
0.21
131.49
` crore
188.90
177.63
67.76
0.35
135.99
Notes:
1. The Company does not expect any reimbursements in respect of the above contingent liabilities.
2.
It is not practicable to estimate the timing of cash outfl ows, if any, in respect of matters at (a) to (e) above pending ”resolution of the
arbitration/appellate proceedings“.
200
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule K
Sales & service:
Manufacturing, trading and property development activity
Construction and project related activity
Software development products and services
Income from fi nancing activity/annuity based projects
Toll collection and related activity
Servicing
Commission
Engineering and service fees
Income from wind power generation
Premiums earned (net)
Schedule L(i)
Other operational income:
Equipment and property rentals
Technical fees
Property maintenance recoveries
Facility management income
Profi t on sale of fi xed assets (net)
Unclaimed credit balances
Miscellaneous income
Schedule L(ii)
Other income:
Interest income:
2010-2011
` crore
7433.03
38416.81
2378.59
2134.50
446.33
378.75
186.87
597.16
6.15
0.28
51978.47
2010-2011
` crore
83.88
1.12
16.27
9.29
135.74
33.44
257.37
537.11
2009-2010
` crore
6227.59
33153.67
1837.15
1476.01
337.41
263.95
153.72
404.74
–
–
43854.24
2009-2010
` crore
85.92
7.75
19.56
7.20
6.25
24.68
304.86
456.22
2010-2011
2009-2010
` crore
` crore
` crore
` crore
Interest received on inter-corporate deposits from associate
companies,customers and others
Income from long term investments:
Interest on bonds and Government securities
Income from current investment:
55.57
4.24
Interest on bonds, government securities and other investments
244.83
33.05
0.02
103.51
Dividend Income:
From long term investments
Trade investments
Other investments
From current investments
Profi t on sale of Investment:
Profi t on sale of long term investments
Profi t on sale of current investments (net)
Profi t on sale of fi xed assets (net)
Lease rental income
Unclaimed credit balances written back
Miscellaneous income
Provision no longer required written back
Provision for diminution in value of investments no longer required (net)
304.64
136.58
5.72
2.34
8.06
222.56
260.21
67.58
5.12
–
5.12
292.36
230.62
297.48
1923.58
76.19
327.79
124.42
23.72
0.49
94.03
1.78
7.83
1115.32
1999.77
3.59
9.68
0.09
146.52
–
–
2593.71
201
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Schedules forming part of the Consolidated Accounts (contd.)
2010-2011
2009-2010
` crore
` crore
` crore
` crore
Schedule M
Manufacturing, construction and operating expenses:
Materials consumed:
Raw materials and components
Construction materials
Less: Scrap sales
Purchase of trading goods
(Increase)/decrease in stocks:
Closing stock:
Finished goods
Work-in-progress
Less: Opening stock:
Finished goods (including stock of ` 10.62 crore acquired
on acquisition of subsidiaries)
Work-in-progress (including stock of ` 3.80 crore acquired
on acquisition of subsidiaries)
Value of materials, tools, and WIP transferred on sale of undertaking
Sub-contracting charges
Stores, spares and tools [Note no.18]
Excise duty
Power and fuel
Royalty and technical know-how fees
Packing and forwarding
Hire charges - plant and machinery and others
Bank Guarantee charges
Insurance claims incurred (net)
Engineering, professional, technical and consultancy fees
Insurance
Rent
Rates and taxes
Travelling and conveyance
Repairs to plant and machinery
Repairs to buildings
General repairs and maintenance
Interest and other fi nancing charges
Software development expenses [including provision for gratuity fund &
post retirement medical benefi t ` 5.95 crore (previous year ` 2.57 crore)]
Cost of built up technology park space and property development land:
Opening stock:
Work-in-progress
Completed property
Property development land
Add: Expenses on construction during the year
Add: Transferred from fi xed assets to inventory
[Note no.10 of schedule E]
Less: Value of WIP transferred on sale of stake
in subsidiary/Joint venture company
Less: Closing Stock:
Work-in-progress
Completed property
Property development land
Other expenses [Note no.16(b)]
9444.35
10387.95
19832.30
73.15
531.44
1543.01
2074.45
410.47
1116.16
1526.63
68.48
130.08
417.10
615.66
141.11
114.05
12.77
858.05
280.44
53.41
400.24
734.09
6747.71
8354.07
15101.78
64.93
19759.15
1970.00
15036.85
1530.96
(547.82)
–
8919.18
1406.17
8.60
403.12
17.13
173.81
483.48
74.32
2.45
645.05
160.87
157.84
74.53
402.30
34.77
18.15
140.40
962.36
1497.72
487.73
(20.45)
9201.17
1160.08
(3.45)
375.46
2.99
134.75
351.03
111.71
–
466.33
162.65
172.34
48.31
318.42
33.58
7.44
124.29
667.65
1089.36
399.85
1112.36
1512.21
464.65
1535.29
1999.94
174.58
9.75
323.85
508.18
210.90
–
11.80
707.28
68.48
130.08
417.10
615.66
123.96
653.35
37540.89
91.62
789.20
32340.02
202
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule N
Staff expenses:
Salaries, wages and bonus
Contribution to and provision for:
2010-2011
2009-2010
` crore
` crore
` crore
` crore
3146.94
2518.48
Provident fund and pension fund
Superannuation/employee pension schemes
Gratuity funds
105.68
78.62
38.16
84.44
55.34
52.77
Welfare and other expenses
Schedule O
Sales, administration and other expenses:
Power and fuel
Packing and forwarding
Professional fees
Insurance
Rent
Rates and taxes
Travelling and conveyance
Repairs to buildings
General repairs and maintenance
Directors’ fees
Telephone, postage and telegrams
Advertising and publicity
Stationery and printing
Commission:
Distributors and agents
Others
Bank charges
Miscellaneous expenses
Bad debts and advances written off
Less: Provision for doubtful debts and advances written back
Discount on sales
Provision for standard assets
Provision for doubtful debts,advances and non-performing assets (net)
Provision for foreseeable losses on construction contracts (net)
Provision for diminution in value of investments(net)
Other provisions [Note no.24]
Schedule P
Interest expenses & brokerage:
Debentures and fi xed loans
Others
222.46
432.55
3801.95
192.55
354.38
3065.41
2010-2011
2009-2010
` crore
` crore
` crore
` crore
33.87
39.03
164.61
108.73
74.67
181.83
257.98
39.94
184.77
73.51
321.02
16.40
204.40
0.64
120.17
118.29
47.56
72.90
63.38
604.68
55.88
71.84
30.27
194.33
42.22
–
278.63
3055.31
2010-2011
` crore
614.25
216.61
830.86
39.43
47.46
112.36
29.71
55.35
135.26
166.97
30.61
159.45
68.71
247.14
12.45
156.52
0.29
106.49
75.30
42.62
86.89
48.91
356.01
82.65
57.83
17.46
186.57
59.14
21.61
19.28
2193.51
2009-2010
` crore
500.70
191.22
691.92
203
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule Q
Signifi cant Accounting Policies
1.
Basis of accounting
The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted
accounting principles [“GAAP”] except for the revaluation of certain fi xed assets, and in compliance with the provisions of the
Companies Act, 1956 and the Accounting Standards as specifi ed in the Companies (Accounting Standards) Rules, 2006, prescribed by
the Central Government.
The preparation of fi nancial statements in conformity with GAAP requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and
the disclosures relating to contingent liabilities as of the date of the fi nancial statements. Examples of such estimates include the useful
lives of tangible and intangible fi xed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefi t
plans, etc. Difference, if any, between the actual results and estimates, is recognised in the period in which the results are known.
The accounts of Indian subsidiaries, joint ventures and associates have been prepared in compliance with the Accounting Standards
as specifi ed in the Companies (Accounting Standards) Rules, 2006, prescribed by the Central Government, and those of the foreign
subsidiaries, joint ventures and associates have been prepared in compliance with the local laws and applicable accounting standards.
Necessary adjustments for differences in the accounting policies, wherever applicable, have been made in the consolidated fi nancial
statements.
2.
Revenue recognition
Revenue is recognised based on the nature of activity when consideration can be reasonably measured and there exists reasonable
certainty of its recovery.
a)
Sales and service
i)
ii)
iii)
iv)
Sales and service include excise duty and adjustments made towards liquidated damages and price variation wherever
applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers, are not taken into
account.
Revenue from sale of goods is recognised when the substantial risks and rewards of ownership are transferred to the buyer
under the terms of the contract.
Revenue from property development activity is recognised when all signifi cant risks and rewards of ownership in the land
and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from
the customer exists.
Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and equipment
is recognised as follows:
a)
b)
c)
Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as
agreed with the customer.
Fixed price contracts received up to March 31, 2003: Contract revenue is recognised by applying percentage of
completion to the contract value. Percentage of completion is determined as follows:
I)
II)
in the case of item rate contracts, as a proportion of the progress billing to contract value; and
in the case of other contracts, as a proportion of the cost incurred-to-date to the total estimated cost.
Fixed price contracts received on or after April 1, 2003: Contract revenue represents the cost of work performed on
the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is
determined as a proportion of cost of work performed to-date to the total estimated contract costs.
Government subsidy related to customer contracts is recognised as revenue from operations in the Profi t and Loss
Account, on a prudent basis, in proportion to work completed when there is reasonable assurance that the conditions
for the grant of subsidy will be fulfi lled.
Expected loss, if any, on the construction/project related activity is recognised as an expense in the period in which
it is foreseen, irrespective of the stage of completion of the contract. While determining the amount of foreseeable
loss, all elements of costs and related incidental income not included in contract revenue is taken into consideration.
Construction and project related work-in-progress is refl ected at cost till such time the outcome of the job cannot be
ascertained reliably and at realisable value thereafter.
v)
Revenues from construction/project related activity and contracts executed in joint ventures under work-sharing arrangement
[being jointly controlled operations, in terms of Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint
Ventures”], is recognised on the same basis as similar contracts independently executed by the Company.
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule Q (contd.)
vi)
vii)
Revenue from software development is recognised based on software developed or time spent in person hours or person
weeks, and billed to customers as per the terms of specifi c contracts.
Income from hire purchase and lease transactions is accounted on accrual basis, pro-rata for the period, at the rates implicit
in the transaction. Income from bill discounting, advisory and syndication services and other fi nancing activities is accounted
on accrual basis.
viii) Revenue relatable to construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by
the group is recognized during the period of construction using percentage of completion method. Revenue relatable to toll
collections of such projects from users of facilities are accounted when the amount is due and recovery is certain. Licence
fees for way-side amenities are accounted on accrual basis. Revenue from annuity based projects is recognised in the Profi t
& Loss Account over the concession period of the respective projects based on the implicit rate of return embedded in the
projected cash fl ows. Such income is duly adjusted for any variation in the amount and timing of the cash fl ows in the
period in which such variation occurs.
ix)
x)
xi)
xii)
xiii)
Revenue from service related activities is recognised using either the proportionate completion method or completed
contract method whichever is considered appropriate.
Commission income is recognised as and when the terms of the contract are fulfi lled.
Revenue from engineering and service fees is recognised as per the terms of the contract.
Trusteeship fees are accounted on an accrual basis in accordance with the Trust Deed and are dependent on the net asset
value as recorded by the respective mutual fund schemes.
Insurance Premium (net of service tax) is recognised as income over the contract period or period of risk, as appropriate,
after adjusting for unearned premium (unexpired risk) and premium defi ciency, if any. Premium defi ciency, if any, is
recognised if the sum of expected claim costs and related claim management costs exceed related reserve for unexpired
risk for every line of business. Reserve for unexpired risk is recognized net of reinsurance ceded and represents premium
written that is attributable and to be allocated to succeeding accounting periods for risks to be borne by the Company
under contractual obligations on a contract period basis or risk period basis, whichever is appropriate. It is calculated on a
daily pro-rata basis, written on policies during the twelve months preceding the Balance Sheet date for fi re, marine cargo
and miscellaneous business (excluding Project related Engineering insurance contracts) and 100% for marine hull business,
on all unexpired policies at balance sheet date, in accordance with Section 64 V(1)(ii)(b) of the Insurance Act, 1938. The
reserve for unexpired risk is computed for project related engineering insurance contract through the usage of Cubic Curve
Method. A reserve for unexpired risks is recorded at 50% per cent of the net premium retro-ceded to the Company from
India Motor Third Party Insurance Pool (IMTPIP) during the year.
Reinsurance premium ceded is accounted in the year in which the risk commences and over the period of risk in accordance
with the treaty arrangements with the reinsurers. Reinsurance premium ceded on unearned premium is carried forward
to the period of risk and is set off against related unearned premium. Premium on excess of loss reinsurance cover is
accounted as per the terms of the reinsurance arrangements.
Commission on reinsurance ceded is recognized as income on ceding of reinsurance premium.
Profi t commission under re-insurance treaties, wherever applicable, is recognized in the year of fi nal determination of the
profi ts.
Claims incurred comprise claims paid, estimated liability for outstanding claims made following a loss occurrence reported
and estimated liability for claims Incurred But Not Reported (‘IBNR’) and claims Incurred But Not Enough Reported (‘IBNER’).
Further, claims incurred also include specifi c claim settlement costs such as survey/legal fees and other directly attributable
costs.
Claims (net of amounts receivable from reinsurers/coinsurers) are recognised on the date of intimation based on estimates
from surveyors/insured in the respective revenue accounts. Estimated liability for outstanding claims at Balance Sheet date
is recorded net of claims recoverable from/payable to co-insurers/reinsurers and salvage to the extent there is certainty of
realisation. Estimated liability for outstanding claims is determined by management on the basis of ultimate amounts likely
to be paid on each claim based on the past experience. These estimates are progressively revalidated on availability of
further information. IBNR represents that amount of claims that may have been incurred during the accounting period but
have not been reported or claimed. The IBNR provision also includes provision, if any, required for claims IBNER. Estimated
liability for claims Incurred But Not Reported (‘IBNR’) and claims Incurred But Not Enough Reported (‘IBNER’) is based on
actuarial estimate duly certifi ed by the appointed actuary of the Company. IBNR/IBNER has been created on re-insurance
accepted from Indian Motor Third Party Insurance Pool (IMTPIP) based on actuarial estimates received from the IMTPIP.
b)
Profi t/Loss on contracts executed by Integrated Joint Ventures under profi t-sharing arrangement [being jointly controlled entities,
in terms of Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures”] is accounted as and when the same
is determined by the joint venture. Revenue from services rendered to such joint ventures is accounted on accrual basis.
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Schedule Q (contd.)
c) Other operational income represents income earned from the activities incidental to the business and is recognised when the
d)
e)
f)
right to receive the income is established as per the terms of the contract.
Interest Income is accrued at applicable interest rate.
Dividend income is accounted when the right to receive the same is established.
Other Government grants, which are revenue in nature and are intended to compensate the related costs, are recognised as
income in the Profi t and Loss account to match such costs, as and when incurred.
g) Other items of income are accounted as and when the right to receive arises.
3.
Principles of consolidation
a)
b)
The fi nancial statements of the Parent Company and its Subsidiaries have been consolidated on a line-by-line basis by adding
together the book values of the like items of assets, liabilities, income and expenses, after eliminating intra-group balances and
the unrealised profi ts/losses on intra-group transactions, and are presented to the extent possible, in the same manner as the
Company’s independent fi nancial statements.
Investments in associate companies have been accounted for, by using equity method whereby investment is initially recorded
at cost and the carrying amount is adjusted thereafter for post acquisition change in the Company’s share of net assets of the
associate. The carrying amount of investment in associate companies is reduced to recognise any decline which is other than
temporary in nature and such determination of decline in value, if any, is made for each investment individually.
c)
The Company’s interests in joint ventures are consolidated as follows :
Type of joint venture
Accounting treatment
Jointly Controlled Operations
Company’s share of revenues, common expenses, assets and liabilities are included in revenues,
expenses, assets and liabilities respectively.
Jointly Controlled Assets
Jointly Controlled Entities
Share of the assets, according to nature of the assets, and share of the liabilities are shown
as part of gross block and liabilities respectively. Share of expenses incurred on maintenance
of the assets is accounted as expense. Monetary benefi ts, if any, from use of the assets are
refl ected as income.
The Company’s interest in Jointly Controlled Entities are proportionately consolidated on a line-
by line basis by adding together the book values of assets, liabilities, income and expenses,
after eliminating the unrealised profi ts/losses on intra-group transactions.
Joint venture interests accounted as above are included in the segments to which they relate.
4.
Extraordinary and Exceptional items
Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are
classifi ed as extraordinary items. Specifi c disclosure of such events/transactions is made in the fi nancial statements. Similarly, any
external event beyond the control of the Company, signifi cantly impacting income or expense, is also treated as extraordinary item
and disclosed as such.
On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company,
is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classifi ed as an
exceptional item and accordingly disclosed in the notes to accounts. [Note no.16(a)]
5.
Research and development
a)
Revenue expenditure on research is expensed under respective heads of account in the period in which it is incurred.
b) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
i)
ii)
iii)
iv)
v)
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The Company has intention to complete the intangible asset and use or sell it;
The Company has ability to use or sell the intangible asset;
The manner in which the probable future economic benefi ts will be generated including the existence of a market for
output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;
The availability of adequate technical, fi nancial and other resources to complete the development and to use or sell the
intangible asset; and
The Company has ability to measure the expenditure attributable to the intangible asset during its development reliably.
vi)
The development expenditure capitalized as intangible asset is amortised over its useful life.
Other development costs that do not meet above criteria are expensed in the period in which they are incurred.
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule Q (contd.)
c)
Capital expenditure on research and development is classifi ed under tangible/intangible fi xed assets and depreciated on the same
basis as other fi xed assets.
6.
Employee benefi ts
a)
b)
Short Term Employee Benefi ts
All employee benefi ts falling due wholly within twelve months of rendering the service are classifi ed as short term employee
benefi ts. The benefi ts like salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia, are
recognized in the period in which the employee renders the related service.
Post-Employment Benefi ts
i)
Defi ned Contribution Plans: The Company’s superannuation scheme, state governed provident fund scheme, insurance
scheme and employee pension scheme are defi ned contribution plans. The contribution paid/payable under the schemes is
recognized during the period in which the employee renders the related service.
ii) Defi ned Benefi t Plans: The employees gratuity fund schemes, post-retirement medical care schemes, pension scheme and
provident fund scheme managed by trust are the Company’s defi ned benefi t plans. Wherever applicable, the present value
of the obligation under such defi ned benefi t plans is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise to additional unit of employee benefi t entitlement
and measures each unit separately to build up the fi nal obligation.
The obligation is measured at the present value of the estimated future cash fl ows. The discount rate used for determining
the present value of the obligation under defi ned benefi t plans, is based on the market yield on government securities, of a
maturity period equivalent to the weighted average maturity profi le of the related obligations at the Balance Sheet date.
Actuarial gains and losses are recognised immediately in the Profi t and Loss Account.
The interest element implicit in the actuarial valuation of defi ned benefi t plans is classifi ed under interest expense and
balance charge is recognised as employee benefi ts in the Profi t and Loss Account.
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defi ned benefi t
plans to recognise the obligation on the net basis.
Gains or losses on the curtailment or settlement of any defi ned benefi t plan are recognised when the curtailment or
settlement occurs. Past service cost is recognised as expense on a straight-line basis over the average period until the
benefi ts become vested.
Long Term Employee Benefi ts
The obligation for long term employee benefi ts such as long term compensated absences, long service award, etc. is recognised
in the similar manner as in the case of defi ned benefi t plans as mentioned in (b) (ii) above.
Termination Benefi ts
Termination benefi ts such as compensation under voluntary retirement-cum-pension scheme is amortised over a defi ned period.
The defi ned period of amortization is fi ve years or the period till March 31, 2010, whichever is earlier.
c)
d)
7.
Fixed assets
Fixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation, accumulated amortisation
and cumulative impairment. Fixed asset which were revalued as on October 1,1984 are stated at the values determined by the valuers
less accumulated depreciation, accumulated amortisation and cumulative impairment. Assets acquired on hire purchase basis are stated
at their cash values. Specifi c know-how fees paid, if any, relating to plant and machinery is treated as part of cost thereof.
Administrative and other general overhead expenses that are specifi cally attributable to construction or acquisition of fi xed assets or
bringing the fi xed assets to working condition are allocated and capitalised as a part of the cost of the fi xed assets.
Own manufactured assets are capitalised at cost including an appropriate share of overheads.
(Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions, infra.)
8.
Leases
The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of
inception.
a)
Lease transactions entered into prior to April 1, 2001:
Assets leased out are stated at original cost. Lease equalisation adjustment is the difference between capital recovery included in
the lease rentals and depreciation provided in the books of account.
Lease rentals in respect of assets acquired under leases are charged to Profi t and Loss Account.
b)
Lease transactions entered into on or after April 1, 2001:
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Schedule Q (contd.)
Finance leases:
i)
Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classifi ed as
fi nance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value
of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each
period.
Assets given under leases where the Company has transferred substantially all the risks and rewards of ownership to lessee,
are classifi ed as fi nance leases. Where under a contract, the Company has agreed to manufacture/construct an asset and
convey, in substance, a right to the benefi ciary to use the asset over a major part of its economic life, for a pre-determined
consideration, such arrangement is also accounted as fi nance lease.
iii) Assets given under a fi nance lease are recognised as a receivable at an amount equal to the net investment in the
lease. Wherever the asset is manufactured/constructed by the Company, the fair value of the asset, representing the net
investment in the lease, is recognised as sales revenue in accordance with the Company’s revenue recognition policy. Lease
income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the
lease.
Initial direct costs relating to assets given on fi nance leases are charged to Profi t and Loss Account.
Assets acquired on leases where a signifi cant portion of the risks and rewards of ownership are retained by the lessor are
classifi ed as operating leases. Lease rentals are charged to the Profi t and Loss Account on accrual basis.
Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease
term.
iv)
Operating leases:
i)
(Also refer to policy on depreciation, infra)
9. Depreciation
a)
Indian companies
Owned assets
a)
Revalued Assets :
Depreciation is provided for based on straight line method on the values and at the rates given by the valuers. The
difference between depreciation provided based on revalued amount and that on historical cost is transferred from
revaluation reserve to Profi t and Loss Account.
b) Assets carried at historical cost:
Depreciation on assets carried at historical cost is provided on the written down value basis on assets acquired up
to March 31, 1968 (at the rates prescribed under Schedule XIV to the Companies Act, 1956) and on straight line
basis on assets acquired subsequently (at the rates prevailing at the time of their acquisition) on assets acquired up
to September 30, 1987. For the assets acquired there after, depreciation is provided at the rates prescribed under
Schedule XIV to the Companies Act, 1956 or at higher rates in line with the estimated useful lives of the assets.
c) Depreciation for additions to/deductions from owned assets is calculated pro-rata from/to the month of additions/
d)
deductions. Extra shift depreciation is provided on a location basis.
Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying
amount of the asset is allocated over its remaining useful life.
Leased assets
a)
Lease transactions entered into prior to April 1, 2001:
Lease charge comprising statutory depreciation and lease equalisation charge is provided for assets given on lease
over the primary period of the lease equal to recovery of net investment in the lease. Accordingly, while the statutory
depreciation on such assets is provided for on straight line method as per Schedule XIV to the Companies Act, 1956,
the difference is adjusted through lease equalisation and lease adjustment account.
Lease transactions entered into on or after April 1, 2001:
Assets acquired under fi nance leases are depreciated on a straight line method over the lease term. Where there
is reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term, such
assets are depreciated at the rates prescribed under Schedule XIV to the Companies Act, 1956 or at the higher rates
adopted by the Company for similar assets.
b)
ii)
ii)
i)
ii)
b)
Foreign companies
Depreciation has been provided by the foreign companies on methods and at the rates required/permissible by the local laws so
as to write off the assets over their useful life.
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Schedules forming part of the Consolidated Accounts (contd.)
Schedule Q (contd.)
10.
Intangible assets and amortisation
Intangible assets are recognised when it is probable that the future economic benefi ts that are attributable to the asset will fl ow to
the enterprise and the cost of the asset can be measured reliably. Intangible assets are amortised as follows:
a)
b)
c)
d)
e)
f)
g)
Leasehold land: Over the period of lease.
Specialised software: Over a period of three to ten years.
Lump sum fees for technical know-how: Over a period of three to seven years.
Trade-marks: over a period of fi ve years.
Development costs for new products: Over a period fi ve years
Customer Contracts and relationship: Over a period of ten years
Toll collection rights obtained in consideration for rendering construction services represent the right to collect toll revenue
during the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the group. Toll collection rights
are capitalized as intangible asset upon completion of the project at the cumulative construction costs including related margins
(refer accounting policy on revenue recognition above) plus obligation towards negative grants payable to National Highway
Authority of India (NHAI), if any. Till the completion of the project, the same is recognised as capital work-in-progress. Toll
collection rights are amortised over the period of rights given under the concession agreement.
Administrative and other general overhead expenses that are specifi cally attributable to acquisition of intangible assets are allocated
and capitalised as a part of the cost of the intangible assets.
Amortisation on impaired assets is provided by adjusting the amortisation charges in the remaining periods so as to allocate the asset’s
revised carrying amount over its remaining useful life.
Goodwill represents the difference between the Group’s share in the net worth of a subsidiary or an associate or a joint venture, and
the cost of acquisition at each point of time of making the investment in the subsidiary or the associate or the joint venture. For this
purpose, the Group’s share of net worth is determined on the basis of the latest fi nancial statements prior to the acquisition after
making necessary adjustments for material events between the date of such fi nancial statements and the date of respective acquisition.
Capital Reserve on consolidation represents negative goodwill arising on consolidation.
Goodwill arising out of acquisition of equity stake in a subsidiary, an associate or a joint venture is amortised in equal amounts over a
period of ten years from the date of fi rst acquisition. In the event of cessation of operations of a subsidiary, associate or joint venture,
the unamortised goodwill is written off fully.
Exploration and evaluation expenditure incurred for potential mineral reserves is recognised and reported as part of “capital work-in-
progress” under “Intangible Assets” when such costs are expected to be either recouped in full through successful exploration and
development of the area of interest or alternatively, by its sale; or when exploration and evaluation activities in the area of interest have
not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically available reserves and
active and signifi cant operations in relation to the area are continuing or are planned for the future. Exploration assets are re-assessed
on a regular basis and these costs are carried forward provided that at least one of the conditions outlined above is met. All other
exploration and evaluation expenditure is recognised as expense in the period in which it is incurred.
11.
Impairment of assets
As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine:
a)
b)
the provision for impairment loss, if any; or
the reversal of impairment loss recognised in previous periods, if any.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
a)
b)
in the case of an individual asset, at the higher of the net selling price and the value in use;
in the case of a cash generating unit (a group of assets that generates identifi ed, independent cash fl ows), at the higher of the
cash generating unit’s net selling price and the value in use.
(Value in use is determined as the present value of estimated future cash fl ows from the continuing use of an asset and from its
disposal at the end of its useful life.)
12.
Investments
Long term investments (other than associates) are carried at cost, after providing for any diminution in value, to recognise a decline
“other than temporary” in nature. Current investments are carried at lower of cost and fair value. The determination of carrying
amount of such investments is done on the basis of weighted average cost of each individual investment. Investment in associate
companies is accounted using “equity method” as stated in Para 3 (b) above.
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Schedule Q (contd.)
13.
Inventories
Inventories are valued after providing for obsolescence, as under:
a)
Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net
realisable value.
b) Manufacturing work-in-progress at lower of cost including related overheads or net realisable value.
In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs.
Finished goods at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty
paid/payable on such goods.
Property development land at lower of cost or net realisable value.
Completed property is valued at lower of cost or net realisable value.
c)
d)
e)
14. Government grant of capital nature
Grants received from NHAI in the nature of “promoter contribution” are credited to “Capital Reserve”.
15. Securities premium account
The difference between the market value and the consideration received in respect of shares issued pursuant to Stock
Appreciation Rights Scheme.
The discount allowed, if any, in respect of shares allotted pursuant to Stock Options Scheme.
Securities premium includes:
i)
a)
b)
ii)
The following expenses are written off against securities premium account:
i)
ii)
iii)
Expenses incurred on issue of shares.
Expenses (net of tax) incurred on issue of debentures/bonds.
Premium (net of tax) on redemption of debentures/bonds.
16. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost
of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires
a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the
period in which they are incurred.
17. Employee stock ownership schemes
In respect of stock options granted pursuant to the Company’s Employee Stock Options Schemes, the intrinsic value of the options
(excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation
cost over the vesting period.
18. Foreign currency transactions, foreign operations, forward contracts and derivatives
a)
b)
The reporting currency of the Company is Indian Rupee.
Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of
the transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary
items, carried at historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the
transaction.
Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date
at the closing rate are:
i)
ii)
adjusted in the cost of fi xed assets specifi cally fi nanced by the borrowings contracted upto March 31, 2004 to which the
exchange differences relate.
adjusted in the cost of fi xed assets specifi cally fi nanced by borrowings contracted between the period April 1, 2004 to
March 31, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India.
iii)
recognised as income or expense in the period in which they arise, in cases other than (i) and (ii) above.
c)
Financial statements of foreign operations comprising jobs contracted prior to April 1, 2004, are translated as follows:
i)
ii)
Closing inventories at rates prevailing at the end of the year.
Fixed Assets as at April 1, 1991 at rates prevailing at the end of the year in which the additions were made. Subsequent
additions are at rates prevailing on the dates of the additions. Depreciation is accounted at the same rate at which the
assets are translated.
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d)
e)
f)
iii) Other assets and liabilities at rates prevailing at the end of the year.
iv) Net revenues at the average rate for the year.
Financial statements of foreign operations comprising jobs contracted on or after April 1, 2004, are treated as Integral operations
and translated as in the same manner as foreign currency transactions, as described above. Exchange differences arising on such
translation are recognised as income or expense of the period in which they arise.
Financial statements of overseas non-integral operations are translated as under:
i)
Assets and liabilities at the rate prevailing at the end of the year. Depreciation and amortization is accounted at the same
rate at which assets are converted.
Revenues and expenses at yearly average exchange rates prevailing during the year.
ii)
Exchange differences arising on translation of non integral foreign operations are accumulated in the foreign currency translation
reserve until the disposal of such operations.
Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted fi rm commitments or highly
probable forecast transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting Standard
(AS) 11 [“The Effects of Changes in Foreign Exchange Rates”]. Exchange differences arising on such contracts are recognised in
the period in which they arise.
Gains and losses arising on account of roll over/cancellation of forward contracts are recognised as income/expense of the period
in which such roll over/cancellation takes place.
g) All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on unexecuted fi rm
commitments and highly probable forecast transactions, are recognised in the fi nancial statements at fair value as on the Balance
Sheet date, in pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008
on accounting of derivatives. The Company has adopted Accounting Standard (AS) 30 [“Financial Instruments: Recognition and
Measurement”] for accounting of such derivative contracts, not covered under Accounting Standard (AS) 11 [“The Effects of
Changes in Foreign Exchange Rates”], as mandated by the ICAI in the aforesaid announcement.
Accordingly, the resultant gains or losses on fair valuation/settlement of the derivative contracts covered under Accounting
Standard (AS) 30 [“Financial Instruments: Recognition and Measurement”] are recognised in the Profi t and Loss account
or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge is effective, the gains
or losses are recognised in the “Hedging Reserve” which forms part of “Reserves and Surplus” in the Balance Sheet, while
the same is recognised in the Profi t & Loss Account where the hedge is ineffective. The amount recognised in the “Hedging
Reserve” is transferred to Profi t and Loss Account in the period in which the underlying hedged item affects the Profi t and Loss
Account.
The premium paid/received on a foreign currency forward contract is accounted as expense/income over the period of the
contract.
h)
19. Segment accounting
a)
Segment accounting policies
Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specifi c accounting
policies have been followed for segment reporting:
i)
ii)
iii)
iv)
v)
Segment revenue includes sales and other income directly identifi able with/allocable to the segment including inter segment
revenue.
Expenses that are directly identifi able with/allocable to segments are considered for determining the segment result.
Expenses which relate to the Group as a whole and not allocable to segments are included under “Unallocable Corporate
Expenditure.”
Income which relates to the Group as a whole and not allocable to segments is included in “Unallocable Corporate
Income”.
Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profi t before tax of the
Group.
Segment assets and liabilities include those directly identifi able with the respective segments. Unallocable corporate
assets and liabilities represent the assets and liabilities that relate to the Group as a whole and not allocable to any
segment.
b)
Inter-segment transfer pricing
Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price
agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated
basis.
211
7/2/2011 3:24:18 PM
Cons p188-241.indd 210
7/2/2011 3:24:18 PM
Cons p188-241.indd 211
Schedules forming part of the Consolidated Accounts (contd.)
Schedule Q (contd.)
20. Taxes on income
a)
Indian companies:
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with
the provisions of the Income Tax Act 1961, and based on the expected outcome of assessments/appeals.
Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year, and
quantifi ed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head “Capital Gains” are recognised and
carried forward to the extent there is virtual certainty that suffi cient future taxable income will be available against which such
deferred tax assets can be realised.
Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that suffi cient
future taxable income will be available against which such deferred tax assets can be realised.
b)
Foreign companies:
Foreign companies recognise tax liabilities and assets in accordance with the applicable local laws.
21. Provisions, contingent liabilities and contingent assets
Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if
a)
b)
c)
the Company has a present obligation as a result of a past event,
a probable outfl ow of resources is expected to settle the obligation and
the amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that
the reimbursement will be received.
Contingent liability is disclosed in case of:
a)
b)
c)
a present obligation arising from past events, when it is not probable that an outfl ow of resources will be required to settle the
obligation
a present obligation when no reliable estimate is possible;
a possible obligation arising from past events where the probability of outfl ow of resources is not remote.
Contingent assets are neither recognised, nor disclosed.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance sheet date.
212
Cons p188-241.indd 212
7/2/2011 3:24:18 PM
Cons p188-241.indd 213
7/2/2011 3:24:19 PM
Notes forming part of Consolidated Accounts
1
Basis of preparation
a)
The Consolidated Financial Statements (CFS) are prepared in accordance with Accounting Standard (AS) 21 “Consolidated Financial
Statements”, Accounting Standard (AS) 23 “Accounting for Investments in Associates in Consolidated Financial Statements” and
Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures”, as specifi ed in the Companies (Accounting
Standards) Rules, 2006. The CFS comprises the fi nancial statements of Larsen & Toubro Limited (L&T), its subsidiaries, associates
and joint ventures. Reference in these notes to L&T, Company, Parent Company, Companies or Group shall mean to include
Larsen & Toubro Limited or any of its subsidiaries, associates and joint ventures, unless otherwise stated.
b)
The notes and signifi cant policies to the CFS are intended to serve as a guide for better understanding of the Group’s position.
In this respect, the Company has disclosed such notes and policies which represent the required disclosure.
2
The list of subsidiaries, associates and joint ventures included in the consolidated fi nancial statements are as under:-
Sr.
no.
Name of subsidiary company
As at 31-3-2011
As at 31-3-2010
Country of
Incorporation
Proportion
of ownership
Interest (%)
Proportion
of voting
power held
(%)
Proportion
of ownership
Interest (%)
Proportion of
voting power
held (%)
1
2
3
4
5
6
7
Indian Subsidiaries
Tractor Engineers Limited
Bhilai Power Supply Company Limited
L&T-Sargent & Lundy Limited
Spectrum Infotech Private Limited
L&T-Valdel Engineering Limited
L&T Shipbuilding Limited
L&T Electricals and Automation Limited (formerly
known as L&T Strategic Management Limited)
8 HI-Tech Rock Products & Aggregates Limited
9
10
11
12
13
14
15
16
17
L&T Seawoods Private Limited
L&T-Gulf Private Limited
L&T-MHI Boilers Private Limited
L&T-MHI Turbine Generators Private Limited
Raykal Aluminium Company Private Limited
L&T Natural Resources Limited
L&T Plastics Machinery Limited
L&T Technologies Limited
L&T Special Steels and Heavy Forgings Private
Limited
18
PNG Tollway Limited (formerly known as L&T PNG
Tollway Private Limited)
19
L&T Rajkot-Vadinar Tollway Limited (formerly
known as L&T Rajkot-Vadinar Tollway Private
Limited)
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
20 Kesun Iron & Steel Company Private Limited
(formerly known as L&T Engserve Private
Limited)
India
India
L&T Howden Private Limited
India
L&T Solar Limited
India
L&T Sapura Shipping Private Limited
India
L&T Sapura Offshore Private Limited
India
L&T Powergen Limited
India
Ewac Alloys Limited
India
L&T Kobelco Machinery Private Limited
L&T EmSyS Private Limited $
India
L&T Infra & Property Development Private Limited $$ India
21
22
23
24
25
26
27
28
29
100.00
99.90
50.00
100.00
100.00
100.00
100.00
100.00
100.00
50.0002
51.00
51.00
80.00
100.00
100.00
100.00
100.00
99.90
50.00
100.00
100.00
100.00
100.00
100.00
100.00
50.0002
51.00
51.00
80.00
100.00
100.00
100.00
100.00
99.90
50.00
100.00
100.00
100.00
100.00
100.00
100.00
50.0002
51.00
51.00
80.00
100.00
100.00
100.00
100.00
99.90
50.00
100.00
100.00
100.00
100.00
100.00
100.00
50.0002
51.00
51.00
80.00
100.00
100.00
100.00
74.00
74.00
74.00
74.00
74.00
74.00
74.00
74.00
100.00
100.00
100.00
100.00
95.00
50.10
100.00
60.00
60.00
100.00
100.00
51.00
–
–
95.00
50.10
100.00
60.00
60.00
100.00
100.00
51.00
–
–
100.00
–
–
–
–
–
–
–
100.00
100.00
100.00
–
–
–
–
–
–
–
100.00
100.00
213
Cons p188-241.indd 212
7/2/2011 3:24:18 PM
Cons p188-241.indd 213
7/2/2011 3:24:19 PM
Notes forming part of Consolidated Accounts (contd.)
As at 31-3-2011
As at 31-3-2010
Sr.
no.
Name of subsidiary company
Country of
Incorporation
Proportion
of ownership
Interest (%)
Proportion
of voting
power held
(%)
–
100.00
100.00
100.00
100.00
100.00
99.99
99.99
99.99
99.99
100.00
100.00
99.99
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
Proportion
of ownership
Interest (%)
Proportion of
voting power
held (%)
100.00
100.00
100.00
100.00
100.00
100.00
99.99
99.99
99.99
99.99
100.00
99.99
99.99
99.99
100.00
100.00
100.00
100.00
–
–
100.00
84.27
84.27
84.27
84.27
84.27
84.27
84.27
84.27
84.27
84.27
100.00
100.00
100.00
100.00
100.00
100.00
99.99
99.99
99.99
99.99
100.00
99.99
99.99
99.99
100.00
100.00
100.00
100.00
–
–
100.00
84.27
84.27
84.27
84.27
84.27
84.27
84.27
84.27
84.27
84.27
–
100.00
100.00
100.00
100.00
100.00
99.99
99.99
99.99
99.99
100.00
100.00
99.99
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
Larsen & Toubro Infotech Limited
L&T Concrete Private Limited $$$
L&T Realty Private Limited
L&T Power Limited
30
31
32
33 Chennai Vision Developers Private Limited
34
35 GDA Technologies Limited
L&T Finance Limited
36
India Infrastructure Developers Limited
37
L&T Infrastructure Finance Company Limited
38
L&T Finance Holdings Limited (formerly known as
39
L&T Capital Holdings Limited)
L&T General Insurance Company Limited
L&T Aviation Services Private Limited
L&T Investment Management Limited
L&T Mutual Fund Trustee Limited
L&T Capital Company Limited
L&T Trustee Company Private Limited
L&T Power Development Limited
L&T Uttaranchal Hydropower Limited
L&T Arunachal Hydropower Limited
L&T Himachal Hydropower Limited
40
41
42
43
44
45
46
47
48
49
50 Nabha Power Limited
51
52
53 Narmada Infrastructure Construction Enterprise
L&T Infrastructure Development Projects Limited
L&T Panipat Elevated Corridor Limited
Limited
54
55
56
57
58
59
60
61
62
L&T Krishnagiri Thopur Toll Road Limited
L&T Western Andhra Tollways Limited
L&T Vadodara Bharuch Tollway Limited
L&T Transportation Infrastructure Limited
L&T Western India Tollbridge Limited
L&T Interstate Road Corridor Limited
International Seaports (India) Private Limited
L&T Port Kachchigarh Limited (formerly known as
L&T Port Sutrapada Limited)
L&T Ahmedabad-Maliya Tollway Limited (formerly
known as L&T Ahmedabad-Maliya Tollway
Private Limited)
63
L&T Halol-Shamlaji Tollway Limited (formerly
known as L&T Halol-Shamlaji Tollway Private
Limited)
64
65
66
67
68
69
70
L&T Krishnagiri Walajahpet Tollway Limited
L&T Devihalli Hassan Tollway Limited
L&T Metro Rail (Hyderabad) Limited
L&T Transco Private Limited
L&T Chennai-Tada Tollway Limited
Sutrapada SEZ Developers Limited @@
Sutrapada Shipyard Limited @@
214
Cons p188-241.indd 214
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
97.65
97.65
100.00
100.00
97.65
97.65
100.00
100.00
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
97.65
100.00
–
–
–
100.00
100.00
100.00
100.00
100.00
–
–
–
100.00
100.00
100.00
100.00
7/2/2011 3:24:19 PM
Cons p188-241.indd 215
7/2/2011 3:24:19 PM
Notes forming part of Consolidated Accounts (contd.)
Sr.
no.
Name of subsidiary company
71
L&T Samakhiali Gandhidham Tollway Private
Limited
L&T Urban Infrastructure Limited
L&T Vision Ventures Limited
L&T Tech Park Limited
L&T Bangalore Airport Hotel Limited
72
73
74
75
76 CSJ Infrastructure Private Limited
77
L&T Arun Excello Commercial Projects Private
Limited
78
L&T Arun Excello IT SEZ Private Limited
79 Cyber Park Development and Construction
India
India
India
India
India
India
India
India
Limited @
L&T Infocity Limited
L&T Hitech City Limited
India
India
80
81
India
82 Hyderabad International Trade Expositions Limited India
India
83
India
84
India
85 Andhra Pradesh Expositions Private Limited $$$$
L&T South City Projects Limited
L&T Siruseri Property Developers Limited
As at 31-3-2011
As at 31-3-2010
Country of
Incorporation
Proportion
of ownership
Interest (%)
Proportion
of voting
power held
(%)
Proportion
of ownership
Interest (%)
Proportion of
voting power
held (%)
97.65
73.24
49.80
37.35
54.20
60.05
37.35
37.35
–
65.18
48.23
37.87
37.35
37.35
–
97.65
73.24
49.80
37.35
54.20
60.05
37.35
37.35
–
65.18
48.23
37.87
37.35
37.35
–
100.00
63.20
42.98
32.23
46.77
51.83
32.23
32.23
32.23
56.25
41.63
32.68
32.23
32.23
32.68
100.00
63.20
42.98
32.23
46.77
51.83
32.23
32.23
32.23
56.25
41.63
32.68
32.23
32.23
32.68
@
The Company has sold its stake on December 29, 2010.
@@ The Company is in the process of winding up.
$
$$
The Company has been liquidated and its name has been struck off from the register of ROC u/s 560(5) of the Companies Act,
1956 w.e.f. February 11, 2011.
The Company is under liquidation and its name is struck off from the register of ROC u/s 560(5) of the Companies Act, 1956
on April 16, 2011.
$$$ The Company has been liquidated and its name has been struck off from the register of ROC u/s 560(5) of the Companies Act,
1956 w.e.f. March 16, 2011.
$$$$ The Company has been liquidated and its name has been struck off from the register of ROC u/s 560(5) of the Companies Act,
1956 w.e.f. February 5, 2011.
Name of subsidiary company
As at 31-3-2011
As at 31-3-2010
Country of
Incorporation
Proportion
of ownership
Interest (%)
Proportion
of voting
power held
(%)
Proportion
of ownership
Interest (%)
Proportion of
voting power
held (%)
Sr.
no.
1
2
3
4
5
6
Foreign subsidiaries
Larsen & Toubro LLC
Larsen & Toubro Consultoria E Projeto Ltda
Larsen & Toubro Infotech GmbH
Larsen & Toubro Infotech Canada Limited
Larsen & Toubro Infotech LLC
USA
Brazil
Germany
Canada
USA
L&T Infotech Financial Services Technologies Inc.
Canada
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
65.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
65.00
100.00
100.00
–
100.00
100.00
100.00
–
100.00
100.00
65.00
–
100.00
100.00
100.00
–
100.00
100.00
65.00
65.00
65.00
65.00
65.00
215
7/2/2011 3:24:19 PM
Cons p188-241.indd 214
7/2/2011 3:24:19 PM
Cons p188-241.indd 215
7 GDA Technologies Inc.
8
9
Larsen & Toubro International FZE
Larsen & Toubro (Oman) LLC
10
Larsen & Toubro Electromech LLC
USA
UAE
Sultanate of
Oman
Sultanate of
Oman
Notes forming part of Consolidated Accounts (contd.)
Sr.
no.
Name of subsidiary company
As at 31-3-2011
As at 31-3-2010
Country of
Incorporation
Proportion
of ownership
Interest (%)
Proportion
of voting
power held
(%)
Proportion
of ownership
Interest (%)
Proportion of
voting power
held (%)
11
L&T Modular Fabrication Yard LLC
12
13
14
15
Larsen & Toubro (East Asia) SDN.BHD ##
Larsen & Toubro Qatar LLC ##
L&T Overseas Projects Nigeria Limited
L&T Electricals Saudi Arabia Company Limited, LLC
16
Larsen & Toubro Kuwait Construction General
Sultanate of
Oman
Malaysia
Qatar
Nigeria
Kindgom of
Saudi Arabia
65.00
65.00
65.00
65.00
30.00
49.00
100.00
75.00
100.00
100.00
100.00
75.00
30.00
49.00
100.00
75.00
100.00
100.00
100.00
75.00
Contracting Company, WLL ##
Kuwait
49.00
75.00
49.00
75.00
17
Larsen & Toubro (Qingdao) Rubber Machinery
Company Limited
18 Qingdao Larsen & Toubro Trading Company Limited
19
Larsen & Toubro (Jiangsu) Valve Company Limited
20
Larsen & Toubro Readymix Concrete Industries
LLC ##
21
Larsen & Toubro Saudi Arabia LLC
22
Larsen & Toubro (Wuxi) Electric Company Limited
23
Larsen & Toubro ATCO Saudia LLC ##
24 Offshore International FZC ****
25
26
27
28
29
30
31
32
33
34
L&T Electrical & Automation FZE
Tamco Switchgear (Malaysia) SDN BHD
Tamco Shanghai Switchgear Company Limited ***
Tamco Electrical Industries Australia Pty Limited
PT Tamco Indonesia
Larsen & Toubro Heavy Engineering LLC
Pathways FZE
L&T Infrastructure Development Projects Lanka
(Private) Limited
L&T Infocity Lanka Private Limited**
Peacock Investments Limited
35 Mango Investments Limited
Lotus Infrastructure Investments Limited
L&T Real Estate India Fund
L&T Asset Management Company Limited
L&T Realty FZE
36
37
38
39
40
Peoples Republic
of China
Peoples Republic
of China
Peoples Republic
of China
UAE
Kindgom of
Saudi Arabia
Peoples Republic
of China
Kindgom of
Saudi Arabia
UAE
UAE
Malaysia
Peoples Republic
of China
Australia
Indonesia
Sultanate of
Oman
UAE
Sri Lanka
Sri Lanka
Mauritius
Mauritius
Mauritius
Mauritius
Mauritius
UAE
Larsen & Toubro T&D SA (PTY) LTD
South Africa
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
49.00
100.00
100.00
100.00
49.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
49.00
75.00
49.00
75.00
60.00
100.00
100.00
–
100.00
100.00
70.00
60.00
100.00
100.00
–
100.00
100.00
70.00
60.00
100.00
100.00
100.00
100.00
100.00
70.00
60.00
100.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
100.00
100.00
93.34
–
100.00
100.00
100.00
100.00
100.00
100.00
72.50
93.34
–
100.00
100.00
100.00
100.00
100.00
100.00
72.50
80.37
29.25
100.00
100.00
100.00
100.00
100.00
100.00
–
80.37
29.25
100.00
100.00
100.00
100.00
100.00
100.00
–
## The Parent Company, together with its subsidiaries controls the composition of Board of Directors.
** The Company has sold its stake on April 6, 2010.
*** The Company has sold its stake on February 16, 2011.
**** The Company is under liquidation.
216
Cons p188-241.indd 216
7/2/2011 3:24:19 PM
Cons p188-241.indd 217
7/2/2011 3:24:19 PM
Notes forming part of Consolidated Accounts (contd.)
As at 31-3-2011
As at 31-3-2010
Country of
Incorporation
Proportion
of ownership
Interest (%)
Proportion
of voting
power held
(%)
Proportion
of ownership
Interest (%)
Proportion of
voting power
held (%)
Sr.
no.
Name of associate company
1
L&T-Komatsu Limited
2 Audco India Limited
3
4
5
6
7
8
Ewac Alloys Limited ###
L&T-Case Equipment Private Limited ^
International Seaport (Haldia) Private Limited
L&T-Chiyoda Limited
L&T-Ramboll Consulting Engineers Limited
L&T-Crossroads Private Limited ^^
9 NAC Infrastructure Equipment Limited
10 Gujarat Leather Industries Limited #
Vizag IT Park Limited
11
12
13
14
15
16
17
18
19
TNJ Moduletech Private Limited #
L&T Camp Facilities LLC ^^^^
L&T Arun Excello Realty Private Limited
Feedback Ventures Private Limited
JSK Electricals Private Limited ^^^
International Seaport Dredging Limited ####
Salzer Electronics Limited ^^^^
20 Asia Alloys Precicasters Private Limited
21
Rishi Consfab Private Limited
22 Magtorq Private Limited
India
India
India
India
India
India
India
India
India
India
India
India
UAE
India
India
India
India
India
India
India
India
Larsen & Toubro Qatar & HBK Contracting LLC
Qatar
50.00
50.00
–
–
21.79
50.00
50.00
–
30.00
50.00
16.95
24.50
40.00
49.00
24.17
23.16
26.00
–
26.06
26.00
26.00
42.85
50.00
50.00
–
–
21.79
50.00
50.00
–
30.00
50.00
16.95
50.00
40.00
49.00
24.17
23.16
26.00
–
26.06
26.00
26.00
42.85
50.00
50.00
50.00
50.00
18.80
50.00
50.00
31.60
30.00
50.00
14.63
24.50
40.00
49.00
20.86
23.16
26.00
24.74
26.06
26.00
26.00
–
50.00
50.00
50.00
50.00
18.80
50.00
50.00
31.60
30.00
50.00
14.63
50.00
40.00
49.00
20.86
23.16
26.00
24.74
26.06
26.00
26.00
–
The Company is under Liquidation.
#
### The Company has become a subsidiary w.e.f. December 14, 2010 and shown under “Indian subsidiaries” in item no. 26 above.
#### The Company is no longer an Associate due to divestment/reduction of stake during the year.
^
^^
^^^ Accounts have been consolidated for six months period ended September 30, 2010.
^^^^ Accounts have been consolidated for nine months period ended December 31, 2010.
The Company has sold its stake on March 31, 2011.
The Company has sold its stake on December 14, 2010.
Sr.
no.
1
2
Name of joint venture
Jointly controlled entities-Indian joint ventures
L&T-AM Tapovan Joint Venture
International Metro Civil Contractors
3 Desbuild L&T Joint Venture
4 HCC-L&T Purulia Joint Venture
5
Bauer-L&T Diaphragm Wall Joint Venture
6 Metro Tunneling Group
7
8
L&T-Hochtief Seabird Joint Venture
L&T-SUCG Joint Venture
9 Metro Tunneling Chennai L&T SUCG Joint Venture
10
11
The Dhamra Port Company Limited
L&T Bombay Developers Private Limited @@@
Country of
Incorporation
As at 31-3-2011 As at 31-3-2010
Proportion
of ownership
Interest (%)
Proportion of
ownership Interest
(%)
India
India
India
India
India
India
India
India
India
India
India
65.00
26.00
49.00
43.00
50.00
26.00
90.00
51.00
75.00
48.83
–
65.00
26.00
49.00
43.00
50.00
26.00
90.00
51.00
–
42.14
31.60
217
Cons p188-241.indd 216
7/2/2011 3:24:19 PM
Cons p188-241.indd 217
7/2/2011 3:24:19 PM
Notes forming part of Consolidated Accounts (contd.)
Name of joint venture
Country of
Incorporation
As at 31-3-2011 As at 31-3-2010
Proportion
of ownership
Interest (%)
Proportion
of ownership
Interest (%)
Sr.
no.
12
13
Jointly controlled entities-foreign joint ventures
L&T-Eastern Joint Venture
IndIran Engineering Projects and Systems
Jointly controlled operations-Indian joint ventures
L&T-HCC Joint Venture
Patel-L&T Consortium
14
15
16 Consortium of Global Industries Offshore LLC, USA and L&T
17
18 Consortium of Toyo Engineering Company and L&T
19
20
21
L&T-SVEC Joint Venture
L&T-KBL-MAYTAS UJV
L&T and Scomi Engineering BHD. Joint Venture
L&T-KBL (UJV) Hyderabad
65.00
50.00
65.00
50.00
UAE
Iran
India
India
India
India
India
India
India
India
@@@ The Company has sold its stake on July 29, 2010.
3
4.
5.
During the year ended March 31, 2011, an amount of ` 102.63 crore was amortised from goodwill arising on acquisition of subsidiary
and associate companies. (previous year: ` 51.25 crore)
Reserves and Surplus shown in the consolidated Balance Sheet includes the Group’s share in the respective reserves of subsidiaries and
proportionate reserves of joint ventures. Reserve attributable to minority stakeholders is reported as part of minority interest in the
consolidated Balance Sheet. Retained earnings comprise Group’s share in general reserve and Profi t and Loss Account.
The effect of acquisitions (including newly formed)/disposal of stake in subsidiaries during the year on the Consolidated Financial
Statements is as under:
a)
Acquisitions (including newly formed):
Name of subsidiary companies
L&T Infotech Financial Services Technologies Inc
L&T Krishnagiri Walajahpet Tollway Limited
L&T Devihalli Hassan Tollway Limited
L&T Metro Rail (Hyderabad) Limited
L&T Arunachal Hydropower Limited
L&T Himachal Hydropower Limited
L&T Howden Private Limited
L&T Solar Limited
L&T Sapura Shipping Private Limited
L&T Sapura Offshore Private Limited
L&T Powergen Limited
Ewac Alloys Limited
L&T Kobelco Machinery Private Limited
Larsen & Toubro Consultoria E Projeto Ltda
Larsen & Toubro T&D SA (PTY) LTD
Total
b) Disposal:
Effect on Group profi t/(loss)
after minority interest for the
period ended March 31, 2011
6.25
` crore
Net Assets
as at
31-3-2011
293.70
0.25
(0.46)
(1.37)
(0.07)
(0.35)
(1.81)
–
13.43
0.81
–
8.98
(0.21)
–
–
25.45
90.26
32.74
342.60
7.90
38.71
6.38
0.05
180.94
1.35
0.05
173.47
29.55
0.91
4.92
1203.53
Name of subsidiary companies
L&T Infocity Lanka Private Limited
Cyber Park Development and Construction Limited
Tamco Shanghai Switchgear Company Limited
Total
Effect on Group
profi t/(loss)
after minority
interest for the
period ended
March 31, 2011
–
(2.94)
0.27
(2.67)
Net assets as at
31-3-2011
1.03
0.13
(1.87)
(0.71)
Effect on Group
profi t/(loss) after
Minority Interest
for the period
ended Mar 31,
2010
12.82
18.81
40.61
72.24
` crore
Net assets as at
31-3-2010
12.82
26.69
40.34
79.85
218
Cons p188-241.indd 218
7/2/2011 3:24:20 PM
Cons p188-241.indd 219
7/2/2011 3:24:20 PM
Notes forming part of Consolidated Accounts (contd.)
6
a) Of the Equity Shares of ` 2 each comprised in the subscribed and paid-up capital of the Company :
i)
ii)
9,19,943 (previous year: 9,19,943) equityshares were allotted as fully paid up, pursuant to contracts, without payment
being received in cash.
44,96,76,280 (previous year: 44,96,76,280) equity shares were issued as bonus shares by way of capitalisation of general
reserve: ` 2.35 crore (previous year: ` 2.35 crore), securities premium: ` 87.47 crore (previous year: ` 87.47 crore) and
capital redemption reserve: ` 0.12 crore (previous year: ` 0.12 crore).
iii)
2,67,45,064 (previous year: 2,00,88,346) equity shares were allotted as fully paid up on exercise of grants under Employees
Stock Ownership Schemes.
b) Options outstanding as at the end of the year on un-issued share capital:
Particulars
Employee Stock Options granted and outstanding #
3.5% 5 years & 1 day, US$ denominated foreign currency convertible bonds
Number of equity shares
to be issued as fully paid
As at 31-3-2011
As at 31-3-2010
1,39,53,309
49,07,243
1,75,51,015
49,07,243
# the number of options has been adjusted consequent to bonus issue wherever applicable.
The Directors recommend payment of fi nal dividend of ` 14.50 per equity share of ` 2 each on the number of shares outstanding
as on the record date. Provision for fi nal dividend has been made in the books of account for 60,88,52,126 shares outstanding as at
March 31, 2011 amounting to ` 882.84 crore.
Stock option schemes
a)
The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility
criteria. The options are vested equally over a period of 4 years [5 years in the case of Series 2006(A)], subject to the discretion
of the management and fulfi lment of certain conditions.
The details of the grants under the aforesaid schemes under various series are summarised below:
b)
1
2
3
4
5
6
7
8
Sr.
No.
Series reference
Grant price `
Grant dates
2000
2002(A)
2002(B)
2003(A)
2003(B)
2006
2006(A)
2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010
3.50
3.50
3.50
3.50
3.50
3.50
17.50
17.50
17.50
17.50
601
601
601
601
1–6–2000
19–4–2002
19–4–2002
Vesting commences on
1–6–2001
19–4–2003
19–4–2003
23–5–2003
onwards
23–5–2004
onwards
23–5–2003
onwards
23–5–2004
onwards
1–9–2006
onwards
1–9–2007
onwards
1–7–2007
onwards
1–7–2008
onwards
Options granted and outstanding
at the beginning of the year
Options lapsed/withdrawn during
the year
Options granted during the year
Options exercised during the year
Options granted and outstanding
at the end of the year
of which-
Options vested
Options yet to vest
16800
16800
21500
21500
39700
39700
31452
31452
1124980
1959888
8839975
13324860
7476608
5895175
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
33250
51622
227758
336341
686201
633070
276700
164300
–
–
3260665
2808090
435550
947586
4637774
4148544
1114538
593587
16800
16800
21500
21500
39700
39700
31452
31452
932880
1124980
3974443
8839975
8936534
7476608
16800
–
16800
–
21500
–
21500
–
39700
–
39700
–
31452
–
31452
–
102482
830398
85644
1039336
3717133
257310
4759655
4080320
1180945
7755589
769990
6706618
c)
d)
During the year, the Company has recovered ` 17.93 crore (previous year: ` 3.60 crore) from its subsidiary companies towards
the stock options granted to their employees, pursuant to the employee stock option schemes.
The shares allotted during the year under the Company’s ESOP scheme includes 4,68,856 number of shares in respect of stock
options exercised during the year 2009-2010.
Stock ownership schemes of subsidiary companies:
a)
Employee Stock Ownership Scheme (‘ESOS Plan’)
Under the Employee Stock Ownership Scheme (ESOS) 25,96,095 options are outstanding as at March 31, 2011 (previous year:
25,84,459). The grant of options to the employees under ESOS is on the basis of their performance and other eligibility criteria.
Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of ` 5 each.
7.
8.
9.
Cons p188-241.indd 218
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Cons p188-241.indd 219
219
7/2/2011 3:24:20 PM
Notes forming part of Consolidated Accounts (contd.)
All vested options can be exercised on the First Exercise Date as may be determined by the Compensation Committee prior to
date of IPO. The details of the grants under the aforesaid scheme are summarised below:-
Sr.
No.
ESOP Series
1 Grant Price (`)
2 Options granted and outstanding at the
beginning of the year
3 Options granted during the year
4 Options cancelled/lapsed during the year
5 Options exercised and shares allotted during
the year
6 Options granted and outstanding at the end
of the year
of which-
Options vested
Options yet to vest
I,II & III
IV-XX
2010-2011
2009-2010
2010-2011
2009-2010
25
10
393003
393003
2191456
2139506
XXI
2010-2011
10
–
–
–
–
–
–
23364
61250
9300
–
393003
–
393003
–
2168092
–
2191456
393003
–
393003
–
970917
1197175
970917
1220539
35000
–
–
35000
–
35000
b)
Employees Stock Ownership Scheme-2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’)
The Company had instituted the Employees Stock Ownership Scheme-2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’) for the
employees and directors of its foreign subsidiary. The grant of options to the employees under this Sub-Plan is on the basis of
their performance and other eligibility criteria. The term of option shall be 5 years from the date of grant. The options are vested
over a period of fi ve years, subject to fulfi lment of certain conditions specifi ed in the respective option agreement. Each option
entitles the holder to exercise the right to apply for and seek allotment of one equity share of ` 5 each at an exercise price of
USD 12 (equivalent to ` 530) per share. Under the said plan, options granted and outstanding as at the end of the year are
96,500 options, 77,993 options have been vested while 18,507 options remain unvested, as at the end of the year.
Employees Stock Options granted and outstanding as at the end of the year on unissued share capital represent options
` 26,92,595 (previous year: ` 26,80,959).
c)
Employee Stock Option Plan 2008 (ESOP 2008)
The Employee Stock Option Plan 2008 of one of the domestic subsidiary of the Company is designed to provide stock options
to employees in a specifi c category. All grants under the plan are to be issued and allotted by the allotment committee of the
Board of the said subsidiary. The options are to be granted to the eligible employees based on certain criteria and approval of
the allotment committee of the Board and as per the detailed and respective Employee Stock Option Agreements that the said
subsidiary enters into with them.
The options have been granted on September 10, 2009. Options have been granted at an exercise price equal to the fair market
value of the shares as determined by an independent valuer.
The Employees shall be allotted a pre-defi ned number of equity shares against each option and the options will vest over a
period of fi ve years from the date of grant at a pre-defi ned percentage of the total vesting, which shall each be subject to the
condition that the employees will secure specifi c annual performance ratings for every allotment and Company achieving certain
performance target.
Options can be exercised anytime within a period of 5 years from the date of vesting. The employees also have the exit option
which they can exercise under certain events.
Summary of Stock Options
2010-2011
2009-2010
No. of stock
options
Weighted
average
exercise price
(`)
No. of stock
options
Weighted
average
exercise price
(`)
Options Outstanding on April 1, 2010
Options granted during the year
Options forfeited/lapsed during the year
Options exercised during the year
Options outstanding on March 31, 2011
65,40,000
–
–
–
–
–
10.50
66,60,000
–
–
1,20,000
–
65,40,000
10.50
65,40,000
Options vested but not exercised on March 31, 2011
–
–
–
–
10.50
–
–
10.50
–
220
Cons p188-241.indd 220
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Cons p188-241.indd 221
7/2/2011 3:24:20 PM
Notes forming part of Consolidated Accounts (contd.)
Information in respect of options outstanding as at March 31, 2011.
Range of exercise price
Number of options Weighted average
Number of options Weighted average
remaining life
remaining life
` 10.50
65,40,000
upto April 2013
65,40,000
upto April 2013
2010-2011
2009-2010
Since the options have been granted at an exercise price equal to the fair market value of the shares as determined by an
independent valuer there is no charge to the Profi t and Loss Account.
d)
Employee stock option scheme (ESOP 2010)
One of the domestic subsidiary of the Company has formulated Employee Stock Option Scheme 2010 (ESOP Scheme-2010) in
the year 2010-11, for which intrinsic value method is used.
The Plan is designed to provide stock options to employees of the said subsidiary and its subsidiaries and holding company. All
grants under the plan are to be issued and allotted by the Nomination and Remuneration Committee of the said subsidiary.
The options are to be granted to the eligible employees based on certain criteria and approval of the Committee and as per the
respective Employee Stock Option Agreements that the said subsidiary enters into with them.
1,07,50,000 options are granted on November 30, 2010 under this scheme. Options have been granted at an exercise price
which will be at a discount of 15% of the issue price of equity shares of said subsidiary being offered in the initial public offering
(IPO) which is under consideration.
The Employees shall be allotted a pre-defi ned number of equity shares against each option and the options will vest over a
period of four years from the date of grant at a pre-defi ned percentage of the total vesting, which shall each be subject to the
conditions as per respective Employee Stock Option Agreements that the Company enters into with them.
Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of equity.
The compensation costs of stock options granted to employees are accounted by the Company using the intrinsic value method
wherein the fair market value of equity shares has been determined by an independent valuer.
The details of the grant under the aforesaid scheme are summarized below:
Sr.
No.
1. Grant price – `
2. Grant date
Particulars
2010-2011
The exercise price of the options would be a price
which will be at a discount of 15% of the Issue Price.
3. Options granted and outstanding at the beginning of the year
4. Options granted during the year
5. Options cancelled/lapsed during the year
6. Options exercised during the year
7. Options granted and outstanding at the end of the year of
which –
– Options vested
– Options yet to vest
Information in respect of options outstanding as at March 31, 2011
30-11-2010
–
1,07,50,000
1,34,600
–
–
1,06,15,400
Cons p188-241.indd 220
7/2/2011 3:24:20 PM
Cons p188-241.indd 221
Range of exercise price
Number of options Weighted average
Number of options Weighted average
31-3-2011
31-3-2010
The exercise price of the options would
be a price of 15% discount to the Issue
Price of IPO.
10. Loans and advances include:
remaining life
remaining life
1,06,15,400
3.5 years
–
–
a)
rent deposit with whole-time directors: ` 0.03 crore (previous year: ` 0.03 crore). The maximum amount outstanding at any time
during the year ` 0.03 crore (previous year: ` 0.03 crore).
221
7/2/2011 3:24:20 PM
Notes forming part of Consolidated Accounts (contd.)
b)
amount including interest accrued, due from the managing director and whole-time directors in respect of housing loan ` 0.34
crore (previous year: ` 0.61 crore). The maximum amount outstanding at any time during the year ` 0.61crore (previous year:
` 0.63 crore).
11. Sundry creditors–Others include
a) Advance of ` 6.78 crore received from M/s. JRE Tank Terminals Private Limited under an agreement dated August 24, 2007
towards sale of 67,87,500 equity share of ` 10 each in M/s. Ennore Tank Terminals Private Limited to be transferred on
completion of three calendar years from the date of commencement of commercial operation. The said project has commenced
commercial operations on January 15, 2009. Accordingly, the above equity shares will be transferred on or after January 15,
2012.
b) Advance of ` 14.30 crore received from M/s. Sical Logistics Limited against sale of 1,43,00,000 equity shares of ` 10 each in Sical
Iron Ore Terminals Limited at cost (including further shares, if any subscribed) to Sical Logistics Limited vide agreement for share
sale and purchase dated December 17, 2008, subject to the condition that the transfer will be completed only after three years
from the date of commencement of commercial operation by Sical Iron Ore Terminals Limited as per clause 18.2.2(i)(d) of the
license agreement dated September 23, 2006 with Ennore Port Limited. As of March 31, 2011 Sical Iron Ore Terminals Limited
is yet to commence commercial operation.
12. Balance with non-scheduled banks include an amount of ` 0.69 crore (previous year: ` 0.69 crore), which is subject to an escrow
arrangement duly approved by the Reserve Bank of India, whereby the proceeds of the deposit, together with interest thereon, would
be applied towards full and fi nal settlement of loan taken from Rafi dian Bank, Iraq, which is included under unsecured loans.
13. Sales and Service include ` 352.29 crore (previous year: ` 118.06 crore) for price variations net of liquidated damages in terms of
contracts with the customers and shipbuilding subsidy ` 32.16 crore (previous year: ` 56.80 crore).
14. Extraordinary item during the year represents proportionate reversal of ` 70.84 crore (previous year: ` 62.55 crore), out of the provision
made in earlier years in respect of the Company’s investment in shares of Satyam Computer Services Limited (SCSL), pursuant to sale
of a part of its holding in SCSL during the year.
15. Disclosures pursuant to Accounting Standard (AS) 7 (Revised) “Construction Contracts”
i)
Contract revenue recognised for the fi nancial year
Particulars
` crore
2010-2011
2009-2010
38416.81
33153.67
ii) Aggregate amount of contract costs incurred and recognised profi ts (less recognised losses)
as at the end of the fi nancial year for all contracts in progress as at that date
95795.04
76811.42
iii) Amount of customer advances outstanding for contracts in progress as at the end of the
fi nancial year
iv)
Retention amounts due from customers for contracts in progress as at the end of the
fi nancial year
7832.77
6531.81
3718.81
2644.63
16. a) Other income for the year ended March 31, 2011 includes the following items of exceptional nature [accounting policy no.4]:
•
•
•
Gain of ` 26.06 crore (net) recognised on divestment of the group’s stake in four subsidiaries (previous year: ` 20.71 crore
on divestment of the group’s stake in a subsidiary company).
Gain of ` 152.03 crore recognised on divestment of the group’s stake in two of its associate companies (previous year:
` 173.48 crore (net) on divestment/dilution of the group’s stake in four of its associate companies).
Gain of ` 2.53 crore recognised on divestment of the group’s stake in a joint venture company.
b) Other expenses under manufacturing, construction and operating expenses includes ` 474.77 crore towards construction of
1400 MW power plant at Rajpura, Punjab (Previous year: ` 508.95 crore).
17. Loans and advances include ` 100.00 crore (previous year: ` 136.00 crore) under ‘Advances recoverable in cash or in kind’ towards
interest free loan to L&T Employees Welfare Foundation Trust to part-fi nance its acquisition of equity shares in the Company held by
Grasim Industries Limited and its subsidiary. The loan is repayable in 9 years commencing from May, 2005 with a minimum repayment
of ` 25.00 crore in a year.
18. The cost of specialised machine tools including jigs, fi xtures, dyes, gauges and moulds used in the production in Electrical and
Electronics business was expensed out in earlier years. These items of plant & machinery have a useful life of 5 years. During the year,
the cost of such tools, where useful life has not expired, has been capitalized. The amount expensed out in earlier years in respect
of such tools has been reversed during the year and accordingly, the expense under “Stores, spares and tools” is lower by ` 77.32
crore. Similarly, the cumulative depreciation based on useful life of such tools has been provided in the books during the year and as
a result, the depreciation for the year is higher by ` 51.08 crore.
222
Cons p188-241.indd 222
7/2/2011 3:24:20 PM
Cons p188-241.indd 223
7/2/2011 3:24:21 PM
Notes forming part of Consolidated Accounts (contd.)
19. a)
The useful life of certain tangible assets was revised downward during the year as mandated by Accounting Standard (AS) 6
“Depreciation Accounting” and permitted by Schedule XIV of Companies Act. Consequently, depreciation rates have been
revised upward resulting in additional charge of depreciation of ` 51.30 crore (net). As a result, profi t before tax for the year is
lower to that extent. [accounting policy no.9a(i)(b)]
b)
The Company has reviewed the useful life of certain intangible assets during the year. Consequently, amortisation rates have
been revised resulting in lower charge of amortisation of ` 3.42 crore (net). As a result, profi t before tax for the year is higher
to that extent. [accounting policy no.10]
20. Segment Reporting:
a)
b)
During the year, segment reporting has been reconstituted in compliance with the threshold norms for reportable segments.
Consequently, segment fi gures for the previous year have been regrouped.
Information about business segments (Information provided in respect of revenue items for the year ended March 31, 2011 and
in respect of assets/liabilities as at March 31, 2011-denoted as “CY” below, previous year denoted as “PY”)
i)
Primary segments (Business segments):
` crore
Particulars
Engineering &
Construction
Electrical & Electronics Machinery & Industrial
Financial Services
Developmental Projects
Others
Elimination
Total
CY
PY
CY
PY
Products
CY
PY
CY
PY
CY
PY
CY
PY
CY
PY
CY
PY
Revenue-including excise duty
External
Inter-segment
Total revenue
Result
Segment result
Less:
inter-segment margins on capital
jobs
Unallocated corporate income/
(expenditure) (net)
Operating profi t (PBIT)
Interest expense
Interest income
Profi t before tax (PBT)
Provision for current tax
Provision for deferred tax
Profi t after tax
(before extraordinary items)
Profi t from extraordinary items
Profi t after tax
(after extraordinary items)
Segment assets
Unallocable corporate assets
Total assets
Segment liabilities
Unallocable corporate liabilities
Total liabilities
Capital expenditure
Depreciation (including obsolescence,
amortisation and impairment) included in
segment expense
Non-cash expenses other than depreciation
included in segment expense
39400.73
1761.66
41162.39
33798.64
1049.38
34848.02
3752.56
235.99
3988.55
3617.08
184.61
3801.69
3187.22
94.91
3282.13
2510.80
55.10
2565.90
2118.07
25.76
2143.83
1436.85
19.43
1456.28
1118.14
4.44
1122.58
731.57
1.98
733.55
2938.86
57.04
2995.90
2215.52
39.14
2254.66
(2179.80)
(2179.80)
(1349.64)
(1349.64)
52515.58
–
52515.58
44310.46
–
44310.46
4948.29
4155.83
493.86
491.34
572.06
464.70
536.16
406.77
291.06
189.25
450.05
338.01
7291.48
6045.90
37878.94
27115.02
3048.15
2693.92
1954.82
1410.02
18791.22
12149.90
16984.32
12171.79
2452.92
1747.22
23950.16
17980.82
1180.38
997.83
1081.19
959.02
16619.87
10059.14
5277.58
2545.24
488.21
389.92
3894.69
2237.56
195.73
157.31
166.81
305.18
189.95
269.89
4302.43
2019.51
332.78
67.96
560.68
422.67
140.35
78.62
50.29
28.94
67.40
48.37
367.89
263.02
109.10
92.19
159.46
92.29
9.02
10.16
7.89
8.02
1.40
0.36
–
0.04
5.93
7.26
209.98
7081.50
176.93
7258.43
(830.86)
304.64
6732.21
2207.71
140.19
4384.31
70.84
4455.15
151.67
5894.23
2006.46
7900.69
(691.92)
136.58
7345.35
2039.77
(2.37)
5307.95
135.72
5443.67
81110.37
13467.37
94577.74
48597.39
19903.80
68501.19
57287.87
13193.95
70481.82
32931.97
15471.34
48403.31
223
7/2/2011 3:24:21 PM
Cons p188-241.indd 222
7/2/2011 3:24:20 PM
Cons p188-241.indd 223
Notes forming part of Consolidated Accounts (contd.)
(ii)
Secondary segments (geographical segments):
Particulars
Domestic
Overseas
Total
CY
PY
CY
PY
CY
PY
` crore
External Revenue by location of customers
42000.08
32819.84
10515.50
11490.62
52515.58
44310.46
Carrying amount of Segment Assets by
location of assets
Cost incurred on acquisition of tangible and
intangible fi xed assets
75372.15
51156.33
5738.22
6131.54
81110.37
57287.87
7641.38
4369.37
1441.01
688.04
9082.39
5057.41
c)
Segment reporting: segment identifi cation, reportable segments and defi nition of each reportable segment:
i)
Primary/secondary segment reporting format
a]
b]
The risk-return profi le of the Company’s business is determined predominantly by the nature of its products and
services. Accordingly, the business segments constitute the primary segments for disclosure of segment information.
In respect of secondary segment information, the Company has identifi ed its geographical segments as (i) Domestic
and (ii) Overseas. The secondary segment information has been disclosed accordingly.
ii)
Segment identifi cation
Business segments have been identifi ed on the basis of the nature of products/services, the risk-return profi le of individual
businesses, the organisational structure and the internal reporting system of the Company.
iii)
Reportable segments
Reportable segments have been identifi ed as per the criteria specifi ed in Accounting Standard (AS) 17 “Segment Reporting”
as specifi ed in the Companies (Accounting Standards) Rules, 2006.
iv)
Segment composition
•
•
Engineering & Construction Segment comprises execution of engineering and construction projects in India/
abroad to provide solutions in civil, mechanical, electrical and instrumentation engineering (on turnkey basis or
otherwise) to core/infrastructure sectors including railways, shipbuilding and supply of complex plant and equipment
to core sectors. The segment capabilities include basic/detailed engineering, equipment fabrication/supply, erection &
commissioning, procurement/construction and project management.
Electrical & Electronics Segment comprises manufacture and sale of low & medium voltage switchgear and control
gear, custom-built switchboards, petroleum dispensing pumps & systems [upto the date of sale in previous year],
electronic energy meters/protection (relays) systems, control & automation products and medical equipment.
• Machinery & Industrial Products Segment comprises manufacture and sale of industrial machinery & equipment,
manufacture & marketing of industrial valves, construction equipment and welding/industrial products and cutting
equipments, manufacture and sale of undercarriage assemblies.
•
•
•
Financial Services Segment comprises of services such as corporate fi nance, equipment fi nance, general insurance,
infrastructure fi nance, asset management of mutual fund schemes and related advisory services.
Developmental Projects comprises development, operation and maintenance of basic infrastructure projects,
toll collection including annuity based project, power development, development and operation of port facilities,
development of urban infrastructure and providing related advisory services.
Others include ready mix concrete, e-engineering services and embedded systems, information technology services
and mining and aviation.
224
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Cons p188-241.indd 225
7/2/2011 3:24:21 PM
Notes forming part of Consolidated Accounts (contd.)
21. Disclosure of related parties/related party transactions:
i.
Names of the related parties with whom transactions were carried out during the year and description of relationship:
Associate companies:
1 Audco India Limited
3
5
L&T-Chiyoda Limited
L&T-Ramboll Consulting Engineers Limited
7 Magtorq Private Limited
9
International Seaport (Haldia) Private Limited
11
13
15
17
L&T Arun Excello Realty Private Limited
TNJ Moduletech Private Limited#
JSK Electricals Private Limited
Feedback Ventures Private Limited
#
The Company is under Liquidation
2
4
6
8
10
12
14
16
EWAC Alloys Limited##
L&T-Komatsu Limited
L&T-Case Equipment Private Limited^
Vizag IT Park Limited
Salzer Electronics Limited
L&T Camp Facilities LLC
NAC Infrastructure Equipment Limited
Larsen & Toubro Qatar & HBK Contracting LLC
## The Company has become a subsidiary w.e.f. December 14, 2010
^
The Company has sold its stake on March 31, 2011
Joint Ventures (Other than Associates):
1
3
International Metro Civil Contractors
The Dhamra Port Company Limited
5 Metro Tunneling Group
7 Desbuild L&T Joint Venture
9
IndIran Engineering Projects and Systems
11
L&T-AM Tapovan Joint Venture
13 Metro Tunneling Chennai L&T SUCG Joint Venture
@@@ The Company has sold its stake on July 29, 2010
Key Management Personnel & their relatives:
2
4
6
8
10
12
Bauer-L&T Diaphragm Wall Joint Venture
L&T-Eastern Joint Venture
L&T-Hochtief Seabird Joint Venture
L&T Bombay Developers Private Limited @@@
HCC-L&T Purulia Joint Venture
L&T-SUCG Joint Venture
1 Mr. A.M. Naik, (Chairman & Managing Director)
2 Mr. J.P. Nayak (whole-time director)
Mrs. Neeta J. Nayak (wife)
Mr. Nitin Nayak (son)
3 Mr. Y. M. Deosthalee (whole-time director)
4 Mr. K. Venkataramanan (whole-time director)
Mrs. Jyothi Venkataramanan (wife)
5 Mr. R. N. Mukhija (whole-time director) ^
6 Mr. K. V. Rangaswami (whole-time director)
Ms. Debika Ajmani (daughter)
Ms. Radhika Mukhija (daughter)
7 Mr. V. K. Magapu (whole-time director)
8 Mr. M. V. Kotwal (whole-time director)
9 Mr. Ravi Uppal (whole-time director) ~
^ Up to October 23, 2010.
~ W.e.f. November 1, 2010
Cons p188-241.indd 224
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Cons p188-241.indd 225
225
7/2/2011 3:24:21 PM
Notes forming part of Consolidated Accounts (contd.)
ii.
Disclosure of related party transactions:
Sr.
no.
Nature of transaction/relationship/major parties
` crore
2010-2011
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
1
Purchase of goods & services (including commission paid)
Associates & joint ventures, including:
727.63
695.53
Audco India Limited
Ewac Alloys Limited
Salzer Electronics Limited
Total
2
Sale of goods/contract revenue & services
Joint ventures:
The Dhamra Port Company Limited
Total
3
Purchase/lease of fi xed assets
Associates & joint ventures, including:
L&T-Case Equipment Private Limited
Audco India Limited
Total
4
Sale of fi xed assets
Associates & joint ventures, including:
Audco India Limited
Total
5
Subscription to equity and preference shares (including
application money paid and investment in joint ventures)
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
6
Receiving of services from related parties
Associates & joint ventures, including:
L&T-Chiyoda Limited
Total
7
Rent paid, including lease rentals under leasing/hire purchase
arrangements including loss sharing on equipment fi nance
Associates & joint ventures, including:
Ewac Alloys Limited
L&T-Komatsu Limited
L&T-Chiyoda Limited
Key management personnel
Relatives of key management personnel
Total
426.72
79.08
108.71
218.84
3.81
–
0.31
77.50
0.61
0.22
0.74
–
727.63
221.98
221.98
3.98
3.98
0.32
0.32
90.28
90.28
0.61
0.61
0.96
0.06
0.24
1.26
331.62
115.94
136.43
539.19
–
58.40
87.94
3.71
0.17
0.72
0.28
695.53
597.62
597.62
76.08
76.08
–
–
115.70
115.70
3.72
3.72
1.16
0.06
0.24
1.46
226
Cons p188-241.indd 226
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Cons p188-241.indd 227
7/2/2011 3:24:22 PM
Notes forming part of Consolidated Accounts (contd.)
Sr.
no.
Nature of transaction/relationship/major parties
8
Charges for deputation of employees to related parties
2010-2011
` crore
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
Associates & joint ventures, including:
54.91
26.85
Ewac Alloys Limited
L&T-Case Equipment Private Limited
Audco India Limited
L&T-Komatsu Limited
L&T-Chiyoda Limited
Total
9
Dividend received
Associates & joint ventures, including:
L&T-Komatsu Limited
Ewac Alloys Limited
Audco India Limited
L&T-Case Equipment Private Limited
Voith Paper Technology (India) Limited
54.91
44.67
2.22
9.36
11.85
6.78
22.03
14.40
13.06
8.60
6.00
–
26.85
20.28
Total
44.67
20.28
10
Commission received, including those under agency
arrangements
Associates & joint ventures, including:
L&T-Komatsu Limited
Total
11
Rent received, overheads recovered and miscellaneous income
Associates & joint ventures, including:
L&T-Case Equipment Private Limited
L&T-Chiyoda Limited
Ewac Alloys Limited
Total
12
Interest Received
Associates & joint ventures, including:
International Seaport Dredging Limited
The Dhamra Port Company Limited
L&T-AM Tapovan Joint Venture
Key Management Personnel
Total
13
Interest Paid
Associates:
Audco India Limited
Total
14
Buy Back of shares by
Associates:
Audco India Limited
Total
157.05
157.05
8.71
8.71
2.42
2.42
14.61
14.61
–
–
157.05
3.00
3.47
1.09
–
0.71
1.57
–
14.61
–
115.96
115.96
24.79
24.79
0.80
0.03
0.83
12.96
12.96
27.23
27.23
2.78
5.60
8.32
4.16
4.75
4.20
4.56
6.30
–
3.95
115.17
2.85
6.65
8.54
0.79
–
–
12.96
–
27.23
227
Cons p188-241.indd 226
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Cons p188-241.indd 227
7/2/2011 3:24:22 PM
Notes forming part of Consolidated Accounts (contd.)
Sr.
no.
Nature of transaction/relationship/major parties
15
Payment of salaries/perquisites
Key Management Personnel:
2010-2011
2009-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
` crore
70.00
68.65
A. M. Naik
J. P. Nayak
Y. M. Deosthalee
K. Venkataramanan
R. N. Mukhija
K. V. Rangaswami
V. K. Magapu
M. V. Kotwal
Ravi Uppal
14.18
7.21
8.09
8.04
11.84
5.90
5.88
6.50
2.36
15.30
7.76
8.70
8.65
8.60
6.33
6.32
6.99
–
Total
70.00
68.65
“Major parties” denote entities who account for 10% or more of the aggregate for that category of transaction during
respective period.
iii. Amount due to/from related parties:
Sr.
no.
Nature of transaction/relationship/major parties
1
Accounts receivable
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
2
Accounts payable (including acceptance & interest accrued)
Associates & joint ventures, including:
Audco India Limited
Total
3
Loans & advances recoverable
Associates & joint ventures, including:
L&T-Ramboll Consulting Engineers Limited
L&T-Chiyoda Limited
L&T Camp Facilities LLC
L&T-AM Tapovan Joint Venture
The Dhamra Port Company Limited
Key Management Personnel
Relatives of Key Management Personnel
Total
4
Advances received in the capacity of supplier of goods/
services classifi ed as “advances from customers” in the
Balance Sheet
Associates & joint ventures, including:
L&T Arun Excello Realty Private Limited
Total
As at 31-3-2011
As at 31-3-2010
Amount Amounts for
major parties
Amount Amounts for
major parties
` crore
105.74
105.74
302.99
302.99
195.33
0.37
0.12
195.82
–
–
102.08
264.37
–
–
–
40.43
140.14
–
99.98
99.98
359.30
359.30
11.61
0.64
0.12
12.37
0.10
0.10
87.92
306.97
1.61
4.10
1.49
–
–
0.10
228
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Cons p188-241.indd 229
7/2/2011 3:24:22 PM
Notes forming part of Consolidated Accounts (contd.)
Sr.
no.
Nature of transaction/relationship/major parties
5
Due to Whole time directors
Key Management Personnel:
As at 31-3-2011
Amount Amounts for
major parties
As at 31-3-2010
Amount Amounts for
major parties
` crore
37.97
44.29
A.M. Naik
J. P. Nayak
Y.M. Deosthalee
K. Venkataramanan
R.N. Mukhija
K.V. Rangaswami
V.K. Magapu
M.V. Kotwal
Ravi Uppal
9.12
4.81
4.56
4.55
2.47
3.65
3.65
3.65
1.51
10.55
5.27
5.27
5.27
5.27
4.22
4.22
4.22
–
Total
37.97
44.29
“Major parties” denote entities who account for 10% or more of the aggregate for that category of transaction during
respective period.
iv. Notes to related party transactions:
a)
b)
c)
The Company has a sole selling agreement with L&T-Komatsu Limited (LTK), an associate company, valid for the period of 5
years from October 16, 2006 in line with Government of India (GOI) approval letter dated May 28, 2007. The appointment
shall be in effect as long as the joint venture agreement between the parent Company and M/s Komatsu Asia Pacifi c Pte.
Limited, Singapore (which is a subsidiary of Komatsu Limited, Japan) remains in force, subject to approval of GOI, under
section 294 AA of the Companies Act, 1956. As per the terms of the agreement, the Company is the exclusive agent of
L&T-Komatsu Limited to market LTK machines and provide product support. Pursuant to the aforesaid agreement, LTK is
required to pay commission to the Company at specifi ed rates on the sales effected by the Company.
The Company has renewed the selling agency agreement from October 1, 2003 with Ewac Alloys Limited (EWAC), a wholly
owned subsidiary company (an associate till December 13, 2010). The agreement shall remain valid until either party gives
12 months’ prior written notice to the other for termination. As per the terms of the agreement, the Company is the selling
agent authorised to purchase and resell EWAC products in accordance with the prices and other conditions stipulated in
the agreement.
The Company had a selling agency agreement till August 31, 2009, with L&T-Plastics Machinery Limited, a wholly owned
subsidiary. Pursuant to the aforesaid agreement, L&T-Plastics Machinery Limited was required to pay commission to the
Company at specifi ed rates on sales effected by the Company till the aforesaid date.
Note: The fi nancial impact of the agreements mentioned at (a) to (c) above has been included in/disclosed vide note no.21(ii)
supra
22. Leases:
i) Where the Company is a Lessor:
a)
b)
The Company has given on fi nance leases certain items of plant and machinery. The leases have a primary period that is
fi xed and non-cancellable and a secondary period. There are no exceptional/restrictive covenants in the lease agreement.
The total gross investment in these leases as on March 31, 2011 and the present value of minimum lease payments
receivable as on March 31, 2011 is as under:
Particulars
1.
2.
3.
Receivable not later than 1 year
Receivable later than 1 year and not later than 5 years
Receivable later than 5 years
Gross investment in lease (1+2+3)
Less: Unearned fi nance income
Present value of receivables
Minimum Lease Payments
` crore
Amount
31-3-2011
1.16
168.64
–
169.80
32.59
137.21
Amount
31-3-2010
22.40
56.53
–
78.93
15.81
63.12
229
Cons p188-241.indd 228
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Cons p188-241.indd 229
7/2/2011 3:24:22 PM
Notes forming part of Consolidated Accounts (contd.)
c)
In respect of one of the leases referred to in (a) above, the lease receivables were recorded at the inception, at the present
value of minimum lease payments, and subsequently securitised.
ii) Where the Company is a Lessee:
a)
Finance Leases:
i)
Assets acquired on fi nance lease mainly comprise plant & machinery, vehicles and personal computers. The leases
have a primary period, which is fi xed and non-cancellable. In the case of vehicles, the Company has an option to
renew the lease for a secondary period. The agreements provide for revision of lease rentals in the event of changes in
(a) taxes, if any, leviable on the lease rentals (b) rates of depreciation under the Income tax Act, 1961 and (c) change
in the lessor’s cost of borrowings. There are no exceptional/restrictive covenants in the lease agreements.
ii)
The minimum lease rentals as at March 31, 2011 and the present value as at March 31, 2011 of minimum lease
payments in respect of assets acquired under fi nance leases are as follows:
Particulars
Minimum Lease
Payments
` crore
Present Value of
Minimum Lease
Payments
As at
As at
As at
As at
31-3-2011
31-3-2010
31-3-2011
31-3-2010
i.
ii.
Payable not later than 1 year
Payable later than 1 year and not later than 5 years
iii.
Payable later than 5 years
Total
Less: Future fi nance charges
Present value of minimum lease payments
0.32
0.32
0.49
1.13
0.16
0.97
0.20
0.45
–
0.65
0.07
0.58
0.28
0.28
0.41
0.97
0.18
0.40
–
0.58
iii) Contingent rent recognised/(adjusted) in the Profi t and Loss Account in respect of fi nance leases: ` nil (previous year:
` nil)
b) Operating leases:
i.
The Company has taken various commercial premises and plant and machinery under cancellable operating leases.
These lease agreements are normally renewed on expiry.
ii.
[a]
The Company has taken certain assets on non-cancellable operating leases, the future minimum lease payments
in respect of which, as at March 31, 2011 are as follows:
Particulars
i.
ii.
Payable not later than 1 year
Payable later than 1 year and not later than 5 years
iii.
Payable later than 5 years
Total
` crore
Minimum Lease Payments
As at
31-3-2011
As at
31-3-2010
27.52
46.50
122.49
196.51
23.16
48.98
175.79
247.93
[b] The lease agreements provide for an option to the Company to renew the lease period at the end of the
non-cancellable period. There are no exceptional/restrictive covenants in the lease agreements.
iii.
Lease rental expense in respect of operating leases: ` 102.18 crore (previous year: ` 33.04 crore)
iv. Contingent rent recognised in the Profi t and Loss Account: ` 0.02 crore (previous year: ` nil)
230
Cons p188-241.indd 230
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Cons p188-241.indd 231
7/2/2011 3:24:22 PM
Notes forming part of Consolidated Accounts (contd.)
23. Basic and Diluted Earnings per share [EPS] computed in accordance with Accounting Standard (AS) 20 “Earnings per share”
Particulars
Basic
Profi t after tax as per accounts (` crore)
Weighted average number of shares outstanding
Basic EPS (`)
Diluted
Profi t after tax as per accounts (` crore)
Add: Interest/exchange difference (gain)/loss on
bonds convertible into equity shares (net of tax)
(` crore)
Adjusted profi t for diluted earnings per share
(` crore)
Weighted average number of shares outstanding
Add: Weighted average number of potential
equity shares that could arise on conversion
of FCCBs
Add: Weighted average number of potential
equity shares on account of employee stock
options
Weighted average number of shares outstanding
for diluted EPS
Diluted EPS (`)
Face value per share(`)
Before extraordinary items
2009-2010
2010-2011
After extraordinary items
2010-2011
2009-2010
4385.33
60,57,99,369
5315.02
59,31,01,390
4456.17
60,57,99,369
5450.74
59,31,01,390
72.39
89.61
73.56
91.90
4385.33
–
5315.02
18.50
4456.17
–
5450.74
18.50
A
B
A/B
A
B
C=A+B
D
4385.33
60,57,99,369
5333.52
59,31,01,390
4456.17
60,57,99,369
5469.24
59,31,01,390
E
F
–
21,78,009
–
21,78,009
92,49,776
1,13,27,980
92,49,776
1,13,27,980
G=D+E+F
C/G
61,50,49,145
71.30
2
60,66,07,379
87.92
2
61,50,49,145
72.45
2
60,66,07,379
90.16
2
Note: Potential equity shares that could arise on conversion of FCCBs are not resulting into dilution of EPS in the current year. Hence,
they have not been considered in working of diluted EPS in accordance with Accounting Standard (AS) 20 “Earnings per
share”.
24. Disclosures required by Accounting Standard (AS) 29 “Provisions, Contingent Liabilities and Contingent Assets”:
a) Movement in provisions:
Sr.
no
Particulars of disclosure
Product
Warranties
Excise
Duty
Sales
Tax
Class of Provisions
Litigation
related
obligations
Periodic
Major
Maintenance
` crore
Others
Total
Contractual
rectifi cation
cost-
Construction
contracts
Balance as at 1-4-2010
1
2 Additional provision during the year
Provision reversed during the year
3
Translation adjustments
4
Balance as at 31-3-2011 (5=1+2-3-4)
5
13.41
– 45.73
7.59
2.18
–
13.55 0.69 51.14
7.16 0.69
–
7.02
–
–
8.24
5.85
–
0.10
13.99
–
32.80*
–
–
32.80
394.80
203.02 124.40
356.84
–
302.75
69.01 70.84# 149.05
0.10
–
–
602.49
436.76 53.56
Cons p188-241.indd 230
7/2/2011 3:24:22 PM
Cons p188-241.indd 231
#
*
pertains to proportionate reversal of an extraordinary item included in opening provision. (refer note no.14 supra)
includes ` 11.18 crore pertaining to previous years
b) Nature of provisions:
i.
ii.
iii.
Product Warranties: The Company gives warranties on certain products and services, undertaking to repair or replace
the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2011 represents
the amount of the expected cost of meeting such obligations of rectifi cation/replacement. The timing of the outfl ows is
expected to be within a period of two years from the date of Balance Sheet.
Provision for sales tax represents mainly the differential sales tax liability on account of non-collection of declaration forms
for the period prior to 5 years.
Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in
appeal.
231
7/2/2011 3:24:22 PM
Notes forming part of Consolidated Accounts (contd.)
iv.
v.
Periodic Major Maintenance represents provision made for resurfacing obligations in accordance with the terms of
concession agreement with National Highway Authority of India (NHAI).
Contractual rectifi cation cost represents the estimated cost the Company is likely to incur during defect liability period as
per the contract obligations in respect of completed construction contracts accounted under Accounting Standard (AS) 7
(Revised) “Construction Contracts”.
vi. Others mainly represent residual provision in respect of company’s investment in shares of Satyam Computer Services
Limited.
c) Disclosures in respect of contingent liabilities are given as part of Schedule J to the Balance Sheet.
25. Estimated amount of contracts remaining to be executed on capital account (net of advances) ` 21154.75 crore (previous year:
` 9128.60 crore).
26. a)
Provision for current tax (net of tax deducted at source and advance tax) includes:
i)
ii)
iii) Credit for Minimum Alternative Tax (MAT) entitlement ` 28.39 crore (previous year: ` 26.59 crore) under section 115JB of
Provision for wealth tax ` 2.34 crore (previous year: ` 2.70 crore)
Provision for income tax in respect of earlier years ` 94.88 crore (net) [previous year: ` 134.41 crore) (net)]
iv)
v)
the Income Tax Act, 1961.
Income tax payable outside India ` 29.18 crore (previous year: ` 27.81 crore)
Provision for income tax in respect of a subsidiary which was sold during the year ` 4.54 crore (previous year: ` 0.37
crore)
Reversal of excess provision for tax on fringe benefi ts ` Nil (previous year: ` 10.01 crore) pertaining to earlier years.
Translation effect on account of non-integral foreign operation ` 0.11 crore (previous year: ` Nil)
vi)
vii)
Tax effect of ` 0.62 crore (previous year: ` 6.57 crore) is on account of debenture issue expenses which has been credited to
securities premium account.
Computation of cumulative deferred tax asset/liabilities has not been made in respect of certain foreign subsidiaries of the Group.
In the opinion of management, the impact is not material.
b)
27. a)
b) Major components of deferred tax liabilities and deferred tax assets:
Particulars
Deferred tax liabilities:
Difference between book and tax depreciation
Gain on derivative transactions to be offered for
tax purposes in the year of transfer to Profi t
and Loss Account
Disputed statutory liabilities paid and claimed as
deduction for tax purpose but not debited to
Profi t and Loss Account
Others
Total
Deferred tax (assets):
Provision for doubtful debts and advances debited
Deferred
tax
liabilities /
(assets)
31-3-2010
Charge/
(credit)
to Profi t
and Loss
Account
Effect
due to
acquisition/
disposal
Charge/(credit) to
Reserves
Translation
reserve
Hedging
reserve
` crore
Deferred
tax
liabilities /
(assets )
31-3-2011
429.93
155.52
(0.79)
(0.01)
–
584.65
32.48
–
–
–
(7.13)
25.35
30.59
15.45
508.45
8.60
32.12
196.24
–
–
(0.79)
–
–
(0.01)
–
–
(7.13)
39.19
47.57
696.76
to Profi t and Loss account
(211.35)
(50.05)
Loss on derivative transactions to be claimed for
tax purposes in the year of transfer to Profi t
and Loss Account
Unpaid statutory liabilities/provision for
compensated absences debited to Profi t and
Loss Account
Unabsorbed depreciation/brought forward business
losses
Difference between book and tax depreciation
Other items giving rise to timing difference
Total
Net deferred tax liability/(assets)
Previous year
232
Cons p188-241.indd 232
–
–
–
–
–
(26.21)
–
(89.12)
(8.69)
(0.65)
(5.94)
(0.77)
(22.03)
(355.42)
153.03
130.83
(2.00)
(1.99)
6.68
(56.05)
140.19
(2.37)
–
–
–
(0.65)
(1.44)
(7.54)
–
–
0.08
0.08
0.07
(0.19)
–
(261.40)
26.21
–
–
(98.46)
–
–
–
26.21
19.08
32.30
(7.94)
(2.76)
(15.27)
(385.83)
310.93
153.03
7/2/2011 3:24:23 PM
Cons p188-241.indd 233
7/2/2011 3:24:23 PM
Notes forming part of Consolidated Accounts (contd.)
28. a)
The Group has undertaken various projects on ‘Build-Operate-Transfer’ (BOT) basis as per the concession agreements with
the government authorities. Under the agreements the concession period for toll collection or annuity payments ranges from
15 to 35 years. At the end of the said concession period, the entire facilities are transferred to the concerned government
authorities.
b)
c)
The aggregate amount of revenues and profi ts before tax (net) recognised during the year in respect of construction services
related to Build-Operate-Transfer (BOT) projects is ` 1589.70 crore and ` 141.48 crore respectively [refer accounting policy
disclosed in Schedule Q vide Para 2(a)(viii)].
Loans and advances include ` 486.52 crore (previous year: ` 516.00 crore) being cumulative construction costs incurred including
related margins in respect of Annuity based Build-Operate-Transfer (BOT) projects.
29. The Parent Company has given, inter alia, the following undertakings in respect of its investments:
a)
Jointly with L&T Infrastructure Development Projects Limited (a subsidiary of the Company), to the term lenders of its subsidiary
companies L&T Transportation Infrastructure Limited (LTTIL):
i.
ii.
not to reduce their joint shareholding in LTTIL below 51% until the fi nancial assistance received from the term lenders is
repaid in full by LTTIL and
to jointly meet the shortfall in the working capital requirements of LTTIL until the fi nancial assistance received from the term
lenders is repaid in full by LTTIL.
In terms of Company’s concession agreement with Government of India and Government of Gujarat, not to change the control
over L&T Western India Tollbridge Limited (a subsidiary of the Company) during the period of the agreement.
To the debenture holders of L&T Infrastructure Development Projects Limited (a subsidiary of the Company) and to the lenders
of its subsidiaries L&T Panipat Elevated Corridor Limited and L&T Krishnagiri Thopur Toll Road Limited, not to dilute Company’s
shareholding below 51%.
To the lender of L&T Offshore International FZC (a subsidiary of L&T International FZE), not to pledge or reduce Company’s
shareholding in L&T International FZE (a subsidiary of the Company) below 100% of the issued and allotted share capital.
To National Highway Authority of India, to hold minimum 26% stake in L&T Samakhiali Gandhidham Tollway Private Limited till
180 days from the date of concession agreement. However, the Company has decided to hold this stake for a period of 2 years
after the construction period.
To National Highway Authority of India, to hold minimum 26% stake in PNG Tollway Limited (formerly known as PNG Tollway
Private Limited) till the commercial operations date.
b)
c)
d)
e)
f)
g)
To Gujarat State Road Development Corporation Limited,
a)
to hold in L&T Ahmedabad Maliya Tollway Limited (formerly known as L&T Ahmedabad Maliya Tollway Private Limited)
and in L&T Halol-Shamlaji Tollway Limited (formerly known as L&T Halol-Shamlaji Tollway Private Limited) alongwith L&T
Infrastructure Development Projects Limited:
i.
ii.
100% stake during the construction period;
51% stake for 5 years from the date of commercial operation or end of construction of the project, whichever is
later; and
iii.
51% stake during operational period.
b)
not to divest the stake in L&T Infrastructure Development Project Limited until the aforesaid undertakings are valid.
h)
To Gujarat State Road Development Corporation Limited, to hold in L&T Rajkot-Vadinar Tollway Limited (formerly known as L&T
Rajkot-Vadinar Tollway Private Limited):
i.
ii.
100% stake during the construction period;
51% stake for 5 years from the date of commercial operation or end of construction of the project, whichever is later;
and
iii.
51% stake during operational period.
i)
j)
k)
To the lenders of L&T Ahmedabad Maliya Tollway Limited (formerly known as L&T Ahmedabad Maliya Tollway Private Limited)
(a subsidiary of the Company), not to divest control without the prior approval of the lenders or Gujarat State Road Development
Corporation Limited.
To the lenders of L&T Rajkot-Vadinar Tollway Limited (formerly known as L&T Rajkot-Vadinar Tollway Private Limited) (a subsidiary
of the Company), not to divest control without the prior approval of the lenders or Gujarat State Road Development Corporation
Limited.
Jointly with L&T-MHI Turbine Generators Private Limited (a subsidiary of the Company) and Mitsubishi Heavy Industries Limited (JV
partners in L&T-MHI Turbine Generators Private Limited), to Andhra Pradesh Power Development Company Limited (APPDCL) to
render unconditional and irrevocable fi nancial support for the successful execution of APPDCL 2x800 MW Power Project-Steam
Turbine Generator Package Tender, near Krishnapatnam, Nellore District, Andhra Pradesh.
Cons p188-241.indd 232
7/2/2011 3:24:23 PM
Cons p188-241.indd 233
233
7/2/2011 3:24:23 PM
Notes forming part of Consolidated Accounts (contd.)
l)
m)
To City and Industrial Development Corporation of Maharashtra Limited (CIDCO) that it shall continue to hold not less than 51%
stake in L&T Seawoods Private limited (LTSPL) until CIDCO execute the lease deed for land in favour of LTSPL.
To National Highway Authority of India, to hold together with its associates in L&T Devihalli Hassan Tollway Limited, minimum
51% equity stake for a period of 2 years after construction period.
n)
To National Highway Authority of India, to hold together with its associates in L&T Krishnagiri Walajahpet Tollway Limited:
i.
minimum 51% equity stake during the construction period
ii. minimum 33% stake for 3 years from project completion date
iii. minimum 26% or such lower stake as may be permitted by National Highway Authority of India during remaining
concession period
o)
p)
q)
r)
s)
t)
u)
To the lenders of PNG Tollway Limited (formerly known as PNG Tollway Private Limited), to hold minimum 51% equity stake in
PNG Tollway Limited, until fi nal settlement date.
To the security trustee of the lenders of L&T Sapura Shipping Private Limited, not to sell or transfer equity stake without prior
approval.
To hold 15,899 shares comprising 9.85% of the issued capital of International Seaport Dredging Limited till January 24, 2016.
To the Security Trustee of the lenders of L&T Metro Rail (Hyderabad) Limited, to hold and maintain along with L&T Infrastructure
Development Projects Limited (a subsidiary of the Company) at least 51% stake till fi nal settlement date.
To hold certain minimum stake in its subsidiary companies namely, L&T-MHI Boilers Private Limited and L&T-MHI Turbine
Generators Private Limited. These undertakings have been given to the customers/potential customers of the Company, as also
those of L&T-MHI Boilers Private Limited and L&T-MHI Turbine Generators Private Limited. The undertakings will remain valid till
the end of defect liability period or till such period as prescribed in the related bid documents/contracts.
To the lenders of L&T Aviation Services Private Limited, to hold in L&T Aviation Services Private Limited, majority equity stake until
any amount is outstanding under buyers credit facility.
To the lenders of L&T Seawoods Private Limited, to maintain a minimum 51% stake in L&T Seawoods Private Limited, until any
amount is outstanding under banking credit facilities.
30. L&T Infrastructure Development Projects Limited (IDPL), a subsidiary of the Company:
a)
has given the following undertakings jointly with Tata Steel Limited and The Dhamra Port Company Limited (DPCL) to the term
lenders of DPCL:
i)
ii)
to meet the cost overrun to the extent of 10% of the original project cost and
not to reduce the joint share holding below 51% upto the commercial operations date and below 26% during the balance
remaining operations period
b)
has given the following undertakings jointly with the Company to the term lenders of L&T Transportation Infrastructure Limited
(LTTIL):
i)
ii)
not to reduce their joint shareholding in LTTIL below 51% until the fi nancial assistance received from the term lenders is
repaid in full by LTTIL and
to jointly meet the shortfall in the working capital requirements of LTTIL until the fi nancial assistance received from the term
lenders is repaid in full by LTTIL.
c)
has given the following undertakings jointly with the Company to the term lenders of L&T Metro Rail (Hyderabad) Limited (L&T
MRHL):
i)
to bring in the entire Sponsors’ Contribution for implementation of Project in the following manner:
a.
b.
10% of the Sponsors’ Contribution towards Project Equity Capital before the date of Initial Disbursement, which has
been executed during the year,
balance of the Sponsors’ Contribution towards Project Equity Capital (except Government of Andhra Pradesh Grant),
maintaining the stipulated Debt to Equity Ratio from time to time.
to meet the cost overrun to the extent of 5% of the project cost.
to provide funds to L&T MRHL in case the Government of Andhra Pradesh’s Grant is not received in time.
to meet the shortfall if any, in maintaining the Debt Service Coverage Reserve.
to pledge 51% of the paid-up and voting equity share capital of L&T MRHL.
ii)
iii)
iv)
v)
234
Cons p188-241.indd 234
7/2/2011 3:24:23 PM
Cons p188-241.indd 235
7/2/2011 3:24:23 PM
Notes forming part of Consolidated Accounts (contd.)
d)
has pledged its investment in the equity shares of the followings companies to the lenders of term loan of the respective
companies.
Sr.
No.
(a) Subsidiary companies
Name of companies
1
2
3
4
5
L&T Panipat Elevated Corridor Limited
L&T Krishnagiri Thopur Toll Road Limited
L&T Western Andhra Tollway Limited
L&T Vadodara Bharuch Tollway Limited
L&T Interstate Road Corridor Limited
(b) Jointly controlled entity
1
The Dhamra Port Company Limited
As at
` crore
As at
31-3-2011
31-3-2010
42.99
40.16
28.81
22.18
27.60
42.99
40.16
28.81
22.18
27.60
165.24
125.71
The Company has also given the following undertaking, to the term lenders of the aforesaid subsidiary companies:
a)
not to reduce its shareholding in the said subsidiary companies below 51% upto a period of 3 years after commercial
operation date and below 26% till fi nal settlement date.
To meet the cost overrun to the extent of 5% of the project cost, except for L&T Panipat Elevated Corridor Limited, for
which the project completion certifi cate has been obtained during the year.
In the case of L&T Vadodara Bharuch Tollway Limited: to provide fi nancial support to the borrower to meet shortfall, if
any, in meeting the debt repayment after receipt of termination payment from National Highway Authority of India, in the
event of a termination of the concessionaire agreement pursuant to occurrence of the concessionaire event of default or
any force majeure event as stated in the said concessionaire agreement in addition to (a) and (b) above.
b)
c)
31.
32.
In terms of provisions of sub-section 1A of section 115O of the Income Tax Act 1961, dividend distribution tax payable by the
Company, is net of dividend distribution tax paid by its subsidiary companies which are not subsidiaries of other company amounting
to ` 30.39 crore, relating to dividend of ` 187.35 crore declared by them. Accordingly the additional tax on dividend includes ` 30.39
crore paid by the subsidiary companies.
In line with the Company’s risk management policy, the various fi nancial risks mainly relating to changes in the exchange rates, interest
rates and commodity prices are hedged by using a combination of forward contracts, swaps and other derivative contracts, besides
the natural hedges.
a)
The particulars of derivative contracts entered into for hedging purposes outstanding as at March 31, 2011 are as under:
Category of derivative instruments
i)
For hedging foreign currency risks
a)
b)
Forward contracts for receivables including fi rm commitments and highly probable
forecasted transactions
Forward contracts for payables including fi rm commitments and highly probable
forecasted transactions
c) Currency swaps
d) Option contracts
ii)
For hedging interest rate risks
Interest rate swaps
iii)
For hedging commodity price risks
Commodity futures
b) Unhedged foreign currency exposures as at March 31, 2011 are as under:
` crore
Amount of exposures hedged
As at
31-3-2011
As at
31-3-2010
11254.50
10956.44
9220.21
7721.13
5566.41
624.54
5583.69
874.99
276.59
300.00
58.25
34.39
As at
31-3-2011
27081.65
` crore
As at
31-3-2010
23769.34
Cons p188-241.indd 234
7/2/2011 3:24:23 PM
Cons p188-241.indd 235
i)
ii)
Unhedged foreign currency exposures
Receivables, including fi rm commitments and highly probable forecasted transactions
Payables, including fi rm commitments and highly probable forecasted transactions
26705.79
19686.05
235
7/2/2011 3:24:23 PM
Notes forming part of Consolidated Accounts (contd.)
c)
An amount of ` 81.14 crore [net gain] (previous year: ` 40.07 crore [net gain]) has been accounted under respective revenue
heads in the Profi t and Loss Account towards exchange difference arising on foreign currency transactions and forward contracts
covered under Accounting Standard (AS) 11 “The Effects of changes in Foreign Exchange Rates”.
33. Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benefi ts”:
i.
Defi ned Contribution Plans:
Amount of ` 96.61 crore (previous year: ` 73.40 crore) is recognised as an expense and included in “staff expenses”
(Schedule N) in the Profi t and Loss Account.
ii.
Defi ned Benefi t Plans:
a)
The amounts recognised in Balance Sheet are as follows:
Particulars
A
Amounts to be recognised in Balance
Sheet
Present value of defi ned benefi t
obligation
- Wholly funded
- Wholly unfunded
Less: Fair value of plan assets
Less: Unrecognised past service costs
Add: Amount not recognised as an
asset (limit in para 59(b))
Amount to be recognised as liability or
Gratuity Plan
Post-retirement
Medical Benefi t Plan
Company Pension Plan
` crore
Trust-Managed
Provident Fund Plan
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
362.25
27.65
389.90
327.89
0.04
338.23
20.04
358.27
294.56
–
–
97.60
97.60
–
1.61
–
83.84
83.84
–
1.29
–
162.89
162.89
–
0.75
–
136.47
136.47
–
0.86
1615.09
–
1615.09
1583.61
–
1364.97
–
1364.97
1350.42
–
0.02
–
–
–
–
–
–
–
(asset)
61.99
63.71
95.99
82.55
162.14
135.61
31.48
14.55
B
Amounts refl ected in the Balance Sheet
Liabilities
Assets
Net liability/(asset)
61.99
–
61.99
63.71
–
63.71
95.99
–
95.99
82.55
–
82.55
162.14
–
162.14
135.61
–
135.61
34.69
–
34.69#
20.95
–
20.95#
b)
The amounts recognised in Profi t and Loss Account are as follows:
Particulars
Gratuity Plan
Post-retirement
Medical Benefi t Plan
Company Pension Plan
Trust-Managed
Provident Fund Plan
2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010 2010-2011 2009-2010
` crore
1
2
3
4
5
6
7
8
Current service cost
Interest cost
Expected (return) on plan assets
Actuarial losses/(gains)
Past service cost
Effect of any curtailment or settlement
Adjustment for earlier years
Actuarial (loss)/gain not recognised in
books
Translation adjustments
Amount capitalised out of the above
9
10
Total (1 to 10)
I
II
Amount included in “staff expenses”
Amount included in “manufacturing,
construction and operating expenses”
Amount included in “interest expenses”
III
Total (I to III)
Actual return on plan assets
32.09
25.99
(21.20)
4.92
0.43
–
(0.20)
–
0.10
(0.24)
41.89
38.16
5.35
(1.62)
41.89
25.58
28.24
22.19
(19.19)
18.45
–
–
0.16
–
(0.83)
(0.07)
48.95
52.77
2.25
(6.07)
48.95
21.48
5.72
7.04
–
3.83
0.51
–
–
–
–
–
17.10
10.90
0.60
5.60
17.10
–
5.29
6.04
–
0.55
0.17
–
–
–
–
–
12.05
11.10
0.32
0.63
12.05
–
3.60
11.08
–
16.15
0.11
–
–
–
–
–
30.94
21.50
–
9.44
30.94
–
236
Cons p188-241.indd 236
3.81
11.90
(28.60)
0.11
–
–
93.34**
135.05
– (135.05)
13.34
–
–
–
–
–
–
(12.78)
0.67
–
(13.45)
(12.78)
–
(3.75)
–
–
102.93
93.34
–
9.59
102.93
121.71
74.15**
103.07
(103.07)
25.11
–
–
–
(25.11)
–
–
74.15
74.15
–
–
74.15
77.96
7/2/2011 3:24:23 PM
Cons p188-241.indd 237
7/2/2011 3:24:23 PM
Notes forming part of Consolidated Accounts (contd.)
c)
The changes in the present value of defi ned benefi t obligation representing reconciliation of opening and closing balances
thereof are as follows:
` crore
Particulars
Gratuity Plan
Post-retirement
Medical Benefi t Plan
Company Pension Plan
Trust-Managed
Provident Fund Plan
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
Opening balance of the present value of
defi ned benefi t obligation
Add: Current service cost
Add: Interest cost
Add: Contribution by plan participants
i) Employer
ii) Employee
iii) Transfer-in/(out)~
Add/(less): Actuarial losses/(gains)
Less: Benefi ts paid
Add: Past service cost
Add: Business combination /acquisition
Add: Adjustment for earlier years
Add/(less): Translation adjustments
Closing balance of the present value of defi ned
benefi t obligation
358.27
32.09
25.99
–
–
(1.73)
9.30
(36.96)
0.48
0.90
1.59
(0.03)
290.67
28.24
22.19
–
–
–
20.74
(18.36)
–
0.12
14.67
–
83.84
5.72
7.04
–
–
–
3.83
(4.20)
0.83
0.54
–
–
75.83
5.29
6.04
–
–
–
0.55
(3.87)
–
–
–
–
136.47
3.60
11.08
152.78 1364.97
1127.81
3.81
11.90
93.34**
135.05
74.15**
103.07
–
–
–
16.15
(4.41)
–
–
–
–
–
–
–
(28.60)
(3.42)
–
–
–
–
–
168.05
–
–
(149.88)
–
3.56
–
–
–
125.94
–
–
(76.46)
–
–
10.46
–
389.90
358.27
97.60
83.84
162.89
136.47 1615.09
1364.97
d)
Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as
follows:
Particulars
Opening balance of the fair value of the plan assets
Add: Expected Return on Plan Assets *
Add/(less): Actuarial gains/(losses)
Add: Contribution by the employer
Add/(less): Transfer in/(out)
Add: Contribution by plan participants
Less: Benefi ts paid
Add: Business combination/disposal (net)
Add: Adjustments for earlier years
` crore
Gratuity Plan
As at
31-3-2011
294.56
21.20
4.38
45.89
(2.36)
–
(36.96)
0.90
0.28
As at
31-3-2010
255.06
19.19
2.29
35.42
–
–
(18.36)
0.10
0.86
Trust-Managed Provident Fund Plan
As at
31-3-2010
1151.80
103.07
(25.11)
67.30
–
123.66
(76.46)
–
6.16
As at
31-3-2011
1350.42
135.05
(13.34)
93.00
–
164.85
(149.88)
3.51
–
Closing balance of the plan assets
327.89
294.56
1583.61
1350.42
Note: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts
based on their value at the time of redemption, assuming a constant rate of return to maturity.
*
Basis used to determine the overall expected return:
The trust formed by the Company manages the investments of provident funds and gratuity fund. Expected return
on plan assets is determined based on the assessment made at the beginning of the year on the return expected
on its existing portfolio, along with the estimated increment to the plan assets and expected yield on the respective
assets in the portfolio during the year. Also refer note no. 33(ii)(f)(7) below.
The Company expect to fund ` 34.36 crore (previous year: ` 43.67 crore) towards its gratuity plan and ` 98.94 crore
(previous year: ` 78.60 crore) towards its trust-managed provident fund plan during the year 2011-2012.
Employer’s and employees’ contribution (net) for March is paid in April
Employer’s contribution to provident fund
Amount transferred on sale of business undertakings (net) ` (1.73) crore
#
**
~
Cons p188-241.indd 236
7/2/2011 3:24:23 PM
Cons p188-241.indd 237
237
7/2/2011 3:24:23 PM
Notes forming part of Consolidated Accounts (contd.)
e)
The major categories of plan assets as a percentage of total plan assets are as follows:
Particulars
Government of India Securities
State Government Securities
Corporate Bonds
Equity Shares of Listed Companies
Fixed Deposits under Special Deposit Scheme framed by
Central Government for Provident Funds
Insurer Managed Funds
Public Sector Unit Bonds
Others
Gratuity Plan
Trust-Managed
Provident Fund Plan
As at
31-3-2011
As at
31-3-2010
As at
31-3-2011
As at
31-3-2010
34%
10%
13%
2%
9%
1%
28%
3%
28%
13%
6%
3%
12%
1%
33%
4%
24%
12%
7%
–
19%
–
38%
–
23%
12%
6%
–
23%
–
36%
–
f)
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
1
Discount Rate:
a) Gratuity Plan
b) Company Pension Plan
c)
Post-Retirement Medical Benefi t Plan
Expected return on plan assets
Annual increase in healthcare costs (see note below)
Salary Growth rate:
a) Gratuity Plan
2
3
4
b) Company Pension Plan
5
Attrition rate:
As at
31-3-2011
As at
31-3-2010
8.11%
8.11%
8.11%
7.50%
5.00%
5.00%
6.00%
8.01%
8.01%
8.01%
7.50%
5.00%
6.00%
7.00%
a)
b)
For post-retirement medical benefi t plan & company pension plan, the attrition rate varies from 2% to 8%
(previous year: 2% to 8%) for various age groups.
For gratuity plan the attrition rate varies from 1% to 6% (previous year: 1% to 7%) for various age
groups.
The estimates of future salary increases, considered in actuarial valuation, take into account infl ation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the
interest income on long term investments of the fund. Any shortfall in the interest income over the interest
obligation on cumulative basis is recognised immediately in the Profi t and Loss Account as actuarial loss.
The obligation of the company under the post-retirement medical benefi t plan is limited to the overall ceiling limits.
At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to
increase at 5% p.a.
A one percentage point change in assumed healthcare cost trend rates would have the following effects on the
aggregate of the service cost and interest cost and defi ned benefi t obligation:
6
7
8
9
` crore
Particulars
Effect of 1% increase
Effect of 1% decrease
2010-2011
2009-2010
2010-2011
2009-2010
Effect on the aggregate of the service cost and
interest cost
Effect on defi ned benefi t obligation
1.67
9.50
1.03
(2.34)
(1.59)
6.11
(7.63)
(4.93)
238
Cons p188-241.indd 238
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Cons p188-241.indd 239
7/2/2011 3:24:24 PM
Notes forming part of Consolidated Accounts (contd.)
g) The amounts pertaining to de(cid:192) ned bene(cid:192) t plans are as follows:
Particulars
As at
31-3-2011
As at
31-3-2010
As at
31-3-2009
As at
31-3-2008
As at
31-3-2007
` crore
1
Post-retirement medical benefi t plan (unfunded)
Defi ned benefi t obligation
95.99
82.55
74.40
58.74
47.09
Experience adjustment plan liabilities
7.91
5.73
1.13
2.66
–
2
Gratuity plan (funded/unfunded)
Defi ned benefi t obligation
389.90
358.27
290.67
244.08
212.63
Plan assets
Surplus/(defi cit)
327.89
294.56
255.06
213.22
160.33
(61.99)
(63.71)
(35.61)
(30.86)
(52.30)
Experience adjustment plan liabilities
30.37
30.67
8.38
16.44
Experience adjustment plan assets
4.38
2.29
13.05
6.49
25.84
(3.03)
3
Post-retirement pension plan (unfunded)
Defi ned benefi t obligation
162.14
135.61
151.80
151.35
118.56
Experience adjustment plan liabilities
17.46
(4.11)
(6.89)
26.87
–
4
Trust managed provident fund plan (funded)
Defi ned benefi t obligation
1615.09
1364.97
1127.81
1014.16
933.74
Plan assets
Surplus/(defi cit)
1583.61
1350.42
1151.80
1014.85
947.84
(31.48)
(14.55)
23.99
0.69
14.10
h) General descriptions of defi ned benefi t plans:
1. Gratuity plan :
The Company operates gratuity plan wherein every employee is entitled to the benefi t equivalent to fi fteen days
salary last drawn for each completed year of service. The same is payable on termination of service or retirement
whichever is earlier. The benefi t vests after fi ve years of continuous service. The company’s scheme is more favorable
as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan, which is not
material, is unfunded and managed within the Company.
2.
Post-retirement medical benefi t plan:
The Post-retirement Medical Benefi t plan provides for reimbursement of health care costs to certain categories of
employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the
employee at the time of retirement.
3.
Company’s pension plan:
In addition to contribution to State-Managed Pension Plan (EPS scheme), the Company operates a post retirement
pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends
on the cadre of the employee at the time of retirement.
4.
Trust managed provident fund plan:
The Company manages provident fund plan through a Provident Fund Trust for its employees which is permitted
under the Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and
employees and guarantees interest at the rate notifi ed by the Provident Fund Authority. The contribution by employer
and employee together with interest are payable at the time of separation from service or retirement whichever is
earlier. The benefi t under this plan vests immediately on rendering of service.
Cons p188-241.indd 238
7/2/2011 3:24:24 PM
Cons p188-241.indd 239
239
7/2/2011 3:24:24 PM
Notes forming part of Consolidated Accounts (contd.)
34. The Company’s share in respect of the assets, liabilities, reserves, income and expenses, related to its interests in the jointly controlled
entities, incorporated in the consolidated fi nancial statements are:
Particulars
As at 31-3-2011
As at 31-3-2010
` crore
I
Assets
II
Liabilities
III
IV
Reserves
Income
V
Expenses
1
2
3
4
1
2
3
1
2
1
2
3
4
5
6
Fixed Assets
Investments
Deferred tax
Current assets, loans and advances
(a)
Inventories
(b) Sundry debtors
(c) Cash and bank balances
(d) Other current assets
(e) Loans and advances
Secured loans
Unsecured loans
Current liabilities and provisions
(a) Current liabilities
(b) Provisions
Sales
Other income
Operating expenses
Staff expenses
Sales, administration and other expenses
Interest expense
Depreciation
Provision for tax
1709.23
1318.10
6.19
0.02
–
33.61
89.85
72.16
218.06
1235.51
107.80
416.46
14.63
89.21
54.20
10.47
74.75
12.45
9.40
7.03
14.25
5.75
109.09
–
30.50
15.68
58.13
97.25
194.14
937.86
166.50
360.60
2.39
100.18
271.13
7.00
175.41
20.77
18.59
5.36
56.28
2.54
35. Deferred payment liability of ` 4511.66 crore (previous year: ` 1951.26 crore) represents:
a)
Negative grant/additional concession fee of ` 3312.90 crore (previous year: ` 704.28 crore) payable to National Highway
Authority of India (NHAI), as per the concession agreement entered into with NHAI.
b) Commitment payable to National Housing Development Authority (NHDA) amounting to ` 6.67 crore (previous year: ` nil) as
per the joint venture agreement entered into with NHDA.
c)
Deferred conversion fee liability of ` 107.09 crore (previous year: ` 161.98 crore) towards conversion of land from Industrial to
commercial use as per the approval from Chandigarh Housing Board (CHB)
240
Cons p188-241.indd 240
7/2/2011 3:24:24 PM
Cons p188-241.indd 241
7/2/2011 3:24:24 PM
Notes forming part of Consolidated Accounts (contd.)
d)
Lease premium amounting to ` 1085.00 crore (previous year: ` 1085.00 crore) payable to City and Industrial Development
Corporation of Maharashtra (CIDCO) pursuant to conferment of development-cum-leasehold rights to execute the lease deed
for land.
In respect of the total amount of ` 4511.66 crore, an amount of ` 93.91 crore (previous year: ` 37.81 crore) is payable within a period
of one year.
36. One of the subsidiaries, which has been awarded a Build-Operate-Transfer (BOT) project for construction of a bypass toll road and a
bridge over the River Noyyal in Coimbatore District of Tamil Nadu State, under the Concession Agreement dated October 3, 1997, had
received a termination notice from the Ministry of Surface Transport, Government of India. The ground of termination was Government
of India’s subsequent intention to go for four-laning of the existing two lane road. The subsidiary has obtained injunction from Delhi
High Court against the said notice of the Government and is accordingly continuing to collect the toll. The tolling rights of the
subsidiary are protected under the aforesaid concession agreement. The subsidiary has also fi led an application opting for arbitration
as provided in the concession agreement for resolution of disputes.
37.
(a) Miscellaneous expenses include provision of ` 1.50 crore (net) (previous year: ` 0.90 crore) towards commission payable to
non-executive directors of the Company, in terms of the special resolution passed at the Annual General Meeting held on August
26, 2010.
(b)
The expenditure on research and development activities charged to Profi t and Loss Account, as certifi ed by the Management,
is ` 72.81 crore (previous year: ` 88.83 crore). In additioin, the Company has carried out work of a developmental nature of
` 16.46 crore (previous year: ` nil) which is partially/fully paid for by the customers.
38. There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2011.
39. Figures for the previous year have been regrouped/reclassifi ed wherever necessary.
As per our report attached
SHARP & TANNAN
Chartered Accountants
ICAI registration no.109982W
by the hand of
R. D. KARE
Partner
Membership no.8820
Mumbai, May 19, 2011
A. M. NAIK
Chairman & Managing Director
Y. M. DEOSTHALEE
S. RAJGOPAL
M. M. CHITALE
N. MOHAN RAJ
BHAGYAM RAMANI
A. K. JAIN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 19, 2011
Cons p188-241.indd 240
7/2/2011 3:24:24 PM
Cons p188-241.indd 241
241
7/2/2011 3:24:24 PM
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Particulars
Sr.
no.
GDA
Technologies
Inc.
L&T
Infotech
Financial
Services
Technologies
Inc.
Larsen
& Toubro
Infotech
Canada
Limited
Larsen
& Toubro
Infotech,
GmbH
Larsen
& Toubro
Infotech LLC
Pathways
FZE
Larsen
& Toubro
Infotech
Limited
GDA
Technologies
Limited
`
` crore
Larsen &
Toubro ATCO
Saudia LLC
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-12-2010
31-3-2011
31-3-2011
31-12-2010
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
Particulars
Canadian
Dollar
USD
Canadian
Dollar
Euro
USD
UAE Dirham
45.9900
44.5950
45.9900
63.3825
44.5950
12.1725
Saudi Riyal
11.9200
284.17
5.15
0.00
0.11
–
0.20
16.13
0.17
1.08
8.70
33.03
325.91
325.91
–
47.83
8.80
3.38
5.43
–
–
–
–
(23.87)
50.22
31.50
31.50
0.06
30.27
2.17
0.00
2.17
–
–
–
–
2.92
3.06
5.99
5.99
–
14.61
0.28
0.06
0.23
–
–
–
–
9.77
6.17
16.06
16.06
0.00
56.26
2.38
0.36
2.02
–
–
–
–
3.27
1.90
5.17
5.17
–
42.24
1.87
–
1.87
–
–
–
–
(0.22)
0.08
0.06
0.06
–
–
(0.11)
–
(0.11)
–
–
–
–
1070.54
818.50
1905.17
1905.17
109.10
2331.81
368.65
55.73
312.92
151.58
–
–
–
30.06
0.04
30.27
30.27
–
1.08
0.27
(0.99)
1.26
–
–
–
–
(7.61)
36.75
30.21
30.21
–
24.22
0.11
0.02
0.09
–
–
–
–
Larsen &
Toubro (East
Asia) SDN.BHD
Larsen
& Toubro
Electromech
LLC
Offshore
International
FZC
31-12-2010
Omani Rial
31-12-2010
USD
Larsen &
Toubro Kuwait
Construction
General
Contracting
Company, WLL
31-12-2010
Kuwaiti Dinar
L&T Modular
Fabrication
Yard LLC
L&T Overseas
Projects Nigeria
Limited
L&T-Sargent &
Lundy Limited
Bhilai Power
Supply
Company
Limited
31-12-2010
31-12-2010
Omani Rial Nigerian Naira
31-3-2011
31-3-2011
Financial year ending on
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
31-12-2010
Malaysian
Ringgit
14.4975
0.86
0.09
1.71
2.66
2.66
–
0.70
(0.69)
0.02
(0.71)
–
–
–
–
116.0425
44.7050
158.8375
116.0425
0.3001
3.56
0.27
32.02
32.75
0.33
0.05
8.26
75.37
179.70
258.62
258.62
–
458.28
40.89
4.92
35.97
7.12
–
–
–
2.35
31.89
34.51
34.51
–
89.04
19.65
–
19.65
–
–
–
–
(5.59)
16.95
43.38
43.38
–
33.07
(3.13)
–
(3.13)
–
–
–
–
28.64
137.06
198.45
198.45
–
253.74
31.12
–
31.12
–
–
–
–
(0.23)
0.02
0.13
0.13
–
–
(0.00)
–
(0.00)
–
–
–
–
–
8.81
8.86
8.86
–
–
–
–
–
–
–
–
–
39.89
27.33
75.47
75.47
43.84
86.31
21.05
6.77
14.28
–
–
–
–
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Sr.
no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
242
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Particulars
Sr.
no.
L&T-Valdel
Engineering
Limited
L&T-Gulf
Private Limited
Raykal
Aluminium
Company
Private Limited
Kesun Iron &
Steel Company
Private Limited
L&T Sapura
Shipping
Private Limited
L&T Sapura
Offshore
Private Limited
`
` crore
Larsen &
Toubro (Oman)
LLC
Larsen &
Toubro Heavy
Engineering
LLC
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-12-2010
31-12-2010
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Particulars
Sr.
no.
Omani Rial
Omani Rial
116.0425
116.0425
1.18
8.00
1.39
0.01
158.56
0.01
50.65
8.98
35.80
18.60
55.58
55.58
8.11
70.32
7.18
1.33
5.86
–
–
–
–
(3.71)
3.57
7.86
7.86
–
10.89
0.30
(0.05)
0.34
–
–
–
–
(0.69)
0.23
0.93
0.93
–
–
(0.07)
–
(0.07)
–
–
–
–
(0.23)
0.23
0.01
0.01
–
–
(0.01)
–
(0.01)
–
–
–
–
22.38
577.06
758.00
758.00
–
62.10
22.39
0.02
22.38
–
–
–
–
1.34
122.60
123.95
123.95
–
189.33
2.09
0.75
1.34
–
–
–
–
(50.38)
196.18
196.45
196.45
–
33.07
(31.41)
–
(31.41)
–
–
–
–
377.27
825.10
1211.35
1211.35
–
1662.62
125.12
15.03
110.09
4.31
–
–
–
Larsen &
Toubro Qatar
LLC
Larsen
& Toubro
Readymix
Concrete
Industries LLC
Larsen &
Toubro Saudi
Arabia LLC
Spectrum
Infotech
Private Limited
L&T
Shipbuilding
Limited
HI Tech Rock
Products &
Aggregates
Limited
L&T - MHI
Boilers Private
Limited
L&T- MHI
Turbine
Generators
Private Limited
Financial year ending on
31-12-2010
31-12-2010
31-12-2010
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
Currency
Qatari Rial
UAE Dirham
Saudi Riyal
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
12.2950
12.1725
11.9200
0.24
1.27
4.64
0.44
623.13
(29.08)
33.26
4.41
4.41
0.13
–
0.76
–
0.76
–
–
–
–
16.49
72.75
90.51
90.51
–
56.70
(2.31)
–
(2.31)
1.24
–
–
–
(24.20)
26.74
7.18
7.18
–
–
(2.09)
–
(2.09)
–
–
–
–
8.31
24.63
33.38
33.38
–
23.88
3.78
1.61
2.17
–
–
–
–
(3.21)
1277.80
1897.72
1897.72
–
–
(0.10)
0.87
(0.97)
–
–
–
–
0.05
0.39
3.22
3.66
3.66
–
10.58
0.55
0.17
0.37
–
–
–
–
220.10
250.10
(104.54)
2177.01
2292.57
2292.57
329.83
1008.52
(52.35)
0.01
(52.36)
–
–
–
–
(95.60)
1984.08
2138.58
2138.58
31.22
1125.65
(28.52)
–
(28.52)
–
–
–
–
243
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Particulars
Sr.
no.
L&T Special
Steels and
Heavy Forgings
Private Limited
L&T Power
Ltd.
L&T Howden
Private Limited
L&T Arun
Excello IT SEZ
Private Limited
L&T Arun
Excello
Commercial
Projects Private
Limited
`
` crore
L&T Bangalore
Airport Hotel
Limited
Chennai Vision
Developers
Private Limited
CSJ
Infrastructure
Private Limited
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
300.00
153.49
10.00
18.37
0.96
72.00
0.01
45.89
(7.15)
553.70
846.55
846.55
103.29
–
(4.77)
–
(4.77)
–
–
–
–
4.80
0.39
158.68
158.68
158.54
–
6.47
0.39
6.08
–
–
–
–
(3.62)
13.19
19.57
19.57
–
–
(3.62)
–
(3.62)
–
–
–
–
59.22
191.57
269.16
269.16
–
0.63
(17.32)
4.26
(21.58)
–
–
–
–
33.99
55.35
90.30
90.30
–
–
(1.10)
0.43
(1.54)
–
–
–
–
(0.31)
234.09
305.78
305.78
–
–
(0.19)
(0.00)
(0.19)
–
–
–
–
(0.01)
0.00
0.00
0.00
–
–
(0.00)
–
(0.00)
–
–
–
–
126.31
712.65
884.85
884.85
–
–
(1.03)
0.02
(1.05)
–
–
–
–
Particulars
Sr.
no.
L&T Hitech
City Limited
L&T Infocity
Limited
L&T Realty
Private Limited
L&T Realty FZE L&T Seawoods
Private Limited
L&T Siruseri
Property
Developers
Limited
L&T South
City Projects
Limited
L&T Tech Park
Limited
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-12-2010
31-3-2011
31-3-2011
31-3-2011
31-3-2011
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
244
UAE Dirham
12.1725
20.00
27.00
47.16
9.66
881.06
0.05
56.48
31.63
(9.69)
55.59
65.90
65.90
–
0.35
(6.63)
1.17
(7.80)
–
–
–
–
358.69
99.46
485.15
485.15
2.84
199.68
186.36
46.42
139.94
–
–
–
–
(3.24)
292.01
335.94
335.94
–
–
(0.23)
–
(0.23)
–
–
–
–
1.61
0.03
11.30
11.30
–
–
(0.01)
–
(0.01)
–
–
–
–
(4.34)
1116.35
1993.06
1993.06
–
–
(0.82)
–
(0.82)
–
–
–
–
(0.01)
0.00
0.04
0.04
–
–
(0.00)
–
(0.00)
–
–
–
–
88.06
191.74
336.28
336.28
–
131.76
13.64
0.75
12.89
–
–
–
–
7.52
77.35
116.49
116.49
–
19.44
0.77
(4.36)
5.13
–
–
–
0.00
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Particulars
Sr.
no.
L&T Urban
Infrastructure
Limited
L&T Vision
Ventures
Limited
Hyderabad
International
Trade
Expositions
Limited
L&T
Ahmedabad -
Maliya Tollway
Limited
L&T Arunachal
Hydropower
Limited
L&T Chennai
– Tada Tollway
Limited
L&T Devihalli
Hassan Tollway
Limited
`
` crore
L&T Halol
- Shamlaji
Tollway
Limited
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
488.85
9.67
17.01
97.02
7.97
42.00
33.21
130.50
56.15
320.09
865.09
865.09
29.14
41.95
34.64
(0.05)
34.68
–
–
–
0.04
(2.26)
1.16
8.57
8.57
–
–
(1.90)
–
(1.90)
–
–
–
-
(1.86)
33.07
48.22
48.22
–
–
3.62
0.79
2.83
–
–
–
-
(0.74)
547.65
643.93
643.93
–
–
(0.08)
–
(0.08)
–
–
–
-
(0.07)
2.41
10.31
10.31
–
–
(0.06)
0.01
(0.07)
–
–
–
-
(0.19)
235.68
277.49
277.49
–
–
(0.03)
–
(0.03)
–
–
–
-
(0.47)
0.14
32.88
32.88
–
–
(0.47)
–
(0.47)
–
–
–
-
(0.67)
731.49
861.32
861.32
–
–
(0.24)
(0.00)
(0.24)
–
–
–
-
Particulars
Sr.
no.
L&T Himachal
Hydropower
Limited
L&T Metro Rail
(Hyderabad)
Limited
L&T
Infrastructure
Development
Projects
Limited
L&T
Infrastructure
Development
Projects Lanka
(Private)
Limited
L&T Interstate
Road Corridor
Limited
International
Seaports
(India) Private
Limited
L&T
Krishnagiri
Thopur Toll
Road Limited
L&T
Krishnagiri
Walajahpet
TT
Tollway
Limited
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Sri Lankan
Rupee
0.4118
39.05
344.00
249.30
61.31
57.16
2.50
78.75
90.00
(0.35)
93.26
131.96
131.96
–
–
(0.34)
0.01
(0.35)
–
–
–
–
(1.40)
13.20
355.80
355.80
–
–
(2.03)
(0.63)
(1.40)
–
–
–
–
1369.49
534.25
2153.04
2153.04
367.52
29.08
15.55
(0.23)
15.78
–
–
–
–
(5.52)
29.56
85.35
85.35
–
–
–
–
–
–
–
–
–
12.88
447.43
517.46
517.46
–
86.42
6.52
1.30
5.22
–
–
–
–
(3.92)
1.44
0.02
0.02
–
–
(0.02)
–
(0.02)
–
–
–
–
(60.08)
774.49
793.16
793.16
–
80.14
(24.52)
–
(24.52)
–
–
–
–
0.26
36.28
126.53
126.53
–
–
0.44
0.18
0.26
–
–
–
–
245
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Particulars
Sr.
no.
L&T Power
Development
Limited
L&T
Transportation
Infrastructure
Limited
L&T Western
Andhra
Tollways
Limited
L&T Western
India Tollbridge
Limited
Nabha Power
Limited
Narmada
Infrastructure
Construction
Enterprise
Limited
L&T Panipat
Elevated
Corridor
Limited
`
` crore
PNG Tollway
Limited
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
Particulars
1330.00
41.40
56.50
13.95
960.00
47.35
84.30
84.55
(1.01)
8.22
1337.21
1337.21
21.05
13.45
2.31
–
2.31
–
–
–
–
36.86
152.43
230.69
230.69
–
21.29
13.68
2.42
11.26
–
–
–
–
2.20
277.14
335.84
335.84
–
37.55
(20.20)
–
(20.20)
–
–
–
–
15.07
0.12
29.14
29.14
–
–
(0.12)
–
(0.12)
–
–
–
–
1.49
1176.24
2137.73
2137.73
2.72
474.07
1.99
0.62
1.37
–
–
–
–
82.43
7.10
136.88
136.88
–
43.74
32.44
6.47
25.98
–
–
–
–
(121.92)
703.14
665.52
665.52
–
38.70
(46.13)
–
(46.13)
–
–
–
–
(0.88)
372.56
456.23
456.23
–
–
(0.05)
–
(0.05)
–
–
–
–
L&T Rajkot
- Vadinar
Tollway
Limited
L&T
Samakhiali
Gandhidham
Tollway Private
Limited
L&T Port
Kachchigarh
Limited
Sutrapada SEZ
Developers
Limited
Sutrapada
Shipyard
Limited
L&T Transco
Private Limited
L&T
Uttaranchal
Hydropower
Limited
L&T Vadodara
Bharuch
Tollway
Limited
Financial year ending on
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
90.02
80.54
4.16
0.05
0.05
0.01
131.05
43.50
(0.58)
412.22
501.65
501.65
–
–
(0.30)
–
(0.30)
–
–
–
–
(5.23)
2645.07
2720.38
2720.38
–
35.26
(5.23)
–
(5.23)
–
–
–
–
(4.18)
0.03
0.00
0.00
–
–
(3.27)
–
(3.27)
–
–
–
–
(0.02)
0.01
0.03
0.03
–
–
(0.02)
–
(0.02)
–
–
–
–
(0.02)
0.01
0.03
0.03
–
–
(0.02)
–
(0.02)
–
–
–
–
(16.50)
161.14
144.65
144.65
–
–
(2.86)
0.00
(2.86)
–
–
–
–
(0.56)
79.00
209.49
209.49
–
–
0.14
0.05
0.09
–
–
–
–
(151.36)
1393.15
1285.29
1285.29
–
189.65
(78.58)
–
(78.58)
–
–
–
–
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Sr.
no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
246
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Particulars
Sr.
no.
L&T Asset
Management
Company
Limited
L&T Finance
Holdings
Limited
L&T
Infrastructure
Finance
Company
Limited
India
Infrastructure
Developers
Limited
L&T
Investment
Management
Limited
L&T General
Insurance
Company
Limited
Lotus
Infrastructure
Investments
Limited
`
` crore
L&T Real
Estate India
Fund
Financial year ending on
31-12-2010
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-3-2011
31-12-2010
31-12-2010
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
USD
44.7050
USD
USD
44.7050
44.7050
0.00
1417.02
702.15
101.06
150.00
200.00
0.04
0.00
(0.11)
0.12
0.01
0.01
–
–
(0.05)
–
(0.05)
–
–
–
–
364.62
357.40
2139.05
2139.05
151.64
5.69
0.22
0.08
0.14
–
–
–
–
586.24
6410.90
7699.30
7699.30
350.00
702.19
293.98
93.15
200.83
–
–
–
–
(5.86)
522.06
617.26
617.26
7.00
0.44
1.77
0.66
1.11
–
–
–
–
(124.44)
6.45
32.01
32.01
21.86
7.56
(39.57)
0.00
(39.58)
–
–
–
–
(67.39)
31.60
164.21
164.21
76.21
0.77
(59.32)
–
(59.32)
–
–
–
–
(0.11)
(0.19)
0.09
0.01
0.01
–
–
(0.05)
–
(0.05)
–
–
–
–
0.21
0.02
0.02
–
–
(0.09)
–
(0.09)
–
–
–
–
Particulars
Sr.
no.
L&T Capital
Company
Limited
L&T Finance
Limited
Mango
Investments
Limited
L&T Mutual
Fund Trustee
Limited
Peacock
Investments
Limited
L&T Trustee
Company
Private Limited
L&T Plastics
Machinery
Limited
L&T Electricals
Saudi Arabia
Company
Limited, LLC
Financial year ending on
31-3-2011
31-3-2011
31-12-2010
31-3-2011
31-12-2010
31-3-2011
31-3-2011
31-12-2010
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
USD
44.7050
USD
44.7050
Saudi Riyal
11.9200
22.00
230.92
0.04
0.05
0.04
0.01
16.00
22.29
17.84
108.63
148.47
148.47
135.89
12.87
26.14
5.10
21.04
15.84
–
–
–
1501.45
9552.46
11284.83
11284.83
201.91
1376.34
349.85
119.41
230.44
–
–
–
–
(0.11)
0.09
0.01
0.01
–
–
(0.05)
–
(0.05)
–
–
–
–
(0.01)
0.04
0.08
0.08
0.01
0.05
(0.04)
–
(0.04)
–
–
–
–
(0.11)
0.09
0.01
0.01
–
–
(0.05)
–
(0.05)
–
–
–
–
(0.00)
0.00
0.01
0.01
–
–
(0.00)
–
(0.00)
–
–
–
–
5.82
47.89
69.71
69.71
–
192.36
20.96
2.56
18.40
–
–
10.40
–
1.85
36.54
60.67
60.67
–
29.69
0.18
–
0.18
–
–
–
–
247
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Particulars
Sr.
no.
L&T Electrical
& Automation
FZE
Ewac Alloys
Limited
L&T Kobelco
Machinery
Private Limited
Larsen &
Toubro LLC
Larsen
& Toubro
(Jiangsu) Valve
Company
Limited
`
` crore
Tamco
Electrical
Industries
Australia Pty
Ltd.
Qingdao
Larsen &
Toubro Trading
Company
Limited
Larsen
&Toubro
(Qingdao)
Rubber
Machinery
Company
Limited
Financial year ending on
31-12-2010
31-3-2011
31-12-2010
31-3-2011
31-12-2010
31-12-2010
31-12-2010
31-12-2010
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Particulars
Sr.
no.
UAE Dirham
12.1725
Chinese Yuan
Renminbi
6.9101
USD Chinese Yuan
Renminbi
Chinese Yuan
Renminbi
Australian
Dollar
44.7050
6.9101
6.9101
45.5200
1.09
8.29
36.91
30.00
38.72
71.49
111.29
111.29
–
115.84
18.34
–
18.34
–
–
–
–
40.39
50.96
99.63
99.63
6.81
60.80
13.18
4.20
8.98
–
–
–
–
(11.37)
27.04
52.58
52.58
–
32.51
(5.63)
–
(5.63)
–
–
–
–
(0.45)
0.38
29.93
29.93
1.00
–
(0.25)
0.16
(0.41)
–
–
–
–
0.24
0.74
8.64
9.62
9.62
–
33.85
(0.47)
0.08
(0.55)
–
–
–
–
26.84
6.75
84.86
118.45
118.45
–
70.22
0.61
0.08
0.53
–
–
–
–
0.54
0.23
1.11
1.88
1.88
–
0.93
0.11
0.03
0.09
–
–
–
–
45.20
(37.19)
23.95
31.96
31.96
–
80.18
9.40
–
9.40
–
–
–
–
PT Tamco
Indonesia
Tamco
Switchgear
(Malaysia) SDN
BHD
Tractor
Engineers
Limited
Larsen &
Toubro (Wuxi)
Electric
Company
Limited
L&T Aviation
Services Private
Limited
Larsen
& Toubro
International
FZE
L&T
Technologies
Limited
L&T Natural
Resources
Limited
Financial year ending on
31-12-2010
31-12-2010
31-3-2011
31-12-2010
31-3-2011
31-12-2010
31-3-2011
31-3-2011
Currency
Exchange rate on the last day of
fi nancial year
Share capital (including share application
money pending allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary
companies] (details on pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
1
2
3
4
5
6
7
8
9
10
11
12
13
14
248
Indonesian
Rupiah
0.0050
Malaysian
Ringgit
14.4975
Chinese Yuan
Renminbi
6.9101
USD
44.7050
12.93
119.18
6.80
24.61
30.30
1147.40
0.05
0.05
(39.71)
38.94
12.17
12.17
–
23.48
(1.38)
–
(1.38)
–
–
–
–
163.25
205.09
487.51
487.51
0.01
530.81
81.61
10.23
71.37
18.43
–
–
–
28.59
89.84
125.23
125.23
0.01
170.91
10.38
1.62
8.76
–
–
–
–
6.31
19.94
50.86
50.86
–
39.36
2.49
0.31
2.17
–
–
–
–
(1.71)
38.02
66.61
66.61
–
3.16
(1.66)
–
(1.66)
–
–
–
–
(295.68)
(0.00)
(6.26)
37.27
888.98
888.98
3.37
6.96
26.33
–
26.33
–
–
–
–
0.00
0.05
0.05
–
–
(0.00)
–
(0.00)
–
–
–
–
6.35
0.14
0.14
–
–
(0.94)
–
(0.94)
–
–
–
–
Information regarding Subsidiary Companies
(for the fi nancial year or as on, as the case may be)
Sr.
no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Particulars
Financial year ending on
Currency
Exchange rate on the last day of fi nancial year
Share capital (including share application money pending
allotment)
Reserves
Liabilities
Total liabilities
Total assets
Investments [excluding subsidiary companies] (details on
pages 249 to 256)
Turnover
Profi t before taxation
Provision for taxation
Profi t after taxation
Interim dividend – Equity
Interim dividend – Preference
Proposed dividend – Equity
Proposed dividend – Preference
L&T Electricals and
Automation Limited
31-3-2011
L&T Powergen
Limited
31-3-2011
` crores
L&T Solar Limited
31-3-2011
0.05
(0.01)
0.01
0.05
0.05
–
–
(0.00)
–
(0.00)
–
–
–
–
0.05
(0.00)
0.00
0.05
0.05
–
–
(0.00)
–
(0.00)
–
–
–
–
0.05
(0.00)
0.00
0.05
0.05
–
–
(0.00)
–
(0.00)
–
–
–
–
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
Unquoted
L&T Finance Limited
Long term investment (at cost):
Government securities:
12% National saving certifi cates 2002 (` 4000)
`
Debentures:
Infrastructure Development Finance Limited
IDFC Ltd (M+170bps) 16 May 2012
IDFC Ltd (M+183bps) 04 Dec 2012
IDFC Ltd (M+150bps) 16 May 2017
Mahindra & Mahindra Financial Services Limited
M & M Fin Ser (M+260) 16 Jan 2012
Fully paid equity shares:
Invent Assets Securitisation & Reconstruction Private Ltd.
Alpha Micro Finance Consultants Private Limited
Share application money pending allotment:
Invent Assets Securitisation & Reconstruction Private Limited
Security receipts:
Invent Assets Securitisation & Reconstruction Private Limited
Current investments (at cost):
Other company:
Fully paid equity shares:
Metropoli Overseas Ltd.
Anil Chemicals and Industries Ltd.
Elque Polyesters Ltd.
Monnet Industries Ltd.
Intergrated Digital Info Services Ltd.
Others:
LTF Securitisation Trust 2002 (`1000)
SUB –TOTAL
Less: Provision for diminution in value
TOTAL
40
700
250
400
250
3,780,000
2,00,000
99,400
40,000
194,300
18,800
383,334
100
100
0.00 Unquoted
1000000
1000000
1000000
1000000
10
10
10
10
10
10
10
10
70.87 Quoted
25.94 Quoted
46.84 Quoted
25.39 Quoted
8.51 Unquoted
0.20 Unquoted
7.47 Unquoted
16.65 Unquoted
0.15 Unquoted
0.08 Unquoted
0.19 Unquoted
0.08 Unquoted
0.12 Quoted
0.00 Unquoted
202.46
)
(
(0.56)
201.91
249
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010 (contd.)
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
Unquoted
Larsen & Toubro Infotech Limited
Current investments (at cost):
Mutual funds:
Liquid funds:
HDFC Liquid Fund-Premium Plan–Growth
L&T Liq Sup Inst. Plan–Cumulative
TATA Liquid Super High Inv.Fund–Appreciation
Income Fund:
HDFC Income Fund–Growth
Short Term Plans:
BNP Paribas Overnight Fund IP Gr
Flexi Debt Plans:
Kotak Credit Opp. Fund–Growth
Templeton India Income Opportunities Fund–Growth
Monthly Income Plans:
Birla Sun Life MIP II–Savings 5 Plan–Growth
HDFC MF Monthly Income Plan–Long Term–Growth
L&T Monthly Income Plan–Gr
Reliance MIP–Growth
Fixed Maturity Plans:
DSP BlackRock FMP 13M Series 2–Growth
DSP Black Rock FMP 12M Ser 12
HDFC FMP 18M October 2009–Growth–Series XI
HDFC FMP 20M Sep 2009–Growth–Series XI
HDFC FMP 370 D–June 2010 (2)–Growth Option
HDFC FMP 370 D July 2010 (1)–Growth Option
HDFC FMP 370 D November 2010 (1)–Growth Option
HDFC Gild Fund to FMP 100 D
ICICI Prudential Interval Fund–Annual Interval Plan I–Institutional
Growth
ICICI Prudential FMP Series 52–1 Year Plan C Cumulative
ICICI Prudential FMP Ser 53–I yr
ICICI Prudential Fixed Maturity Plan–Series 53–1
ICICI Prudential FMP Ser 55–I yr
IDFC Fixed Maturity yearly series –32 Gr
IDFC Fixed Maturity 36 Mths Ser II
IDFC Fixed Maturity Ser 35
Kotak FMP 13M Series 6–Growth
Kotak FMP 370Days Series 5–Growth
L&T Fixed Maturity Plan Series–12–Plan–15 M–March 10–I–Growth
L&T FMP I (September 24M–A)–Growth Option
L&T FMP II (November 12 M A)–Growth
L&T FMP II (January 90D A)
L&T FMP II (Dec 370 Days)
Religare Fixed Maturity Plan–Series–II Plan B (15 Months)
Religare Fixed Maturity Plan –Series III–Plan A–(12 Months)–Growth
Option
Religare FMP Series IV PlanE
Religare FMP Ser V 368 D
Reliance Fixed Horizon Fund–XV–Series 4–Growth Plan
Reliance Fixed Horizon Fund XV Series 6–IP–Growth Option
Reliance Fixed Horizon Fund XV Series 7–Growth
Tata Fixed Maturity Plan Series 25 Scheme A–Super High Invest
Plan–Growth
Tata Fixed Maturity Plan Series 27 Scheme A–Growth
Templeton FTFTF Series XII–Plan B (3 Yrs.)–Growth
UTI Fixed Term Income Fund Series VII–III (367 Days)–Growth Plan
UTI Fixed Term Income Fund Series VIII–I (367 Days)–Growth Plan
UTI Fixed Term Income Fund Series VIII–II (367 days)–Growth Plan
UTI FTIF–Series VIII–IV–(369 Days)–IP Growth
UTI Fixed Term Income Fund Series VIII–V (366 days)–Growth
Option
BNP Paribas Fixed Term Fund
SUB –TOTAL
Less: Provision for diminution in value
TOTAL
250
1,017,926
6,507,684
11,053
2,284,198
1,992,204
2,000,000
1,926,931
183,220
308,653
130,373
196,342
2,000,000
2,000,000
2,000,000
2,000,000
2,000,288
3,000,000
2,000,000
5,000,000
999,600
1,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
3,000,000
2,000,000
2,000,000
2,000,000
3,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,244
2,000,271
1,000,000
2,000,000
1,000,000
2,000,000
2,000,000
2,000,000
2,000,000
3,000,454
2,000,296
2,000,000
10
10
1000
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
2.00 Unquoted
8.75 Unquoted
2.00 Unquoted
5.00 Unquoted
3.00 Unquoted
2.00 Unquoted
2.00 Unquoted
0.30 Unquoted
0.65 Unquoted
0.25 Unquoted
0.40 Unquoted
2.15 Unquoted
2.02 Unquoted
Unquoted
2.22
2.23 Unquoted
2.00 Unquoted
3.00 Unquoted
2.04 Unquoted
5.00 Unquoted
1.00 Unquoted
1.03 Unquoted
2.03 Unquoted
2.03 Unquoted
2.00 Unquoted
2.00 Unquoted
2.00 Unquoted
2.00 Unquoted
2.00 Unquoted
3.00 Unquoted
2.14
Unquoted
2.04 Unquoted
2.04 Unquoted
3.00 Unquoted
2.04 Unquoted
2.15 Unquoted
2.00 Unquoted
2.04 Unquoted
2.00 Unquoted
2.00 Unquoted
2.00 Unquoted
1.04 Unquoted
2.24 Unquoted
1.03 Unquoted
2.00 Unquoted
2.00 Unquoted
2.00 Unquoted
2.00 Unquoted
3.13 Unquoted
2.08 Unquoted
2.03 Unquoted
109.11
)
(
(0.00)
109.10
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010 (contd.)
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
q
Unquoted
Larsen & Toubro International FZE (as at 31-12-2010)
Long term investment (at cost):
Associate company:
Fully paid equity shares:
L&T–Camp Facilities LLC
Jointly controlled entity:
Fully paid equity shares:
IndIran Engg & Project Services Krish LLC
TOTAL
L&T–Sargent & Lundy Limited
Long term investment (at cost):
Mutual fund:
Birla Sun Life Fixed Term Plan CW
HDFC FMP 370 Days
IDFC FMP Yearly series 42
Kotak FMP 370 Days – Series 8
Current investments (at cost):
Mutual fund:
UTI Short term Income Fund
Birla Sun Life Qtly Interval Fund
Reliance Monthly Interval Fund
Reliance Qtly Interval Fund
HDFC Short Term Opportunity Fund
HDFC Qtly Interval Fund
IDFC FMP 6M
IDFC Money Manger – Investment Plan
L&T FMP – II (January 90 Day)
L&T FMP – III (February 90 Day)
DWS Money Plus Fund
TOTAL
L&T Infrastructure Development Projects Limited
Long term investment (at cost):
Associate companies:
Fully paid equity shares:
Aggregating
to US Dollar
667164
875
Irani Riyal
1000000
each
3,000,000
2,000,000
3,001,064
2,000,000
1,983,104
3,538,692
3,499,405
999,570
4,991,367
4,997,351
5,777,480
2,012,201
2,002,886
3,000,000
937,146
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
2.98 Unquoted
0.39 Unquoted
3.37
3.00 Unquoted
2.00 Unquoted
3.00 Unquoted
2.00 Unquoted
2.00 Unquoted
3.54 Unquoted
3.50 Unquoted
1.00 Unquoted
4.99 Unquoted
5.00 Unquoted
5.78 Unquoted
2.03 Unquoted
2.00 Unquoted
3.00 Unquoted
1.00 Unquoted
43.84
International Seaports Haldia (Private) Limited
9,830,000
10
9.83 Unquoted
Jointly controlled entity:
Fully paid equity shares:
The Dhamra Port Company Limited
323,999,960
10
324.00 Unquoted
Other companies:
Fully paid equity shares:
SICAL Iron Ore Terminals Limited
Ennore Tank Terminals Private Limited
Narmada Infrastructure Construction Enterprise Limited
Second Vivekananda Bridge Tollway Company Private Limited
(` 10,000)
Current investments (at cost):
Bonds:
17,050,000
6,787,500
6,701,500
1,000
10
10
10
10
14.30 Unquoted
6.79 Unquoted
12.10 Unquoted
0.00 Unquoted
6.25% Rural Electrifi cation Corporation Ltd NCRT Bonds–Series VIII
500
10000
0.50 Unquoted
TOTAL
367.52
251
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010 (contd.)
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
q
Unquoted
L&T Capital Company Limited
Long term investment (at cost):
Associate companies:
Fully paid equity shares:
Salzer Electronics Limited
TNJ Moduletech Private Limited
Feedback Ventures Private Limited
JSK Electricals Private Limited
Asia Alloys Precicasters Private Limited
Rishi Consfab Private Limited
Magtorq Private Limited
Other companies:
Fully paid equity shares:
BSCPL Infrastructure Limited (formerly B.Seenaiah & Company
(Projects) Limited)
Astra Microwave Products Limited
Areva T & D India Limited
Windsor Machines Limited
TOTAL
Larsen & Toubro Infotech,GmbH
Current investments (at cost):
Other company:
Fully paid equity shares:
Pan Health,USA
TOTAL
Larsen & Toubro Qatar LLC (as at 31-12-2010)
Long term investment (at cost):
Jointly controlled entity:
Fully paid equity shares:
Larsen & Toubro Qatar & HBK Contracting Co WLL–JV
TOTAL
L&T Urban Infrastructure Limited
Long term investment (at cost):
Associate companies:
Fully paid equity shares:
26,79,808
8,64,000
37,90,000
21,20,040
13,78,000
27,04,000
9,000
611,616
7,950,045
478,534
24,634
10
10
100
10
10
10
100
10
2
2
10
16.33 Quoted
0.00 Unquoted
37.90 Unquoted
2.12 Unquoted
1.38 Unquoted
2.70 Unquoted
4.42 Unquoted
35.05 Unquoted
23.00 Quoted
12.82 Quoted
0.17 Quoted
135.89
1,00,000
USD 1
0.00 Unquoted
0.00
100
QTR
100000
0.13 Unquoted
0.13
L&T Arun Excello Realty Private Limited
316,800
10
29.14 Unquoted
29.14
TOTAL
L&T Infrastructure Finance Company Limited
Long term investment (at cost):
Other company:
Fully paid equity shares:
BSCPL Infrastructure Ltd
Tikona Digital Networks Pvt. Ltd
Bhoruka Power Corporation Ltd.
Compulsory Convertible Debentures:
Tikona Digital Networks Pvt. Ltd
Cumulative Redeemable Preference Shares
Anrak Aluminium Limited
KSK Energy Ventures Limited
TOTAL
252
436,300
100
587,850
10
10
10
25.00 Unquoted
0.03 Unquoted
50.00 Unquoted
175,956
2840
49.97 Unquoted
125,000,000
100,000,000
10
10
125.00 Unquoted
100.00 Unquoted
350.00
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010 (contd.)
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
q
Unquoted
L&T Power Ltd. (formerly known as L&T Power Projects Limited)
Current investments (at cost):
Mutual fund:
L&T – Fixed Maturity Plan
L&T Liquid Fund –
Reinvestment
Institutional Plan Plus – Daily Dividend
10,000,000
146,830,399
TOTAL
L&T – MHI Boilers Private Limited
Current investments (at cost):
Mutual fund:
Short term debt plan:
HDFC Quarterly Interval Fund Plan B Wholesale Growth
HDFC Quaterly Interval Fund Plan C Wholesale Growth
Birla Sun Life Short Term FMP Series 4 Growth
ICICI Prudential Liquid Super Institutional Plan Growth
ICICI Prudential M F Blended Plan–Plan B
ICICI Prudential Interval Fund Quarterly Interval Plan I Institutional
Growth
Reliance Liquidity Fund Growth Plan
Reliance Quaterly Interval Fund Series III Institutional Growth Plan
Reliance Interval Fund Quarterly Plan Series I Institutional Growth
Plan
Reliance Fixed Horizon Fund XVII Series 2 Growth Plan
DSP Black Rock Money FMP 3M Series 28 Growth
DSP Black Rock Money FMP 3M Series 29 Growth
UTI Fixed Income Interval Fund Monthly Interval Plan II Institutional
Growth Plan
SBI Magum Insta Cash Fund Cash Option
SBI Debt Fund Series 90 Days 38 Growth
L&T Liquid Super Institutional Plan
L&T FMP II (February 91 D A) Growth
39,665,669
24,120,564
3,500,000
1,018,143
28,667,828
14,706,733
1,885,476
19,689,690
19,420,304
15,000,000
15,291,150
30,000,000
14,730,691
0
10,189,989
31,045,990
26,053,020
TOTAL
L&T–Valdel Engineering Limited
Current investments (at cost):
Mutual fund:
DSP Black Rock FMP – 3M Series 31 – Divident Payout Maturity
HDFC High Interest Fund – Short Term Plan – Growth
L&T FMP – III (March 90 D A) – Dividend (Payout)
2,000,000
776,253
4,611,359
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10.00 Quoted
148.54 Quoted
158.54
40.29 Unquoted
25.00 Unquoted
3.50 Unquoted
14.74
Unquoted
30.00 Unquoted
15.25 Unquoted
2.77 Unquoted
25.00 Unquoted
20.00 Unquoted
15.00 Unquoted
15.29 Unquoted
30.00 Unquoted
15.04 Unquoted
0.00 Unquoted
10.19 Unquoted
41.70 Unquoted
26.05 Unquoted
329.83
2.00 Unquoted
1.50 Quoted
4.61 Unquoted
8.11
TOTAL
GDA Technologies Inc.
Current Investment:
Other companies:
Fully paid equity shares:
Arkadoc Group, Inc
Citrix System, Inc.
SUB –TOTAL
Less: Provision for diminution in value
TOTAL
150,000
114
USD 1
USD 1
0.07 Quoted
0.02 Quoted
0.09
(0.03)
0.06
253
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010 (contd.)
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
q
Unquoted
L&T Power Development Limited
Long term investment (at cost):
Other companies:
Fully paid equity shares:
Konaseema Gas Power Limited
21,000,000
10
21.05 Unquoted
TOTAL
21.05
L&T– MHI Turbine Generators Private Limited
Current investments (at cost):
Mutual fund:
Short term debt plan:
L&T FMP – II (November 91 DA) – Growth
31,215,924
10
31.22 Unquoted
TOTAL
31.22
L&T Finance Holdings Limited (formerly known as L&T Capital
Holdings Limited)
Long term investment (at cost):
Associate company:
Fully paid equity shares:
NAC Infrastructure Equipment Limited
4,500,000
10
4.50 Unquoted
Other companies:
Fully paid equity shares:
Federal Bank Limited
City Union Bank Limited
SUB –TOTAL
Less: Provision for diminution in value
TOTAL
L&T Investment Management Limited
Current investments (at cost):
Mutual fund:
L&T Liquid Sup Inst. Plan – Cum.
L&T Select Income Fund– Flexi Debt Institutional Growth
L&T Fixed Maturity Plan Series 12– Plan 15M March–10 II–Growth
L&T Fixed Maturity Plan –II ( November 12 M A Growth)
L&T Fixed Maturity Plan – III (February 90 D A ) – Growth
L&T Fixed Maturity Plan – III (January 90 D A ) – Growth
TOTAL
254
7,995,619
19,195,012
10
1
123.76 Quoted
27.88 Quoted
156.14
(4.50)
151.64
9,826,123
478,638
200,000
2,000,000
3,059,460
3,000,000
10
10
10
10
10
10
13.10 Unquoted
0.51 Quoted
0.20 Unquoted
2.00 Unquoted
3.06 Unquoted
3.00 Unquoted
21.86
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010 (contd.)
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
q
Unquoted
L&T Mutual Fund Trustee Limited
Current investments (at cost):
Mutual fund:
L&T Liquid Fund– Regular Cum
6,386
10
0.01 Unquoted
TOTAL
Nabha Power Limited
Current investments (at cost):
Mutual fund:
L&T Liquid Inst Daily Dividend Reinvestment Plan
ICICI Prudential Flexible Income Plan Premium – Daily Div.
1,821,716
82,491
10
106
0.01
1.84 Unquoted
0.87 Unquoted
2.72
TOTAL
L&T Special Steels and Heavy Forgings Private Limited
Current investments (at cost):
Mutual fund:
ICICI Prudential Liquid Inst. Plan
IDFC Cash Fund Super Inst. Plan C DDR
Birla Sun Life Cash Manager DDR
Kotak Mahindra Liquid Inst. Plan DDR
Reliance Liquid Fund Cash Plan DDR
TOTAL
Ewac Alloys Limited
Current investments (at cost):
Mutual fund:
3,007,445
10,053,915
19,965,052
8,210,715
29,714,529
100
10
10
10
10
30.08 Unquoted
10.06 Unquoted
20.00 Unquoted
10.04 Unquoted
33.11 Unquoted
103.29
HDFC Cash Management Fund–Treasury Advantage Plan–Wholesale–
Daily Dividend;Option:Reinvest
6,790,626
10
6.81 Unquoted
TOTAL
L&T Kobelco Machinery Private Limited
Current investments (at cost):
Mutual fund:
6.81
L&T Mutual Fund – Freedom Income STP Inst.– Cum Org
633,846
10
1.00 Unquoted
TOTAL
India Infrastructure Developers Limited
Current investments (at cost):
Mutual fund:
1.00
L&T Monthly Income Plan – cumulative
3,599,064
19
7.00 Quoted
TOTAL
7.00
255
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-3-2011/31-12-2010 (contd.)
Name of the Company
No of Shares/
Units/Bonds
Face Value
(`(( )
Book Value
(`(( crore)
Quoted/
q
Unquoted
L&T General Insurance Company Limited
Long term investment (at cost):
Government securities:
8.20% Government Stock 2022
8.26% Government Stock 2027
7.80% Government Stock 2020
Bonds:
HDFC 8.79% Housing Bonds
8.84% Powergrid Bonds
NTPC Bonds
Current investments (at cost):
Government Securities ( Short Term)
7 Day Treasury Bill
Mutual Funds:
L & T Freedom Income STP
JM Financial Money Fund Manager–Growth
Birla Sun Life Ultra Short Term Fund
Kotak Floater–ST–Growth
Kotak Floater–Long Term Growth
TOTAL
Tamco Switchgear (Malaysia) Sdn Bhd (as at 31-12-2010)
Long term investment (at cost):
Other companies:
Fully paid equity shares:
PT TAMCO Indonesia
TOTAL
Tractor Engineers Limited
Long term investment (at cost):
Other companies:
Fully paid equity shares:
Larsen and Toubro Saudi Arabia LLC
Larsen & Toubro LLC
TOTAL
L&T Infocity Limited
Long term investment (at cost):
Associate company:
Fully paid equity shares:
Vizag IT Park Limited
Current investment:
2,000,000
500,000
1,500,000
400,000
700,000
100,000
100
100
100
100
100
100
20.36 Unquoted
4.94 Unquoted
15.22 Unquoted
3.97 Quoted
7.01 Quoted
1.00 Quoted
1,400,000
100
13.99 Unquoted
1,582,158
368,154
2,461,652
2,228,912
154,229
10
10
10
10
10
2.50 Unquoted
0.51 Unquoted
2.88 Quoted
3.58 Unquoted
0.24 Unquoted
76.21
2,500
Indonesian
Rupiah 2010
0.01 Unquoted
0.01
200
2500
1000 SAR
1 USD
0.002 Unquoted
0.01 Unquoted
0.01
2,340,000
10
2.34 Unquoted
National Highways Authority of India Bonds – Series XI
500
10000
TOTAL
256
0.50 Unquoted
2.84
LARSEN & TOUBRO LIMITED
Regd. Office : L&T House, Ballard Estate, Mumbai 400 001
ANNUAL GENERAL MEETING - AUGUST 26, 2011 AT 3.00 P.M.
ATTENDANCE
SLIP
NAME AND ADDRESS OF THE REGISTERED SHAREHOLDER
D.P. Id
Client Id/
Folio No.
No. of Shares
I certify that I am a registered shareholder / proxy for the registered shareholder of the Company.
I hereby record my presence at the ANNUAL GENERAL MEETING of the Company at Birla Matushri Sabhagar, 19, Marine Lines,
Mumbai - 400 020 on Friday, August 26, 2011.
Note : Please complete this and hand it over at the entrance of the hall.
_________________________________
SIGNATURE
LARSEN & TOUBRO LIMITED
Regd. Office : L&T House, Ballard Estate, Mumbai 400 001
ANNUAL GENERAL MEETING - AUGUST 26, 2011 AT 3.00 P.M.
FORM OF
PROXY
I/We ________________________________________________________________________________________________________
of __________________________________________ in the district of ______________________________________________
being a member / members of LARSEN & TOUBRO LIMITED, hereby appoint ___________________________________________________
of __________________________________________ in the district of ________________________________________ or failing him
____________________________ of ___________________________ in the district of ______________________________________________
as my/our proxy to vote for me/us on my/our behalf at the ANNUAL GENERAL MEETING of the Company to be held on Friday, August
26, 2011 and at any adjournment thereof.
Signed this _________ day of _______________________2011.
D.P. Id
Client Id/
Folio No.
No. of Shares
Signature .....................
Affix a
15 paise
Revenue
Stamp
.............................
Note : This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company,
not less than 48 hours before the commencement of the Meeting.