Beyond Boundaries
69th Annual Report
2013-2014
A. M. Naik
Group Executive Chairman
Dear Shareholders,
In May 2014, the country rang in a decisive mandate for change.
straight year, meant that FY14 ended in negative growth. New
It is now up to the new political dispensation to deliver on its
investments, particularly in the private sector were muted as many
agenda and accelerate the process of renewed growth. It would
projects remained mired in uncertainty. While the Government
need to act decisively on a number of reform measures that will
managed to contain Fiscal Deficit within budgeted numbers
drive development, including reducing subsidies, streamlining
by cutting back on expenditure, the burden from the triad of
approval processes, professionalising the public sector and
subsidies continued unabated.
privatising natural resources under a transparent and stable policy
regime.
On the positive side, the Current Account Deficit was narrowed
down through a restriction on gold imports, aided by stagnant
Looking back, fiscal 2013-14 continued to witness the constraints
imports of petroleum products as well as capital goods thanks
that have hampered the economy in the last couple of years.
to the industrial slowdown. Wholesale inflation also contracted,
GDP growth last year was lacklustre at 4.7% and Fiscal Deficit
leading to a benign commodity pricing environment. There was
continued to be high. Feeble industrial production for the third
intermittent progress in key reforms such as expediting and
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streamlining approval processes, SEB regulations, diesel/LPG price
also extends to South East Asia, CIS, and select African nations.
hikes, and establishing policy certainty in areas such as power
International talent and experience is essential to achieve our
purchase tariffs and toll-based highway concessions.
goals, and we are strengthening our multi-cultural leadership
In the international arena, FY14 was marked by encouraging
experience and local customer insight.
developments such as a booming infrastructure sector in the
Middle East, with a number of landmark projects in transportation
The thrust on international markets is yielding gratifying results.
and power transmission & distribution being ordered, and other
International Order Inflows represent 33% of the total inflows
multi-year opportunities in the pipeline. The Hydrocarbon sector
during the year under review, and showcase remarkable success
in the region also continues to be vibrant, and attracts a large
in winning major new orders in the infrastructure sector.
base, with the induction of professionals possessing rich domain
number of global E&C companies, giving rise to stiff competition.
Talent Management
Performance Overview
In an age of increasing technological parity, high calibre
Against the backdrop of this challenging environment, your
talent, with the requisite training and exposure creates a key
Company has turned in a commendable performance on most
differentiator between companies and represents a competitive
key performance parameters.
edge. Your company therefore places continuing emphasis on
identification and induction of talent at various levels and across
Order Inflows, which are the mainstay of any company engaged
multiple functions. Systems are in place to ensure that a multi-
predominantly in Engineering & Construction business, clocked
cultural leadership team is rapidly integrated into the mainstream
in at
94,108 Cr., representing a robust 15% growth over
and embedded with the values, ethos and philosophy of L&T.
the previous year. The unexecuted Order Book at the year-end
stands at
162,952 Cr., thus providing a healthy revenue and
We recognise that the career preferences of the youth today are
margin visibility over the next few years. Despite severe execution
biased towards jobs in the new economy, making the task of
challenges in the domestic market, your Company managed to
attracting and retaining young talent more difficult. As a counter-
keep project execution largely on track, and helped by robust
weight, your company promotes and projects the opportunity of
growth in overseas revenues, registered a 10% growth in Gross
working on critical projects that would make a tangible difference
Revenues at
57,164 Cr. Profit after Tax registered
5,493 Cr
to nation, society and community.
which translates to a growth of 25% over the previous year on
a like-to-like basis.
Sustainable Development
At the Group level, Gross Revenues displayed a growth of 14%
85,889 Cr for the year under review. PAT, at
and stood at
Inclusive growth that takes into account the interests of all
stakeholders is at the heart of your Company’s value system. These
values have helped us empower communities and accelerate their
4,902 Cr represents a decline of 6% over the previous year,
development. Right from inception, we have been involved in
caused by capacity underutilisation in two new subsidiaries, viz.
community engagement programmes ranging from health,
L&T Shipbuilding Ltd. and L&T Special Steels & Heavy Forgings
education to skill building. The Company’s contribution to
Pvt. Ltd, as well as execution challenges faced in the Hydrocarbon
CSR has been widely recognized. Early in 2014, L&T received
business.
the prestigious The Economic Times ‘Corporate Citizen of the
Year – 2013’ award.
It gives me pleasure to announce that your Company has
recommended dividend of
14.25 per equity share on a face
The mandatory spending of 2% of profits on CSR initiatives
value of
2 per share for the year. The corresponding dividend
under the newly introduced provisions of the Companies Act,
during the previous fiscal was at
12.33 per equity share.
2013, is in line with L&T’s policy on CSR. We are also using this
Internationalisation
window of opportunity to extend our social and environmental
outreach. A CSR committee with Board-level representation has
Your Company is moving decisively towards consolidating its
been constituted to drive projects across the organization in a
international operations through a replication in the Middle East
more robust manner. We have also expanded the sustainability
of its domestic structure and systems. While the prime focus is the
organizational structure and formulated a Sustainability &
Gulf Cooperation Council countries, the international outreach
Corporate Social Responsibility (SCSR) team.
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Thrust areas on the sustainability front include augmenting efforts
d) Water & Renewable Energy – The sector has seen a
at energy conservation, climate change, water conservation and
strong growth in investments over the last two
material management.
Outlook
years, with growing focus from the Government
sector in improving access to water and preventing
pollution of its sources. In FY14, your Company has
Despite the continuing slowdown, the macro environment has
been able to achieve significant order inflow growth
shown early signs of recovery, and with the dawn of a stable
in this segment, backed by strong project execution
government, promises to improve gradually during FY15. Your
capabilities and operational excellence. With a
Company has identified specific opportunities for growth
healthy Order Backlog and growing order prospects,
within India and internationally, which it is targeting effectively.
the business from these sectors is expected to see an
Segments that hold promise in FY15 include –
upswing in FY15.
1) Infrastructure –
e) Urban Infrastructure – Opportunities in residential
a) Roads – This segment is expected to pick up in
buildings, office space, hospitals, hotels, educational
FY15 through ordering of more than 2,300 km of
new projects on Engineering, Procurement &
institutions, shopping complexes and
continue to provide a large canvas of business
factories
Construction (EPC) mode, and 3,000 km in PPP mode.
potential. Your Company has become the EPC
Apart
from
this,
there are several upcoming
contractor of choice for major developers and this is
opportunities in building Expressways and Elevated
driving profitable growth. Projects
in Mass
Corridors. Being the distinct leader in the segment,
and Affordable Housing, Healthcare and Educational
we will selectively participate in these EPC bids where
Institutions hold additional promise in FY15.
the prospects meet our internal viability benchmarks.
We will also continue to target upcoming road
f) Airports – Increasing passenger and cargo traffic
projects in the Gulf countries, where we have had
over the last decade has sustained growth in aviation
significant order wins during FY14.
industry. The Government plans to modernise a
number of Tier II City airports and build a few
b) Metro and Mono Rails – The Company has been
Greenfield airports as well. Similarly, a number of
involved in the execution of metro rail projects in
nations in the Asian region are modernising and
cities across the country and in India’s first monorail
expanding their airport infrastructure. On the back
in Mumbai (Phase I commissioned in FY14). This
of our excellent track record in this sector, we are
enables the Company to exploit opportunities
well-positioned for airport projects within and
to secure contracts in India, where multiple cities
outside India.
are initiating metro rail projects. We have also won
two major, prestigious contracts in the Middle East,
2) Heavy Engineering & Shipbuilding -
for Riyadh and Doha Metro projects during FY14,
We have the capability to meet the requirements for high
contributing significantly
to
the order
inflow
technology critical equipment and systems. In the process plant
growth during the year. We are participating in
equipment segment, the international market looks promising
bidding for further such prospects in the region.
in the medium term. The domestic nuclear segment is expected
to see ordering activity in FY15. However, the setback that the
c) Railways Business – The thrust on strengthening the
international nuclear power sector experienced with the natural
rail network across the country holds good prospects
disaster at Fukushima, Japan, will continue to affect demand in
for our Railways business. We have already secured
this segment, and impinge on volumes in our new forging unit.
an initial order in consortium with a Japanese
company for a major section of the Dedicated Freight
During the last few years, the defence sector had been adversely
Corridor, and are bidding for more packages. We are
impacted by a slow pace of decision making resulting in deferral
also exploring international markets, especially the
of contract awards. However, recent initiatives to involve the
Gulf countries where several projects are coming up.
private sector in defence equipment manufacturing and the
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stated intentions of the present stable political establishment
4) Thermal Power -
augur well for your Company.
Policy paralysis, negative market sentiments and procedural
bottlenecks have adversely affected the domestic Power sector
The shipyard at Kattupalli, which was commissioned in FY13,
in the last couple of years. Pressing concerns with respect to land,
is capable of building warships, submarines and specialized
fuel, financing and statutory approvals have shrunk the order
commercial ships. It is equipped with a state-of-the-art ship-lift
pipeline, putting pressure on the Company’s capacity utilization.
that enables it to undertake simultaneous new build, repair &
refits. While the global commercial shipbuilding trend remains
Some welcome steps such as raising distribution tariffs, imposing
subdued, we envisage that the Indian defence sector is likely to
anti-dumping duties on imported equipment, and fast tracking of
open up and provide opportunities for building defence ships.
Fuel Supply Agreements and other clearances have been taken.
However, in view of the large backlog of projects which are stuck
Apart from this, we are looking at addressing the growing
due to various constraints, revival in the sector is still some time
demand for specialised ships such as LNG and Ethane carriers,
away.
and Chemical tankers through technical collaborations. We are
also looking to leverage our position in the hydrocarbon sector
Under the circumstances, we are doing our best to be competitive
by developing semi-submersible rigs and floating LNG platforms,
through cost reduction, design optimisation and smart sourcing.
opportunities emerging from oil & gas exploration and production
in deep offshore fields.
3) Hydrocarbon –
We are also placing emphasis on expanding our spectrum of
services to select Gulf countries and the Southeast Asia for gas
based power plants, and have recently achieved breakthrough
On the domestic front, Exploration & Production (E&P) spends in
orders in Bangladesh.
upstream hydrocarbon segment are expected to sustain during
FY15. The decision to move towards market driven pricing in
5) Power Transmission & Distribution -
both Diesel and Natural Gas is expected to spur upstream capex.
Government policies lay stress on investments in strengthening the
Opportunities in LNG regasification terminals and integrated
power grid and the power distribution system through central and
refinery and petrochemical projects should open up in the year
multilateral funding agencies. We have demonstrated a steady
ahead. Implementation of re-development projects should provide
growth in order book position in domestic and international
a fillip to the onshore gas processing segment. Investments are
markets.
also expected in cross-country pipeline projects.
In the upstream sector, the Company’s capabilities extend to
Gulf countries will continue to provide significant business
the repair, rebuild and construction of new Jack-up Rigs and
opportunities for power transmission and distribution business
The emphasis on strengthening of transmission grids in
FPSO topsides. The business is well placed to leverage its multi-
in the coming years.
locational Modular Fabrication Facilities to respond to global
trends towards modularization of onshore gas processing plants.
6) Metallurgical and Material Handling -
Several large and prestigious international orders have bolstered
to a myriad factors including sector slowdown, mining bans
our presence in select geographies. We are increasingly pursuing
imposed by the judiciary, prevailing complexities of policies
opportunities overseas through alliances with the leading global
governing mining, land acquisition as well as the dearth of new
EPC companies. This has necessitated putting in place a multi-
investments. Efforts are underway to resolve these issues through
national organization, with a cross-cultural team possessing local
various government proposals, legislations and policies. As the
The outlook in this area continues to be challenging, due
knowledge and domain expertise.
economy grows, demand for metals particularly steel, aluminium
and copper will necessitate expansion of capacity. We are well
The Company has transferred its Hydrocarbon Business to a
positioned to benefit from the confidence we enjoy because of
wholly owned subsidiary in FY14, to enable greater autonomy
our track record and timely completion of projects.
and formulation of HR policies in line with industry practices so
Material Handling prospects in areas of steel, mines, power, ports
as to attract the best talent.
and long distance conveyors for bulk ores are likely to grow in line
with economic growth.
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7) Electrical & Automation -
Europe, Gulf countries and the Far East. The Company has
The Electrical & Automation business continues to maintain its
also undertaken certain major initiatives intended to enhance
leadership position in LV Switchgear. It has also made a mark
the visibility, profile and sharpen its distinction through
in the MV segment through an acquisition of an international
the differentiated solutions it offers in multiple domains.
company a few years ago. Product development in both LV and
MV Switchgear continues to forge ahead. The project business
Technology Services, a Strategic Business Unit of L&T, is being
has enhanced its focus on international markets. The coming
formed into a subsidiary. This will result in consolidation of all
year should see an upward momentum. The Company has also
engineering services business of L&T and L&T Infotech. This
acquired three companies which will bridge technology gaps in
subsidiary will provide autonomous functioning in line with
one case, enhance product range in the second and augment
industry practices.
market reach through the third.
11) Financial Services -
8) Machinery & Industrial Products -
This business, which was listed in 2011, continues to grow
The Construction Machinery business was able to register flattish
profitably with a loan book in excess of Rs 40,000 Cr at the end
growth despite shrinkage in construction equipment market and
of FY14. Net Interest Margins at 5.5% reflect the healthy interest
entry of new competitors. Your Company acquired the stake of
spreads that the business earns. The business has successfully
the JV partner Komatsu in Construction Machinery business.
concluded acquisitions in mutual funds business and housing
The Company also acquired the stake of JV partner Flowserve in
the Valves business. The reported revenues in Valves and Cutting
12) Developmental Projects -
finance.
Tools businesses were lower for the Standalone entity, as the
Development projects undertaken by the Company in roads,
businesses were transferred to subsidiaries during FY14. However,
ports, metro rail and power continue to progress satisfactorily,
the Valves business as a whole continued to grow due to Oil &
with some of these projects currently operational. The Company
Gas and Power sector investments in India and overseas. Fresh
has opened up alternate funding lines to enable commissioning
infusion of investment in these sectors in the US, the Middle
of the upcoming projects and reduce dependencies on your
East and other countries is expanding the potential for our
Company’s balance sheet, and advanced on monetising the value
international operations.
of matured assets
9) Realty –
Before I conclude, I would like to extend my thanks to Team L&T,
L&T has recently started realty business by using its own
Government, customers, vendors and other stakeholders, without
land parcels and in joint ventures with other developers
whom our continued growth momentum would not have been
and this has already started yielding good results. Market
possible. I would also like to thank my fellow Board Members for
has received our entry in this business with enthusiasm.
their unstinted support and encouragement.
With the help of L&T’s brand, its construction capability and
Thank You
marketing reach, this business is poised to deliver profitable
growth in the coming years.
10) Information Technology & Integrated Engineering
Services Business -
In USD terms, L&T Infotech, a wholly owned subsidiary, grew at
18% Y-o-Y on a consolidated, like-to-like basis. Profit after Tax
grew by 4%, due to the impact of prior period adjustment.
A. M. Naik
L&T Infotech has embarked on building a strong sales and
Group Executive Chairman
marketing team globally with emphasis on the Americas,
Mumbai, May 30, 2014
5
Contents
Company Information
Organisation Structure
Leadership Team
L&T Nationwide Network & Global Presence
Corporate Sustainability
Annual Business Responsibility Report
Standalone Financials - 10 Year Highlights
Consolidated Financials - 10 Year Highlights
Graphs
Directors’ Report
Management Discussion & Analysis
Auditors’ Report
Balance Sheet
Statement of Profit and Loss
Cash Flow Statement
Notes forming part of Accounts
Auditors’ Report on Consolidated Financial Statements
Consolidated Balance Sheet
Consolidated Statement of Profit and Loss
Consolidated Cash Flow Statement
Notes forming part of Consolidated Accounts
Information regarding Subsidiary Companies
6
7
8 - 9
10
12 - 13
14 - 17
18 - 35
36
37
38 - 39
40 - 74
75 - 150
151 - 153
154
155
156 - 157
158 - 227
228 - 229
230
231
232
233 - 294
295 - 320
Company Information
Board of Directors
MR. A. M. NAIK
Group Executive Chairman
MR. K. VENKATARAMANAN
Chief Executive Officer & Managing Director
MR. M. V. KOTWAL
Whole-time Director & President (Heavy Engineering)
MR. S. N. SUBRAHMANYAN
Whole-time Director & Senior Executive Vice President
MR. R. SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
MR. SHAILENDRA ROY
Whole-time Director & Senior Executive Vice President
(Construction & Infrastructure)
(Power, Minerals & Metals)
MR. S. RAJGOPAL
Independent Director
MR. S. N. TALWAR
Independent Director
MR. M. M. CHITALE
Independent Director
MR. SUBODH BHARGAVA
Independent Director
MR. A. K. JAIN
Nominee of SUUTI
MR. M. DAMODARAN
Independent Director
MR. VIKRAM SINGH MEHTA
Independent Director
MR. SUSHOBHAN SARKER
Nominee of LIC
MR. ADIL ZAINULBHAI
Independent Director
Company Secretary
Registered Office
Auditors
Solicitors
Mr. N. Hariharan
L&T House, Ballard Estate, Mumbai - 400 001
M/s. Sharp & Tannan
M/s. Manilal Kher Ambalal & Co.
Registrar & Share Transfer Agents
Sharepro Services (India) Private Limited
69th ANNUAL GENERAL MEETING AT BIRLA MATUSHRI SABHAGAR, 19, MARINE LINES, MUMBAI 400 020 ON FRIDAY, AUGUST 22, 2014 AT 3.00 P.M.
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8
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Leadership Team
A. M. Naik
Group Executive Chairman
K. Venkataramanan
CEO & Managing Director
M. V. Kotwal
President
(Heavy Engineering)
S. N. Subrahmanyan
Sr. Executive Vice President
(Construction & Infrastructure)
R. Shankar Raman
Chief Financial Offi cer
Shailendra Roy
Sr. Executive Vice President
(Power, Minerals & Metals)
S. C. Bhargava
Sr. Vice President
(Electrical & Automation)
10
11
Nationwide Network
12
Global Presence
13
Case Studies in
Good Citizenship
Case studies are CSR* in action. They demonstrate how pronouncements
and policies are actually making a difference on the ground.
The following case studies** trace the complete sequence - from
problems addressed to solutions implemented.
*CSR - defi ned in its widest sense and inclusive of both community service and environment protection
**For more case studies and details, please refer to annual L&T’s Sustainability Reports.
C ASE
STU DY
Putting Waste to Work
Tunnels are all about fi nding a way through obstacles and speeding
high demand during
tunnel
progress. But what about a way of dealing with the material thrown
construction. At our Singoli
up when tunnels are excavated? It’s called ‘muck’ by tunnelling
Bhatwari HEP project, we
engineers and is produced in large volumes.
developed a method to crush
muck and use it as an effective
Conventionally, one simply disposes of the muck as waste. Our
substitute for the aggregates
engineers sought and found a way of dealing with muck that is
and sand that go into the making
greener and saves money.
of concrete. We also used the
muck as a fi ller in gabions.
Aggregates are the largest component of concrete and are in
The benefi ts are many:
By reducing the demand for aggregates, we cut down on the
Less tunnel muck means lower environmental impact. No need
need for land and mining
for large-scale transportation to dispose off muck
Quantity of Muck Excavated (in Tons)
Tunnel Muck Utilisation (in Tons)
Total Excavation from Tunnel (Riverbed Material) (A)
Qty. of Muck per Ton of Riverbed Material (B)
11,050
49.5
Sent to Crusher
Used in Gabions
Used in Land Fills
Total Muck Excavated (AxB)
546,975
Total Muck Utilised
191,441
82,046
273,488
546,975
Outcome
Over 546,975 tons of muck was put to productive use.
1414
C ASE
STU DY
True Progress is Progress for All
No man is an island and neither are organisations. We understand
VOCATIONAL TRAINING
that if our progress is to be sustainable over a period of time, it has
to be collective.
To ensure collective development, Project Sarvodaya was
initiated in the year 2012-13 at Filterpada, a community of
12,500 people in the vicinity of Powai Campus.
After a need assessment survey, it was decided to focus on the
health and livelihood needs of Filterpada, with a special focus on
the needs of the women. The Sarvodaya Community Centre was
established by Larsen & Toubro Public Charitable Trust (LTPCT)
in partnership with Community Aid & Sponsorship Programme
(CASP), an NGO.
Project Sarvodaya is an easily replicable model for bringing
about social harmony and enhancing the well-being
of families.
It was found that the women in this community rarely got an
opportunity to fi nancially support their families. Vocational
training courses like beautician and tailoring were offered to
the interested trainees.
HEALTH INITIATIVES
Health awareness programmes on waterborne and contagious
diseases were interwoven with initiatives like clean house &
clean society competition as well as healthy baby competition.
A weekly gynaecology clinic is run and cases, if observed, are
referred to L&T’s Andheri Health Centre (AHC) for further
treatment.
Health check-up is also conducted on a regular basis by L&T’s
Mobile Health Van.
A special campaign on awareness regarding curative and
preventive health measures was organised for a community
comprising predominantly tribal population.
Impact
In the reporting year, over 450 women benefi ted through the training courses.
1515
C ASE
STU DY
Sunlight at Night
The Company that is India’s largest EPC solution provider of large scale solar power plants, also leads the way in putting
solar energy to work in much smaller sizes through solar lanterns. D.VA, the solar lantern by L&T’s E&A business, is virtually
unbreakable, energy-effi cient and easy-to-handle.
D.VA offers several advantages over conventional solar lamps:
1
2
3
4
The life span of the solar
panels range between 20
and 25 years. Its bright LEDs
have a rated life of up to
50,000 hours
D.VA can be charged
through solar panels of
5W rating, or regular
mains (AC supply)
charging adaptor in low
or no sunlight conditions
When fully charged, D.VA
works for up to 10 hours at
works for up to 10 hours at
maximum brightness and 40
hours in ‘night’ mode
hours in ‘night’ mode
Three brightness modes
- full, economy and night.
Equipped with an in-built
dimming feature, it provides
a range of light outputs
to suit various ambient
conditions at different
times of the day
Outcome
D.VA virtually extends sunlight into the night. It allows children to study
longer, extends shop hours, and provides ease of doing household
chores after sundown. Other benefi ts include a lower electricity bill and
reduced use of kerosene.
Design Council’s India Design
D.VA won the India Design Council’s India Design
Mark Award (IMark) for good design. Over 3,000 D.VA
solar lanterns are in service.
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C ASE
STU DY
Teaching Safety - The Experiential Way
Safety Innovation School
L&T Hydrocarbon set up a unique
Safety Innovation School at
Hazira, near Surat. Spread over
10,000 sq. mt., it is a one of its
kind facility in the country that
imparts safety training through
experimental learning.
Along with a host of latest safety
related equipment, the School
also has 3D simulation and
training for medical emergencies
through an automated CPR
process.
1717
Annual Business Responsibility Report (ABRR) 2013-14
The format adopted by L&T for its Annual Business
Responsibility Report (BRR) conforms to the requirements
of Securities & Exchange Board of India (SEBI) listing
requirement. It covers the National Voluntary Guidelines
(NVG) based on Social, Environmental & Economic
Responsibilities of Business released by the Ministry of
Corporate Affairs, India.
Since 2008, the Company has been publishing a
Sustainability Report every year, prepared as per the
Global Reporting Initiative (GRI) G3 guidelines. The
Sustainability Reports are externally assured and ‘GRI
Checked Application Level A+’, signifying the highest level
of disclosure in public domain. The report can be accessed
at www.lntsustainability.com.
The Company is the first engineering & construction
organisation in India to report on its Corporate
Sustainability performance, and among the earliest to
state its conformance with the eight missions of National
Action Plan on Climate Change (NAPCC), India.
Section A: General Information about the Company
1. Corporate Identity Number (CIN) of the Company: L99999MH1946PLC004768
2. Name of the Company: Larsen & Toubro Limited
3. Registered address: L&T House, Ballard Estate, Mumbai: 400 001, India
4. Website: www.Larsentoubro.com
5. E-mail id: sustainability-ehs@Larsentoubro.com
6. Financial Year reported: April 1, 2013 - March 31, 2014
7. Sector(s) that the Company is engaged in (industrial activity code-wise):
Group
Class
Sub Class
Description
28246
30111
30112
30114
41001
42101
42102
42201
42202
42901
46594
68100
71100
Manufacture of electric motors, generators, transformers and electricity distribution and control apparatus
Manufacture of parts and accessories for machinery / equipment used by construction and mining industries.
Building of commercial vessels, passenger vessels, ferry boats, cargo ships, tankers, tugs, hovercraft (except
recreation type hovercraft), etc.
Building of warships and scientifi c investigation ships, etc.
Construction of fl oating or submersible drilling platforms.
Construction of buildings carried out on own-account basis or on a fee or contract basis.
Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways,
bridges, tunnels and subways.
Construction and maintenance of railways and rail-bridges.
Construction and maintenance of power plants
Construction / erection and maintenance of power, telecommunication and transmission lines.
Construction and maintenance of industrial facilities such as refi neries, chemical plants, etc.
Sale of construction and civil engineering machinery and equipment.
Real estate activities with own or leased property.
Architectural and engineering activities and related technical consultancy.
271
282
301
2710
2824
3011
410
421
4100
4210
422
4220
465
681
711
4659
6810
7110
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8. List three key products/services that the Company manufactures/provides (as in balance sheet)
1. Construction and project related activity.
2. Manufacturing and trading activity.
3. Engineering service.
9. Total number of locations where business activity is undertaken by the Company
i. Number of International Locations : 35
ii. Number of National Locations : 100
10. Markets served by the Company – Local/State/National/International: All
Section B: Financial Details of the Company
1. Paid up Capital (INR): 185.38 crore
2. Total Turnover (INR): 57,164 crore
3. Total profit after taxes (INR): 5,493 crore
4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%): 1.40%
5. List of activities in which expenditure in 4 above has been incurred:
Community and social engagements broadly covering;
a. Education
b. Skill Building
c. Health Care
d. Environment protection
Section C: Other Details
1. Does the Company have any Subsidiary Company/ Companies?
2.
3.
Yes
Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate
the number of such subsidiary company(s):
Yes. The Business Responsibility (BR) initiatives of the company are extended to the Subsidiary/Associate
Companies and these are encouraged to participate in various related activities of BR.
Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the
BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%,
More than 60%]:
Yes. The Company promotes BR initiatives in its value chain. At present, less than 30% of its suppliers/
distributors participate in BR initiatives.
Section D: BR Information
1. Details of Director/Directors responsible for BR
a) Details of the Director/Director responsible for implementation of the BR policy/policies
• DIN Number: 00001744
• Name: Mr. M. V. Kotwal
• Designation: Whole time Director & President (Heavy Engineering)
19
b) Details of the BR head
S. No.
Particulars
Details
1.
2.
3.
4.
5.
DIN Number (If applicable)
Not Applicable
Name
Designation
Mr. Ajit Singh
Executive Vice President – Corporate Infrastructure & Services
Telephone Number
+91-22-67052447
Email ID
sustainability-ehs@Larsentoubro.com
2. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N)
Name of principles:
P1 – Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
P2 – Businesses should provide goods and services that are safe and contribute to sustainability throughout their life
cycle
P3 – Businesses should promote the well-being of all employees
P4 – Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalized
P5 – Businesses should respect and promote human rights
P6 – Businesses should respect, protect, and make efforts to restore the environment
P7 – Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner
P8 – Businesses should support inclusive growth and equitable development
P9 – Businesses should engage with and provide value to their customers and consumers in a responsible manner
S. No.
Questions
P1
P2
P3
P4
P5
P6
P7
P8
P9
Do you have a policy/policies for
Has the policy being formulated in consultation with the relevant stake-
holders?
Does the policy conform to any national /international standards? If yes,
specify? (50 words)
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Yes. The policies are aligned with NVG guidelines
and applicable international standards of ISO
9001, ISO 14001, OHSAS 18001 and ILO principles.
Has the policy being approved by the Board?
Yes.
If yes, has it been signed by MD/owner/CEO/appropriate Board Director?
Signed by the Group Executive Chairman
Does the Company have a specifi ed committee of the Board/ Director/
Offi cial to oversee the implementation of the policy?
Yes.
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Indicate the link for the policy to be viewed online?
www.Lntsustainability.com
Has the policy been formally communicated to all relevant internal and
external stakeholders?
Does the company have in-house structure to implement the policy/
policies?
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
1.
2.
3.
4.
5.
6.
7.
8.
20
Questions
P1
P2
P3
P4
P5
P6
P7
P8
P9
S. No.
9.
Does the Company have a grievance redressal mechanism related to the
policy/policies to address stakeholders’ grievances related to the policy/
policies?
10.
Has the company carried out independent audit/evaluation of the work-
ing of this policy by an internal or external agency?
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
2a.
If answer to S.No. 1 against any principle, is ‘No’, please explain why: (Tick up to 2 options)
S. No.
Questions
P1
P2
P3
P4
P5
P6
P7
P8
P9
1.
2.
3.
4.
5.
6.
The Company has not understood the Principles
The Company is not at a stage where it fi nds itself in a position to
formulate and implement the policies on specifi ed principles
The Company does not have fi nancial or manpower resources available
for the task
It is planned to be done within next 6 months
It is planned to be done within the next 1 year
Any other reason (please specify)
-----
-----
-----
-----
-----
-----
3. Governance related to BR
• Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR
performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year
o Annually
• Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How
frequently it is published?
Yes, the Company has been publishing its Sustainability Report annually as per the framework of
Global Reporting Initiative (GRI) G3 since 2008. The sustainability reports are externally assured and
are ‘GRI Checked Application Level A+’, signifying the highest level of disclosure. The report can be
accessed at www.Lntsustainability.com
Section E:
Principle 1: Businesses should conduct
and govern themselves with Ethics,
Transparency and Accountability
L&T is committed to achieving its business goals solely
through means that are, and are seen to be, ethical,
transparent and with total accountability. This in an
inflexible principle that has historically shaped the character
of L&T. Ethics, transparency and accountability as well as a
number of allied attributes are part of the codified vision
statement of the Company, and its policies on Corporate
Social Responsibility (CSR), Corporate Human Resource
and Corporate Environment, Health and Safety (EHS).
These policies and practices extend to and encompass the
operations of subsidiary and associate companies. Sound
systems and policies are in place (e.g. Whistle Blower
Policy) to promote the Company’s principles of ethics and
fair practices across all the group companies.
21
A ‘Code of Conduct’ governs the actions of L&T’s Board
and senior management. The CEO & Managing Director
provides an annual declaration regarding its compliance by
the Company. The Code of Conduct can be accessed on
the Company’s website – www.Larsentoubro.com.
The Executive Management Committee (EMC) guides
formulation of a sustainability strategy and ensures
effective implementation. Additionally, it deliberates
on policies for the company. At the corporate level,
sustainability initiatives and performance are regularly
reviewed by a nominated member of the EMC.
L&T has formulated an Environmental and Social ‘Code of
Conduct’ for its suppliers. It includes specific clauses on
ethics and transparency. The non-financial performance of
the Company is also disclosed in public domain via annual
Sustainability Reports. This report is third party verified
and confirms to the world-wide acceptable framework of
Global Reporting Initiative (GRI).
Details related to stakeholder complaints are included in
the Director’s Report Section of this Annual Report.
Principle 2: Businesses should provide
goods and services that are safe and
contribute to sustainability throughout
their life cycle
L&T’s product and project spectrum underpins infrastructure
and core sector industries. In distinct ways, the Company’s
offerings facilitate the efficient utilization and distribution
of resources that contribute to public good, and set in
motion the chain that enhances the quality of life.
The Company recognises carbon footprint as a significant
measure of sustainable value. This is reflected in raw
material selection and increasing focus on Energy-efficient
processes. ‘State of the art’ manufacturing practices
ensure the manufactured products adhere to the highest
possible health and safety standards from development
stage throughout their life-cycle. The Company undertakes
a comprehensive review of health and safety impact of
products, projects and services.
22
A codified policy publicly affirms the organisation’s commitment,
governs actions and provides clarity of direction.
All the Company’s products are labelled and convey
complete information pertinent to installation, operation
and maintenance. Training is provided to customer
personnel on safe and efficient operation and maintenance.
For its switchgear products, L&T has set up full-fledged
training centres around the country which provide generic
(i.e. brand agnostic) training on good electrical practices.
Signage systems are installed at all project sites.
The Company has a growing portfolio of green products
and services. They assist customers by conserving natural
resources, and reduce energy consumption and associated
GHG emissions.
The Company has developed proven expertise, and
is widely recognized as an industry leader in multiple
projects that contribute to sustainability. These include
the construction of green buildings, mass rapid transit
systems, solar power plants executed on an EPC basis,
fuel switch projects, dehydrogenation & desulphurization
(DHDS) projects, coal gasifiers, super critical thermal power
The Administrative Building at L&T’s Kattupalli Campus has won
‘LEED Platinum Certification’ from the globally respected United
States Green Building Council (USGBC)
plant & energy efficient equipment, power transmission
& distribution systems, Energy-efficient electrical &
automation systems.
Green buildings constructed by the Company’s
Construction business help customers reduce energy
and water consumption, utilize recycled material and
locally sourced construction material. The Company is
a leading EPC solutions provider for Solar Photo Voltaic
(PV) based power plants helping customers save energy
and contribute to reduction of GHG emissions from
consumption of indirect energy.
L&T is engaged in multiple mass rapid transit systems in India.
The Company is also currently executing metro systems in
Riyadh, Saudi Arabia and Qatar.
Metro and mono rail are widely acknowledged as eco-
friendly mass transit systems that reduce per capita fuel
consumption and carbon emissions in urban areas. The
Company executed India’s first mono-rail project, a major
part of the expansion plans for mass public transport
systems in Mumbai.
The Hydrocarbon business of the Company has proven
capabilities in execution of fuel switch projects for
fertilizer plants and refineries. This significantly helps
customers reduce sulphur emissions and improve product
quality by switching from fuel oil and Low Sulphur Heavy
Stock (LSHS) based ammonia plants to natural gas and
Re-gasified Liquefied Natural Gas (R-LNG) based plants.
The Heavy Engineering business manufactures coal gasifiers
that uses coal efficiently. The Electrical & Automation
business offers low-watt loss fuses, Power Management
Systems, AC drives, smart metering systems etc.
L&T’s unique Safety Innovation School at Hazira, near
Surat reflects the Company’s commitment to safety and to
the dissemination of safe practices across all its worksites
and production centres. Safety training at the School is
imparted through experiential learning.
Sustainability Practices in Value Chain
L&T recognizes that - no matter how well intentioned -
the individual initiatives of an organization to enhance
sustainability would not achieve the overall impact
of collective effort. The Company therefore actively
propagates environment-friendly, safe and socially-
responsible business practices across the value chain. L&T
has formulated an Environment & Social Code of Conduct
which many of its suppliers are committed to practice.
The Company conducts capacity building programmes for
vendors, sub-contractors and provides training & technical
expertise towards business efficiency improvement. Local
sourcing improves logistics as well as helps to develop
the local economy. Around 80% of the Company’s
requirements are met by local suppliers.
Material recycling and use of alternate materials is also
being explored. However, as the Company’s products are
‘engineered to order’ based on customer’s requirement,
the scope for direct material recycling is limited. Alternate
materials such as fly ash in place of cement, crushed
23
development. It provides an array of opportunities for new
learnings, expand skills sets, opportunity to develop their
skills and secure a happy and fulfilling life. The Company’s
Corporate Human Resource Policy codifies its commitment
to a culture of excellence while inspiring innovation and
creativity.
Total workforce
L&T employees
(Standalone)
Refer “Standalone Financials
– 10 Year Highlights” section
of the Annual Report
Number of permanent
women employees
3,042
Contract workmen
3,84,132
The Company directly employs 82 persons with disabilities.
The value chain also employs 96 persons with disabilities.
No discrimination is countenanced on the basis of caste,
religion, gender or handicap. This is in line with the
Company’s endeavour to foster a culture of diversity and
equal opportunity in employment. Employment of children
and forced or compulsory labour is prohibited within the
Company, its subsidiary and associate companies. The
contract documents also include Human Rights clauses
which are strictly adhered to within its premises.
The Company recognizes employee unions and associations
affiliated with different trade unions at manufacturing
facilities. 7.3% of permanent employees are covered
under this category.
Safety cannot be prioritised, it is an intrinsic part of the
Company’s operations across all its businesses. Enhancing
safety standards is one of the thrust areas for the
Company. The Corporate Environment, Health & Safety
(EHS) Policy encapsulates the Company’s commitment to
providing a safe and healthy workplace to all employees
and stakeholders. Female employees are covered under
the policy on ‘Protection of Women’s Rights at Workplace’.
Safety performance is being reviewed at regular intervals
at all levels. The Board also reviews safety performance
on quarterly basis.
Regular safety trainings, mock drills and other safety
interventions are undertaken to build a safe work culture
within the organization. Further, a wide range of technical,
The Company promotes material conservation among its supply
chain while ensuring that quality is not compromised.
sand instead of natural sand, blast furnace slag in road
construction in place of natural aggregate etc. help to
conserve precious natural resources. Other examples
include recycling of steel scrap and zinc waste, wherever
feasible.
The Company also engages with its value chain by means
of an established stakeholder engagement framework.
The findings of this engagement help to formulate
& implement the sustainability strategy for continual
inclusive growth.
Principle 3: Business should promote
well-being of employees
L&T is widely acknowledged as a professional organisation.
Importantly the Company also recognises the person behind
the professional, and has institutionalised systems that
encourage personal growth in tandem with professional
Safety techniques need to be scientifically disseminated. L&T has
set up a one-of-a-kind Safety Innovation School in Hazira.
24
Principle 4: Businesses should respect
the interests of, and be responsive
towards all stakeholders, especially
those who are disadvantaged,
vulnerable and marginalized
The heterogeneity and diversity of the country and its
people find reflection in the Company’s composition and
structure. L&T is one of the most widely held companies
in India with diverse and transparent shareholding.
The Company engages with its identified stakeholders
on an ongoing basis through a structured stakeholder
engagement programme. Specific engagement
mechanisms have been established for each stakeholder
group identified. L&T is committed to continuously
improving the value proposition it offers to customers,
shareholders, employees, suppliers and other stakeholders
and develop the communities around us.
Multiple communication platforms, including formal and
informal channels of communication, are employed in
L&T’s continuing dialogue with stakeholders. This diverse
pool of engagement channels helps enable deeper insights
into their expectations, and ensures that stakeholder
information remains current and updated.
The Company’s engagement framework is based
on objectives like proactive response, transparency,
inclusiveness and trust. The framework has been
continually refined and enables us to customize our
communication and undertake elaborate engagement
initiatives for internal and external stakeholders. This in
turn contributes to superior strategy formulation, decision-
making and accountability.
Nation building continues to be the underlying theme in all
our endeavors. We consider it our responsibility to provide
opportunities to all strata of society and equip them with
the necessary skills and resources for inclusive growth.
The Company has identified disadvantaged sections of
the society through community need assessment surveys
and provides strategic social interventions in partnership
with local NGOs and communities. The details of such
programmes are described under Principle 8.
25
Leadership Development Academy at Lonavala near Mumbai is
one of the only institutions of its kind in India. It provides the
springboard for Team L&T to attain the next level of professional
growth.
functional as well as managerial training is imparted to the
employees to nurture their competencies. State-of-the-art
training facilities, including a Leadership Development
Academy at Lonavala and a unique ‘Safety Innovation
School’ at Hazira near Surat, enable the Company to
impart effective training in a conducive environment.
New employees are also provided compulsory training on
multiple disciplines including health, safety & environment,
climate change and sustainable development along
with orientation towards the Company businesses and
functions of various departments. All contract workmen
receive mandatory safety training before commencing
their work. More than four million man-hours of training
was provided in FY 2013-14 to the permanent employees.
No complaints relating to child labour, forced labour,
involuntary labour or sexual harassment were received in
the FY 2013-14.
In addition to workplace safety management, efforts are
also made towards employee wellness through ‘Working
on Wellness’ initiative. This focuses on stress management
and essential healthcare to enhance the overall employee
well-being and promote work -life balance.
The Company has a dedicated Corporate Brand
Management & Communications department which
facilitates an on-going dialogue between the organization
and its stakeholders. Communication channels include:
For External Stakeholders
For Internal Stakeholders
Stakeholders engagement
sessions
Client satisfaction surveys
Employee satisfaction survey
Engagement Survey for
further improvement in
employees’ engagement
process
Regular business interaction,
supplier, dealer and stockist
meets
Circulars
Social initiatives
Welfare initiatives for
employees and their families
Online news bulletins to
convey topical developments
A large bouquet of print and
on-line in-house magazines -
some location specific, some
business specific
Internal spot news
Periodic feedback
mechanism
Press Releases, Infodesk - an
online service, dedicated
email id for investor
grievances
AGM (Shareholders
interaction)
Investors meet and
shareholder visit to works
A corporate website that
presents an updated picture
of capabilities & activities
Access to the business media
to provide information &
respond to queries
Principle 5: Businesses should respect
and promote Human Rights
The sanctity of Human Rights is upheld in letter and
spirit and the Company actively seeks to identify, assess,
and manage human rights impacts within its sphere of
influence and activities. L&T’s Human Resource Policy
draws on the Universal Declaration of Human Rights, the
ILO Core Conventions on Labour Standards and the UN
Global Compact. The Company is also a member of the
Global Compact Network India.
26
L&T complies with ethical and human rights standards and
follows applicable local laws and regulatory requirements
such as conventions of the International Labour
Organisation (ILO), the Factories Act 1948, Building &
Other Construction Workers (Regulation of Employment
&Conditions of Service) Act 1996, Central Rules 1998 and
Industrial Disputes Act 1947.
The Company ensures that human rights clauses are
included in our contract documents with sub-contractors
and are strictly adhered to within our premises and sites,
while also being extended to Subsidiary and Associate
companies. Employees are sensitized on human rights
through induction training programmes, interactive
sessions, intranet, policy manuals and posters.
Recruitment rules, procedures and general conditions of
service stipulate equal opportunities for all its employees
at the time of recruitment as well as during the course of
employment irrespective of gender, ethnicity, nationality,
sexual orientation, political and religious affiliation.
Responsible business practices are propagated across the
value chain. To cascade sustainability across the supply
chain, L&T has developed an environment & social ‘Code of
Conduct’ for our suppliers. Many suppliers are signatories
to this code and have committed themselves to practicing
it in letter and spirit. Essential environment-friendly and
socially-responsible business practices propagated by the
code include energy efficiency, water conservation, waste
reduction, occupational health & safety, prevention of
corruption and respect for human rights.
There were no reported complaints related to human
rights violations during the FY 2013-14.
Principle 6: Business should respect,
protect, and make efforts to restore the
environment
Environmental health is critical to business sustainability.
L&T endeavors to reduce the impact of operations by
protecting the environment, conservation of resources and
mitigating climate change. Over the years, the Company
has formulated and executed green strategies which yield
both environmental benefits and business growth. The
underlying philosophy is to continuously enhance the
efficiency of processes and augment the Company’s green
portfolio.
Systems are in place to identify and assess potential
environmental risks and opportunities in its operations.
The environment preservation policy and initiatives are
propagated within its Subsidiary and Associate Companies
and its key suppliers are also encouraged to follow such
practices.
The Company remains committed to the eight missions
of the National Action Plan on Climate Change (NAPCC)
instituted by the Government of India. The Company has
been increasingly investing in products and processes
that assist sustainable economic growth - enhancing
energy security, developing low-carbon technologies
for building infrastructure, spreading sustainability
knowledge and greening the nation’s landscape. The
Company has undertaken numerous initiatives for energy
and Greenhouse gas (GHG) emission intensity reduction,
increased use of renewable energy, promotion of green
building construction, and enhancement of green cover,
provision of solar & renewable energy solutions to
customers and building of capacity for environmental
management. The Company proactively discloses its
carbon emissions annually to the Carbon Disclosure
Project.
Pollution standards set by the regulatory bodies like central
and state pollution control boards are adhered to, and
the Company seeks environmental regulatory approvals
prior to the commencement of operations at units and
project sites. Regular checks are conducted by internal
and independent agencies, to ensure compliance with
relevant pollution control regulations. Compliance reports
are submitted to Central Pollution Control Board (CPCB)
/ State Pollution Control Boards (SPCB). The Company’s
Board of Directors has complete access to the information
within the Company, which includes a quarterly report on
any material effluent or pollution problems. The Company
encourages all of its manufacturing and service sites to
develop and maintain a management system based on
ISO 14001. During the financial year, there are no pending
or unresolved show cause/legal notices from CPCB/SPCB.
As a part of the Company’s effort to protect the
environment and in accordance with the circular issued
by the Ministry of Corporate Affairs, Government of India,
shareholders have been given the option of receiving
documents related to general meetings (including AGM),
Audited Financial Statements, etc., through e-mail.
Water and wastewater management
The Company’s water consumption and wastewater
discharge have declined steadily over the years. Various
water management initiatives like water auditing,
rainwater harvesting and Industrial & domestic wastewater
treatment & reuse are in place across the Company’s
manufacturing locations. In all, 28 out of 29 locations
of the Company have now achieved ‘zero wastewater
discharge’ status.
Check dams do more than provide water, they offer a sense of
stability to communities. Small rural communities which were
compelled to migrate every summer in search of water found it
possible to remain in their villages. L&T Public Charitable Trust has
built over 150 check dams in the Dahanu and Talasari blocks of
Maharashtra.
Efforts to conserve water have been stepped up, with a
sharper focus on water management projects in drought
affected tribal areas of Maharashtra. Over 150 check
dams were constructed in Dahanu and Talasari blocks of
Maharashtra by Larsen & Toubro Public Charitable Trust,
in collaboration with Rotary Club. This has contributed
to creating a reservoir potential of more than 860 million
litres of water in these blocks. In addition, four L&T
campuses - Powai (West), Talegaon, E&A Mahape and
Ahmednagar have been certified as ‘Water Positive by an
independent assurance provider.
27
Details of efforts made for reconstruction of
biodiversity
Over 514,000 saplings were planted in and around the
Company’s manufacturing facilities & project sites in 2013-
14. Over 150,000 fully grown trees are being nurtured
across L&T campuses. Around 35% of the available open
land at the Company’s manufacturing locations has green
cover. In addition, the Company has internally circulated a
guidance manual on scientific methods of tree plantation
titled ‘Enlarging Green Cover’. The Company continues
to ensure that its operations do not adversely impact the
biodiversity of the region. Close to 1 million saplings were
planted in and around the company’s establishments and
project sites in last three years.
Recycled raw material
The opportunity available to the Company to use recycled
material is limited by the fact that most of the Company’s
products are Engineered To Order (ETO) and have to
adhere to customer specification, stringent international
design and manufacturing codes. The Company however
continues to recycle steel and zinc in the construction
business. Use of alternative materials such as fly ash,
crushed sand and Ground Granulated Blast Furnace Slag
(GGBS) in its construction business has progressively
increased.
Sustainability roadmap
A Sustainability Roadmap 2012-15 drawn up by the
Company focuses on seven core thrust areas. These include
energy conservation & Greenhouse Gas (GHG) mitigation,
embedding a ‘safety culture’, water conservation,
material management, enhancing the health index of
the organisation and continuing social interventions.
Performance across all sustainability parameters are
disclosed in the Corporate Sustainability Report. (For more
details please refer to www.lntsustainability.com)
The Company has a registered project by its Infrastructure
Development arm (L&T IDPL) on Clean Development
Mechanism (CDM) under United Nations Framework
Convention on Climate Change (UNFCCC) related to
Green Power Generation Project (8.7 MW wind farm).
The National CDM Authority - Ministry of Environment
& Forests, Government of India has approved this as a
‘Project contributing to sustainable development’ and
given ‘Host country approval’ for the project on June 12,
2012. This project aims to reduce approximately 16,128
tonnes of CO2 equivalent per annum.
28
Principle 7: Responsible Public
Advocacy
The Company recognizes its role and responsibility in
contributing to and moulding policies that will affect the
industries of which it is a part. L&T executives are active
members of various industrial forums, chambers and
councils. The policies they help to formulate cover aspects
affecting manufacturing, business, products, services and
clients.
Institutes and industrial forums in which the Company
participates include:
• Association of Business Communicators of India
• Associated Chambers of Commerce and Industry of
India (ASSOCHAM)
• Bombay Chamber of Commerce & Industry (BCCI)
• Global Compact Network India (GCNI)
• Construction Industry Development Council (CIDC)
• Confederation of Indian Industry (CII)
• Federation of Indian Chambers of Commerce and
Industry (FICCI)
• Indian Electrical and Electronics Manufacturers
Association
• Indian Institute of Chemical Engineers (IIChE)
• National Safety Council
• National Fire Protection Institution
L&T’s senior executives interact closely with CII on focused
programmes of sustainable development, skill building
and are part of the working team on Environment, Health
& Safety (EHS), energy conservation and Corporate Social
Responsibility (CSR).
Principle 8: Support Inclusive Growth
Inclusive growth is at the heart of Company’s social
engagement strategy. The Company has defined the
Corporate Social Responsibility policy which has been is
approved by the Board. In 2013-14, the Company has
combined the sustainability & Corporate Social Initiatives
(CSI) cell and formulated an Apex Sustainability and
Corporate Social Responsibility (SCSR) team. This team
is responsible for driving both sustainability and CSR
programmes across the organization. The Company
has a following structure for implementation of CSR
programmes.
• The Apex SCSR Team at the Corporate level and SCSR
team at business level are established
• CSR projects are identified and implemented by unit
level SCSR team, area/branch offices and project-based
team with guidance from Apex and Business level SCSR
teams
• Ladies Club formed by spouses of L&T employees
participates in implementation of CSR projects
• Employee volunteers
- christened “L&Teers”
demonstrate personal commitment to CSR. Their efforts
are focused on health & education programmes
In tandem with NGOs and the society at large, L&T adopts
a collaborative approach to identify the requirements of
local community through need assessment surveys. This
forms an essential precursor to all social programmes.
Periodic impact assessment monitors the benefits received
by the community and recommends mid-course changes
needed, if any.
Community development programmes are either fully
adopted or supported by the Company as per the need
on case to case basis. Capacity building programmes for
local administrations are also conducted to successfully
run the programmes.
The following thrust areas have been identified for
community engagement:
• Health
• Education
• Skill Building
A snapshot of initiatives in above thrust areas is as follows.
Health:
L&T’s community health centres are located at Mumbai,
Thane, Ahmednagar, Hazira, Vadodara, Coimbatore,
L&T has community health centres at several locations around the
country. In addition, it also owns and operates mobile health vans
that provide marginalized communities access to health care.
Chennai and Kansbahal. These centres provide diagnostic
health services, including gynaecological, paediatric,
immunization, Chest & TB, ophthalmic consultation,
dialysis services etc.
Mobile medical vans owned and operated by L&T provide
marginalized communities access to modern health
care. These vans focus on health education- promoting
healthy behaviour, early diagnosis and referral. These vans
currently serve nine locations. In addition the Company
conducts health camps, and participates in public private
partnership (PPP) health projects like programs to spread
awareness of HIV /AIDS. This helps to greatly extend and
enhance the impact of L&T’s outreach programmes.
Education:
Educational interventions are focused on pre-primary
and primary section of schools. The Company supports
pre-schools (anganwadi & Balwadi), which have
‘Science on Wheels’ - L&T joins hands with an NGO to promote
science in schools. This is part of L&T’s broad spectrum of
community initiatives.
been established as community learning centres for
underprivileged children and provides infrastructure aids,
has established libraries, provides teaching aids, uniforms
and computers to schools. The Company runs specific
programmes in schools on subjects such as Mathematics,
Science, English, Health & Hygiene and Safety. Under the
29
‘Science on Wheels’ programme, mobile science vans visit
various schools in villages to impart knowledge through
experiential learning. In addition, summer camps, sports
activities, periodical health check-up camps are conducted
at adopted schools.
Skill building:
Eight Construction Skills Training Institutes (CSTI) across
India are currently imparting skills for school dropouts
and illiterate village youth. CSTI provides training in
construction trades such as carpentry, bar bending,
masonary, electrician, welding and scaffolding. Course
duration ranges from three months to six months.
Trainees are provided a stipend and hostel facility. Skill
training - it has been found has a transformative effect,
turning unemployed youths into productive members of
society. Certificates of proficiency are issued to trainees on
completion of the course. Trainees are free to start their
own ventures or are recruited by subcontractors at L&T’s
project sites.
L&T’s Construction Skills Training Institutes change the future
of underprivileged youth. In three to six months, they turn
unemployed, village ‘drop-outs’ into trained carpenters, masons,
electricians…
Project Neev is an initiative of the Company to work
towards enriching the lives of the differently abled through
interventions such as vocational training programmes.
Handicrafts and other products made by the participants
in the Project Neev programme are marketed through
various channels. This provides opportunities for gainful
employment while enhancing the sense of self worth.
30
The Company has reached to over eight lakh beneficiaries
through various CSR programmes and initiatives.
L&T Public Charitable Trust (LTPCT) conducts vocational
training programmes for women which provides
opportunities to generate livelihood through self-help
groups. The programmes impart skills related to tailoring,
beautician, home-nursing, food processing etc.
This year, with the construction of 50 additional check
dams in the Dahanu Taluka of Maharashtra, the total tally
of check dams has reached 150, facilitating irrigation
and ground water recharge for rural communities in the
drought affected areas.
Please refer ‘Social Performance’ section of Sustainability
Reports for further details on various social engagement
and community development programmes at Company
level.
The Company contributed
towards social development.
76.50 crore in 2013-14
Principle 9: Engage with and provide
value to customers
The Company’s business proposition and its competitive
edge revolve around the additional value it consistently
provides to customers. The high percentage of ‘repeat
orders’ and the long span of customer relationships indicate
a very high level of mutually satisfactory engagement.
Product performance is enhanced through regular
investments in R&D, design, technology and upgrading
of manufacturing processes. L&T also invests in developing
customer focused solutions. Projects incorporate state-of-
the-art technology, developed either through in-house
capabilities or sourced from global leaders.
Health and safety aspects are integrated at the product
design stage itself. Products are labeled and accompanied
by operation and maintenance manuals in line with
relevant codes and requisite specifications. The products
are tested and benchmarked against stringent national
and international standards such as BIS, IS, ISO and IEC.
Projects executed by the Company have extensive signage.
As a company that offers high value, capital-intensive
products and projects, L&T is in close and continuing
touch with its client base. Structured interactions
include customer meets, satisfaction surveys and training
programmes that increase skill levels and promote
best practices. These interactions facilitate resolution
of complaints, if any, and fruitful exchange of views.
Customer feedback initiates the process of performance
analysis and product enhancement.
All norms, standards and voluntary codes and guidelines
related to marketing communication are adhered to by the
Company. The brand management guidelines developed
by the Company’s Corporate Brand Management &
Communication (CBMC) department promotes clarity
and consistency in communications. The guidelines cover
product and corporate branding, advertising across all
media, signage systems, labeling, films and marketing
documentaries, promotion at exhibitions and trade fairs.
Regarding unfair trade practices, irresponsible advertising
and or anti-competitive behaviour, no stakeholder has filed
case against the Company in the last five years and there
are no pending cases as on March 31, 2014.
At L&T’s Switchgear Training Centres around the country, the
emphasis is not on ‘selling’ of brand or product, but on ensuring
that customers adopt good electrical practices and gain the
maximum value from switchgear.
The high percentage of ‘repeat orders’ that L&T secures across
all its businesses is possibly the most accurate reflection of
customer confidence in the Company’s offerings.
31
Annexure: Mapping of Annual Business Responsibly Report (ABRR)
Question
Reference
Section
Page Number
Section A : General Information about the Company
1. Corporate Identity Number (CIN) of the Company
2. Name of the Company
3. Registered Address
4. Website
Email id
5.
Financial Year Reported
6.
Sector(s) that the Company is engaged in (industrial activity code-wise)
7.
8.
9.
i.
List three key products/services that the Company manufactures/provides (as in bal-
ance sheet)
Total number of locations where business activity is undertaken by the Company
Number of International Locations (Provide details of major 5
ii. Number of National Locations
10. Markets served by the Company – Local/State/National/International
Section B: Financial Details of the Company
1.
2.
3.
4.
Paid up Capital (INR)
Total Turnover (INR)
Total profi t after taxes (INR)
Total spending on Corporate Social Responsibility (CSR) as percentage of profi t
after tax (%)
5.
List of activities in which expenditure in 4 above has been incurred: -
Section C : Other Details
1. Does the Company have any Subsidiary Company/ Companies?
2.
3.
Do the Subsidiary Company/Companies participate in the BR Initiatives of the par-
ent company? If yes, then indicate the number of such subsidiary company(s)
Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does
business with, participate in the BR initiatives of the Company? If yes, then indicate
the percentage of such entity/entities?
[Less than 30%, 30-60%, More than 60%]
AR
AR
AR
AR
AR
AR
AR
AR
AR
AR
AR
AR
AR
AR
AR
Page no 18
Page no 18
Page no 18
Page no 18
Page no 18
Page 19
Page 19
Page 19
Page 19
Page 19
Page 19
Page 19
Page 19
Page 19
Page 19
Section D: BR Information
1. Details of Director/Directors responsible for BR
a)
Details of the Director/Director the BR policy/policies
• DIN Number
• Name
• Designation
b) Details of the BR head
• DIN Number (if applicable)
• Name
• Designation
• Telephone number
• e-mail ID
AR
Page 19-20
3. Governance Related to BR
Indicate the frequency with which the Board of Directors, Committee of the Board or
CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, An-
nually, More than 1 year
AR
Page 21
32
Question
Does the Company publish a BR or a Sustainability Report? What is the Hyperlink for
viewing this report? How frequently it is published?
Section E : Principle-wise Performance
Principle1: Ethics, Transparency and Accountability
Reference
Section
AR
Page Number
Page 21
Does the policy relating to ethics, bribery and corruption cover only the company?
Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others?
AR
Page 21-22
How many stakeholder complaints have been received in the past fi nancial year and
what percentage was satisfactorily resolved by the management?
Principle 2 : Sustainable Products and Services
List up to 3 of your products or services whose design has incorporated social or envi-
ronmental concerns, risks and/or opportunities.
For each such product, provide the following details in respect of resource use (energy,
water, raw material etc.) per unit of product (optional):
Does the company have procedures in place for sustainable sourcing (including transpor-
tation)?
Has the company taken any steps to procure goods and services from local & small
producers, including communities surrounding their place of work?
If yes, what steps have been taken to improve their capacity and capability of local and
small vendors?
Does the company have a mechanism to recycle products and waste? If yes what is the
percentage of recycling of products and waste (separately as <5%, 5-10%, >10%).
Also, provide details thereof, in about 50 words or so.
The details related to
stakeholder complaints
are included in the Di-
rector’s Report Section
of this Annual Report.
AR
AR
AR
AR
Green buildings
constructed by the
Company’s Construc-
tion Business help
customers to reduce
energy and water
consumption, utilize
recycled material and
locally source most of
construction mate-
rial. The Company is
a leading EPC solution
provider for Solar
Photo Voltaic (PV)
based power plants
helping customers save
on the energy bills and
contribute to reduc-
tion of GHG emissions
from consumption of
indirect energy.
Page 22-24
Page 22-24
Page 22-24
Page 22-24
Page 22-24
33
Principle 3: Employee Well Being
Question
Total number of employees.
Total number of employees hired on temporary/contractual/casual basis.
Number of permanent women employees.
Number of permanent employees with disabilities
Do you have an employee association that is recognized by management?
What percentage of your permanent employees is members of this recognized employee
association?
Please indicate the Number of complaints relating to child labour, forced labour, invol-
untary labour, sexual harassment in the last fi nancial year and pending, as on the end of
the fi nancial year.
What percentage of your under mentioned employees were given safety and skill up
gradation training in the last year?
Principle 4: Valuing Marginalized Stakeholders
Has the company mapped its internal and external stakeholders?
Out of the above, has the company identifi ed the disadvantaged, vulnerable & marginal-
ized stakeholders?
Are there any special initiatives taken by the company to engage with the disadvan-
taged, vulnerable and marginalized stakeholders?
Principle 5: Human Rights
Does the policy of the company on human rights cover only the company or extend to
the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others?
How many stakeholder complaints have been received in the past fi nancial year and
what percent was satisfactorily resolved by the management?
Principle 6: Environment
Does the policy related to Principle 6 cover only the company or extends to the Group/
Joint Ventures/Suppliers/Contractors/NGOs/others?
Does the company have strategies/ initiatives to address global environmental issues
such as climate change, global warming, etc?
Does the company identify and assess potential environmental risks?
Does the company have any project related to Clean Development
Mechanism?
Has the company undertaken any other initiatives on – clean technology,
Energy effi ciency, renewable energy, etc.? Y/N.
34
Reference
Section
Page Number
Page 24
Page 25
Page 25
Page 25-26
Page 25-26
Page 26
Page 27
Page 27
Page 27-28
Page 27-28
Page 27-28
Page 27-28
Question
Are the Emissions/Waste generated by the company within the permissible limits given
by CPCB/SPCB for the fi nancial year being reported?
Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e.
not resolved to satisfaction) as on end of Financial Year.
Principle 7: Policy Advocacy
Is your company a member of any trade and chamber or association? If Yes, Name only
those major ones that your business deals with:
Have you advocated/lobbied through above associations for the advancement or im-
provement of public good?
Principle 8: Inclusive Growth
Does the company have specifi ed programmes/initiatives/projects in
Pursuit of the policy related to Principle 8?
Are the programmes/projects undertaken through in-house team/own foundation/exter-
nal NGO/government structures/any other organisation?
Have you done any impact assessment of your initiative?
What is your company’s direct contribution to community development projects -
Amount in INR and the details of the projects undertaken?
Have you taken steps to ensure that this community development initiative is success-
fully adopted by the community?
Principle 9: Customer Welfare
What percentage of customer complaints/consumer cases are pending as on the end of
fi nancial year.
Does the company display product information on the product label, over and above
what is mandated as per local laws?
Is there any case fi led by any stakeholder against the company regarding unfair trade
practices, irresponsible advertising and/or anti-competitive behaviour during the last fi ve
years and pending as of end of fi nancial year
Did your company carry out any consumer survey/ consumer satisfaction trends?
Reference
Section
Page Number
Page 27-28
The details related to
stakeholder complaints
are included in the Di-
rector’s Report Section
of this Annual Report.
Page 28-29
Page 29-30
Page 29-30
Page 29-30
Page 29-30
Page 29-30
Page 30-31
Page 30-31
35
STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS
Description
2013-14
2012-13
(Restated) $$
Statement of Profit and Loss
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
crore
Gross revenue from operations
57164
52196
53738
44296
37356
34337
25342
17938
14995
13362
PBDIT^^
6667
5473
6283
5640
4816
3922
2969
1784
1126
855
Profit after tax (excluding
extraordinary/exceptional items)
4905
4169
4413
3676
3185
2709
2099
1385
863
631
Profit after tax (including
extraordinary/exceptional items)
5493
4384
4457
3958
4376
3482
2173
1403
1012
984
Balance Sheet
Net worth
Deferred tax liability (net)
Loan funds
Capital employed
Ratios and statistics
PBDIT as % of net revenue from
operations @
PAT as % of net revenue from
operations $
RONW % *
Gross Debt: Equity ratio
Dividend per equity share ( ) ##
Basic earnings per equity share ( ) #
33662
29291
25223
21846
18312
12460
9555
5768
4640
3369
410
11459
290
8478
133
9896
263
7161
77
48
61
6801
6556
3584
45531
38059
35252
29270
25190
19064
13200
40
2078
7886
77
1454
6171
95
1859
5323
11.78
10.60
11.82
12.84
13.00
11.56
11.87
10.14
7.63
6.50
9.71
8.50
8.38
9.01
11.82
10.26
8.69
7.97
6.86
7.48
17.46
0.34:1
14.25
59.36
16.06
18.95
19.73
28.49
31.71
29.21
27.19
25.67
32.82
0.29:1
0.39:1
0.33:1
0.37:1
0.53:1
0.38:1
0.36:1
0.32:1
0.56:1
12.33
53.33
11.00
48.61
9.67
8.33
7.00
5.67
43.55
49.18
39.67
25.20
4.33
16.74
67.43
3.67
12.68
55.67
2.92
12.94
42.32
Book value per equity share ( ) ##
362.95
317.09
274.35
238.96
202.46
141.54
108.63
No. of equity shareholders
8,32,831
8,54,151
9,26,719
8,53,485
8,14,678
9,31,362
5,78,177
4,28,504
3,27,778
3,23,908
No. of employees
54,579
50,592
48,754
45,117
38,785
37,357
31,941
27,191
23,148
19,848
Profit before depreciation, interest and tax (PBDIT) is excluding extraordinary/exceptional items and other income
PBDIT as % of net revenue from operations = [(PBDIT/(gross revenue from operations less excise duty)]
Profit After Tax (PAT) as % of net revenue from operations = [(PAT including extraordinary/exceptional items)/(gross revenue from operations less excise duty)]
RONW [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous expenditure)]
Basic earnings per equity share have been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/restructuring
during the respective years
After considering adjustments for issue of bonus shares/restructuring during the respective years
(i)
(ii)
Figures for the year 2004-05 to 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary
The figures for the year 2012-13 have been restated as per the requirement of Accounting Standard (AS) 24 to exclude the financial results of erstwhile
Hydrocarbon business
The basic earnings per share do not include the results of Hydrocarbon business for the year 2013-14. However, the basic earnings per share figures for
all the corresponding previous periods are based on results which include Hydrocarbon business. Accordingly, the basic earnings per share for the year
2013-14 are not comparable with the figures of all the corresponding previous periods
(iii)
^^
@
$
*
#
##
$$
36
CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS
Description
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
crore
Statement of Profit and Loss
Gross revenue from operation
85889
75195
64960
52470
44310
40932
29819
20877
16809
14717
PBDIT^^
10754
9929
8884
7677
6423
5024
3706
2615
1585
1179
Profit attributable to Group shareholders
(excluding extraordinary/exceptional items)
4568
4911
4649
4238
3796
3007
2304
1810
1051
697
Profit attributable to Group shareholders
(including extraordinary/exceptional items)
4902
5206
4694
4456
5451
3789
2325
2240
1317
1050
Balance Sheet
Net worth
37712
33860
29387
25051
20991
13988
10831
6922
4964
3316
Deferred tax liability (net)
337
184
82
311
153
131
122
107
127
138
Loan funds
80153
62672
47150
32798
22656
18400
12120
6200
3499
3454
Capital employed
124863
103322
82790
63697
46839
35547
24192
14107
8697
7013
Ratios and statistics
PBDIT as % of net revenue from operations @
12.63
13.33
13.81
14.75
14.61
12.40
12.58
12.75
9.57
PAT as % of net revenue from operations $
5.76
6.99
7.30
8.56
12.40
9.35
7.89
10.92
7.95
8.13
7.24
RONW % **
13.71
16.47
17.26
19.38
31.23
30.64
26.92
38.01
32.30
36.12
Gross debt:equity ratio
2.13:1
1.85:1
1.61:1
1.31:1
1.08:1
1.32:1
1.12:1
0.90:1
0.71:1
1.06:1
Basic earnings per equity share ( ) #
52.97
56.53
51.21
49.04
61.27
43.17
26.96
26.73
16.50
13.80
Book value per equity share ( ) ##
406.65
366.59
319.64
273.97
232.04
158.84
122.87
80.92
59.57
41.63
Dividend per equity share ( ) ##
14.25
12.33
11.00
9.67
8.33
7.00
5.67
4.33
3.67
2.92
^^
Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items and other income.
@
PBDIT as % of net revenue from operation = [(PBDIT/(gross revenue from operation less excise duty)].
$ PAT as % of net revenue from operation = [(PAT including extraordinary/exceptional items)/(gross revenue from operation less excise duty)].
** RONW [(profit available for appropriation including extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous
expenditure)].
#
Basic earnings per equity share have been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/
restructing during the respective years.
## After considering issue of bonus shares/ restructuring during the respective years.
37
L&T - ORDER INFLOW
(INCLUDING INTEGRATED JOINT VENTURES)
100000
94108
10
e
r
o
r
c
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
81562
4.5
2012-13#
4.7
2013-14
Order inflow
GDP growth
e
g
a
t
n
e
c
r
e
P
9
8
7
6
5
4
L&T - ORDER BOOK
(INCLUDING INTEGRATED JOINT VENTURES)
200000
150000
143966
13%
162952
e
r
o
r
c
100000
50000
0
L&T - GROSS REVENUE FROM OPERATIONS AND PAT
70000
6
0000
50000
e
r
o
r
c
40000
30000
20000
10000
0
57164
5493
52196
4384
2012-13#
2013-14
7000
6000
5000
4000
e
r
o
r
c
3000
2000
1000
Gross revenue from operations
PAT including exceptional and extraordinary items
L&T - PBDIT AS % OF NET REVENUE FROM OPERATIONS
e
r
o
r
c
7000
6000
5000
4000
3000
2000
1000
0
5473
10.6
6667
11.8
2012-13#
2013-14
20
15
10
5
0
e
g
a
t
n
e
c
r
e
P
2012-13#
2013-14
Order Book
PBDIT as % of Net revenue from operations
Net revenue from operations and PBDIT exclude exceptional/extraordinary items
PBDIT
L&T - FIXED ASSET TURNOVER RATIO
L&T - SEGMENT-WISE ORDER INFLOW 2013-14
e
r
o
r
c
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
7754
6.7
8108
7.1
2012-13#
2013-14
8
7
6
5
4
s
e
m
i
t
f
o
r
e
b
m
u
N
Heavy Engineering
3323 crore
(4%)
Metallurgical &
Material
Handling
2574 crore
(3%)
Power
3277 crore
(3%)
Electrical & Automation
3878 crore
(4%)
Machinery &
Industrial Products
2311 crore
(2%)
Others
2349 crore
(3%)
Infrastructure
76396 crore
(81%)
Average net fixed assets
Fixed asset turnover ratio
Total order inflow (including integrated joint ventures) 94108 crore
# To facilitate like-to-like comparison, the figures for 2012-13 have been restated to exclude Hydrocarbon business which has been transferred w.e.f. April 1, 2013 to a
wholly owned subsidiary.
38
L&T - SEGMENT-WISE REVENUE 2013-14
L&T - SEGMENT-WISE ORDER BOOK
AS AT MARCH 31, 2014
Electrical & Automation
3657 crore
(7%)
Machinery & Industrial Products
1897 crore
(3%)
Heavy Engineering
6588 crore
(4%)
Metallurgical &
Material
Handling
9728 crore
(6%)
Power
15601 crore
(10%)
Electrical & Automation
1385 crore
(1%)
Machinery &
Industrial Products
crore
574
(0.4%)
Others
2008 crore
(1%)
Infrastructure
127068 crore
(78%)
Total segment wise revenue 57164 crore
Total order book (including integrated joint ventures) 162952 crore
L&T - SEGMENT-WISE RESULT 2013-14
L&T - SEGMENT-WISE EBIDTA MARGINS*
Electrical & Automation
434 crore
(7%)
Machinery & Industrial Products
209 crore
(3%)
Others
2315 crore
(4%)
Infrastructure
34515 crore
(60%)
Others
216 crore
(3%)
Infrastructure
3880 crore
(57%)
Heavy
Engineering
4291 crore
(8%)
Metallurgical &
Material
Handling
5357 crore
(9%)
Power
5132 crore
(9%)
Heavy
Engineering
686 crore
(10%)
Metallurgical &
Material
Handling
821 crore
(12%)
Power
518 crore
(8%)
e
g
a
t
n
e
c
r
e
P
25
20
15
10
5
0
21.3
17.9
17.0
18.2
16.3
13.6
14.2
12.7
13.1
11.7
11.3
12.3
11.0
7.9
Infrastructure
Power
2012-13
Metallurgical
& Material
Handling
2013-14
Heavy
Engineering
Electrical &
Automation
Others
Machinery &
Industrial
Products
* Earnings before interest, tax, depreciation and amortisation as
percentage of net segment revenue
L&T CONSOLIDATED GROSS REVENUE FROM
OPERATIONS AND PAT
10
9
8
7
6
5
4
e
g
a
t
n
e
c
r
e
P
e
r
o
r
c
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
75195
5206
85889
4902
2012-13
2013-14
6000
5000
4000
e
r
o
r
c
3000
2000
1000
Consolidated gross revenue from operations
Consolidated PAT including exceptional and extraordinary items
39
Total segment result 6764 crore
L&T CONSOLIDATED - ORDER INFLOW
140000
120000
100000
e
r
o
r
c
80000
60000
40000
20000
0
126992
102921
4.5
2012-13
4.7
2013-14
Order inflow
GDP growth
Directors’ Report
The Directors have pleasure in presenting their Annual
Report and Accounts for the year ended March 31, 2014.
FINANCIAL RESULTS
Profit before depreciation, exceptional
and extraordinary items and tax
Less: Depreciation, amortisation and
obsolescence
Add: Transfer from Revaluation Reserve
Profit before exceptional and
extraordinary items and tax
Add: Exceptional items
Profit before extraordinary items and tax
Add: Extraordinary items
Profit before tax
Less: Provision for Tax
Profit after Tax from continuing
operations
Profit from discontinued operations
Tax expenses on discontinued operations
Profit from discontinued operations
(after tax)
Profit for the period carried to Balance
2013-14
crore
2012-13
(Restated#)
crore
7,471.83
6,405.68
793.36
728.69
6,678.47
0.94
5,676.99
0.95
6,679.41
588.50
7,267.91
–
7,267.91
1,774.78
5,493.13
–
–
5,677.94
176.24
5,854.18
78.11
5,932.29
1,547.80
4,384.49
778.86
252.70
–
526.16
Sheet
5,493.13
4,910.65
Add: Balance brought forward from
previous year
Less: Dividend paid for the previous
year (including dividend
distribution tax)
Balance available for disposal
(which the directors appropriate as
follows):
Debenture Redemption Reserve
Proposed Dividend
Dividend Tax
General Reserve
Balance to be carried forward
Dividend
The Directors recommend payment of
final dividend of 14.25 per equity
share of 2/- each on 92,69,12,658
shares.
285.75
152.39
2.78
5,776.10
2.71
5,060.33
44.00
1,320.85
77.80
4,000.00
50.25
1,138.47
85.86
3,500.00
5,442.65
4,774.58
333.45
1,320.85
285.75
1,138.47
# The figures for the year ended March 31, 2013 have been
restated as per the requirement of Accounting Standard (AS)
24 to exclude the financial results of erstwhile Hydrocarbon
business undertaking.
40
59,045 crore as against
YEAR IN RETROSPECT
The gross sales and other income for the financial year under
review were
54,083 crore for
the previous financial year registering an increase of 9%.
The Profit before tax from continuing operations including
extraordinary and exceptional items was
7,268 crore and
the Profit after tax from continuing operations including
extraordinary and exceptional items of 5,493 crore for the
financial year under review as against
5,932 crore and
4,385 crore respectively for the previous financial year,
registering an increase of 23% and 25% respectively.
TRANSFER OF HYDROCARBON BUSINESS
During the year, the Company completed the transfer of
it’s Hydrocarbon Independent Company undertaking along
with related assets, liabilities and specific identified reserves
through a Scheme of Arrangement between Larsen & Toubro
Limited and L&T Hydrocarbon Engineering Limited, a wholly
owned subsidiary of the Company (“LTHE”) and their
respective Shareholders and Creditors under the provisions
of Sections 391 to 394 of the Companies Act, 1956. The
Appointed Date of the Scheme was April 1, 2013 and the
Effective Date was January 16, 2014.
DIVIDEND
The Directors recommend payment of dividend of
per equity share of 2/- each on the share capital.
14.25
DEPOSITORY SYSTEM
As the members are aware, the Company’s shares are
compulsorily tradable in electronic form. As on March 31,
2014, 97.58% of the Company’s total paid-up Capital
representing 90,44,84,644 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
32,32,101 equity shares upon exercise of stock options by
the eligible employees under the Employee Stock Option
Schemes.
The shareholders of the Company approved the issue of
bonus shares in the ratio of 1:2 through postal ballot on
July 3, 2013. The Company accordingly issued 30,82,94,576
bonus shares on July 15, 2013.
During the year under review, the Company raised
100
crore via issuance of Non-Convertible Debentures. Further,
the Company has drawn down long term foreign currency
loans in USD equivalent to approximately
296 crore. The
Company also refinanced its foreign currency loans of
approximately US$ 360 million in order to reduce its interest
cost.
During the year, the Company repaid a part of its long term
foreign currency loans, equivalent to about 775 crore and
redeemed Non-Convertible Debentures of 500 crore.
CAPITAL EXPENDITURE
As at March 31, 2014, the gross fixed and intangible assets,
12,226 crore and the
including leased assets, stood at
net fixed and intangible assets, including leased assets, at
8,237 crore. Capital expenditure during the year amounted
to 1,015 crore.
DEPOSITS
There are no deposits which were due for repayment on
or before March 31, 2014. All unclaimed deposits were
transferred to Investor Education & Protection Fund during
the year.
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 to locate the shareholders who have not
claimed their dues.
During the year, the Company has transferred a sum
of 94,49,482 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 11,58,07,343 as
on March 31, 2014.
SUBSIDIARY COMPANIES
During the year under review, the Company subscribed to
/ acquired equity / preference shares in various subsidiary
companies. These subsidiaries include SPVs executing
projects secured through Build Operate Transfer (BOT) route,
companies in shipbuilding, technology services or holding
companies making investments in companies such as those
engaged in power, financial services, real estate businesses,
etc. The details of investments in subsidiary companies
during the year are as under:
A) Shares acquired during the year:-
Name of the company
Type of Shares
No. of shares
L&T Construction Equipment Limited
(see Note 1)
Equity
6,00,00,000
L&T General Insurance Company Limited
Equity
L&T Hydrocarbon Engineering Limited
Equity
8,00,00,000
100,00,00,000
L&T Hydrocarbon Engineering Limited
Preference
50,00,00,000
Type of Shares
Special Equity
Name of the company
L&T Infrastructure Development Projects
Limited
L&T Metro Rail (Hyderabad) Limited
Equity
L&T-MHI Turbine Generators Private Limited Equity
Equity
L&T Power Development Limited
Equity
L&T Seawoods Private Limited
Preference
L&T Shipbuilding Limited
Equity
L&T Special Steels and Heavy Forgings
Private Limited
L&T Technology Services Limited
L&T Technology Services Limited
Larsen & Toubro Hydrocarbon
International Limited LLC
Equity
Preference
Equity
No. of shares
10,000
62,53,980
2,04,00,000
93,03,00,000
150,50,90,000
9,00,00,000
1,96,84,000
10,24,50,000
40,00,00,000
450
B) Equity Shares sold / transferred during the year:
Name of the company
Narmada Infrastructure Construction Enterprise
Limited
Number of shares
1,26,48,507
L&T Finance Holdings Limited (See Note 2)
10,04,34,612
Note:
1. During the year, the Company acquired 50% stake in
L&T Construction Equipment Limited (formerly known
as L&T-Komatsu Limited) from the JV partner. With this
acquisition, L&T Construction Equipment Limited is now
a wholly owned subsidiary of the Company.
2. The Company has to comply with the SEBI minimum
public shareholding requirement in L&T Finance
Holdings Limited by August 2014. Towards meeting this
objective, it has sold shares of L&T Finance Holdings
Limited during the year.
The Ministry of Corporate Affairs (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, subject to certain conditions being fulfilled by the
Company. As required under the circular, the Board of
Directors has, at its meeting held on January 22, 2014, 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 uploaded on the Company’s Website
viz. www.Larsentoubro.com and will also be available for
inspection by any shareholder at the Registered Office of
the Company, on any working day during business hours.
AUDITORS’ REPORT
The Auditors’ Report to the Shareholders does not contain
any qualification.
41
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 certificate obtained from the Statutory
Auditors, confirming 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 certificate obtained from the Statutory
Auditors confirming compliance, is provided in Annexure ‘C’
forming part of this Report.
PERSONNEL
The Board of Directors wishes to express its appreciation to
all the employees for their outstanding contribution to the
operations of the Company during the year. The information
required under Section 217(2A) of the Companies Act, 1956
and the Rules made thereunder, is 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.
BUSINESS RESPONSIBILITY REPORTING
As per Clause 55 of the Listing Agreement with the Stock
Exchanges, a separate section on Business Responsibility
Reporting forms a part of this Annual Report (refer pages
18-35). The activities carried out by the Company as a part
of its CSR initiatives during 2013-14 are covered in the same.
SUSTAINABILITY REPORTING
The Company has been one of the first engineering and
construction companies in India to publish its report
on Corporate Sustainability. 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 confirms:
ii.
iii.
iv.
v.
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, 2014 and of the profits of
the Company for the year ended on that date;
that proper and sufficient 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
During the year under review, Mr. N. Mohan Raj, the Nominee
Director representing ‘Life Insurance Corporation of India’,
resigned with effect from October 21, 2013. Mr. N. Mohan
Raj would have been liable for retirement by rotation at the
ensuing Annual General Meeting (AGM) of the Company.
The said vacancy is not proposed to be filled at the ensuing
AGM. The Board places on record its appreciation of his
immense contribution to the Company
Mr. S. Rajgopal and Mr. S. N. Talwar, Independent Directors
have desired to retire at the ensuing AGM. The Board places
on record its appreciation of their immense contribution to
the Company.
Mr. A. K. Jain, Mr. S. N. Subrahmanyan and Mr. A. M.
Naik retire from the Board by rotation and are eligible for
re-appointment at the forthcoming AGM.
Pursuant to the provisions of the new Companies Act, 2013
and revised Clause 49 of the Listing Agreement (effective
from October 1, 2014), the Company has decided the term
of Independent Directors as below:
Name of Director
Tenure upto
Remarks
Mr. Subodh
Bhargava
29.03.2017
Mr. M. M. Chitale
31.03.2019
To retire on attaining
age of 75 years as per
Company policy, on
29.03.2017.
As per revised Clause
49, for one term of 5
years from 01.04.2014
to 31.03.2019.
As per revised Clause 49,
the first term of 5 years
is from 01.04.2014 to
31.03.2019.
that in the preparation of the annual accounts, the
applicable Accounting Standards have been followed
and there has been no material departure;
Mr. M. Damodaran
31.03.2019
i.
42
Name of Director
Tenure upto
Remarks
COST AUDITORS
Mr. Vikram Singh
Mehta
31.03.2019
As per revised Clause 49,
the first term of 5 years
is from 01.04.2014 to
31.03.2019.
The Board has appointed Mr. Adil Zainulbhai as an
Independent Director of the Company from May 30, 2014
to May 29, 2019. Mr. Zainulbhai, appointed as an Additional
Director, will hold office till the ensuing AGM and is eligible
for re-appointment.
The notice convening the AGM includes the proposal for
appointment / 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 qualification.
AUDITORS
The Auditors, M/s. Sharp & Tannan (S&T), hold office until
the conclusion of the ensuing Annual General Meeting. As
per the provisions of the Companies Act, 2013, S&T are
eligible to be appointed for a maximum further period of
3 years. Certificate from the Auditors has been received to
the effect that they are eligible to act as auditors of the
Company under Section 141 of the Companies Act, 2013.
The Board recommends the appointment of S&T as Auditors
of the Company from the conclusion of the ensuing AGM
until the conclusion of the next AGM.
S&T has submitted the Peer Review Certificate dated
February 6, 2014 issued to them by Institute of Chartered
Accountants of India (ICAI).
The Cost Audit Report from M/s R. Nanabhoy & Co.,
Cost Accountants for FY 2012-13 was filed with MCA on
September 23, 2013.
The Company has appointed M/s R. Nanabhoy & Co., Cost
Accountants, for conducting the audit of cost records of the
Company for FY 2013-14, for applicable Product Groups
covered under Cost Audit Order No.52/26/CAB-2010 dated
November 6, 2012. The Report of the Cost Auditors is under
finalization and will be filed within the prescribed period.
The Board, on the recommendation of the Audit Committee,
has approved the appointment and remuneration of M/s R.
Nanabhoy & Co. as the Cost Auditors of the Company for the
financial year ending March 31, 2015. In case of any material
revision in scope pursuant to notification of the Companies
(Cost Audit Report) Rules, 2013, the Audit Committee is
empowered to finalise the revised remuneration subject to
approval by the Board. Hence, proposal for ratification of
remuneration of the Cost Auditor is not being placed in the
ensuing Annual General Meeting and will be placed before
the shareholders subsequently.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the customers,
supply chain partners, employees, Financial Institutions,
Banks, Central and State Government authorities, Regulatory
authorities, Stock Exchanges and various 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
Group Executive Chairman
Mumbai, May 30, 2014
43
Annexure ‘A’ to the Directors’
Report
(Additional information given in terms of notification issued
by the Ministry of Corporate Affairs)
[A] CONSERVATION OF ENERGY:
(a) Energy Conservation measures taken:
1
Improving energy effectiveness / efficiency of
Equipment and Systems
Integration of HVAC system of one building with
HVAC main system of another building at Chennai
campus.
Replacement of old inefficient Split / Ductable AC
units with energy efficient units.
Utilization of chiller for HVAC system at campuses.
Power generation through solar power.
Power factor improvement in Daikin VRV Load
Distribution System by installing APFC panels.
Installation of low Concentrating Solar Photovoltaic
Tracker based grid system at Construction Skills
Training Institute (CSTI) at Kanchipuram works.
Installation of fixed tilt Solar Rooftop Photovoltaic
system in various buildings at Chennai campus of
L&T Construction.
Use of Variable frequency drive in motors for
welding positioners, EOT cranes, AHU , Water
pumps, Welding trolleys, Rotary table & Machine
tools to improve the motor efficiency.
Providing energy efficient cooling tower in place of
old cooling tower in big rolling machine.
Modification PLC program of SIRMU DHD Machine.
Use of Timers & efficiency check for HVAC and
Street Lighting to conserve energy
Installation of solar light pipes & solar water heaters
to reduce use of conventional energy.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Installation of occupancy sensor in shops and
offices for air conditioner load.
Installation of VFDs for LT/CT motions on cranes.
Reduction of the shop floor lighting power
consumption by using a timer to switch-off the
lights during dinner time.
Using lower power DG sets at night.
Application of heat shield paint Admin building
terrace for reduction in HVAC load.
Reduction of Heat Treatment Energy by combined
normalizing and tempering cycle and effective
utilization of demand at Foundry Business Unit
(FBU).
Fixing VVF drive in 60T Hoist in the EOT crane at
Rubber Processing Machinery Unit (LTRPM).
Effective time management for Air conditioning
system through use of timers.
Server virtualization resulting into saving in power
consumption.
Conducting awareness campaign in the campuses
for reduction of the electricity usage.
Installation of solar street lights in various campuses.
Installation of motion sensors meeting rooms.
Installation of energy monitor in data center for
monitoring electricity consumption.
Installation of Variable Frequency Drives for Air
Heating Units.
Arresting air leakages, reduction in use of
compressor.
Installation of Energy efficient chiller compressor at
centralized air conditioned plant at Kansbahal.
Replacement of stand-alone air dryer by centralized
refrigerant type air dryer at Kansbahal.
Observing ‘Walk-to-Work’ day at Kansbahal on 2nd
Saturday of each month.
Installation of Bio toilets (designed by DRDO) to
conserve energy on sewage treatment.
2
Improving energy effectiveness / efficiency of
Manufacturing Processes
Installation of transparent sheets & sky light panels
on shop sides for using day light obviating use of
hand lamps during day time.
Installations of turbo ventilators for shop floor
roofs.
Use of 62.5 KVA DG set for continuous operation in
ESS Test facility when required instead of 400 KVA
DG set provisioned by the building owner thereby
saving energy.
(cid:3)(cid:122) Modification of acid fume extraction system in
galvanizing and fitting air compressors with VFD
in fabrication at transmission line tower factories.
(cid:3)(cid:122)
(cid:3)(cid:122)
Replacement of rotary speed switch with VVVF
drives in radial drilling machines.
Purchase of Green Power from third party to reduce
the carbon footprint.
(cid:3)(cid:122)
Use of Biogas plant to reduce the canteen waste.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
44
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Reduction in NG consumption in PWHT of top tube
sheet of EO reactor by modifying internal firing
arrangement thereby reducing cycle time from 55
hours to 43 hours.
Conducting Free Air Delivery (FAD) test on
compressor of Old Messer, Messer Plasma CNC
cutting & HFS-4B to reduce power consumption.
Development of Electrical resistance furnace for
warm edge breaking of 110 thick plate.
Optimization of LPG consumption in Shop floor
by Implementing Hydrogen gas for CNC cutting
machine in place of LPG resulting in annual Carbon
emission reduction of around 25 Tons and annual
savings of 0.1 Tons of LPG.
(b) Additional investments and proposals, if any,
being implemented for reduction of consumption
of energy:
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Replacement of VAM based HVAC system with
water screw chiller based HVAC.
Backup power for SKODA-1,2 & 3 in Machine shop
catered by UPS.
Installation of DC power source Auto OFF manual
ON system in SAW in all the power sources.
Drip irrigation for newly developed Garden area, to
conserve energy of water pump & save water.
Installation of Lighting transformer in shop & area
lighting in workshops.
Implementation of hood for NG burner during
pre-heating process.
Optimization of LPG consumption in canteen
by replacing LPG stove with Biomass smokeless
stove (fuel-agri waste pellets manufactured from
Groundnut shell, Sawdust, Coconut Husk, Cotton
stick etc.) resulting in annual LPG savings of 1.3
Tons.
Spreading awareness campaign in line with Energy
Conservation.
Installation of solar water heater in Engineer’s
Hostel at Kansbahal.
(c)
Impact of measures at (a) and (b) above
for reduction of energy consumption and
consequent impact on the cost of production of
goods:
(cid:3)(cid:122)
The measures taken have resulted in substantial
savings in cost of production, cost of power
consumption, energy savings, and reduction in
maintenance cost, reduction in carbon dioxide
emissions & processing time / cycle time.
(cid:3)(cid:122)
The Control &Automation (“C&A”) business
unit located at Unnati building at Mahape (Navi
Mumbai) was awarded LEED (Leadership in Energy
and Environmental Design) Gold certification by the
U.S. Green Building Council. LEED is the world’s
preeminent certification programme for the design,
construction and operation of high performance
green buildings. LEED certification encourages
energy efficient, water conserving buildings that
use sustainable or green resources.
(d) Total Energy Consumption and Energy
Consumption per unit of production as per
Form A in respect of industries specified in the
Schedule:
FORM A
FORM FOR DISCLOSURE OF PARTICULARS WITH
RESPECT TO CONSERVATION OF ENERGY
A. POWER & FUEL CONSUMPTION
FOUNDRY
Reporting
Year 2013 -14
FOUNDRY
Previous Year
2012-13
293.879 L
KWhr
258.492 L
KWhr
2,027.98 L
1,734.95 L
6.90
(Average)
6.71
(Average)
2.3114L KWHr 4.2387L KWHr
1. Electricity
(a) Purchased Unit
Total amount
Rate / Unit
(b) Own generation
(i)
Through diesel
generator Unit
Unit per ltr. Of diesel
oil
3.08 Units
3.33 Units
Cost / unit
18.99
13.17
(ii)
Through steam turbine
/ generator
Unit
Unit per ltr. of fuel oil /
gas,
Cost / unit
2.
Coal (specify quality and
where used)
Quantity (tones)
Total cost
Average rate
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
45
3. H S D
4.
Quantity (k.ltrs.)
Total amount
Average rate
Others/internal generation
(please give details)
Quantity (k.ltrs.)
Total cost
Rate / unit
A.
Consumption per unit of
production Stands (if any)
Products (with details) unit
Casting
Ferro Alloy
Electricity
Casting
Ferro Alloy
H S D
Casting
Ferro Alloy
Coal (specify quality)
Others (specify)
FOUNDRY
Reporting
Year 2013 -14
FOUNDRY
Previous Year
2012-13
390.91
258.895 L
66.23/Ltr
372.17
235.509 L
63.28/Ltr
NIL
NIL
NIL
NIL
NIL
NIL
12,200 Tons
–
KWH/Ton
1,793.08
–
8,984 Tons
–
KWH/Ton
2,060.02
–
27.71 Ltr/Ton
–
NIL
NIL
41.43 Ltr/Ton
–
NIL
NIL
[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.
Specific areas in which R&D carried out by the
Company:
The research facilities are augmented with the latest
computer workstations, operating systems and
communication network / data storage facilities. A
fully computerized Technical Library, having the latest
technical publications, research journals and product/
technology databases further supplement the R&D
resources. Emphasis is given on creating Intellectual
Properties (IP) and managing the Intellectual Property
Rights (IPR). Some of the areas in which R&D was carried
out during the year are:
(cid:3)(cid:122)
Development of dry mortar for Buildings.
(cid:3)(cid:122)
Studies on M120 Ultra High Performance Concrete
and Dam concrete.
(cid:3)(cid:122)
Development of concrete rheometer.
(cid:3)(cid:122)
(cid:3)(cid:122)
Development of E-Pad for site construction
engineers.
Studies on horizontal and vertical connections of
precast concrete wall panels.
(cid:3)(cid:122)
Development of automatic creep testing equipment.
(cid:3)(cid:122)
Studies on creep of M45 and above grade concrete.
(cid:3)(cid:122)
Development of Emulsion based cold mix with
Recycled Asphalt pavement material for binder
course.
(cid:3)(cid:122)
Studies on PPA modified bitumen.
(cid:3)(cid:122)
Development of Apparatus for Bituminous layer
Bond strength evaluation.
(cid:3)(cid:122)
Development of Modal Pile Load Test.
(cid:3)(cid:122)
Studies on rectifying foundation settlement by
chemical injection.
(cid:3)(cid:122)
Studies on foundations and hilly slope stability.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Development of alternate methods for curing of
concrete in metro projects.
Development of Seasonal-Tilt Module Mounting
Structure for enhancing power generation from
Solar Power Plants.
Study of fills used in the thermal design of Natural
Draft Cooling tower (NDCT) all around the world
and their present day for current projects.
Designing optimum forebay layout for Condenser
cooling water pump house by way of CFD analysis.
Analysis of plate / shell elements using sandwich
theory based on Eurocode.
(cid:3)(cid:122)
Development of welding Simulation Technology.
(cid:3)(cid:122)
Development of LNG vaporizer.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Development of cyclone separator for FCC
regenerator in refinery.
Weapon Launch Systems – Structures, Mechanisms,
Stabilization Systems, Drives & Control Systems.
Field & Air Defence Guns – Ballistics, Mechanisms,
Optronics.
(cid:3)(cid:122)
Fire Control Systems, C2 Systems.
(cid:3)(cid:122)
Robotics & remotely operated / unmanned systems.
(cid:3)(cid:122)
Development of Controlled Low Strength and low
density filling materials.
(cid:3)(cid:122)
RF, Microwave & telemetry systems.
(cid:3)(cid:122)
Image Processing & Video Analytics.
46
(cid:3)(cid:122)
Composites – Design & Process Technologies.
(cid:3)(cid:122)
Development of ion-mobility spectroscopy (IMS)
based chemical agent monitors (CAM).
(cid:3)(cid:122)
Development of military communication hardware:
(cid:3)(cid:122)
Radio Relay
(cid:3)(cid:122)
Field Wireless system
(cid:3)(cid:122)
Vehicle Intercom System
(cid:3)(cid:122)
Indigenous development of:
(cid:3)(cid:122)
CNC UT Machine for Canister
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Facility for ‘Al’ Nano coating on large Air frame
(Adv. Composites)
Improvised Prepreg manufacturing to reduce
delamination risk in Adv. composites
Raw material to reduce import dependency for
Airframe
Process improvement for 25 % reduction in UD
Prepreg for Canister (Qty / Cannister)
(cid:3)(cid:122)
(cid:3)(cid:122)
Development of Investment Cast Nozzles for
Chevron Lummus. Process Reactor Internals.
Development of Zinc Nickel plating (Environmental
friendly process) as an alternate process for
cadmium plating (Cyanide process).
(cid:3)(cid:122)
Development of new products in mechanical tyre
curing presses.
Electrical & Automation’s in-house design & development
capabilities are rated among the best in the industry.
The R&D facilities (Switchboard Design & Development
Centre) at Powai–Mumbai, Ahmednagar, Mysore
and Coimbatore are approved by the Department of
Scientific & Industrial Research, Ministry of Science &
Technology.
During the year, two new R&D Centres were introduced
viz. EDDC (Embedded Design & Development Centre)
at Powai and PEATC (Power Electronics & Automation
Technology Center) at Mahape - Navi Mumbai. These
centres network with international labs, testing centres
and academic institutions for sharing of knowledge
on new technology trends and introducing those for
customers in different segments.
During the year, the Electrical Standard Products business
unit introduced some new products that included RTO
and RX thermal overload relays, change-over-switches
of higher ratings and remote motor operators for the
same. New AU Series of Final Distribution Products,
exhibited at ELECRAMA 2014, won the ‘Best Product
Award’.
The Metering & Protection Systems business unit is
engaged in the design and development of electricity
meters and protective relays. The technology used in
the design of these products has been indigenously
developed. Thrust on R&D activities include the
development of new, cost-optimized meter platforms
that offer better features, development and integration
of modules to facilitate remote communication of meter
data over Radio / GSM and development of Pre-Paid
Meters, Smart Meters, Protective Relays and Panel
Meters.
New products introduced in the year are 3-phase Class
0.5 accuracy meter platform, 1-Phase meter, Pre-paid
meter for Indonesia market, Class 0.5 Accuracy Multi-
Function Meter, Over Current Earth Fault Relay and RS
485 Module for 3-phase DIN meter.
During the financial year, the Electrical Systems &
Equipment (“ESE”) business unit introduced new
products as well as enhanced the existing products in
the form of Intelligent Controllers for Feeder & Motor
Protection of Intelligent Switchgear assemblies. Some
of the landmark achievements were Low Voltage Motor
Protection Relay - MCOMP - obtaining an enhanced
certification of conformity to the new Profibus DP-V1
communication standards for Motor Control from DCS.
This conformity facilitates enhanced positioning of
MCOMP as a best-in-class Intelligent Motor Controller
to meet the international and domestic demands for
Intelligent Switchgear Control & interface with DCS/
SCADA. Further, LV and MV Feeder Protection Relays
obtained Certification of Conformity to the IEC
61850 standard towards interoperable substation
communication protocol. This will enhance ESE’s
competitiveness to bid and execute orders for LV
and MV Intelligent Switchgear assemblies. ESE now
meets some of the most demanding requirements of
Substation Device Integration & Automation Solutions
internationally as well as in-country for Utility and
Industry segments.
Moreover, the launch of complete design verified
range of LV distribution switchboards type ‘Ti’ along
with 33 kV GIS integration at Ahmednagar paved the
way for ESE’s positioning in the infrastructure segment,
especially in India’s Metro Rail Networks and Data /
Technology centers.
Technology absorption by C&A business unit included
Smart Card Reader for hazardous environment,
Substation Automation with IEC 61850 interface on
iVision Platform, Meter Data Acquisition System for
Smart Gird & Technology transfer from Mitsubishi Heavy
47
Industries (“MHI”), Japan for the Distributed Control
System of Supercritical thermal power plants.
following key areas have been identified under R&D
Action Plan:
C&A also introduced a new R&D unit (PEATC- Power
Electronics & Automation Technology Centre) which
will enhance the in-house expertise for product
development.
2. Benefits derived as a result of above R&D:
(cid:3)(cid:122)
(cid:3)(cid:122)
In house testing facility is created as import
substitution.
Reliable test results and timely delivery of test
results.
(cid:3)(cid:122)
Sustainable product and environment friendly.
(cid:3)(cid:122)
National standards improvement.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Alternative methods of construction have the
potential to reduce the consumption of natural
materials i.e. Sustainability based construction.
In house methodology on thermal design of NDCT
can be utilized for future projects.
In house CFD analysis resulted in reduction in time
for optimizing the design works.
Awareness of International codes & standards
based on which the technology is designed.
Indigenisation & development of products with
prospects of order inflow / commercialisation for
Indian Defence & Aerospace sector.
Requirements of IMS CAM for Homeland security
and Indian Defence with prospects of large order
inflow.
Increased self-reliance and savings in Foreign
Exchange.
Pollution control- Zinc Nickel plating.( Alternate
plating process for Cadmium painting).
(cid:3)(cid:122)
Competing with international competitors.
(cid:3)(cid:122)
Tangible and intangible benefits like cost reduction /
saving foreign exchange, expanded product range,
competency development and expansion in
offerings to the power sector.
(cid:3)(cid:122)
Addressing different markets and niche segments.
(cid:3)(cid:122)
Maintain technology control and have a
contemporary product portfolio.
3. Future Plan of Action:
(cid:3)(cid:122)
Development of thermal resistant spray plaster.
(cid:3)(cid:122)
Standardization of precast connections.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Application of light weight concrete elements at
site.
Construction and mechanical evaluation of the trial
road stretch at site with recycled materials.
Studies on alternative materials for construction in
buildings.
Studies on alternative materials for construction in
road.
Alternative methods to conserve water in large
construction sites.
Studies on service life improvement of concrete and
steel structures.
Development of new / upgraded products in
defence & aerospace equipment.
SPM for Airframes integration & perforation
drilling.
(cid:3)(cid:122)
Winding attachment for airframes components.
(cid:3)(cid:122)
Plate bending machine with Pre-bending capacity
of 60 mm thickness.
(cid:3)(cid:122)
Emissivity meter for Airframe.
(cid:3)(cid:122)
Development of Hydraulic presses for passenger car
and truck- bus tyres and development of all electric
presses for the same segment by LTRPM
(cid:3)(cid:122)
Tyre building machine for Aircraft tyre
(cid:3)(cid:122)
HTCP 36” Economy version
(cid:3)(cid:122)
48” Stack PCI
(cid:3)(cid:122)
46” & 52” Independent cavity HTCP
(cid:3)(cid:122)
HTCP 62”& 66” for TBR segment
(cid:3)(cid:122)
Bladder presses for sizes 42”, 55”, 90”
(cid:3)(cid:122)
Launch of AU Series of Final Distribution products.
(cid:3)(cid:122)
Initiation of major new product development
programs in Powergear, Controlgear and LV Panels
and Systems which, in addition to setting global
benchmarks in the industry, would also address
the needs arising from the increased use of non-
conventional energy sources in the future.
Future development activities are identified based on
the expected needs of upcoming Projects as well as
requirements for in-house capability development. The
(cid:3)(cid:122)
Greater emphasis in product development programs
to environmental friendly design concepts in
terms of material consumption, raw materials and
48
processes as also energy usage which is expected
to lend a cutting edge to the product portfolio and
enhance the market share and profitability.
(cid:3)(cid:122)
Initiating life cycle management programs for
product upgrades based on customer feedback
and development of new applications for deriving
competitive advantages.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
4. Expenditure on R&D:
Capital
Recurring
Total
Total R&D expenditure as a percentage
of total turnover
crore
2013-14
66.90
107.14
174.04
0.30%
TECHNOLOGY ABSORPTION, ADAPTATION AND
INNOVATION:
1.
Efforts in brief made towards technology
absorption, adaptation and innovation:
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Design & Construction of MIAL Hangar – 145m
long column-free span Hangar in India & longest
span trussed structure used in a building (other
than bridges) in Asia.
Using CFD (Computational Fluid Dynamics) as
a tool for moving from prescriptive design to
performance based design in the area of area of
HVAC applications.
Design of a slender 132.2m high observation tower
for TCS, Siruseri using steel & concrete composites.
Three nos. of 2.4 kW Micro-Wind Turbines installed
at TC-II Building, L&T Construction Campus,
Chennai as part of pilot project on Micro-grids.
Development of understanding on CIGS based thin
film modules and Low Concentrating Photovoltaic
(LCPV) modules by employing the same for in-house
pilot projects.
Study of technology and application of
Advanced Micro-grid Control Systems through its
implementation for in-house pilot projects.
(cid:3)(cid:122)
Development of full span U trough precast system
for Kochi Metro project.
(cid:3)(cid:122)
Development of movable winch launching girder.
(cid:3)(cid:122)
Development of modular type temporary bridge for
marine construction.
Use of 4D Analysis software RM in design of
continuous spans
Proposal for precast construction for portal frames
without modifying approved designs.
Planned, designed, fabricated and erected a
Circular Spider / Truss / Strong Back for erecting
the Inner Containment Liner in one single ring
(Pre-fabricated Ring Liner) by eliminating all the
backing trusses in liner in place of liner erection
in discrete panels which involve enormous in-situ
welding. This is successfully implemented for Ring
Liner erection resulting in considerable reduction
in cycle time. This is attempted first time in Indian
Nuclear Power Plants. This resulted in reduced cycle
time, increased productivity and reduction in steel
Quantities.
(cid:3)(cid:122)
(cid:3)(cid:122)
Introduction of Temporary retaining wall around
openings in Station boxes which will ensure that
substantial work will be completed and the Key
dates of the project will not be affected.
Improvement in permanent liner in conditions of
soft clays up to 18m where alternative of segmental
temporary liner requires thick liner and oscillator
arrangement to retrieve pile.
(cid:3)(cid:122)
Simulation of Blast analysis - Confined explosion/
inside tunnel/ above a tunnel.
(cid:3)(cid:122)
Simulation of Underwater explosion in a conduit.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Simulation of missile penetration in a concrete slab
to study the damage level.
Analysis of time history effect of blast load in a
concrete element with reinforcement.
Introduction of New Project Management software
TILOS-8 (For Linear Projects).
Development of 4D Simulation using Navisworks
software.
(cid:3)(cid:122)
Hybrid Concrete lining for Surge-Shaft.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
In-house thermal designing of NDCT covering all
the aspects of Kroger handbook, considered as the
basis of thermal design for NDCTs.
Modifications of Heating & Ventilation load
calculations from ISHRAE recognized manual
calculations to Hourly Analysis Program software
based on ASHRAE codes.
Use of AFT FATHOM Hydraulic analysis based
on relevant international codes & standards for
Pumping head calculations.
49
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Implementation of a methodology to calculate
drainage volume for each drain point in loop for a
complex piping loop involving both above ground
and buried pipes with numerous fittings and
equipments.
Use of ANSYS 14 analysis by means of numerous
iterations to finalize design and erection.
Construction of Expansion Joints in the Cold Water
Tunnels of NDCT and IDCT (Induced draft cooling
tower) Packages of Projects, using SPIGOT type
joints with DOUBLE Water Stoppers.
Development of in-house software codes for design
of Beams, Columns and Walls as per AERB codes
and extensive use of the same.
Technology absorption & adaptation
for
development of Combat Vehicles & Artillery
Systems.
(cid:3)(cid:122)
Supply of Deck panels for Mission Mars (ISRO).
(cid:3)(cid:122)
Indigenization of design, specifications and
adaptation to International conditions of various
components for Rubber Processing Machines by
LTRPM.
(cid:3)(cid:122)
Indigenization of Hub & Frame castings by Foundry
Business Unit (FBU).
2.
Benefits derived as a result of the above efforts,
e.g., product improvement, cost reduction,
product development, import substitution, etc.:
(cid:3)(cid:122)
Indigenisation (import substitution) & development
of products for Indian Defence & Aerospace sector.
(cid:3)(cid:122)
Product improvement.
(cid:3)(cid:122)
Increase in know how within the country.
(cid:3)(cid:122)
Cost reduction.
(cid:3)(cid:122)
(cid:3)(cid:122)
Rapid adaption and agility to meet end-user
requirements.
Enhanced product life-cycle and technical support
to Indian Defence & Aerospace sector.
(cid:3)(cid:122)
Obsolescence management.
3.
Information regarding technology imported
during the last 5 years
S.
No.
a)
b)
Technology Imported
Year of
Import
Status
Design of control valves 2011-12 Under absorption
Crushing Technology
On continuous basis at
Kansbahal
50
[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 is a diversified conglomerate and deals in
a diversified range of products worldwide. The Company
has set up offices abroad and appointed agents in
various countries to boost exports. The Company is
on a continuous basis 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 offices and joint
ventures with world leaders. Its large technology base
and pool of experienced personnel enable it to offer
integrated services in world markets.
Heavy Engineering IC (HE IC):
New Qualifications / Approvals were undertaken for
niche market like Titanium clad equipments with various
licensers.
Export efforts have been initiated in tapping
Replacement Market business in Indonesia, Venezuela
& New Zealand, New market in Iraq and CIS countries,
Potential market for Modification, Revamp and Upgrade
projects for refineries in Middle East countries, New
Fertilizer investments in USA & Africa, LNG equipment
business in USA and New opportunities in Petrochemical
emerging out of increased Shell Gas availability. Efforts
are being made for alignment with Leading Process
Licensors such as KBR, Urea Casale & Invista to increase
Export business.
HE IC has entered into new geographical market by
supplying Ammonia and Urea Equipment to China. It has
also received orders for supply of fertilizer equipment &
LNG equipment from USA and CIS, supply of Ammonia,
Urea equipment and Boiler package to Nigeria and
supply of Equipment for Boiler & Reactor packages to
Hydrogen plant in Russia. It is also expecting business
from Ammonia Casale / UHDE for supply of Ammonia
Converter Baskets.
HE IC has entered into technical business tie-ups in
various areas. It has completed capability assessment
with CARE for Petróleos de Venezuela (PDVSA) and with
Anadarko for Mozambique LNG project.
In the current financial year, HE IC has exported critical
static reactors to Saudi Arabia and booked new orders
for exports to Mexico, Venezuela, etc. The US, Middle
East and South East Asian markets are promising with
new investments and up-gradations. However, projects
in South America & Africa are not likely to pick up as
per expectations. HE IC expects new opportunities to be
driven by Shale gas, refinery up-gradations, clean fuel
projects and integrated petrochemical segments.
HE IC has set up International Marketing Network with
expatriate local language speaking Country Managers
and Business Directors in Americas, ME, Russia & CIS,
Far East, Europe, etc. HE IC is also pursuing Lakshya
strategic initiatives to enhance order inflows from Africa,
Russia, CIS and Iraq. It is also focusing on opportunities
in replacement markets like USA and has tied up with
licensors such as Chevron, Shell, Axens, Haldor Topsoe,
etc. HE IC is also focusing on the LNG Market in USA,
Africa & Russia for CS & SS Heavy Wall Vessels.
HE IC has taken certain initiatives for Power Plant
equipments. It has renewed Alstom Qualification
for Condenser and Feed-water Heater for projects
worldwide which has resulted in getting an order for
4 condensers for Philippines. HE IC expects additional
prospects in Israel, Panama, Thailand, Netherlands in
the coming year.
HE IC is in the process of initiating EN standard
qualification with Alstom to target power plant projects
in Europe Region, pre-qualification with Siemens to
supply to projects worldwide and bid to MHI Japan for
projects worldwide. In the Gasifier segment, HE IC has
initiated pre-qualification with Linde for syngas cooler &
gasifier reactor and also submitted pre-qualification for
Shell’s Enterprise Framework Agreement for Low Alloy
Steel reactors.
HE IC has been exploring opportunities for export of
Defence, Nuclear Power & Aerospace equipment as
well. Orders received for supply of Casks & Canisters to
US Customer, Supply of equipment to Israel Aerospace
Industries, MBDA & ITER (International Thermonuclear
Experimental Reactor).
Construction IC:
Power Transmission & Distribution‘s (PT&D) International
Business Units offer complete solutions in the field
of Power Transmission & Distribution including High
Voltage Substations, Power Transmission Lines, EHV
Cabling and EI&C Works for Infrastructure Projects such
as Airports , Oil & Gas Industries etc. in Gulf & African
Countries. During the year 2013-14 major orders were
bagged in Qatar. The IC is also focusing to expand
its business horizon in ASEAN and African countries
with special focus on Kenya, Mozambique and Algeria.
However, UAE witnessed slowdown in Transmission &
Distribution sector investments.
Business Environment:
The international business grew substantially, supported
largely by Qatar’s ambitious plan to augment the
existing power system network to fulfil their growing
infrastructure needs & meet future demand while
Kuwait showed positive signs of bulk investments in
power transmission sector. Saudi Arabia has become
one of the key area of focus as its central utility is going
for vast expansion plans to meet its demand forecast.
Business Performance:
IC bagged a remarkable order in Qatar for turnkey
construction of 18 No’s of EHV GIS Substations and
151 KM of EHV Cabling works for KAHRAMAA. This
order enjoys the feat of being the Single largest ever
EPC Order for PT&D IC. The business was also successful
in bagging a Breakthrough order in O&G segment in
UAE by securing an order from GASCO to build 220/33
kV GIS substation.
The other major contracts include 132kV GIS substation
orders from Ministry of Electricity & Water and Kuwait
Institute of Scientific Research in Kuwait.
The IC also bagged prestigious orders to execute 230kV
Transmission line works at Abu ali plant for ARAMCO &
110kV Transmission line projects in western region of
Saudi Arabia for Saudi Electricity Corporation.
This year also marks a noteworthy achievement in our
internationalization initiative. The IC made a successful
foray into African market by bagging a 400kV substation
order from SONELGAZ, a prominent utility in Algeria.
Volatility in Commodity Prices:
The Commodity Price had lot of volatility, especially
in Copper, however the IC protected its margin by
mitigating the risk through hedging.
Outlook:
In International (Gulf) market the business is poised
for a positive growth in view of upcoming prospects in
Power & infrastructure projects. Strong opportunities
are foreseen on the backdrop of GCC investment plans
on Grid Strengthening & Power System Interconnection.
Utilities in UAE are mainly concentrating on upgrading
the existing network offering significant business
potential. There is a rapid increase in power demand in
countries such as Qatar, Kuwait, Saudi & UAE to expand
oil production in order to meet its rising requirement
across the globe which necessitates augmentation of
power distribution networks.
Africa’s Low electrification rate serves as a hindrance
to economic growth & industrialization, addressing this
51
issue has been a key emphasis for local government
especially among East African countries leading to
bulk investments, unleashing significant potential &
opportunities for us in T&D sector. Intensifying power
demand in South East Asian countries also offers huge
potential.
Electrical & Automation IC (EAIC):
During financial year 2013-14, the LV & MV switchboard
businesses have got orders from the Middle-East market,
especially from the oil & gas sector.
The Cluster Sales Unit (CSU) is responsible for
implementation and delivery of the Lakshya plan.
During the year, EAIC business filed as many as 153
Patent, 06 Trademark, 47 Design and 1 Copyright
applications in India, along with 9 foreign applications
(1 TM, 1 Design, 7 PCT National Phase). This was the
7th consecutive year of filing more than 100 Patent
applications.
Future Outlook:
EAIC is confident of higher growth with the Utility
segment indicating increased activities along with
revival in the Building segment in GCC region. Africa
has become a destination of new opportunities.
Prospects of turnkey automation projects are improving
and opportunities in the energy management segment
should contribute to better growth for automation
products and solutions.
Power IC:
During the year Power business achieved a major
breakthrough in the overseas market by securing an
EPC order for 360 MW combined cycle power project
at Bheramara in Bangladesh. The business is also
pursuing other prospects in Bangladesh and the South
East Asian region. Additionally, the Power Business was
also successful in securing orders for supply and service
of HRSG’s, also in Bangladesh.
The Piping Center of Power IC, which manufactures high
pressure piping spools, is actively pursuing the export
market and during the year received orders worth USD
11 million from USA.
The joint ventures with Mitsubishi – L&T MHI Boilers
Private Limited (LMB) and L&T MHI Turbine Generators
Private Limited (LMTG) – also bagged export orders.
LMB received order to supply pressure parts to Egypt
while LMTG received orders for supply of components
to Saudi Arabia.
Future outlook:
With the domestic gas-based power plant market
continuing to remain stressed, business will continue
52
to explore opportunities gas-based opportunities in the
Middle East and South East Asian region.
The Power Business is exploring opportunities to use the
Piping Center facility for oil & gas sector in the export
market.
The joint venture companies are actively exploring
international market for supply of components and
engineering services.
Manufacturing & Industrial Products IC (MIP IC):
LTRPM has succeeded in obtaining international order for
118” MTCP with bottom SMO from a major European
Tyre Manufacturer and order for Automatic Truck Tyre
Building Machines from another Major American Tyre
Major, which opens a new market segment for the
Business Unit.
A few initiatives detailed:
The following initiatives are being followed on a
continuous basis by the Company:
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Widening new geographical areas for augmenting
its exports.
Exploring inorganic growth opportunities for
the acquisition of specialized engineering outfits
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 dissemination through various
platforms within the organization.
Bringing in high caliber resources in the areas
of front-end marketing, engineering, project
management,
risk management, contract
administration, etc., to strengthen the overseas
operations.
(cid:3)(cid:122)
Customized Talent Management programs for
catering to the training and development needs of
employees.
Total foreign exchange used and earned:
Foreign Exchange earned
Foreign Exchange saved / deemed
exports
Total
Foreign Exchange used
crore
2013-14
9,409.75
1,142.16
10,551.91
9,901.27
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 BONUS ISSUE 2013
Details of the Options granted, pricing formula, Options vested, exercised, shares arising as a result of exercise of Options,
Options lapsed, variation of terms of Options, money realized by exercise of Options, total number of Options in force,
employee-wise details of Options granted to senior managerial personnel etc., since inception of the Scheme till March 31,
2013 and also the adjustments made consequent to the demerger of cement business of the Company and restructuring
of share capital and issue of Bonus shares in 2006 and 2008 are available in the Annexure ‘B’ to the Directors’ Report of
Annual Report for 2012-2013.
(a)
(1)
(2)
Particulars
(1)
Options granted and
outstanding as on April 1,
2013
Options granted during
the year prior to Bonus
Issue
(Equity shares of 2/- each)
(b) The pricing formula (Adjusted
grant price per share)
(c) Options vested and outstanding
2000
(2)
2002-A
(3)
ESOP SERIES
2002-B
(4)
2003-A
(5)
16,800
21,500
39,700
31,452
2003-B
(6)
4,35,202
4,500
4,39,702
3.50
17.50
as on April 1, 2013
16,800
21,500
39,700
31,452
1,09,802
Add: vested during the year
prior to Bonus Issue
Total
(d) Options exercised during the
year prior to Bonus Issue
(e) Total number of shares arising
as a result of exercise of
Options during the year prior
to Bonus Issue
(Equity shares of 2/- each)
(f) Options lapsed during the year
prior to Bonus Issue
(g) Variation of terms of Options
(h) Money realised by exercise of
Options during the year prior
to Bonus Issue
Total Number of Options in
force prior to Bonus Issue -
(i)
Vested
Unvested
Total
–
–
–
–
8,587
16,800
Nil
21,500
Nil
39,700
Nil
31,452
Nil
1,18,389
45,750
Nil
Nil
Nil
Nil
45,750
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
3,400
Nil
8,00,625/-
16,800
Nil
21,500
Nil
39,750
Nil
31,452
Nil
70,639
3,19,913
16,800
21,500
39,750
31,452
3,90,552
53
Particulars
(1)
2000
(2)
2002-A
(3)
ESOP SERIES
2002-B
(4)
2003-A
(5)
2003-B
(6)
(j)
Employee-wise details of
Options granted during the
year prior to Bonus Issue to –
(i)
(ii)
Senior Managerial
Personnel
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) Identified 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 2013 the total number of Options in force as above as at the record date
for Bonus Issue i.e., July 13, 2013 was readjusted in number in the ratio of Bonus Issue (1:2) and the above exercise
price of 3.50 and 17.50 was readjusted to 2.30 and 11.70 respectively.
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(I) Employee Stock Ownership Scheme 1999-2003
B. POST BONUS ISSUE 2013
ESOP SERIES
2000
(2)
2002-A
(3)
2002-B
(4)
2003-A
(5)
25,200
32,250
59,550
47,178
2003-B
(6)
5,85,829
Particulars
(1)
(a)
(1)
Options granted (outstanding
and adjusted consequent to
Bonus Issue )
(2)
Options granted post Bonus
Issue
(Equity shares of 2/- each)
(b) The pricing formula
(Adjusted grant price per share )
(c) Options vested
2.30
11.70
(adjusted on Bonus Issue)
25,200
32,250
59,550
47,178
Add: vested post Bonus Issue
–
–
–
–
Total
25,200
32,250
59,550
47,178
3,00,451
54
93,300
6,79,129
1,05,959
1,94,492
Particulars
(1)
(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
Total Number of Options in force -
(i)
2000
(2)
2002-A
(3)
2002-B
(4)
2003-A
(5)
ESOP SERIES
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
2003-B
(6)
1,68,636
1,68,636
10,950
Nil
19,73,041.20
Nil
Nil
Nil
Nil
Nil
Vested
Unvested
25,200
32,250
59,550
47,178
Nil
Nil
Nil
Nil
1,27,015
3,72,528
25,200
32,250
59,550
47,178
4,99,543
None
None
None
(j)
Total
Employee-wise details of Options
granted Post Bonus Issue 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) Identified 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
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(II) Employee Stock Option Scheme 2006
A. PRE BONUS ISSUE 2013
Details of the Options granted, pricing formula, Options vested, exercised, shares arising as a result of exercise of Options,
Options lapsed, variation of terms of Options, money realized by exercise of Options, total number of Options in force,
employee-wise details of Options granted to senior managerial personnel etc., since inception of the Scheme till March
31, 2013 and also the adjustments made consequent to the issue of Bonus shares in 2006 and 2008 are available in the
Annexure ‘B’ to the Directors’ Report of Annual Report for 2012-2013.
Particulars
(1)
(a)
(1) Options granted and outstanding as on April 1, 2013
(2) Options granted during the year prior to Bonus Issue
ESOP SERIES
2006
(2)
9,11,468
Nil
2006-A
(3)
72,89,329
1,115
(Equity shares of 2/- each)
9,11,468
72,90,444
55
Particulars
(1)
ESOP SERIES
2006
(2)
2006-A
(3)
(b) The pricing formula (Adjusted grant price per share)
601/-
(c) Options vested and outstanding as on April 1, 2013
Add: Vested during the year prior to Bonus Issue
Total
(d) Options exercised during the year prior to Bonus Issue
(e) Total number of shares arising as a result of exercise of Options
during the year prior to Bonus Issue
(Equity shares of 2/- each)
(f) Options lapsed during the year prior to Bonus Issue
(g) Variation of terms of Options
(h) Money realised by exercise of Options during the year prior to
Bonus Issue
Total Number of Options in force prior to Bonus Issue –
(i)
Vested
Unvested
Total
(j)
Employee-wise details of Options granted during the year prior
to Bonus Issue to –
i)
ii)
ii)
Senior Managerial Personnel
Any other employee who receives a grant, in any one year,
of Options amounting to 5% or more of Options granted
during that year
Identified 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
9,11,468
–
9,11,468
3,87,135
3,87,135
21,35,578
6,39,504
27,75,082
7,70,285
7,70,285
2,746
Nil
23,26,68,135/-
2,01,054
Nil
46,29,41,285/-
5,21,587
Nil
5,21,587
19,41,475
43,77,630
63,19,105
None
None
None
Consequent to the issue of Bonus Shares 2013 the total number of Options in force as above as at the record date for
Bonus Issue i.e., July 13,2013 was readjusted in number in the ratio of Bonus Issue (1:2) and the above exercise price of
601/- was readjusted to 400.70
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
(II) Employee Stock Option Scheme 2006
B. POST BONUS ISSUE 2013:
Particulars
(1)
(a)
(1)
Options granted (outstanding and adjusted consequent to
Bonus Issue )
ESOP SERIES
2006
(2)
2006-A
(3)
7,82,390
94,78,918
(2) Options granted Post Bonus Issue
Nil
13,52,790
Equity shares of 2/- each)
7,82,390
1,08,31,708
56
Particulars
(1)
ESOP SERIES
2006
(2)
2006-A
(3)
(b) The pricing formula (Adjusted grant price per share)
400.70
(c) 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
Total Number of Options in force –
(i)
Vested
Unvested
Total
Employee-wise details of Options granted post Bonus Issue to –
(j)
i)
ii)
iii)
Senior Managerial Personnel
Any other employee who receives a grant, in any one year,
of Options amounting to 5% or more of Options granted
during that year
Identified 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
7,82,390
–
7,82,390
2,50,898
2,50,898
29,12,334
19,56,174
48,68,508
16,09,397
16,09,397
21,311
Nil
10,05,34,828.60
5,30,097
Nil
64,48,85,377.90
5,10,181
Nil
5,10,181
30,96,418
55,95,796
86,92,214
None
None
None
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
Employee Stock Ownership Scheme -1999-2003 and Employee Stock Option Scheme 2006
(k)
a. Diluted EPS before extraordinary items 59.00
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 profits and on EPS
(l)
b. Diluted EPS after extraordinary items 59.00
Had fair value method been adopted for expensing
the compensation arising from employee share-
based payment plans:
a. The employee compensation charge debited to
the Statement of Profit and Loss for the year
2013-2014 would have been higher by 21.30
crore (previous year: 29.85 crore) [excluding
5.45 crore (previous year: 2.30 crore) on
account of grants to employees of subsidiary
companies]
b. Basic EPS before extraordinary items would have
59.13
59.36 per share to
decreased from
per share
57
Information required to be disclosed under SEBI (ESOS & ESPS) Guidelines, 1999
Employee Stock Ownership Scheme -1999-2003 and Employee Stock Option Scheme 2006
c. Basic EPS after extraordinary items would have
59.13
59.36 per share to
decreased from
per share
d. Diluted EPS before extraordinary items would
59.00 per share to
have decreased from
58.77 per share
e. Diluted EPS after extraordinary items would have
58.77
59.00 per share to
decreased from
per share
379.45 per share
No Such grants during the year
556.06 per share
No Such grants during the year
(m)(i)
m(ii)
(n)
(a)
(b)
Weighted average exercise prices of Options granted
during the year where exercise price is less than market
price
Weighted average exercise prices of Options granted
during the year where exercise price equals market price
Weighted average fair values of Options granted during
the year where exercise price is less than market price
Weighted average fair values of Options granted during
the year where exercise price equals market price
Method and significant assumptions used to estimate the fair
value of Options granted during the year
(b)
(a)
(a) Method
(b) Significant Assumptions
Black-Scholes Option Pricing Model
(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
8.88%
4.34 years
38.00%
53.42 per option
834.48 per option
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 26 August 1999, 22 August 2003 and 25 August 2006.
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
58
ANNEXURE ‘C’ TO THE DIRECTORS’ REPORT
A. CORPORATE GOVERNANCE
Corporate Governance is a set of principles, processes and systems which govern a company. The elements of Corporate
Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and trust.
Corporate Governance enables an organization to perform efficiently 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
your Company always seeks to ensure that its performance goals are met accordingly. The Company has established
systems and procedures to ensure that its Board of Directors is well informed and well equipped to fulfil its overall
responsibilities and to provide management with the strategic direction needed to create long term shareholders value.
The Company has adopted many ethical and transparent governance practices even before they were mandated by
law. The Company has always worked towards building trust with shareholders, employees, customers, suppliers and
other stakeholders based on the principles of good corporate governance.
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) Executive Management – by the Corporate Management comprising of the Executive Directors and one Senior
Managerial Personnel and one Advisor to the Chairman.
(iii) Strategy & Operational Management – by the Independent Company Boards of each Independent Company (IC)
comprising of representatives from the Company Board, Senior Executives from the IC and independent members.
(iv) Operational Management – by the Business Unit (BU) 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 confidence.
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 fiduciary position, empowered to oversee the management functions
with a view to ensure its effectiveness and enhancement of shareholder 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 financials and budgets before they
are presented to the Company Board.
c. Group Executive Chairman (GEC):
The GEC 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
59
objectives. He presides over the Board and the Shareholders’ meetings. The GEC provides leadership and devotes
his full attention to certain core actions which include, inter alia, focus on restructuring, mentor senior executives,
succession planning, corporate governance, interface with critical Government entities and major customers for
the Company and Group Companies and provide support, wherever necessary.
d. Chief Executive Officer and Managing Director (CEO & MD):
The CEO & MD will be fully accountable to the Board for the Company’s business results, people development,
operational excellence, business development and other related responsibilities.
e. Executive Directors (ED) / Senior Management Personnel:
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.
f. 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.
g.
Independent Company Board (IC Board):
In 2010-11, the Company developed its strategic plan for 2010-15 (Lakshya 2015) which, inter alia, defined
various business areas to be focused on over the next five years. The thrust of Lakshya 2015 was increased
accountability and ownership for performance, making the company less complex to manage and be more focused
on its core business. The Company was restructured into 12 independent Companies (ICs) [not legal entities] with
each IC having its own Board, with members within the Company, independent members and a representative
from the Company’s Board.
Company’s long term Strategic Plan – Lakshya 2016 envisages substantial growth in international markets,
especially Gulf countries. With a view to achieving the same, the Company has spelt out its vision of building a
strong organization in Middle East, for which the structure, processes and leadership is more or less being finalized.
It is envisaged that it will help the Company in achieving it strategic goals.
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 March 31,
2014, the Board comprises Group Executive Chairman, Chief Executive Officer and Managing Director, 4 Executive
Directors and 8 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 Office 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,
10 Meetings were held on April 4, 2013, April 5, 2013, May 22, 2013, July 3, 2013, July 22, 2013, August 12,
2013, August 22, 2013, October 18, 2013, January 22, 2014 and February 19, 2014.
The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group Executive
Chairman and CEO & 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
60
perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with
the Group Executive Chairman. The minutes is signed by the Chairman 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.
The following composition of the Board of Directors is as on March 31, 2014. Their attendance at the Meetings
during the year and at the last Annual General Meeting is as under:
Name of Director
Category
Meetings held
during the year
No. of Board
Meetings
attended
Attendance at
last AGM
Mr. A. M. Naik
Mr. K. Venkataramanan
Mr. M. V. Kotwal
Mr. S. N. Subrahmanyan
Mr. R. Shankar Raman
Mr. Shailendra Roy
Mr. S. Rajgopal
Mr. S. N. Talwar
Mr. M. M. Chitale
Mr. N. Mohan Raj (Note 1) $
Mr. Subodh Bhargava
Mr. A. K. Jain (Note 2)
Mr. M. Damodaran
Mr. Vikram Singh Mehta
Mr. Sushobhan Sarker (Note 1)
GEC
CEO & MD
ED
ED
ED
ED
NED
NED
NED
NED
NED
NED
NED
NED
NED
10
10
10
10
10
10
10
10
10
8
10
10
10
10
10
10
10
10
9
10
10
10
8
10
4
10
10
7
9
7
YES
YES
YES
YES
YES
YES
YES
YES
YES
NO
YES
YES
YES
YES
NO
Meetings held during the year are expressed as number of meetings eligible to attend.
Note: 1. Representing equity interest of LIC
2. Representing equity interest of SUUTI
$ ceased to be a director w.e.f. 21.10.2013.
GEC – Group Executive Chairman
ED – Executive Director
CEO & MD – Chief Executive Officer and Managing Director
NED – Non-Executive Director
1. None of the above Directors are related inter-se.
2. None of the Directors hold the office of director in more than the permissible number of companies under
the Companies Act, 1956.
As on March 31, 2014, the number of other Directorships & Memberships / Chairmanships of Committees of the
Board of Directors are as follows:
Name of Director
No. of other company
Directorships
No. of Committee
Membership
No. of Committee
Chairmanship
Mr. A. M. Naik
Mr. K. Venkataramanan
Mr. M. V. Kotwal
3
1
1
1
–
–
–
–
–
61
Name of Director
No. of other company
Directorships
No. of Committee
Membership
No. of Committee
Chairmanship
Mr. S. N. Subrahmanyan
Mr. R. Shankar Raman
Mr. Shailendra Roy
Mr. S. Rajgopal
Mr. S. N. Talwar
Mr. M. M. Chitale
Mr. Subodh Bhargava
Mr. A. K. Jain
Mr. M. Damodaran
Mr. Vikram Singh Mehta
Mr. Sushobhan Sarker
1
10
12
1
13
10
6
2
9
7
3
1
8
5
1
4
4
2
1
7
2
1
–
1
1
–
3
4
1
1
2
–
1
(cid:3)(cid:122)
Committee memberships include memberships of Audit Committee and Shareholders’ Grievance Committee in
all public limited companies (whether listed or not) and excludes private limited companies, foreign companies
and Section 25 companies.
(cid:3)(cid:122)
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 -
(cid:3)(cid:122)
Annual revenue budgets and capital expenditure plans.
(cid:3)(cid:122)
Quarterly results and results of operations of Independent Company and business segments.
(cid:3)(cid:122)
Financing plans of the Company.
(cid:3)(cid:122)
Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee and
Shareholders’ Relationship Committee.
(cid:3)(cid:122)
Details of any joint venture, acquisitions of companies or collaboration agreement.
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Quarterly report on fatal or serious accidents or dangerous occurrences, any material effluent or pollution
problems.
Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-
payment for goods sold or services rendered, if any.
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.
(cid:3)(cid:122)
Developments in respect of human resources.
(cid:3)(cid:122)
Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor service
such as non-payment of dividend, delay in share transfer, etc., if any.
d. Post-meeting internal communication system:
The important decisions taken at the Board / Committee meetings are communicated to the concerned departments /
Independent Companies promptly.
62
F. BOARD COMMITTEES
The Board currently has 4 Committees: 1) Audit
Committee, 2) Nomination and Remuneration
Committee, 3) Stakeholders’ Relationship Committee
and 4) Corporate Social Responsibility Committee.
The terms of reference of the Board Committees are
determined by the Board from time to time. The Board
is responsible for constituting, assigning and co-opting
the members of the Committees. The meetings of
each Board Committee are convened by the respective
Committee Chairman. The role and composition of
these Committees, including the number of meetings
held during the financial year and the related attendance
are provided below.
1) Audit Committee
i) Terms of reference:
The role of the Audit Committee includes the
following:
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Overseeing the Company’s financial
reporting process and disclosure of its
financial information.
Recommendation for appointment,
remuneration and terms of appointment
of auditors of the Company.
Reviewing and discussing with the
Statutory Auditors and the Internal
Auditor about internal control systems.
Review and monitor the auditor’s
independence and performance, and
effectiveness of audit process;
Reviewing major accounting policies and
practices and adoption of applicable
Accounting Standards.
Reviewing major accounting entries
involving exercise of judgment by the
management.
(cid:3)(cid:122)
Disclosure of contingent liabilities.
(cid:3)(cid:122)
(cid:3)(cid:122)
Reviewing, if necessary, the findings of
any internal investigations by the Internal
Auditors and reporting the matter to the
Board.
Reviewing
mechanisms of the Company.
the
risk management
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Reviewing of compliance with Listing
Agreement and various other legal
requirements concerning
financial
statements and related party transactions.
Examination of financial statements and
the auditor’s report thereon;
Reviewing the operations, new initiatives
and performance of the business,
formation of committee at Independent
Company time.
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.
Approval of the appointment of the Chief
Financial Officer (CFO).
Recommendation of appointment of cost
auditor.
Approval or subsequent modification of
transactions of the Company with related
parties;
Scrutiny of inter-corporate loans and
investments;
Valuation of undertakings or assets of the
Company, wherever it is necessary;
Evaluation of internal financial controls
and risk management systems;
Monitoring the end use of funds raised
through public offers and related matters.
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, 2014
comprised three Non-Executive Directors, all of
whom are independent as per Clause 49 of the
Listing Agreement.
iii) Meetings:
During the year ended March 31, 2014, 9
meetings of the Audit Committee were held
on April 4, 2013, May 6, 2013, May 21, 2013,
63
June 27, 2013, July 22, 2013, October 17,
2013, December 17, 2013, January 21, 2014
and February 21, 2014.
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 $
Mr. A. K. Jain
Mr. M. Damodaran
Member
Member
Member
9
6
9
8
9
4
9
6
Meetings held during the year are expressed
as number of meetings eligible to attend.
$ Mr. N. Mohan Raj ceased to be a Director of
the Company w.e.f. 21.10.2013.
All the members of the Audit Committee are
financially literate and have accounting or
related financial management expertise.
The CEO & MD, the Chief Financial Officer
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
institutionalized. The Company’s Internal Audit
function is ISO 9001:2008 certified. The Head
of Corporate Audit Services reports jointly
to the Group Executive Chairman and Chief
Executive Officer & Managing Director. The
staff of Corporate Audit department is rotated
periodically.
From time to time, the Company’s systems
of internal controls covering financial,
operational, compliance, IT applications, etc.
are reviewed by external experts. Presentations
are made to the Audit Committee on the
findings of such reviews.
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
(NRC)
i) Terms of reference:
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
(cid:3)(cid:122)
Identify persons who are qualified to
become directors and who may be
appointed in senior management (here,
means personnel of the company who
are members of its core management
team excluding the Board of Directors
comprising all members of management
one level below the executive directors,
including the functional heads) in
accordance with the criteria laid down by
the Committee;
Formulate criteria for determining
qualifications, positive attributes and
independence of a director;
Recommend to the Board appointment
and removal of such persons;
Carry out evaluation of every director’s
performance;
Recommend to the Board a policy, relating
to remuneration for the directors, Key
Managerial Personnel (KMP) and other
employees
ii) Composition:
The Committee has been in place since
1999. As at March 31, 2014, the Committee
comprised 3 Non-Executive Directors and the
Group Executive Chairman.
iii) Meetings:
During the year ended March 31, 2014, 7
meetings of the Nomination & Remuneration
Committee were held on April 4, 2013, May
22, 2013, July 2, 2013, July 22, 2013, October
18, 2013, January 22, 2014 and February 19,
2014.
64
The attendance of Members at the Meetings
was as follows:
Name
Status
No. of
meetings
during
the year
No. of
Meetings
Attended
Mr. S. Rajgopal
Mr. S. N. Talwar
Mr. Subodh Bhargava
Mr. A. M. Naik
Chairman
Member
Member
Member
7
7
7
7
7
5
7
7
Meetings held during the year are expressed
as number of meetings eligible to attend.
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 conflict of interest, ensures
availability of diverse perspectives, business
experience, legal, financial & other expertise,
integrity, managerial qualities, practical
wisdom, ability to read & understand financial
statements, commitment to ethical standards
and values of the Company and ensure healthy
debates & sound decisions.
While evaluating the suitability of a Director for
re-appointment, besides 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 definition of Independent Director
as given under Clause 49 of the Listing
Agreement. As per the definition, all our NED’s
qualify as “Independent Directors”. 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 certificate
confirming that they meet the “independence
criteria” as mentioned in Clause 49 of the
Listing Agreement.
These certificates have been placed on the
website of the Company.
presence, its economic & financial position,
industrial trends, compensation paid by the
peer companies, etc. Compensation reflects
each Board member’s responsibility and
performance. The level of Board compensation
to Executive Directors is designed to be
competitive in the market for highly qualified
executives.
The Company pays remuneration to Executive
Directors by way of salary, perquisites &
retirement benefits (fixed components) &
commission (variable component), based on
recommendation of the 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 and participation
in IC meetings.
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,
2014:
v) Remuneration Policy
(a) Executive Directors:
The remuneration of the Board members
is based on the Company’s size & global
The details of remuneration paid / payable
to the Executive Directors is as follows:
65
Names
Salary
Perquisites
Mr. A. M. Naik
Mr. K. Venkataramanan
Mr. M. V. Kotwal
Mr. S. N. Subrahmanyan
Mr. R. Shankar Raman
Mr. Shailendra Roy
288.00
182.40
135.00
114.00
102.00
87.00
25.85
161.69
113.27
18.40
18.40
97.36
` Lakh
Commission
1,929.00
723.00
524.00
916.00
733.00
465.00
Retirement
Benefits
598.59
244.46
177.93
278.10
225.45
149.04
(cid:122)
(cid:122)
(cid:122)
Notice period for termination of
appointment of Group Executive
Chairman, Chief Executive Officer &
Managing Director and other Whole-time
Directors is six months on either side.
No severance pay is payable on termination
of appointment.
Details of Options granted under
Employee Stock Option Schemes are 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
Mr. S. Rajgopal
Mr. S. N. Talwar
Mr. M. M. Chitale
Mr. N. Mohan Raj ^
Mr. Subodh Bhargava
Mr. A. K. Jain
Mr. M. Damodaran
Mr. Vikram Singh Mehta
Mr. Sushobhan Sarker
* Payable to respective Institutions they represent.
^ Ceased to be a Director w.e.f. 21.10.2013
2.00
1.60
2.00
0.80*
2.00
2.00
1.40
1.80
1.40*
Sitting
Fees for
Committee
Meeting
1.40
1.00
1.80
0.80*
1.40
1.80
1.20
0.60
0.60*
` Lakh
Commission
46.70
30.80
38.25
20.80*
42.00
22.50*
37.25
25.25
26.49*
Details of shares and convertible
instruments held by the Non-Executive
Directors as on March 31, 2014 are as
follows:
Names
Mr. S. Rajgopal #
Mr. S. N. Talwar
Mr. M. M. Chitale
Mr. Subodh Bhargava
Mr. A. K. Jain *
No. of Shares held
1,350
9,000
1,629
750
600
66
No. of Shares held
150
885
150
Names
Mr. M. Damodaran
Mr. Vikram Singh Mehta
Mr. Sushobhan Sarker *
* held jointly with the Institutions they represent
# has been granted 90,000 stock options but not
yet exercised
3)
Stakeholders’ Relationship Committee
(earlier known as Shareholders’ / Investors
Grievance Committee):
i) Terms of reference:
The terms of reference of the Stakeholders’
Relationship Committee are as follows:
(cid:122)
(cid:122)
Redressal of Shareholders’ / Investors’
complaints
Allotment, transfer & transmission of
Shares / Debentures or any other securities
and issue of duplicate certificates and
new certificates on split / consolidation /
renewal etc. as may be referred to it by
the Share Transfer Committee.
ii) Composition:
As on March 31, 2014 the Stakeholders’
Relationship Committee comprised of 1 Non-
Executive Director and 2 Executive Directors.
iii) Meetings:
During the year ended March 31, 2014, 4
meetings of the Shareholders’ / Investors
Grievance Committee were held on May 22,
2013, July 22, 2013, October 18, 2013 and
January 22, 2014.
The attendance of Members at the Meetings
was as follows-
Name
Status
No. of
Meetings
Attended
No. of
meetings
during the
year
3
4
4
1
3
3
4
1
Mr. Vikram Singh Mehta @ Chairman
Chairman
Mr. Sushobhan Sarker ^
Member
Mr. S. N. Subrahmanyan
Mr. Shailendra Roy *
Member
Meetings held during the year are expressed as number of meetings
eligible to attend.
* Inducted as a member w.e.f. 22.01.2014
@ Ceased as Chairman w.e.f. 22.01.2014
^ Appointed as Chairman w.e.f. 22.01.2014
Mr. S. N. Subrahmanyan acted as Chairman at the meeting held
on 22.01.2014.
Mr. N. Hariharan, Company Secretary is the
Compliance Officer.
iv) Number of Requests / Complaints:
During the year, the Company has resolved
investor grievances expeditiously except for
the cases constrained by disputes or legal
impediments.
During the year, the Company / its Registrar’s
received the following complaints from
SEBI / Stock Exchanges and queries from
shareholders, which were resolved within the
time frames laid down by SEBI.
Particulars
Received
Resolved
Pending*
Opening
Balance
Complaints:
SEBI / Stock Exchange
Shareholder Queries:
Dividend Related
Transmission / Transfer
Demat / Remat
NIL
91
91
770
37
1
8,055
1,125
93
8,762
1,155
94
NIL
63
7
NIL
* Investor complaints / queries shown
outstanding as on March 31, 2014 have
been subsequently resolved. The substantial
increase in number of queries is on account
of the Company’s repeated reminders to
shareholders regarding unclaimed shares and
dividends.
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 51
meetings during the year and approved the
transfer of shares lodged with the Company.
4) Corporate Social Responsibility Committee:
The Corporate Social Responsibility Committee
(‘CSR Committee’) was constituted at the Board
meeting held on January 22, 2014 as required under
the provisions of Section 135 of the Companies
Act, 2013.
i) Terms of reference:
The terms of reference of the CSR Committee
are as follows:
(a)
formulate and recommend to the Board,
a Corporate Social Responsibility Policy
which shall indicate the activities to be
undertaken by the Company;
(b)
recommend the amount of expenditure to
be incurred on the activities referred to in
clause (a); and
(c)
monitor the Corporate Social Responsibility
Policy of the Company from time to time.
ii) Composition:
As on March 31, 2014 the CSR Committee
comprised of 1 Non-Executive Director and 2
Executive Directors.
iii) Meetings:
During the year ended March 31, 2014, no
meetings of the CSR Committee were held.
The Members at the Committee are as follows-
Name
Status
Mr. Vikram Singh Mehta
Chairman
Mr. M. V. Kotwal
Mr. R. Shankar Raman
Member
Member
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.
The Company holds Board meetings at its registered
office and also if necessary, in locations, where
it operates. Site / factory visits are organized at
various locations for the Directors.
b)
Information to directors:
The Board of Directors has complete access to
the information within the Company, which inter
alia, includes items as mentioned on Page 62 in
Annexure ‘C’ to the Directors’ Report.
Presentations are made regularly to the Board /
N&R / Audit Committee (AC) (minutes of AC & N&R
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,
67
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 defined framework.
A detailed note on risk management is given in the
Financial Review section of Management 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
auditors. S&T has furnished a declaration confirming
their independence as well as their arm’s length
relationship with the Company as well as declaring
that they have not taken up any prohibited non-
audit assignments for the Company. Mr. Milind P.
Phadke has signed the audit report for 2013-14 on
behalf of S&T.
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.larsentourbo.
com. The declaration of Chief Executive Officer &
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 affirmed compliance
with the Code of Conduct as adopted by the Board
of Directors.
K. Venkataramanan
Chief Executive Officer & Managing Director
Date: May 29, 2014
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
2012-2013
August 22, 2013
3.00 p.m.
2011-2012
August 24, 2012
3.00 p.m.
2010-2011
August 26, 2011
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 22, 2013:
(cid:3)(cid:122)
To approve raising of capital through QIP’s
by issue of shares / convertible debentures /
securities upto an amount of USD 600 million
or 3200 crore.
(cid:3)(cid:122)
To approve appointment of Statutory Auditors
and remuneration payable to them.
Annual General Meeting held on August 24, 2012:
(cid:3)(cid:122)
(cid:3)(cid:122)
To approve appointment of Mr. A. M. Naik as
the Executive Chairman 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 3200 crore.
(cid:3)(cid:122)
To approve appointment of Statutory Auditors
and remuneration payable to them.
Annual General Meeting held on August 26, 2011:
(cid:3)(cid:122)
To approve appointment of Statutory Auditors
and remuneration payable to them.
g) Approval of Members through Postal Ballot:
The Company received approval of the members on
July 3, 2013, for passing an Ordinary Resolution as
per Section 192A of the Companies Act, 1956 read
with the Companies (Passing of the Resolution by
Postal Ballot) Rules, 2011, for issue of bonus shares
in the ratio of 1:2. Mr. S. N. Ananthasubramanian,
Practicing Company Secretary, was appointed as
the Scrutinizer for conducting the Postal Ballot
68
process. The details of the voting pattern are as
under:
Particulars
In favour of
the resolution
Against the
resolution
TOTAL
No. of votes cast
E-Voting
2,94,96,606
Physical
31,41,10,243
Total
34,36,06,849
19,267
18,187
37,454
% of total
votes cast
99.99
0.01
31,41,29,510
2,95,14,793
34,36,44,303
100.00
Number of Invalid Ballots (unsigned / unticked) was
648.
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
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.
News Releases Official news releases are sent to stock exchanges
as well as displayed on the Company’s website:
www.Larsentoubro.com.
Procedure for Postal Ballot:
After receiving the approval of the Board of
Directors, Notice of the Postal Ballot, text of the
Resolution and Explanatory Statement, relevant
documents, Postal Ballot Form and self-addressed
postage envelopes are sent to the shareholders to
enable them to consider and vote for and against
the proposal within a period of 30 days from the
date of dispatch. The calendar of events containing
the activity chart is filed with the Registrar of
Companies within 7 days of the passing of the
Resolution by the Board of Directors. After the
last day for receipt of ballots, the Scrutinizer,
after due verification, submits the results to the
Chairman. Thereafter, the Chairman declares the
result of the Postal Ballot. The same is published
in the Newspapers and displayed on the Company
Website and Notice Board.
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 conflict 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 194-205 of
the Annual Report.
3. The Company has followed all relevant
Accounting Standards notified by the
Companies (Accounting Standards) Rules,
2006 while preparing the Financial Statements.
4. The Company makes presentations to
Institutional Investors & Equity Analysts on the
Company’s performance on a quarterly basis.
Website
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 on
a quarterly basis and the quarterly shareholding
pattern of the Company is also displayed on
the website. The entire Annual Report and
Accounts of the Company and subsidiaries are
available in downloadable formats. It will also
be made available on the websites of the Stock
Exchanges.
Filing with
Stock
Exchanges
Information to Stock Exchanges is now being
filed online on NEAPS for NSE and BSE Online
for BSE.
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. UNCLAIMED SHARES
As required under Clause 5A of the Listing Agreement,
the Company had sent reminders to the shareholders
whose shares were lying unclaimed / undelivered with
the Company. The Company has received a substantial
number of requests to claim these share certificates
which are released after a through due diligence. As on
today, the Company has share certificates of only 1.95%
of the total shareholders lying unclaimed / undelivered.
These will be transferred to the Unclaimed Suspense
Account as required under the Listing Agreement. The
Company has already opened the “Unclaimed Suspense
Account” and is in the process of completing the
formalities for transferring the shares.
69
I. GENERAL SHAREHOLDERS’ INFORMATION
a) Annual General Meeting:
The Annual General Meeting of the Company has
been convened on Friday, August 22, 2014 at Birla
Matushri Sabhagar, Marine Lines, Mumbai – 400
020 at 3.00 p.m.
b) Financial calendar:
1. Annual Results of 2013-14 May 30, 2014
2. Mailing of Annual Reports Third week of July, 2014
3. First Quarter Results
4. Annual General Meeting
5. Payment of Dividend
6. Second Quarter results
7. Third Quarter results
During the last week of July 2014 *
August 22, 2014
August 26, 2014
During first week of November, 2014 *
During first week of February, 2015 *
* Tentative
c) Book Closure:
The dates of Book Closure are from Saturday,
August 16, 2014 to Friday, August 22, 2014 (both
days inclusive) to determine the members entitled
to the dividend for 2013-2014.
d)
Listing of equity shares / shares underlying
GDRs on Stock Exchanges:
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
2014-2015 to the above Stock Exchanges.
f) Custodial Fees to Depositories:
The Company has paid custodial fees for the
year 2014-2015 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:
Bombay Stock Exchange (BSE)
: Scrip Code - 500510
National Stock Exchange (NSE)
: Scrip Code - LT
ISIN
Reuters RIC
:
:
INE018A01030
LART.BO
Luxembourg Exchange Stock Code
: 005428157
London Exchange Stock Code
: LTOD
70
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.
h) Stock market data for the year 2013-14:
Month
L&T BSE Price ( )
High
Low
2013
Pre-Bonus (till 10.07.2013)
1,546.50
April
1,652.10
May
1,464.00
June
1,453.65
July
Post-Bonus (from 11.07.2013)
July
August
September
October
November
December
2014
January
February
March
1,009.80
864.50
898.00
984.65
1,047.00
1,152.40
1,079.70
1,113.95
1,301.00
1,313.20
1,400.00
1,336.10
1,372.30
834.25
678.10
687.60
777.10
912.30
1,033.50
951.60
962.00
1,087.00
BSE SENSEX
Low
High
Month
Close
19,622.68
20,443.62
19,860.19
19,640.27
20,351.06
19,569.20
20,739.69
21,205.44
21,321.53
21,483.74
18,144.22
19,451.26
18,467.16
19,147.31
19,126.82
17,448.71
18,166.17
19,264.72
20,137.67
20,568.70
19,504.18
19,760.30
19,395.81
19,294.12
19,345.70
18,619.72
19,379.77
21,164.52
20,791.93
21,170.68
Month
Close
1,512.60
1,401.60
1,404.15
1,413.55
846.45
722.25
788.60
972.55
1,043.35
1,069.90
985.40
1,108.30
1,272.65
21,409.66
21,140.51
22,467.21
20,343.78
19,963.12
20,920.98
20,513.85
21,120.12
22,386.27
)
(
E
S
B
-
T
&
L
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
Stock Performance
L&T BSE ( ) BSE SENSEX
Apr
13
May
13
Jun
13
Jul
13
Oct
13
Sep
13
Nov
Aug
13
13
Daily Closing Price
Dec
13
Jan
14
Feb
14
Mar
14
25000
24000
23000
22000
21000
20000
19000
18000
17000
16000
X
E
S
N
E
S
E
S
B
Month
L&T NSE Price ( )
Low
High
Month
Close
High
NIFTY
Low
Month
Close
2013
Pre-Bonus (till 10.07.2013)
1,547.00
April
1,652.00
May
1,464.00
June
1,457.00
July
1,313.00
1,398.00
1,335.00
1,387.00
1,512.20
1,400.75
1,407.90
1,413.70
5,962.30
6,229.45
6,011.00
5,904.35
5,477.20
5,910.95
5,566.25
5,760.40
5,930.20
5,985.95
5,842.20
5,816.70
Month
L&T NSE Price ( )
Low
High
Month
Close
High
1,010.90
864.90
898.65
984.95
1,048.80
1,154.40
Post-Bonus (from 11.07.2013)
July
August
September
October
November
December
2014
January
February
March
1,079.90
1,114.70
1,302.25
835.00
677.15
687.40
776.55
912.10
1,032.65
951.50
965.10
1,086.65
847.15
724.55
788.75
973.70
1,045.95
1,070.25
985.90
1,109.65
1,271.90
6,093.35
5,808.50
6,142.50
6,309.05
6,342.95
6,415.25
6,358.30
6,282.70
6,730.05
NIFTY
Low
5,675.75
5,118.85
5,318.90
5,700.95
5,972.45
6,129.95
6,027.25
5,933.80
6,212.25
)
(
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L
2000
1900
1800
1700
1600
1500
1400
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700
600
Stock Performance
L&T NSE ( ) NSE NIFTY
Apr
13
May
13
Jun
13
Jul
13
Oct
13
Sep
13
Nov
Aug
13
13
Daily Closing Price
Dec
13
Jan
14
Feb
14
Mar
14
Month
Close
5,742.00
5,471.80
5,735.30
6,299.15
6,176.10
6,304.00
6.089.50
6,276.95
6,704.20
7000
6750
6500
6250
6000
5750
5500
5250
5000
4750
4500
Y
T
F
I
N
E
S
N
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 certificate on half yearly basis
confirming 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,
2014:
No. of Shares
Upto 500
501 – 1000
1001 – 2000
2001 – 3000
3001 – 4000
4001 – 5000
5001 – 10000
10001 & ABOVE
TOTAL
Shareholders
Number
7,58,416
40,245
18,677
5,936
2,375
1,567
2,879
2,736
8,32,831
%
91.06
4.83
2.24
0.71
0.29
0.19
0.35
0.33
100.00
Shareholding
Number
6,64,99,332
2,83,82,620
2,61,88,136
1,47,80,365
82,64,464
70,48,739
1,99,64,276
75,57,84,726
92,69,12,658
%
7.17
3.06
2.83
1.60
0.89
0.76
2.15
81.54
100.00
l) Categories of Shareholders is as under:
Category
31.03.2014
31.03.2013
No. of
Shares
%
No. of
Shares
%
Financial Institutions
28,57,74,435
30.83
18,79,45,375
30.54
Foreign Institutional
Investors
Shares underlying
GDRs
17,12,25,959
18.47 10,20,52,770
16.58
2,47,96,796
2.68
220,48,741
3.58
Mutual Funds
5,26,61,895
Bodies Corporate
6,41,75,878
Directors & Relatives
34,43,552
5.68
6.92
0.37
3,42,05,671
4,41,01,953
26,57,738
5.56
7.17
0.43
L&T Employees
Welfare Foundation
11,16,06,174
12.04
7,44,04,116
12.09
General Public
21,32,27,969
23.01 14,79,69,617
24.05
TOTAL
92,69,12,658 100.00 61,53,85,981 100.00
Categories of Shareholders
as on March 31, 2014
General Public
23.01%
L&T Employees
Welfare
Foundation
12.04%
Directors & Relatives
0.37%
Bodies Corporate
6.92%
Mutual Funds
5.68%
Financial
Institutions
30.83%
Foreign
Institutional
Investors
18.47%
Shares underlying GDRs
2.68%
m) Dematerialization of shares:
The Company’s Shares are required to be
compulsorily traded in the Stock Exchanges in
71
dematerialized form. The Company had sent letters
to shareholders holding shares in physical form
emphasizing the benefits of dematerialization.
The number of shares held in dematerialized and
physical mode is as under:
No. of shares % of total
capital
issued
Held in dematerialized form
in NSDL
Held in dematerialized form
in CDSL
Physical
Total
86,82,26,764
93.67
3,62,57,880
3.91
2,24,28,014
92,69,12,658
2.42
100.00
Shares held in Demat / Physical Form
as on March 31, 2014
CDSL
3,62,57,880
3.91%
Physical
2,24,28,014
2.42%
NSDL
86,82,26,764
93.67%
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,
2014:
3.50% USD 200 million Foreign Currency
Convertible Bonds due 2014
(i)
(ii)
(iii)
(iv)
(v)
Principal Value of the Bonds issued
Principal Value of Bonds converted to
GDRs since issue.
Principal Value of Bonds outstanding as
at March 31, 2014
Underlying Equity Shares / GDR’s issued
pursuant to conversion as per (ii) above
Underlying Equity Shares / GDR’s that
may be issued pursuant to conversion
notices in respect of (iii) above
USD 200 million
NIL
USD 200 million
NIL
73,60,865 shares
These Convertible Bonds are listed on the Singapore
Exchange Securities Trading Limited.
72
o) Listing of Debt Securities:
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
q) Plant Locations:
The L&T Group’s facilities for design, engineering,
manufacture and modular fabrication are based
at multiple locations within India including
Ahmednagar, Bangalore, Chennai, Coimbatore,
Faridabad, Hazira (Surat), Katupalli (Ennore),
Raigad, Rourkela, Mumbai, Mysore, Pithampur,
Puducherry, Talegaon and Vadodara. L&T’s
manufacturing footprint covers the Gulf (Oman,
Saudi Arabia, U.A.E.), South East Asia (Malaysia,
Indonesia) China and Australia. The L&T Group also
has an extensive network of offices 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
Samhita Warehousing Complex,
Bldg. No.13 A B, 2nd Floor
Off Sakinaka Telephone Exchange Lane,
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
s)
Investor Grievances:
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:
1. A Nomination & Remuneration Committee is in
place since 1999. The Committee comprises of
three Non-Executive Directors and the Group
Executive Chairman.
2. The Company has a Whistle Blower Policy in
place since 2004 which is also applicable to
group companies to report concerns about
unethical behaviour, actual / suspected
frauds and violation of Company’s Code of
Conduct or Ethics Policy. This has now been
made mandatory under the Companies Act,
2013 and revised Clause 49 of the Listing
Agreement.
3. Access to the Audit committee of the Board is
also available.
u) Securities Dealing Code:
Pursuant to the SEBI (Prohibition of 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, Officers 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
specified limit, permission of Compliance Officer
is also required. All the Designated Employees
are also required to disclose related information
periodically as defined in the Code. Directors and
designated employees who buy and 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’s shares.
Mr. N. Hariharan, Company Secretary has been
designated as the Compliance Officer.
v)
ISO 9001:2008 Certification:
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 certified.
w) Secretarial Audit:
As stipulated by SEBI, a Qualified 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
confirms 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.
73
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification
To the Board of Directors of Larsen & Toubro Limited
Dear Sirs,
Sub: CEO / CFO Certificate
(Issue in accordance with provisions of Clause 49 of the Listing Agreement)
We have reviewed the financial statements, read with the cash flow statement of Larsen & Toubro Limited for the year
ended March 31, 2014 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 financial reporting. We have evaluated
the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to
the Auditors and Audit Committee, deficiencies, if any, in the design or operation of such internal controls of which
we are aware and steps taken or proposed to be taken for rectifying these deficiencies.
(d) We have indicated to the Auditors and the Audit Committee:
that there were no significant changes in internal controls over financial reporting during the financial year; and
(i)
(ii) that there were no significant changes in accounting policies made during the year; and
(ii) that there were no instances of significant fraud of which we have become aware.
R. Shankar Raman
Chief Financial Officer
Yours sincerely,
K. Venkataramanan
Chief Executive Officer &
Managing Director
A. M. Naik
Group Executive Chairman
Place: Mumbai
Date: May 30, 2014
Auditors Certificate 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, 2014 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 financial 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 efficiency or
effectiveness with which the management has conducted the affairs of the Company.
Mumbai, May 30, 2014
74
SHARP AND TANNAN
Chartered Accountants
Firm’s Registration No. 109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No. 33013
Management Discussion & Analysis 2013-14
Global Economic Condition:
In the year 2013-14, the global economy showed signs of
revival after almost 4 years since the onset of the financial
crisis. The recovery this time was different as developed
economies consolidated while most emerging markets
faced challenges to reviving growth. In the process, the
financial system has emerged stronger while fiscal balances
in the developed world are improving. The synchronised
efforts of central banks and governments continued with
record low interest rates and monetary stimulus measures.
USA finally introduced a gradual taper of its stimulus
which has so far not destabilised global financial markets.
The remarkable turnaround in their fiscal balance due to
steep expenditure cuts introduced earlier can once again
be restored thus providing a fillip to growth. While the
housing sector has seen some credible recovery, the shale
gas boom has driven industrial growth and jobs.
The European Union also made some recovery though
an uneven one. The north, led by Germany, had a
solid year, reducing unemployment and boosting living
standards. Across the Mediterranean the pattern was more
disappointing, with Italy, Spain, Portugal and Greece all
enduring a year of rising unemployment, however, the
numbers have started to improve. Europe and the euro are
not out of trouble, but the acute phase of their difficulties
may be past.
The emerging and developing economies faced
challenges to growth, with some easing in the second
half of 2013. Investment weakness continues to hamper
the economy with tightening of external funding and
financial conditions. New investments have stagnated
amid an erosion of business sentiment, unfavourable
global environment and weak domestic demand. These
economies were impacted by supply side constraints
due to structural and policy bottlenecks leading in turn
to high inflation and volatile exchange rates. In 2014,
investment cycle is unlikely to pick up in a robust manner
until business sentiment improves and credible signs of
domestic demand revival are seen.
Growth was also tepid in the Middle East and North
Africa region (MENA) in 2013 due to lower buoyancy in
oil revenues, as the region saw a decline in oil production.
In 2014-15, growth is expected to strengthen as public
spending on non-oil activity increases and oil production
recovers. On the other hand, the sub-Sahara Africa region
registered a strong growth of 4.8% in 2013 underpinned
by investments in natural resources and infrastructure.
Growth is projected to accelerate to about 5.5% in 2014
reflecting positive domestic supply-side developments and
the strengthening in global recovery.
Global growth is expected to be better in the current
year, as the developed world consolidates further. In the
advanced economies, risks to economic activity associated
with very low inflation have come to the fore, especially in
the euro area, where large output gaps have contributed
to low inflation. Emerging market economies will have to
tackle inflationary pressures and currency volatility in the
short and medium-term as they attempt to revive growth.
There is a risk of continuing tight financial conditions
leading to a higher cost of capital leading to a further
slowdown in investments. Also the recent geo-political
risks may lead to a renewed bout of increased risk aversion
in global financial markets.
Overview of Indian Economy:
The GDP growth of Indian economy was 4.7% in the
year 2013-14. The economy has remained challenged as
growth has been below 5% in the last 7 quarters between
Q1, 2012-2013 to Q4, 2013-2014. The only exception in
this period was Q2, 2013- 2014 when GDP grew by 5.2%.
This slowdown has coincided with a decline in financial
savings, low and sluggish growth in fixed capital formation
over successive quarters, persistently high inflation, low
business confidence and particularly inadequate structural
policy measures which have had a profound effect on
potential growth.
The year witnessed sustained high inflation and a highly
volatile exchange rate in the first half of the year. The
subsequent tightening of monetary policy effectively
choked economic recovery. Domestically, structural
reforms did not proceed at the pace expected by markets,
as bottlenecks continued to hamper investment projects,
particularly in the critical power sector.
Since early September, external pressures have eased
somewhat, in large part due to the postponement of
75
“tapering” by the US Federal Reserve, which helped to
stabilize global interest rates. This has led to a return of
capital inflows. Simultaneously, the RBI took a number
of measures to boost reserves, while the government has
acted to reduce the current account deficit and shore up
investor confidence. Indeed, the current account deficit
has shrunk quite remarkably from a high of 4.7% of GDP
in 2012-13 to 1.7% in 2013-14. As a result, the INR has
recovered, and asset prices have moved higher.
With the exception of agriculture, all the other sectors in
the economy continued to remain weak in 2013-14. The
industrial sector continued to lag and declined by 0.1%,
a 22 year low. The entrenched stagnation in economic
growth over two year’s reflects a subdued investment and
consumption demand which has resulted in contraction
in production of manufacturing sector, capital goods and
consumer durables in the current year. Also, growth in
services sector which is the largest contributor to GDP
remained almost stagnant at 6.2% in 2013-14 with
growth decelerating in the trade, hotel, transport and
communication sector. The only sub-sector that recorded
a strong growth of 12.9% was financing, insurance and
real estate.
India’s earlier consumption-lead growth story post 2008
continued to falter, with both private and government
sector consumption decelerating in 2013-14. Growth in
government consumption, which sharply picked up in the
first quarter, remained subdued for the rest of the year as
fiscal pressures intensified. Also, private final consumption
expenditure which has the largest share of 60% in the
GDP, slowed down further at 4.9% in 2013-14 from 5.0%
in 2012-13. On the investment side, gross fixed capital
formation declined by 0.1% in 2013-14 from an already
negligible growth of 0.8% in 2012-13. However, it was
the external sector that stemmed the rot, with a gradual
recovery in the exports (8.4%) due to competiveness gains
from weaker currency and pickup in demand in some
advanced economies, and a contraction in imports (-2.6%)
due to a sharp policy driven moderation in gold imports.
Business Scenario:
Macro economic and policy uncertaintities, persisting
inflation, tight liquidity conditions and high interest
rates adversely impacted business environment in India
in the year 2013-14. While the Company continued to
focus on maximizing the domestic opportunities, it also
76
strengthened its presence in the select overseas markets
amidst strong competitive pressures.
The core sectors such as infrastructure, power, minerals &
metals, defence, oil & gas which hold business prospects
for the Company, await policy decisions and structural
reforms. Speedy resolution of issues, in these sectors, is
important for boosting the Company’s prospects. The
reform initiatives and their rigorous implementation by the
new government is expected to remove the bottlenecks,
presently impeding the economic growth in India and
thereby improve business environment.
The Middle East economies appear to be on the path of
sustainable development with projection of consistent
growth in coming years on the back of investment in
Infrastructure and Oil & Gas sectors.
Growth Strategies and Thrust Areas :
• Strengthening execution and operational
efficiency:
Execution excellence and successful implementation of
cost optimization initiatives are imperative for translating
the targeted top-line growth into earnings growth and
sustainable margins. In this respect, the businesses
have taken various steps for focused cost reduction and
productivity improvement to enhance their competitive
positioning.
• Capacity augmentation:
The Company has made significant investments in the
past few years in expanding its facilities for various
businesses. While these new capacities provide the
competitive edge to the Company, the returns on these
investments are expected only over a longer term. The
businesses are focusing on increasing capacity utilization
and enhancing productivity in order to improve returns
on these investments.
• International business:
Over the years, the Company has been accelerating
its journey as a value-creating Indian multinational to
replicate the success it has achieved in India, in some
chosen global markets. The achievement of the plans
in respect of international business largely depends
upon successful procurement of targeted business
against the stiff competition, risk management, cost
competitiveness, efficient contract management and
execution excellence.The strategy of internationalization
is helping the Company to achieve the twin-objective
of hedging against domestic slowdown and attaining
global competitiveness. The Company is, therefore,
building its international organization.
• Human Resource Development:
Talent acquisition and retention remain the focus areas
to augment the journey of internationalization to
create a multicultural work force and for strengthening
leadership cadre with appropriate domain competencies.
The Company has a strong committed work force
nurtured and backed up by its professional culture
coupled with innovative HR process aimed at strategic
alignment with the business objectives. Top performing
employees are periodically identified and put through a
six-step leadership development process. The Company’s
in house Project Management Institute in Baroda hosts
several programs on project execution excellence to
complete projects in time and within cost.
The Company with its healthy order book, presence in
diverse sectors, increasing international business and
proven track record is well positioned to maintain the
growth momentum and create value for its stakeholders.
It is in this background that the Company’s various
businesses present their operations review for the year
2013-14 as follows:
77
Infrastructure Business
The new Gateway of India - Terminal 2 at Mumbai Airport. L&T has constructed several modern airports that include New Delhi, Bengaluru and
Hyderabad in India. The Salalah International Airport in Oman is at an advanced stage of construction.
Infrastructure business segment is the construction arm
of the Company and enjoys leadership position in the
construction sector in India. The Infrastructure segment
offers EPC solutions with single-source responsibility, for
executing large industrial and infrastructure projects from
concept to commissioning through dedicated businesses –
Buildings & Factories, Transportation Infrastructure, Heavy
Civil Infrastructure, Power Transmission & Distribution and
Water & Renewable Energy.
With a track record of over 70 years in the field of
construction, L&T’s Infrastructure has the proven capability
for executing all types of mega projects on a turnkey basis,
involving innovative design, comprehensive construction
services including procurement, supply, installation, testing
and commissioning services.
78
L&T Infrastructure’s international presence is increasing,
with history of work sites in 20 countries that encompass
South Asia, South East Asia, the Middle East, Russia, CIS
countries including African countries. L&T was one of
the earliest companies to operate in Gulf and over the
years, gained significant market presence in UAE, Oman,
Qatar, Saudi Arabia, Kuwait and Bahrain for executing
projects on EPC basis. A few recent prestigious projects
of Infrastructure business segment include the Riyadh
Metro in KSA, the Doha metro in Qatar, the EPC works
for substations for Kahramaa in Qatar and the Western
Dedicated Freight Corridor (WDFC) for Dedicated Freight
Corridor Corporation of India Ltd. (DFCCIL) in India.
Buildings and Factories Business
Overview:
Buildings & Factories (B&F) business undertakes
engineering design and construction of Airports, IT Parks,
High-rise structures, office spaces, educational institutions,
stadiums, convention centres, metro stations, hospitals,
hotels, residential buildings, factories, cement plants and
warehouses.
The thrust is on providing world-class “Concept to
Commissioning” solutions to our customers in various
building segments. This helps us in maintaining the
leadership position, retaining key customers, entering
new geographies and securing relatively large value
orders. Construction excellence coupled with technology,
experience and expertise gained over several decades
has helped B&F to project itself as one of the premium
contractors in the industry.
Business Environment:
Business environment continued to be challenging both on
domestic and international front during 2013-14. Despite
the tough times, B&F was successful in maintaining its
leadership position in the market with considerable growth
in revenue and order inflows.
The Residential business unit maintained a considerable
growth in order book and market expansion across Tier I
and Tier II cities in the country. Major orders were secured
from reputed real-estate developers for building high-rise
residential towers. B&F has been a pioneer in the industry
in terms of construction of world-class hospitals in the
country. It leveraged upon its EPC capabilities and secured
major orders for construction of hospitals for central and
state Governments. In IT & Institutional Space business
unit, major orders were secured to build convention
centres, office buildings and museum.
The year 2013-14 continued to be challenging for some
business units like Airports and Factories. Major airport
development plans in the domestic sector continues to
be deferred, mainly due to land acquisition and funding
issues. Similarly, the manufacturing and automobile sector
continued its negative growth and companies deferring
the expansion plans.
Reduced opportunities
in some segments were
compensated by considerable growth in others and overall
B&F continued its Y-o-Y growth in terms of revenue and
order book.
Major Orders Secured and Under Execution:
The year 2013-14 order inflows maintained a steady
growth with major orders being bagged in all the business
units. B&F successfully secured some of the largest
residential orders in the country for constructing high-rise
towers in Gurgaon, Bengaluru, Mumbai and Chennai from
reputed real-estate developers like Prestige, DLF, Olympia
and Omkar. It also successfully secured a major order
for construction of an international convention centre
in Mumbai from Samsung C&T. Major orders were also
secured for building a state-of-the-art global technology
centre for Shell in Bengaluru, an IT Park for Tech Mahindra
in Bengaluru, and passenger terminal building in Cochin
International Airport, Kerala. B&F also secured orders for
constructing major hospital projects for central and state
governments, a manufacturing facility in Jaipur for JCB
Air-traffic Control Tower, Mumbai Airport
High-rise towers for a residential project in Delhi. The Buildings &
Factories business provides world-class ‘Concept-to-Commissioning’
solutions across various building segments.
79
and cement plants for Orient and Emami. It also secured
additional orders from key clients like Tata Consultancy
Services (TCS), Cognizant, Boeing, LDA, Jawaharlal
Institute of Postgraduate Medical Education and Research
(JIPMER), Ford, Honda and Maruti.
Some of the key projects commissioned by B&F during
the year 2013-14 are terminal building T2 and Air Traffic
Control (ATC) Tower for Mumbai International Airport,
terminal building in Bengaluru International Airport, a
major IT office facility for Cognizant in Pune, a major
precast residential project in Mumbai for Omkar, a 10,000
tonnes per day capacity cement plant project in Malkhed
for Ultratech and an automobile manufacturing facility for
Ford in Sanand, Gujarat.
Significant Initiatives:
Apart from continuing its focus on technological
advancements and R&D, B&F has also introduced some
major initiatives with an objective to strengthen its customer
portfolio, steading business growth and expanding
into emerging markets. Key moves have been taken to
strengthen the international organization and follow a
focused approach towards projects that complement
our strengths. B&F also has provided a special thrust
on improving Operational Excellence by implementing
construction techniques like ‘Lean Construction’ and
improving project cycle time. ‘Srishti’ 3D Studio was setup
in our Engineering Design and Research Centre. This is first
of its kind in Indian construction industry where ideas are
created, synergised and the designs are culminated into
virtual reality. Various other initiatives were also initiated
in safety, HR practices, talent acquisition and workmen
management.
Outlook:
On the domestic front, stable government in the centre,
should hasten the decision making and implementation
of planned infrastructure projects. In the private sector,
the Company is optimistic on expansion plans of IT
companies and major residential orders in Tier – II cities.
Opportunities in sectors like aviation, manufacturing,
cement, automobiles and pharmaceuticals may continue
to be slow.
In the International sector, opportunities in GCC region
have opened up and B&F is highly focused on the market
with a target to secure major airport, metro stations and
hospital orders. B&F is positive on the scenario in the
regions.
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Seawoods Grand Central, Navi Mumbai - one of India’s largest Transit-
Oriented Development projects that will house a railway station, and
is poised to be a nerve centre of commerce and leisure.
B&F is a proven player in the construction industry with an
exemplary record of handling major design & build projects
and executing the same within stringent timelines.
B&F is poised for sustained growth in the forthcoming
years on the backdrop of a healthy order book, wide
customer network, strong organisational setup, efficient
supply chain management, requisite resources and skilled
workforce.
Major Subsidiary Company
Larsen & Toubro (Oman) LLC (LTO):
Subsidiary Company
LTO is a JV with Muscat Trading Company LLC (Zubair
Corporation Group), providing engineering, construction
and contracting services for nearly a decade in Sultanate
of Oman. The Company has an excellent track record in
civil projects 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.
Last year, LTO successfully secured a major order for
construction of Sultan Qaboos Youth Complex in Salalah
for Culture and Recreation.
Luxurious amenities at a premium residential property in Mumbai.
Prospects for the upcoming year seem to be attractive in
segments like Airports, Hospitals, Institutional space and
commercial buildings as major orders are in pipeline in
these segments. Based on the region’s economic scenario
and LTO’s past performance, we are confident of expanding
our business portfolio in the region.
Transportation Infrastructure Business
Overview:
Industry Structure & developments:
Transportation Infrastructure business comprises of Roads,
Runways (Airside Infrastructure) & Elevated Corridors
(RREC), International Infrastructure, Railways Construction
& Railways Systems. It has sustained its growth momentum
despite challenges posed domestically by sluggish
economic growth resulting from policy paralysis, inflation
and higher interest rates.
The Roads, Runways & Elevated Corridors business is largely
dependent on PPP & EPC projects of National Highways
Authority of India (NHAI), State Road Corporations, PWDs
and City Development authorities.
For Railway business,Rail Vikas Nigam Limited (RVNL)
is an important client providing consistent business
opportunities with competition for small packages. Indian
market continues to expand as Tier II cities are going for
Mass Rapid Transit Systems (MRTS).
International Infrastructure business is mainly concentrated
in GCC countries of Oman, UAE, Qatar, Saudi Arabia &
Kuwait.
Business Environment:
Domestically, pre- construction issues like land acquisition,
environmental clearance & relocating utility continue
to contribute to delays in road project which is being
mitigated with smart mobilisation.
Majority of the UAE Projects will be self-financing models.
Immense pricing pressure due to intense competition
across all operating countries will continue.
Customer expectations continue to be on-time delivery,
best-in-class quality and competitive price. Competition
in the infrastructure sector continues to be severe from
established as well as new players, small and mid-size
projects being most competitive.
Major Orders Secured and Under Execution:
Major orders bagged domestically during the year 2013-14
include Rourkela-Sambalpur Road Project (Odisha), EPC
projects Manawath–Beed (Maharashtra), Jharsuguda-
Kanaktora Road project (Odisha) and Kannur Airport
(Kerala).
Railways business made a major breakthrough by bagging
the prestigious mega project of Western Dedicated Freight
Corridor (WDFC) Civil & Track Package (CTP) 1&2. Total
value of orders worth 4410 crore is booked by Railways
business from DFCC & RVNL. The Railway Business
bagged Civil and Track packages (CTP 1&2) from WDFC
and Electrical & Mechanical Package (Mughalsarai to
Sonnagar) from EDFC. India’s first Monorail –Mumbai
Monorail commissioned on February 1, 2014.
India’s first monorail, in Mumbai, built and commissioned by L&T.
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In the International Infrastructure business unit, our
consistent efforts of last 2 years in organisation building
& networking has finally yielded results as 4 prestigious
mega road project orders worth 8600 crore. International
Orders include Batinah Expressway & Bid bid-Sur Highway
in Oman, Maffraq to Al Ghwaifat road project in UAE
and Al Wakrah in Qatar to Transportation Infrastructure
business and its subsidiary.
Projects executed during the year are Krishnagiri Walajahpet
Road Project (148 km, TN), Khalifa Port Interchange Project
(Department of Transport, UAE).
Transportation Infrastructure has bagged 11 International
Safety awards, 3 RoSPA Gold (Royal Society for the
Prevention of Accidents), 1 RoSPA Silver & 7 British Safety
Council award along with 5 prestigious Safety Awards
from National Safety Council (NSC), India for the year
2013.
Transportation Infrastructure also received Dossier
Construction Award for Best Contractor of the year- 2013
in Oman.
Significant Initiatives:
Transportation Infrastructure has secured large orders
in Dubai, Oman and Qatar in the year 2013-14.
It acknowledges that it is critical to build a robust
organisation with a strong leadership pipeline to ensure
timely and profitable execution of all the projects already
secured/being secured.
Accordingly, one of the major initiatives is building of
on-ground leadership for integrating multi-cultural &
multi-linguistic leadership, inculcating L&T values and
creating a vibrant L&T brand in the Middle East similar
to the one in India. This has led to the organisational
restructuring of domestic business and business in GCC
countries of Oman, UAE, Qatar & Saudi. Massive emphasis
was given in Expatriate staff recruitment including country
head & business development positions in all the above
countries of Gulf.
In domestic roads business, Transportation Infrastructure
business will continue our initiatives in Value Engineering
through Mechanistic Pavement Design, Use of Reclaimed
Asphalt Pavement, alternative materials, integral design
for Flyovers and flexible wire rope safety barriers.
The business is targeting improvement in overall operations
with focus on design, subcontracting, procurement,
equipment utilisation, construction methodology, project
management and contract management. Operational
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excellence program is initiated across Transportation
Infrastructure for improvement in profitability and to
enable faster completion via risk mitigation and improved
planning.
Talent management and leadership development continue
to be the major focus areas across the Transportation
Infrastructure business. In addition to the programme
organised by L&T at a corporate level for leadership
development, Talent Acquisition will continue to play a
key role in growth. Rapid ramp-up of quality manpower
is of prime importance, especially as the quantum of
international operations increase. In tune with the plans
for internationalisation- Safety, Quality & Productivity have
been identified as the themes for Talent Development.
Outlook:
L&T continues to be a leader in both roads & rails business
in India. Domestically, many of the bottlenecks in the road
sector are expected to get resolved. Award process in Road
Sector will improve vastly. Delhi-Meerut & Agra-Lucknow
Expressway are potential prospects during current year. In
the Airport segment, we would continue to leverage our
excellent track record & capabilities.
As per FY 2014-15 plan of NHAI, approximately 15000
crore of EPC Road projects &
35000 crore PPP projects
will be bid out this year.
In the airport segment, the Navi Mumbai and Bangaluru
airport airside work projects are major opportunities in
FY 2014-15.
In the Elevated Corridor Segment, there are quite a few
projects in anvil in FY 2014-15 from various state authority
bodies like MMRDA (Mumbai Metropolitan Region
Development Authority), GDA (Ghaziabad Development
Authority), KMDA (Kolkata Metropolitan Development
Authority) etc.
In India, several Expressway Projects by NHAI and State
governments are expected in FY 2014-15 in PPP or in EPC
mode in addition to planned outlay in National Highways
Development Project (NHDP). However, the solution to the
existing problem of stalled projects and award of fresh
projects in PPP segment will take some more time due to
the economic sluggishness.
In Metros & Mono Rails, projects are expected from Kochi
Metro and Kerala Monorail Authorities, besides Metros in
Ahmedabad and Lucknow. In the mainline market, more
tenders are expected from RVNL and other private players
in railway sidings. However, in metros & RVNL projects,
there will be severe competition.
In the countries like UAE, Oman and Qatar, next five years
expenditure on development of road is estimated in excess
of $ 5 Billion. However, severe competition will be faced
and also good performance in the on-going projects must
be consistently maintained.
UAE Expo-2020 & FIFA 2022 in Qatar promise for fast
track infrastructure developmental in Airports, Rails &
Expressways.
Saudi Railway Corporation, Oman National Rail project,
Qatar Rail Corporation, & ETIHAD Rail are coming up with
huge opportunities in development of railway network of
around $ 9.4 Billion. Transportation Infrastructure business
has consolidated our position in GCC countries and it is a
major step towards realizing the objective of establishing
L&T as a recognized EPC contractor in Gulf Countries for
Infrastructure projects.
The future looks to be promising for Railways Strategic
Business Unit (SBG) in the domestic fronts too. The
remaining projects of Phase I & Phase II (Civil & Track,
Electrical & Mechanical, Signaling & Telecom packages)
of WDFC are expected to be awarded along with Eastern
Dedicated Freight Corridor (EDFC) packages.
Major Subsidiary Company
Larsen & Toubro (Oman) LLC (LTO):
Subsidiary Company
The economy in Oman continued its growth in a sustained
manner during 2013-14, supported by higher crude
production and contained inflation. The Government of
Oman has allocated funds for large public investment
programs, particularly in infrastructure and social
sectors. LTO is targeting large value road and expressway
orders from upcoming projects in Oman. The Company
is expanding Plant & Machinery base considering the
expected investments by Government of Oman in large
infrastructure projects.
Heavy Civil Infrastructure Business
Overview:
Heavy Civil Infrastructure business undertakes Design,
Engineering and Construction of infrastructure projects
of the nation in Metros, Nuclear, Hydel, Ports, Special
Bridges, Tunnels and Defence Infrastructure segments. The
goal is to become a Total Infrastructure solution provider
not just in India but abroad as well. Our In-house design
strength and Unique Construction methodology cell give
us an edge over our competitors in the market and helps
us serve our customers from concept to commissioning.
Business Environment:
The year 2013-14 has been a golden year for Heavy
Civil infrastructure business. Various initiatives for
internationalisation have paved the way for bagging the
most prestigious and largest single order of L&T i.e. Riyadh
Metro rail project through Joint Venture mode. With just
a few months after booking a $5.9 Billion Riyadh Metro,
Heavy Civil business made a successful entry into Qatar
region with Doha Metro rail Project worth $3.2 Billion
through Joint Venture mode. This further has strengthened
our presence in the overseas markets, opening up new
opportunities. Foraying into international markets helped
to maintain the growth in order inflow in spite of weak
domestic market. On the domestic leg, two packages of
Kochi Metro were bagged by the Metros BU of the Heavy
Civil Infrastructure.
Heavy civil business also tasted success in various other
segments like Special Bridges, Nuclear and Defence
Infrastructures. Some of the orders booked include iconic
2nd Narmada Cable-stay Bridge, Civil package from Indira
Gandhi Centre of Atomic research at Kalpakkam etc. Hydel
and Ports segments, however, saw only limited tenders
mainly due to environmental clearance issues for various
projects in the country.
Some proud moments for Heavy Civil Infrastructure business
in 2013-14 were river impounding of 330 MW Srinagar
HEP in Uttarakhand, synchronisation of Kudankulam
Nuclear Project-Unit 1&2 in Tamil Nadu to Grid, completion
of elevated corridor leading to Iconic T2 terminal in
Mumbai, 4 Tunnel Boring Machines (TBM) breakthroughs
in Chennai Metro and Delhi Metro Underground packages
and completion of civil structures for nation’s maiden
Monorail project (Stage I) in Mumbai. For the first time in
the history of Indian Nuclear Construction, a full ring liner
was pre-fabricated and successfully erected at Kakrapar
Atomic Power project (Unit 3&4) in Gujarat.
Heavy Civil Infrastructure Company in 2013-14 won
various national and international accolades for our safety
standards at our project sites. Kakrapar Atomic power
Project bagged the prestigious Sarvasreshta Puraskar,
highest honor in India for construction safety given by
National Safety Council. We won 5 ROSPA awards and 2
from British Safety Council.
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Kakrapar Atomic Power Project, Gujarat, under construction. L&T has contributed to India’s nuclear power programme both through comprehensive
construction of critical structures and supply of vital equipment.
Significant Initiatives:
Heavy Civil Infrastructure has identified considerable
opportunities in the Middle East for future growth of the
business. These are also projects of national importance
and are being monitored at the highest level in the
respective countries.
Acknowledging that the projects underway are complex
in nature owing to the involvement of several partners as
well as consortium approach to execution, management
has laid greater emphasis on building the on-ground
leadership and management team in these markets. This
move is expected to help in faster and effective decision
making as well as implementation of the same.
With our vision of becoming a global major taking shape,
business development teams for international domain
were also strengthened this year.
Talented human resource has been the key asset of the
Heavy Civil Infrastructure. Substantial efforts have been
put into training and leadership development through
various programs. Training days per employee saw an
increase of about 300% during the current year. Apart
from technical training programs, special emphasis was
given on soft skills training and personality development
programs.
Internationalisation and increase in Joint Venture jobs
also has brought in an increased number of experts from
foreign Nations. Continuous efforts are on to recruit talent
from across the globe for increasing the skill inventory to
cater to mega projects. Various strategic initiatives like
formation of competency cells for resource optimisation,
strengthening the procurement team and other cost
competitiveness measures are in place to improve our
internal processes and increase profitability.
Outlook:
Even though an election year, the view on infrastructure
spending remained upbeat with the country trying to
stabilise the growth rate through internal public spending.
Few port projects have got environmental clearances.
Some strategic decisions by the Government are expected
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micro tunneling, mine shafts and other related activities.
Many challenging projects have been completed for this
year. 40 nos of 2.5 m Dia 40 m long plunge-in column
through hard rock strata for Chennai Metro project, 800
m wide and 30 m deep rock socketed diaphragm wall
in Bangaluru with state of the art trench cutter are such
examples of our strength and capability.
L&T Geostructure has good business opportunities in
the coming financial year. New technology, expertise
pertaining to equipment, construction methodology and
right talent are important in this business. L&T Geostructure
will continue to focus on technology leadership in the
areas of ground engineering to penetrate the market and
expand our market share.
Power Transmission & Distribution Business
Overview:
L&T’s Power Transmission and Distribution (PT&D) is a
leading EPC player in the field of Power Transmission and
Distribution business offering integrated solutions and end
to end services ranging from Design, Manufacture, Supply,
Installation and Commissioning of Transmission Lines,
Underground Cable Networks, Substations, Distribution
Networks, Electrical, Instrumentation & Communication
works for Power, Process & Infrastructure Projects in both
Domestic & International markets.
Extra High Voltage Substation Systems & Power Distribution
Business Unit focuses on providing turnkey solutions for
Extra High Voltage Air Insulated/Gas Insulated Substations
for Utilities & Power Plants, EHV Cable Networks, Utility
Power Distribution & Power Quality Improvement works
with associated DMS/Smart grid systems, complete
Electrical, Instrumentation & Communication (EI&C)
solutions for large Power Plants including Thermal &
Nuclear plants, various industrial & infrastructure projects
such as Metallurgical Plants, Hydrocarbon & Pipeline
Projects, IT Parks, Airports, Sea Ports, Metros, OFC
networks etc.
Transmission Line Business Unit offers turnkey solutions
in building overhead lines for Power Evacuation &
Transmission Systems, bolstered by its state of the art tower
manufacturing units at Puducherry and Pithampur supplying
over 1.2 lakh tonnes of tower components annually &
complimented by its NABL accredited tower testing facility
at Kanchipuram. (NABL- National Accreditation Board for
Testing and Calibration Laboratories)
85
Tunnel for Delhi Metro. L&T has built underground and elevated
corridors for the metro in major cities.
330 MW hydroelectric project in Uttaranchal - one of the many at the
foothills of the Himalayas.
to facilitate major prospects in coming years. Feasibility
studies and budget allocations for freight corridors, Metros
at Tier II cities have already been planned. There are some
more bright prospects for Metro segments in Gulf region.
With commissioning of Kudankulam Atomic Power project
Unit I & II, prospects for further units are looking bright.
Many interesting special bridge projects are under various
stages of tendering and approval. Indian government has
approved 4 new hydro power projects in Bhutan.
With healthy order book backed by strong team spread
geographically, Heavy Civil business is confident of
achieving its revenue targets for 2014-15.
Major Subsidiary Company
L&T Geostructure (LTGS):
L&T Geostructure LLP was formed in 2012-13. LTGS
undertakes projects in the business areas of ground
engineering namely soil investigation, deep excavation,
earth retaining structures, large diameter piling, marine
and riverfront structures, ground improvement, deep
foundation-supported bridges, water retaining structures,
PT&D ‘s International Business Units offer complete solutions
in the field of Power Transmission & Distribution including
High Voltage Substations, Power Transmission Lines, Extra
High Voltage (EHV) Cabling and Electrical, Instrumentation
and Controls (EI&C) Works for Infrastructure Projects such
as Airports, Oil & Gas Industries etc. in Gulf & African
countries namely UAE, Qatar, Kuwait, Oman, Saudi Arabia,
Algeria & Kenya.
Business Environment:
During the year 2013-14, Power Transmission &
Distribution Sector in India experienced a dynamic change
in its balance equation with distribution sector gaining
momentum backed by significant investments, however,
power generation sector remained muted with no major
expansions or new projects taking off. The sector plagued
by many unresolved policy issues continued to be sluggish.
Issues related to fuel linkages, land acquisition, liquidity
etc. affected capacity additions.
In the backdrop of governmental reforms programme in
distribution sector, fostered by central funding agencies,
utilities have laid emphasis on strengthening their
respective distribution networks for better efficiency,
accountability & management. The PT&D positioned itself
to capitalise this emerging opportunity and was successful
in bagging major orders.
The opportunities in Transmission sector were steady as
central & select state utilities were concentrating on Power
System Strengthening Schemes to meet their demands.
The PT&D was successful in tapping the potential
available in Urban Mass Transit (Metro) Projects in Delhi
& Hyderabad.
The current economic downturn & policy issues had a
severe impact on industrial projects with no expansions
and Greenfield projects announced, while the ongoing
projects too are moving at a slow pace.
The international business grew substantially, supported
largely by Qatar’s ambitious plan to augment the existing
power system network to fulfill their growing infrastructure
needs & meet future demand while Kuwait showed
positive signs of bulk investments in power transmission
sector. Saudi Arabia has become one of the key area of
focus as its central utility is going for vast expansion plans
to meet its demand forecast. The inopportune aspect was
that UAE witnessed slowdown in T&D sector investments.
Major orders bagged:
Major orders secured in domestic market include 765kV
GIS Substations at Varanasi & Srikakulam for Power Grid
Corporation of India Limited (PGCIL), 400kV Gas-insulated
substations (GIS) in Wangtoo, HP for Himachal Pradesh
Power Transmission Corporation Limited (HPPTCL), 400kV
Air Insulated Substations (AIS) at Tamil Nadu for Tamil
Nadu Transmission Corporation Limited (TANTRANSCO),
Power Distribution & Quality improvement works under
Restructured Accelerated Power Development and Reforms
Programme (RAPDRP) & Rural Electrification schemes for
various DISCOM’s in the states of Uttar Pradesh, West
Bengal, Kerala & Odisha.
E&I Works for Infrastructure Projects include Auxiliary
Power Network, E&M Works with associated SCADA
system for Delhi Metro Rail Corporation Limited (DMRC)
Ph III Metro network.
Major Transmission Line projects secured include 765kV
Transmission Line from Angul to Jharsuguda & 400kV
India’s first 1200 kV substation at Bina in Madhya Pradesh built by L&T.
800 kV transmission lines between Nidhura and Agra.
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Line in Indore for PGCIL; 400kV Transmission Line from
Rasipalayam to Salem & from Mettur TPS to Thiruvalam
for TANTRANSCO. A major breakthrough order under
Tariff Based Competitive Bidding route was materialized
by securing an order from Kudgi Transmission Company to
build a 765kV Transmission Line from Kudgi to Narendra in
Karnataka. This line is being built to evacuate Power from
NTPC Limited kudgi 3X800MW TPS.
In international market, the PT&D bagged a remarkable
order in Qatar for turnkey construction of 18 nos.
of EHV GIS Substations and 151 KM of EHV Cabling
works for Qatar General Electricity & Water Corporation
(KAHRAMAA). This order enjoys the feat of being the
single largest ever EPC Order for PT&D IC.
The business was also successful in bagging a breakthrough
order in Oil & Gas (O&G) segment in UAE by securing an
order from Abu Dhabi Gas Industries Limited (GASCO) to
build 220/33 kV GIS substation.
The other major contracts include 132kV GIS substation
orders from Ministry of Electricity & Water (MEW) and
Kuwait Institute of Scientific Research (KISR) in Kuwait.
The PT&D also bagged prestigious orders to execute 230kV
Transmission line works at Abu Ali plant for Saudi Aramco
& 110 kV Transmission line projects in western region of
Saudi Arabia for Saudi Electricity Company (SEC)
This year also marks a noteworthy achievement in our
internationalisation initiative. The IC made a successful
foray into African market by bagging a 400kV substation
order from Socièté Nationale de l’Electricité et du Gaz,
National Society for Electricity and Gas (SONELGAZ), a
prominent utility in Algeria.
Major Orders Executed:
The key projects commissioned include major EHV
substations viz. 400 kV AIS for GMR at Deedwana,
220kV GIS at Bangaluru for Karnataka Power
Transmission Corporation Limited (KPTCL) & at Chennai
for TANTRANSCO, 132kV GIS for Jaipur Metro; 400kV
Switchyard projects for 2x660MW Thermal Power Plant
(TPP) in Chhattisgarh for DB Power, 4X600 MW Tamnar
TPP for Jindal, 2X700 MW Rajpura TPP for Nabha Power
and Electrical works for Kudankulam Nuclear plant. We
also executed Electrical & IT Infrastructure works for
landmark Mumbai Airport T2, flaunting our ability to build
spectacular projects.
The PT&D made a remarkable achievement by
commissioning a 471 metres high Guyed Mast
communication tower which went on to become the
tallest tower in India. The PT&D also completed six major
transmission Line projects viz 765kV transmission Line
from Anta to Phagi for Rajasthan Rajya Vidyut Prasaran
Nigam Ltd (RRVPNL) 400 kV transmission Line from
Parbati to Amritsar, Jabalpur to Bina for PGCIL, 400kV
Line at Deedwana & Raipur for GMR & 132kV Line from
Lakshmikantpur to Kakdip for West Bengal State Electricity
Transmission Company Limited (WBSETCL).
The business also received industry honor as Outstanding
Company in Power T&D in EPC category from EPC
World 2013, a testimony to our strong project execution
capabilities.
In international market we have commissioned six EHV
GIS substations of 132kV level at Sudah Port, Kalba,
Taweelah and Sir Baniyas in UAE for TRANSCO, SUG in
Kuwait for Joint Operations and at Logistic Village in Qatar
for KAHRAMAA. We have also executed 400 kV Fujairah
to Ras al-Khaimah transmission line project in one of the
toughest terrains under severe climatic conditions.
Significant Initiatives:
Reorganized Substation & Industrial Electrification BU’s as
EHV Substation & Power Distribution BU and introduced
separate segments to cater to EHV Substations, Utility
Distribution and Electrical & Instrumentation projects, in
order to effectively capitalise new opportunities, enhance
customer relationship & improve our competitive position.
• In view of our growing exposure to Utility Distribution
segment, innovative Project Management techniques
suited to the specific needs of such projects are being
developed and implemented for effective control &
monitoring.
• Operational excellence measures such as effective
inventory control are
contract management,
implemented all across.
• PT&D dedicated Construction skill training institute at
Cuttack to enhance workmen skills.
• Our Transmission Line factories and testing station
achieved ISO: 50001 – 2011 Energy Management
System certification which is a country first for such
business area.
• In the backdrop of increasing share of business from gulf
countries, the business has recruited significant number
of expats with experience & expertise to intensify project
execution capabilities.
• Committed Business Development teams have been
formed to tap the business potential available in Infra/
Industrial Projects in Qatar, Saudi & UAE.
• Special focus to target tower exports to select foreign
nations.
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• As part of PT&D internationalisation strategy to
expand into Africa & ASEAN nations, we have
strengthened our talent base to vigorously pursue
emerging potential.
Outlook:
Electrical Power is the propelling force for strong economic
growth of a country & must be complemented by
capacity additions which will necessitate a corresponding
development of transmission & distribution assets. The
investment outlook in power sector is promising. To
meet the unmet and growing demands, decongest the
transmission corridors and strengthen the transmission
system, the Central & State utilities have identified several
transmission projects to be executed over the next coming
years. Debt Restructuring Plan of DISCOM/State Utilities
will pave way for revival of their financial health and in turn
faster project implementation. Ministry of Power sponsored
Power Distribution & Power Quality Improvement Projects
supported by central funding agencies will drive the
business substantially. However concerted efforts will
be required to overcome the regulatory and financial
challenges that are hindering timely implementation of
the above projects.
In the Power Generation & Industries front, though
some revival is expected during the later part of the year,
key contribution to growth is likely to emerge from the
potential opportunities available in Electrical & Telecom
works, Optical fibre cabling (OFC) & EHV Power Cabling
Networks.
In International (Gulf) market, the business is poised for a
positive growth in view of upcoming prospects in Power &
infrastructure projects. Strong opportunities are foreseen
on the backdrop of GCC investment plans on Grid
Strengthening & Power System Interconnection. Utilities
in UAE are mainly concentrating on upgrading the existing
network offering significant business potential. There is
a rapid increase in power demand in countries such as
Qatar, Kuwait, Saudi & UAE to expand oil production
in order to meet its rising requirement across the globe
which necessitates augmentation of power distribution
networks.
Africa’s low electrification rate serves as a hindrance to
economic growth & industrialisation. Addressing this issue
has been a key emphasis for local government especially
among East African countries leading to bulk investments,
unleashing significant potential & opportunities for us in
T&D sector. Intensifying power demand in South East
Asian countries also offers huge potential.
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Substation incorporating 765 kV Air-Insulated Switchgear at Unnao
in Uttar Pradesh. L&T offers complete solutions in high-voltage
substations and power transmission lines.
Major Subsidiary Company:
Larsen & Toubro (Oman) LLC (LTO):
Subsidiary Company
LTO is a Joint Venture with Muscat Trading Company
LLC (Zubair Corporation Group), providing engineering,
construction and contracting services in Sultanate of
Oman. LTO made its maiden venture into Oman in 1994
and has completed 20 years, emerging as one of the
leading EPC construction companies. During the past year,
the Company won a major order for 132kV Grid Station
at Al-Amrat & Mabella along with associated Overhead
lines. LTO also won the award for ‘CSR Initiative of the
Year’ at the Construction week Oman Awards 2014, a
notable achievement.
In the coming years, Oman central electricity utility, to
meet the anticipated demand, is planning huge capital
investment to increase the transmission system capacity by
upgrading the voltage level & augmenting the grid stations
which augurs good prospects for our business.
Water & Renewable Energy Business
Overview:
The process of building a nation must factor in the
importance of sustainability. The Water & Renewable
Energy Business is a live example of the industry’s
growing focus on efficient utilization of water resources
and increasing the mix of renewable energy in our daily
lives. The Business comprises Water & Effluent Treatment
Strategic Business Group (SBG) and the Renewable Energy
Business Unit (BU).
The Water & Effluent Treatment SBG caters to turnkey
infrastructure projects including water supply &
distribution, desalination plants, water management
system, waste water networks, water & waste water
treatment plants, industrial water systems, lift irrigation
systems and canal rehabilitation.
The Renewable Energy BU provides EPC services for projects
on photo voltaic (PV) and concentrated solar power plants,
wind power plants, micro-grid systems, smart-grid systems
and integrated security solutions.
also projects involving construction of five waste water
treatment plants in Chhattisgarh, West Bengal and Delhi.
The business also won some prestigious projects like Lift
Irrigation schemes from Department of Water Resources
(WRD), Odisha and a major order from NWRWS &
KD-Gujarat under the Saurashtra Narmada Avtaran
Irrigation (SAUNI) Irrigation Scheme.
Business Environment:
The Water & Effluent Treatment SBG has re-affirmed
its status as a leading player in Water Infrastructure
projects in India during the year 2013-14. Major projects
commissioned in the year 2013-14 include the prestigious
Hogenakkal Water Supply & Fluorosis Mitigation project
covering 3,300 habitations in Krishnagiri & Dharmapuri
districts of Tamil Nadu, Botad Branch Canal Lift Irrigation
project for NWRWS&KD, Gujarat (Narmada Water
Resources, Water Supply & Kalpsar Department) and the
NC-34 Water Supply Scheme, which is the first package to
be completed among the eight packages awarded under
Swarnim Gujarat Saurashtra Kutch Bulk Water Pipeline
Grid.
The Business has secured fresh orders in the year 2013-14
consisting of Water Supply Schemes to more than 1300
villages from Public Health Engineering Department (PHED),
Rajasthan and 2700 habitations from Tamil Nadu Water
suppy And Drainage board (TWAD), Tamil Nadu (including
laying of transmission pipelines, construction of water
treatment plants and pumping stations) and “Reduction
in Un-accounted For Water” project in Bangaluru from
Bangaluru Water Supply and Sewerage Board (BWSSB),
Karnataka. The business secured Waste Water projects at
Porbander, Junagadh and Jamnagar districts from Gujarat
Water Supply And Sewerage Board (GWSSB), Gujarat and
In the Renewable Energy BU, the year witnessed
addition of very few solar power plants due to delays in
implementation of solar policies. Nevertheless, it has been
successful in executing significant projects, especially in
the states of Gujarat and Rajasthan.
It has successfully completed construction of 125 MW
Concentrated Solar Power (CSP) Plant, the largest Solar
Thermal Power Plant in Asia. Furthermore, a 20 MW Solar
PV Plant was commissioned in 2013-14 for a leading
developer in Rajasthan. The Business also bagged and
commissioned the 7.5 MW Rooftop-based Solar PV
Plant in 2013-14, the largest of its kind in the world. It
successfully executed and commissioned a 5MW Solar PV
project for the Finolex Group. It also setup a Solar PV plant
at CSTI, Kanchipuram which won the prestigious Intersolar
award 2013. With this, the Renewable Energy Business
has executed a cumulative of 187 MW of Solar PV Plants
till date.
Coming to the Integrated Security Solutions space, the
Business made a major breakthrough in 2013-14 by bagging
the City Surveillance and Intelligent Traffic Management
System (CSITMS) Project from the Government of Gujarat,
which shall be executed in three key cities of Gujarat viz.
Gandhinagar, Ahmedabad and Vadodara.
110 MGD Water Treatment Plant, Bhagirathi, Delhi. L&T has extensive
experience in design and construction of water treatment plants,
transmission mains and distribution networks.
Desalination is helping the world supplement a vital resource.
L&T’s capabilities in the water sector include setting up of thermal
desalination plants.
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Significant Initiatives:
In lieu of changing business dynamics marked by
increasing competition from local and global players, the
Water & Renewable Energy Business is undertaking several
significant initiatives to maintain its lead in the market
without compromising on its internal benchmarks on
quality and profitability.
L&T Solar in association with MNRE has started a “Solar
Training Institute” at our Construction Skills Training
Institute (CSTI), Pilkhuwa, with an objective to bridge the
gap between demand and supply of skilled manpower for
the solar projects. These initiatives are part of the broader
strategy of the business in sustaining a healthy growth
on long term basis by building a robust order backlog
consisting of businesses cutting across states, applications
and technologies. Some of these significant initiatives are:
• Forge technology tie-ups with leading international
players for water & waste water projects, CSP plants,
micro-grids in India and the Middle East.
• Target opportunities in desalination, water management
and micro-tunneled sewerage networks.
• Expand business in Odisha and Bihar for water supply &
distribution projects; Madhya Pradesh and Chhattisgarh
for waste water projects.
• Target captive/accelerated depreciation customers for
solar power projects.
• Continue thrust on operational excellence through
efficient supply-chain management, working capital
management, cost optimisation and effective resource
management.
Outlook:
Huge prospects have been identified for the year 2014-15
in Water & Effluent Treatment market in India. Various
water supply & distribution projects are expected to be
announced under Jawaharlal Nehru National Urban
Renewal Mission (JNNURM) phase-II. With more than
75% of sewage generated in India flowing untreated,
major investments are anticipated from urban local
bodies for waste water collection, treatment and disposal/
re-use. More waste water projects are expected in the
eastern states under the National Ganga River Basin
Authority (NGRBA). Lift irrigation schemes combined with
distribution systems are coming up in a major way to
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Reverse osmosis technology in operation at desalination projects.
boost agriculture growth. Rehabilitation of existing canal
networks, including canal relining is witnessing traction.
As far as finance is concerned, leading institutions like
World Bank & Japan International Cooperation Agency
(JICA) are committing funding in various water and waste
water schemes in India.
Coming to Renewable Energy BU, year 2014-15 is expected
to be positive with the allocations of 750 MW of solar
plants under JNNSM Ph-2 and 500 MW of solar plants
under various state solar policies (Tamil Nadu, Andhra
Pradesh, Karnataka, Punjab and Rajasthan). The BU has
envisaged that post elections there would be a good thrust
in renewable energy projects. Keeping the long term vision
of JNNSM in perspective, MNRE has envisaged setting
up of large scale solar plants (up to 4000 MW) utilizing
surplus land/wasteland in the deserts. Major potential is
envisaged in the Middle East, especially in Qatar and the
Kingdom of Saudi Arabia.
In Integrated Security Solutions space, all the state
governments are providing major thrust on city surveillance
and intelligent traffic management systems. There is an
increased focus on implementation of security systems
at critical infrastructure areas like nuclear power plants,
metros, airports etc. Local Police communication networks
are being automated in various states.
Power Business
2x700 MW supercritical thermal power plant built by L&T on EPC basis for Nabha Power at Rajpura in Punjab. L&T’s joint venture with Mitsubishi
Hitachi Power Systems enables the power sector to access the advantages of world-class technology.
Overview:
Power business provides end-to-end EPC solutions for
setting up coal and gas based power plants on a lump
sum turnkey basis, with capabilities stretching across the
spectrum of power generation value chain from design to
commissioning.
With world class In-house manufacturing facilities for super
critical Boilers, Turbines & Generators, Pressure Piping,
Axial Fans, Air-Preheaters and Electrostatic Precipitators
are its added and unmatched advantage, having the
capability to cater to over 90% (by value) of the power
generation value chain.
The business has incomparable experience in Project
Management, Engineering & Construction Management
which gives it competitive edge over its competitors.
This is amply demonstrated by the achievement of COD
(commercial operations date) in a record time of 46
months for Nabha Power Limited’s first unit of 2x700 MW
supercritical thermal power plant at Rajpura in Punjab.
Geographically, the business has a pan India presence
with multiple project sites, project management centres
at Vadodara, Faridabad and Chennai and world class
manufacturing facilities at Hazira.
The business has made its way in the international
arena by getting EPC order for gas based power plant in
Bangladesh.
Business Environment:
The year 2013-14 witnessed a continuation of weak
business environment with issues of fuel supply, land
acquisition and regulatory uncertainty affecting fresh
ordering. The year saw project awards of a meagre 3580
MW in the super critical space, with many orders being
deferred on account of environmental clearance issues
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UMPP orders on the anvil. The sector is also expected
to witness more regulatory certainty and action post the
general elections.
The year 2013-14 saw the Power business achieve a major
breakthrough in the overseas market with the award of an
EPC order for 360 MW Bheramara combined cycle power
project in Bangladesh. The business is also pursuing other
promising prospects in the country. In India, It has also
been declared as the lowest bidder in the 2x660 MW
Malwa Phase II coal based EPC project, where the formal
award is awaited.
On the execution front, the year saw commercial operations
of the country’s first indigenously manufactured super
critical Boiler, Turbine & Generator for the 700-MW unit
at Nabha Power’s Rajpura plant. With this, the business
synchronized a total of 3075 MW capacity during the year
across various plant configurations like coal based EPC,
balance of plant, steam turbine generator island as well
as gas based CCPP.
The difficult business environment coupled with the
stretched finances of Power Developers meant that the
Power business had to keep a sharp focus on working
capital and cash management. Rigorous efforts were put
in to ensure collection of due receivables. In spite of the
challenging economic conditions prevailing in the country
as well as the sector specific issues, the business was able
to conclude 2013-14 with a healthy cash position.
Significant Initiatives:
Sensing the early signals of further pressure on price
reduction and tight completion schedule for its future
jobs, the Power business has taken steps towards setting
and land acquisition delays. The economic slowdown and
lack of implementation of reforms by power distribution
companies made the independent power producers (IPPs)
retreat from the domestic power sector.
On the policy front, the extension of Phased Manufacturing
Program (PMP) by CEA till October 2015 and the inclusion
of mandatory domestic Boiler, Turbine and Generator
(BTG) sourcing in standard bidding documents were
positive developments. The implementation of fuel pass
through mechanism is also expected to give a fillip to coal
based plants.
In view of the uncertain gas supply situation in the country,
the Power business had initiated steps to tap export
markets for gas based power projects. The year 2013-14
saw the business gain a foothold in the overseas market
with an EPC job in Bangladesh. Meanwhile, the gas output
in the domestic market continued to decline in 2013-14,
resulting in near shutdown of the gas based power market
in the nation. To counter this domestic downturn, the
business will continue to explore gas based opportunities
in the Middle East, South and South East Asia.
Fuel shortage has stranded a lot of power projects in India.
Coal India Limited has failed to ramp up production to the
desired level and more than 125 projects, recommended
by MoP, with capacity of around 140 GW are awaiting
coal linkage. Gas has also become a scarce commodity,
mainly due to low production of KG-D6 gas field. Banks
are staring at a huge bad debt and are shying away from
financing new power projects.
The financial health of the power distribution companies
is another major area of concern. Payment dues to
generating companies are adding to their cost burden,
making power generation a losing proposition.
The major concern, however, remains the excess BTG
manufacturing capacity built up in the Indian market,which
is slated to reach 24000 MW by 2014-15. The year 2013-14
also saw aggressive competition with incumbents bidding
all-time low prices to bag awards in the shrunk market.
The business has initiated aggressive cost optimization
measures to protect margins in the event of further price
pressures.
For 2014-15, there is a slight improvement in the market
scenario, with multiple government tenders and two
Natural gas-fired combined-cycle power plant built by L&T at Vemagiri
in Andhra Pradesh.
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new benchmarks for cost and time schedules. It has
initiated “Project Shikhar” in collaboration with a global
management consultancy firm as partners to assist in cost
reduction and meeting tight project schedule.
It has also undertaken a project called “Samanvaya”
in partnership with another leading consultancy firm
to achieve competitive advantage through operational
excellence. The focus of the initiative is to review and
redesign the organization structure and identify the
optimal staffing for its various types and sizes of projects.
The business continued its initiative to focus on high
quality and safety standards and practices. It received
British Safety Council’s Five Star Rating and Sword of
Honour award recognising its efforts on safety at project
sites and its workshops.
The Power Projects Professional Program (P4) is another
initiative undertaken by the business to equip its potential
project managers with the latest project management
knowledge and to develop a talent pool having expertise
in execution excellence.
Unless a strong government with significant reforms
agenda takes charge at the Centre, the power sector will
not be able to see an upward trend.
As a business philosophy, management believes in growth
with strong governance system. The Power business has
adequate internal control system in place commensurate
with the nature of business in the areas of financial,
operational and risk management system.
The business has capability centres in various areas like
supply chain, contract management, quality assurance,
EHS & commissioning services. These centres implement
best policies and practices across the business units and
projects.
The business has ensured that policies and procedures
on internal control are well laid out and implemented.
The business has also put in place a system through
project reviews, audits & reporting which helps in review
& revalidation of effectiveness of internal controls in the
business.
Outlook:
While the year 2013-14 saw some positive developments on
the policy front, project awards continued to be lackluster
on account of regulatory and political uncertainties. We
expect the business sentiment to improve post elections as
the political uncertainty is expected to be resolved by then.
With IPP market having dried up, opportunities for the
business during the year will come from PSUs like NTPC
and State Electricity Boards. For gas based opportunities,
we will capitalize on our successful foray into Bangladesh
market to further strengthen our presence in the South
East Asian region.
Driven by its relentless focus on execution excellence and
foray into international market, the business is aiming
to capitalise on the thermal power opportunities as they
emerge and fortify its place as a credible, integrated EPC
player in the power sector.
Major Subsidiary & Associate Companies:
L&T-MHI BOILERS PRIVATE LIMITED (LMB)*:
Subsidiary Company:
LMB is a joint venture between L&T and Mitsubishi Heavy
Industries, Japan incorporated in India for the engineering,
design, manufacture, erection and commissioning of super
critical boilers in India. L&T has a 51% stake in the joint
venture. The manufacturing hub of LMB is at Hazira,
Gujarat while it has established design and engineering
centres at Faridabad and Chennai. The company can
manufacture super critical boilers up to a single unit of
1000 MW at its Hazira complex.(The company has total
installed capacity of 4000 MW for manufacture of boilers)
Projects under execution have achieved several milestones
with stamp of quality and performance in 2013-14. LMB
achieved successful hydraulic tests of three units of 660
MW and two units of 700 MW super critical power plants
Supercritical boiler manufactured at the state-of-the-art manufacturing
facilities in Hazira.
* The company has applied for change in the name from L&T-MHI Boilers Private Limited to L&T-MHPS Boilers Private Limited
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in 2013-14. Nabha Power Limited achieved commercial
operations of first 700 MW unit of 2x700 MW super critical
thermal power plant at Rajpura, Punjab on January 31,
2014 with boiler manufactured and supplied by LMB.
Manufacturing facility at Hazira was awarded British Safety
Council’s prestigious ‘Sword of Honour on November 29,
2013 in London. LMB’s manufacturing facility indigenised
in-house manufacture of orifices, dissimilar welding and
solution heat treatment for stainless steel. The facility also
established production of wind box and gas distribution
dampers in-house during the year.
LMB completed its first export order to supply pressure
parts for Rabigh Arabian Water Electricity Company,
Saudi Arabia. The company bagged another prestigious
export order from MHI to supply pressure parts for Upper
Egypt Electricity Production Company. The company
is exploring business opportunities in the international
market and approaching global EPC players to supply
boiler components.
L&T-MHI TURBINE GENERATORS PRIVATE LIMITED
(LMTG)*:
Subsidiary Company:
LMTG is a joint venture between L&T and Mitsubishi
Group, Japan comprising MHI and Mitsubishi Electric Corp.
(MELCO). The company is engaged in the engineering,
design, manufacture, erection and commissioning of
super critical turbines and generators in India. L&T has
a 51% stake in the joint venture. The company has a
state-of-the-art manufacturing facility at Hazira, Gujarat
for manufacture of STG equipment of capacity ranging
from 500 MW to 1000 MW.
Supercritical turbine being assembled at the Hazira Campus.
During 2013-14, the company focused on completing the
orders on hand and has delivered on time to repose the
customers’ confidence in LMTG’s capabilities and project
management. Nabha Power Limited achieved commercial
operations of first 700 MW unit of 2x700 MW super critical
thermal power plant at Rajpura, Punjab on January 31,
2014 with turbine & generator manufactured and supplied
by LMTG.
In 2013-14, LMTG has been accorded the ISO Integrated
Management Systems Certification from DNV. It is the
first manufacturing company in the country to receive this
combined certification for all four ISO certifications (ISO
9000, ISO 14000, ISO 18000 and ISO 50000) which is a
major milestone towards excellence.
The competition has intensified, with both domestic
and international players competing for a few available
projects with aggressive pricing. To overcome this, the
company is constantly focusing on product upgradation
and feature improvements, cost competitiveness, better
supply chain management, control over working capital
and efficient utilisation of resources with the objective of
reducing wastage, enhancing efficiency and maximizing
productivity.
The company is also exploring the possibilities of export
orders to offset the weak demand in domestic market.
Exports will remain a thrust area in the coming years to
maintain the revenue targets and to meet the expectations
of international customers regarding quality and delivery.
Despite prevailing economic uncertainties, the year 2014-
2015 holds prospects of growth for the Indian economy
provided power and infrastructure development assume
prominence in the next government’s agenda after the
general elections.
L&T HOWDEN PRIVATE LIMITED (LTH):
Subsidiary Company:
LTH is a joint venture between L&T and Howden Group,
UK. The company was formed in 2010 with the objective
of supplying high end fans and air pre-heaters for super
critical power plants being set up in India. L&T has a stake
of 50.10% in the joint venture. The company has a state-
of-the-art manufacturing facility for manufacture of fans
and air pre-heaters at Hazira, Gujarat along with a fan
testing facility. It also has a design and engineering centre
at Faridabad near New Delhi.
* The company has applied for change in the name from L&T-MHI Turbine Generators Private Limited to L&T-MHPS Turbine Generators Private Limited
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During the past year, the company has completed supplies
for its various projects that had a total of 30 axial fans and
14 rotary air pre-heaters. It has won several orders for
new equipment, after market and service businesses. The
coming year will provide challenges in terms of executing
the projects bagged and the company is geared up to face
these challenges.
With several existing power plants in India being quite old,
the aftermarket segment is expected to grow, and LTH will
additionally focus on the aftermarket business to establish
itself in this segment.
L&T-SARGENT & LUNDY LIMITED (LTSL):
Subsidiary Company:
LTSL, established in 1995, is a premier engineering &
consultancy firm in the power sector. LTSL is an equal joint
venture between L&T and Sargent & Lundy LLC, USA.
LTSL offers complete gamut of power plant engineering
& consultancy services - from concept to commissioning.
Its experience list includes overseas projects in USA, Saudi
Arabia, Oman, UAE, Jordan, China, Thailand, Malaysia,
Sri Lanka, Bangladesh, Nigeria, Panama, Kuwait, Morocco
and Kenya. Besides having considerable expertise in gas
based and subcritical coal based power projects, LTSL is
also involved in engineering of super critical coal based
projects and forms the engineering base for L&T’s thrust
into turnkey execution of super critical technology.
During 2013-14, LTSL added new clients in international
market and also made a breakthrough in new areas
of business in substation engineering and project
management consultancy services. It received the Regional
Export Award from EEPC (Engineering Export Promotion
Council), India, in the category of “Star Performer -
Medium Enterprise - Engineering Services” for outstanding
export performance. The company proved its engineering
capabilities with the successful commissioning of the
various coal and gas based projects during the year.
During 2014-15, LTSL will focus on domestic and
international markets and will continue its thrust on
new areas of business viz. project and construction
management services at site, transmission and distribution
and solar projects.
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Metallurgical & Material Handling Business
A Continuous Annealing Process Line built by L&T at Tata Steel’s plant at Jamshedpur. L&T undertakes detailed engineering, procurement,
manufacture, supply, construction, erection and commissioning of projects in the areas of ferrous and non-ferrous metals, and mineral beneficiation.
Overview:
Metallurgical & Material Handling (MMH) undertakes EPC
(Engineering, Procurement & Construction) projects for
Ferrous (iron & steel making) and Non-Ferrous (aluminium,
copper, lead & zinc) metal industries, Bulk Material &
Ash handling systems in Power, Ports, Steel and Mining
sector. It has a well-established Industrial Machinery &
Foundry work shop at Kansbahal, Odisha and a high end
fabrication shop at Kancheepuram, Tamil Nadu to cater to
the specific requirements of the customer. MMH business
has International presence in Gulf region as well.
Business Environment:
Economic scenario in India has been generally challenging
since the last couple of years. Steel and Power Sectors have
witnessed similar down trends in investments. Certain
existing projects were either put on hold or slowed due
to declining demands as well as poor liquidity. However
recent Government initiatives and certain policies have
been reflected in investment decisions in both Private and
Public Sector. Since the Order Book position was relatively
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reasonable, the performance during the year was not very
significantly affected.
MMH business has been partnering various Power
producers in their material handling projects and played
a major role in commissioning of 7 Coal handling plants
(CHP) in the year 2013-14.
Plants commissioned during the year 2013-14 in Steel
segment are Continuous Annealing & Processing Line &
Coke Oven Battery 11 for Tata Steel at Jamshedpur, Sinter
Plant for SAIL at Rourkela and Bhilai, Can Mill Body Plant
(1.35 LTPA) at Hirakud, Aluminium Smelter (0.36 MTPA)
for Mahan at Singrauli, Alumina Refinery (1.5 MTPA) for
Utkal.
Material Handling Business Units of MMH business have
also been supporting the major power producers in
their efforts to commission their projects and the major
ones commissioned during the year 2013-14 are CHP
(5x660MW) for PowerGen Infrastructure at Tiroda, CHP
(2x660MW) for Shingaji TPP at Malwa, CHP (2x500MW)
for DVC at Koderma, Coal and Ash Handling Plant
(2x660MW) for L&T Power, Rajpura.
High-end Equipment for metallurgical sector involving
Heavy fabrication,intricate castings, precision machining
and critical assembly.
MMH business managed to stay ahead of its competitors
in the major bids during the year 2013-14 including
Sinter Plant #4 for Bhushan, Pet coke Handling System
for Reliance at Jamnagar, CHP for Block B, Nigahi & Khadia
Expansion for Northern Coal Field Limited, 700L Bucket
Wheel Excavator for Neyveli Lignite, Material Handling
System for Adani Mining Private Limited At Dahej &
Mundra.
MMH business is currently executing major Metallurgical
projects at Kalinganagar & Jamshedpur for Tata Steel
Limited, at Bhilai & Durgapur for SAIL, at Bellary for Jindal
Steel works and at Angul for Bhushan Steel and Jindal Steel
& Power Limited including Material Handling packages
at Chhabra for RRVUNL, Mahan for Hindalco, Amravati
for Elena Power, Barh for NTPC, Koderma for DVC and
15 other packages are under execution concurrently for
various other customers.
With mines, both coal and iron ore opening up in a big
way to cater to the steel and power plants, the business
of material handling and long distance conveying in the
mine heads have been identified as a major thrust area
for the IC. Ore Beneficiation including that of iron ore and
coal have also been seen as the major areas of investment
in near future.
With the inclusion of Industrial Machinery & Foundry
Business Unit, Kansbahal, MMH business has forayed
into high end customised manufacturing needs of steel,
power & other metallurgical sector customers. The
primary products of Kansbahal includes Surface Miner,
Crushing Systems, Paper Machinery, Apron Feeder and key
equipment for coke oven, pellet and steel making segment.
The business is now fully equipped for manufacturing of
The manufacturing shop has been successful in supplying
6 nos 150T Laddles to Emirates Steel in UAE, 9 nos Torpedo
Laddle Car to RINL at Vizag and Skid Mounted Crusher for
GMR in Chattisgarh. The manufacturing sector has been
strategically planning to further augment and enhance its
product portfolio with new products like Coal Mill Parts
and Pallet Cars. The fabrication shop at Kancheepuram
continues to provide the support and strength of critical
and heavy fabrication and assembly works of Material
Handling Equipment like Stackers, Reclaimers and host of
other mid precision level equipment catering to the Steel
and other process plants.
Key success factor for the MMH business are customer
satisfaction, operational efficiency and consistent
performance all which have resulted in repeat orders
from our valued customers. MMH has also established
International set up in the Gulf to further increase its
business potential. In International segment, MMH
recently commissioned Electric Arc Furnace for JSIS, Oman.
Significant Initiatives:
MMH business has made strategic alliance with
leading global technologist as a part of its business line
diversification in both Ferrous and Non-Ferrous segment
which include:
• Paul Wurth in Blast Furnace, Coke Oven and By-Product
Plant.
• Outotec- in Sinter and Pellet plant.
• Nippon Steel in Coke-dry- quenching and Continuous
Annealing & Processing line.
• METSO and HATCH in Iron ore beneficiation
• SMS, in Steel making Segment.
• LUET, China for Coke Oven
• Siemens VAI for Slab Caster
• Norwest and Kellog’s Brown & Root for Coal Washery
• Chalieco for Aluminium Plants
To avail further business augmentation, the material
handling sector has envisaged opportunities in
• Ash Handling including retrofit (Wet to Dry)
• Container Handling System
• EPC support for MDO (Mining, Development and
Operation) – One stop Solution
• Rail Freight Handling System
Coal-handling plant executed by L&T at Koderma in Jharkhand. L&T
is a single-point solutions provider for a comprehensive range of
material-handling systems.
The Non-Ferrous sector has started to expand its portfolio
into By-product plants for Zinc & Copper.
97
The Manufacturing facility at Kanshbahal has augmented
its business by collaborating with KEMCO, Japan for
advanced sand manufacturing systems. It has also taken
initiatives to explore business opportunities in East & South
Africa and GCC countries and is targeting a significant
portion of sales through exports (Track Pads, Rings and
Balls, Pallet Cars). It is also expecting increased sales
through new products (Coal Mill Parts, Pallet Cars).
Constant efforts are on to further strengthen the in-house
capabilities and rigorous implementation of operational
excellence initiatives. The Material Handling unit has
taken the help of Delft University, Netherlands to enhance
engineering capability of Long Belt Conveyor (LBC), Pipe
conveyor & Shift able Conveyors.
Outlook:
The Steel and Power sector has started to show some signs
of improvement towards the end of the year 2013-14 and
with the firming up of steel prices, regulatory impediment
of iron ore mine easing gradually & commitment of
fresh coal linkage (11000 MW). Ministry of environment
has started clearing large scale projects. Coal Mining
opportunities started to increase in both private and PSUs
sector. The government is expected to show accelerated
implementation in the Power sector to meet 13th plan
and improvement of fund availability to power projects.
Domestic Aluminum Industry is expected to move upward
in tandem with the Steel sector and a turnover is expected
in the second half of 2014-15. With a strong management
team and dedicated workforce, MMH is confident of
posting good performance in 2014-15.
Coke oven battery executed by L&T for one of India’s major steel
plants.
Limestone crusher manufactured by L&T.
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Heavy Engineering Business
A low-alloy steel HP stripper being shipped from L&T’s Hazira Campus to a refinery in Texas. L&T has designed, manufactured and supplied critical
process plant equipment to over 40 countries.
Overview:
The Heavy Engineering (HE) business manufactures and
supplies custom designed, engineered critical equipment
& systems to core sector industries like Fertiliser, Refinery,
Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear
Power, Aerospace and Defence applications. The HE has
good track record of executing large size and complex
projects with a high technology base with major capabilities
including in-house engineering, R&D centres with world
class fabrication facilities and experienced and competent
project team and safe work culture.
HE has manufacturing & fabrication facilities at Mumbai
in Maharashtra, at Vadodara & Hazira in Gujarat, at
Visakhapatnam in Andhra Pradesh and at Sohar in
Oman. At Coimbatore in Tamil Nadu, it has a Precision
Manufacturing Facility to cater to the needs of precision
machined/manufactured components & assemblies. A
Strategic Systems Complex for integration and testing
of weapon system, sensors and engineering systems is
located at Talegaon in Maharashtra. Defence Electronic
Systems’ design and engineering, catering to Military
Communications and Avionics facility, is supported through
a dedicated Strategic Electronics Centre including a new
product development centre at Bengaluru in Karnataka.
Manufacturing teams are backed by production engineering
and manufacturing process development centres at each
location. The business has “Technology and Product
Development Centres” in Mumbai and Bengaluru – for
new product development, research & development for
process plant and nuclear equipment and for equipment
& systems (including electronic systems/subsystems) for
strategic sector. Strategic Submarine Design Centre is
also located in Mumbai. A heavy fabrication facility, set
up as a Joint Venture in Oman, manufactures a range of
equipment for the hydrocarbon and power sector.
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Business Environment:
The Heavy Engineering business is structured into two
major Strategic Business Groups (SBGs):
• Process Plant Equipment and Nuclear
• Defence and Aerospace.
There are various Business Units operating under this
structure.
The order inflow during the year 2013-14 has been
impacted by a weak global economic scenario, intense
competition and government policy inertia in the domestic
markets. The defence segment has particularly been
impacted by slow decision making in respect of policies/
major acquisition programs and withdrawal in funds
allocated for defence capital expenditure.
In the Process Plant Equipment businesses, the margins are
under pressure due to aggressive pricing from competitors
having idle capacities. The competition is intense in pricing,
deliveries and payment terms offered by European,Korean
and Japanese fabricators. The localisation policies of
certain countries and preference to local suppliers by some
of the EPC companies and customers due to socio-political
compulsions have also impacted the business of HE. The
competitiveness of the business is also influenced by the
absence of competitively priced, long tenor financing from
Indian export credit agencies for exported engineering
products. International sanctions on Iran deprive us from
some good business opportunities.
In the Defence and Aerospace Segment, there were early
signs of operationalisation of the Defence Procurement
Procedure 2013 in terms of program ‘categorisation’ and
sustained interaction between the Ministry of Defence
and Industry interactive forums. However, defence offset
opportunities have not fructified in significant value terms
due to dilution in offset related guidelines; viz. inclusion
of homeland security and civil aviation (as eligible for
offsets) and introduction of offset multipliers for small
& medium enterprises. The Defence business was also
impacted by deferred decisions on ordering and with a
Methanol converter for China.
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Significant Initiatives:
In the pursuit for the exclusive position in the global
process plant equipment business and for gaining an early-
mover advantage in the Defence equipment sector, the
Heavy Engineering continued its pursuit of manufacturing
excellence and productivity and with this commitment, it
continues to invest in its campaign titled ‘UDAAN’ which
signifies flight or breaking free from existing mindsets to
scale new heights. UDAAN was initiated with the objective
of achieving an exclusive position in the global process
plant equipment business and to fortify our lead position
as supplier of defence equipment & systems from the
private sector.
Some of the initiatives under “UDAAN” are:
• Enterprise-wide Collaboration for Alignment with
Strategy (ECAS)
• LAKSHYA (Strategy perspective planning exercise)
• Implementation of Theory of Constraints
• Employee Engagement
• Innovation
• Sustainability and Corporate Social Responsibility
Initiatives
‘Theory of Constraints’ based ‘Critical Chain Project
Management’ targets improving execution and delivery
performance. It uses a focusing process to identify the
constraint and restructure the rest of the organisation
around it in order to increase the flow.
Operational excellence measures such as productivity
monitoring, knowledge management across products,
optimum inventory management are undertaken for
the products under execution. ECAS seeks to enhance
Organisational Excellence through a strategy of promoting
Customer Intimacy and a culture of cross functional
collaboration.
Employee engagement, feedback and ideation workshops
are conducted with the objective of creating an innovative,
involved and committed work force. Belbin Team building
workshops across various businesses were organised to
build a culture of camaraderie and strengthen employee
bonding. The business continued to engage key business
development personnel and international business heads
in select geographies. The business strives for continuous
improvement for the protection and development of
health, safety and environmental assets of its employees
and stakeholders. During the year, HE continued its thrust
on the safety cultural transformation through various
initiatives.
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Pinaka multi-barrel rocket-launcher. L&T works closely with defence
research organisations to develop and manufacture weapon and
missile systems.
The photograph is for representation purposes only, and does not purport to be a
photograph of the actual nuclear-powered submarine.
L&T made a vital contribution to India’s first nuclear-powered
submarine – Arihant – viz. design engineering, pressure hull, outer
hull and structures, special equipment, outfitting - equipment, piping,
cabling systems, integration and trials.
long ‘bid to award’ cycle. The procurement policies did
not pick momentum and with budget cuts enforced in
the latter part of the financial year, indenting for major
projects got delayed. Reduced Defence budget allocations
had a consequent impact on realisation of advances and
collections resulting in a higher working capital.
Technology & Product Development Centres continuously
focus on new product development and development of
improved manufacturing technology. These Centres are
engaged in enhancing technologies related to process
industries, manufacturing, mechanical systems, defence
electronics & embedded software solutions and submarine
designs. These Centres provide specific emphasis on
welding & metallurgy, composite materials, heat transfer,
hydrodynamics, computational fluid dynamics, stress
analysis, drives, microwave & RF, embedded systems,
high availability systems and military communication.
Significant initiatives have been taken by these Centres
to focus on new product development either through
internal development projects or through participation in
opportunities presented by “Make” & Buy & Make Indian”
programs or through collaborative programs with National
laboratories such as DRDO, ISRO.
Outlook:
In the Process Plant Equipment business, new investments
and upgrade projects are expected in USA, Middle East and
South East Asian market. New opportunities are driven by
the availability of shale gas, clean fuel projects, Gas to
Liquid (GTL) requirements and integrated petrochemical
segments. Domestic fertilizer investment decisions are
expected to be made consequent to the revised Urea
Investment Policy approved by the Cabinet Committee
on Economic Affairs. Domestic nuclear projects are in the
process of completion of land acquisition and long lead
items are expected to be tendered, however, the ambiguity
in respect of civil nuclear liability implementation rules
remains. While developed economies are showing some
sluggishness resulting in rise in unemployment levels,
emerging economies are now coming back on growth track.
High crude oil price scenario and the planned withdrawal
of stimulus packages are likely to have favourable impact
on inflationary pressures and higher commodity prices.
Due to stiff competition in international markets foreign
OEMs are looking at cost effective solutions by outsourcing
development, build to print and maintenance activities,
which opens opportunities for HE .
The decision making by the Ministry of Defence is expected
to gain momentum post-elections once the government
assumes office. Government of India is very keen to
maximize indigenous content in all Defence programs.
Changes favourable to the private sector are also expected
in the Defence Procurement Procedure 2013 based on
industry feedback. There is increased emphasis on private
industry participating in development and manufacturing
for Defence and avionics indigenisation. Offset policy
is opening up more and more Indian private industry
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participation. The Indian Defence sector is growing at
an unprecedented rate with the country now ranked
as the 10th largest investor in defence globally. Military
expenditure in India is forecasted to grow at a CAGR of
8.3% and is expected to exceed $ 75 billion per year by
2020.
HE envisages good market opportunities in the medium
to long term and with superior technology, a lot of it
home grown, state-of-the-art manufacturing facilities, all
of which augurs well for HE IC to tap upcoming business
opportunities.
Major Subsidiary Companies
L&T SPECIAL STEELS AND HEAVY FORGINGS
PRIVATE LIMITED (LTSSHF):
Subsidiary Company:
LTSSHF is a joint venture (JV) between Larsen & Toubro (L&T)
and Nuclear Power Corporation of India Limited (NPCIL)
with L&T holding 74% equity stake. The JV Company has
set up a fully integrated manufacturing facility at Hazira,
Gujarat to produce ingots and finished forgings required
for critical equipment in nuclear power and hydrocarbon
industry, rotors in power industry, rolls in steel plants and
other heavy forgings for general engineering applications.
The JV is a major strategic step towards achieving India’s
independence from imports of heavy forgings and
ensuring timely supply of heavy forgings for nuclear power
plants. LTSSHF commenced commercial operations from
October 1, 2012 with a capacity to produce a single piece
ingot up to 300 MT and forgings up to 125 MT in the
first phase.
During the year, the Company has successfully made
Special Steels in various grades, ingot of the largest size
in the country and made heavy forgings required for
critical equipment in refineries, fertilizers, nuclear, power
and other segments. A vertical shaft furnace facility
required for manufacture of rotors was commissioned.
The company has been successful in qualifying its facility
with various customers and obtaining development orders.
The company has witnessed fierce competition from global
established players due to excess overall capacity. It is
focused on enhancing capacity utilisation and improving
production processes & manufacturing efficiencies to
remain competitive.
SPECTRUM INFOTECH PRIVATE LIMITED (SIPL):
Subsidiary Company:
SIPL is a wholly owned subsidiary of L&T. SIPL undertakes
Technology development and manufacture of avionics
LRUs for military applications. SIPL concentrates largely
on product development in embedded solutions, control
and signal processing for defence sector and undertakes
technology development and manufacture of avionics
LRUs for military applications. SIPL is certified by Centre for
Military Airworthiness and Certification (CEMILAC) of the
Ministry of Defence, India for the same. SIPL has obtained
AS 9100 Rev C, ISO 9001 and IS0 27001 certifications.
Avionics LRUs that SIPL has designed, developed and
manufactured are on-board the Light Combat Aircraft
(LCA). SIPL has developed technology to position and
control high precision Gimbal platform for directed energy
weapon applications. SIPL is a key player in the design,
development and engineering of Integrated Life Support
System for LCA.
The avionics business environment has become highly
competitive and challenging due to limited customer base.
New programs like LCA MKII, LUH, LCH and HTT40 have
opened new business opportunities in avionics domain.
However, increased competition from smaller firms and
entry of new players coupled with volatility in FE rate
have resulted in a very challenging business environment.
SIPL continues to work with the Ministry of Defence and
Hindustan Aeronautics Limited to develop new products
and in production phase for jointly developed products.
LARSEN & TOUBRO HEAVY ENGINEERING LLC:
Subsidiary Company:
Larsen & Toubro Heavy Engineering LLC is a Joint Venture
between Zubair Corporation and L&T, established in
Sultanate of Oman. L&T, through its wholly owned
subsidiary Larsen and Toubro International FZE, holds
70% in the Company. The heavy engineering facility was
commissioned in October 2009 and is based at Sohar in
Oman. The Company focuses on business in the Middle East,
mainly GCC countries and supplements manufacturing
and fabrication facilities located in India. The company
seeks to leverage the geographical advantage with Oman
Government’s in-country-value requirements, Clean Fuel
projects coming up in Kuwait and Oman’s expected large
value investments in the hydrocarbon sector and revamp
prospects in certain ageing refinery projects.
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Electrical & Automation Business
An expansive range of switchgear, offered by L&T – an industry leader in power distribution systems. Switchgear is part of L&T’s broad range of
electrical and electronic systems, widely used in industrial, agricultural, building and commercial sectors.
Overview:
Electrical & Automation (E&A) business of Larsen &
Toubro offers a wide range of products and solutions for
electricity distribution and control in industries, utilities,
infrastructure, buildings and agriculture sectors. Its suite
of offering includes Low and Medium Voltage Switchgear
Components, Electrical Systems, Marine Switchgear,
Industrial & Building Automation Solutions, Surveillance
Systems, Energy Meters and Protection Relays.
E&A business is supported up by its five decades of
experience in Design & Development that facilitates
the introduction of contemporary products and a high
precision Tool Manufacturing facility which is a pre-
requisite for high quality manufacturing. Lately, E&A has
added three new Switchgear Training Centres (STC) to
its existing three centres across India that impart training
and learning on good electrical practices to engineers,
consultants, technicians and electricians.
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The manufacturing facilities located at Mumbai (Powai),
Navi Mumbai (Mahape & Rabale), Ahmednagar, Vadodara,
Coimbatore and Mysore in India as well as in Saudi Arabia,
Jebel Ali (Dubai), Kuwait, Malaysia, Indonesia, Australia
and the UK.
The E&A business comprises two Strategic Business Groups
(SBGs) and designated subsidiaries. Further, there are
business units that operate under each SBG. The Products
SBG includes Electrical Standard Products (ESP) and
Metering & Protection System (MPS) business units while
Projects SBG has Electrical Systems & Equipment (ESE) and
Control & Automation (C&A).
Business Environment
The switchgear industry witnessed flat to negative growth
in India owing to factors like tight liquidity, delayed
policy decisions and deferments in projects finalization,
continuously weakening rupee, volatility in commodity
prices, rise in input costs and lower realisation due to
shrunk market and an intensified competition. E&A
business, however, performed better than the industry in
the country and also experienced better prospects in the
international market with an increase in enquiries/order
inflow. Better acceptance of its offering in the Middle East
market led to an increase in the order inflow in the year
2013-14.
Its largest business unit- ESP - focused on Tier II/III cities/
towns in India and managed to improve its market
share which was inline with its growth strategy. The
other business unit - MPS - that is primarily restricted
to institutional clients like state-owned distribution
companies remained flat amidst fierce competition. ESE
business unit’s traditional customer bases (power, cement,
paper and steel) shrunk due to non-addition in capacities.
Infrastructure sector, however, showed higher potential for
growth not only in domestic but also in the international
market and thus remained a key focus area. C&A business
unit made continuous efforts with its systems integration
solutions to bag orders from Oil&Gas as well as Metal
and Minerals segments. All in all, in spite of tough market
conditions, the E&A business managed to register growth
in the year FY 2013-14.
Significant Initiatives:
E&A attempted to improve its performance in a variety of
ways that comprised restructuring of business, acquisitions,
new capacity creation, launch of new products and
numerous process improvement initiatives.
During the year 2013-14, it acquired Kuwait-based Kana
Controls General Trading & Contracting Company W.L.L.,
a supplier approved by the Kuwait oil companies for
Automation solutions, for expanding and strengthening
its scope of offerings in the Kuwait market that offers a
major growth opportunity.
During the year 2013-14, E&A business filed as many as
153 Patent, 06 Trademark, 47 Design and 1 Copyright
applications in India, along with 9 foreign applications
(1 TM, 1 Design, 7 PCT National Phase). This was the
7th consecutive year of filing more than 100 patent
applications.
E&A’s in-house design & development capabilities are
rated among the best in the industry. The facilities at
Powai-Mumbai, Ahmednager, Mysore and Coimbatore
are approved by the Department of Scientific & Industrial
Research, Ministry of Science & Technology. In 2013-14,
two new R&D Centers were introduced - EDDC (Embedded
Design and Development centre) at Powai & PEATC(Power
Electronics &Automation Technology Center) at Mahape-
Navi Mumbai. The centres network with international
labs, testing centres and academic institutions for keeping
abreast of new technology trends and introducing those
for customers in different segments.
Focused R&D activities have enabled Electrical Standard
Products to have a healthy New Product Intensity (NPI)
index of >30% - an index that measures the sales of
products introduced in the market in the last five years
to the total sales in the financial year. Electrical Standard
Products released new and up-to-date products like MOC
Contactor, M-Power, ETACON and new MCCBs that
supported theincrease of market share for core products.
The metering business introduced new CT operated Tri-
vector meter (M3A),Single Phase meter (Alpha), Cl 0.5
Multi-Function meter - Vega, over-current Earth Fault Relay
- MC31/MC61, pre-paid meter (Indus) for Indonesia and
RS485 module for DIN 3-Phase meter. Pilots for low radio
communication facilitating collection of data over mesh
network were installed at Pondicherry, CESC Kolkata and
Torrent Power-Surat
E&A’s improved profitability in a tight market condition
came about with strategic initiatives to reduce the overall
net working capital by streamlining customer contracts for
timely payment of advances and outstanding. Credit time
for vendors was also increased. Additionally, an increase
in the production of MDU (Modular Devices) and MCCBs
(Moulded Case Circuit Breaker) was registered with
the shifting of manufacturing operations to Vadodara.
Superior quality of products, particularly MCCB and MDU,
helped resulted in higher acceptance in the UAE and Qatar
markets. Other initiatives to improve probability included
procurement optimisation, value engineering, supply chain
rationalisation, operational efficiency and expense control.
In the prevailing domestic economic scenario,
internationalisation holds the key to maintaining a healthy
growth rate. It helps in better understanding of customers’
needs and aids the brand building initiatives. In this context,
the decision to form International Sales Organization (ISO)
in FY 2012-13 and club regions into different clusters
brought deeper focus on the international market. This
also helped E&A grow its market share in the GCC and
other countries and thereby increase international sales.
The in-house design and development capabilities of
E&A reaped rich rewards during the year. The AU series
of final distribution products (MCBs and RCCBs) was
awarded the ‘Best Product’ developed by an Indian
exhibitor at ELECRAMA 2014. The T-ERA switchboard
received ‘Certificate of Commendation’ in Best Product
Launch Award category at the Middle East Electricity 2014
exhibition in February at Dubai International Exhibition
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Centre. The sleek solar lantern, D.VA, won the National
‘Good Design’ - India Design Mark Award (IMark) award
instituted by India Design Council in July 2013.
for MV Switchgear will be a positive development. The
expected African infrastructure boom would continue to
drive the demand for Power and electricity.
Continuously striving for process excellence, E&A received
the SAP’s Award for Consumer Excellence (ACE) 2013 in
the ‘R&D, Design and New Product Development’ category
for IT Business Solutions and Lifecycle team’s Computer
Aided Design (CAD) Integration project in October. Its
Precision Machining Centre (PMC) under Engineered
Tooling Solutions (ETS) at Coimbatore was awarded
‘Certificate of Merit’ under small scale manufacturing
businesses in the Ramkrishna Bajaj National Quality Award
(RBNQA) 2013 in March 2014.
In line with the upkeep of environment, its Automation
Campus building, Unnati, at Navi Mumbai received
Gold certification under Existing Building - Operation &
Maintenance category from LEED (Leadership in Energy
& Environmental Design), developed by the U.S. Green
Building Council (USGBC).
Outlook:
Industrial activities in India are expected to improve after
the general elections with a stable government expected
to be in place. Sector like retail, building, infrastructure,
telecom etc. are expected to support growth. Higher
growth is also likely for products that are energy efficient.
Demand for Tariff Meters through contractors and utility
procurement is expected to grow by over 25%. Market
liquidity is also expected to improve.
E&A sees positive business scenario from the UAE and
Qatar markets with the award of Expo-2020 and FIFA 2022
respectively. South East Asian countries and the Kingdom
of Saudi Arabia (KSA) markets promise growth in building
and infrastructure segments. In KSA, product approvals
The key to success in the year 2014-15 will be new product
development. E&A plans to launch pre-paid meter, smart
meter, modular devices, main distribution board for
infrastructure segment and new range of MCCBs. Capacity
enhancement strategy in the form of a new manufacturing
facility for BBT in Coimbatore, manufacturing line for
meters in Indonesia and the localization of Ring Main
Unit for MV solutions in Ahmednagar are the other
growth drivers. The possibility of El-nino effect may affect
agriculture demand in India. Emphasis on ‘localization’ in
the Middle East is hindering market penetration and also
putting pressure on the need for local set-up and approval.
Major Subsidiary and Associate companies:
TAMCO GROUP OF COMPANIES:
Subsidiary Companies:
TAMCO is the leading manufacturer of Low and Medium
Voltage switchgear with facilities in Malaysia, Indonesia
and Australia. Its products are widely used in power, oil &
gas, construction and manufacturing industries. Through
extensive R&D and advanced manufacturing technology,
TAMCO has been able to deliver high quality, safe, reliable
and cost effective products and solutions. Its strength has
been its flexibility to develop and adapt products to meet
customers’ needs and, therefore,it has a high reference
list across the globe.
FY 2013-14 was a reasonably good year for TAMCO
with the company making inroads in the UK and KSA
markets. While the Malaysian market has grown at a
steady rate of 4%, the recent drive of the government to
favour Bumiputera companies may pose challenges. The
Indonesia unit has done well in its market and increased its
Switchboard installation at a power plant. L&T provides power
distribution and control solutions – including LV and MV switchboards
– across the value chain, from point of generation to end-user.
A section of L&T’s range of electronic meters and relays
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reach. However, the Australia market has shown a decline
in growth due to the economic slowdown. TAMCO has
expanded its facility for manufacturing in Malaysia and
invested in new machines to ramp up capacity.
by ramping up sales teams and in-country project execution
team as significant opportunities are being seen in Jeddah
and Riyadh in the infrastructure segment and in Dammam
in the energy segment.
TAMCO Malaysia unit received the ‘MV Switchgear
Company of the Year-2014’ award from Frost & Sullivan
that appreciated its superior performance in areas such as
leadership, technological innovation, customer service and
strategic product development.
Operation is being strengthened to increase integration
capacity as building expansion is underway and expected
to be completed by July 2014. Further, the vendor base
is being enlarged to include Turkey and Europe to retain
cost leadership.
Business outlook in the Middle East is quite encouraging
with many prospects in the pipeline. In Malaysia too, the
Oil and Gas sector looks very encouraging for the next
two years due to the ‘RAPID’ project of Petronas coming
up in Johor. Indonesian market shows signs of growth,
but the same is not true for the Australian economy. With
increased competition in all markets, price realization may
be lower.
Key growth strategies would be to set up or acquire a
Bumiputera company for business with Government
controlled institutions in Malaysia, launch a low cost RMU
in Q1 of FY 2014-15, start MV manufacturing in Indonesia,
restructure Australia operations to improve profitability
and have a team for developing OEMs in select countries.
L&T ELECTRICAL & AUTOMATION FZE (LTEAFZE):
L&T Electrical & Automation FZE (LTEAFZE) is based
in Jebel Ali, Dubai and operates in the Automation,
Instrumentation and Telecommunication space in the
Middle East, Africa, CIS and Iraq market. Its state-of-the-
art Systems Integration Centre is accredited with ISO 9001,
18001, 27001, TUV for Functional Safety and USGBC Gold
Certification.
Telecommunication business, a key pillar for expanding
business,is moving in the right direction.
Investments have increased in the Infrastructure segment
owing to pressure on the local governments in view of
the political upheaval in the last few years. Infrastructure
investment is also seen in KSA, Kuwait, Qatar and UAE for
providing better facilities to the local population as well
as creating employment opportunities. This is expected
to pick up in FY 2014-15 onwards as a lot of projects
announced in previous years are starting to move especially
in the metro / rail, airports, hospitals, sports complexes etc.
Engineering function is being expanded in India and
there is a plan to shift majority of Automation & Telecom
engineering to the India set up by the middle of FY 2014-
15. The KSA branch formation has been completed and
now, Qatar is under focus for local registration by June
2014.
L&T ELECTRICALS AND AUTOMATION SAUDI
ARABIA COMPANY LIMITED, LLC (LTEASA):
L&T Electricals & Automation Saudi Arabia Company
Limited (LTEASA) is the result of a joint venture with Yusuf
Bin Ahmed Kanoo Group of KSA. It has set up a state-
of-the-art integrated manufacturing facility in Dammam
to cater 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, Pre-fabricated/Packaged
Substations, Variable Frequency Drive (VFD) panels and
Automation solutions.
KSA has drawn up huge investment plans for catering to
the transportation, social & water infrastructure projects.
LTEASA expects recent approval from local authorities will
give an opportunity to participate in the upcoming tenders
from the aforesaid sectors. Thrust on approvals for LV (Low
voltage) switchboards, SMDBs (Sub main Distribution
boards) and DBs (Distribution Boards) will brighten its
prospects in the local infrastructure projects.
Approvals are expected from Ministry of Housing and
Ministry of Health that will open the doors for a new
segment where huge investment is underway. Also,Saudi
Electricity Company approval, expected by Q2 of FY
2014-15 will give access to the huge SEC and Government
tenders. Another key strategy for growth in LTEASA is to
start in-house manufacturing of MV switchboards to meet
the needs in KSA market.
Concerted efforts in FY 2012-13 & FY 2013-14 to break
into the KSA market have started bearing results, especially
in Telecom / ELV markets in energy and infrastructure
segments. LTEAFZE will continue its efforts in FY 2014-15
HENIKWON CORPORATION SDN BHD, MALAYSIA:
Established in 1982, Henikwon Corporation is leading
manufacturer of Low Voltage (LV) and Medium Voltage
(MV) Bus Bar Trunking (BBT) systems and a globally
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recognized brand that complies with international quality
standards. The acquisition of Henikwon (in August 2012)
has brought a customer base of large corporations to
E&A’s business and complements its portfolio in making
comprehensive offering for the building and infrastructure
segments. It further enhances E&A’s presence in South East
Asia and results in increased engagement with the Indian
and Middle East markets.
Busducts are becoming increasingly popular as an integral
part of electrical package offerings (LV and/or MV) in
upcoming projects across various segments. A trend of
customers favouring complete solutions under supply,
installation, testing & commissioning has set in. Henikwon
supplies its products and solution in more than 15 countries
in segments like Airports, Oil & Gas, Petrochemical &
Power Plant, IT- parks, Banking, Automotive, Institutions,
Factories and Buildings etc.
Significant initiatives include aggressively targeting the
Malaysia market, deriving synergy from Electrical Standard
Products as well as TAMCO, actively pursuing business
from Japanese and Korean EPC players and strengthening
marketing channel in Indonesia, Thailand and Vietnam.
Another important initiative is to launch a new, cost
competitive and contemporary range of BBTs. There are
plans to augment capacity with a manufacturing setup
in Coimbatore.
High content of commodities (copper and aluminum)
makes material cost and price critical. These risks are
mitigated by getting advances, secured payments and LME
(London Metal Exchange) based price variation clauses in
all contracts.
SERVOWATCH SYSTEM LTD, UK
UK-based Servowatch became part of E&A in April 2012.
The company provides marine specific alarm, control &
monitoring software solution and system integration. Its
application includes propulsion control, engine control,
power management, security &surveillance, fire detection,
ventilation and bridge control. Servowatch has executed
more than 1000 installations over 25 years. It enjoys a
growing position in the non-combatant naval market
with systems on board vessels in Asia and South America.
Strong relationship with DSME (Daewoo Shipbuilding &
Marine Engineering) in Korea is leading to a preferred
supplier status for non and full combatant programs.
Servowatch is ISO9001:2008 accredited and is moving
towards ISO27001:2013 accreditation for information
security. It also has ABS manufacturing accreditation.
Servowatch is able to operate cost effectively in the
naval systems domain, but with the increasing system
demands and higher level platforms being addressed,
differentiation will become increasingly product and
software performance related, coming from a rising cost
base. Major focus markets are Asia, USA and Eastern
Europe for new installations while refit and repair are
centred in Middle East and Asia.
Competition is coming from shipyards offering total
electrical solutions with ship design, including the
Integrated Platform Management Systems.
Kana Controls General Trading & Contracting
Company W.L.L., Kuwait (“Kana Controls”)
LTEAFZE acquired Kuwait-based Kana Controls in
September 2013. Kana Controls was established in
1990 and offers systems for all type of Automation
including Field Instruments & Sensors, Flame Detection
& Combustion, Termination & Wiring devices, Panel
Mounted Instruments & devices, Interface devices, Power
Supplies, Panels & Enclosures.
Kana Controls is approved with most customers in Kuwait
and shall provide a good platform to serve the control &
automation business opportunities in Kuwait.
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Machinery and Industrial Products Business
L&T 9020 wheel loader – part of the wide range of machines for the construction and mining sectors.
Overview:
Machinery and Industrial Products (MIP) comprises
two Strategic Business Groups (SBGs) – Machinery and
Industrial Products.
Machinery Strategic Business Group (SBG):
Machinery SBG consists of Construction & Mining
Machinery, Rubber Processing Machinery, Foundry
Business Unit and Cutting tools business. Construction and
Mining Machinery Business Unit (CMB) markets Hydraulic
Excavators supplied by Komatsu India Private Limited (KIPL)
and the entire range of equipment available from Komatsu
worldwide, besides equipment and hydraulic components
manufactured by L&T Construction Equipment Limited
(formerly L&T-Komatsu Limited). CMB also represents
Scania, Sweden for their Mining Tipper Trucks. CMB
also markets Wheel Loaders which it manufactures at
Kansbahal. CMB provides after-sales product support for
all the equipment distributed by them.
L&T Construction Equipment Limited,a wholly owned
subsidiary of L&T, manufactures Hydraulic Excavators
for KIPL besides its own Hydraulic excavator model and
Hydraulic Components, all of which are distributed by
CMB.
Rubber Processing Machinery Business Unit (RPM BU)
manufactures and markets Rubber Processing Machinery
for the tyre industry. Currently, the Unit has manufacturing
facilities at Manapakkam, Chennai and Kancheepuram
near Chennai. L&T Kobelco Machinery Private Limited,
Karai, Kancheepuram, a Joint Venture with KOBE,
manufactures Internal Mixers and Twin Screw Roller Head
Extruders.
The Foundry Business Unit (FBU) manufactures and
markets large sized SG Iron and special Iron casting for
Wind Power and other Engineering sectors at its state-of-
the-art casting manufacturing unit at Coimbatore that has
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an annual capacity of 30,000T. FBU can produce castings,
single piece, in the weight range of 3T to 28T.
L&T Cutting Tools Limited (LTCTL) (formerly, Tractor
Engineers Limited) is a wholly owned subsidiary of
L&T. It provides metal cutting solutions to the Indian
manufacturing industry covering automobile, engineering
and machine tools segments through marketing of
Industrial cutting tools manufactured by ISCAR Limited,
Israel.
Industrial Products Strategic Business Group (SBG):
Industrial Products (IP) SBG consists of businesses related
to Industrial Valves, Welding equipment & products and
cutting tools.
L&T Valves Limited (LTVL)(formerly,Audco India Limited)
is a wholly owned subsidiary of L&T marketing and
manufacturing Industrial Valves for Oil & Gas and
Power Sectors as well as some of the most reputed EPC
contractors throughout the world. LTVL has manufacturing
facilities at Chennai, Kanchipuram and Coimbatore.
EWAC Alloys Limited (EWAC) is a wholly owned subsidiary
of L&T, having manufacturing facility at Ankleshwar,
Gujarat and is a market leader with principal products
and services comprising Maintenance & Repair (M&R)
consumables, specification grade electrodes, flux-cored
welding wires, wear plates etc.
Product Development Center (PDC) of MIP business is
based at Coimbatore and renders Engineering and Product
Development support for all the businesses of MIP.
Business Environment:
In view of ongoing economic slowdown and other factors,
Indian GDP for the year 2013-14 turned out to be sub 5%
levels against the original expectation of around 6%. This
impacted performance of CMB, RPM, Foundry business
unit which depend on investment in infrastructure sector.
The Construction Equipment market shrank by about
23% in 2013-14 which was largely attributed to policy
paralysis, cost escalation in case of existing projects and
high interest cost coupled with reluctance from banks to
offer credit to various infra companies. Continuing ban
on mining in states including Orissa, Karnataka & Goa
adversely impacted Mining Equipment Business.
The year 2013-14 was a difficult for the Indian Automotive
Industry due to increasing fuel cost, higher cost of capital
and liquidity issues. These factors adversely affected
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investments in the Tyre projects in India. Globally, the
advanced economies saw green shoots of investments
and the tyre production exceeded the forecast of 4%
overall. The replacement market provided more growth
opportunities than the OE markets. RPM’s International
business saw a considerable improvement due to the
enhanced activities of the global tyre majors.
Capacity addition in wind energy generation increased by
10% during 2013-14 (1699 MW in 2012-13 to 1865 MW
in 2013-14) which was mainly driven by re-introduction of
Generation- Based Incentives and increase in wind energy
tariff in Maharashtra & Karnataka. Higher exchange rates
and stabilisation of input prices in local market have
worked to the advantage of FBU and helped in gaining
competitive edge as a cost effective supplier compared to
other market players.
Lower demand from automobile sector impacted Cutting
Tools business. The automotive and machine tools sector
showed negative sales growth in 2013-14. However, sales
performance in Q4 showed signs of revival. Profitability
and margins were impacted due to rupee depreciation,
which resulted in higher cost of inputs.
In case of Industrial Products SBG, order inflow in the
domestic market of Valves Business was impacted due to
the postponement and delays in the major projects in Oil
& Gas and Power Sectors. In the international oil & gas
segment, project activity in the Middle East and Asia Pacific
continues to be very active. Thrust on power segment has
resulted in break-through orders from Middle East, Europe
and North America markets. Maiden orders were also
received for the Tar sands projects in Canada.
For Welding Product business, the effect of slowdown
across core sectors like Cement, Steel, Power and Mining
segments had an adverse effect on volumes and margins.
Increase in input and conversion cost increases were only
partly compensated due to highly competitive market.
Liquidity conditions were very tight. Persistent hardening
of interest rate increased the Receivables at Distributors-
end resulting in lower offtake.
Significant Initiatives:
To improve market share, CMB launched a newer version
of its successful PC 210 excavator (20T) named “PC 210
– 8MO”, which promises better fuel economy, increased
cooling efficiency and improved monitor panel. CMB
also successfully launched application-specific hydraulic
excavators (such as PC 71 (7T), PC 130 (10T to 14T) and
PC 130 (to work inside tunnel) from the Komatsu range.
L&T markets the Komatsu range of hydraulic excavators in India.
In case of RPM, Operational Excellence (OPEX) Initiatives in
the areas of On-Time Delivery, Profitability Enhancement,
Cost Reduction and Product Acceptability have helped
in over-all performance of this business. The Business
received a “Certificate of Merit” for its initiatives in the
Manufacturing & Supply Chain Excellence in The Economic
Times India Manufacturing Excellence Awards 2013 in
partnership with Frost & Sullivan. RPM has also broadened
its product portfolio to include more sizes of Tyre Building
machines as well as some New Products in tyre and non-
tyre industries. As an initiative to make this business more
profitable, measures have been taken to control cost and
expand market reach. RPM launched a new breed of
Hydraulic Presses, which was a product of collaborative
effort between RPM and PDC. RPM is also venturing into
newer geographies, with main focus on capturing business
with Japanese Tyre Companies. Intense efforts are also on
to retain its traditional customers.
FBU has emerged as a productive foundry in this segment
with excellent co-operation amongst various entities across
the organisation. Improvement in delivery performance
helped to consolidate business with its key customers &
increase share of business. FBU has implemented a number
of initiatives aimed at cost reduction through localisation
of key input material and increase in yield by developing
multiple grades.
Outlook:
Demand for Hydraulic Excavators is likely to remain
generally flat during FY 2014-15, however CMB is
expected to improve market share by aiming growth of
5% over previous year. Demand from realty and general
construction sectors are expected to remain sluggish.
The demand will sustain from ongoing new metro-rail
projects and other industrial construction. Coal & other
non-ferrous mining activityis expected to grow during
2014-15. Opening up of mining in Goa is expected to drive
growth in second half of FY 2014-15. About 14 highway
projects have been identified by NHAI and it is expected
that total of 24300 Cr worth projects will be undertaken
under EPC Model in the next 2-3 years. It is anticipated
that formation of a new government at the centre may
see some policy changes which shall help revival in second
half of FY 2014-15.
Global Tyre demand is likely to maintain its growth path at
4.7% to 3.3 Bn units ( USD 220 Bn ) by 2015. Passenger
Car Radial segment is likely to grow across the continents
and Truck Bus Radial is also likely to witness growth in
most of the areas. Tyre Companies are harnessing their
energy to focus onto the replacement tyre market to
keep up the growth trend. Another promising area is
“Automation Projects” which are becoming more active.
RPM Business is restructuring its operations to focus on
a “Product Unit” basis to facilitate growth of products
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across the portfolio. This is aimed at optimising cost and
enhancing accountability & growth in business. Spares and
Re-Manufacturing will get a Product Unit focus in order to
improve the bottom-line.
Wind Turbine installation in India is expected to be around
2200 MW in 2014-15. Rising import costs from China
and stabilisation in key input prices in local markets are
expected to drive sales of WTG Castings in 2014-15. FBU
has received newer export orders (including some sample
orders from Siemens) from WTG players from countries
including Europe and the US. Securing repeat orders from
these customers are likely to open up newer markets and
geographies for FBU and thereby positioning itself as the
premium supplier to the major WTG players around the
globe.
Overall, the business outlook for 2014-15 is optimistic
for businesses of MIP. Government stability post-election,
inflation control and recovery from policy paralysis are
likely to be key factors that would help revival of business
growth in 2014-15.
Major Subsidiary Companies:
EWAC ALLOYS LIMITED (EWAC):
EWAC, a wholly owned subsidiary of L&T, 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, specification
grade electrodes, flux-cored welding wires, wear plates/
parts,services etc.
The year of 2013-14 had been challenging in terms of
the business environment. During the year 2013-14,
EWAC had terminated certain distributorship agencies
with respect to Welding and Cutting Equipment. Overall
slowdown in key sectors such as auto, cement and steel
also had adverse impact on sales.
However, EWAC expects situation to improve in the year
2014-15 with revival of investments and softening of
interest rates. Further major initiatives are planned for
addressing export markets and providing total repair
solutions to customers in the coming year, which is
expected to drive business growth for the company.
L&T KOBELCO MACHINERY PRIVATE LIMITED (LTKM):
LTKM is a 51:49 joint venture (JV) of Larsen & Toubro (L&T)
and Kobe Steel Ltd, Japan to manufacture Internal Mixers
and Twin Screw Roller-head Extruders for the tyre industry.
This venture has been successfully complementing the
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Rubber Processing Machinery Business of L&T by providing
world-class products to the customers.
The Auto boom of yesteryears is fuelling the growth for
the replacement tyres. Increased demand coupled with
the softening of the rubber prices has helped tyre industry
to post better results and also consider expansion in
Passenger tyre and truck tyre segments. However, these
positive trends will yield results in 2014-15 as the sales of
the relevant LTKM products shall happen only in this year.
Localised manufacture of the components provides a
major cutting edge for the company to compete against
the international competitors from Europe and USA.
Price competitiveness coupled with shorter lead time will
provide continued advantage for the company, in addition
to the technology support from Kobe Steel Ltd. Japan,
which is a major advantage.
LTKM begins the year 2014-15 with a healthy order book.
In addition, it has made significant break-through in
convincing the Global tyre companies to consider it as
one of their major source for the supply of Mixers and
Extruders.
L&T CONSTRUCTION EQUIPMENT LIMITED (LTCEL):
LTCEL is engaged in the manufacture of Hydraulic
Excavators and other associated hydraulic components.
In April 2013, Larsen & Toubro Limited has acquired 50%
share held by Komatsu Asia & Pacific Pte. Limited (KAP) in
the LTCEL. With this buy-out, the company has become
a wholly owned subsidiary of Larsen & Toubro Limited.
Consequent to the buy-out of shares from KAP, LTCEL
has entered into Contract Manufacturing Arrangement
with Komatsu India Private Limited, for manufacture of
Hydraulic Excavators. LTCEL also manufactures L&T Model
of hydraulic excavator and hydraulic components.
L&T VALVES LIMITED (LTVL) (formerly, Audco India
Limited):
LTVL, a premier Valve Manufacturing Company, is a wholly
owned subsidiary of Larsen & Toubro Limited. Effective
July 1, 2013, LTVL has integrated the marketing and
manufacturing operations in its fold through acquisition of
L&T’s Valve Manufacturing Unit at Coimbatore and transfer
of Marketing operations from L&T. LTVL manufactures a
wide range of flow control products which addresses both
domestic and international markets in a range of industry
segments.
To support Middle East, Europe & North American
markets, LTVL has established a distributor presence in
these markets. LTVL has targeted High Alloy products for
growth in this region and has secured breakthrough orders
in this segment, which is expected to provide immense
opportunities in the coming years.
In the domestic market to address the tight market
situation, initiatives in a phased manner in the HVAC
as well as Pharma sector have been taken up including
product customisation, in order to provide better value
to its customers. Business for ball and butterfly valves
in this segment through the stockists network has seen
a steady increase. In Actuation and Control valves, the
preliminary work done during 2012-13 has yielded major
orders for Remote Operated Valves from Oil Marketing
Companies. The year also marked the launch of Double
Block and Bleed Valves, to meet the critical applications
in Oil terminals as envisaged by the MB Lal Committee
report. LTVL has secured maiden orders and track record
of performance for these new products has been now
well established. LTVL expects significant opportunities in
this product line both in the international and domestic
markets in the coming years.
In the Oil and Gas sector, major investments are being
done by Middle East, Asia Pacific as well as in India,
which offers tremendous business prospects. LTVL is well
positioned with the comprehensive product range meeting
the quality expectations of customer. In the Power sector,
in the domestic market, prospects appear to be moderate.
L&T CUTTING TOOLS LIMITED (LTCTL) (formerly
Tractor Engineers Limited):
L&T Cutting Tools Limited had discontinued its
manufacturing operations of undercarriage systems
and components at Talegaon in the previous year and a
substantial part of assets were disposed off.
LTCTL entered into exclusive distributorship arrangement
with Iscar, Israel for provides Industrial cutting tool products
& solutions to the Indian Machine tool industry across the
automobile, aerospace, defence and other engineering
sectors. The company expects sustainable demand for its
products in the foreseeable future.
L&T’s valves find application in refineries and petrochemical complexes,
LNG and GTL plants, process platforms and cross-country pipelines,
and supercritical and nuclear power plants across the globe.
Five-axis machining centres ensure dimensional accuracy and
consistency
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Hydrocarbon Business
Aromatic Complex built on LSTK basis for ONGC Mangalore Petrochemicals Limited.
Scheme of Arrangement & Transfer of Hydrocarbon
business:
Earlier, a business vertical of L&T, the Hydrocarbon
business is now housed in a wholly owned subsidiary-L&T
Hydrocarbon Engineering Limited (“the Company”). The
Hydrocarbon undertaking (“HC undertaking”) of L&T
along with related assets, liabilities, specific identified
reserves, employees, management, etc. were vested and
transferred to the Company under a Court approved
Scheme of Arrangement (“Scheme”) on a going concern
basis with effect from April 1, 2013 (“Appointed Date”).
The aforementioned Scheme was sanctioned by the
Honourable Bombay High Court vide its order dated
December 20, 2013 and it came into effect on January 16,
2014 (“Effective Date”).
Hydrocarbon undertaking’s all work experience,
qualifications, capabilities, legacies & track record,
financials, contracts with clients & vendors and licenses &
permissions were also transferred. The scheme will enable
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the Company to achieve focused leadership & management
attention, attracting and retaining domain intense talent
and capitalising on the global growth opportunities for
wider reach into international markets.
The Company continues to draw on the parent Company’s
organisational strengths and experience. The Board has also
given an in-principle approval for transfer of investments
in subsidiary & associate companies in Hydrocarbon sector
from L&T to the Company. This transfer process is expected
to be completed in FY 2014-15.
Overview:
The Hydrocarbon business provides “design to build”
engineering, procurement and construction solutions
on turnkey basis in oil & gas, petroleum refining,
chemicals & petrochemicals, fertiliser sectors and cross
country pipelines. Capabilities include front end design
through engineering, procurement, fabrication, project
management, construction and installation up to
commissioning services.
The Company has time & again proved its mettle in
delivering large, complex projects due to its integrated
strengths coupled with an experienced and highly skilled
work force. The Company has key capabilities including
in-house engineering, R&D centre, world class modular
fabrication facilities, an experienced & competent project
execution team and a safe work culture. The key aspects
of business philosophy are excellence in corporate
governance, high quality standards, best in class HSE
protocol, IT security practices, timely execution and cost
competitiveness.
The Company has major work centres in India at Powai
(Mumbai), Vadodara, Chennai, Faridabad, Hazira and
Kattupalli and international presence in Middle East
and South East Asia. The Company’s project execution
capabilities in Middle East are located in UAE (Sharjah
and Abu Dhabi), Saudi Arabia (Al-Khobar), Kuwait, Oman
(Muscat) & Qatar (Doha). In addition the company has
a major modular fabrication facility in Sohar in Oman.
The Company’s presence in South East Asia is spread
across offices at Singapore, Malaysia (Kuala Lumpur) and
Indonesia (Jakarta).
The Company has operations across the Hydrocarbon
Value-Chain in India & Overseas:
• Hydrocarbon Upstream
• Hydrocarbon Mid & Downstream - Domestic
• Hydrocarbon Construction & Pipelines - Domestic
• Hydrocarbon Mid & Downstream including Pipelines
- International
Hydrocarbon Upstream:
The Company offers turnkey solutions to the global
offshore Oil & Gas industry encompassing well-head
platforms, process platforms & modules, subsea pipelines,
brown field developments, floating systems & offshore
drilling rigs. The Company has successfully executed large
offshore platforms and pipeline projects in east and west
coast of India, Middle East, South East Asia and Africa for
global companies such as ONGC, GSPC, ADMA OPCO,
Bunduq, Qatar Petroleum, Maersk Oil Qatar, PTTEP,
Petronas and Songas.
The Company has also established experience in the
Jack-up rig refurbishment and is qualified to build new
Jack-up rigs, floating production storage & off-loading
(FPSO) topsides and subsea projects. The Company has
two state-of-the-art fabrication facilities at strategically
important locations for modular structures, heavy jackets
and oil rigs offering round the year delivery. Hazira, near
Surat in Gujarat, caters to business opportunities in the
West Coast of India (Mumbai High). Kattupalli near Chennai
in Tamil Nadu caters to opportunities from East Coast (KG
Basin) and South East Asia. L&T Modular Fabrication Yard
LLC’s yard at Sohar, Oman caters to opportunities in the
MENA region. These yards have a total fabrication capacity
of about 150,000 MT per year.
The Company has business development offices at Abu
Dhabi,Singapore, and Kuala Lumpur to provide the
necessary thrust for its international growth vision. The
Company is also exploring upcoming opportunities in the
CIS region and East Africa.
The Company’s subsidiaries offer offshore installation
capabilities by virtue of owning and operating a Heavy
Lift Pipe Lay vessel and also access to engineering centres
at Bengaluru, Chennai and Faridabad.
Topsides sail away from L&T Modular Fabrication Yard in Sohar, Oman for Nasr & Umm Lulu Development project of ADMA-OPCO, Abu Dhabi.
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DDW1 Wellhead Platform & Process-cum-living quarters platform for
GSPC installed off India’s east coast.
A jack-up rig along with a wellhead platform and a jacket at L&T’s
Modular Fabrication Yard in Sohar, Oman.
The Company received an order from BG Exploration and
Production India Limited for Engineering, Procurement,
Construction & Installation of a wellhead platform and 30
Km subsea pipeline spread over the Panna-Mukta fields
in India. The Company in consortium with a partner, also
bagged a turnkey order for conversion of a Mobile Offshore
Drilling Unit (MODU) to a Mobile Offshore Production Unit
(MOPU) from ONGC.
Hydrocarbon Mid & Downstream –Domestic:
The Company provides a wide range of EPC solutions
for hydrocarbon refining, petrochemical and fertilizer
(ammonia & urea complexes) sectors.
The Company has track record of successfully executing
multiple large value projects on a turnkey basis with
in-house Engineering Resource Centers located at Mumbai,
Faridabad and Vadodara, catering to the complete
spectrum of feed, process and detailed engineering.
The Company also draws engineering support from L&T-
Chiyoda Limited.
The Company has rich experience of project execution
with technologies from process licensors like UOP,
Axens, HaldorTopsoe, CB&I Lummus, Black & Veatch,
Ortloff, Exxon Mobil, BOC Parsons, Du-Pont (Invista) &
Davy Process Technologies. The Company has executed
on-shore gas processing, refinery & petrochemical
projects for PSU companies like Indian Oil Corporation,
Mangalore Refineries & Petrochemicals, Oil & Natural Gas
Corporation, Hindustan Petroleum Corporation, Bharat
Petroleum Corporation, etc. as well as fertiliser companies
like National Fertilisers, Gujarat Narmada Valley Fertilisers
and others.
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Orders received during the year include supply of cracking
furnace modules and EPC execution of cryogenic ethylene
package for a large petrochemical complex in India.
Hydrocarbon Construction & Pipelines – Domestic:
The Company undertakes EPC projects of cross-country
pipelines for Oil & Gas and renders turnkey construction
services for refineries, petrochemicals, chemical plants,
fertilizers, gas gathering stations, crude oil & gas terminals
and underground cavern storage systems for LPG.
Major capabilities include heavy lift competency, advanced
welding technologies, world class HSE and Quality
systems. The Company has strategically invested in key
construction equipment such as earth moving equipment,
Auto Rebar Plants and Batching Plants for civil works,
heavy lift, all terrain cranes of various capacities, pipe
layers and entire range of pipeline spread equipment,
automatic welding machines and other plant & machinery
for electromechanical construction Works.
The Company’s subsidiary (JV with Gulf Interstate
Engineering of USA) provides world class engineering
capabilities forcross-country pipeline construction.
The Company has executed projects for major private
sector customers like Cairn Energy, Reliance Industries,
HPCL-Mittal Energy, as well as all major oil PSUs.
During the year, a major order was received for the
Composite Construction Works,
including Civil,
Mechanical, Electrical & Instrumentation works for the
largest Refinery & Petrochemical complex in India.
Motor Spirit Upgradation Project and Diesel HDS project with offsites & utilities executed for IOCL-Mathura refinery complex.
Hydrocarbon Mid & Downstream International:
The Company’s network of international offices and
facilities across Middle East countries, select South East
Asian and CIS countries are geared to respond to the
needs of its client base in multiple geographies. The
Company’s business operations in Middle-East are spread
across United Arab Emirates, Sultanate of Oman, Qatar,
Kingdom of Saudi Arabia, Kuwait, Iraq & Bahrain. In South
East Asia, the Company is targeting prospects in Indonesia
& Malaysia. The international headquarters are located
in Sharjah supported by regional hubs in Al-Khobar and
Kuala Lumpur.
Cross-cultural teams possessing local knowledge and
domain expertise are being built up. Quite a few senior
business development executives of different nationalities
and having rich domain experience with customer insight
have been inducted in these countries.
The Company is prequalified by major international Oil &
Gas producers such as Saudi Aramco, Kuwait Oil Company
(KOC) & Kuwait National Petroleum Company (KNPC),
SOCAR & BOTAS (TANAP, Turkey), PETRONAS, CNPC and
Dragon Oil in Turkmenistan, Lukoil in Uzbekistan and
Sonatrach in Algeria. Pre-qualification with TOTAL and
TULLOW in Uganda and SOCAR in Azerbaijan are under
progress.
In Oman, the company received a major order for
Engineering, Procurement & Construction of 3rd stage
Depletion Compression Project at Yibal-Natih Gas reservoir.
In United Arab Emirates, the Company bagged an order
for Engineering, Procurement & Construction of a new
Aviation Fuel Terminal at Abu Dhabi International Airport
for storage and delivery of Jet A-1 fuel.
In Qatar, the Company bagged an EPC order for Third Party
Gas Interconnecting facilities at Ras Laffan from Dolphin
Energy Limited.
In Kingdom of Saudi Arabia, Larsen Toubro Arabia, a
locally incorporated In-Kingdom EPC company received
its maiden order from Saudi Aramco for setting up gas
processing facilities for Midyan Gas Fields.
Business Environment:
The year 2013-14 was a difficult year for the Company.
There were cost over-runs in some of the international
projects bagged during 2010 to 2012. Most of these
projects were first of its kind with respect to customers, size
& scale, technical complexity, and were situated in remote
geographic locations. The problems were compounded
during the year due to inclement weather conditions,
unforeseen delays in project close-outs, extended stay of
resources, stringent localisation norms and restrictions on
visa availability, difficult contractual terms and financial
difficulties of customer.
For 2014-15 is expected to be a year of transition and one
focused on closing out the legacy projects and bidding
on new opportunities incorporating there in learnings
from past challenges. The Management is recruiting new
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talent and restructuring the organization to ensure that
the necessary resources and the optimal structure are
in place to achieve long-term success. The Company is
taking steps to improve cost structure, building stronger
customer relationships and creating a culture of operational
excellence and greater accountability.
Significant Initiatives:
During the year, the Company has been prequalified
for several upcoming projects in Kingdom of Saudi
Arabia, United Arab Emirates, Kuwait, Oman, Turkey,
Turkmenistan and Algeria. The Company has entered into
strategic alliances with major EPC bidders for some of the
targeted projects.
Operational excellence measures such as productivity
monitoring, integrated project execution, knowledge
management across projects and effective contract
management are being undertaken for projects under
execution.
The Company has established a branch in Singapore and
is in the process of establishing branches in Ashgabat,
Turkmenistan and in Abu Dhabi, UAE.
The Company has institutionalised risk management
processes with clear policies and guidelines incorporating
global best practices and procedures along with usage
of industry wide quantitative tools and techniques to
enhance/protect operating margins. The Risk Management
process is aimed at identification, assessment, mitigation,
monitoring risks and capturing lessons learnt from pre-bid
to execution stage till project close out.
The challenges in the form of growing competition,
newer geographies, forex variation, claims management
and staffing of key manpower are mitigated through
specific actions like operational excellence initiatives,
alliancing, cost optimisation, increased customer intimacy,
compliance with stringent HSE standards, proactive hedge
management, strong contract management and talent
acquisition and retention.
All projects undergo a well-structured pre-bid risk review
process by risk management committee at business
and at corporate levels with well-defined authorisation
levels. The process involves a detailed assessment of
risks and deliberation on mitigation measures by the risk
management committee followed by on-going projects risk
reviews at regular intervals. Project Managers/Project team
members also undergo certified Risk Induction Programme
conducted by ECRI (Engineering & Construction Risk
Institute) on a continuous basis to get acquainted with
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Global Best Practices in Engineering & Construction Risk
Management.
is an
The Company believes that a strong internal control
mechanism
important pillar of corporate
governance. It has established internal control mechanism
commensurate with the size and complexity of its business.
L&T’s Group policy on internal control provides structured
framework for identification, rectification, monitoring and
reporting of internal control weaknesses in the Company.
The Company also follows well documented Standard
Operating Procedures (SOPs) for critical business processes.
The Company has a strong resource base of skilled
and experienced people working in various disciplines.
HR efforts are targeted to ensure that the right talent
is sourced, selected, trained and deployed across the
organisation. Special efforts are being put to identify high
potential leaders and groom them through six stages of
leadership development to take on higher responsibilities
in the future. The Company participates in L&T’s Corporate
training programmes like Leadership programme (SDP,
EDP, LDP etc), EMBA programmes and special E learning
programmes (DDI, Harvard and other certification
programme) on a regular basis. The Company continues
to foster a high performance culture by recognising good
performers and providing them with career enhancing
opportunities.
As a part of its drive towards building international project
management capabilities, several senior professionals have
been recruited from leading international EPC companies.
Health, safety & environment is the cornerstone of our
business philosophy and the Company strives for continuous
3-D CAD model for 2 x 44,000 MTPA Hydrogen Generation Units
for Guru Gobind Singh Refinery of HPCL-Mittal Energy at Bathinda
(Punjab).
improvement for the protection and development of
health, safety, and environmental assets of its employees
and stakeholders. During the year, sustained thrust on
continual improvement in HSE systems & processes
across locations and business units through the dedicated
organizational support led by committed leadership, the
business continued to emphasize on the Zero Incident
Credo. Two crucial projects were commissioned safely
without any reportable incident during the year. This
year we focused on Implementation of behaviour based
safety through senior management audits and a system of
safety observations & safety field audit implementation at
all domestic and international facilities. Human resources
being a critical factor, various competency building
programs such as NEBOSH, HSE in Design and Lead
Auditor course (for ISO 14000 & OHSAS 18000), Trained
the trainers were conducted for line managers and safety
personnel. The one of its kind in India, Safety Innovation
School at Hazira became operational with 24 sessions
conducted which trained as many as 785 employees and
contractors. An integrated centralized online system for
recording Safety performance and real time reporting
of incidents was developed in house for disseminating
& sharing of the safety information & initiatives. Various
internal & external audits were conducted during the year
to monitor the implementation of various safety systems
at the project sites along with a close follow up for closure
of the recommendations. Campaigns on various on-job
and off-job safety issues such as Road Safety, Stress
Management, and Sustainability were conducted during
the year. “SurakshaJeet” an initiative launched in the
previous years, continued its sustained thrust on sharing
the best practices across the construction business units
which has achieved the desired effect of improved safety
performance.
As a responsible Corporate Citizen, the Company has been
constantly delivering on stakeholder’s expectations in an
equitable and inclusive way through improved human
well-being and social equity, while significantly reducing
environmental risks and ecological scarcities. During the
year, we have taken up various initiatives based on local
requirements such as Mother and Child Health, Education
& Skill Building at various international and domestic
project locations. Environment protection remains a
priority for the business and various initiatives adopted at
office campuses and project sites have led to significant
conservation of precious resources such as energy and
water.
During the year, a number of international safety
certifications were achieved, which are vital in view of
the growing international operations. The business won
several national & international recognitions, accolades
and appreciations from clients, which includes some of
the prestigious awards namely Golden Peacock Award
for Occupational Health & Safety, Platinum Award won
by MFF Hazira & Certificate of Appreciation by MFF
Kattupalli received during FICCI Safety Excellence Awards
for Manufacturing, The British Safety Council International
Safety Merit award was received by MFF Hazira, MFF
Kattupalli, MFY Sohar & Dolphin Export Gas Processing
Project Site and RoSPA Gold Award by MFY Sohar &
Hydrocarbon Mid & Downstream International.
Outlook:
After a lull in ONGC orders in FY 2013-14, new project
awards by ONGC are expected to pick up in FY 2014-15,
both in the offshore platform projects as well as onshore
gas processing projects. The Company is also adapting
to changing competitive landscape by building higher
competencies in Offshore Pipeline Projects and Brownfield
Projects. As part of de-risking strategy, the Company
is looking beyond traditional PSU clients and actively
developing relationships with private sector customers.
To provide long term stable growth, the Company is also
exploring the possibility of entering into “Long Term Frame
Agreements” with International Oil Companies for their
yearly capex requirements. To diversify its business profile,
the Company is also looking at building new Jack-up Rigs
for drilling companies.
In the Mid and Downstream sector, the Company is
witnessing a number of exciting opportunities in Middle
East. United Arab Emirates has planned several field
development projects to achieve a production of 3.5
million bpd crude oil by 2017 from current 2.8 million
bpd. Opportunities in Oman exist mainly in redevelopment
of existing fields undertaking by National Oil Companies
to boost recovery rates. Saudi Arabia is developing gas
facilities to replace the domestic consumption of crude
oil with gas and hence free up the crude for export.
However, the country has recently brought greater
regulation for localization which is eventually increasing
the cost and complexity of doing business. The Company
is also participating in multiple bids for supply of modular
process plants in consortium with leading international
EPC Companies.
Consequent to a stable government regime in India, the
Company is optimistic that the capex cycle will receive the
much needed boost including fast-tracking the Fertiliser
Expansion projects, ONGC offshore & gas processing
projects and cross-country pipeline projects. Accordingly,
the Company expects improved order inflows in FY
2014-15.
119
Information Technology Business
The Bangalore facility of L&T Infotech. This L&T subsidiary offers domain-led solutions to global clients in BFSI, manufacturing, energy and the
petrochemical industry.
Overview:
Information Technology business forms part of the IT
& Technology services segment of Larsen & Toubro.
Information Technology business is housed in a wholly
owned subsidiary viz. Larsen & Toubro Infotech Limited
(“L&T Infotech”). L&T Infotech comprises of two business
clusters ‘Industrials’ and ‘Services’ with a view to accelerate
growth in the technology space.
• The ‘Industrials’ cluster leverages the parent Company’s
existing strengths and heritage to cater to manufacturing
plants, establishments including wholesale, retail sale of
products and establishments dealing with energy and
utilities. This cluster also houses horizontals of SAP,
enterprise Integration, Oracle as well as Manufacturing
Execution Systems. Horizontals are responsible to serve
clients across both clusters.
• The ‘Services’ cluster focuses on Banking, Financial
Services, Insurance, Travel & Logistics, Media &
Entertainment and Healthcare. This cluster houses
horizontals of Testing, Mobility, and Infrastructure
Management System and Business Intelligence/Data
Warehouse. Horizontals are responsible to serve clients
across both clusters.
Business Environment:
The world economy showed some signs of recovery
in FY 2013-14. Indian economy witnessed slower
growth. Changing economic and business conditions
and increasingly competitive environment are driving
corporations to transform the manner in which they
operate. Companies are now more focused towards
their core business objectives of revenue growth and
profitability.
FY 2013-14 has been a year of transition and transformation
for the Indian IT-BPM industry as it toiled hard to continue
its growth trajectory albeit at a slower pace despite global
economic uncertainty. Service, software exports and BPO
remain the mainstay of the sector. Over the last five
years, the IT and ITES industry has grown at a remarkable
pace. A majority of the Fortune 500 and Global 2000
120
corporations are sourcing IT and ITES from India and it is
the premier destination for the global sourcing of IT and
ITES accounting for 55 per cent of the global market in
offshore IT services and garnering 35 per cent of the ITES/
BPO market.
The Indian IT-BPM industry has exhibited rapid evolution
– in terms of expanding their vertical and geographic
markets, attracted new customer segments, transformed
from technology partners to strategic business partners
imbibing a shared vision, offering considerably wider
spectrum of services over the years. Growth has been
both organic and inorganic, resulting in the emergence
of the first Indian MNCs – over 580 global centers in
over 75 countries delivering IT-BPM services. At the same
time there has been no let down in focus on operational
efficiencies. India’s IT and BPO sector exports has grown by
12-14 per cent in FY 2013-14 to touch US$ 85-87 billion.
The Indian IT infrastructure market is projected to grow by
9.7 per cent y-o-y to reach US$ 2.1 billion. The Indian IT
industry exports are expected to grow by 13-15% to reach
$97-99 billion in 2014-15 mainly on account of increased
demand from US and Europe and return of discretionary
spending.
Indian IT- BPM Industry is demonstrating its existence and
establishment on the five core pillars that it has nurtured
and evolved over the past couple of years. With customers
increasingly engaging with Indian service providers as a
‘strategic partner’, rather than just a pure ‘technology
service provider’, key players in the Indian sourcing
industry have re-aligned and capitalised on the following
five areas –
• Continued focus on optimal cost-efficiency: Leading
players in the Indian market continued to maintain
optimum levels of cost-efficiency through various internal
processes and productivity improvement initiatives.
Service providers are mitigating cost escalations by
adopting various strategic imperatives including agile
delivery models, automation and standardization
of business processes, delivery excellence, tapping
alternative delivery locations as well as providing faster
career transition growth for high performing employees.
• Unparalleled human capital: One of the most critical
factor that is contributing to India’s position as the most
favored destination in the global sourcing market is its
unparalleled human capital. India has the world’s largest
employable talent pool and every year it churns out a
huge number of technical and non-technical pool of
graduates and post graduates. India’s uniquely diverse
workforce, large-scale talent re-engineering initiatives,
as well as employee engagement activities is ensuring a
future-ready workforce, which in turn, is enabling the
industry to grow up the value chain in providing both
end-to-end and value added services across sectors.
• Unique customer centricity: The unique customer centric
approach of Indian service providers is best demonstrated
by re-engineering businesses/organizational structures;
strategic advisory relationships focus on product/service
delivery innovation as well as scale up the value chain
by managing high end complex IT-BPM engagements.
Indian service providers are focusing on three main
imperatives: business outcome solutions + non-linearity
+ transforming customer businesses.
• Scalable and secure environment: The sheer size of the
Indian market provides a high level of stability in terms
of managing concentricity risk as compared to other
sourcing markets. With political/economic stability, India
has been able to further de-risk its delivery approach by
expanding its global delivery network to other locations
so as to leverage their niche capabilities, in addition to
adopting robust security practices/business continuity
models.
• Supportive ecosystem:
India’s
infrastructure
development landscape is expected to transform to the
next level in the coming years. This will be driven by the
government’s massive thrust of over USD 1 trillion in
investments on infrastructure development during the
twelfth plan period (2013-2017). Besides, with large-
scale investments in e-Governance projects and focus
on establishing the national cyber security policy, the
IT-BPM industry is very much well poised to maintain its
growth trajectory in the domestic market.
Business environment of IT BPM industry and L&T Infotech
witness multiple risks and challenges such as geography
concentration, over dependence on a few business
verticals and clients. Downturn or slower recovery in the
specific geography or business vertical or downsizing by
the key clients may have adverse impact on the prospects.
The major business being international, change in the
legislations of foreign countries, restrictions on offshore
outsourcing and stringent immigration regulations
governing on-site execution of contracts pose considerable
challenges to Indian IT companies. External unforeseen
circumstances and exchange rate risks are inherent in the
business environment. Intense competition and employee
attrition are other major risks being tackled by the IT
industry. Legal & contractual compliance assumes major
importance in execution
Significant Initiatives:
In rapidly changing global landscape, businesses are
struggling to create sustainable advantage relative to the
competition, thereby requiring different types of expertise,
apart from technology. Solution demand is more Industry-
specific. L&T Infotech has made strategic investments in
people (talent acquisition, development & retention),
technology and domain specific solution labs are critical
to the on-going business proposition. L&T Infotech
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leverages the domain expertise of L&T Group and has been
investing heavily in building domain solutions. It offers IT
Solutions driven by business context and rooted in domain
knowledge. For L&T Infotech’s clients across the globe,
these result in more impactful industry solutions focused
on gaining efficiencies, reducing rework and improving
time to market for its clients.
L&T Infotech has increased focus on investing in new
service lines like IMS, Analytics, Testing and Mobility. This
in addition to our continued focus on our domain led
solutions by Service Lines like ERP and Consulting, will
enable us to provide complete outsourcing services to our
clients.
Geographical Expansion: L&T Infotech is investing in
sales and marketing efforts in new geographies such as
Australia, Canada, Singapore and South Africa, while
consolidating our client-facing organisation in North
America and Europe. L&T Infotech has had early success
in these geographies and already has a very interesting
clientele. Through its‘ Transfer Agency Cloud Enabled
Platform’ acquisition, L&T Infotech is well entrenched in
Canada and is in a position to leverage its presence there
for other verticals such a Insurance, High-Tech and Energy
& Petrochemicals. L&T Infotech has recently established
a Wealth Management Center in Singapore to serve our
clients in Asia-Pac.
Global Delivery Model: While United States and Europe
continues to be the main revenue generating regions, L&T
Infotech is continuously focusing on strategic expansion in
countries like Australia, Japan, Singapore, DACH Region
and India by leveraging existing relationships/partnerships,
identifying potential local special domain partners and
building a strong and effective sales team to increase our
foothold in new geographies. L&T Infotech has around 10
delivery centers and 2 proximity centers with diversified
L&T Infotech’s global headquarters in Mumbai.
122
workforce across the globe to cater to 24/7 business needs
of the clients.
Innovation Focus: At the organisation level R&D initiatives
are being run by Technology & Consulting Group and Client
specific R&D functions are being run by the respective
Verticals / Service Lines. The ongoing investments in
Research and Development have been helping to build
an array of industry specific IPs such as accelerators,
frameworks, platforms, solutions etc. L&T Infotech has an
Enterprise Business Solution Lab which tests innovative
business ideas, which adds value client, it also prototypes
solutions to reduce implementation.
We also have Thought Partnership™ structured
program to deliver IT and consulting initiatives that
lead to value-creation beyond stated objectives in the
contract. A key part of the program is about sharing
best practices and doing proof-of-value pilots wherever
required.
New acquisitions: L&T Infotech is looking at acquisitions
that will offer an undisputed leadership stamp, in a
vertical, geography or platform. These acquisitions would
be mainly aimed at the objective to significantly enhance
the revenue in the next two years, leveraging on existing
brand and customers, who believe in us.
Human Resource Strategy: Our focus on hiring, engaging
and retaining key talent continued this year. We continue
to align talent engagement, competency development,
role and career progression, benchmarked compensation
and benefits for our employees worldwide. This has helped
the Company to attract and retain the best talent across
the globe as well as build a pipeline of leaders to meet
its future requirements. L&T Infotech has designed a
leadership program to provide a focused efforts to groom
leaders as they transition from one level to the other.
These programs are based on the leadership competency
framework. Specific programs have been designed
to impart skills and clarify attitudes for each of these
competencies.
At the end of Fiscal year 2013-14, total employee
strength of L&T Infotech was 17,654. The attrition rate
for the year was 13.2% as against 12.3% for the previous
year.
Headcount
2013-14
17,654*
2012-13
17,665
2011-12
16,395
2010-11
14,458
2009-10
11,508
*After transfer of PES employees to L&T Technology
Services Limited (LTTS) as a result of transfer of PES
Business w.e.f. 1st January 2014.
In order to make business competitive and strive excellence,
L&T Infotech has adopted a three pronged strategy to
differentiate ourselves from competitors and provide a
value proposition to the client:
Program LAKSHYA: A long-term strategy plan focused on
global footprint building, was initiated in year 2012 by
L&T, parent company of L&T Infotech. As an offshoot of
the program LAKSHYA, program for Leadership through
Excellence Agility and Profitability (LEAP) was conceived
by L&T Infotech aiming to achieve accelerated growth
and profitability comparable to the best in class in the
IT services industry. LEAP facilitated identification of
various strategic initiatives across Sales, Marketing, and
Growth (SMG), Delivery (DEL), Technology (TCE), and
Cost Management (CMG) which were formulated into
‘Corporate Thrust Areas’. Further, the Company has
embarked on an Operational Excellence program to drive
operational efficiencies across the organisation. As part
of the program, various initiatives around improving
utilization and cost optimization have been initiated. A
dedicated program management office has been set up
to spearhead these initiatives.
The thrust areas have been assigned with owners and
the execution process and governance structure has been
put in place. The Thrust Areas are closely monitored by
corporate strategy team and periodic updates are given
to senior management.
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Leadership through Excellence Agility and Profitability (LEAP)
Our Value Proposition: In order to make ourselves
competitive and strive excellence L&T Infotech has adopted
a three pronged strategy to differentiate ourselves from
competitors and provide a value proposition to the client
viz business to IT connect, execution excellence, engage
the future.
Business to IT Connect: L&T Infotech leverages the
domain expertise of its sister companies and has been
investing heavily in building domain solutions. It offers IT
Solutions driven by business context and rooted in domain
knowledge providing more impactful industry solutions
focused on gaining efficiencies, reducing rework and
improving time to market for its clients.
Execution Excellence: L&T Infotech demonstrates execution
excellence with its committed talent pool of associates and
effective use of proprietary tools and processes to achieve
clients’ goals on-time, in-cost with a world-class quality.
Engage the Future: With a focus on future business
requirements, L&T Infotech is making its businesses
future-ready by building platforms and solutions based
on emerging technologies. Its 2-tier (Technology Office at
Cluster Level and Vertical/Client specific Technology office)
dedicated technology offices deliver business benefits
by harmonizing technology ecosystem and creating
differentiators using technology as the prime mover. This
helps clients benefits with the skills and capabilities to
deliver next generation solutions.
Outlook:
As the global macro-economic scenario continues to
improve with positive signs from US and Europe, there
has been a gradual improvement in IT budgets across the
globe.
As per NASSCOM, the Indian IT sector exports are set to
cross USD 99 Billion during FY 2014-15 and y-o-y growth
of 13-15% is due owing to increase in demand from US
and European clients.
With firms moving towards more revenue focused models
and disruptive technologies such as social media, analytics
& cloud, avenues for more vertical oriented solutions are
opening. Opportunities seem promising but it requires
companies to continuously innovate and evolve.
True to these global trends, L&T Infotech has taken number
of initiatives like increased focus on regions such as Europe
by strengthening the sales efforts, building IMS capabilities
in the wake of growing opportunities, and strengthening
management team with induction of senior leaders from
industry. By targeting and offering services across verticals
in sync with L&T Infotech’s three pronged strategy, L&T
Infotech plans to continue higher growth momentum in
FY 2014-15.
123
Technology Services Business
Knowledge City at Vadodara houses one of the delivery centres of L&T Technology Services Ltd. Other centres are located in Chennai, Bangalore,
Mysore, Hyderabad, Mumbai, New Jersey and California.
Overview:
Technology Services business forms part of the IT &
Technology Services segment of Larsen & Toubro (L&T). To
achieve the next level of growth through comprehensive
solutions across industries, the Integrated Engineering
Services (IES) business of L&T and Product Engineering
Services (PES) business of L&T Infotech Ltd. came together
and formed L&T Technology Services Limited (“L&T
Technology Services”), a 100% subsidiary of L&T. This
allows L&T Technology Services to expand its footprint in
the engineering services market through a multitude of
industry verticals.
L&T Technology Services offers design and development
solutions throughout the entire development chain across
various industries such offering include Industrial Products,
Medical Devices, Transportation, Telecom and Hi-tech and
to the Process Industry. The company also offers solutions
in the areas of Mechanical engineering Services, Embedded
Systems Services, and Product Lifecycle Management
(PLM).
With a CAGR of 40% over the last 3 years, technology
Services is today acknowledged amongst the top 5 in the
Indian Engineering Research and Development (ER&D)
service segment.
The Zinnov 2013 Global Service Provider Ranking, (GSPR)
has placed 6 of the company’s verticals in the leadership
zone and the Industrial Products vertical in the Leadership
Zone for the third time in a row. This is a true reflection
of the commitment to be on the fast track of being the
“BEST” in engineering outsourcing service industry.
124
The company has its design and delivery locations in
Vadodara, Chennai, Bangaluru, Mysore, Hyderabad and
Mumbai in India. Outside of India, the 2 delivery centres
include one in Edison, New Jersey and another in San Jose,
California in the US.
L&T Technology Services has several alliances and
partnerships some of which include AUTOSAR (Automotive
Open System Architecture), CABA, CiA , National
Instruments, GENIVI, Siemens, Dassault Systemes, PTC,
Texas instruments and Institute of Asset Management
(IAM).
L&T Technology Services is an ISO 9001:2008 and a CMMI
level 5 certified organization.
Business Environment:
The engineering services market is rapidly changing as
new disruptive technologies are impacting the current
paradigm. With more than 30+ billion connected devices
expected in the next five years, the Internet of Things/
M2M market is causing all our clients to explore new ways
to leverage, develop new products and business models to
monetize their respective value chain. The trends to shift
to digital manufacturing, 3D printing, and virtual factory
/modeling and innovative and simplistic industrial designs
are becoming more real now.
As per Gartner, global spend in engineering services will
reach $1.4 trillion by 2020. Total outsourcing spend in
engineering services will grow 3-4 times the rate of total
spend on engineering with a substantial contribution from
the emerging markets. NASSCOM has predicted the Indian
outsourcing industry growth at 13-15% for 2014-15 as
worldwide spending on outsourcing is set to accelerate
through 2015.
L&T Technology Services with its multi-disciplinary and
multi-domain presence has the advantage to leverage its
best practices across different industry verticals and is well
poised to address the business environment.
Mega trends impacting the outsourcing industry are
convergence of Technologies / Industries:
• Products and Solutions with multiple functionalities
are emerging especially in industries such as Consumer
Electronics, Medical Devices, Automotive and Mobile
Devices with cross-industry collaborations
• Open standards driven innovation
• Electronics and software emerging as a key value
differentiator
• Adoption of cloud computing, big data, and software
driven infrastructure is opening new opportunities for
cost savings and innovation across many industries
including Telecom, Consumer, Healthcare, Utilities and
Manufacturing
Significant Initiatives:
The next level of growth to achieve industry leadership
demands an organization which is geared up for providing
comprehensive solutions across industries. Formation of
Technology Services was a step in that direction.
A few initiatives that the company has taken to boost
momentum are:
• The change in technology and market trends is driving
us to adapt and develop new innovative solutions and
build new competencies. Three new solution offerings
that L&T Technology Services has introduced in early
2014 to capitalise on these changes and enable rapid
growth are:
• Internet of Things (IoT)/M2M,
• Engineering Analytics and
• Power Electronics for Electric Vehicles.
• It continues its emphasis on account mining by focusing
on high growth potential accounts
• The Technology Solutions & Innovation Centre (TSIC) has
fostered within the organization a culture of innovation
and healthy competition through the Tech Panorama
and Tech Expression events which has encouraged
company wide employee participation aiding in
employee engagement
Engineering talent is drawn from India’s premier academic institutes.
125
• Initiatives such as Wings for balancing gender diversity
& inclusion, implementation of the technical career
path, identification & development of high potential
employees, advanced project management certification
programs have been taken keeping the future growth
of our employees in mind
• For improving delivery capabilities L&T Technology
Services is investing in setting up labs and POC’s to drive
innovation and technology advantage
• Future expansion to be more focused in tier - 2 cities
which will highly reduce the facility and infrastructure
costs
• Existing facilities are optimally planned. New facilities
in Vadodara, Mysore and Bangaluru are being planned
to support the growth of manpower as required for
business growth. A phase wise occupation of facilities
is done as per the requirement which helps in better
planning of CAPEX
• The company has filed more than 135 patents
co-authored with its clients and close to 12 patents in
its own name.
L&T Technology Services’ 98% business is through exports.
It’s presence across geographies and continuous venture
into new regions has reduced possibility of any adverse
impact in case of any geography specific turbulence.
Being in the engineering services outsourcing space,
the markets today have many other emerging low cost
countries like Malaysia, Indonesia, etc. who are also
capable of providing engineering services at competitive
prices. We are countering this risk by offering better
pricing and high quality deliverables.
The engineering services market is rapidly changing as new
disruptive technologies are impacting the current business
model. L&T Technology Services is continuously investing
in solution development, new service offerings, labs to
align itself with the technology trends.
Outlook
Global trends in the economy today motivate the people in
general to invest in businesses which have been growing
significantly over the years. Engineering Services is one
such industry. L&T Technology Services added 33 new
clients during the year out of which 12 clients are Fortune
500 companies. In the race towards capturing a sizeable
pie of this market, L&T technology Services has been able
to achieve a revenue growth of 20% during the current
fiscal year.
Investments in emerging geographies and new solutions
are expected to add substantially towards incremental
revenues in the year 2014-15.
126
Financial Services Business
Financial Services Business
The Financial Services business segment comprises retail
and corporate finance, housing finance, infrastructure
finance, investment and wealth management business
carried through L&T Finance Holdings Limited. Financial
Services business also includes general insurance which
is housed in a wholly owned subsidiary viz. L&T General
Insurance Limited.
L&T Finance Holdings
Overview:
The goal of L&T Finance Holdings (LTFH) is to become
a comprehensive provider of financial solutions. The
company’s businesses, carried out through its wholly
owned subsidiaries, are structured as Retail Finance,
Wholesale Finance, Investment Management and Wealth
Management.
Despite the challenging macroeconomic environment
during the year 2013-14, the company achieved a new
milestone by crossing 40000 crore in consolidated loans
and advances, registering a healthy growth of 20% on a
Y-o-Y basis.
L&T Mutual Fund’s managed assets stood
18255 crore
this fiscal and the Wealth Management business crossed
5000 crore in serviced assets.
Business Environment
Retail Finance business
The Retail Finance business, consisting of retail, mid-
corporate and housing finance businesses is carried out
through our wholly owned subsidiaries, L&T Finance
Limited, Family Credit Limited and L&T Housing Finance
Limited. These comprise loans for the purchase of income
generating activities as well as consumer assets, working
capital loans for SMEs, term loans for medium and large
127
companies, micro finance, loans for purchase of homes
and loans against property. The product portfolio under
Retail Finance is as follows:
Consumer
and Auto
Loans
Farm
Equipment
Personal
Vehicles (PV)
Small & Light
Commercial
Vehicles (SCV
and LCV)
Micro
and Small
Enterprises
Construction
Equipment
Medium
& Heavy
Commercial
Vehicles
(MHCV)
Warehouse
Receipt
Finance
Mid and
Large
Corporations
Loans and
Leases
Loan Against
Securities
Housing
Finance
Micro
Finance
Home Loans
Construction
Funding
Joint Liability
Loans
Micro
Individual
Loans
Supply Chain
Finance
Loan
Against
Property
Our growth has been led by our geographical presence,
strong OEM tie-ups and rapid roll-out capabilities with
respect to innovative season-specific and geography-
specific schemes. Asset quality pressures have been due
to stress in the commercial vehicle (CV), construction
equipment (CE) and mid-corporate segments. A conscious
attempt to de-grow in the CV/CE segments and focus on
quality of promoters, close monitoring of security, cash
flows and end use in the mid-corporate segment, enabled
us to arrest further worsening of asset quality.
The business and credit review functions operate
individually to effectively manage credit risk. We
introduced new technology advancements during the year
We fulfill the desire for personal mobility by financing two-wheelers
and cars across rural and urban India
to significantly reduce turnaround time in loan processing
and collections.
Wholesale Finance
The Wholesale Finance business comprises infrastructure
financing and non-infra wholesale financing across three
lending entities: L&T Infrastructure Finance Company
Limited (L&T Infra Finance), L&T FinCorp Limited and L&T
Infra Debt Fund Limited, which are subsidiaries of the
Company.
During the year under review, the business focused
on strengthening its portfolio and was selective in
disbursements to Greenfield projects compared to earlier
years, but maintained a steady growth. Disbursement
was spread across key infrastructure sectors including
conventional power, renewable energy, roads, ports, SEZ
and industrial parks, telecommunications, oil & gas, urban
infrastructure, etc.
The business’s concentration risk with respect to single
borrower and single promoter group remains comfortably
low, with the top 10 borrowers and promoter groups
constituting only 25% and 31% of the total exposure
respectively, as on March 31, 2014.
Retail Finance participates across the income cycles of the rural
economy - crop, dairy and warehousing. We finance tractors and
farm equipment and encourage rural enterprise in dairy, commodity
storage and trading.
The year saw increased focus towards low risk operational
projects, which was largely the result of a changed business
environment and emerging dynamics of the Infrastructure
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Debt Fund. L&T Infra Debt Fund Limited, sponsored by
L&T Infra Finance, commenced business this financial year.
Investment Management Business
L&T Mutual Fund has been one of the fastest growing
fund houses in the Indian mutual fund industry with
average assets growing at 63% to
18255 crore as at
March 31, 2014 as against
11170 crore last year. The
number of investor folios stood close to 8,00,000. This
growth was achieved on the back of improved fund
performance, effective cost management, strong risk
L&T Mutual Fund went up the ladder by three notches In FY 14 and
now ranks No. 13 in the industry.
management and significantly improved customer and
distributor engagement. Most of the funds consistently
outperformed their respective benchmarks across 1, 3 and
5 years periods. L&T Mutual Fund increased in its market
share from 1.6% in March 2013 to 2.2% in March 2014
and improved its industry ranking from 16th to 13th.
Moreover, the business achieved break-even for the
financial year led by asset growth and tight cost controls.
Wealth Management Business
Wealth Management is carried out through L&T Capital
Markets Limited, which was set up in 2012-13. The
business operates through offices in Mumbai, Delhi,
Bangalore, Chennai, Hyderabad, Ahmedabad, Baroda and
Pune and has a client base of over 1500 high net worth
customers across the country. Average assets under service
have crossed 5000 crore.
Significant Initiatives:
New initiatives undertaken during the year FY 2013-14
include: -
• Mobile phone receipting for near-instant visibility of
collections made on the field
• Deployment of tablets to digitize sourcing of loans in the
retail business
• L&T Mutual Fund completed 51 Investor Awareness
Programmes and 283 Distributor Trainings across cities.
It introduced a new service called “Multi-Scheme SIP”,
launched its Facebook page, launched an application for
the distributor fraternity called “I-advise” and initiated a
unique investor education programme.
Outlook:
The fiscal has seen a continued growth slowdown combined
with high inflation. Though the global slowdown has
definitely hurt exports and affected investment, according
to an IMF study, two-third of the downslide in GDP growth
can be attributed to domestic factors such as supply
bottlenecks, delayed project approval and implementation
and policy uncertainty. Growth in industrial output and
new capital expenditure saw significant deceleration
during the fiscal. Though recent policy actions have
reduced India’s vulnerabilities, structural issues and high
inflation continue to remain key concerns, which need to
be tackled for a sustainable turnaround.
L&T General Insurance
Overview
L&T General Insurance business entered its third full year
of operations selling more than 2,60,000 policies. Motor
remains the largest contributor to Gross Written Premium
(GWP) with a share of 52%. Health and other Commercial
Lines of business contributed 19% and 29% of the total
GWP respectively. In the commercial segment, Fire and
Engineering were the main contributors. L&T General
Insurance has a pan India presence with 14 branches.
Business Environment
Indian general insurance industry continues to show an
impressive growth of 12% during 2013-14. All lines of
business grew at a lower rate than previous year resulting
in a lower industry growth which could be primarily
attributed to lower GDP growth. The growth in premium
for private players is 15% as compared to 10% for public
players. Consequently the market share of private players
grew from 43% to 44%.
129
Motor and Health lines of business are the fastest growing
segment and now accounts for 44% and 23% of the
industry’s GWP.
Significant Initiatives:
• During the year, the business made significant foray into
Individual Health.
• The business achieved a policy issuance TAT (Turn
Around Time) of 92% in the retail non-micro segment
by issuing the policies on the same day of application.
• The business has been awarded Celent Asia Model
Insurer award in the area of “Distribution category:
Other channels” for developing a point of sale system
for manufacturing tie up channel.
• The business has covered 17,82,239 lives under the
‘social sector’ business and issued 34,546 policies in
rural areas (comprising 8% of the GWP) during the
current financial year.
Outlook:
Low insurance penetration in terms of premium percentage
to GDP and growth in urbanisation are expected to sustain
as well as accelerate the growth of the general insurance
industry in general. L&T General Insurance is poised to
leverage the opportunities on the back of its operational
efficiencies supported by its state-of-the-art technology
platform.
130
Developmental Projects Business
The Hyderabad Metro Rail Project is the world’s largest public-private project in the urban transportation sector. It is poised to reduce commuting
time and enhance the quality of life in the metropolis of Hyderabad.
Developmental Projects Business
Developmental Projects business segment comprises (a)
Infrastructure projects executed through L&T Infrastructure
Development Limited and its subsidiaries and associates
(L&T IDPL Group); (b) Power Development Projects
executed through L&T Power Development Limited and
its subsidiaries (L&T PDL Group) and (c) Kattupalli Port
operations of L&T Shipbuilding Limited.
The operations of developmental projects business
segment primarily involves development, operation and
maintenance of basic infrastructure projects in the Public
Private Partnership format, toll collection including annuity
based road projects, power development and power
transmission, development & operation of port facilities
and providing related advisory services. The business
model envisages calibrated churning of the portfolio to
monetize assets at an appropriate time for capital and also
for realization of returns on the developed projects from
the perspective of shareholder value creation.
L&T IDPL Group
Overview
L&T Infrastructure Development Projects Limited (L&T IDPL)
is a major player in the Public-Private Partnership projects
in India with business interests across Roads and Bridges,
Ports, Metro Rail, Wind energy and emerging sectors
such as Power Transmission Lines, Water and Railways.
Incorporated in the year 2001 as L&T Holdings Limited,
then a wholly owned subsidiary of Larsen & Toubro, L&T
IDPL is currently India’s premier road developer with a
portfolio of 19 projects with 9736 kms at an estimated
project cost of
23160 crore. Of these, 11 projects are
under operation, 4 projects under implementation and 4
projects are under development.
L&T IDPL’s portfolio of infrastructure assets also includes
the Hyderabad metro rail project, a transmission line
project, ports and a wind energy project.
131
Business Environment:
Toll collection across several projects in the road sector
of the country has not been as per expectations due to
lower industrial output and severe economic downturns
resulting in lower growth in traffic. The total toll collection
(including annuity income) across various subsidiaries was
1197 crore for the year 2013-14 as against 1112 crore
in the previous year. The growth of 7.64% is also
attributable to the L&T Devihalli Hassan Tollway Limited
which commenced tolling during the year.
Due to the inherent complexity and long duration of
infrastructure projects, there are uncertainties and a
variety of risks encompassing this sector. L&T IDPL’s risk
management approach has focused on a forward looking,
life cycle oriented risk assessment to identify the potential
risks throughout the life of the projects and to determining
measures to mitigate the risks.
Significant Initiatives:
Many of our projects have won awards for delivering
exemplary performance in the infrastructure sector.
During the year 2013-14, L&T IDPL has won the D&B
Infra award for the road project L&T Ahmedabad-Maliya
Tollway Limited under three categories namely Roads &
Highways, Public Private Partnership and Environmental
Sustainability.
At L&T IDPL, the Human Resources skill sets and talent
are unique and hence the developmental interventions
are designed in such a manner that training initiatives
cover instilling and developing leadership qualities
including management of an uncertain environment,
relationship management, fostering a developer mind-set,
value enhancement of portfolio. Employee engagement
survey, administration of various psychometric tools,
post-performance management system survey, custom
designed ’people manager‘ programs and feedback are a
regular affair at L&T IDPL.
Outlook:
During the year 2013-14, few projects were announced
for bidding. The Company has successfully won a project
in the Sambalpur–Rourkela road stretch in the State of
Odisha. The Company has also made its entry into the
transmission line and secured its first transmission line
project in the State of Karnataka. Post the general election
in May 2014, it is expected now that the infra sector would
see accelerated pace of development and several large
projects in the different segments in the infrastructure
space that would be bid out.
132
L&T PDL Group:
Overview :
L&T Power Development Limited (PDL), a wholly owned
subsidiary of L&T, has been incorporated as its’ Power
Development arm with an objective of developing,
investing, operating and maintaining power generation
projects of all types namely thermal, hydel, nuclear and
other renewable forms of energy including captive and
co-generation power plants.
Currently, L&T PDL portfolio comprises projects in Thermal
and Hydel power generation.
Hydel Power Projects
Hydel projects with an aggregate capacity of 870 MW are
in various stages of development. A brief status is depicted
below:
Name of
Project
Capacity
(MW)
State
Name of
Subsidiary
Current
Status
Construction
work is in
progress
} Detailed
Project
Report
submitted
Singoli-
Bhatwari
Hydro Electric
Project
Tagurshit
Hydro Electric
Project
Sach-Khas
Hydro Electric
Project
Reoli-Dugli
Hydro Electric
Project
99
Uttarakhand L&T
Uttaranchal
Hydropower
Limited
L&T
Arunachal
Hydropower
Limited
L&T Himachal
Hydropower
Limited
L&T Himachal
Hydropower
Limited
74
Arunachal
Pradesh
267
Himachal
Pradesh
430
Himachal
Pradesh
TOTAL
870
Thermal Power Projects
L&T PDL is in advanced stages of implementing a 1400
MW super critical thermal power project through its
wholly owned subsidiary – Nabha Power Limited (NPL).
NPLis a special purpose vehicle formed by Punjab State
Electricity Board (PSEB) to undertake the development of
a thermal power project at Rajpura, Punjab. L&T Power
Development Limited (L&T PDL) emerged as a successful
bidder in the tender floated by PSEB and the ownership of
NPL was transferred to L&T PDL in Jan – 2010.
NPL is setting up a 2 X 700 MW Supercritical thermal
power plant in Rajpura Punjab. This is the first development
project of L&T in thermal power space and the first power
plant to be owned & operated by L&T. Entire power
generated from this plant is contracted with Punjab State
Power Corporation Limited for a period of twenty five
years under a Power Purchase Agreement (PPA).
First unit of 700 MW has already commenced commercial
operations in Feb – 2014 and power generation has
commenced.
Business Environment:
The Year 2013-14 continued to witness challenges in the
areas of Coal supply and regulatory uncertainty. Overall
scenario in terms of inflation and interest rates also was
not very encouraging.
Power Generation Capacity additions have accelerated in
the eleventh plan period. On the important issue of fuel
while there has been an increase in the coal production,
there is still significant dependence on imported coal. It is
important that mining activity and coal block / environment
clearances are fast tracked in order to reduce the same.
This year has witnessed a balanced view being taken on
various industry issues by Regulators across the country.
Positive initiatives such as pass through of imported coal
costs, new bidding guidelines, accelerated clearances,
regular tariff hikes etc. were seen.
Significant Initiatives :
• First Unit of 700 MW was commissioned and declared
commercial operations on 1st Feb – 2014 after successful
completion of necessary tests under the PPA.
• A long term Fuel Supply Agreement (FSA) with
South Eastern Coalfields Limited has been executed
during the year. Fuel supply under the FSA has already
commenced.
• Anticipating a challenging fuel supply scenario the
company undertook significant initiatives to ensure
approvals for sourcing of coal from alternative sources.
• Other development aspects of the project such as Land
availability, Water linkage and Evacuation infrastructure
are put in place.
• Construction of Second unit of 700 MW is in advanced
stage of completion.
• Company has acquired the necessary approvals and
clearances for Power Plant operations.
• Agreements for sale of dry fly ash have been entered
into.
• State of the art ERP System has been implemented to
support operations and maintenance activities.
• Experienced Power Plant operation and maintenance
team has been established.
CSR initiatives in the area of development of village
infrastructure, skill building, enhancing gender ratio,
health and environment were implemented during the
year.
Risks profile and mitigation measures:
As a private developer,the environment in the Power sector
poses following major risks:
a.
Regulatory risks (Clearances, Government Policies,
dispute resolution etc.)
Financial Risks (Economic shocks, inflation, access to
capital etc.)
Operation & Fuel related Risks (Fuel quality, Availability
etc.)
Strategic risks (market scenario, demand supply
situation)
b.
c.
d.
The company has a robust risk management process
which involves risk identification, assessment & evaluation,
strategy & mitigation and Monitoring & review mechanism.
The company has implemented multiple measures in each
of the risk areas to ensure a proactive approach and timely
mitigation.
Outlook:
Increased private participation in the power sector is
expected to play an important role in future capacity
additions. Lower per capita consumption promises robust
long term demand. On the fuel side Coal production
capacity is expected to increase by FY 2017.
At the state level, a power surplus situation is envisaged
in the near future. This surplus is however expected to
decline gradually as no significant capacity additions are
planned beyond the ones currently under implementation.
With energy demand expected to grow, the system is likely
to be deficit again in the medium term.
Maximising the plant availability, efficiency, ensuring
adequate fuel availability, cost competitiveness and timely
commissioning of second unit are identified as the thrust
areas for FY 2014-15.
133
L&T’s modern port at Kattupalli, north of Chennai.
L&T Shipbuilding Limited:
Kattupalli Port Operations
L&T Shipbuilding Limited is a Joint Venture between L&T
and Tamilnadu Industrial Development and Corporation
Limited (TIDCO) wherein L&T holds 97% and TIDCO holds
3% in the Company to develop shipyard cum minor port
complex. Both the shipyard and the port have SEZ status.
Kattupalli port at Chennai has a container terminal with
two container berths. During the year, leading Shipping
lines such as Maersk, Hyundai Merchant Marine (HMM)
and Nippon Yusen Kaisha Lines (NYKL) made trail calls
successfully. NYKL has commenced regular weekly call at
Kattupalli Port.
The traffic through the port is expected to improve, post
removal of certain customs procedure related impediments,
in respect of the Container Freight Stations (CFS) located
in and around Chennai.
134
Financial Review 2013-14
I. PERFORMANCE REVIEW
A. L&T STANDALONE
The Company despite the challenges posed by a slowing
domestic economy and unfavourable investment climate
has registered an impressive growth in order inflow,
improvement in EBITDA margins and increase in Profit after
Tax (PAT) during the year 2013-14.
The performance for the year ended March 31, 2014
excludes the performance of Hydrocarbon business segment,
which has been transferred with effect from April 1, 2013
to L&T Hydrocarbon Engineering Limited, a wholly owned
subsidiary of the Company upon sanction of the scheme by
the Hon’ble Bombay High Court vide order dated December
20, 2013. Consequently, the performance for the previous
year ended March 31, 2013 has been suitably restated.
The Company successfully secured new orders worth
94108 crore during the year 2013-14, registering a
commendable growth of 15% over the previous year. The
order intake was notable against the backdrop of depressed
investment sentiment, slowing GDP growth, policy
uncertainty and intense competition prevailing in India during
the year. Buildings & Factories, Heavy Civil Infrastructure,
Transportation Infrastructure, Power Transmission &
Distribution and Water & Renewable Energy businesses
contributed significantly to the order inflows during the year.
International orders increased 3 times over the previous year
contributing to 33% of the order inflow during 2013-14
aided by focused efforts on internationalisation.
e
r
o
r
c
95000
85000
75000
65000
55000
45000
35000
25000
15000
5000
Order Inflow
15.4%
81562
10134
94108
30752
64444
7441
57003
71428
63356
2011-12
2012-13
2013-14
Domestic
International
To facilitate like-to-like comparison, the figures for 2011-12 and 2012-13
have been restated to exclude Hydrocarbon business
The Order Book as at the year end stood at 162952 crore
providing good revenue visibility for the next couple of
years. The order book registered a growth of 13% over the
previous year with international orders constituting 21% of
the order book.
Revenue from Operations
Gross revenue for the year 2013-14 at 57164 crore grew by
around 10% over the previous year. While businesses of the
Infrastructure segment registered a healthy growth of 23%
over the previous year, the Power segment and Metallurgical
& Material Handling segment recorded decline in the revenue
owing to the unresolved long pending sectoral constraints.
60000
50000
40000
30000
e
r
o
r
c
20000
10000
0
Gross Revenue from Operation
57164
9.5%
9129
52196
7512
44908
5487
39421
44684
48035
2011-12
2012-13
2013-14
Domestic
International
To facilitate like-to-like comparison, the figures for 2011-12 and 2012-13
have been restated to exclude Hydrocarbon business
International revenue at 9129 crore grew 22% over 2012-13
and constituted 16% of the total revenue. The international
revenue is mainly contributed by Power Transmission &
Distribution, Commercial Buildings & Airports, Process Plants
& Nuclear Equipment and Integrated Engineering Services
businesses.
Healthy order book and on-time execution would enable the
Company to maintain the revenue growth momentum in the
near to medium term.
Operating Cost and PBDIT
Manufacturing, Construction and Operating (MCO)
expenses at
43346 crore for the year 2013-14 increased
Expenses and Operating Profit as a %
to Net Sales Revenue
11.8%
(10.6%)
3.4%
(4.0%)
8.2%
(7.5%)
Mfg. Construction &
Operating Expenses
Staff Expenses
Sales, Administration &
Other Expenses
Operating Profit (PBDIT)
76.6%
(77.9%)
[Figures in brackets ( ) relate to previous year]
135
by 8%.These expenses mainly comprise cost of construction
& other materials and subcontracting expenses. The MCO
expenses reduced from 77.9% to 76.6% of revenue on the
back of efficient contract management and decline in key
input prices.
4662 crore
The staff expenses for the year 2013-14 at
increased by 21% as compared to the previous year. There
was a net addition of 3987 employees during the year,
taking the Company’s manpower strength to 54579 as at
March 31, 2014.
Sales and administration expenses for the year 2013-14 at
1923 crore decreased to 3.4% of net sales revenue due to
reversal of warranty provisions on successful close out of jobs
and lower exchange loss as compared to the previous year.
The EBITDA margin for the year at 11.8% improved by
120 basis points as compared with the previous year.
Consequently, Profit before depreciation, interest and tax
(PBDIT) stood at
6667 crore for the year, registering a
growth of 21.8% over the previous year.
Depreciation & Amortisation charge
Depreciation and amortisation charge for the year 2013-14
at
792 crore increased by 9% over the previous year.
Increase in the depreciation charge for the year reflects the
impact of the depreciation on the additions made to the
fixed assets.
Other Income
Other income for the year 2013-14 amounted to 1881 crore
as against 1887 crore for the previous year. Dividends from
Group companies during the year 2013-14 amounted to
865 crore as against 585 crore for the previous year. The
short term investments of temporary surpluses made in low
risk securities, yielded income at 452 crore for the year. The
other income for the year 2013-14 included exceptional gain
of
589 crore on divestment of the Company’s part-stake
in L&T Finance Holdings Limited towards complying with
the listing requirements on minimum public shareholding.
Finance Cost
The interest expenses for the year 2013-14 at 1076 crore
were higher vis-à-vis
955 crore for the previous year. The
increase in the interest expenses is mainly due to interest
on higher short term borrowings made during the year to
finance the rising working capital needs of the businesses.
The average borrowing cost for the year 2013-14 was
contained at 9.6% p.a., despite elevated interest rates
and tight liquidity conditions prevalent in the year as also
volatility in the exchange rates witnessed in the first half of
the year 2013-14.
136
Profit after Tax
Profit after Tax (PAT), including extraordinary and exceptional
items, for the year 2013-14 at
5493 crore was higher
vis-à-vis
4384 crore for the previous year, recording an
increase of 25.3%.Excluding the exceptional gains(net of
tax) of
589 crore earned during the year, the Profit after
Tax (PAT) at 4905 crore recorded a growth of 17.6% over
the previous year.
Profit After Tax
6000
4500
e
r
o
r
c
3000
1500
0
5493
25.3%
4384
3912
2011-12
2012-13
2013-14
To facilitate like-to-like comparison, the figures for 2011-12 and 2012-13
have been restated to exclude Hydrocarbon business
Earnings per share
The Earnings Per Share (EPS) including exceptional and
extraordinary items, for the year 2013-14 at 59.36 showed
an improvement of 11.3% over the previous year. The same,
however, is not comparable vis-à-vis 2012-13 which included
the profit from operations of the erstwhile Hydrocarbon
business undertaking.
Funds Employed and Returns
The overall Funds Employed by the Company at 45531 crore
as at March 31, 2014 increased by 7312 crore as compared
to the position as on March 31, 2013.
The Company incurred
962 crore towards capital
expenditure during the year. The major expenditure was
incurred on procurement of various plant and equipment
for the businesses in Infrastructure segment.
Net Working Capital as at March 31, 2014 at 13692 crore
increased to 24% of sales as compared to
9056 crore
at 17.3% of sales as on March 31, 2013. Higher unbilled
construction work-in-progress and relatively lower increase
in customer advances resulted in increase in net working
capital.
During the year, investments and loans to subsidiary and
associate companies increased by 3329 crore (net). Major
investments have been made in subsidiary companies
operating in Hydrocarbon, Power Development, Technology
Funds Employed
RONW %
ROCE %
ESOP proceeds
To facilitate like-to-like comparison, the figures for 2011-12 and 2012-13
have been restated to exclude Hydrocarbon business
Sale of current investments
Services, Infrastructure Development Projects and Realty
businesses.
During the year 2013-14, the Company continued its
strategic initiative of restructuring its businesses to provide
the necessary impetus for its core businesses. Hydrocarbon,
Valves and Cutting Tools businesses have been transferred
to the wholly-owned subsidiaries of the Company to provide
the required focus and agility to these businesses to take
advantage of market opportunities.
Funds Employed and Returns
50000
40000
30000
20000
e
r
o
r
c
10000
0
35252
38219
16.6
13.5
16.1
13.7
45531
17.5
14.9
30
25
20
15
10
e
g
a
t
n
e
c
r
e
P
2011-12
2012-13
2013-14
Return on Net Worth (RONW) including the gains on
divestitures for the year 2013-14 is 17.5% as against 16.1%
for the previous year. Return on Capital Employed (ROCE) for
the year 2013-14 at 14.9% is higher compared to 13.7%
as that of the previous year. The investments made in the
recent past through the Group companies in capital intensive
businesses have yet to earn adequate returns, as the
newly created facilities have not reached their full scale of
commercial operations. The majority of the SPVs developing
toll roads under concession agreements are either under
construction or in their initial phase of operations and have
not started yielding returns.
459 crore vis-à-vis negative EVA of
Economic Value Added (EVA) for the year 2013-14 is
at
112 crore for
the year 2012-13. Gains on divestment of stake in L&T
Finance Holdings Limited resulted in improvement in EVA
as compared to the previous year despite increase in funds
employed.
Liquidity & Gearing
Tight liquidity position continued to prevail through the
year 2013-14 resulting in build-up of working capital. The
Company tapped internal accruals and resorted to short term
borrowings to meet the rising working capital requirements.
Cash accruals from the operations were lower at
1047 crore during the year 2013-14 as compared to
1472 crore generated in the previous year mainly due
to increase in working capital. Borrowings during the year
(net of repayments) amounted to
2612 crore. Dividend
and treasury income contributed
1359 crore to the cash
generation during the year 2013-14. There was net decrease
of 1381 crore in the current investment and cash balances
as on March 31, 2014 as compared to the balances as at the
beginning of the year.
The Company has incurred capital expenditure of 962 crore
and has made a net investment of 3329 crore in its Group
companies during the year 2013-14.
Fund Flow Statement
crore
Particulars
Operating activities
Borrowings (net of repayments)/
(Repayments)
Dividend from Group companies and
Treasury income
(Increase)/decrease in cash balance
Sources of Funds
Capital expenditure (net)
Investments in Group companies (net
of divestment)
Interest paid
Dividend paid
Total Utilisation of Funds
2013-14
2012-13
1047
1472
2612
(1515)
1359
144
1718
(337)
6543
(962)
(3329)
(1025)
(1227)
(6543)
1180
164
1447
1187
3935
(1000)
(970)
(850)
(1115)
(3935)
The total borrowings as on March 31, 2014 stood at
11459 crore. The loan portfolio of the Company comprises
a judicious mix of domestic and suitably hedged foreign
currency loans. The gross Debt Equity ratio increased to
0.34:1 as at March 31, 2014 from 0.29:1 as at March 31,
2013. The Company has a low net Debt Equity ratio of
0.17:1 as at March 31, 2014 after considering short term
investments in liquid funds.
B. L&T GROUP PERFORMANCE
As at March 31, 2014, L&T Group consists of 138 subsidiaries,
13 associates and 17 joint venture companies. Apart from
extension of the Company’s core businesses including
Hydrocarbon in the Group companies, certain distinct
businesses such as Information Technology, Financial Services
and Developmental Projects form part of the Group through
investments in subsidiary and associate (S&A) companies.
137
The unit 1 of the 2*700 MW supercritical thermal power plant
at Rajpura in Punjab commenced commercial operations
during the year. Seawoods project in Navi Mumbai was
commercially launched and marketing efforts are under way.
Hyderabad Metro Rail project has achieved progress in its
construction despite challenges with respect to right of way
and Andhra Pradesh State Reorganisation during the year.
The consolidated revenue at
85889 crore for the year
2013-14 registered a growth of 14.2% over the previous year.
S&A companies operating in Financial Services, Information
Technology and Realty businesses have registered a healthy
growth during the year 2013-14. Revenue from International
business has grown by 21% during the year 2013-14 and
constitutes 28% of total revenue of the Group.
Gross Revenue from Operations
95000
85000
75000
65000
55000
45000
35000
25000
15000
5000
e
r
o
r
c
14.2%
75195
19882
85889
24004
64960
13256
51704
55313
61885
2011-12
2012-13
2013-14
Domestic
International
The Company has changed its accounting policy on
amortisation of toll road projects for more appropriate
presentation of financial statements. As per the revised
accounting policy, the amortisation will be based on the
new revenue based method prescribed by the Ministry of
Corporate Affairs under Schedule XIV to the Companies
Act, 1956. Pursuant to the aforesaid policy change, the
consolidated PAT is higher by 955 crore.
The overall consolidated Profit after Tax (PAT) was 4902 crore
for the year 2013-14 as compared to PAT of
5206 crore
for 2012-13. The consolidated PAT for the year 2013-14 was
lower mainly on account of prestabilisation period losses
incurred by new ventures namely L&T Shipbuilding Limited
and L&T Special Steel and Heavy Forgings Private Limited
aggregating to 876 crore. These two newly commissioned
facilities are yet to gain scale and have adversely impacted
the PAT at the Group level due to fixed cost of interest and
depreciation.
138
Profit After Tax
5206
4902
4694
6000
5000
e
r
o
r
c
4000
3000
2011-12
2012-13
2013-14
Consequently, Consolidated Earnings per Share (EPS)
including exceptional and extraordinary items for the year
2013-14 at
52.97 showed a decline of 6.3% over the
previous year.
Funds Employed and Returns
The overall Funds Employed by the Group at 85615 crore as
at March 31, 2014 increased by 14421 crore as compared
to the position as on March 31, 2013.
e
r
o
r
c
90000
80000
70000
60000
50000
40000
30000
20000
10000
Funds Employed and Returns
85615
25
71194
16.5
57516
17.3
e
g
a
t
n
e
c
r
e
P
20
15
10
13.7
2011-12
2012-13
2013-14
Funds Employed
RONW %
Return on Net Worth (RONW) including the gains on
divestitures for the year 2013-14 is 13.7% as against 16.5%
for the previous year. The reduction is attributable to decline
in the overall consolidated profit after tax.
C. SEGMENT WISE PERFORMANCE
The Company has changed the identification of its reportable
segments during the year 2013-14 for better reflection
of segment performance as well as to further align the
segment reporting with the internal reporting structure.
The operations of the Engineering and Construction
segment which were hitherto reported as part of one
single segment have now been reported into its different
component segments. Further, the Urban Infrastructure
Development business which was hitherto reported as part
of Developmental Projects under Consolidated Segment
Reporting, has been included as part of Realty business and
reported under “Others” segment.
Accordingly, the segments at the standalone level are
(a) Infrastructure (b) Power (c) Metallurgical & Material
Handling (d) Heavy Engineering (e) Electrical & Automation
(f) Machinery & Industrial Products (g) Others comprising
Realty, Shipbuilding and Integrated Engineering Services.
In addition, the segments at the consolidated level include (a)
Hydrocarbon (b) IT & Technology Services (c) Financial Services
(d) Developmental Projects and (e) Others comprising Realty,
Shipbuilding, Ready Mix Concrete, Mining and Aviation.
The Integrated Engineering Services which forms part of
“Others” segment at the standalone level is reported as
part of IT and Technology Services at the consolidated level.
1.
Infrastructure Segment
1.1. L&T Standalone:
Order inflow of the segment during the year at
76396 crore registered a healthy growth of 37%
over the previous year. Heavy Civil, Transportation
Infrastructure and Water & Renewable Energy
businesses have recorded significant growth in the order
inflow. Buildings & Factories and Power Transmission &
Distribution businesses also secured major orders during
the year 2013-14.
Infrastructure Segment
Order Inflow
76396
36.9%
55788
45132
80000
60000
40000
e
r
o
r
c
20000
0
The segment revenue for the year at
35115 crore
recorded a significant increase of 22% over the previous
year, despite slow progress on a few jobs under execution
due to various reasons. The revenue growth was mainly
driven by Power Transmission and Distribution, Buildings
& Factories, Transportation Infrastructure and Water
& Renewable Energy businesses. International sales
revenue during the year 2013-14 at 5306 crore grew
by 18% as compared to
4491 crore for 2012-13 led
by Power Transmission and Distribution, Buildings &
Factories and Transportation Infrastructure businesses.
e
r
o
r
c
40000
36000
32000
28000
24000
20000
16000
12000
8000
4000
0
Infrastructure Segment
Gross Revenue
21.8%
35115
5306
28819
4491
23979
3175
20804
24328
29809
2011-12
2012-13
2013-14
Domestic
International
The segment recorded improved EBITDA margin of
12.3% for 2013-14 vis-à-vis 11.3% earned in the
previous year on the back of execution efficiencies and
better contract management.
Infrastructure Segment
EBITDA Margin
e
r
o
r
c
5000
4000
3000
2000
1000
0
2693
11.8
3165
11.3
4226
12.3
25
20
15
10
5
e
g
a
t
n
e
c
r
e
P
2011-12
2012-13
2013-14
EBITDA
OPM %
1.2. L&T Group:
2011-12
2012-13
2013-14
Order inflow at the Group level in the Infrastructure
segment grew by 43% to
81373 crore for
139
the year 2013-14. The order inflow growth has
been contributed by international projects bagged
through unincorporated joint ventures with consortium
partners.
e
r
o
r
c
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Infrastructure Segment
Order Inflow (Group)
81373
30128
43.0%
56894
8436
49633
7980
41653
48458
51245
2011-12
2012-13
2013-14
Domestic
International
At Group level, Infrastructure segment recorded gross
segment revenue of 37980 crore for the year 2013-14
registering 22% growth over the previous year in line
with growth recorded at standalone level under the
Infrastructure segment.
Infrastructure Segment
Gross Revenue (Group)
e
r
o
r
c
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
22.4%
37980
7649
31040
6539
24501
30331
24713
5479
19234
2011-12
2012-13
2013-14
Domestic
International
The Group segment EBITDA margin improved to 11.0%
during the year 2013-14 vis-à-vis 10.7% earned in the
year 2012-13 after absorbing cost overruns on a few
jobs being executed by the subsidiary companies.
The Funds Employed by the Group segment at
12910 crore as at March 31, 2014 increased by
3342 crore as compared to the position as on
March 31, 2013.
140
2. Power Segment
2.1. L&T Standalone:
Order inflow of the segment during the year at
3277 crore registered a decline of 59% over the
previous year. The year witnessed drying up of order
prospects, as the power sector in India faced multiple
bottlenecks, which impacted new investments in the
sector. The segment, however, secured a prestigious
international order towards the end of the year.
Power Segment
Order Inflow
7936
2407
3277
2011-12
2012-13
2013-14
e
r
o
r
c
8000
7000
6000
5000
4000
3000
2000
1000
0
The segment revenue for the year at
5140 crore
also declined 36% over the previous year, mainly due
to lower opening order book and delays in award of
targeted order inflow.
Power Segment
Gross Revenue
8074
7367
5140
2011-12
2012-13
2013-14
e
r
o
r
c
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
The segment recorded improved EBITDA margin of
11.0% for 2013-14 vis-à-vis 7.9% earned in the
previous year on the back of progress achieved on the
jobs under execution.
Power Segment
EBITDA Margin
730
9.9
636
7.9
566
11.0
20
15
10
5
e
g
a
t
n
e
c
r
e
P
e
r
o
r
c
1000
800
600
400
200
0
2011-12
2012-13
2013-14
EBITDA
OPM %
2.2. L&T Group:
Order Inflow at the Group level in the Power segment
declined by 57% to
3513 crore during the year
2013-14. The decline in order inflow at standalone level
resulted in decline in the order inflow at the Group level.
Power Segment
Order Inflow (Group)
8219
2305
3513
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2011-12
2012-13
2013-14
At Group level, Power segment recorded gross
segment revenue of
5880 crore for the year ended
Power Segment
Gross Revenue (Group)
8895
7563
5880
2011-12
2012-13
2013-14
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
e
r
o
r
c
e
r
o
r
c
March 31, 2014 registering a decline of 34% over the
previous year in line with decline recorded at standalone
segment level.
The Group segment recorded improved EBITDA margin
of 23.1% during the year ended March 31, 2014
vis-à-vis 14.4% in 2012-13 mainly due to better margins
recorded by L&T-MHI Boilers Private Limited, a subsidiary
of the Company.
The Funds Employed by the Group segment at
1824 crore as at March 31, 2014 decreased by
247 crore as compared to the position as on
March 31, 2013.
3. Metallurgical and Material Handling Segment
3.1. L&T Standalone:
Order inflow of the segment during the year at
2574 crore registered a decline of 50% over the
previous year. Order inflow was lower due to deferment
of targeted orders, as Minerals & Metals sector which
constitutes major customer base for the segment,
witnessed slower growth on account of several
unresolved policy issues.
e
r
o
r
c
e
r
o
r
c
MMH Segment
Order Inflow
7438
5108
2574
2011-12
2012-13
2013-14
8000
7000
6000
5000
4000
3000
2000
1000
0
5546 crore
The segment revenue for the year at
declined by 14% over the previous year due to reduced
opening order book and delays in receipt of fresh orders.
8000
7000
6000
5000
4000
3000
2000
1000
0
MMH Segment
Gross Revenue
6056
6430
5546
2011-12
2012-13
2013-14
141
The segment recorded decline in EBITDA margin at
17.0% for 2013-14 vis-à-vis 17.9% earned in the
previous year on account of cost overruns and delays in
approval of claims.
MMH Segment
EBITDA Margin
1046
903
17.0
17.9
1034
18.9
e
r
o
r
c
1200
1000
800
600
400
200
0
25
20
15
10
5
e
g
a
t
n
e
c
r
e
P
2011-12
2012-13
2013-14
EBITDA
OPM %
3.2. L&T Group:
2724 crore in the
Order inflow at the Group level at
MMH segment showed a decline of 48% during the
year 2013-14. The international subsidiary Company
under the segment secured fresh orders during the year
2013-14.
MMH Segment
Order Inflow (Group)
7382
5224
2724
2011-12
2012-13
2013-14
8000
7000
6000
5000
4000
3000
2000
1000
0
At Group level, MMH segment recorded gross
segment revenue of
5732 crore for the year ended
MMH Segment
Gross Revenue (Group)
7643
6521
5732
2011-12
2012-13
2013-14
8000
7000
6000
5000
4000
3000
2000
1000
0
e
r
o
r
c
e
r
o
r
c
142
March 31, 2014 registering a decline of 12% over the
previous year.
The Group segment recorded decline in EBITDA margin
at 16.6% during the year ended March 31, 2014
vis-à-vis 17.7% in 2012-13 in line with the decline at
the standalone level.
The Funds Employed by the Group segment at
3043 crore as at March 31, 2014 increased by
441 crore as compared to the position as on
March 31, 2013.
4. Heavy Engineering Segment
4.1. L&T Standalone:
Order inflow of the segment during the year at
3323 crore registered a decline of 17% over the
previous year due to postponement of projects and the
consequent deferment of targeted orders. International
orders at 1056 crore represents 32% of the total order
inflow.
e
r
o
r
c
e
r
o
r
c
5000
4000
3000
2000
1000
0
Heavy Engineering Segment
Order Inflow
3983
1270
3323
1056
2713
2267
2561
998
1563
2011-12
2012-13
2013-14
Domestic
International
The segment revenue for the year at
4322 crore
registered an impressive growth of 44% over the
previous year, mainly driven by Process Plant & Nuclear
Equipment jobs under execution. International revenue
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Heavy Engineering Segment
Gross Revenue
4322
43.9%
1351
3003
957
2046
2971
2736
694
2042
2011-12
2012-13
2013-14
Domestic
International
during the year 2013-14 at 1351 crore grew 41% as
compared to 957 crore for 2012-13.
previous year in line with growth recorded at standalone
segment level.
The segment EBITDA margins for both 2013-14 and
2012-13 were subdued due to cost overruns. The
segment recorded a decline in EBITDA margin at 18.2%
for the year 2013-14 vis-à-vis 21.3% earned in the
previous year.
Heavy Engineering Segment
EBITDA Margin
689
30.5
595
21.3
e
r
o
r
c
800
600
400
200
0
769
18.2
35
30
25
20
15
10
5
e
g
a
t
n
e
c
r
e
P
2011-12
2012-13
2013-14
EBITDA
OPM %
4.2. L&T Group:
Group level order inflow in the Heavy Engineering
segment declined by 7% to
3687 crore for the year
ended March 31, 2014. During the year, L&T Heavy
Engineering LLC, a subsidiary company operating at
Oman improved its order procurement on the back of
certain successful pre-qualifications.
Heavy Engineering Segment
Order Inflow (Group)
e
r
o
r
c
5000
4000
3000
2000
1000
0
3981
1212
3687
1397
2769
2290
2572
996
1576
2011-12
2012-13
2013-14
Domestic
International
At Group level, Heavy Engineering segment recorded
gross segment revenue of
4522 crore for the year
ended March 31, 2014 registering 49% growth over the
e
r
o
r
c
6000
5000
4000
3000
2000
1000
Heavy Engineering Segment
Gross Revenue (Group)
49.3%
3028
962
2066
4522
1526
2996
2772
679
2093
2011-12
2012-13
2013-14
Domestic
International
The Group segment recorded EBITDA margin of 15.8%
during the year ended March 31, 2014 vis-à-vis 19.0%
in 2012-13. L&T Special Steels and Heavy Forgings
Private Limited, a joint venture with NPCIL, operated
below its full commercial scale being the first full year of
its operations. The under recovery of fixed overheads of
this new facility adversely impacted the EBIDTA margin
of the segment.
The Funds Employed by the Group segment at
4276 crore as at March 31, 2014 increased by
412 crore as compared to the position as on
March 31, 2013.
5. Electrical & Automation Segment
5.1. L&T Standalone:
The segment revenue of Electrical & Automation
3907 crore for the year 2013-14,
business stood at
recording an increase of 7% over the previous year
e
r
o
r
c
4000
3500
3000
2500
2000
1500
1000
500
0
E&A Segment
Gross Revenue
3579
343
7.2%
3644
353
3907
469
3236
3291
3438
2011-12
2012-13
2013-14
Domestic
International
143
despite slow-down in the market demand during the
year. International revenue contributed about 12% of
the total revenues during the year 2013-14.
The Funds Employed by the Group segment at
2401 crore as at March 31, 2014 increased by
271 crore as compared to the position as on
E&A Segment
EBITDA Margin
600
432
13.6
481
14.2
400
389
e
r
o
r
c
200
12.7
0
2011-12
2012-13
2013-14
EBITDA
OPM %
e
g
a
t
n
e
c
r
e
P
25
20
15
10
5
The EBITDA margin for the year at 14.2% improved
by 60 basis points as compared with the previous year,
contributed by operational efficiencies and better sales
mix.
5.2. L&T Group
At Group level, E&A segment recorded gross
segment revenue of
5133 crore for the year ended
March 31, 2014 registering 6% growth over the
previous year. The revenue growth at the group level
was driven by the performance of Tamco Group of
subsidiary companies and the subsidiaries operating in
the Middle East.
e
r
o
r
c
6000
5000
4000
3000
2000
1000
E&A Segment
Gross Revenue (Group)
5.9%
4846
1352
5133
1725
4303
1202
3101
3494
3408
2011-12
2012-13
2013-14
Domestic
International
The Group segment recorded EBITDA margin of 13.3%
during the year ended March 31, 2014 vis-à-vis 14.1%
in the year 2012-13. The decline in the EBIDTA Margin
at group level is attributable to lower margin realisation
by a few international subsidiaries.
144
March 31, 2013.
6. Machinery & Industrial Products Segment (MIP)
6.1. L&T Standalone:
The segment revenue declined in the year 2013-14 to
1943 crore due to restructuring of business portfolio
and sluggish market conditions. International sales
revenue during 2013-14 at 458 crore constituted 24%
of the revenue during the year, largely led by Industrial
Valves and Rubber Processing Machinery businesses.
e
r
o
r
c
3000
2700
2400
2100
1800
1500
1200
900
600
300
0
MIP Segment
Gross Revenue
2554
439
2395
533
2115
1862
1943
458
1485
2011-12
2012-13
2013-14
Domestic
International
The segment margin declined during the year 2013-14
to 12.7% compared to 16.3% in the previous year due
to the lower sales volume and competitive pressures.
e
r
o
r
c
600
400
200
0
MIP Segment
EBITDA Margin
470
19.4
362
16.3
234
12.7
2011-12
2012-13
2013-14
EBITDA
OPM %
e
g
a
t
n
e
c
r
e
P
25
20
15
10
5
6.2. L&T Group:
At Group level, MIP segment recorded 22% growth in
segment gross revenue of
3527 crore for the year
2013-14 vis-à-vis 2880 crore in the previous year. The
growth in revenue at segment level is mainly attributable
to consolidation of full year performance of L&T Valves
Limited and L&T Construction Equipment Limited which
have become subsidiaries post acquisition of the balance
50% stake by the Company. International revenues
represent about 21.7% of total segment revenue for
2013-14 at Group level.
e
r
o
r
c
4500
4000
3500
3000
2500
2000
1500
1000
MIP Segment
Gross Revenue (Group)
3374
556
2818
22.5%
2880
586
2294
3527
764
2763
2011-12
2012-13
2013-14
Domestic
International
The MIP segment recorded an EBITDA margin of 13.8%
during the year 2013-14 as against 16.1% during the
previous year due to changes in the sales mix and
competitive pressures.
The Funds Employed by the Group segment at
1288 crore as at March 31, 2014 increased by 85 crore
as compared to the position as on March 31, 2013.
7. Hydrocarbon Segment
Hydrocarbon segment, at consolidated level, represented
by L&T Hydrocarbon Engineering Limited and other
subsidiaries recorded order inflow of
9775 crore
during 2013-14 registering a growth of 37% for the
year ended March 31, 2014. The growth was driven
by domestic orders bagged by L&T Hydrocarbon
Engineering Limited. International orders accounted for
nearly 51% of total order inflow for 2013-14.
Hydrocarbon Segment
Order Inflow (Group)
e
r
o
r
c
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
36.6%
9775
4933
7158
4862
6973
6300
673
2296
4842
2011-12
2012-13
2013-14
Domestic
International
Hydrocarbon segment recorded gross segment revenue
of
10055 crore for the year ended March 31, 2014
registering a marginal decline of 2% over the previous
year. The revenues were lower due to low order book
consequent to modest order inflow for the segment
over the last two years.
International revenues during 2013-14 registered a
13% growth over the previous year and constitute 62%
of the total revenues of the segment.
Hydrocarbon Segment
Gross Revenue (Group)
e
r
o
r
c
14000
12000
10000
8000
6000
4000
2000
10533
1273
9260
10250
10055
5529
4721
6228
3827
2013-14
2011-12
2012-13
Domestic
International
8.
The Group segment recorded a sharp decline in
the EBITDA margin to 3% during the year 2013-14
vis-à-vis 11.6% in 2012-13. The margins declined
significantly due to cost and time overruns in some
of the international projects mainly by Hydrocarbon
Construction & Pipelines jobs under execution.
The Funds Employed by the Group segment at
3903 crore as at March 31, 2014 increased by
1642 crore as compared to the position as on
March 31, 2013.
IT & Technology Services (IT&TS)
IT&TS segment at consolidated level comprises L&T
Infotech Group of companies and Integrated Engineering
Services (IES) business run by Larsen and Toubro Limited,
the parent company. At standalone level, IES is grouped
under “Others” segment of the parent company.
IT&TS segment recorded gross segment revenue
6417 crore for the year ended March 31, 2014
of
registering an impressive growth of 28.4% over the
previous year. Most of its revenues are from international
customers.
L&T Infotech Group recorded total income of
4823 crore during the year ended March 31, 2014,
registering 25% growth over the previous year. In USD
terms, L&T Infotech Group recorded 18% growth over
the previous year, on like-to-like basis.
145
IT & Technology Services Segment
Gross Revenue (Group)
e
r
o
r
c
7000
6000
5000
4000
3000
2000
1000
0
6417
28.4%
4999
3975
2011-12
2012-13
2013-14
Integrated Engineering Services business, a strategic
business unit of L&T showed a robust growth of 29% in
revenue for 2013-14 at 1638 crore. Enhanced business
volumes coupled with favourable foreign currency rates
enabled the segment to post growth in its revenue. In
USD terms, IES registered 19% growth in its revenue
over the previous year.
The EBITDA margin for the year 2013-14 stood healthy
at 22.2%, however, the same is lower as compared to
24.0% recorded in the previous year. The drop in margin
compared to previous year is mainly attributable to
investment in building its sales and execution workforce
and higher proportion of resources deployed onsite.
The Funds Employed by the Group segment at
2626 crore as at March 31, 2014 increased by
319 crore as compared to the position as on
March 31, 2013.
9. Financial Services (FS)
FS segment, represented by L&T Finance Holdings
Limited and its subsidiaries, continued its growth
momentum during the year ended March 31, 2014
with an impressive 27.0% growth in its revenue at
5181 crore. The segment recorded a stable net interest
margin of 5.5% as against 5.3% in the previous year.
40080 crore as at
The loan book of the segment at
March 31, 2014, registered a healthy growth of 20%
over the previous year with increased focus on retail
segments and in operating assets of infrastructure
sector.
The asset management business moved up to rank 13 in
the mutual fund industry with the average assets under
management recording a 63% increase over last year to
reach 18255 crore.
The General Insurance business of the segment entered
in its third full year of operations and achieved a Gross
Written Premium (GWP) of 270 crore by selling more
than 2,60,000 policies on the back of efficient policy
146
issuance leveraging its high level technology platform.
Motor Insurance remained the largest contributor
to GWP with a share of 52%. Health and other
Commercial lines of business accounted for 19% and
29% of the total GWP respectively. The business also
made significant foray into individual health segment
during the year. The business has established a pan India
presence with 14 branches.
FS Segment
Gross Revenue (Group)
5181
27.0%
4080
3024
2011-12
2012-13
2013-14
e
r
o
r
c
6000
5000
4000
3000
2000
1000
0
The FS segment disbursed fresh loans and advances
25959 crore during the year 2013-14, recorded
of
healthy growth of 13% over the previous year. Net Non-
performing Assets (NPA) of the segment stood at 2.29%
of loan assets as at March 31, 2014 as against 1.26%
as on March 31, 2013, reflecting the credit environment
in the country.
Total Assets and NIM %
44699
36594
5.34
5.47
27000
5.51
10
9
8
7
6
5
4
3
2
1
e
g
a
t
n
e
c
r
e
P
50000
40000
30000
e
r
o
r
c
20000
10000
0
2011-12
2012-13
2013-14
Total Assets
NIM %
10. Developmental Projects (DP)
The Group has diversified Infrastructure Development
business portfolio with a mix of projects under
development across various sectors such as roads,
bridges, ports, metro and power development. While
power development projects are held and executed by
L&T Power Development Limited, a subsidiary company,
all the developmental projects in the other sectors are
held and developed by L&T Infrastructure Development
Projects Limited except in case of Kattupalli port which
is housed its another subsidiary viz. L&T Shipbuilding
Limited.
L&T Infrastructure Development Projects Limited (L&T
IDPL), a subsidiary of the Company, holds majority
of its investment in the transportation infrastructure
and port sectors. The Group owns 25 concessions in
transportation infrastructure development space under
its fold out of which 19 are roads and bridges, 3 ports,
1 transmission line project, 1 metro rail project and
1 property development project with total estimated
project cost of
46124 crore. As on March 31, 2014,
13 projects are under operation, 6 projects are under
implementation and 6 projects are under development.
As for developmental projects in power sector, the
Group has 5 power projects (1 thermal and 4 hydel)
under development/operation. The total estimated
cost of projects under development aggregate to
18132 crore. The unit 1 of the 2*700 MW super critical
thermal power plant at Rajpura in Punjab commenced
commercial operations during the year.
Developmental Projects segment recorded gross
segment revenue of
1713 crore for the year ended
March 31, 2014, registering a growth of 65% over the
previous year.
DP Segment
Gross Revenue (Group)
1713
64.7%
1040
676
2011-12
2012-13
2013-14
e
r
o
r
c
1800
1600
1400
1200
1000
800
600
400
200
0
The segment recorded improved EBITDA of
810
crore for the year 2013-14 vis-à-vis 698 crore for the
previous year on account of improved performance of
Dhamra Port Company Limited. Most of the operating
road SPVs of the segment are in the initial stage of
operations and therefore, have not achieved its full scale
of the toll income.
The Funds Employed by the Group segment at
30587 crore as at March 31, 2014 increased by
7981 crore as compared to the position as on
March 31, 2013.
11. Others Segment
11.1. L&T Standalone
Others segment at the L&T standalone level comprises
Realty business, Shipbuilding activity at Hazira works
and Integrated Engineering Services.
The segment revenue of Realty business for the year
2013-14 at
558 crore grew more than 4 times over
previous year. The entire revenue accrued from domestic
operations. The segment EBITDA of Realty business
for the year 2013-14 stood at
279 crore compared
to
59 crore in the previous year. The progress on
the projects under execution contributed to EBITDA
expansion during the year.
The segment revenue of Shipbuilding activity at Hazira
works for the year 2013-14 at 151 crore grew by
30.2% over previous year. The EBITDA of Shipbuilding
business for the year 2013-14 stood negative at
355 crore compared to negative EBITDA of 182 crore
in the previous year. The losses on projects under
execution due to time and cost overruns contributed to
negative margin during the year.
The performance of IES has been explained under
“IT&TS segment”.
Other Segment
Gross Revenue 2013-14
151
558
1638
IES
Realty
Shipbuilding
Total - 2347 crore
Other Segment
Gross Revenue 2012-13
116
139
1271
IES
Realty
Shipbuilding
Total - 1526 crore
147
11.2. L&T Group:
II. RISK MANAGEMENT
Others segment at the consolidated level for L&T
Group mainly comprises Realty and Shipbuilding. The
operations of Ready Mix Concrete, Mining and Aviation
businesses which form part of the Group, however, are
not material.
At Group level, Realty business recorded robust growth
1296 crore for the year
in segment gross revenue of
390 crore in the previous year. The
2013-14 vis-à-vis
growth in revenue at segment level is mainly attributable
to progress on four residential real estate development
projects under execution. The Realty business recorded
816 crore during the year 2013-14 as
an EBITDA of
220 crore during the previous year as some
against
of the projects under execution crossed their margin
recognition threshold.
At Group level, Shipbuilding business recorded robust
growth in segment gross revenue of 618 crore for the
year 2013-14 vis-à-vis 119 crore in the previous year.
The Shipbuilding business recorded a negative EBITDA
499 crore during the year 2013-14 as against
of
243 crore during the previous year. The losses on
projects under execution due to time and cost overruns
and under recovery of overheads due to low capacity
utilisation have resulted in negative margin during the
year.
Other Segment
Gross Revenue (Group) 2013-14
64
618
1296
Realty
Shipbuilding
Others
Total - 1978 crore
Other Segment
Gross Revenue (Group) 2012-13
92
119
390
Realty
Shipbuilding
Others
Total - 601 crore
The Funds Employed by the Group segment at
8084 crore as at March 31, 2014 increased by
335 crore as compared to the position as on
March 31, 2013.
148
The Company’s primary activity of engineering and
construction business combines opportunities with
uncertainty and associated risks. Over last decade, Enterprise
Risk Management (ERM) has evolved as an important
function adding value to businesses. The Company has
developed processes to map the risks across the businesses
and respond effectively to achieve the strategic objectives
defined by the Management. Despite the slowdown in the
economy, the Company has been successful in tapping the
opportunities both in domestic and international markets.
This can be attributed to efficient risk enabling environment
prevailing in the Company.
The risk management framework in the Company
addresses risks that are strategic, tactical and operational
in nature. The strategic risks arising out of the changes in
macroeconomic factors, technological innovations, and geo-
political landscape etc. get due attention of the Board and
Management of the Company from time to time. The tactical
risks, on the other hand, cover transactional strategies like
project bidding, positioning with respect to competition,
vendor related risks, credit profile of customers, financial
health of Joint Venture and consortium partners, etc.
Each business group has a well-documented risk
management policy and procedure that addresses the
uniqueness of that business. A structured risk review at the
pre-bid stage and also during the execution of the project
along with well-defined authorisation matrix at business and
corporation level have helped the Company in ensuring that
the risks emanating in the projects get the due attention
of the Management. The Senior Management also reviews
the portfolio level risks at periodic intervals. In case of first
time entry into a new country or geography, the risks and
opportunities in the new geography are evaluated and
approved.
Over the last few years, the Company has been pre-qualified
and selected to participate in large international projects
in Middle East and Far East. The challenges faced in the
international projects are quite different compared to
executing projects in India. The local content and manpower
requirement across the countries continues to pose challenge
for the EPC companies. The Company encounters fairly
severe competition in these markets. In addition to country,
client, regulatory and political risks, the newer set of risks
like consortium arrangement and technology partnership
have emerged due to the large size and complex nature of
projects in these countries. Stringent quality requirements,
increased focus on health, safety and environment makes
execution of these projects extremely challenging especially
in far away and under-developed areas. The Company,
however, has a process to learn the business rules in areas
like contracts administration, execution, customer intimacy,
claims management, leadership development, internal
controls, system related issues, etc. in those countries.
The Company is also mindful of strengthening the risk
management architecture across L&T businesses and
subsidiaries with the increase in Company’s domestic and
international business. The process also addresses areas like
contracts management, talent acquisition and retention,
information security, business continuity and disaster
recovery systems, regulatory compliance, financial reporting
and controls, liquidity management, capital adequacy etc. to
ensure sustainable growth and profitability across the Group.
The Company focuses on the training efforts to strengthen
the quality of risk managers both at corporation and
business levels. The Company monitors the risk profile of
customers, competitors, vendors, partners as well as sectors
in which the Company has business interest to take well
informed decisions. The Management believes that risks
and opportunities are integral part of any business and is
committed to spreading a culture of informed risk taking
within defined parameters.
Internal Controls
Increasing international operations, dynamic business
structure and changing methods of operations with
advancement of technology warrant adequate internal
control mechanism and constant review of its efficacy.
The Company has an internal control mechanism which is
commensurate with the size and complexity of business and
aligned with evolving business needs.
A structured framework for monitoring and reporting of
internal control systems in the Company is provided by
the Corporate Policy on Internal Controls. Various business
segments have well documented policies and standard
operating procedures covering their business processes.
Policies and procedures are reviewed periodically for any
changes required due to change in business needs and
improvements suggested during internal audit to strengthen
the overall internal control systems of the Company. The
Company regularly issues guidelines to ensure uniformity
and reliability of financial statements and also has financial
authorisation guidelines which are followed throughout
the Company. The Company has its Code of Conduct and
Whistle Blower policies in place.
Internal controls are expected to be embedded in business
operations and standard operating procedures. Accordingly,
Business Heads and Heads of Business Support functions are
responsible for design and establishment of internal controls
in their respective areas. There is a separate cell at corporate
level which oversees the internal control mechanism in the
Company. They help to formulate corporate level internal
control policies and provide support to various businesses.
They develop guidelines for areas of weakness which are
identified during internal audit or as triggered by process
owners or management based on internal or external risk
factors.
The Company has an internal audit department that
conducts audit of all units of the Company and its major S&A
companies at regular intervals. The department is staffed
adequately with qualified professionals in both technical
and financial field. All significant observations and corrective
actions taken are reviewed by the Management and Audit
Committee of the Board.
The Company also periodically engages independent
professional firms to carry out reviews of the effectiveness
of various control processes in businesses and support
functions which is in addition to the internal mechanism
to review and monitor internal controls. Their observations
and suggestions on good practices are reviewed by the
Management and the Audit Committee of the Board for
implementation and strengthening of the controls.
III. FINANCIAL RISKS
1. Capital Structure, Liquidity and Interest Rate Risks
The Company continues its policy of maintaining a
conservative capital structure which has ensured that
it retains the highest credit rating amidst an adverse
economic environment. Low gearing levels also equip
the Company with the ability to navigate business
stresses on one hand and raise growth capital on the
other. This policy also provides flexibility of fund-raising
options for future, which is especially important in times
of global economic volatility.
Given the tough economic conditions in FY 2013-14,
there has been an increase in the working capital levels
of the Company. The Company has been investing
capital into subsidiaries as scheduled and in some cases
to provide for deterioration in performance caused
by the economic/business downturn. The Company,
however, continues to maintain adequate liquidity on
the Balance Sheet to deal with economic cycles.
The Company judiciously deploys its periodical surplus
funds in short term investments in line with the
corporate treasury policy. The Company constantly
monitors the liquidity levels, economic and capital
market conditions and maintains access to the lowest
cost means of sourcing liquidity through banking lines,
trade finance and capital markets.
The Company dynamically manages interest rate risks
through a mix of fund-raising products, investment
products and derivative products across maturity
profiles and currencies within a robust risk management
framework.
149
2. Foreign Exchange and Commodity Price Risks
IV. INFORMATION TECHNOLOGY
The various businesses of the Company are exposed to
fluctuations in foreign exchange rates and commodity
prices. Additionally, it has exposures to foreign currency
denominated financial assets and liabilities.
While the business related financial risks, especially
involving commodity prices, by and large, are managed
contractually through variations clauses, the Company’s
loan portfolio is managed by an appropriate choice of
loan currency and appropriate treasury products, for
balancing risks and at the same time optimising the
borrowing costs.
Business related foreign exchange risks are insulated
largely through hedging actions under the framework
of a Board approved Risk Management Policy. Financial
risks in each business portfolio are measured and
managed centrally within the Company. These risks
are reviewed periodically, quantified and managed
within the acceptable thresholds as laid out in the Risk
Management Policy of the Company. The process is also
subject to an annual review by the Audit Committee.
The financial year 2013-14 was characterised by an
unprecedented amount of volatility in foreign exchange
and interest rate markets. The rupee moved from 54
to 69 and back to 60 per US Dollar during the year
while the short term interest rates moved up by almost
2%. The Company was able to deal with the volatility
in markets reasonably well given the robust financial
risk management process in place. The Company has
invested in strengthening the financial risk analytics
framework to insulate the Company from such volatility.
The use of Information Technology (IT) has always been an
essential ingredient to the success of the Company. The
Company views IT as a key enabler to improve productivity,
efficiency and for providing a competitive advantage. The
Company has over many years implemented Enterprise
Resource Planning (ERP) and other solutions to handle
the various business processes. Periodic upgrades and
implementation of newer features of ERPs and other
applications is being done regularly to keep the systems
current and to meet emerging business requirements.
Suitable enhancements to network bandwidth and other IT
Infrastructure is also done proactively.
In line with the current trends in IT, the Company is evaluating
and carrying out pilot implementations of solutions relating
to mobility, social media, analytics and cloud computing.
The implementation of social media within the enterprise
is aimed at increasing communication, collaboration and
employee engagement.
The Company has adopted the principles and technologies
of cloud computing to create the L&T Private Cloud
through the establishment of energy efficient data centers,
virtualisation of compute and storage and consolidation.
With this capability of providing on demand, scalable and
secure IT resources to business, the Company plans to offer
more applications and services from the private cloud. This
will enable us to meet the changing business requirements
at a faster pace and be more cost effective. Information
security processes are reviewed periodically, enhanced
through implementation of latest technologies and also
certified through external ISO 27001 reviews.
Disclaimer
Certain statements in the Management Discussion and Analysis may contain “forward-looking statements” within the
meaning of applicable securities laws and regulations concerning L&T’s future business prospects and business profitability,
which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such
forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and
uncertainties regarding fluctuations in earnings, ability to manage growth, competition (both domestic and international),
economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, time
and cost over runs on contracts, ability to manage international operations, government policies and actions with respect
to investments, fiscal deficits, regulations, etc., interest and other fiscal costs generally prevailing in the economy. Past
performance may not be indicative of future performance. The Company does not undertake to make any announcement
in case any of these forward looking statements become materially incorrect in future or update any forward looking
statements made from time to time by or on behalf of the Company.
150
Independent Auditors’ Report
To the Members of Larsen & Toubro Limited
Report on the financial statements
We have audited the accompanying financial statements of Larsen & Toubro Limited (“the Company”), which comprise the balance sheet as at
March 31, 2014, and the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) read with the General
Circular 15/2013 dated 13 September 2013, of the Ministry of Corporate Affairs, in respect of section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards
on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required
by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a)
(b)
(c)
Report on other legal and regulatory requirements
1.
in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2014;
in the case of the statement of profit and loss, of the profit for the year ended on that date; and
in the case of the cash flow statement, of the cash flows for the year ended on that date.
As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the central government of India in terms of sub-section (4A)
of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
As required by section 227(3) of the Act, 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 purpose 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, statement of profit and loss and cash flow statement dealt with by this Report are in agreement with the books of account;
in our opinion, the balance sheet, statement of profit and loss, and cash flow statement comply with the Accounting Standards notifed under
the Act read with the General Circular 15/2013 dated 13 September 2013, issued by the Ministry of Corporate Affairs, in respect of section
133 of the Companies Act, 2013; and
on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the board of directors, none
of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section
274 of the Companies Act, 1956.
b.
c.
d.
e.
2.
Mumbai, May 30, 2014
Annexure to the Auditors’ report
(Referred to in paragraph (1) of our report of even date)
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
1
(a)
(b)
(c)
The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets.
We are informed that the Company has formulated a programme of physical verification of all the fixed 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 verification of the fixed assets
has been carried out by management during the year and no material discrepancies were noticed on such verification.
The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status.
151
2
(a)
(b)
(c)
3
(a)
(b)
As explained to us, inventories have been physically verified by management at reasonable intervals during the year. In our opinion, the frequency of
such verification is reasonable.
As per the information given to us, the procedures of physical verification of inventory followed by management are, in our 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 verification between the physical stocks and the book records
were not material.
According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms 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.
According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms 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.
4
5
6
7
8
9
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, fixed 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.
According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered in
the register maintained under section 301 of the Companies Act, 1956; accordingly paragraph 4(v) (b) of the Order is not applicable.
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 fixed deposits other than
unclaimed matured deposits.
In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.
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 all its manufacturing and construction activities 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.
(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 31 March 2014 for a period of more than six months from the date they became payable.
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, income tax and profession tax as at 31 March 2014 which have not been deposited on account of a dispute pending are as
under:
(b)
Name of the statute Nature of the disputed dues
Non-submission of forms
Non-submission of forms, dispute related to sales in transit,
rejection of exemption certificates, rate of tax dispute and other
matters
Non-submission of forms, additional demand for pending
forms, rate of tax dispute, disallowance of branch transfer,
sub-contractor’s turnover, interest demand on road permit,
disallowance of exemptions on sale of assets, transit sale and
other matters
Non-submission of forms, disallowance of transit sales, high
seas sales, classification dispute and other matters
Non-submission of forms
Non-submission of forms, dispute related to sales in transit and
other matters
Non-submission of forms, labour and service charges, sub-
contractors turnover, pumping and freight charges, inter-state
sales turnover, arbitrary demand raised, TDS disallowed, rate
dispute, classification dispute, disallowance of works contract
tax and other matters
Classification dispute,tax deducted at source at lower rate, sales
in transit, local VAT, local WCT, rate of tax of declared goods
and other matters
Central Sales Tax
Act, Local Sales Tax
Acts and Works
Contract Tax Act
152
Amount
crore*
Period to which the amount relates
1.46 1991-92, 1992-93, 1994-95, 1996-97 to 2003-04,
2005-06 to 2009-10
3.56 1991-92, 1992-93, 1993-94, 1996-97, 1997-98
and 1999-00 to 2011-12
399.00 1989-90, 1991-92 to 2011-12
Forum where disputes
are pending
Commercial Tax Officer
Assistant Commissioner
(Appeals)
Deputy
Commissioner(Appeals)
51.65 1993-94, 1996-97, 1997-98, 1999-00, 2001-02
to 2009-10
8.52 1997-98, 2002-03 to 2011-12
0.52 2001-02 to 2004-05, 2006-07 and 2008-09
Joint
Commissioner(Appeals)
Additional
Commissioner(Appeals)
Commissioner (Appeals)
325.24 1987-88, 1989-90 to 2011-12
Sales Tax Tribunal
259.46 1986-87, 1987-88, 1998-99 to 2011-12
High Court
Name of the statute Nature of the disputed dues
Taxability of sub-contractor turnover, rate of tax for declared
goods, inter-state sales, non-submission of forms and high
seas sales
Disallowance of cenvat credit, excise duty refund rejected, short
payment of service tax, excise duty on concrete mix made at
site, service tax rate dispute and other matters
Demand of excise duty on site fabricated steel structure, export
rebate disallowance, valuation dispute, excise duty on concrete
mix made at site, non-maintenance of proper records, packing/
re-packing, labelling/re-labelling amounting to manufacturing
activity and other matters
Dispute on site mix concrete and PSC grinder
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 and service tax on commercial construction
service
Dispute regarding tax deducted at source at lower rates
Assessment under section 143(3) read with section 144C(13)
Demands raised relating to employees located in other states
The Central Excise
Act, 1944, Service
Tax under Finance
Act, 1994 and
Customs Act, 1962
Income-tax Act,
1961
The Maharashtra
State Tax on
Professions, Trade
Callings and
Employments Act,
1975
Amount
crore*
Period to which the amount relates
3.20 1991-92, 1995-96, 1997-98 and 1999-00 to
Forum where disputes
are pending
Supreme Court
2006-07
0.90 2006-07 to 2011-12
Commissioner (Appeals)
1215.66 1991-92, 2001-02 to 2011-12
CESTAT
0.27 1997-98
27.18 2002-03 to 2011-12
Supreme Court
CESTAT
10.47 2003-04 to 2006-07
High Court
0.97 2005-06, 2010-11 to 2012-13
188.10 2006-07 to 2008-09
1.14 2007-08
Commissioner (Appeals)
ITAT
Joint Commissioner
(Appeals)
*Net of pre-deposit paid in getting the stay/appeal admitted
10
11
12
13
14
15
16
17
18
19
20
21
The Company has no accumulated losses as at March 31, 2014 and it has not incurred cash losses in the financial year ended on that date or in the immediately
preceding financial year.
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 financial institution or bank or debenture holders as at the balance sheet date.
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.
The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the 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 financial 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.
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.
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.
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.
The Company has not raised any money by public issues during the year.
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 30, 2014
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No. 33013
153
Balance Sheet as at March 31, 2014
EQUITY AND LIABILITIES:
Shareholders’ Funds
Share capital
Reserves and surplus
Non-current liabilities
Long term borrowings
Deferred tax liabilities (net)
Other long term liabilities
Long term provisions
Current liabilities
Short term borrowings
Current maturities of long term borrowings
Trade payables
Other current liabilities
Short term provisions
TOTAL
ASSETS:
Non-current assets
Fixed Assets
Tangible assets
Intangible assets
Capital-work-in-progress
Intangible assets under development
Non-current investments
Long term loans and advances
Cash and bank balances
Other non-current assets
Current assets
Current investments
Inventories
Trade receivables
Cash and bank balances
Short term loans and advances
Other current assets
TOTAL
CONTINGENT LIABILITIES
COMMITMENTS (Capital and others)
OTHER NOTES FORMING PART OF THE ACCOUNTS
SIGNIFICANT ACCOUNTING POLICIES
As at 31-3-2014
As at 31-3-2013
Note
crore
crore
crore
crore
A
B
185.38
33476.45
123.08
29019.64
33661.83
29142.72
5478.14
409.92
93.57
299.61
3876.04
2104.74
16345.45
13921.76
2113.52
7560.81
113.99
411.86
150.55
4046.23
1982.53
21538.76
1782.86
6345.65
15418.58
7271.03
242.22
502.03
285.92
6281.24
8301.20
734.53
828.65
16932.65
14400.47
2083.81
38361.51
78304.58
34980.11
72424.03
8237.21
15168.41
3721.57
9.54
53.24
8901.98
10522.70
3669.07
39.02
43.30
8218.75
86.39
491.05
105.79
5580.69
2064.18
22613.01
1455.66
5743.76
11790.66
51114.61
78304.58
49247.96
72424.03
C(I)
Q(13)
C(II)
C(III)
D(I)
D(II)
D(III)
D(IV)
D(V)
E(I)
E(II)
E(I)
E(II)
F
G(I)
G(II)
G(III)
H(I)
H(II)
H(III)
H(IV)
H(V)
H(VI)
I
J
Q
R
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
154
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
Statement of Profit and Loss for the year ended March 31, 2014
REVENUE:
Revenue from operations (gross)
Less: Excise duty
Revenue from operations (net)
Other income
Total revenue
EXPENSES:
Manufacturing, construction and operating expenses:
Cost of raw materials, components consumed
Construction materials consumed
Purchase of stock-in-trade
Stores, spares and tools consumed
Sub-contracting charges
Changes in inventories of finished goods, work- in- progress and
stock-in-trade
Other manufacturing, construction and operating expenses
Employee benefits expense
Sales, administration and other expenses
Finance costs
Depreciation, amortisation and obsolescence
Less: Transfer from revaluation reserve
Less: Overheads charged to fixed assets
Total expenses
Profit before exceptional and extraordinary items and tax
Exceptional items
Profit before extraordinary items and tax
Extraordinary items
Profit before tax
Tax expenses
Current tax
Deferred tax
Profit after tax for the period from continuing operations
Profit from discontinued operations [Note Q(14)(g)]
Tax expense on discontinued operations [Note Q(14)(g)]
Profit from discontinued operations (after tax) [Note Q(14)(g)]
Profit for the period 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 ( )
OTHER NOTES FORMING PART OF THE ACCOUNTS
SIGNIFICANT ACCOUNTING POLICIES
}
2013–14
Note
crore
crore
2012–13
crore
crore
57163.85
564.93
52195.70
584.74
56598.92
1880.89
58479.81
51610.96
1887.29
53498.25
7574.93
13927.00
2063.23
2093.09
12191.48
(1090.87)
3445.97
728.69
0.95
6002.80
15973.55
1922.16
2054.07
13272.94
110.03
4010.90
793.36
0.94
43346.45
4662.37
1932.03
1076.08
792.42
51809.35
8.95
51800.40
6679.41
588.50
7267.91
–
7267.91
1686.53
88.25
1412.01
135.79
1774.78
5493.13
–
–
–
5493.13
59.36
59.00
59.36
59.00
2.00
40204.83
3860.93
2085.66
954.75
727.74
47833.91
13.60
47820.31
5677.94
176.24
5854.18
78.11
5932.29
1547.80
4384.49
778.86
252.70
526.16
4910.65
52.55
52.12
53.33
52.89
2.00
K
L
M
N
O
P
Q(3)(a)
Q(3)(b)
Q(5)
Q(13)
Q(12)
Q
R
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
155
Cash Flow Statement for the year ended March 31, 2014
I
Cash flow from continuing operations
A. Cash flow from operating activities:
Profit before tax (excluding extraordinary and exceptional items)
6679.41
5677.94
2013-14
crore
2012-13
crore
Adjustments for:
Dividend received
Depreciation, amortisation and obsolescence (net)
Exchange difference on items grouped under financing/investing activities
Effect of exchange rate changes on cash and cash equivalents
Expenditure on voluntary retirement scheme
Interest expense
Interest income
Profit on sale of fixed assets (net)
Profit on sale of investments (net)
Employee stock option-discount forming part of staff expenses
Provision/(reversal) for diminution in value of investments
Operating profit before working capital changes
Adjustments for:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
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
B. Cash flow from investing activities:
Purchase of fixed assets
Sale of fixed assets (including advance received)
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)
Deposits/Loans (given)/repaid (net)-subsidiaries, associates, joint venture companies and third parties (net)
Advance towards equity commitment (net)
Interest received
Dividend received from subsidiaries
Dividend received from other investments
Cash (used in)/from investing activities (before extraordinary items)
Extraordinary items
Cash received on sale of Valves Business Unit
(867.25 )
792.42
192.43
2.18
–
1076.08
(494.92 )
(25.06 )
(197.55 )
55.88
13.64
7227.26
(7445.20 )
(27.55 )
3269.52
3024.03
(1976.79 )
1047.24
(1014.97 )
52.94
(3640.36 )
727.24
(0.10 )
–
1718.37
(1375.50 )
(87.51 )
491.35
863.06
4.19
(2261.29 )
149.60
Consideration received on transfer of Hydrocarbon business pursuant to scheme of arrangement [Note Q(14)]
1760.00
Amount transferred to L&T Hydrocarbon Engineering Limited pursuant to scheme of arrangement [Note Q(14)]
(862.63 )
Cash received (net of expenses) on sale of Medical Business
Net cash (used in)/from investing activities (after extraordinary items)
–
(1214.32 )
156
(589.66 )
727.74
349.53
(0.90 )
(38.05 )
954.75
(532.46 )
(226.23 )
(248.92 )
76.65
(17.24 )
6133.15
(3652.71 )
(302.88 )
947.53
3125.09
(1652.85 )
1472.24
(1298.95 )
298.94
(907.74 )
388.21
(35.99 )
218.26
1446.55
57.79
(743.00 )
590.64
583.21
6.45
604.37
–
–
–
52.36
656.73
Cash Flow Statement for the year ended March 31, 2014 (contd.)
C. Cash flow from financing activities:
Proceeds from fresh issue of share capital
Proceeds from long term borrowings
Repayment of long term borrowings
(Repayments)/Proceeds from other borrowings (net)
Dividends paid
Additional tax on dividend
Interest paid (including cash flows from interest rate swaps)
Net cash (used in)/from financing activities
Net increase/(decrease) in cash and cash equivalents (A + B + C)
II
Cash flow from discontinued operations:
A. Net cash (used in)/from operating activities
B. Net cash (used in)/from investing activities
C. Net cash (used in)/from financing activities
Net increase/(decrease) in cash and cash equivalents (A + B + C)
Net increase/(decrease) in cash and cash equivalents (I + II)
Cash and cash equivalents at beginning of the year
less : Transfer pursuant to scheme of arrangement [Note Q(14)]
Cash and cash equivalents at end of the year
2013-14
crore
crore
144.05
4165.87
(4981.69 )
3428.25
(1140.85 )
(86.26 )
(1025.32 )
504.05
336.97
–
–
–
–
336.97
1457.15
1794.12
1496.36
(39.21 )
2012-13
crore
163.14
3494.96
(2300.14 )
(2710.03 )
(1012.79 )
(101.82 )
(849.55 )
(3316.23 )
(1187.26 )
643.43
(191.80 )
325.97
777.60
(409.66 )
1906.02
1496.36
Notes:
1. Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: “Cash Flow Statements” as specified in
the Companies (Accounting Standards) Rules, 2006.
2. Purchase of fixed assets includes movement of capital work-in-progress during the year.
3. For cash and cash equivalents not available for immediate use as on the Balance Sheet date [Note G(II)(a)].
4. Cash and cash equivalents included in the Cash Flow Statement comprise the following :
(a) Cash and cash equivalents disclosed under current assets [Note H(IV)]
(b) Cash and cash equivalents disclosed under non-current assets [Note G(II)]
Total cash and cash equivalents as per Balance Sheet
(c) Unrealised exchange loss on cash and cash equivalents
Total cash and cash equivalents as per Cash Flow Statement
5. Previous year’s figures have been regrouped/reclassified wherever applicable.
2013-14
crore
1782.86
9.54
1792.40
1.72
1794.12
2012-13
crore
1455.66
39.02
1494.68
1.68
1496.36
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
157
Notes forming part of the Accounts
NOTE [A]
Share capital
A(I) Share capital authorised, issued, subscribed and paid up:
Particulars
Authorised:
Equity shares of 2 each
Issued, subscribed and fully paid up:
Equity shares of 2 each
As at 31-3-2014
As at 31-3-2013
Number of
shares
crore
Number of
shares
crore
1,62,50,00,000
325.00 1,62,50,00,000
325.00
92,69,12,658
185.38
61,53,85,981
123.08
A(II) Reconciliation of the number of equity shares and share capital:
Particulars
2013-14
2012-13
Number of
shares
crore
Number of
shares
crore
Issued, subscribed and fully paid up equity share outstanding
at beginning of the year
61,53,85,981
123.08
61,23,98,899
122.48
Add: Shares issued on exercise of employee stock options
during the year
Add: Shares issued as bonus on July 15, 2013
Issued, subscribed and fully paid up equity shares outstanding
32,32,101
30,82,94,576
0.65
61.65
29,87,082
–
0.60
–
at the end of the year
92,69,12,658
185.38
61,53,85,981
123.08
A(III) Terms/rights attached to equity shares:
The Company has only one class of share capital, i.e. equity shares having face value of 2 per share. Each holder of equity share is
entitled to one vote per share.
A(IV) Shareholder holding more than 5% of equity shares as at the end of the year:
Name of the shareholder
Life Insurance Corporation of India
L&T Employees Welfare Foundation
Administrator of the Specified Undertaking of the
Unit Trust of India
As at 31-3-2014
As at 31-3-2013
Number of
shares
15,75,56,473
11,16,06,174
Shareholding
%
17.00
12.04
Number of
shares
10,12,52,038
7,44,04,116
Shareholding
%
16.45
12.09
7,59,25,962
8.19
5,06,17,308
8.23
A(V) Shares reserved for issue under 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
As at 31-3-2014
As at 31-3-2013
Number of
equity shares to
be issued as
fully paid
98,66,116 @
crore
(At face value)
1.97 *
Number of
equity shares to
be issued as
fully paid
87,45,451
crore
(At face value)
1.75 *
convertible bonds (FCCB) ##
73,60,864 @
1.47 **
49,07,243
0.98 **
The equity shares will be issued at a premium of 367.43 crore (previous year: 491.96 crore)
*
The equity shares will be issued at a premium of 934.93 crore (previous year: 935.42 crore) on the exercise of options by the bond holders
**
#
Note A(VIII) for terms of employee stock option schemes
## Note D(II)(a) for terms of foreign currency convertible bonds
@
The number of options have been adjusted consequent to bonus issue wherever applicable
A(VI) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended
March 31, 2014 are 30,82,94,576 (previous period of five years ended March 31, 2013: 29,25,92,054 shares)
158
Notes forming part of the Accounts (contd.)
A(VII) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding
last five years ended on March 31, 2014: Nil (previous period of five years ended March 31, 2013: Nil)
A(VIII) Stock option schemes
a)
b)
Terms:
i.
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 fulfillment of certain conditions.
ii. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue
of equity shares. Management has discretion to modify the exercise period.
The details of the grants under the aforesaid schemes under various series are summarised below:
2002 (A)
2000
2003 (A)
2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13
601.00
601.00 400.70*
17.50 400.70*
2006 (A)
2002 (B)
2003 (B)
11.70*
11.70*
2.30*
2006
3.50
3.50
3.50
1-6-2000
1-6-2001
2.30*
19-4-2002
19-4-2003
2.30*
19-4-2002
19-4-2003
17.50
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
Sr.
no.
1
2
3
4
5
6
7
8
9
10
11
12
13
Series reference
Grant price ( )
Grant dates
Vesting commences on
Options granted and outstanding at
the beginning of the year
Options lapsed prior to bonus
Options granted prior to bonus
Options exercised prior to bonus
Options granted and outstanding as
on July 13, 2013**
Adjusted options as on July 13,
2013** consequent to bonus issue
Options lapsed post bonus issue
Options granted post bonus issue
Options exercised post bonus issue
Options granted and outstanding at
the end of the year
of which
Options vested
Options yet to vest
16800
–
–
–
16800
25200
–
–
–
16800
–
–
–
–
–
–
–
–
21500
–
–
–
21500
32250
–
–
–
21500
–
–
–
–
–
–
–
–
39700
–
–
–
39700
59550
–
–
–
39700
–
–
–
–
–
–
–
–
31452
–
–
–
31452
47178
–
–
–
31452 435202 647302 911468 2026751 7289329 8645349
42513 201054 781908
2746
1115 1072250
–
770285 1646362
3400
62150
–
4500 118000
45750 267950 387135 1072770
–
–
–
– 390552
– 521587
– 6319105
– 585829
10950
–
–
93300
– 168636
– 782390
21311
–
–
–
– 250898
– 9478918
– 530097
– 1352790
– 1609397
–
–
–
–
–
25200
16800
32250
21500
59550
39700
47178
31452 499543 435202 510181 911468 8692214 7289329
25200
–
16800
–
32250
–
21500
–
59550
–
39700
–
47178
–
31452 127015 109802 510181 911468 3096418 2135578
– 5595796 5153751
– 372528 325400
–
14 Weighted average remaining
contractual life of options (in years)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
4.87
5.12
0.08
0.51
4.17
4.39
*Current year grant price restated pursuant to the issue of bonus shares
** Record date: July 13, 2013
c)
The number and weighted average exercise price of stock options for the following group of options are as follows:
2013-14
2012-13
Particulars
(i) Options granted and outstanding at the beginning of the year
(ii) Options granted pre bonus issue
(iii) Options allotted pre bonus issue
(iv) Options lapsed pre bonus issue
(v) Options granted and outstanding prior to bonus issue
(vi) Adjusted options consequent to bonus issue
(vii) Options granted post bonus issue
(viii) Options allotted post bonus issue
(ix) Options lapsed post bonus issue
(x) Options granted and outstanding at the end of the year
(xi) Options exercisable at the end of the year out of (x) supra
No. of stock
options
87,45,451
5,615
12,03,170
2,07,200
73,40,696
1,10,11,315
14,46,090
20,28,931
5,62,358
98,66,116
38,97,792
Weighted
average
exercise price
( )
564.54
133.37
578.81
591.43
561.11
374.10
375.60
368.37
393.13
374.42
371.36
No. of stock
options
1,14,28,854
11,90,250
29,87,082
8,86,571
–
–
–
–
–
87,45,451
32,66,300
Weighted
average
exercise price
( )
562.27
543.15
548.66
560.10
–
–
–
–
–
564.54
561.50
159
Notes forming part of the Accounts (contd.)
d) Weighted average share price at the date of exercise for stock options exercised during the period is 1120.61 (previous year:
1452.14) per share
e)
i.
In respect of stock options granted pursuant to the Company’s 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 over the vesting period.
ii.
Expense on employee stock option schemes debited to the Statement of Profit and Loss during 2013-14 is 55.88 crore
(previous year: 76.65 crore excluding 8.76 crore in respect of discontinued operations) net of recoveries of 3.30 crore
(previous year: 6.18 crore) from its Group companies towards the stock options granted to deputed employees, pursuant to
the employee stock option schemes. (Note N). The entire amount pertains to equity-settled employee share-based payment
plans.
f) During the year, the Company has recovered 16.01 crore (previous year: 12.44 crore) from its subsidiary companies towards
the stock options granted to their employees, pursuant to the employee stock option schemes.
g) Had fair value method been adopted for expensing the compensation arising from employee share-based payment plans:
i.
The employee compensation charge debited to the Statement of Profit and Loss for the year 2013-14 would have been
higher by
21.30 crore (previous year: 29.85 crore) [excluding 5.45 crore (previous year: 2.30 crore) on account of
grants to employees of subsidiary companies]
ii.
Basic EPS before extraordinary items would have decreased from 59.36 per share to 59.13 per share
iii. Basic EPS after extraordinary items would have decreased from 59.36 per share to 59.13 per share
iv. Diluted EPS before extraordinary items would have decreased from 59.00 per share to 58.77 per share
v. Diluted EPS after extraordinary items would have decreased from 59.00 per share to 58.77 per share
h) Weighted average fair values of options granted during the year is 556.06 (previous year: 606.23*) per option
i)
The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to
estimate the fair value of options granted during the year are as follows:
Particulars
Sr.
no.
(i) Weighted average risk-free interest rate
(ii) Weighted average expected life of options
(iii) Weighted average expected volatility
(iv) Weighted average expected dividends over the life of the option
(v) Weighted average share price
(vi) Weighted average exercise price
(vii) Method used to determine expected volatility
2013-14
2012-13
8.88%
4.34 years
38.00%
53.42 per option
834.48 per option
379.45 per share
8.05%
4.26 years
39.38%
46.83* per option
878.54* per option
362.10* per share
Expected volatility is based on the historical
volatility of the Company’s share price applicable
to the total expected life of each option.
j)
The balance in share option outstanding account as on March 31, 2014 is
crore), including
March 31, 2014.
323.70 crore (net) (previous year: 393.96
148.22 crore (previous year: 154.32 crore) for which the options have been vested to employees as on
*Previous year figures have been restated pursuant to the issue of bonus shares.
A(IX) The Directors recommend payment of final dividend of 14.25 per equity share of 2 each on the number of shares outstanding as
on the record date.
Provision for final dividend has been made in the books of account for 92,69,12,658 equity shares outstanding as at March 31, 2014
amounting to 1320.85 crore.
160
Notes forming part of the Accounts (contd.)
NOTE [B]
Reserves and surplus
Particulars
Capital reserve
Securities premium account: [Note Q(5)(b)]
As per last Balance Sheet
Addition during the year
Less: Share/bond issue expenses (net of tax)
Premium on inflation linked debentures (net of tax)
Issue of Bonus shares
Reversal of recoveries credited in previous years
Debenture redemption reserve:
As per last Balance Sheet
Add: Transferred from Surplus Statement of Profit and Loss
Less: Transferred to general reserve
Revaluation reserve:
As per last Balance Sheet
Less: Transferred to Statement of Profit and Loss
Share options outstanding account:
Employee stock options outstanding:
As per last Balance Sheet
Addition during the year
Deduction during the year
Deferred employee compensation expense:
As per last Balance Sheet
Addition during the year
Deduction during the year
Hedging reserve (net of tax): [Note Q(13)]
As per last Balance Sheet
Addition/(deduction) during the year (net)
Add: Transfer pursuant to scheme of arrangement
General reserve:
As per last Balance Sheet
Add: Transferred from Surplus Statement of Profit and Loss
Add: Transferred from debenture redemption reserve
Carried forward
As at 31-3-2014
As at 31-3-2013
crore
7512.11
291.50
7803.61
0.63
3.53
61.65
–
168.26
44.00
68.75
20.19
0.94
585.89
66.86
193.52
(191.93)
(66.86)
123.26
(332.87)
62.35
148.27
20961.72
4000.00
68.75
crore
10.52
crore
crore
10.52
7206.35
309.05
7515.40
0.57
–
–
2.72
7737.80
7512.11
118.01
50.25
–
143.51
168.26
21.14
0.95
19.25
20.19
709.00
92.20
215.31
459.23
585.89
(277.06)
(92.20)
177.33
(135.53)
(191.93)
(301.53)
(31.34)
–
(122.25)
(332.87)
17461.72
3500.00
–
25030.47
33143.00
20961.72
28733.89
161
Notes forming part of the Accounts (contd.)
NOTE [B]
Reserves and surplus (contd.)
Particulars
Brought forward
Surplus Statement of Profit and Loss
As per last Balance Sheet
Profit for the year
Less: Dividend paid for previous year
Additional tax on dividend paid for previous year
Transfer to general reserve
Transfer to debenture redemption reserve
Proposed dividend [Note A(IX)]
Additional tax on dividend
As at 31-3-2014
As at 31-3-2013
crore
crore
33143.00
crore
crore
28733.89
285.75
5493.13
5778.88
2.38
0.40
4000.00
44.00
1320.85
77.80
5445.43
333.45
33476.45
152.39
4910.65
5063.04
2.33
0.38
3500.00
50.25
1138.47
85.86
4777.29
285.75
29019.64
NOTE [C(I)]
Long term borrowings
Particulars
Note
Secured
Unsecured
Total *
Secured Unsecured
Total *
As at 31-3-2014
As at 31-3-2013
Redeemable non-convertible fixed rate debentures
C(I)(a)
Redeemable non-convertible inflation linked debentures C(I)(a)
D(II)(a)
3.50% Foreign currency convertible bonds
C(I)(b)
Term loans from banks
C(I)(c)
Sales tax deferment loan
crore
400.00
–
–
–
–
crore
1050.00
105.34
–
3921.73
1.07
crore
1450.00
105.34
–
3921.73
1.07
crore
900.00
–
–
–
–
crore
1050.00
–
1085.70
4227.08
8.25
crore
1950.00
–
1085.70
4227.08
8.25
400.00
5078.14
5478.14
900.00
6371.03
7271.03
*Loans guaranteed by directors or others Nil (previous year Nil)
C(I)(a)
i)
Secured redeemable non-convertible fixed rate debentures (privately placed):
Sr.
no.
1
2
Face
value per
debenture ( )
10,00,000
Date of
allotment
31-3-2014
crore
31-3-2013
crore
Interest for the
year 2013-14
Terms of repayment for debentures
outstanding as on 31-3-2014
January 5,
2009
400.00
400.00
9.15% p.a.
payable annually
Redeemable at face value at the
end of 10th year from the date of
allotment.
10,00,000
December 5,
2008
–
500.00
11.45% p.a.
payable annually
Total
400.00
900.00
Security: The debentures are secured by way of a first charge having pari passu rights on the immovable property at certain
locations and part of a movable property of a business division, both present and future.
ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed):
Sr.
no.
Face value per
debenture ( )
Date of
allotment
31-3-2014
crore
31-3-2013
crore
Interest for the
year 2013-14
1
10,00,000
April 10,
2012
250.00
250.00
9.75% p.a.
payable annually
Terms of repayment for
debentures outstanding as on
31-3-2014
Redeemable at face value at the
end of 10th year from the date
of allotment.
162
Notes forming part of the Accounts (contd.)
C(I)(a) (contd.)
Sr.
no.
Face value per
debenture ( )
Date of
allotment
31-3-2014
crore
31-3-2013
crore
Interest for the
year 2013-14
2
3
4
10,00,000
10,00,000
10,00,000
May 26,
2010
May 11,
2010
April 13,
2010
300.00
300.00
300.00
300.00
200.00
200.00
8.95% p.a.
payable annually
9.15% p.a.
payable annually
8.80% p.a.
payable annually
Terms of repayment for
debentures outstanding as on
31-3-2014
Redeemable at face value at the
end of 10th year from the date
of allotment.
Redeemable at face value at the
end of 10th year from the date
of allotment.
Redeemable at face value at the
end of 10th year from the date
of allotment.
Total
1050.00
1050.00
iii) Unsecured redeemable non-convertible inflation linked debentures:
Sr.
no.
1
Face value per
debenture ( )
10,00,000
Date of
allotment
May 23,
2013
31-3-2014
crore
105.34 #
31-3-2013
crore
–
Interest for the
year 2013-14
1.65% p.a.
payable on
inflation
adjusted principal
as on the date of
coupon payment
Terms of repayment for debentures
outstanding as on 31-3-2014
Redeemable at the end of 10th year
from the date of allotment.
Redemption value will be calculated
as per the following formula:
[{Average reference WPI $ (on
Maturity Date) / Average reference
WPI (on Issue Date)} * Face Value]
with Floor Rate as 3% and Cap Rate
as 12%.
$ WPI here refers to Wholesale Price
Index
# The principal amount has been calculated as [{Average reference WPI (as at 31-3-2014) / Average reference WPI (as at
23-5-2013)} * Face Value]
C(I)(b)
Term loans from banks (unsecured): External Commercial Borrowings (ECBs)
Sr.
no.
1
31-3-2014
crore
1198.30
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Total
Less:
299.58
119.83
264.91
365.74
599.15
599.15
335.27
174.75
864.31
–
–
–
–
–
–
–
4820.99
899.26
3921.73
31-3-2013
crore
Rate of interest
Terms of repayment of term loan outstanding as on 31-3-2014
1085.70 USD LIBOR + Spread
– USD LIBOR + Spread
108.57 USD LIBOR + Spread
– USD LIBOR + Spread
– USD LIBOR + Spread
– USD LIBOR + Spread
– USD LIBOR + Spread
– USD LIBOR + Spread
190.00 USD LIBOR + Spread
Repayable in 5 equal quarterly installments commencing from January 17, 2019 and ending
on January 17, 2020
Repayment due on July 2, 2018
Repayment due on September 27, 2017
Repayable in 3 installments on (i) August 30, 2016, (ii) August 30, 2017 and (iii) June 28, 2018
Repayable in 3 installments on (i) August 30, 2016, (ii) August 30, 2017 and (iii) June 28, 2018
Repayable in 3 installments on (i) August 30, 2016, (ii) August 30, 2017 and (iii) June 28, 2018
Repayable in 3 installments on (i) August 30, 2016, (ii) August 30, 2017 and (iii) June 28, 2018
Repayable in 2 installments on (i) August 30, 2016 and (ii) August 30, 2017
Repayable in 5 equal installments payable annually from September 18, 2014 to September
18, 2017 with the final installment due on June 18, 2018
Repayment due on July 26, 2014
858.65 JPY LIBOR + Spread
542.85 USD LIBOR + Spread
542.85 USD LIBOR + Spread
352.01 JPY LIBOR + Spread
323.01 JPY LIBOR + Spread
255.11 JPY LIBOR + Spread
168.04 JPY LIBOR + Spread
582.48 JPY LIBOR + Spread
5009.27
782.19 Current portion of long term borrowings [Note D(II)]
4227.08 Long term borrowings as disclosed in Note C(I)
ECB’s guaranteed by directors or others Nil (previous year Nil)
163
Notes forming part of the Accounts (contd.)
C(I)(c)
Sales tax deferment loan (Unsecured):
Sr.
no.
As at 31-3-2014
crore
As at 31-3-2013
crore
Rate of
Interest
Terms of repayment as on March 31, 2014
1
2
3
4
5
6
7
Total
Less:
0.39
0.48
0.44
0.21
0.07
–
6.66
8.25
7.18
1.07
Interest Free
Repayable in 5 equal annual installment of
April 26, 2018
0.08 crore ending
Repayable in 4 equal annual installment of 0.12 crore ending
April 26, 2017
Repayable in 3 equal annual installment of 0.14 crore ending
April 26, 2016
Repayable in 2 equal annual installment of 0.10 crore ending
April 26, 2015
Repayable in 1 equal annual installment of 0.07 crore ending
April 26, 2014
Repayable on April 1, 2014
0.39
0.60
0.58
0.31
0.15
0.05
13.46
15.54
7.29 Current portion of long term borrowings [Note D(II)]
8.25 Long term borrowings as disclosed in [Note C(I)]
C(I)(d) Long term maturities of finance lease obligations:
Sr.
no.
1
Less:
As at 31-3-2014
crore
As at 31-3-2013
crore
Terms of repayment as on March 31, 2014
–
–
–
39.17
39.17 Current portion of long term borrowings [Note D(II)]
–
NOTE [C(II)]
Other long term liabilities
Forward contract payable
Others
NOTE [C(III)]
Long term provisions
Particulars
Particulars
Provision for employee benefits:
Employee pension scheme [Note Q(8)(ii)(a)]
Post-retirement medical benefits plan [Note Q(8)(ii)(a)]
Interest rate guarantee-provident fund [Note Q(8)(ii)(a)]
164
As at 31-3-2014
As at 31-3-2013
crore
79.13
14.44
93.57
crore
485.44
16.59
502.03
As at 31-3-2014
As at 31-3-2013
crore
175.52
96.54
27.55
299.61
crore
186.38
99.54
–
285.92
Notes forming part of the Accounts (contd.)
NOTE [D(I)]
Short term borrowings
Particulars
Secured Unsecured
Total*
Secured Unsecured
Total*
As at 31-3-2014
As at 31-3-2013
Loans repayable on demand from banks [Note D(I)(a)]
Short term loans and advances from banks [Note D(I)(a)&(b)]
Short term borrowings against Government Securities
[Note D(I)(c)]
Loans from related parties (Subsidiary companies)
crore
104.45
103.92
698.86
–
crore
crore
81.22
2773.79
185.67
2877.71
crore
209.26
124.75
crore
8.94
391.58
crore
218.20
516.33
–
113.80
698.86
113.80
–
–
–
–
–
–
907.23
2968.81
3876.04
334.01
400.52
734.53
* Loans guaranteed by directors or others Nil (previous year: Nil)
D(I) (a)
Loans repayable on demand from banks include fund based working capital facilities viz. cash credits and demand loans. The
secured portion of loans repayable on demand from banks of 104.45 crore (previous year: 209.26 crore), short term loans and
advances from the banks of 103.92 crore (previous year: 124.75 crore), working capital facilities and other non-fund based
facilities viz. bank guarantees and letters of credit, are secured by hypothecation of inventories, book debts and receivables.
D(I) (b)
Short term loans and advances from banks includes loans amounting to
discounting facility and are secured against specific receivables.
Nil (previous year: 10.21 crore) availed under bill
D(I) (c)
Short term borrowings 698.86 crore (previous year: Nil) secured against Government Securities represent obligation under
the Collateralized Borrowing and Lending Obligation segment through a daily auction conducted by Clearing Corporation of
India Limited.
NOTE [D(II)]
Current maturities of long term borrowings
Particulars
Unsecured
3.50% Foreign currency convertible bonds [Note D(II)(a)]
Term loan from banks [Note C(I)(b)]
Sales tax deferment loan [Note C(I)(c)]
Finance lease obligation [Note C(I)(d)]
As at 31-3-2014
As at 31-3-2013
crore*
1198.30
899.26
7.18
–
2104.74
crore*
–
782.19
7.29
39.17
828.65
* Loans guaranteed by directors or others Nil (previous year: Nil)
D(II) (a) Foreign currency convertible bonds
3.50% US$ denominated 5 years & 1 day Foreign Currency Convertible Bonds (FCCB) carried at
1198.30 crore as on March 31, 2014
( 1085.70 crore as on March 31, 2013) represent 2000 bonds of US$ 1,00,000 each. The bonds are convertible into the Company’s fully
paid equity shares of 2 each at a conversion price of 1272.13 per share (Pre bonus conversion price was 1908.20 per share) at the
option of the bond holders at any time on and after December 1, 2009 up to October 15, 2014. The bonds are redeemable, subject to
fulfillment of certain conditions, in whole but not in part, at the option of the Company, on or at any time after October 21, 2012 but
not less than seven business days prior to the maturity date, at the principal amount together with accrued interest (calculated up to
but excluding the date of redemption) on the date fixed for redemption, unless the bonds have been previously redeemed, converted or
purchased and cancelled.
165
Notes forming part of the Accounts (contd.)
NOTE [D(III)]
Trade payables
Particulars
Acceptances
Due to related parties:
Subsidiary companies
Associate companies
Joint venture companies
Micro and small enterprises [Note Q(23)]
Due to others
NOTE [D(IV)]
Other current liabilities
Particulars
Interest accrued but not due on borrowings
Interest accrued and due on borrowings
Unclaimed dividend
Due to customers (Construction related activity)
Due to customers (Property development projects)
Advances from customers
Other payable (including sales tax, service tax, excise duty and others)
[Note D(IV)(a)]
As at 31-3-2014
As at 31-3-2013
crore
52.19
2536.29
19.69
61.90
53.94
13621.44
16345.45
crore
607.23
2966.63
44.39
30.32
68.40
13215.68
16932.65
As at 31-3-2014
As at 31-3-2013
crore
123.86
–
28.01
4080.37
98.37
8207.75
1383.40
13921.76
crore
116.42
0.02
23.85
4369.41
–
8723.26
1167.51
14400.47
D(IV) (a) Other payable includes due to directors 52.90 crore (previous year: 40.80 crore) on account of commission.
NOTE [D(V)]
Short term provisions
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Provision for employee benefits :
Gratuity [Note Q(8)(ii)(a)]
Compensated absences
Employee pension scheme [Note Q(8)(ii)(a)]
Post-retirement medical benefits plan [Note Q(8)(ii)(a)]
Bonus provision
Others:
Current tax [Net of payment made Nil (previous year 1658.05 crore)]
Proposed equity dividend
Additional tax on dividend
Other provisions [Note Q(16)]
1.14
425.34
13.00
5.92
11.24
–
1320.85
77.80
258.23
1.11
416.54
11.98
5.77
10.79
456.64
446.19
3.74
1138.47
85.86
409.55
1656.88
2113.52
1637.62
2083.81
166
Notes forming part of the Accounts (contd.)
NOTE [E(I)]
Tangible assets
Class of assets
As at
1-4-2013
Transferred to
LTHEL*
Additions
Deductions
As at
31-3-2014
Up to
31-3-2013
Cost/valuation
Depreciation
For the
Transferred to
LTHEL*
year Deductions
crore
Impairment
As at
31-3-2014
Book value
As at
31-3-2014
As at
31-3-2013
Up to
31-3-2014
Land
Freehold
Leashold
Sub total - Land
Buildings
Owned
Leased out
Sub total -Buildings
Plant and equipment
Owned
Leased out
Taken on lease
Sub total- Plant & equipment
Computers
Owned
Taken on lease
Sub total - Computers
Office equipment
Owned
Sub total - Office equipment
Furniture and fixtures
Owned
Sub total - Furniture & fixture
Vehicles
Owned
Taken on lease
Sub total-Vehicles
Other assets
Owned
Railway sidings
Ships
Sub total-Other assets
Lease Adjustment
Total
Previous year
Add : Asset held for sale
Add : Capital work-in-progress
402.47
138.18
540.65
2524.21
189.88
2714.09
7227.17
38.73
8.88
7274.78
496.61
0.09
496.70
205.87
205.87
237.63
237.63
236.56
0.27
236.83
1.03
48.47
49.50
117.17
–
117.17
874.46
–
8.88
883.34
45.07
–
45.07
26.38
26.38
11.76
11.76
30.57
0.27
30.84
1.12
1.39
2.51
154.73
–
154.73
615.37
–
–
615.37
96.84
–
96.84
37.19
37.19
25.02
25.02
29.17
–
29.17
0.25
71.46
71.71
–
11778.26
10356.77
–
–
–
–
1164.06
–
–
–
–
960.83
– 1590.40
–
7.47
7.47
8.03
–
8.03
102.38
4.51
–
106.89
18.55
–
18.55
3.16
3.16
4.53
4.53
20.90
–
20.90
–
1.92
1.92
–
171.45
168.91
402.56
83.63
486.19
2553.74
189.88
2743.62
6865.70
34.22
–
6899.92
529.83
0.09
529.92
213.52
213.52
246.36
246.36
214.26
–
214.26
–
7.22
7.22
353.61
9.76
363.37
2547.29
12.59
3.17
2563.05
275.65
0.08
275.73
102.13
102.13
115.78
115.78
99.44
0.17
99.61
–
1.70
1.70
10.71
–
10.71
–
0.80
0.80
55.91
3.62
59.53
292.90
–
3.17
296.07
531.74
1.20
–
532.94
29.22
–
29.22
12.87
12.87
7.24
7.24
10.96
0.17
11.13
76.63
–
76.63
22.91
22.91
22.38
22.38
26.21
–
26.21
0.25
69.54
69.79
–
11403.58
11778.26
0.25
22.47
22.72
–
3549.61
2840.17
–
–
–
–
368.94
–
–
4.85
4.85
–
746.25
788.23
–
0.08
0.08
4.18
–
4.18
50.29
4.51
–
54.80
16.78
–
16.78
2.42
2.42
3.03
3.03
11.74
–
11.74
–
1.12
1.12
–
94.15
78.79
–
6.24
6.24
394.63
13.38
408.01
2735.84
9.28
–
2745.12
306.28
0.08
306.36
109.75
109.75
127.89
127.89
102.95
–
102.95
–
–
–
–
–
–
–
6.93 #
–
6.93
–
–
–
–
–
–
–
–
–
–
0.25
26.20
26.45
–
3832.77
3549.61
–
–
–
–
6.93
6.93
402.56
77.39
479.95
2159.11
176.50
2335.61
4129.86
18.01
–
4147.87
223.55
0.01
223.56
103.77
103.77
118.47
118.47
111.31
–
111.31
–
43.34
43.34
(3.07)
7560.81
–
7560.81
411.86
7972.67
402.47
130.96
533.43
2170.60
180.12
2350.72
4679.88
19.21
5.71
4704.80
220.96
0.01
220.97
103.74
103.74
121.85
121.85
137.12
0.10
137.22
–
48.99
48.99
(3.07)
8218.65
0.10
8218.75
491.05
8709.80
* In terms of the Scheme of Arrangement, fixed assets as on 1-4-2013 pertaining to hydrocarbon business have been transferred to L&T Hydrocarbon Engineering Limited (LTHEL) [Note Q(14)].
# Impairment up to 31-03-2014 6.93 crore. During the year Nil
1. Cost/Valuation of freehold land includes 0.14 crore for which conveyance is yet to be completed.
2. Cost/Valuation of buildings includes ownership accommodation:
(i)
(a)
in various co-operative societies and apartments and shop-owners’ associations: 82.62 crore, including 2,415 shares of
50 each, 232 shares of 100 each and 1 share of 250.
167
Notes forming part of the Accounts (contd.)
NOTE [E(I)] (contd.)
(b)
in various co-operative societies and apartments and shop-owners’ associations: 19.07 crore for which share certificates
are yet to be issued.
(c)
in proposed co-operative societies 12.36 crore.
(ii) of 4.39 crore in respect of which the deed of conveyance is yet to be executed.
(iii) of 8.45 crore representing undivided share in properties at various locations.
3.
Additions during the year and capital work-in-progress include
9.87 crore (previous year 10.54 crore) being borrowing cost
capitalised in accordance with Accounting Standard (AS)16 on “Borrowing Costs” as specified in the Companies (Accounting
Standards) Rules, 2006. Asset wise break-up of borrowing costs capitalised is as follows:
Asset class
Building owned
Owned Building Leased out
Plant and equipment owned
Computer owned
Furniture and Fixtures owned
Capital work-in-progress
Total
2013-14
1.81
–
0.01
–
0.01
8.04
9.87
crore
2012-13
17.06
3.17
6.22 *
1.06
–
(16.97) *
10.54
* excludes 0.39 crore pertaining to the discontinued operations.
4. Depreciation for the year as per the statement of profit and loss accounts includes, obsolescence 17.09 crore (previous year 7.59
crore excluding 0.67 crore pertaining to the discontinued operations).
5. Owned assets given on operating lease have been presented separately under tangible assets [Note E(I)] as per Accounting Standard
(AS) 19.
6. Cost/valuation as at April 1, 2013 of individual assets has been reclassified wherever necessary.
7. Out of its lease hold land at Hazira, the Company has given certain portion of land for the use of its subsidiary company. The lease
deed in respect of leasehold land given to the subsidiary company is under execution.
8.
The Company had taken certain plant and equipment on finance lease in earlier years. The said assets have been acquired by the
Company during 2013-14 at the end of the lease term. Accordingly, an amount of 133.22 crore being opening balance of cost of
such assets and an amount of 51.57 crore being opening balance of the accumulated depreciation in respect of such assets have
been reclassified as “owned assets” upon acquisition of ownership interest in such assets. The said assets are being 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
[Note R(9)(b)(ii)].
NOTE [E(II)]
Intangible assets
Particulars
Specialised softwares
Technical knowhow
New product design and
development
Total
Previous year
As at
1-4-2013
182.96
17.63
6.78
207.37
179.67
Add: Intangible assets under development
Cost/valuation
Transferred to
LTHEL* Additions
51.56
7.06
4.51
–
Deductions
2.86
7.54
As at
31-3-2014
227.15
17.15
Up to
31-3-2013
105.69
13.93
Transferred to
LTHEL*
2.40
–
Amortisation
For the
year Deductions
2.12
0.83
25.75
1.47
crore
Book value
As at
31-3-2014
100.23
2.58
As at
31-3-2013
77.27
3.70
Up to
31-3-2014
126.92
14.57
–
4.51
8.55
67.17
–
10.40
15.33
259.63
1.36
120.98
–
2.40
2.80
30.02
0.01
2.96
4.15
145.64
11.18
113.99
5.42
86.39
–
33.94
6.24
207.37
102.44
–
22.93
4.39
120.98
150.55
264.54
105.79
192.18
* In terms of the Scheme of Arrangement,fixed assets as on 1.4.2013 pertaining to hydrocarbon business have been transferred to L&T Hydrocarbon Engineering Limited (LTHEL) [Note Q(14)]
168
Notes forming part of the Accounts (contd.)
NOTE [F]
Non -current investments (at cost unless otherwise specified)
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Long term investments
(1) Trade Investments
(A) Investment in fully paid equity/preference instruments
(a) Subsidiaries companies
(i) Fully paid equity shares
(ii) Fully paid preference shares
(b) Associate companies
Fully paid equity shares
Less: Provision for diminution in value
(c) Other companies
Less: Provision for diminution in value
(B) Investment in integrated joint ventures
(2) Other Investments
Other fully paid equity shares
Non-current Investments (at cost unless otherwise specified)
Particulars
(1) Trade Investments
(A) Investments in fully paid equity/preference instruments
(a) Subsidiary companies:
(i) Fully paid equity shares
13832.61
990.00
10221.23
–
14822.61
10221.23
92.46
0.56
42.90
15.90
32.43
0.56
43.00
15.90
31.87
27.10
286.83
–
15168.41
91.90
27.00
182.57
–
10522.70
Face value
per unit
Number of units
As at
31-3-2014
As at
31-3-2014
crore
As at
31-3-2013
crore
L&T Valves Limited (formerly known as Audco India Limited)
Bhilai Power Supply Company Limited
EWAC Alloys Limited
Hi-Tech Rock Products & Aggregates Limited
Kesun Iron & Steel Company Private Limited
Larsen & Toubro Consultoria E Projeto Ltda
L&T-Gulf Private Limited
L&T Ahmedabad-Maliya Tollway Limited [ 1000 (previous year 1000)]
L&T Aviation Services Private Limited
L&T Capital Company Limited
L&T Cassidian Limited
L&T Finance Holdings Limited (quoted)
L&T Chennai-TADA Tollway Limited [ 1000 (previous year 1000)]
L&T Construction Equipment Limited (formerly known as L&T-Komatsu
Limited) (prior to April 15, 2013, Associate Company)
L&T Devihalli Hassan Tollway Limited [ 1000 (previous year 1000)]
L&T General Insurance Company Limited
L&T Halol-Shamlaji Tollway Limited [ 1000 (previous year 1000)]
L&T Howden Private Limited
L&T Infocity Limited
Carried forward
15,63,260
100
49,950
10
8,29,440
100
50,000
10
9,500
10
96,819
R$ 1
40,00,016
10
100
10
4,56,00,000
10
2,20,00,000
10
10
37,000
10 1,31,65,89,609
100
10
12,00,00,000
10
10
10
10
10
10
100
49,50,00,000
100
1,50,30,000
2,40,30,000
201.54
0.05
150.24
0.05
0.01
0.27
4.00
–
45.60
22.00
0.04
1652.54
–
84.32
–
495.00
–
15.03
16.02
2686.71
201.54
0.05
150.24
0.05
0.01
0.27
4.00
–
45.60
22.00
0.04
1778.59
–
–
–
415.00
–
15.03
16.02
2648.44
169
Notes forming part of the Accounts (contd.)
NOTE [F]
Non-current investments (at cost unless otherwise specified) (contd.)
Particulars
(i) Fully paid equity shares (contd.)
Brought forward
L&T Metro Rail (Hyderabad) Limited
L&T Infrastructure Development Projects Limited
L&T Kobelco Machinery Private Limited
L&T Krishnagiri Walajahpet Tollway Limited [ 26000
(previous year 26000)]
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 [ 1000 (previous year 1000)]
L&T Realty Limited
L&T Samakhiali Gandhidham Tollway 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
L&T Transportation Infrastructure Limited
L&T-Sargent & Lundy Limited
L&T Hydrocarbon Engineering Limited (formerly known as
L&T Technologies Limited )
L&T Technology Services Limited
L&T-Valdel Engineering Limited
Larsen & Toubro Infotech Limited
Larsen & Toubro International FZE
Larsen Toubro Arabia LLC
Larsen & Toubro Hydrocarbon International Limited LLC
Larsen & Toubro LLC
Narmada Infrastructure Construction Enterprise Limited
PNG Tollway Limited
Raykal Aluminum Company Private Limited
Spectrum Infotech Private Limited
L&T Cutting Tools Limited (formerly known as Tractor Engineers Limited)
(ii) Fully paid preference shares
L&T Shipbuilding Limited -12% Non convertible cumulative redeemable
preference shares, October 23, 2028
L&T Technology Services Limited -10% Non convertible redeemable
preference shares,February 15, 2024
L&T Hydrocarbon Engineering Limited -10% Non convertible cumulative
redeemable preference shares, February 7, 2029
Total [1]-(A) (a) (i+ii)
(b) Associate companies:
AIC Structural Steel Construction (India) Private Limited
Gujarat Leather Industries Limited
JSK Electricals Private Limited
Carried forward
170
Face value
per unit
Number of units
As at
31-3-2014
As at
31-3-2014
crore
As at
31-3-2013
crore
10
10
10
10
1,15,53,980
31,28,69,096
2,55,00,000
2,600
10
11,93,91,000
10
19,41,06,000
50,000
10
10 2,72,93,00,000
51,157
10
50,000
10
10
100
4,71,60,700
10
13,000
10
10
6,000
10
9,53,11,850
10 1,50,60,00,000
81,86,80,000
10
50,000
10
41,92,84,000
10
10
50,000
1,08,64,000
10
10
27,82,736
10 1,00,00,50,000
10
10
5
AED
550500
SAR 1000
SAR 1000
USD 1
10
10
10
10
1,000
10,25,00,000
11,79,000
3,22,50,000
1,829
7,500
450
50,000
–
4,39,66,000
37,750
4,40,000
68,000
2686.71
11.55
2696.48
25.50
–
119.39
194.11
0.05
2729.30
0.05
0.05
–
47.16
0.01
0.01
95.31
1506.00
818.68
0.05
419.28
0.05
10.86
0.82
1000.05
102.50
23.89
134.25
1147.40
2648.44
5.30
2696.47
25.50
–
119.39
173.71
0.05
1799.00
0.05
0.05
–
47.16
0.01
0.01
95.31
0.01
818.68
0.05
399.60
0.05
10.86
0.82
0.05
0.05
23.89
134.25
1147.40
11.08
0.68
0.23
–
43.97
0.04
6.80
0.30
13832.61
11.08
–
0.23
12.65
43.97
0.04
6.80
0.30
10221.23
10
10
10
10
10
10
9,00,00,000
90.00
40,00,00,000
400.00
50,00,00,000
500.00
–
–
–
990.00
14822.61
–
10221.23
–
7,35,000
21,20,040
–
0.56
2.12
2.68
0.03
0.56
2.12
2.71
Notes forming part of the Accounts (contd.)
NOTE [F]
Non-current investments (at cost unless otherwise specified) (contd.)
Particulars
Face value
per unit
Number of units
As at
31-3-2014
As at
31-3-2014
crore
As at
31-3-2013
crore
(b) Associate companies: (contd.)
Brought forward
L&T-Chiyoda Limited
L&T-Komatsu Limited (subsidiary company w.e.f. April 15, 2013)
L&T-Ramboll Consulting Engineers Limited
Magtorq Private Limited
Rishi Consfab Private Limited
Salzer Electronics Limited (quoted)
Less: Provision for diminution in value
Total [1]-(A) (b)
(c) Other companies:
International Seaport Dredging Limited
Tidel Park Limited
Astra Microwave Products Limited (quoted)
BBT Elevated Road Private Limited
10
10
10
100
10
10
45,00,000
–
18,00,000
9,000
27,04,000
26,79,808
10,000
10
2
10
15,899
40,00,000
79,50,045
1,00,000
Less: Provision for diminution in value
Total [1]-(A) (c)
(B) Integrated joint venture
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 Shanghai Urban Corporation Group Joint Venture
Metro Tunneling Group
Metro Tunneling Delhi - L&T SUCG Joint Venture
Delhi Metro Railway Corporation - SUCG 27
Metro Tunneling Chennai - L&T SUCG Joint Venture
L&T - Shapoorji Pallonji & Co. Limited Joint Venture -TCS
Total [1]-(B)
Trade Investments- Total (1)
(2) Other Investments
Investments in fully paid equity Instruments
Other companies:
Utmal Multi purpose Service Co-operative Society Limited (B Class)
[ 30000 (previous year 30000)]
Other Investments - Total (2)
Total Non current Investments (1+2)
Details of quoted/unquoted investments:
Particulars
(a) Aggregate amount of quoted investments and market value thereof;
Book Value
Market Value
(b) Aggregate amount of unquoted investments;
Book Value
(c) Aggregate provision for diminution in value of investments is 16.46 crore (previous year 16.46 crore)
2.68
4.50
–
1.80
4.42
2.70
16.33
32.43
0.56
31.87
15.90
4.00
23.00
0.10
43.00
15.90
27.10
2.71
4.50
60.00
1.80
4.42
2.70
16.33
92.46
0.56
91.90
15.90
4.00
23.00
–
42.90
15.90
27.00
0.05
0.06
8.36
6.13
91.71
23.81
13.16
15.13
19.10
12.66
57.84
38.82
286.83
0.05
0.06
8.39
4.06
83.03
19.20
12.73
14.65
6.32
–
28.89
5.19
182.57
15168.41 10522.70
–
–
15168.41 10522.70
As at
31-3-2014
crore
As at
31-3-2013
crore
1691.87
9740.38
1817.92
10503.90
13476.54
8704.78
171
100
300
–
–
Notes forming part of the Accounts (contd.)
NOTE [G(I)]
Long term loans and advances
Particulars
Secured considered good:
Loans against mortgage of house property
Rent deposit (KMP’s)
Capital advances
Unsecured considered good
Capital advances
Loans and advances to related parties:
Subsidiary Companies
Advances towards equity commitment
Intercorporate deposit including interest accrued
[Note Q(2)(a)]
Joint venture company
Loans
Other loans and advances
Security deposits
Earnest money deposits
Advances recoverable in cash or in kind
Balances with customs, port trust etc.
Lease receivable [Note Q(11)(i)(b)]
NOTE [G(II)]
Cash and bank balances
Particulars
Cash and bank balances not available for immediate use
[Note G(II)(a)]
As at 31-3-2014
As at 31-3-2013
crore
3.76
–
2.65
67.41
1208.37
1342.27
490.27
109.18
0.74
496.92
–
–
3721.57
crore
5.60
0.01
6.52
122.36
2264.85
294.01
453.37
107.92
0.51
413.54
0.32
0.06
3669.07
As at 31-3-2014
As at 31-3-2013
crore
9.54
9.54
crore
39.02
39.02
crore
G (II)(a) Particulars of cash and bank balances not available for immediate use
Particulars
As at
31-3-2014
As at
31-3-2013
1
2
3
4
Amount deposited under credit support arrangement which is refundable only on
cessation of exposure to a bank
Amount received including interest accrued there on from customers of property
development business – to be handed over to housing society on its formation
Contingency deposit (including interest accrued thereon) received from customers
of property development business towards their sales tax liability - to be refunded/
adjusted depending on the outcome of the legal case
Other bank balances not available for immediate use being in the nature of security
offered for bids submitted, loans availed, guarantees issued by bank on behalf of the
Company, collaterals, earmarked grants etc.
Total
Less: Amount reflected under current assets [Note H(IV)]
Amount reflected under non-current assets [Note G(II)]
35.15
104.77
19.89
18.65
14.89
12.81
58.28
128.21
118.67
9.54
38.49
174.72
135.70
39.02
172
Notes forming part of the Accounts (contd.)
NOTE [G(III)]
Other non-current asset
Unamortised expenses
NOTE [H(I)]
Current Investments
Particulars
Particulars
Current investments
Government and trust securities
Less: Provision for diminution in value
Debentures and bonds
Less: Provision for diminution in value
Mutual funds
Other current investments
Less: Provision for diminution in value
As at 31-3-2014
As at 31-3-2013
crore
53.24
53.24
crore
43.30
43.30
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
944.28
15.23
723.93
0.06
2118.68
274.63
–
112.87
0.86
1101.08
0.56
2102.56
2265.83
0.23
929.05
723.87
2118.68
274.63
4046.23
112.01
1100.52
2102.56
2265.60
5580.69
Other particulars in respect of current investment mentioned in H(1) are as follows:
Particulars
Current investments:
(1) Government and trust securities:
8.28% Government of India Bonds 2032 (quoted)
7.16% Government of India Bond 2023 (quoted)
8.15% Government of India Bonds 2022 (quoted)
8.33% Government of India Bonds 2026 (quoted)
8.12% Government of India Bond 2020 (quoted)
8.28% Government of India Bond 2027 (quoted)
9.20% Government of India Bond 2030 (quoted)
8.32% Government of India Bond 2032 (quoted)
7.28% Government of India Bond 2019 (quoted)
8.24% Government of India Bond 2027 (quoted)
9.84% Andhra Pradesh SDL 2024 (quoted)
8.90% Maharashtra SDL 2022 (quoted)
Less: Provision for diminution in value
Government and trust securities -Total
Face value
per unit
Number of Units
As at
31-3-2014
As at
31-3-2014
crore
As at
31-3-2013
crore
100
100
100
100
100
100
100
100
100
100
100
100
5,00,000
75,00,000
20,00,000
1,00,00,000
2,75,00,000
1,91,75,800
55,00,000
15,00,000
1,80,00,000
71,06,000
2,00,600
8,000
4.91
66.49
19.71
106.37
262.68
179.98
54.69
13.89
167.47
66.00
2.01
0.08
944.28
15.23
929.05
4.91
–
5.09
102.87
–
–
–
–
–
–
–
–
112.87
0.86
112.01
173
Notes forming part of the Accounts (contd.)
NOTE [H(I)]
Current investments (contd.)
Particulars
(2) Debentures and Bonds
(i) Subsidiary companies:
Face value
per unit
Number of Units
As at
31-3-2014
As at
31-3-2014
crore
As at
31-3-2013
crore
L&T Finance Limited - 10.24% Secured Redeemable Non Convertible
Debenture, 17 September 2019 (quoted)
L&T Infrastructure Finance Company Limited -
8.91% Non Convertible Debentures, 16 April 2013 (quoted)
L&T Infrastructure Finance Company Limited -
8.91% Non Convertible Debentures, 16 April 2014 (quoted)
L&T Infrastructure Finance Company Limited -
8.91% Non Convertible Debentures, 16 April 2015 (quoted)
Less: Provision for diminution in value
Subsidiary companies-Total
(ii) Other Debentures and Bonds
9.15% ICICI Bank Ltd. NCD 31 December 2022 (quoted)
9.05% HDFC Ltd. NCD 29 January 2014 (quoted)
9.62% HDFC Ltd. NCD 27 February 2014 (quoted)
9.62% HDFC Ltd. NCD 26 February 2014 (quoted)
9.18% HDFC Ltd. NCD 22 October 2014 (quoted)
6.86% IIFCL Tax Free Bonds 26 March 2023 (quoted)
7.18% IRFC Ltd. Tax Free Bonds 19 February 2023 (quoted)
10.75% The Tata Power Co. Ltd. NCD 21 August 2072 (quoted)
8.00% Indian Overseas Bank 2016 Bonds (quoted)
8.20% Power Finance Corporation 2022 (quoted)
9.32% National Bank for Agricultural and
Rural Developement 2015 (quoted)
9.46% Power Finance Corporation 2026 (quoted)
9.61% Power Finance Corporation 2021 (quoted)
9.70% Power Finance Corporation 2021 (quoted)
9.75% Rural Electrification Corporation Limited 2021 (quoted)
8.20% National Highway Authority of India 2022 (quoted)
8.00% Indian Overseas Bank Bonds 13 Mar 2016 (quoted)
8.20% NHAI Tax Free Bonds 25 Jan 2022 (quoted)
8.20% PFC Ltd. Tax Free Bonds 01 Feb 2022 (quoted)
8.46% PFC Ltd. Tax Free Bonds 30 Aug 2028 (quoted)
9.18% HDFC Ltd. NCD 22 Oct 2014 (quoted)
9.32% NABARD Bonds 23 Feb 2015 (quoted)
1.44% Inflation Indexed Bonds 05 Jun 2023 (quoted)
10.05% HDB Financial Services Ltd.
Bonds SR-I/1/5 20 Dec 2023 (quoted)
10.20% HDB Financial Services Ltd. Bonds 09 Aug 2022 (quoted)
8.41% NTPC Ltd. Tax Free Bonds SR-1A 16 Dec 2023 (quoted)
9.80% BOI Bonds SR-XI 30 Sep 2023 (quoted)
Citicorp Finance India Ltd. SR-515 NCD 12 Apr 2016 (quoted)
ECL Finance Ltd. NCD SR-C5C401 11 Mar 2015 (quoted)
ECL Finance Ltd. NCD SR-C5C403 19 Mar 2015 (quoted)
Less: Provision for diminution in value
Other Debentures & Bonds -Total
Debentures & Bonds -Total
1,000
3,69,570
36.96
10,00,000
1,000,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
1,000
1,000
10,00,000
10,00,000
1,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
1,000
10,00,000
1,000
1,000
10,00,000
10,00,000
10,00,000
100
10,00,000
10,00,000
1,000
10,00,000
1,00,000
1,00,00,000
1,00,00,000
–
–
–
2,50,000
30,00,000
5
50
741,713
854,355
17
150
100
5,000,000
260
21
79,162
98
2,505
25
25
–
–
–
36.96
–
36.96
–
–
–
–
–
25.00
300.00
0.51
–
–
–
–
–
–
–
–
4.90
76.92
89.22
1.70
14.99
10.00
41.79
25.99
2.12
7.92
9.80
26.11
25.00
25.00
686.97
0.06
686.91
723.87
36.98
24.95
24.95
24.95
111.83
0.30
111.53
5.00
149.74
100.34
75.29
14.99
25.00
300.00
101.05
4.90
89.23
10.00
19.99
1.60
10.03
5.18
76.91
–
–
–
–
–
–
–
–
–
–
–
–
–
–
989.25
0.26
988.99
1100.52
174
Notes forming part of the Accounts (contd.)
NOTE [H(I)]
Current investments (contd.)
Particulars
(3) Mutual funds:
DWS Short Maturity Fund - Direct Plan - Annual Bonus
Baroda Pioneer Liquid Fund - Plan A - Growth
JM Money Manager Fund - Super Plus Plan - Bonus -Bonus Units
DSP Blackrock Liquidity Fund - IP - Growth
DWS Insta Cash Plus Fund - Super Institutional Plan - Bonus
L&T FMP - Series VIII - Plan J (368 Days) - Growth (quoted)
DWS Money Plus Fund - Regular Plan - Bonus
DWS Treasury Fund - Cash - Regular - Bonus
DWS Treasury Fund - Investment Plan - Direct Plan - Bonus
HDFC Liquid Fund - Growth
IDBI Liquid Fund - Growth
IDFC Cash Fund - Regular - Growth
JM High Liquidity Fund - Bonus Option - Bonus Units
JP Morgan India Liquid Fund - Super IP - Growth
JP Morgan India Treasury Fund - Direct Plan - Bonus
L&T Cash Fund - Growth
L&T FMP - VII (January 507D A) - Growth (quoted)
L&T FMP - VII (March 13M A) - Growth (quoted)
L&T FMP - VII (March 367D A) - Growth (quoted)
L&T FMP - VII (March 367D B) - Growth (quoted)
L&T FMP - VII (March 381D A) - Growth (quoted)
L&T FMP - Series VIII - Plan A - Growth (quoted)
L&T Floating Rate Fund Direct Plan - Growth
L&T Liquid Fund - Growth
L&T Short Term Opportunities Fund - Growth
Principal Cash Management Fund - Growth - Bonus
Religare Invesco Liquid Fund - Growth
SBI Premier Liquid Fund - Growth
UTI Treasury Advantage Fund IP - Bonus
Birla Sun Life Infrastructure Fund - Regular Plan - Dividend
DSP BlackRock India Tiger Fund - Regular Plan - Dividend
DWS Ultra Short Term Fund - Direct Plan - Annual Bonus
Franklin India Prima Fund - Dividend
HDFC Infrastructure Fund - Dividend
HDFC Mid-Cap Opportunities Fund - Dividend
ICICI Prudential Discovery Fund - Regular Plan - Dividend
ICICI Prudential Infrastructure Fund - Regular Plan-Dividend
IDFC Sterling Equity Fund - Regular Plan - Dividend
L&T FMP - Series X - Plan A (368 days) - Growth (quoted)
Principal Cash Mgmt Fund - Regular Plan - Growth
Birla Sun Life Cash Plus - Regular Plan - Growth
DWS Insta Cash Plus Fund - Super Institutional Plan - Growth
ICICI Prudential Liquid - Regular Plan - Growth
L&T FMP SR X - Plan D (367 Days) - Direct Plan - Growth (quoted)
L&T FMP SR X - Plan D (367 Days) - Growth (quoted)
Pramerica Liquid Fund - Growth
Templeton India TMA - Super IP - Growth
Mutual funds-Total
Face value
per unit
Number of Units
As at
31-3-2014
As at
31-3-2014
crore
As at
31-3-2013
crore
10
1,000
6,92,69,027
3,40,584
10 30,26,25,946
–
–
1,50,00,000
–
–
1,84,64,465
1,97,85,995
–
3,21,198
–
–
3,28,65,547
–
2,00,00,000
1,00,00,000
–
–
1,00,00,000
2,00,00,000
2,88,45,876
34,15,678
–
–
2,83,862
7,45,019
–
2,46,49,603
1,70,26,445
3,34,97,695
59,46,165
6,25,36,675
98,47,678
1,16,37,212
2,48,37,121
4,23,09,745
1,00,00,000
4,01,716
24,34,384
30,07,980
26,37,828
50,00,000
50,00,000
1,46,406
1,04,728
1,000
100
10
10
10
10
10
1,000
1,000
10
10
10
1,000
10
10
10
10
10
10
10
1,000
10
1,000
1,000
1,000
1,000
10
10
10
10
10
10
10
10
10
10
1,000
100
100
100
10
10
1,000
1,000
105.71
50.00
330.88
–
–
15.85
–
–
19.66
50.00
–
50.00
–
–
36.82
–
22.08
10.99
–
–
10.90
21.25
35.99
600.00
–
–
50.00
150.00
–
28.37
22.35
33.34
23.31
64.29
16.47
24.44
27.84
57.76
10.22
50.00
50.00
50.00
50.00
5.08
5.08
20.00
20.00
2118.68
–
100.00
–
50.00
13.92
–
55.79
14.79
–
50.00
25.00
50.00
446.91
50.00
100.00
450.00
20.00
10.00
10.00
5.00
10.00
–
–
350.00
25.09
37.50
100.00
100.00
28.56
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2102.56
175
Notes forming part of the Accounts (contd.)
NOTE [H(I)]
Current investments (contd.)
Particulars
(4) Other Current investments:
(i) Certificate of deposits:
Allahabad Bank 10 June 2013
Axis Bank 06 June 2013
Bank of Baroda 06 December 2013
Canara Bank 24 February 2014
Corporation Bank 05 December 2013
Corporation Bank 06 March 2014
Corporation Bank 10 December 2013
Corporation Bank 17 February 2014
Corporation Bank 22 November 2013
IDBI Bank 05 December 2013
IDBI Bank 10 February 2014
Indian Overseas Bank 14 March 2014
Oriental Bank of Commerce 03 January 2014
Oriental Bank of Commerce 05 March 2014
Oriental Bank of Commerce 30 May 2013
Punjab National Bank 05 March 2014
Punjab National Bank 10 March 2014
Punjab National Bank 25 March 2014
State Bank of Hyderabad 06 September 2013
State Bank of Hyderabad 13 March 2014
State Bank of Mysore 29 November 2013
State Bank of Patiala 03 June 2013
State Bank of Travancore 22 November 2013
UCO Bank 05 March 2014
UCO Bank 10 March 2014
UCO Bank 14 March 2014
United Bank of India 24 May 2013
(ii)
Less: Provision for diminution in value
Certificate of deposits-Total
Investment in collateralised borrowing and lending obligation
Other Current investments-Total (4) (i+ii)
Total Current Investments
Details of quoted/unquoted investments:
Particulars
(a) Aggregate amount of quoted current investments and market value thereof;
Book Value
Market Value
(b) Aggregate amount of unquoted current investments;
Book Value
Face value
per unit
Number of Units
As at
31-3-2014
As at
31-3-2014
crore
As at
31-3-2013
crore
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
1,00,000
1,00,000
1,00,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
NA
NA
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
274.63
274.63
4046.23
220.86
196.61
23.55
46.20
70.67
92.17
47.06
138.79
47.25
23.54
23.18
46.04
46.76
23.08
98.48
230.86
184.48
91.60
48.12
46.08
235.79
23.66
47.25
23.08
46.08
46.08
98.51
2265.83
0.23
2265.60
–
2265.60
5580.69
As at
31-3-2014
crore
As at
31-3-2013
crore
1754.39
1798.22
1268.94
1324.54
2291.84
4311.75
(c) Aggregate provision for diminution in value of current investments is 15.29 crore (previous year 1.65 crore)
176
Notes forming part of the Accounts (contd.)
NOTE [H(II)]
Inventories (at cost or net realisable value whichever is lower)
Particulars
Raw Materials
[Includes goods-in-transit 17.17 crore (previous year: 34.75 crore)]
Components
[Includes goods-in-transit 15.38 crore (previous year: 77.64 crore)]
Construction material
[Includes goods-in-transit 85.22 crore (previous year: 0.31crore)]
Manufacturing work-in-progress [Note Q(25)(d)]
Finished goods
Stock-in-trade (in respect of goods acquired for trading)
[Includes goods-in-transit 6.07 crore (previous year: 31.82 crore)]
Stores and spares
[Includes goods-in-transit 8.15 crore (previous year: 4.14 crore)]
Loose tools
Property development related work-in-progress [Note Q(6)(b)]
NOTE [H(III)]
Trade receivables
As at 31-3-2014
As at 31-3-2013
crore
416.09
310.04
88.74
547.59
203.17
117.21
135.09
5.33
159.27
1982.53
crore
451.07
348.08
0.74
646.59
209.11
169.19
84.62
5.02
149.76
2064.18
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Secured:
Debts outstanding for more than 6 months:
Considered good
Other debts (Debts outstanding for less than 6 months)
Considered good
–
Unsecured:
Debts outstanding for more than 6 months
Considered good
Considered doubtful
Other debts: [Note H(III)(a)]
Considered good
Considered doubtful
Less: Allowance for doubtful debts
1959.71
473.54
2433.25
19560.82
0.19
21994.26
473.73
–
0.77
18.23
–
0.77
1845.58
514.40
2359.98
20766.66
0.34
23126.98
514.74
21520.53
21538.76
22612.24
22613.01
H(III) (a) Other debts includes
14846.62 crore (previous year: 13917.82 crore excluding 1769.84 crore in respect of discontinued
operations) contractually not due.
177
Notes forming part of the Accounts (contd.)
Note [H(IV)]
Cash and bank balances
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Cash and cash equivalents
Balance with banks
Cheques and drafts on hand
Cash on hand
Fixed deposits with banks (maturity less than 3 months)
Other bank balances
Fixed deposits with banks including interest accrued thereon
[including Nil of bank deposits with more than 12 months
maturity (previous year: Nil)]
Earmarked balances with banks-unclaimed dividend
Margin money deposits
Cash and bank balances not available for immediate use
[Note G(II)(a)]
Bank balances subject to restriction on repatriation [Note H(IV)(a)]
1174.94
195.51
2.31
250.20
2.88
28.01
10.34
118.67
–
Particulars
Note [H(IV)(a)]
Rafidian Bank
Mashreq Bank
Total
Note [H(V)]
Short term loans and advances
Particulars
Secured considered good:
Loans against mortgage of house property
Rent deposit (KMP’s)
Inter-corporate deposits including interest accrued-Others
Unsecured considered good:
Loans and advances to related parties:
Subsidiary companies:
Loans [Note Q(2)(a)]
Intercorporate deposit including interest accrued
[Note Q(2)(a)]
Others
Carried forward
178
708.93
337.20
3.23
230.16
1622.96
1279.52
2.58
23.85
5.07
135.70
8.94
159.90
1782.86
31-3-2014
crore
–
–
–
176.14
1455.66
31-3-2013
crore
8.25
0.69
8.94
As at 31-3-2014
As at 31-3-2013
crore
1.06
0.01
100.00
–
995.69
934.76
2031.52
crore
1.72
–
–
200.00
605.35
840.99
1648.06
Notes forming part of the Accounts (contd.)
NOTE [H(V)]
Short term loans and advances (contd.)
Particulars
Brought forward
Associate Companies:
Advance recoverable
Joint Ventures:
Others
Others considered good:
Security deposits
Earnest money deposits
Advances recoverable in cash or in kind
Income tax receivable of current year
[Net of provision 1684.53 crore]
Balances with customs, port trust etc.
Lease receivable [Note Q(11)(i)(b)]
Considered doubtful:
Deferred credit against sale of ships
Security deposits
Other loans and advances
Less: Allowance for doubtful loans and advances
NOTE [H(VI)]
Other current asset
Particulars
Due from customers (construction and project related activity)
Due from customers (property development activity) [Note Q(6)(b)]
Interest accrued on investments
Unbilled revenue
Unamortised expenses
As at 31-3-2014
As at 31-3-2013
crore
2031.52
2.37
25.46
198.64
64.49
3761.20
209.16
52.73
0.08
24.92
1.39
141.14
6513.10
167.45
6345.65
crore
1648.06
6.69
20.52
167.54
72.40
3773.67
–
54.44
0.44
22.58
1.40
131.79
5899.53
155.77
5743.76
As at 31-3-2014
As at 31-3-2013
crore
15203.35
84.85
39.23
71.78
19.37
crore
crore
crore
11692.89
1.83
35.66
48.63
11.65
15418.58
15418.58
11790.66
11790.66
179
Notes forming part of the Accounts (contd.)
NOTE [I]
Contingent liabilities
Particulars
(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 for debt given on behalf of Subsidiary
companies
(f) Corporate guarantees for performance given on behalf of
Subsidiary companies
As at 31-3-2014
As at 31-3-2013
crore
184.75
122.11
41.80
463.58
3772.85
5627.07
crore
177.97
112.60
41.21
390.39
3491.72
930.60
Notes:
1.
2.
3.
4.
The Company does not expect any reimbursements in respect of the above contingent liabilities.
It is not practicable to estimate the timing of cash outflows, 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 outflows, if any, could generally occur up to thirteen years, being the period over which the
validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence
of the borrowing to which the guarantees relate.
In respect of matters at (f), the cash outflows, if any, could generally occur up to four years, being the period over which the validity
of the guarantees extends.
NOTE [J]
Commitments
Particulars
(a) Estimated amount of contracts remaining to be excuted on capital account (net of advances )
Estimated amount of committed funding by way of equity/loans to subsidiary companies
(b)
As at
31-3-2014
As at
31-3-2013
crore
404.38
4428.00
crore
390.48
7453.00
NOTE [K]
Revenue from operations
Particulars
2013-14
2012-13
Note
crore
crore
crore
crore
Sales & service:
Construction and project related activity
Manufacturing and trading activity
Property development activity
Engineering and service fees
Servicing
Commission
Q(6)(a),Q(25)(a)(iii)
Q(25)(a)(i)
Q(6)(b),Q(25)(a)(ii)
Q(25)(a)(vi)
Q(25)(a)(iv)
Q(25)(a)(v)
47861.55
6176.82
447.84
1539.86
422.47
118.64
Other operational revenue:
Income from hire of plant and equipment
Technical fees
Company’s share in profit of Integrated
joint ventures
Lease rentals
Income from services to the Group companies
Premium earned (net) on related forward
exchange contract
Miscellaneous income
Q15(b)
61.95
–
20.86
61.98
89.35
120.04
242.49
43413.08
6406.51
73.79
1203.54
406.08
158.77
56567.18
51661.77
7.43
40.05
10.10
49.73
92.48
204.37
129.77
596.67
57163.85
533.93
52195.70
180
Notes forming part of the Accounts (contd.)
NOTE [K(I)]
Revenue from sales & service include:
(a)
(b)
1558.70 crore (previous year: 928.17 crore, excluding 236.54 crore (debit) in respect of discontinued operations) for price
variations net of liquidated damages in terms of contracts with the customers.
Shipbuilding subsidy
7.22 crore)
Nil crore (previous year: 10.02 crore) and reversal of shipbuilding subsidy of
31.54 crore (previous year:
NOTE [L]
Other Income
Particulars
Interest Income
From long term investments
From current investments
Subsidiary companies
Others
From others
Subsidiary and associate companies
Others
Dividend income
From long term investments:
Subsidiary companies
Associate companies
Other trade investments
From current investments
Net gain/(loss) on sale of investment
Long term investments (net)
Current investments (net)
Net gain/(loss) on sale of fixed assets (net)
Lease rental
Miscellaneous income (net of expeses) [Note L(I)]
2013-14
2012-13
crore
crore
crore
crore
–
4.06
263.01
196.36
31.49
863.06
2.35
1.84
867.25
–
–
197.55
0.40
10.83
300.09
181.27
39.87
494.92
532.46
583.21
1.80
1.20
586.21
3.45
24.71
224.21
867.25
197.55
25.06
45.94
250.17
1880.89
589.66
248.92
226.23
43.68
246.34
1887.29
NOTE [L(I)]
Miscellaneous income includes recoveries from subsidiary, joint venture and associate companies towards directly attributable expenses
incurred on employees deputed to these companies. Such expenses, the details of which are given hereunder, have been netted off from
miscellaneous income.
Expenses
2013-14
2012-13
Salaries
Contribution to Provident Fund
Compensation for Employee Stock Option Plan (ESOP)
Welfare expenses
Other expenses
Total
crore
58.37
2.31
3.26
2.13
2.46
68.53
crore
81.06
1.94
6.18
1.02
2.31
92.51
181
Notes forming part of the Accounts (contd.)
NOTE [M ]
Manufacturing, construction and operating expenses
Particulars
2013-14
2012-13
crore
crore
crore
crore
Materials consumed:
Raw materials and components [Note Q(25)(b)]
Less: Scrap sales
Construction materials
Purchase of stock-in-trade [Note Q(25)(c)]
Value of stock-in-trade transferred on sale of business
Stores, spares and tools consumed
Sub-contracting charges
Changes in inventories of finished goods, work-in-progress and
stock-in-trade and property development :
Closing stock:
Finished goods
Stock-in-trade
Work-in-progress
Less: Opening stock:
Finished goods
Stock-in-trade
Work-in-progress
Other manufacturing, construction and operating expenses:
Excise duty
Power and fuel [Note O(I)]
Royalty and technical know-how fees
Packing and forwarding [Note O(I)]
Hire charges - plant & equipment and others
Engineering, technical and consultancy fees
Insurance [Note O(I)]
Rent [Note O(I)]
Rates and taxes [Note O(I)]
Travelling and conveyance [Note O(I)]
Repairs to plant and equipment
Repairs to buildings [Note O(I)]
General repairs and maintenance [Note O(I)]
Bank guarantee charges
Miscellaneous expenses [Note O(I)]
182
6110.42
107.62
2025.59
(103.43)
203.17
117.21
3068.09
3388.47
209.11
169.19
3120.20
3498.50
0.17
593.15
3.25
290.07
556.55
485.53
131.16
278.82
223.72
659.10
44.16
8.31
191.09
99.69
446.13
7574.93
13927.00
2063.23
2093.09
12191.48
6002.80
15973.55
1922.16
2054.07
13272.94
7670.51
95.58
2078.47
(15.24)
209.11
169.19
3120.20
3498.50
237.88
196.33
1973.42
2407.63
110.03
(1090.87)
(6.27)
555.02
7.07
231.66
557.91
384.61
104.23
223.72
156.25
560.68
41.62
6.71
176.60
67.45
378.71
4010.90
43346.45
3445.97
40204.83
Notes forming part of the Accounts (contd.)
NOTE [N]
Employee benefits expense
Particulars
Salaries, wages and bonus
Contribution to and provision for:
Provident funds and pension fund
Superannuation/employee pension schemes
Gratuity funds [Note Q(8)(b)]
Expenses on Employee Stock Option Schemes [Note A(VIII)(e)(ii)]
Insurance expenses-Medical and others [Note O(I)]
Staff welfare expenses
[Note L(I) for employee benefit expenses netted off]
NOTE [O]
Sales, administration and other expenses
Particulars
Power and fuel [Note O(I)]
Packing and forwarding [Note O(I)]
Professional fees
Audit fees [Note Q(18)]
Insurance [Note O(I)]
Rent [Note O(I)]
Rates and taxes [Note O(I)]
Travelling and conveyance [Note O(I)]
Repairs to buildings [Note O(I)]
General repairs and maintenance [Note O(I)]
Directors’ fees
Telephone, postage and telegrams
Advertising and publicity
Stationery and printing
Commission:
Distributors and agents
Others
Bank charges
Carried Forward
2013-14
2012-13
crore
crore
crore
110.84
39.32
41.95
2012-13
crore
123.94
29.06
36.32
2013-14
crore
3812.21
189.32
55.88
68.23
536.73
4662.37
crore
63.58
147.02
163.33
3.63
20.57
126.17
67.37
262.28
23.47
218.03
0.26
104.55
63.50
41.86
20.86
3.04
29.24
3.23
23.90
32.55
1362.07
crore
3098.77
192.11
76.65
43.62
449.78
3860.93
crore
60.12
204.90
134.08
3.31
12.96
100.29
60.25
209.49
19.29
214.64
0.28
86.79
79.88
35.97
32.47
33.70
1288.42
183
Notes forming part of the Accounts (contd.)
NOTE [O]
Sales, administration and other expenses (contd.)
Particulars
Brought Forward
Miscellaneous expenses [Note O(I)] *
Bad debts and advances written off
Less: Allowance for doubtful debts and advances written back
Company’s share in loss of integrated joint ventures [Note O(15)(b)]
Discount on sales
Allowance for doubtful debts and advances (net)
Provision (reversal) for foreseeable losses on construction contracts
Provision (reversal) for diminution in value of investments (net)
Exchange (gain)/loss (net)
Other provisions [Note Q(16)(a)]
2013-14
crore
43.56
43.19
crore
1362.07
350.12
0.37
0.36
74.40
85.13
(60.99)
13.64
226.53
(119.60)
1932.03
2012-13
crore
38.14
37.00
crore
1288.42
293.30
1.14
22.62
72.17
15.89
36.68
(17.24)
457.10
(84.42)
2085.66
* Miscellaneous expenses includes 0.02 crore pertaining to discontinued operations [Note Q(14)(e)]
NOTE [O(I)]
Aggregation of expenses disclosed vide notes M, N and O in respect of specific items as mentioned in the revised schedule VI
to the Companies Act 1956, are as follows:
crore
2013-14
2012-13@
Sr. no.
Nature of expenses
1
2
3
4
5
6
7
8
9
Power and fuel
Packing and forwarding
Insurance
Rent
Rates and taxes
Travelling and conveyance
Repairs to buildings
General repairs and maintenance
Miscellaneous expenses
Note M
593.15
290.07
131.16
278.82
223.72
659.10
8.31
191.09
446.13
Note N
–
–
68.23
–
–
–
–
–
–
Note O
63.58
147.02
20.57
126.17
67.37
262.28
23.47
218.03
350.12
Total
656.73
437.09
219.96
404.99
291.09
921.38
31.78
409.12
796.25
@ excluding 579.82 crore pertaining to the discontinued operations, as under:
Sr. no.
Nature of expenses
1
2
3
4
5
6
7
8
9
Power and fuel
Packing and forwarding
Insurance
Rent
Rates and taxes
Travelling and conveyance
Repairs to buildings
General repairs and maintenance
Miscellaneous expenses
Total
NOTE [P]
Finance costs
Particulars
Interest expenses
Other borrowing costs
Exchange loss (attributable to finance costs)
184
Note N
–
–
43.62
–
–
–
–
–
–
Note O
60.12
204.90
12.96
100.29
60.25
209.49
19.29
214.64
293.30
2012-13
Note N
–
–
9.39
–
–
–
–
–
–
9.39
Note O
3.04
0.02
2.44
8.72
1.54
20.96
0.77
10.36
13.95
61.80
Note M
555.02
231.66
104.23
223.72
156.25
560.68
6.71
176.60
378.71
Note M
200.25
8.67
33.06
59.04
18.49
151.34
–
17.14
20.64
508.63
2013-14
crore
1012.46
18.00
45.62
1076.08
Total
615.14
436.56
160.81
324.01
216.50
770.17
26.00
391.24
672.01
Total
203.29
8.69
44.89
67.76
20.03
172.30
0.77
27.50
34.59
579.82
2012-13
crore
890.29
7.83
56.63
954.75
Notes forming part of the Accounts (contd.)
NOTE [Q]
Q(1) The Balance Sheet as on March 31, 2014 and the Statement of Profit and Loss for the year ended March 31, 2014 are drawn and
presented as per the format prescribed under Revised Schedule VI to the Companies Act, 1956.
Q(2) Particulars in respect of loans and advances in the nature of loans as required by the listing agreement:
Name of the Company
Balance as at
31-3-2014
31-3-2013
crore
Maximum outstanding during
2012-13
2013-14
(a)
(b)
(c)
3
4
5
6
Loans and advances in the nature of loans given to subsidiaries:
1
2
Larsen & Toubro Infotech Limited
L&T Cutting Tools Limited
(formerly known as Tractor Engineers Limited)
L&T Capital Company Limited
L&T Seawoods Private Limited
L&T Infrastructure Development Projects Limited
L&T Realty Limited
(post merger of L&T Urban Infrastructure Limited)
L&T Chennai Projects Private Limited
L&T Commercial Projects Private Limited
L&T Finance Holdings Limited
7
8
9
10 L&T Shipbuilding Limited
11 L&T Special Steels & Heavy Forgings Private Limited
12 L&T Sapura Offshore Private Limited
13 PNG Tollway Limited
14 L&T Infocity Limited
15 Ewac Alloys Limited
16 L&T Hydrocarbon Engineering Limited
(formerly known as L&T Technologies Limited)
17 L&T Technology Services Limited
18 L&T Valves Limited
(formerly known as Audco India Limited)
L&T Shipbuilding Limited
Total
Loans and advances in the nature of loans where repayment
schedule is not specified/is beyond 7 years:
1
2 PNG Tollway Limited
Total
Loans and advances in the nature of loans where interest is
not charged or charged below bank rate:
1
2
L&T Capital Company Limited
L&T Realty Limited
(post merger of L&T Urban Infrastructure Limited)
L&T Seawoods Private Limited
L&T Cutting Tools Limited
(formerly known as Tractor Engineers Limited)
3
4
Total
–
–
–
–
314.54
841.20
–
–
200.61
–
245.30
–
52.64
–
5.51
603.10
15.02
60.04
–
–
–
–
–
788.30
177.01
–
–
–
46.09
4.12
47.84
36.00
–
–
–
–
2337.96*
1099.36*
–
52.64
52.64
–
–
–
–
–
–
47.84
47.84
–
200.00
–
–
200.00
40.14
–
–
–
324.55
998.52
179.31
–
200.61
–
245.30
4.21
52.64
36.77
10.50
603.10
15.02
60.05
5.00
24.37
103.50
265.20
–
1148.74
177.01
29.07
–
169.19
46.09
26.25
47.84
135.23
11.98
–
–
–
–
52.64
169.19
47.84
–
200.00
–
–
103.50
200.00
265.20
18.00
* Long term loans and advances [Note G(I)] - 1342.27 crore (previous year: 294.01 crore) and
Short term loans and advances [Note H(V)] - 995.69 crore (previous year: 805.35 crore)
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.
Q(3) Extraordinary and Exceptional Items [Note R(4)]:
(a) Exceptional items for the year ended March 31, 2014 includes gain of
588.50 crore on sale of the Company’s part stake in
L&T Finance Holdings Limited, a subsidiary company.
214.29 crore on sale of the Company’s stake in L&T
Exceptional items for the year ended March 31, 2013 included gain of
Plastics Machinery Private Limited, a subsidiary company and expenses incurred on voluntary retirement scheme amounting to
38.05 crore (excluding 0.29 crore pertaining to the discontinued operations).
(b) Extraordinary items during the year ended March 31, 2013 represent the following:
(i)
Reversal of 52.89 crore being provision made in earlier years in respect of the Company’s investment in shares of Satyam
Computer Services Limited (SCSL)
(ii) Gain of 25.22 crore (net of tax 18.72 crore) on sale of the Company’s Medical Equipment Business unit. Tax of 6.50
crore is included under current tax.
185
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Q(4) The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 107.14 crore
(previous year: 86.67 crore excluding 11.50 crore pertaining to the discontinued operations). Further, the Company has incurred
capital expenditure on research and development activities as follows:
(a) on tangible assets of 4.97 crore (previous year: 12.18 crore excluding 0.27 crore pertaining to the discontinued operations);
(b) on intangible assets being expenditure on new product development of 60.73 crore (previous year: 43.76 crore) [Note R5(b)];
and
(c) on other intangible assets of 1.20 crore (previous year: 0.96 crore).
In addition, the Company has carried out work of a developmental nature of
fully paid for by the customers.
Nil (previous year: 21.27 crore) which is partially/
Q(5) (a) Provision for current tax includes 9.74 crore in respect of income tax payable outside India (previous year: 20.25 crore)
(b) Tax effect of 2.00 crore (previous year: 0.17 crore) on account of debenture issue expenses and premium on inflation linked
debenture has been credited to securities premium account.
Q(6) (a) Disclosures pursuant to Accounting Standard (AS) 7 (Revised) “Construction Contracts”:
Particulars
i)
ii)
Contract revenue recognised for the financial year [Note (K)]
Aggregate amount of contract costs incurred and recognised profits (less recognised
losses) as at end of the financial year for all contracts in progress as at that date
iii) Amount of customer advances outstanding for contracts in progress as at end of the
financial year
Retention amounts by customers for contracts in progress as at end of the financial year
iv)
@ Figures reported as comparatives for financial year 2012-13 exclude discontinued operations.
2013-14
2012-13@
crore
crore
47861.55
43413.08
156833.52
124855.67
7695.87
6736.98
7664.56
6018.42
(b) Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions (Revised 2012) issued by the Institute of
Chartered Accountants of India
Particulars
i)
ii)
Amount of project revenue recognised for the financial year [Note (K)]
Aggregate amount of costs incurred and profits recognised as at the end of the financial
year
iii) Amount of advances received
iv) Amount of work-in-progress and the value of inventories [Note (H(II)]
v)
Excess of revenue recognised over actual bills raised (unbilled revenue) [Note (H(VI)]
Q(7) Disclosures pursuant to Accounting Standard (AS) 13 “Accounting for Investments”
2013-14
2012-13
crore
447.84
518.02
39.65
159.27
84.85
crore
73.79
70.24
158.32
149.76
1.83
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 Company L&T Transportation Infrastructure Limited (LTTIL):
i.
not to reduce their joint shareholding in LTTIL below 51% until the financial 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 financial assistance received from
the term lenders is repaid in full by LTTIL.
ii.
b.
c.
To the lenders of L&T Krishnagiri Thopur Toll Road Limited (KTTL), not to dilute Company’s shareholding in L&T Infrastructure
Development Projects Limited below 51% until the borrowings received from the lenders is repaid in full by KTTL.
To Gujarat State Road Development Corporation Limited:
i.
to hold in L&T Ahmedabad-Maliya Tollway Limited, L&T Halol-Shamlaji Tollway Limited and L&T Rajkot-Vadinar Tollway
Limited along with L&T Infrastructure Development Projects Limited:
(cid:122) 100% stake during the construction period;
(cid:122)
51% stake for 5 years from the date of commercial operation or end of construction of the project, whichever is
later; and
(cid:122) 51% stake during operational period.
not to divest the stake in L&T Infrastructure Development Projects Limited until the aforesaid undertakings are valid.
ii.
1.
186
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
d.
e.
f.
g.
h.
i.
To National Highway Authority of India, to hold along with its associates minimum 51% stake in L&T Samakhiali Gandhidham
Tollway Limited 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 till the commercial operations
date.
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.
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 and
iii. Minimum 26% or such lower stake as may be permitted by National Highway Authority of India during remaining
concession period.
To the Security Trustee of the lenders of L&T Krishnagiri Walajahpet Tollway Limited, to hold along with L&T Infrastructure
Development Projects Limited minimum 51% equity stake in L&T Krishnagiri Walajahpet Tollway Limited, until the financial
assistance received from the term lenders is repaid in full. The aforesaid minimum stake can, however, be disposed off
before final settlement date with prior approval of lenders.
To the Security Trustee of the lenders of L&T Metro Rail (Hyderabad) Limited, to hold along with L&T Infrastructure
Development Projects Limited minimum 51% equity stake and retain management control in L&T Metro Rail (Hyderabad)
Limited until the financial assistance received from the term lenders is repaid in full. The aforesaid minimum stake can,
however, be disposed off before final settlement date with prior approval of lenders.
j.
To the Security Trustee of
(i)
(ii)
the lenders of PNG Tollway Limited, to hold along with L&T Infrastructure Development Projects Limited and Ashoka
Buildcon Limited minimum 51% equity stake in PNG Tollway Limited, until the financial assistance received from the
term lenders is repaid in full by PNG Tollway Limited. The aforesaid minimum stake can, however, be disposed off
before final settlement date with prior approval of lenders;
the lenders of L&T Samakhiali Gandhidham Tollway Limited, to hold along with L&T Infrastructure Development Projects
Limited minimum 51% equity stake in L&T Samakhiali Gandhidham Tollway Limited, until the financial assistance
received from the term lenders is repaid in full by L&T Samakhiali Gandhidham Tollway Limited. The aforesaid minimum
stake can, however, be disposed off before final settlement date with prior approval of lenders;
(iii)
the lenders of L&T Sapura Shipping Private Limited, not to sell or transfer equity stake without prior approval;
(iv) L&T Aviation Services Private Limited, to hold atleast 51% stake, directly or indirectly, in L&T Aviation Services Private
Limited, until any amount is outstanding under the Credit Facility Agreement.
k.
To the Government of Andhra Pradesh (GoA) with respect to shareholding in L&T Metro Rail (Hyderabad) Limited, to hold
and maintain along with L&T Infrastructure Development Projects Limited –
i.
ii.
51% stake till the second anniversary of the commercial operation date (COD) of the project;
33% stake till the third anniversary of the commercial operation date of the project;
iii. 26% stake (or such lower proportion as may be permitted by the GoA), till the remaining concession period.
l.
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 and
customers/potential customers 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.
m. To hold 15,899 shares comprising 9.85% of the issued capital of International Seaport Dredging Limited till January 24,
2016.
n.
o.
p.
q.
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 executes the lease deed for land in favour of LTSPL.
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 towards banking credit facilities.
To the debenture trustee of L&T Shipbuilding Limited, to maintain at least 26% stake in L&T Shipbuilding Limited, until any
amount is outstanding towards the debentures.
To the lender of L&T Shipbuilding Limited, to maintain minimum 76% stake in L&T Shipbuilding Limited, until any amount
is outstanding towards the working capital loan.
187
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
2.
Pursuant to the provisions of Clause 36 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, 34,29,46,958
equity shares of L&T Finance Holdings Limited, constituting minimum promoters’ contribution equivalent to 20% of the post
issue paid-up share capital, are mandatorily locked-in till August 12, 2014.
Q(8) Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benefits”.
i.
Defined contribution plans: [Note R(6)(b)(i)] Amount of
74.85 crore (previous year: 95.80 crore excluding 8.00 crore in
respect of discontinued operation) is recognised as an expense and included in “employee benefits expense” (Note N) in the
Statement of Profit and Loss.
ii. Defined benefit plans: [Note R(6)(b)(ii)]
a)
The amounts recognised in Balance Sheet are as follows:
Particulars
A)
Present value of defined benefit
obligation
– Wholly funded
– Wholly unfunded
Less: Fair value of plan assets
Less: Unrecognised past service costs
Amount to be recognised as liability or
(asset)
B) Amounts reflected in the Balance Sheet
Liabilities
Assets
Net liability/(asset)
Net liability/(asset) - Current
Net liability/(asset) - Non-current
Gratuity plan
Post-retirement
medical benefit plan
Company pension plan
Trust-managed
provident fund plan
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
crore
350.30
1.14
351.44
323.91
–
363.34
1.11
364.45
311.80
–
–
103.57
103.57
–
1.11
–
106.56
106.56
–
1.25
–
188.93
188.93
–
0.41
– 1745.52
45.69
198.89
198.89 1791.21
– 1784.96
–
0.53
1665.13
10.81
1675.94
1648.23
–
27.53
52.65
102.46
105.31
188.52
198.36
6.25
27.71
27.53
–
27.53
27.53
–
52.65
–
52.65
52.65
–
102.46
–
102.46
5.92
96.54
105.31
–
105.31
5.77
99.54
188.52
–
188.52
13.00
175.52
198.36
–
198.36
11.98
186.38
7.60
–
7.60
27.72
–
27.72
(19.95) # 27.72 ##
27.55
–
b)
The amounts recognised in Statement of Profit and Loss are as follows:
Particulars
Gratuity plan
Post-retirement medical
benefit plan
Company pension plan
1
2
3
4
5
6
7
i
ii
iii
iv
v
Current service cost
Interest cost
Expected (return) on plan assets
Actuarial losses/(gains)
Past service cost
Losses/(Gains) on Divestiture
Actuarial gain/(loss) not recognised in
books
Total (1 to 7)
Amount included in “employee benefit
expenses”
Amount included as part of “finance cost”
Amount capitalised on New Product
Development
Amount recovered from S&A companies
Transfer pursuant to scheme of
arrangement
Total (i+ii+iii+iv+v)
Actual return on plan assets
2013-14
27.58
28.13
(21.39)
(7.94)
–
–
–
26.38
36.32
(10.89)
0.14
0.81
–
26.38
10.44
2012-13
19.36
28.57
(21.13)
25.43
–
–
–
52.23
41.95
6.61
0.08
0.57
3.02
52.23
34.55
2013-14
7.00
8.39
–
(5.80)
0.14
–
–
9.73
21.42
(11.69)
–
–
–
9.73
–
2012-13
6.07
7.91
–
9.33
0.18
–
2013-14
1.83
15.69
–
(14.38)
0.11
–
2012-13
0.98
15.45
–
9.14
0.11
–
–
23.49
7.45
15.67
–
–
0.37
23.49
–
–
3.25
6.78
(3.53)
–
–
–
3.25
–
–
25.68
0.82
25.95
–
(1.09)
–
25.68
–
crore
Trust-managed provident
fund plan
2013-14
107.66
128.28
(128.28)
45.03
–
–
(16.94)
135.75
107.66
28.09
2012-13
102.80
114.60
(114.60)
(15.99)
–
–
(0.08)
86.73
102.80
(16.07)
–
–
–
–
–
135.75
116.85
–
86.73
122.72
188
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
c)
The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances
thereof are as follows:
Particulars
Opening balance of the present value of
defined benefit obligation
Add: Current service cost
Add: Interest cost
Add: Contribution by plan participants
i)
ii)
iii)
Employer
Employee
Transfer in/(out) ~
Add/(less): Actuarial losses/(gains)
Less: Benefits paid
Add: Past service cost
Closing balance of the present value of
defined benefit obligation
Gratuity plan
As at
31-3-2014
As at
31-3-2013
Post-retirement medical
benefit plan
As at
31-3-2014
As at
31-3-2013
Company pension plan
crore
Trust-managed
provident fund plan
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
364.45
27.58
28.13
–
–
(25.11)
(18.89)
(24.72)
–
341.07
19.36
28.57
–
–
–
38.85
(63.40)
–
106.56
7.00
8.39
–
–
(7.01)
(5.80)
(5.57)
–
88.44
6.07
7.91
–
–
–
9.33
(5.19)
–
198.89
1.83
15.69
–
–
–
(14.38)
(13.10)
–
184.67 1675.94
1544.72
0.98 107.66 $ 102.80 $
114.60
15.45 128.28
–
–
– 170.39
– (154.98)
33.60
(11.35) (169.68)
–
9.14
–
–
175.46
–
(7.87)
(253.77)
–
351.44
364.45
103.57
106.56
188.93
198.89 1791.21
1675.94
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: Benefits paid
Closing balance of the plan assets
Gratuity plan
crore
Trust-managed
provident fund plan
As at
31-3-2014
311.80
21.39
(10.95)
51.48
(25.11)
–
(24.70)
323.91
As at
31-3-2013
291.66
21.13
13.42
48.99
–
–
(63.40)
311.80
As at
31-3-2014
1648.23
128.28
(11.43)
148.59
(154.98)
195.95
(169.68)
1784.96
As at
31-3-2013
1507.47
114.60
8.12
97.12
–
174.69
(253.77)
1648.23
Notes: 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 funds. 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. [Note Q(8)(ii)(f)(7) infra]
The Company expects to fund
(previous year: 108.96 crore) towards its trust-managed provident fund plan during the year 2014-15.
Employer’s and employees’ contribution paid in advance
26.38 crore (previous year: 51.53 crore) towards its gratuity plan and
86.74 crore
#
## Employer’s and employees’ contribution (net) for March is paid in April
$
~
Employer’s contribution to provident fund
Amount transferred out pursuant to scheme of arrangement [Note Q(14)].
189
Notes forming part of the Accounts (contd.)
NOTE [Q] (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
As at
31-3-2014
30%
11%
29%
2%
–
As at
31-3-2013
29%
15%
26%
2%
–
Trust-managed provident
fund plan
As at
31-3-2014
24%
15%
8%
–
12%
As at
31-3-2013
24%
13%
7%
–
14%
1%
20%
7%
1%
20%
7%
–
41%
–
–
42%
–
f)
Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):
1
2
3
4
5
6
7
8
9
Post-retirement medical benefit plan
Discount rate:
a) Gratuity plan
b) Company pension plan
c)
Expected return on plan assets
Annual increase in healthcare costs (see note below)
Salary Growth rate:
a) Gratuity plan
b) Company pension plan
As at
31-3-2014
As at
31-3-2013
9.19%
9.19%
9.19%
7.50%
5.00%
5.00%
6.00%
8.09%
8.09%
8.09%
7.50%
5.00%
5.00%
6.00%
Attrition rate:
a)
For post-retirement medical benefit 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 6%) for various age groups.
b)
The estimates of future salary increases, considered in actuarial valuation, take into account inflation, 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 Statement of Profit and Loss as actuarial loss.
The obligation of the Company under the post-retirement medical benefit 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 defined benefit obligation:
Particulars
Effect of 1% increase
Effect of 1% decrease
2013-14
2012-13
2013-14
2012-13
Effect on the aggregate of the service cost and
interest cost
Effect on defined benefit obligation
2.89
11.70
2.73
11.11
(2.24)
(9.37)
(2.10)
(8.84)
crore
190
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
g)
The amounts pertaining to defined benefit plans are as follows:
Particulars
As at
31-3-2014
As at
31-3-2013
As at
31-3-2012
As at
31-3-2011
As at
31-3-2010
crore
1
Post-retirement medical benefit plan (unfunded)
Defined benefit obligation
Experience adjustment plan liabilities
2
Gratuity plan (funded/unfunded)
Defined benefit obligation
Plan assets
Surplus/(deficit)
Experience adjustment plan liabilities
Experience adjustment plan assets
3
Post-retirement pension plan (unfunded)
Defined benefit obligation
Experience adjustment plan liabilities
4
Trust managed provident fund plan (funded/
unfunded)
102.46
14.10
351.44
323.91
(27.53)
5.49
(8.72)
188.52
(0.22)
105.31
1.62
364.45
311.80
(52.65)
26.26
13.01
87.01
6.60
91.31
7.91
78.99
5.73
341.07
291.66
(49.41)
30.52
(0.45)
336.33
308.38
(27.95)
30.00
4.48
320.41
279.30
(41.11)
30.67
2.21
198.36
(2.79)
184.03
23.21
162.14
17.46
135.61
(4.11)
Defined benefit obligation
Plan assets
Surplus/(deficit)
1791.21
1784.96
(6.25)
1675.94
1648.23
(27.71)
1544.72
1507.47
(37.25)
1396.21
1369.08
(27.13)
1199.77
1186.01
(13.76)
h) General descriptions of defined benefit plans:
1. Gratuity plan:
The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to
fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or
retirement whichever is earlier. The benefit vests after five 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 benefit plan:
The Post-retirement medical benefit 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 notified 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 benefit under this plan vests immediately on rendering of service.
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 Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment
risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/
gain occurs. Further, an amount of 27.55 crore (previous year: reversal of 18.68 crore) has been provided based
on actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan.
191
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Q(9) Disclosures pursuant to Accounting Standard (AS) 17 “Segment Reporting”
a)
Primary segments (business segments):
Particulars
Revenue - including excise duty
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Others
Elimination
Total
Result
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Others
Total
Inter-segment margin on capital jobs
Unallocated corporate income/(expenditure) (net)
Operating Profit (PBIT)
Interest expense
Interest income
Profit before tax (PBT)
Provision for current tax
Provision for deferred tax
Profit after tax (before extraordinary items)
Profit from extraordinary items
Profit after tax (after extraordinary items)
For the year ended 31-3-2014
Inter-segment
External
For the year ended 31-3-2013
Total
External Inter-segment
Total
crore
28131.44
8073.56
5909.30
2856.46
3416.31
2304.27
1504.36
–
52195.70
687.57
0.29
521.14
146.17
227.64
90.92
21.50
(1695.23)
–
34515.70
5131.83
5357.07
4290.63
3656.66
1897.02
2314.94
–
57163.85
599.61
8.23
189.01
31.14
250.68
45.85
32.02
(1156.54)
–
35115.31
5140.06
5546.08
4321.77
3907.34
1942.87
2346.96
(1156.54)
57163.85
3879.07
518.25
821.40
685.67
433.87
209.01
216.47
6763.74
(5.56)
6758.18
1090.89
7849.07
(1076.08)
494.92
7267.91
(1686.53)
(88.25)
5493.13
–
5493.13
28819.01
8073.85
6430.44
3002.63
3643.95
2395.19
1525.86
(1695.23)
52195.70
2866.92
590.12
970.08
507.07
358.00
403.35
222.80
5918.34
(17.04)
5901.30
375.17
6276.47
(954.75)
532.46
5854.18
(1405.51)
(135.79)
4312.88
71.61
4384.49
crore
Other information
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Others
Total
Unallocable corporate assets/liabilities
Segment assets/liabilities pertaining to discontinued operations
Total assets/liabilities
Segment assets
Segment liabilities
As at
31-3-2014
27789.02
6561.67
5192.15
5316.25
2729.62
1067.74
2386.05
51042.50
27262.08
–
78304.58
As at
31-3-2013
22374.89
6093.07
5057.17
4356.71
2434.57
1355.09
2035.70
43707.20
23023.68
5693.15
72424.03
As at
31-3-2014
16277.38
6273.85
2047.73
2674.95
1238.80
539.34
1088.32
30140.37
14502.38
–
44642.75
As at
31-3-2013
14172.04
5418.69
2466.44
2295.18
1153.48
759.08
894.31
27159.22
11518.94
4603.15
43281.31
192
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Capital expenditure
Depreciation, Amortisation
& Obsolescence (included
in segment expense)
Non-cash expenses other
than depreciation included
in segment expense
crore
Other Information
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Others
For the year
ended
31-3-2014
519.28
24.16
17.21
70.22
176.46
31.49
97.20
For the year
ended
31-3-2013
448.63
155.32
11.33
45.80
187.55
39.61
144.79
For the year
ended
31-3-2014
352.35
47.92
81.41
83.27
78.60
24.77
54.98
For the year
ended
31-3-2013
315.33
46.19
76.02
81.81
74.68
27.73
50.81
For the year
ended
31-3-2014
25.86
4.54
6.00
5.46
4.44
1.32
6.84
b)
Secondary segments (geographical segments):
For the year
ended
31-3-2013
33.54
9.22
6.76
8.88
5.63
1.96
10.66
crore
Particulars
External revenue by location of customers
Carrying amount of segment assets by location
Domestic
Overseas
Total
For the year
ended
31-3-2014
48035.29
For the year
ended
31-3-2013
44683.96
For the year
ended
31-3-2014
9128.56
For the year
ended
31-3-2013
7511.74
For the year
ended
31-3-2014
57163.85
For the year
ended
31-3-2013
52195.70
of assets
44547.59
37422.33
6494.91
6284.87
51042.50
43707.20
Cost incurred on acquisition of tangible and
intangible fixed assets
915.88
984.72
20.14
48.31
936.02
1033.03
c)
Segment reporting: segment identification, reportable segments and definition of each reportable segment:
i)
Primary/secondary segment reporting format:
[a]
[b]
The risk-return profile 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 identified its geographical segments as (i) domestic
and (ii) overseas. The secondary segment information has been disclosed accordingly.
ii)
Segment identification:
Business segments have been identified on the basis of the nature of products/services, the risk-return profile of individual
businesses, the organisational structure and the internal reporting system of the Company.
The operations of the Engineering and Construction segment which were hitherto reported as part of one single segment till
previous year have been reclassified into different segments based on internal restructuring and granular clarity of segment
information.
iii) Reportable segments:
Reportable segments have been identified as per the criteria specified in Accounting Standard (AS) 17 “Segment Reporting”.
iv) Segment composition:
•
•
Infrastructure segment comprises engineering and construction of building and factories, transportation
infrastructure, heavy civil infrastructure, power transmission & distribution and water & renewable energy projects.
Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power
generation equipment with associated systems and/or balance-of-plant packages.
• Metallurgical & Material Handling segment comprises turnkey solutions for ferrous (iron & steel making) and
non-ferrous (aluminium, copper, lead & zinc) metal industries, bulk material & ash handling systems in power, port,
steel and mining sector including manufacture and sale of industrial machinery and equipment.
•
Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment
& systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear
Power, Aerospace and Defence.
193
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
•
Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear
components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems
and control & automation products. Electrical & Automation also included medical equipment business in the previous
year (upto the date of sale).
• Machinery & Industrial Products segment comprises manufacture and sale of rubber processing machinery &
castings, manufacture and marketing of industrial valves (upto the date of transfer), construction equipment and
industrial products (upto the date of transfer).
• Others segment include realty, shipbuilding and integrated engineering services.
v)
Pursuant to the Scheme of Arrangement [Note Q(14)], the Hydrocarbon business undertaking of the Company, which was
hitherto reported as part of Engineering and Construction segment, stands transferred to and vested in L&T Hydrocarbon
Engineering Limited as a going concern with effect from April 1, 2013. Accordingly, figures reported as comparatives for
financial year 2012-13 exclude the discontinued operations of Hydrocarbon business undertaking.
vi) The Company has transferred at book value to its wholly owned subsidiaries, the business of manufacturing and marketing
of industrial valves effective July 1, 2013 and Cutting Tools business effective July 15, 2013. Both these businesses were
hitherto reported as part of the Machinery and Industrial Products segment.
Q(10) Disclosure of related parties/related party transactions pursuant to Accounting Standard (AS) 18 “Related party disclosures”
i.
List of related parties over which control exists and status of transactions entered during the year
Name of the related party
Relationship
Sr.
No.
1
L&T Cutting Tools Limited (formerly known as Tractor
Wholly owned Subsidiary
Transaction
entered during
the year (Yes/No)
Yes
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
Hi Tech Rock Products & Aggregates Limited
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 Hydrocarbon Engineering Limited (formerly known as
L&T Technologies Limited)
L&T Special Steels and Heavy Forgings Private Limited
PNG Tollway Limited
L&T Rajkot - Vadinar Tollway Limited
Kesun Iron & Steel Company Private 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
L&T Realty Limited
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Subsidiary*
Subsidiary*
Wholly owned Subsidiary
Wholly owned Subsidiary
Subsidiary*
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Subsidiary*
Subsidiary*
Subsidiary*
Subsidiary*
Wholly owned Subsidiary
Wholly owned Subsidiary
Subsidiary*
Subsidiary**
Subsidiary of L&T Infrastructure Development Projects Limited #
Subsidiary*
Subsidiary*
Wholly owned Subsidiary
Subsidiary*
Subsidiary*
Wholly owned Subsidiary
Wholly owned Subsidiary
Subsidiary*
Wholly owned Subsidiary
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
194
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Name of the related party
Relationship
Sr.
No.
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
L&T Asian Realty Project LLP
L&T Parel Project LLP
Chennai Vision Developers Private Limited
L&T Urban Infrastructure Limited ^^^
L&T South City Projects Limited
L&T Siruseri Property Developers Limited@@@
L&T Vision Ventures Limited
L&T Tech Park Limited
L&T Bangalore Airport Hotel Limited@
CSJ Infrastructure Private Limited
L&T Chennai Projects Private Limited @@
L&T Power Limited
L&T Cassidian Limited
L&T General Insurance Company Limited
L&T Aviation Services Private Limited
L&T Infocity Limited
L&T Hitech City Limited
Hyderabad International Trade Expositions Limited
Larsen & Toubro Infotech Limited
GDA Technologies Limited
L&T Finance Holdings Limited
L&T Finance Limited
L&T Investment Management Limited
L&T Mutual Fund Trustee Limited
L&T FinCorp Limited
L&T Infrastructure Finance Company Limited
L&T Infra Investment Partners Advisory Private Limited
L&T Infra Investment Partners Trustee Private Limited
L&T Vrindavan Properties Limited (formerly known as L&T
Unnati Finance Limited)
L&T Access Distribution Services Limited (formerly known
as L&T Access Financial Advisory Services 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
Nabha Power Limited
L&T Infrastructure Development Projects Limited
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 Vadodara Bharuch Tollway Limited
L&T Transportation Infrastructure Limited
L&T Western India Tollbridge Limited
Subsidiary of L&T Realty Limited #
Subsidiary of L&T Realty Limited
Wholly owned Subsidiary of L&T Realty Limited
Wholly owned subsidiary
Subsidiary of L&T Realty Limited#
Wholly owned Subsidiary of L&T South City Projects Limited #
Subsidiary of L&T Realty Limited #
Subsidiary of L&T Realty Limited #
Subsidiary of L&T Realty Limited #
Subsidiary of L&T Realty Limited #
Subsidiary of L&T Realty Limited #
Subsidiary*
Subsidiary*
Wholly owned Subsidiary
Wholly owned Subsidiary
Subsidiary*
Subsidiary of L&T Infocity Limited #
Subsidiary of L&T Infocity Limited #
Wholly owned Subsidiary
Wholly owned Subsidiary of Larsen & Toubro Infotech Limited
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 Holdings Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
Wholly owned Subsidiary of L&T Infrastructure Finance Company Limited
Wholly owned Subsidiary of L&T Infrastructure Finance Company Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
Wholly owned Subsidiary
Wholly owned Subsidiary of L&T Capital Company Limited
Wholly owned Subsidiary
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
Subsidiary*
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
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Transaction
entered during
the year (Yes/No)
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
195
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Sr.
No.
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
Name of the related party
Relationship
L&T Interstate Road Corridor Limited
International Seaports (India) Private Limited
L&T Port Kachchigarh Limited
L&T Ahmedabad - Maliya Tollway Limited
L&T Halol - Shamlaji Tollway Limited
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
L&T BPP Tollway Limited
L&T Deccan Tollways Limited
L&T Samakhiali Gandhidham Tollway Limited
Larsen & Toubro LLC
Larsen & Toubro Infotech, GmbH
Larsen & Toubro Infotech Canada Limited
Larsen & Toubro Infotech LLC
L&T Infotech Financial Services Technologies Inc.
GDA Technologies Inc. ^
L&T Infrastructure Development Projects Lanka (Private)
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 Infrastructure Development Projects Limited
Subsidiary of L&T Infrastructure Development Projects Limited
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#
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*
Wholly owned Subsidiary of Larsen & Toubro Infotech 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
Wholly owned Subsidiary of Larsen & Toubro Infotech Limited
Subsidiary of L&T Infrastructure Development Projects Limited #
Transaction
entered during
the year (Yes/No)
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
93
Peacock Investments Limited$
94 Mango Investments Limited$
95
96
97
98
99
100
101
102
103
104
105
106
Lotus Infrastructure Investments Limited$
L&T Diversified India Equity Fund
L&T Asset Management Company Limited$
L&T Realty FZE
Larsen & Toubro International FZE
Larsen & Toubro (Oman) LLC
Larsen & Toubro Electromech LLC
L&T Modular Fabrication Yard LLC
Larsen & Toubro (East Asia) SDN.BHD
Larsen & Toubro Qatar LLC
L&T Overseas Projects Nigeria Limited
L&T Electricals & Automation Saudi Arabia Company
Limited, LLC
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 Limited
Wholly owned Subsidiary
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 #
107
Larsen & Toubro Kuwait Construction General Contracting
Subsidiary of Larsen & Toubro International FZE ##
Company, W.L.L.
108
Larsen & Toubro (Qingdao) Rubber Machinery Company
Wholly owned Subsidiary of Larsen & Toubro International FZE
Limited
109
Qingdao Larsen & Toubro Trading Company Limited@@@
110
111
112
113
114
Larsen & Toubro Readymix Concrete Industries LLC
Larsen & Toubro Saudi Arabia LLC
Larsen & Toubro ATCO Saudia LLC
Tamco Switchgear (Malaysia) SDN. BHD
Tamco Electrical Industries Australia Pty Limited
Wholly owned Subsidiary of Larsen &Toubro (Qingdao) Rubber Machinery
Company Limited
Subsidiary of Larsen & Toubro International FZE ##
Subsidiary of Larsen & Toubro International FZE
Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
Wholly owned Subsidiary of Larsen & Toubro International FZE
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
196
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Sr.
No.
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
Name of the related party
Relationship
Subsidiary of Larsen & Toubro International FZE
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 #
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of Larsen & Toubro International FZE
Subsidiary*
Subsidiary*
Wholly owned Subsidiary of Tamco Switchgear (Malaysia) SDN. BHD
Wholly owned Subsidiary of L&T Finance Holdings Limited
Subsidiary of L&T Realty Limited #
PT Tamco Indonesia
Larsen & Toubro Heavy Engineering LLC
L&T Electrical & Automation FZE
Larsen & Toubro Consultoria E Projeto Ltda
Larsen & Toubro T&D SA Proprietary Limited
L&T East-West Tollway Limited
L&T Great Eastern Highway Limited
Servowatch System Limited
L&T Geostructure LLP
Larsen Toubro Arabia LLC
Henikwon Corporation SDN. BHD
L&T Housing Finance Limited
L&T Tejomaya Limited
L&T Valves Limited (formerly known as Audco India Limited) Wholly owned Subsidiary
Wholly owned Subsidiary
L&T Technology Services Limited
Wholly owned Subsidiary of CSJ Infrastructure Private Limited
CSJ Hotels Private Limited
Wholly owned Subsidiary of L&T Housing Finance Limited
L&T Consumer Finance Services Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
Family Credit Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
L&T Capital Markets Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
L&T Infra Debt Fund Limited
Wholly owned Subsidiary of L&T Mutual Fund Trustee Limited
L&T Trustee Services Private Limited
Wholly owned Subsidiary of L&T Finance Holdings Limited
L&T Fund Management Private Limited$$
Subsidiary of Larsen & Toubro Infotech Limited
Larsen & Toubro Infotech South Africa (PTY) Limited
Wholly owned Subsidiary of Larsen & Toubro International FZE
Thalest Limited
Wholly owned Subsidiary of Thalest Limited
Bond Instrumentation & Process Control Limited%
Wholly owned Subsidiary
L&T Construction Equipment Limited (formerly known as
L&T-Komatsu Limited) ^^
Wholly owned subsidiary of L&T Vrindavan Properties Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Subsidiary*
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Wholly owned Subsidiary of L&T Infrastructure Development Projects Limited
Subsidiary*
Kudgi Transmission Limited
L&T Sambhalpur Rourkela Tollway limited
Larsen & Toubro Hydrocarbon International Limited LLC
L&T Information Technology Services (Shanghai) Co. Limited Wholly owned Subsidiaryof Larsen & Toubro Infotech Limited
Kana Controls General Trading & Contracting Company W.L.L. Subsidiaryof L&T Electrical & Automation FZE##
141
142
143
144
145
146 Mudit Cement Private Limited
L&T IDPL Trustee Manager Pte Limited
147
PT Larsen & Toubro Hydrocarbon Engineering Indonesia
148
The Company holds more than one-half in nominal value of the equity share capital
*
The Company, together with its subsidiaries holds more than one-half in nominal value of the equity share capital
**
The Company has sold its shares on January 24, 2014
@
@@
The Company has sold its stake on October 3, 2013
@@@ The Company is in the process of being wound up
#
##
%
^
^^
^^^ The Company has been merged with L&T Realty Limited w.e.f. April 1, 2012 pursuant to High Court order
$
$$
The Company’s subsidiary/wholly owned subsidiary 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
The Company has been liquidated with effect from August 20, 2013
The Company has been dissolved with effect from March 28, 2014.
Associate became a wholly owned subsidiary w.e.f. April 15, 2013
The Company has been liquidated w. e. f. December 2, 2013
The Company has been merged with L&T Investment Management Limited w.e.f. November 22, 2013
Transaction
entered during
the year (Yes/No)
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
No
No
No
No
No
Yes
Yes
Yes
Yes
No
No
No
No
No
197
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
ii
(a) Names of the associates and joint ventures with whom transactions were carried out during the year:
Associate companies:
L&T-Chiyoda Limited
2
Salzer Electronics Limited
L&T Ramboll Consulting Engineers Limited
4 Magrtorq Private Limited
1
3
5
3
5
7
9
11
13
JSK Electricals Private Limited
Joint ventures (other than associates):
1 Metro Tunneling Group
Desbuild-L&T Joint Venture
L&T-AM Tapovan Joint Venture
The Dhamra Port Company Limited
6
2
Feedback Ventures Limited
L&T Hochtief Seabird Joint Venture
4 Metro Tunneling Chennai L&T SUCG Joint Venture
6
8
HCC-L&T Purulia Joint Venture
L&T Shanghai Urban Construction (Group) Corporation
Joint Venture
L&T-Shanghai Urban Construction (Group) CC27
10
L&T-Eastern Joint Venture
Delhi
L&T-Shapoorji Pallonji-TCS
12 Metro Tunneling Delhi L&T SUCG Joint venture
International Metro Civil Contractors
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 (Group Executive Chairman)
2 Mr. K. Venkataramanan (CEO & Managing Director)
Mrs. Jyothi Venkataramanan (wife)
3 Mr. M. V. Kotwal (Whole-time director)
4 Mr. R. Shankar Raman (CFO & Whole-time Director)
5 Mr. S. N. Subrahmanyan (Whole-time Director )
6 Mr. Shailendra Roy (Whole-time Director )
iii. Disclosure of related party transactions:
Nature of transaction/relationship/major parties
Sr.
no.
Amount Amounts for
major parties
Amount Amounts for
major parties
1 Purchase of goods & services (including commission paid)
Subsidiaries, including:
3040.06
4961.52
2013-14
2012-13
crore
L&T-MHI Turbine Generators Private Limited
L&T Valves Limited (formerly known as Audco India Limited)
L&T-MHI Boilers Private Limited
Associates & joint ventures, including:
L&T Valves Limited (formerly known as Audco India Limited)
Salzer Electronics Limited
JSK Electricals Private Limited
Total
2 Sale of goods/contract revenue & services
Subsidiaries, including:
L&T BPP Tollway Limited
L&T Metro Rail (Hyderabad) Limited
Nabha Power Limited
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
782.29
425.52
1042.90
–
120.11
26.73
1072.01
1671.24
1261.76
5.06
1205.39
–
2023.78
587.68
118.75
–
–
–
2390.13
43.17
830.56
5792.08
7112.83
45.84
7158.67
161.91
3201.97
6355.55
5.07
6360.62
198
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Nature of transaction/relationship/major parties
Sr.
no.
Amount Amounts for
major parties
Amount Amounts for
major parties
3 Purchase/lease of fixed assets
Subsidiaries, including:
20.33
34.65
2013-14
2012-13
crore
L&T Shipbuilding Limited
Larsen & Toubro International FZE
EWAC Alloys Limited
L&T Hydrocarbon Engineering Limited
(formerly known as L&T Technologies Limited)
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
Associates & joint ventures:
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
Total
4 Sale of fixed assets
Subsidiaries, including:
L&T Vrindavan Properties Limited
(formerly known as L&T Unnati Finance Limited)
L&T-MHI Boilers Private Limited
PT Tamco Indonesia
L&T Plastics Machinery Limited
Total
5 Sale of Receivables
Subsidiary:
L&T Finance Limited
Total
–
–
–
7.46
5.22
–
16.01
3.33
–
–
98.96
–
20.33
20.36
20.36
98.96
98.96
3.76
38.41
0.54
0.54
–
–
6 Subscription to equity and preference shares (including application
money paid)
Subsidiaries, including:
4655.77
1499.19
L&T Seawoods Private Limited
L&T Hydrocarbon Engineering Limited
(formerly known as L&T Technologies Limited)
L&T Power Development Limited
L&T Shipbuilding Limited
L&T Technology Services Limited
Associates & joint ventures:
AIC Structural Steel Construction (India) Private Limited
Total
7 Investment in Integrated Joint Ventures (Note [R]21)
Increase in Investment, including:
L&T-AM Tapovan Joint Venture
Metro Tunneling Chennai L&T SUCG Joint Venture
L&T-Shapoorji Pallonji & Co. Ltd. Joint Venture -TCS
Metro Tunneling Delhi-L&T SUCG Joint Venture
Delhi Metro Railway Corporation-SUCG 27
Total
Decrease in Investment, including:
L&T Eastern Joint Venture
International Metro Civil Contactors Joint Venture
Total
1505.99
1500.00
930.30
–
502.45
–
–
28.95
33.63
12.78
12.66
–
0.03
–
4655.77
104.29
104.29
0.03
0.03
0.03
1499.22
50.41
50.41
8.72
8.72
14.83
11.55
7.57
–
–
3.76
–
–
0.40
0.13
–
–
–
437.00
818.63
–
0.03
11.69
28.41
5.18
–
–
7.44
–
199
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Nature of transaction/relationship/major parties
Sr.
no.
Amount Amounts for
major parties
Amount Amounts for
major parties
2013-14
2012-13
crore
8 Purchase of investments from
Subsidiary:
L&T Capital Company Limited
Total
9 Sale of investments to
Subsidiaries, including:
L&T Capital Company Limited
Total
10 Buy back of shares by
Subsidiary:
L&T-Sargent & Lundy Limited
Total
11 Capital Reduction by
Subsidiary:
L&T Power Limited
Total
12 Charges paid for miscellaneous services
Subsidiaries, including:
Larsen & Toubro Infotech Limited
L&T Aviation Services Private Limited
Associates & joint ventures, including:
L&T-Chiyoda Limited
L&T-Ramboll Consulting Engineers Limited
Total
13 Rent paid, including lease rentals under leasing/hire purchase
arrangements:
Subsidiaries, including:
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
L&T Electrical & Automation FZE
L&T Infocity Limited
L&T Infotech Limited
L&T Sargent and Lundy Limited
Larsen and Toubro Kuwait Construction General
Contracting Company, W.L.L.
Associates & joint ventures:
L&T Valves Limited
(formerly known as Audco India Limited #)
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
61.56
61.56
–
–
7.50
7.50
153.42
153.42
89.35
6.65
96.00
2.48
1243.04
1243.04
1255.10
1255.10
1243.04
1242.45
–
–
–
–
80.14
0.45
80.59
4.70
–
–
29.54
27.28
–
0.45
1.08
0.50
1.59
–
1.04
–
–
2.01
–
–
61.56
–
7.50
153.42
33.10
27.14
6.48
–
–
–
1.29
0.57
–
0.36
0.66
1.35
Key management personnel
Total
0.01
4.71
0.01
4.50
200
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Nature of transaction/relationship/major parties
Sr.
no.
14 Charges for deputation of employees to related parties
Subsidiaries, including:
L&T Power Development Limited
L&T-Valdel Engineering Limited
L&T Parel Project LLP
2013-14
2012-13
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
67.24
52.39
Associates & joint ventures, including:
25.65
L&T-Chiyoda Limited
L&T Valves Limited (formerly known as
Audco India Limited #)
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
Total
15 Dividend received
Subsidiaries, including:
Larsen & Toubro Infotech Limited
L&T Infocity Limited
EWAC Alloys Limited
L&T Valves Limited (formerly known as
Audco India Limited #)
L&T Construction Equipment Limited (formerly known as
L&T-Komatsu Limited)
L&T Finance Holdings Limited
Associates & joint ventures, including:
Salzer Electronics Limited
L&T- Ramboll Consulting Engineers Limited
92.89
863.06
2.35
11.36
12.30
15.82
25.22
–
–
551.48
–
–
–
96.00
106.28
0.32
1.80
58.21
110.60
583.21
1.80
Total
865.41
585.01
# Out of the total dividend of
50.02
crore has been credited to investment account, being in the nature
of dividend out of pre-acquisition profits
100.05 crore declared,
16 Commission received, including those under agency arrangements
Subsidiaries, including:
9.70
0.96
L&T (Qingdao) Rubber Machinery Company Limited
L&T Kobelco Machinery Private Limited
L&T Cutting Tools Limited (formerly known as Tractor
Engineers Limited)
L&T Construction Equipment Limited (formerly known as
L&T-Komatsu Limited)
Associates & joint ventures:
L&T Construction Equipment Limited (formerly known as
L&T-Komatsu Limited)
Total
–
–
–
9.04
–
138.68
139.64
–
9.70
10.19
11.66
8.52
35.24
16.31
5.93
303.15
134.57
59.64
50.03
–
–
–
1.80
0.38
0.48
0.10
–
138.68
201
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Nature of transaction/relationship/major parties
Sr.
no.
Amount Amounts for
major parties
Amount Amounts for
major parties
17 Rent received, overheads recovered and miscellaneous income
Subsidiaries, including:
431.11
310.99
2013-14
2012-13
crore
Larsen & Toubro Infotech Limited
Larsen & Toubro (Oman) LLC
L&T-MHI Boilers Private Limited
L&T Geostructure LLP
L&T Hydrocarbon Engineering Limited
(formerly known as L&T Technologies Limited)
Associates & joint ventures, including:
L&T-Chiyoda Limited
Total
18 Interest received from
Subsidiaries, including:
L&T Chennai Projects Private Limited (formerly known as
L&T Arun Excello IT SEZ Private Limited)
L&T Realty Limited
L&T Urban Infrastructure Limited
Associates & joint ventures:
The Dhamra Port Company Limited
Total
19 Interest paid to
Subsidiaries, including:
L&T Finance Limited
L&T Transportation Infrastructure Limited
L&T Infrastructure Development Projects Limited
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
Larsen and Toubro Infotech Limited
L&T Shipbuilding Limited
L&T Seawoods Private Limited
Total
20 Transfer of Business to
Subsidiaries:
L&T Hydrocarbon Engineering Limited
(formerly known as L&T Technologies Limited)
L&T Valves Limited
(formerly known as Audco India Limited)
Total
75.18
–
–
60.35
129.58
1.66
–
116.88
–
41.00
3.49
–
–
4.87
5.34
6.41
10.74
1760.00
149.60
1.67
432.78
159.42
41.00
200.42
31.88
31.88
1909.60
1909.60
6.01
317.00
150.48
41.62
192.10
27.35
27.35
–
–
80.31
40.87
52.18
–
–
3.55
18.99
64.31
25.40
41.62
9.25
13.73
3.20
–
–
–
–
–
–
202
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Nature of transaction/relationship/major parties
Sr.
no.
Amount Amounts for
major parties
Amount Amounts for
major parties
21 Payment of Salaries/Perquisites (Other than commission)
13.32
21.72
2013-14
2012-13
crore
(Key management personnel)
A. M. Naik
K. Venkataramanan
V. K. Magapu *
M. V. Kotwal
Ravi Uppal **
S. N. Subrahmanyan
R. Shankar Raman
Shailendra Roy
Total
22 Commission to directors @
(Key management personnel)
A. M. Naik
K. Venkataramanan
V. K. Magapu *
M. V. Kotwal
Ravi Uppal **
S. N. Subrahmanyan
R. Shankar Raman
Shailendra Roy
Total
13.32
67.18
3.92
2.85
–
2.06
–
1.63
1.48
1.38
24.50
9.18
–
6.65
–
11.63
9.31
5.91
21.72
51.82
67.18
51.82
* Retired w.e.f. the close of working hours of September 30, 2012
** Ceased to be director w.e.f. the close of working hours of September 15, 2012
@ Commission to director comprises:
Sr. Particulars
no.
1
2
3
Commission
Contribution to provident fund on commission
Contribution to superannuation fund on commission
Total
2013-14
52.90
6.35
7.93
67.18
3.61
2.58
7.40
1.89
2.05
1.52
1.37
1.30
17.45
10.47
2.82
3.64
1.71
7.01
5.53
3.19
crore
2012-13
40.80
4.90
6.12
51.82
“Major parties”denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period.
203
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
iv Amount due to/from related parties:
Nature of transaction/relationship/major parties
Sr.
no.
1 Accounts receivable
Subsidiaries, including:
Nabha Power Limited
L&T Metro Rail (Hyderabad) Limited
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
2
Accounts payable (including acceptance & interest accrued)
Subsidiaries, including:
L&T-MHI Boilers Private Limited
L&T-MHI Turbine Generators Private Limited
As at 31-3-2014
As at 31-3-2013
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
2082.90
2563.66
66.63
2149.53
2540.89
1028.70
221.77
66.61
1134.94
823.60
70.81
2634.47
2970.87
Associates & joint ventures, including:
81.59
74.71
Metro Tunneling Chennai L&T SUCG Joint venture
L&T-Chiyoda Limited
Metro Tunneling Delhi - L&T SUCG Joint Venture
Salzer Electronic Limited
39.21
–
16.76
13.37
Total
3
Investment in Debt Securities
Subsidiaries:
2622.48
3045.58
36.96
111.83
L&T Infrastructure Finance Company Limited
L&T Finance Limited
–
36.96
Total
4
Loans & advances recoverable
Subsidiaries, including:
36.96
111.83
3292.70
1980.01
L&T Hydrocarbon Engineering Limited
(formerly known as L&T Technologies Limited)
L&T Realty Limited
Associates & joint ventures, including:
The Dhamra Port Company Limited
Key management personnel
Total
5
Advances against equity contribution
Subsidiaries, including:
L&T Shipbuilding Limited
L&T Seawoods Private Limited
L&T Realty Private Limited
518.10
0.01
3810.81
1208.37
775.68
841.04
490.30
421.86
–
699.00
480.57
0.01
2460.59
2264.85
Total
1208.37
2264.85
204
1345.20
–
70.81
1274.69
974.45
18.99
15.23
–
18.87
74.85
36.98
–
751.37
453.41
421.86
1143.99
699.00
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Sr.
no.
6
Nature of transaction/relationship/major parties
Unsecured loans (including lease finance)
Subsidiaries:
L&T Construction Equipment Limited
Nabha Power Limited
L&T Finance Limited
L&T Seawoods Private Limited
L&T Cutting Tools Limited
(formerly known as Tractor Engineers Limited)
As at 31-3-2014
As at 31-3-2013
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
113.80
39.17
50.00
13.00
–
28.30
22.50
Total
113.80
39.17
7
Advances received in the capacity of supplier of goods/services
classified as “advances from customers” in the Balance Sheet
Subsidiaries, including:
694.21
1289.74
Nabha Power Limited
L&T Metro Rail (Hyderabad) Limited
L&T Seawoods Private Limited
L&T BPP Tollway Limited
Total
8
Due to whole time directors
(Key management personnel)
A. M. Naik
K. Venkataramanan
V. K. Magapu *
M. V. Kotwal
Ravi Uppal **
S. N. Subrahmanyan
R. Shankar Raman
Shailendra Roy
1289.74
40.80
694.21
52.90
110.83
346.79
153.83
–
19.29
7.23
–
5.24
–
9.16
7.33
4.65
Total
52.90
40.80
*
Retired w.e.f. the close of working hours of September 30, 2012
** Ceased to be director w.e.f. the close of working hours of September 15, 2012
“Major parties” denote entities accounting for 10% or more of the aggregate for that category of transaction during respective
period.
v. Notes to related party transactions:
The Company has a marketing and selling arrangement with L&T-Construction Equipment Limited (formerly known as L&T-
Komatsu Limited), a subsidiary company, valid for the period of 5 (Five) years from April 16, 2013. As per the terms of the
arrangement, the Company is an agent of L&T-Construction Equipment Limited to market 300 CK Hydraulic Excavators and
hydraulic equipment & parts manufactured by L&T-Construction Equipment Limited and to provide after sales product support
for Excavators. Pursuant to the aforesaid arrangement, L&T-Construction Equipment Limited is required to pay commission to
the Company at specified rates on the sales effected by the Company.
The financial impact of the aforesaid arrangement has been included in/disclosed vide Note Q(10)(iii) supra.
205
–
–
39.17
–
–
369.32
445.70
151.70
159.66
13.74
8.24
2.22
2.87
1.35
5.52
4.35
2.51
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Q(11) Disclosure in respect of Leases pursuant to Accounting Standard (AS) 19 “Leases”
(i) Where the Company is a Lessor:
a.
The Company has given on finance leases certain items of plant and equipment. The leases have a primary period that
is fixed and non-cancellable. The leases are cancellable upon payment by the lessee of an additional amount such that,
at inception, continuation of the lease is reasonably certain. There are no exceptional/restrictive covenants in the lease
agreement.
b.
The total gross investment in these leases as on March 31, 2014 and the present value of minimum lease payments receivable
as on March 31, 2014 is as under:
1. Receivable not later than 1 year
2. Receivable later than 1 year and not later than 5 years
Particulars
3. Receivable later than 5 years
Gross investment in lease (1+2+3)
Less: Unearned finance income
Present value of minimum lease payments receivable
* Long term loans and advances [Note G(I)] - Nil (previous year: 0.06 crore) and
Short term loans and advances [Note H(V)] - 0.08 crore (previous year: 0.44 crore)
(ii) Where the Company is a lessee:
a)
Finance leases:
crore
31-3-2014
31-3-2013
0.09
–
–
0.09
0.01
0.08*
0.51
0.06
–
0.57
0.07
0.50*
i.
[a]
Assets acquired on finance lease mainly comprise plant and equipment, vehicles and personal computers. The
leases had a primary period, which was fixed and non-cancellable. In the case of vehicles, the Company had 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 were no exceptional/restrictive covenants in
the lease agreements.
[b]
The minimum lease rentals and the present value of minimum lease payments in respect of assets acquired under
finance leases are as follows:
Particulars
Payable not later than 1 year [Note (D) (II)]
Total
Less: Future finance charges
Present value of minimum lease payments
[Note (C) (I) (e)]
Minimum lease payments
Present value of minimum
lease payments
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
crore
–
–
–
–
42.66
42.66
3.49
39.17
–
–
39.17
39.17
ii. Contingent rent recognised/(adjusted) in the Statement of Profit and Loss in respect of finance leases: Nil (previous
year: Nil)
206
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
b) Operating leases:
i.
The Company has taken various commercial premises and plant and equipment 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.
2.
Payable not later than 1 year
Payable later than 1 year and not later than 5 years
Total
crore
Minimum lease payments
As at
31-3-2014
As at
31-3-2013
0.15
–
0.15
1.75
0.17
1.92
[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: 84.06 crore excluding 2.77 crore
pertaining to discontinued operations).
iv. Contingent rent recognised in the Statement of Profit and Loss: Nil (previous year: Nil).
Q(12) Basic and diluted earnings per share [EPS] computed in accordance with pursuant to Accounting Standard (AS) 20 “Earnings per
Share”.
Basic
Particulars
Before extraordinary items
After extraordinary items
2013-14
2012-13#
2013-14
2012-13#
Profit after tax as per accounts ( crore)
Weighted average number of shares outstanding
Basic EPS ( )
Diluted
Profit 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
A
B
A/B
A
B
C
5493.13
4839.04
5493.13
4910.65
92,54,16,187 92,08,89,827 92,54,16,187 92,08,89,827
59.36
52.55
59.36
53.33
5493.13
4839.04
5493.13
4910.65
92,54,16,187 92,08,89,827 92,54,16,187 92,08,89,827
56,56,640
75,76,279
56,56,640
75,76,279
for diluted EPS
Diluted EPS ( )
Face value per share ( )
D=B+C 93,10,72,827 92,84,66,106 93,10,72,827 92,84,66,106
A/D
59.00
52.12
59.00
52.89
2
2
2
2
Note: Potential equity shares that could arise on conversion of FCCB’s are not resulting into dilution of EPS. Hence, they have not
been considered in working of diluted EPS in accordance with Accounting Standard (AS) 20 “Earning per share”.
#
The basic and diluted EPS for the year 2012-13 have been restated pursuant to the issue of bonus equity shares in the ratio of
1:2 [one bonus equity share of 2 each for every two equity shares of 2 each held].
207
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Q(13) Major components of deferred tax liabilities and deferred tax assets: pursuant to Accounting Standard (AS) 22 “Accounting for Taxes
on Income”
Particulars
Deferred tax liabilities:
Deferred tax
liabilities/
(assets)
As at
31-3-2013
Less:
Transfer
out*
Charge/
(credit) to
Statement
of Profit
and Loss
Charge/
(credit) to
Hedging
reserve**
crore
Deferred tax
liabilities/
(assets)
As at
31-3-2014
Difference between book and tax depreciation
642.97
52.33
53.15
_
643.79
Gain on derivative transactions to be offered for tax purposes in the
year of transfer to the Statement of Profit and Loss
Disputed statutory liabilities paid and claimed as deduction for tax
purposes but not debited to the Statement of Profit and Loss
Other items giving rise to timing differences
23.58
82.32
94.09
_
_
_
_
6.83
30.41
11.42
49.53
_
_
93.74
143.62
911.56
Total
Deferred tax (assets):
842.96
52.33
114.10
6.83
Provision for doubtful debts and advances debited to the Statement
of Profit and Loss
(221.83)
(8.06)
4.30
_
(209.47)
Loss on derivative transactions to be claimed for tax purposes in the
year of transfer to the Statement of Profit and Loss
(194.97)
(76.34)
_
25.27
(93.36)
Unpaid statutory liabilities/provision for compensated absences
debited to the Statement Profit and Loss
Other items giving rise to timing differences
Total
Net deferred tax liability/(assets)
Previous year
(131.99)
(15.28)
(26.25)
(51.95)
_
(3.90)
(600.74)
(99.68)
(25.85)
242.22
(47.35)
88.25
_
_
25.27
32.10
133.01
–
135.79
(26.58)
(142.96)
(55.85)
(501.64)
409.92
242.22
*
In terms of the Scheme of Arrangement, net deferred tax asset of 47.35 crore as on 31-03-2013 pertaining to the discontinued
operations have been transferred to L&T Hydrocarbon Engineering Limited.
** The amount of (122.25 crore) [previous year: (332.87 crore)] represents net gains/(losses) on effective hedges recognised in
hedging reserve, applying the principles of hedge accounting set out in the Accounting Standard (AS) 30 “Financial Instruments:
32.10 crore (previous year
Recognition and Measurement”. The amount is after considering the net deferred tax liability of
net deferred tax asset: 26.58 crore).
Q(14) Disclosure for transfer of Hydrocarbon business undertaking pursuant to the Scheme of Arrangement:
a) A Scheme of Arrangement (referred to as “Scheme of Arrangement” in Notes forming part of Accounts) under Sections 391-394
of the Companies Act, 1956 was approved by the shareholders of the Company on August 12, 2013, for inter alia transfer of
the Hydrocarbon business undertaking along with related assets and liabilities into L&T Hydrocarbon Engineering Limited.
b)
c)
The Scheme of Arrangement was sanctioned by the High Court of Judicature at Bombay vide its order dated December 20, 2013,
and it came into effect on January 16, 2014 (“Effective Date”).
Pursuant to the declaration of the effective date of the Scheme of Arrangement, the Hydrocarbon business undertaking of
the Company stands transferred to and vested in L&T Hydrocarbon Engineering Limited as a going concern with effect from
April 1, 2013 (the appointed date).
d)
The Hydrocarbon business undertaking of the Company was engaged in executing engineering, procurement and construction
contracts on turnkey basis in the hydrocarbon upstream and mid and down-stream sectors.
208
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
e)
The Scheme of Arrangement also provides for the transfer of the assets and liabilities of the Hydrocarbon business to L&T
Hydrocarbon Engineering Limited. Accordingly, the following assets and liabilities have been transferred to L&T Hydrocarbon
Engineering Limited for a lump sum cash consideration of 1760 crore:
Particulars
ASSETS:
Fixed Assets
Long term loans and advances
Deferred tax Asset (Net)
Current assets
LIABILITIES:
Non-current Liabilities
Current Liabilities
Net Assets
Specific identified reserves:
Hedging Reserve (Debit balance)
Net Asset value & specific identified reserves of Hydrocarbon business
undertaking
Cash consideration received from L&T Hydrocarbon Engineering Limited
Reported as part of “miscellaneous expenses” under Note O
923.38
86.95
47.35
5512.91
35.35
4923.49
crore
6570.59
4958.84
1611.75
148.27
1760.02
1760.00
0.02
f)
The carrying amount of assets and liabilities pertaining to the discontinued operation of Hydrocarbon business undertaking as
on March 31, 2013 are as under:
Fixed Assets
Current Assets
Current Liabilities
Long term loans and advances
Non-current Liabilities
Particulars
crore
923.38
5512.91
4923.49
86.95
35.35
g)
The amount of revenue and expenses pertaining to the discontinued operation of Hydrocarbon business undertaking for the
financial year 2012-13 are as under:
Revenue
Expenses
Pre-tax Profit
Tax
Profit after tax
Particulars
crore
9544.37
8765.51
778.86
252.70
526.16
Q(15) Disclosures in respect of joint ventures pursuant to Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures”
a)
List of Joint Ventures
Sr.
no.
1
2
3
4
Name of joint venture
Description of interest/(description of job)
L&T-Hochtief Seabird Joint Venture
International Metro Civil Contractors
HCC-L&T Purulia Joint Venture
Desbuild - L&T Joint Venture
5 Metro Tunneling Group
Jointly Controlled Entity (Construction of breakwater,
Karwar)
Jointly Controlled Entity (Construction of Delhi Metro
Corridor - Phase I Tunnel Project)
Jointly Controlled Entity (Construction of Pumped Storage
Project)
Jointly Controlled Entity (Renovation of US Consulate,
Chennai)
Jointly Controlled Entity (Construction of Delhi Metro
Corridor - Phase II Tunnel Project)
Proportion of
Ownership
Interest (%)
90
Country
of
residence
India
26
43
49
26
India
India
India
India
209
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Sr.
no.
6
7
8
Name of joint venture
Description of interest/(description of job)
L&T-AM Tapovan Joint Venture
L&T-Shanghai Urban Corporation Group
Joint Venture
L&T-Eastern Joint Venture
9 Metro Tunneling Chennai-L&T SUCG
Joint Venture
10 Metro Tunneling Delhi-L&T SUCG Joint
11
12
13
14
Venture
L&T-Shapoorji Pallonji & Co. Limited
Joint Venture-TCS
L&T-Shanghai Urban Construction
(Group) Joint Venture CC27 Delhi
Civil Works Group-Riyadh Metro
Aktor-Larsen & Toubro-Yapi Merkezi-
stfa-Al Jaber Engineering Joint Venture
15
L&T-Delma Mafraq JV
16
L&T-KBL (UJV) Hyderabad
17
L&T-HCC Joint Venture
18
19
Patel-L&T Consortium
L&T-SVEC Joint Venture
20
L&T-KBL-MAYTAS UJV
21
L&T-BRAPL Joint Venture (package II)
22
L&T-BRAPL Joint Venture (package III)
23
L&T and Scomi Engineering BHD.Joint
Venture
Jointly Controlled Entity (Construction of Head Race Tunnel
for Tapovan Vishnugad Hydro Electric project at Chamoli,
Uttaranchal)
Jointly Controlled Entity (Construction of Twin Tunnel
between IGI Airport and Sector 21 for DMRC)
Jointly Controlled Entity (Construction and maintenance of
295 Residential Units at Dubai)
Jointly Controlled Entity (Construction of UG Stations at
Nehru Park, KMC and Pachiyappas College and associated
tunnels for CMRL)
Jointly Controlled Entity (Construction of Delhi Metro
Corridor - Tunnel Project - Phase CC5)
Jointly Controlled Entity (Design & Build work for
Construction of TCS SEZ at Kolkata, West Bengal)
Jointly Controlled Entity (Design and Construction of
Tunnel for Delhi MRTS Project for Phase-III)
Jointly Controlled Entity (Contract for Detail Design,
Construction and Commissioning of Package 2 of The
Riyadh Metro Project)
Jointly Controlled Entity (Design & Build Package 3,Gold
Line underground,a part of the construction of the Qatar
Integrated Railway Project)
Joint Controlled Entity (Improvement of Mafraq to Al
Ghwaifat Border Post Highway Section No. 4A)
Jointly Controlled Operations (Investigation, Design, Supply
and Erection of necessary lift systems with all electrical and
mechanical components including surge protection systems)
Jointly Controlled Operations (Four laning and strengthening
of existing two lane sections from 240 km to 320 km NH-2)
Jointly Controlled Operations (Parbati Hydro Electric Project)
Jointly Controlled Operations (Lift Irrigation Project at
Hyderabad)
Jointly Controlled Operations (Transmission of 735
Mld treated water associated with all Civil, Electrical &
Mechanical works at Hyderabad)
Jointly Controlled Operations (Design, Supply, Erection,
Testing & Commissioning of 25 KV, 50HZ, Single Phase,
Traction Over-head Equipment, Switching Stations, SCADA
and other associated works, in the state of Karnataka and
Andhra Pradesh, India)
Jointly Controlled Operations (Design, Supply, Erection,
Testing & Commissioning of 25 KV, 50HZ, Single Phase,
Traction Over-head Equipment, Switching Stations, and
other associated works, in the state of Karnataka and
Andhra Pradesh, India)
Jointly controlled operations (Implementation of monorail
system in Mumbai)
Proportion of
Ownership
Interest (%)
65
Country
of
residence
India
51
65
75
60
50
68
29
22
60
–
–
–
–
–
–
–
–
India
UAE
India
India
India
India
Saudi
Arabia
Qatar
UAE
India
India
India
India
India
India
India
India
Note: The Consortium of Toyo Engineering Company and L&T, a jointly controlled operations for the execution of naptha cracker associated
unit of IOCL, Panipat has been excluded from the above list of joint ventures since it pertains to discontinued operations.
210
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
b)
Financial interest in jointly controlled entities (to the extent of the Company’s share)
As at March 31, 2014
Assets
Liabilities
Income
Expenses
For the Year 2013-14
Tax
Company’s share
Net profit
(Note K)
Sr.
no.
1
2
Name of Integrated
joint ventures/jointly
controlled entities
L&T-Hochtief Seabird Joint
Venture
International Metro Civil
Contractors
3 Metro Tunneling Group
4
5
6
7
8
L&T-Shanghai Urban
Corporation Group Joint
Venture
HCC-L&T Purulia Joint
Venture
L&T-AM Tapovan Joint
Venture
Desbuild-L&T Joint
Venture
L&T-Eastern Joint Venture
9 Metro Tunneling Chennai
- L&T SUCG JV-CMRL
10 Metro Tunneling Delhi -
L&T SUCG Joint Venture
11
12
L&T-Shapoorji Pallonji &
Co. Ltd Joint Venture-TCS
L&T-Shanghai Urban
Construction (Group) Joint
Venture-CC27 Delhi
Total
Share of Net Assets in
Jointly Controlled Entities
47.21
(46.89)
3.85
(3.84)
7.23
(7.03)
4.81
(5.08)
2.91
(2.91)
55.20
0.12
(–) *
–
(0.02)
1.17
(3.00)
0.63
(0.77)
–
(–) €
11.32
(57.98) (30.08)
–
(–) ##
0.28
(-0.01)
18.60
(32.57)
110.04
0.46
(0.41)
180.01
(141.76) (181.09)
196.00
(117.23) (110.12)
166.22
(52.24) (92.51)
279.39
250.88
(103.65) (18.57)
66.15
99.55
0.01
(0.01)
0.03
(0.36)
-0.47
(-1.63)
0.02
(0.47)
0.01
(–) &
11.32
(44.73)
– Ω
(–) @@
-1.61
(8.04)
167.47
(170.57)
194.23
(108.51)
160.27
(92.24)
273.87
(18.57)
666.72
834.16
(571.17) (436.57)
804.91
(441.87)
0.43
(–)
–
(–)
0.22
(0.69)
0.19
(0.09)
–
(–) ^
–
(–)
–
(–)
–
(–)
3.82
(3.41)
0.55
(0.50)
1.84
(0.08)
1.71
(–)
8.75
(4.77)
71.02
(66.09)
12.21
(12.23)
22.37
(21.68)
17.97
(17.82)
2.98
(2.98)
146.91
(141.00)
0.34
(0.04)
24.72
(36.63)
167.88
(170.65)
118.65
(123.54)
104.97
(57.43)
263.53
(103.65)
953.55
(753.74)
286.83
(182.57)
crore
Net loss
(Note O)
0.32
(–) $
0.03
(0.34)
–
(–)
–
(–)
0.01
(–) @
–
(14.65)
– #
(–) %
–
(7.63)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
0.48
(1.48)
0.42
(0.21)
–
(–)
–
(–)
–
(–)
2.07
(–)
8.73
(7.11)
1.22
(1.11)
4.11
(0.19)
3.81
(–)
20.86
(10.10)
0.36
(22.62)
Amounts less than 0.01 crore:
Current year: Ω 8258, # 8258
Previous year: * ( 39313), $ ( 11925), € ( 46549), & ( 47781), ^ ( 7326), @ ( 8558), ## ( 520), @@ ( 8289), % ( 7769)
Notes:
i.
ii.
iii.
iv.
v.
Figures in brackets( ) relate to previous year.
Contingent liabilities, if any, incurred in relation to interest in joint ventures as at March 31, 2014: Nil (previous year Nil) and share in Contingent
liabilities incurred jointly with other ventures as at March 31, 2014: Nil (previous year Nil).
Share in contingent liabilities of joint ventures themselves for which the Company is contingently liable as on March 31, 2014:
(previous year 65.95 crore).
Contingent liabilities in respect of liabilities of other ventures of joint ventures as on March 31, 2014: Nil (previous year Nil).
Capital commitments, if any, in relation to interest in joint ventures as at March 31, 2014: Nil (previous year 37.18 crore).
65.86 crore
211
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Q(16) Disclosures pursuant to Accounting Standard (AS) 29 “Provisions, Contingent Liabilities and Contingent Assets”:
a) Movement in provisions:
Particulars
Class of Provisions
Product
warranties
Expected
tax liability
in respect of
indirect taxes
Litigation
related
obligations
Balance as at 1-4-2013
Provision transferred due to transfer of business@
Additional provision during the year
Provision used/reversed during the year #
Balance as at 31-3-2014 (5=1-2+3-4)
9.36
–
4.00
(3.65)
9.71
77.53
(14.10)
23.97
(15.04)
72.36
9.05
(0.78)
–
–
8.27
crore
Total
409.55
(31.08)
107.02
(227.26)
258.23
Contractual
rectification
cost-
construction
contracts
313.61
(16.20)
79.05
(208.57)
167.89
In terms of the scheme of arrangement, provisions as per Accounting Standard (AS) 29, “Provisions, Contingent Liabilities and Contingent
Assets” as on 1-4-2013 pertaining to Hydrocarbon business undertaking have been transferred to L&T Hydrocarbon Engineering Limited
[Note Q(14)].
includes provision used during the year 0.64 crore (previous year: 0.64 crore excluding 47.00 crore pertaining to the discontinued
operations being provision used/reversed during the financial year 2012-13).
Sr.
no.
1
2
3
4
5
@
#
b) Nature of provisions:
i.
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, 2014 represents the
amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected
to be within a period of five years from the date of Balance Sheet.
ii.
Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-
collection of declaration forms.
iii. Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in
appeal.
iv. Contractual rectification 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”.
c) Disclosure in respect of contingent liabilities is given as part of Note (l) to the Balance Sheet.
Q(17) In line with the Company’s risk management policy, the various financial 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, 2014 are as under :
Category of derivative instruments
i) For hedging foreign currency risks
a) Forward contracts for receivables including firm commitments and highly probable
forecasted transactions
b) Forward contracts for payables including firm commitments and highly probable
forecasted transactions
c) Currency Swaps
d) Option Contracts
212
crore
Amount of exposures hedged
As at
31-3-2014
As at
31-3-2013
4727.46
5658.50 *
8898.31
8692.91 $
2296.93
4051.11
160.11
21.99
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Category of derivative instruments
ii) For hedging commodity price risks
Commodity Futures
b) Unhedged foreign currency exposures as at March 31, 2014 are as under :
Unhedged Foreign Currency Exposures
crore
Amount of exposures hedged
As at
31-3-2014
As at
31-3-2013
307.01
242.59
As at
31-3-2014
crore
As at
31-3-2013
i)
Receivables, including firm commitments and highly probable forecasted transactions
39564.88 20584.26 #
ii) Payables, including firm commitments and highly probable forecasted transactions
34795.48 15616.90%
*
$
#
excluding 2281.74 crore pertaining to discontinued operations.
excluding 1353.80 crore pertaining to discontinued operations.
excluding 6476.27 crore pertaining to discontinued operations.
% excluding 8606.34 crore pertaining to discontinued operations.
Note: As per the Royal Monetary Authority of Bhutan, Bhutan’s national currency is pegged to the Indian rupee at parity.
Accordingly, the unhedged foreign currency exposures reported above exclude exposures [Receivables amounting to
345.34 crore (previous year 982.00 crore) and payables amounting to 121.46 crore (previous year 701.25 crore)]
with respect to Bhutan Ngultrum (BTN).
Q(18) Auditors’ remuneration (excluding service tax) and expenses charged to the accounts:
Particulars
For Audit fees
For Taxation matters
For Other services
For reimbursement of expenses
@
*
excluding 0.17 crore pertaining to the discontinued operations.
excluding 0.02 crore pertaining to the discontinued operations.
Q(19) Value of imports (on C.I.F. basis):
Raw materials
Components and spare parts
Capital goods
Particulars
crore
2013-14
2012-13
1.08
0.26
2.05
0.24
1.08
0.26
1.86 @
0.11 *
2013-14
1954.36
1701.93
205.37
crore
2012-13*
1937.00
2450.27
270.43
*
The above excludes the value of imports (on C.I.F. basis) pertaining to the discontinued operations for the financial year 2012-13,
as under:
Raw materials
Components and spare parts
Capital goods
Particulars
crore
2012-13
24.34
702.94
5.49
213
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Q(20) Expenditure in foreign currency:
Particulars
On overseas contracts
Royalty and technical know-how fees
Interest
Professional/consultation fees
Other matters
crore
2013-14
2012-13*
4948.13
3912.95
5.59
147.40
183.12
719.10
7.03
157.11
216.99
510.59
*
The above excludes the expenditure in foreign currency pertaining to the discontinued operations for the financial year 2012-13,
as under:
Particulars
On overseas contracts
Interest
Professional/consultation fees
Other matters
Q(21) Dividends remitted in foreign currency:
crore
2012-13
4341.23
4.32
25.47
614.27
crore
Particulars
2013-14
2012-13
Dividend for the year ended March 31, 2013 to:
i.
ii.
11 non-resident shareholders on 20,826 shares held by them (previous year: 12 non-residents
on 15,700 shares) on 26-8-2013
Custodian of global depositary receipts on 2,93,92,990 shares (previous year: 1,96,66,240
shares) on 26-8-2013
Q(22) Earnings in foreign exchange:
Export of goods [including 942.14 crore on FOB basis (previous year: 978.53 crore)]
Construction and project related activities
Particulars
Export of services
Commission
Interest received
Other receipts
0.03
0.03
36.24
32.45
crore
2013-14
2012-13*
1006.72
6728.40
1614.39
6.73
0.02
53.49
1016.03
5254.47
1296.25
19.08
0.05
63.43
*
The above excludes the earnings in foreign exchange pertaining to the discontinued operations for the financial year 2012-13,
as under:
Construction and project related activities
Export of services
Other receipts
Particulars
214
crore
2012-13
5439.42
23.52
11.44
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Q(23) The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act]
as at March 31, 2014. 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
crore
2013-14
2012-13
51.49
52.74 @
0.11
0.05
Payment made to suppliers (other than interest) beyond the appointed day during the year
19.89
8.47 *
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
@
*
excluding 14.43 crore pertaining to the discontinued operations.
excluding 0.18 crore pertaining to the discontinued operations.
–
0.04
0.14
0.69
–
0.02
0.08
0.32
Q(24) There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2014.
Q(25) Details of sales, raw materials and components consumed, manufacturing work-in-progress and purchase of stock-in-trade:
a)
Sales:
Class of goods
(i) Manufacturing and trading activity:
Switchgear, all types
Earthmoving and agriculture machinery and spares
Valves and accessories
Industrial Machinery
Electricity meters
Rubber processing machinery and accessories
Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery and
solvent extraction plants, evaporator and crystallizer plants and pollution control equipment
in aggregate
Industrial electronic control panels
Steel structural fabrication
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
Defence equipment, all types
Parts and accessories for Prime movers, Boilers, Steam Generating Plants and Nuclear reactors
Transmission line tower
Design, development and manufacturing of airborne assemblies, system and equipment for
Aircrafts, Helicopters & unmanned aerial vehicles and equipment for the aviation sector
Patient monitoring system and accessories
Electro surgical unit and accessories
Ship auxiliaries and components of mechanised sailing vessels
Others
Total
(ii) Property development activity:
2013-14
crore
2245.06
753.48
539.92
431.54
413.12
175.34
115.03
102.03
53.62
53.28
44.25
38.75
15.27
0.30
–
–
–
1195.83
6176.82
447.84
2012-13
crore
1994.40
656.97
853.74
473.69
311.14
293.05
48.73
97.15
38.40
140.11
35.99
0.34
39.06
1.67
38.42
2.61
0.71
1380.33
6406.51
73.79
215
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
Class of goods
(iii) Construction and project related activity:
Civil/Infrastructure/Mechanical/Electrical Construction
Thermal/Hydro/Gas based power plants
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.
Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery and
solvent extraction plants, evaporator and crystallizer plants and pollution control equipment
in aggregate
Defence equipment, all types
Nuclear purpose equipment, de-aerators, ultra high pressure vessels including multiwall
2013-14
crore
2012-13
crore
38810.68
5045.99
32884.98
8023.74
1883.39
1003.41
699.24
488.07
395.07
445.77
vessels, high pressure heat exchangers and high pressure heaters in aggregate
101.47
117.91
Design, development and manufacturing of airborne assemblies, system and equipment for
Aircrafts, Helicopters & unmanned aerial vehicles and equipment for the aviation sector
Parts and accessories for Prime movers, Boilers, Steam Generating Plants and Nuclear reactors
Ship auxiliaries and components of mechanised sailing vessels
Commercial ships
Others
Total
(iv) Servicing
(v) Commission
(vi) Engineering and service fees
Total Sales & service (i) to (vi)-[Note K]
57.41
15.99
0.07
(150.21)
909.45
14.13
9.34
1.65
(71.26)
588.34
47861.55
43413.08
422.47
118.64
1539.86
406.08
158.77
1203.54
56567.18
51661.77
Note: Figures reported as comparatives for financial year 2012-13 exclude the discontinued operations.
b) Raw materials and components consumed:
i)
Class of goods:
Class of goods
Power plant & machinery components
Chemical plant components
Nuclear equipment components, including items for oil & gas etc. industries, in aggregate
Steel
Switchgear components
Electronic devices, test & measuring instruments and industrial electronic control panel
components
Non-ferrous metals
Metering & protection systems and medical equipment and components
Industrial machinery components
Others
Sub-total
Less: Sale value of scrap
Total [Note M]
2013-14
crore
2266.26
162.09
40.91
1322.34
858.59
31.41
163.24
–
20.17
1245.41
6110.42
107.62
6002.80
2012-13
crore
4431.24
152.26
11.74
700.91
857.39
46.57
132.17
35.16
11.54
1291.53
7670.51
95.58
7574.93
Note: Figures reported as comparatives for financial year 2012-13 exclude the discontinued operations.
216
Notes forming part of the Accounts (contd.)
NOTE [Q] (contd.)
ii) Classification of goods:
Classification of goods
Imported (including through canalising agencies)
Indigenous
Total
2013-14
2012-13
% to total
consumption
crore
% to total
consumption
crore
37
63
2200.97
3801.83
34
66
2560.07
5014.86
100
6002.80
100
7574.93
Note: Figures reported as comparatives for financial year 2012-13 exclude the discontinued operations.
c)
Purchases of stock-in-trade
Class of goods
2013-14
2012-13
Electronic, medical & other instruments, accessories and spares
Valves and accessories
Earthmoving and agricultural machinery and spares
Industrial Machinery
Others
Total [Note M]
d) Details of Manufacturing work-in-progress:
crore
874.19
429.52
371.63
59.13
187.69
crore
772.62
519.80
302.13
105.39
363.29
1922.16
2063.23
Class of goods
2013-14
2012-13
Industrial Machinery
Defence equipment, all types
Steel structural fabrication
Switchgear, all types
Transmission line tower
Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery and solvent
extraction plants, evaporator and crystalliser plants and pollution control equipment in
aggregate
Low voltage and Medium voltage switchboards and panels
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.
Casting products
Rubber processing machinery and accessories
Nuclear purpose equipment, de-aerators, ultra high pressure vessels including multiwall vessels,
high pressure heat exchangers and high pressure heaters in aggregate
Ship auxiliaries and components of mechanised sailing vessels
Valves and accessories
Servicing of construction machinery
AC drives, DC drives, programmable logic controllers
Meters and protection systems
Others
crore
44.34
36.47
27.39
50.55
59.86
11.22
71.61
17.66
15.20
8.80
5.13
107.46
–
5.41
1.53
0.54
84.42
crore
59.79
63.97
37.86
49.13
60.64
49.09
61.44
35.04
20.38
19.34
5.67
93.39
1.89
10.58
2.06
0.58
75.74
Total [Note H(II)]
547.59
646.59
Q(26) Figures for the previous year have been regrouped/reclassified wherever necessary.
217
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES
1. Basis of accounting
The Company maintains its accounts on accrual basis following the historical cost convention, except for the revaluation of certain
fixed assets, in accordance with generally accepted accounting principles [“GAAP”] in compliance with the provisions of the Companies
Act, 1956 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013
and relevant provisions of the Companies Act, 1956 read with the General Circular No. 1/19/2013 dated April 4, 2014 of the Ministry
of Corporate Affairs in respect of the relevant provisions/schedules/rules of the Companies Act, 2013. Further, the guidance notes/
announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the
extent where compliance with other statutory promulgations viz. SEBI guidelines, override the same requiring a different treatment.
The preparation of financial 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 financial statements. Examples of such estimates include the
useful lives of tangible and intangible fixed assets, allowance for doubtful debts/advances, future obligations in respect of retirement
benefit plans, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are
known.
2. Presentation of financial statements
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Revised Schedule
VI to the Companies Act, 1956 (“the Act”). The Cash Flow Statement has been prepared and presented as per the requirements of
Accounting Standard (AS) 3 “Cash Flow Statements”. The disclosure requirements with respect to items in the Balance Sheet and
Statement of Profit and Loss, as prescribed in the Revised Schedule VI to the Act, are presented by way of notes forming part of
accounts along with the other notes required to be disclosed under the notified Accounting Standards and the Listing Agreement.
Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places
in line with the requirements of Schedule VI. Per share data are presented in Indian Rupees to two decimals places.
3. 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. Revenue from operations
Sales & Service
i.
a.
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.
ii.
Revenue from sale of manufactured and traded goods is recognised when the substantial risks and rewards of
ownership are transferred to the buyer under the terms of the contract.
iii. Revenue from property development activity which are in substance similar to delivery of goods is recognised when all
significant 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 those property development activities which have the same economic substance as that of a construction
contract is recognised based on the ‘Percentage of Completion method’ (POC) when the outcome of a real estate
project can be estimated reliably upon fulfillment of all the following conditions:
a. All critical approvals necessary for commencement of the project have been obtained;
b.
When the stage of completion of the project reaches a reasonable level of development i.e., contract costs for
work performed bears a reasonable proportion to the estimated total contract costs. For this purpose, a reasonable
level of development is treated as achieved only if the cost incurred (excluding cost of land/developmental rights
and borrowing cost) is atleast 25% of the total of such cost;
c. Atleast 25% of the saleable project area is secured by contracts or agreements with buyers;
218
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
d.
Atleast 10 % of the total revenue as per the agreements of sale or any other legally enforceable documents are
realised at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties
to such contracts will comply with the payment terms as defined in the contracts.
The costs incurred on property development activities are carried as “Inventories” till such time the outcome of the
project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project
can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity
is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of
completion is determined based on the proportion of actual cost incurred to the total estimated cost of the project.
For this purpose, actual cost includes cost of land and developmental rights but excludes borrowing cost.
Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of
the stage of completion of the contract.
iv. Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and
equipment is recognised as follows:
a.
b.
Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as
agreed with the customer.
Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome
of the job cannot be ascertained reliably. When the outcome of the contract is ascertained reliably, contract
revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage
of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the
total estimated contract costs.
Government grants in the nature of subsidy related to customer contracts is recognised as revenue from operations
in the Statement of Profit and Loss, on a prudent basis, in proportion to work completed when there is reasonable
assurance that the conditions for the grant of subsidy will be fulfilled.
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.
v.
Revenue from contracts for the rendering of services which are directly related to the construction of an asset is
recognised on similar basis as stated in (iv) supra.
vi. 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.
vii. Revenue from service related activities is recognised using the proportionate completion method.
viii. Commission income is recognised as and when the terms of the contract are fulfilled.
ix. Revenue from engineering and service fees is recognised as per the terms of the contract
x.
Profit/loss on contracts executed by Integrated Joint Ventures under profit-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.
b. Other operational revenue
Other operational revenue represents income earned from the activities incidental to the business and is recognised when
the right to receive the income is established as per the terms of the contract.
219
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
B. Other Income
i.
Interest income is accrued at applicable interest rate.
ii. Dividend income is accounted in the period in which the right to receive the same is established.
iii. Other Government grants, which are revenue in nature and are towards compensation for the related costs, are recognised
as income in the Statement of Profit and Loss in the period in which the matching costs are incurred.
iv. Other items of income are accounted as and when the right to receive arises.
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
classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any
external event beyond the control of the Company, significantly 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 classified as an
exceptional item and accordingly disclosed in the notes to accounts.
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.
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
iii. The Company has ability to use or sell the intangible asset
iv.
v.
The manner in which the probable future economic benefits 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, financial and other resources to complete the development and to use or sell the
intangible asset and
vi. The Company has ability to measure the expenditure attributable to the intangible asset during its development reliably.
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.
6. Employee benefits
a)
Short term employee benefits:
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee
benefits. The benefits 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.
b)
Post-employment benefits:
i.
Defined contribution plans: The Company’s superannuation scheme, state governed provident fund scheme, employee state
insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the
schemes is recognised during the period in which the employee renders the related service.
ii. Defined benefit plans: The employees’ gratuity fund schemes, post-retirement medical care scheme, pension scheme and
provident fund scheme managed by trust are the Company’s defined benefit plans. The present value of the obligation
under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining
the present value of the obligation under defined benefit plans, is based on the market yield on government securities of
a maturity period equivalent to the weighted average maturity profile of the related obligations at the Balance Sheet date.
220
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.
The interest element in the actuarial valuation of defined benefit plans, which comprises the implicit interest cost and the
impact of changes in discount rate, is classified under finance costs. The balance charge is recognised as employee benefit
expenses in the Statement of Profit and Loss.
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit
plans to recognise the obligation on a net basis.
Gains or losses on the curtailment or settlement of any defined benefit 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
benefits become vested.
c)
Long term employee benefits:
The obligation for long term employee benefits such as long term compensated absences, long service award etc. is recognised
in the similar manner as in the case of defined benefit plans as mentioned in (b)(ii) supra.
d)
Termination benefits:
Termination benefits such as compensation under Voluntary Retirement cum Pension Scheme are recognised as expense in the
period in which they are incurred.
7. Tangible Fixed assets
Fixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation 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
and cumulative impairment. Assets acquired on hire purchase basis are stated at their cash values. Specific know-how fees paid, if
any, relating to plant and equipment is treated as part of cost thereof.
Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or
bringing the fixed assets to working condition are allocated and capitalised as a part of the cost of the fixed assets.
Own manufactured assets are capitalised at cost including an appropriate share of overheads.
Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “capital work-in-progress”. (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.
Lease rentals in respect of assets acquired under leases are charged to Statement of Profit and Loss.
b.
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 classified as
finance 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.
ii. Assets given under a finance 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.
iii.
Initial direct costs relating to assets given on finance leases are charged to Statement of Profit and Loss.
221
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
Operating leases:
i)
Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.
ii) Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease term.
(Also refer to policy on depreciation, infra)
9. 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 Statement of
Profit and Loss.
ii. 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 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 fixtures
i)
ii) Office Equipment
Multifunctional devices (fax machine/scanner/printers), desktop, inkjet/laserjet printers,
switches (audio/video) and projectors
Others
iii) Computers
Desktop, Server & related components
iv) Plant and Equipment general
a) Cranes below 100 ton capacity used for construction activity
b) Minor plant & equipment of construction activity
c) Heavy lift equipment of construction activity
d)
Equipment for tunnelling & laying electrical transmission lines (other than those employed
in heavy construction work)
Equipment used in construction industry for concreting, road making, crushing, piling,
pipeline laying, welding etc.
e)
f) DG sets above 30 kva
g) Erection winches above 2 tons
h) Strand Jack system, theodolite, total station etc. used in construction industry
Specialised machine tools, dies, jigs, fixtures, gauges for electrical business
i)
j) Desktops and laptops given to employees under the Company’s scheme
k) Other laptops
l)
Tunnel Boring Machine
v) Air conditioning and refrigeration equipment
vi) Laboratory and canteen equipment
vii) Motor cars
Rate of Depreciation
(% p.a.)
10.00
25.00
6.67
16.67
6.67
20.00
5.00
10.00
8.33
8.33
8.33
8.33
20.00
33.33
25.00
50.00
8.33
12.50
14.14
iii. Depreciation for additions to/deductions from, owned assets is calculated pro rata. Extra shift depreciation is provided on
a location basis.
222
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
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 finance 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.
iii.
Leasehold land
Land acquired under long term lease is classified under “tangible assets” and is depreciated over the period of lease.
10. Intangible assets and amortisation
Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative
impairment. Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset
will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are amortised over their useful life as
follows:
a.
b.
Specialised software: over a period of six years.
Technical know-how: over a period of six years in case of foreign technology and three years in the case of indigenous technology.
c. Development costs for new products: over a period of five years.
Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated
and capitalised as a part of the cost of the intangible assets.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “Intangible assets under development”.
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.
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; and
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 identified, independent cash flows), 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 flows from the continuing use of an asset and from its
disposal at the end of its useful life).
12. Investment
Trade investments comprise investments in subsidiary companies, joint ventures, associate companies and in the entities in which the
Company has strategic business interest.
Investments, which are readily realisable and are intended to be held for not more than one year from the date of acquisition, are
classified as current investments. All other investments are classified as long term investments.
223
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
Long term investments including trade investments are carried at cost, after providing for any diminution in value, if such diminution
is other than temporary in nature. Investments in integrated joint ventures are carried at cost net of adjustments for Company’s share
in profits or losses as recognised.
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.
Purchase and sale of investments are recognised based on the trade date accounting.
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. However, these items are considered to be realisable at cost if the finished products in which they will be used,
are expected to be sold at or above cost.
b) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some
cases, Manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of
qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs.
c)
Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable
value. Cost includes related overheads and excise duty paid/ payable on such goods.
d) Completed property/Work-in-progress (including land) in respect of property development activity at lower of specifically
identifiable cost or net realisable value.
14. Cash and bank balances
Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances
which have restrictions on repatriation. Short term and liquid investments being not free from more than insignificant risk of change
in value, are not included as part of cash and cash equivalents.
15. Securities premium account
a)
Securities premium includes:
i.
The difference between the market value and the consideration received in respect of shares issued pursuant to Stock
Appreciation Rights Scheme.
ii.
The discount allowed, if any, in respect of shares allotted pursuant to Stock Options Scheme
b)
The following expenses are written off against securities premium account:
i.
ii.
Expenses incurred on issue of shares
Expenses (net of tax effect) incurred on issue of debentures/bonds
iii. Premium (net of tax effect) on redemption of debentures/bonds
16. Borrowing Costs
Borrowing costs include interest, commitment charges, amortisation of ancillary costs, amortisation of discounts/premium related to
borrowings, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency
borrowings, to the extent they are regarded as an adjustment to interest costs.
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventorised
as part of cost of such asset till such time 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 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.
224
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
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 fixed assets specifically financed by the borrowings contracted up to March 31, 2004 to which the
exchange differences relate
adjusted in the cost of fixed assets specifically financed 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.
iii. Other assets and liabilities at rates prevailing at the end of the year.
iv. Net revenues at the average rate for the year.
d)
e)
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 firm 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 such forward contracts are recognised as income /expense of the
period in which such roll over/cancellation takes place.
f) All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on unexecuted firm
commitments and highly probable forecast transactions, are recognised in the financial 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. In addition, the derivative arrangements embedded in the contracts entered in the course of
business are accounted separately if the economic characteristics and risks of the embedded derivatives are not closely related
to economic characteristics and risks of the host contract.
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 (including embedded derivatives)
covered under Accounting Standard (AS) 30 “Financial Instruments: Recognition and Measurement” are recognised in the
Statement of Profit and Loss or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge
in respect of off-balance sheet items is effective, the gains or losses are recognised in the “hedging reserve” which forms part
of “reserves and surplus” in the Balance Sheet. The amount recognised in the “hedging reserve” is transferred to the Statement
of Profit and Loss in the period in which the underlying hedged item affects the Statement of Profit and Loss. Gains or losses in
respect of ineffective hedges are recognised in the Statement of Profit and Loss in the period in which such gains or losses are
incurred.
g)
The premium paid/received on a foreign currency forward contract is accounted as expense/income over the life of the contract.
225
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
19. Segment accounting
a)
Segment accounting policies
Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting
policies have been followed for segment reporting:
i.
ii.
iii.
iv.
v.
Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment
revenue.
Expenses that are directly identifiable 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”.
Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the
Company.
Segment assets and liabilities include those directly identifiable 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.
vi. Segment non-cash expenses forming part of segment expenses includes employee stock option plan (ESOP) charges allocable
to 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.
20. 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 financial statements and the taxable income for
the year, and quantified 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 sufficient 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 sufficient future
taxable income will be available against which such deferred tax assets can be realised.
21. 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,
expenses, assets and liabilities respectively.
Jointly controlled assets
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 benefits, if any, from use of the assets are reflected as income.
Jointly controlled entities
(a)
integrated joint ventures:
(i) Company’s share in profits or losses of integrated joint ventures is accounted on
(b)
(ii)
determination of the profits or losses by the joint ventures.
Investments in integrated joint ventures are carried at cost net of Company’s share
inrecognised profits 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.
226
Notes forming part of the Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
22. 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 outflow 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 outflow of resources will be required to settle the
obligation
a present obligation arising from past events, when no reliable estimate is possible
a possible obligation arising from past events where the probability of outflow 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.
23. Commitments
Commitments are future liabilities for contractual expenditure.
Commitments are classified and disclosed as follows:
a)
Estimated amount of contracts remaining to be executed on capital account and not provided for
b) Uncalled liability on shares and other investments partly paid
c)
Funding related commitment to subsidiary, associate and joint venture companies and
d) Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management.
Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details.
24. Operating cycle for current and non-current classification
Operating cycle for the business activities of the company covers the duration of the specific project/contract/product line/service
including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies)
within the agreed credit period normally applicable to the respective lines of business.
25. Cash Flow Statement
Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method. Under the indirect method, the net profit is adjusted for the effects of:
i.
ii.
transactions of a non-cash nature
any deferrals or accruals of past or future operating cash receipts or payments and
iii.
items of income or expense associated with investing or financing cash flows.
Cash and cash equivalents (including bank balances) are reflected as such in the cash flow statement. Those cash and cash equivalents
which are not available for general use as on the date of Balance Sheet are also included under this category with a specific disclosure.
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
227
Consolidated Financial Statements 2013-14
Independent Auditors’ Report
To the Board of Directors of Larsen & Toubro Limited
We have audited the accompanying consolidated financial statements of Larsen & Toubro Limited (“the Company”) and its subsidiaries,
associates and joint ventures (“the L&T Group”) which comprise the consolidated balance sheet as at March 31,2014, and the consolidated
statement of profit and loss and consolidated cash flow statement for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated
financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with accounting
principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in
accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the
reports of the other auditors on the financial statements of the subsidiaries, associates and joint ventures as noted below, the consolidated
financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
a)
in the case of the consolidated balance sheet, of the state of affairs of the L&T Group as at March 31, 2014;
b)
in the case of the consolidated statement of profit and loss, of the profit of the L&T Group for the year ended on that date; and
c)
in the case of the consolidated cash flow statement, of the cash flows of the L&T Group for the year ended on that date.
Other matters
In respect of the financial statements of a subsidiary, we carried out the audit jointly with other auditor. The details of assets, revenues and
net cash flows in respect of the subsidiary to the extent to which they are reflected in the consolidated financial statements are given below:
Jointly audited :
crore
crore
crore
Total assets
Total revenues Net cash inflows / (outflows)
Subsidiary
454.03
206.95
5.97
In respect of the financial statements of certain subsidiaries, associates and joint ventures, we did not carry out the audit. These financial
statements have been audited 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, revenues and net cash flows in respect of these subsidiaries and joint ventures and the net carrying cost of investment
228
and current year share of net profit in respect of these associates, to the extent to which they are reflected in the consolidated financial
statements are given below:
Audited by other auditors:
crore
crore
crore
Total assets
Total revenues
Net cash inflows / (outflows)
A
B
Subsidiaries
Joint ventures
47340.00
2268.12
8983.61
865.98
113.89
(39.61)
Net carryingcost of
investment
Current year
share of net profit
C Associates
9.53
1.34
Our opinion is not qualified in respect of these matters.
Mumbai, May 30, 2014
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
229
Consolidated Balance Sheet as at March 31, 2014
EQUITY AND LIABILITIES:
Shareholders’ funds
Share capital
Reserves and surplus
Minority interest
Non-current liabilities
Long term borrowings
Deferred payment liabilities for acquisition of fixed assets
Deferred tax liabilities (net)
Other long term liabilities
Long term provisions
Current liabilities
Short term borrowings
Current maturities of deferred payment liabilities for acquisition
of fixed assets
Current maturities of long term borrowings
Trade payables
Other current liabilties
Short term provisions
TOTAL
ASSETS:
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Intangible assets under development
Goodwill on consolidation
Current assets
Non-current investments
Deferred tax assets (net)
Long term loans and advances
Long term loans and advances towards financing activities
Cash and bank balances
Other non-current assets
Current investments
Inventories
Trade receivables
Cash and bank balances
Short term loans and advances
Short term Loans and advances towards financing activities
Other current assets
TOTAL
CONTINGENT LIABILITIES
COMMITMENT (capital and others)
OTHER NOTES FORMING PART OF THE ACCOUNTS
SIGNIFICANT ACCOUNTING POLICIES
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
230
As at 31-3-2014
As at 31-3-2013
Note
crore
crore
crore
crore
37711.61
3179.18
33859.69
2652.87
123.08
33736.61
47392.14
3481.45
377.87
1160.85
346.67
60377.97
52758.98
7965.76
472.53
7313.73
18053.65
17505.60
2539.42
68753.97
170022.73
53850.69
143122.23
46575.98
1432.80
280.39
2793.83
32598.87
38.68
184.94
41739.74
1224.19
194.20
2258.64
21840.73
65.05
148.19
20816.18
7453.29
4061.08
7289.44
2119.75
7543.31
5169.46
23011.32
3566.14
6171.50
10160.06
20029.70
86117.24
170022.73
75651.49
143122.23
A
B
185.38
37526.23
C(I)
Q(22)
Q(15)
C(II)
C(III)
55447.27
2966.75
617.85
979.98
366.12
D(I)
13678.67
Q(22)
D(II)
D(III)
D(IV)
D(V)
515.13
11026.97
20870.58
19731.84
2930.78
20767.46
9391.36
4262.56
10018.43
2136.17
6676.17
5527.46
26384.55
4096.57
7327.16
10835.60
25269.73
E(I)
E(II)
E(I)
E(II)
E(III)
F
Q(15)
G(I)(a)
G(I)(b)
G(II)
G(III)
H(I)
H(II)
H(III)
H(IV)
H(V)
H(V)(a)
H(VI)
I
J
Q
R
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
Consolidated Statement of Profit and Loss for the year ended March 31, 2014
REVENUE:
Revenue from operations (gross)
Less: Excise duty
Revenue from operations (net)
Other income
Total revenue
EXPENSES:
Manufacturing, construction and operating expenses
Cost of raw materials, components consumed
Construction materials consumed
Purchase of stock-in-trade
Stores, spares and tools consumed
Sub-contracting charges
Value of stock transferred on disposal of subsidiary/business
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Other manufacturing, construction and operating expenses
Finance cost of financial services business
Staff expenses for software development business
Employee benefits expense
Sales, administration and other expenses
Finance costs
Depreciation, amortisation, impairment and obsolescence
Less: Transfer from revaluation reserve
Less: Overheads charged to fixed assets
Total expenses
Profit before exceptional and extraordinary items and tax
Exceptional items
Profit before extraordinary items and tax
Extraordinary items
Profit before tax
Tax expense:
Current tax
Deferred tax (net)
Profit after tax
Less: Additional tax on dividend distributed/proposed by subsidiary companies
Add: Share in profit/(loss) (net) of associate companies
Add/(less): Minority interest in (income)/losses
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 ( )
OTHER NOTES FORMING PART OF ACCOUNTS
SIGNIFICANT ACCOUNTING POLICIES
}
2013-14
Note
crore
crore
2012-13
crore
crore
85889.04
760.64
75195.31
697.31
85128.40
981.91
86110.31
74498.00
1055.68
75553.68
9629.08
17957.92
2057.16
2699.52
16914.10
–
(527.32)
7399.61
3135.46
2429.23
1446.77
0.95
2501.64
105.94
10506.06
15562.64
2179.87
2709.56
14516.43
(51.23)
(1960.89)
6889.91
2353.22
1983.19
1651.71
14.64
2241.79
143.75
54688.76
6244.64
3686.43
2124.29
1637.07
68381.19
50.56
68330.63
7223.05
336.76
7559.81
78.11
7637.92
2385.54
5252.38
12.96
5239.42
38.43
5277.85
(72.18)
5205.67
55.75
55.30
56.53
56.07
2.00
61694.76
8027.64
4689.44
3141.44
1445.82
78999.10
37.78
78961.32
7148.99
340.24
7489.23
(6.25)
7482.98
2607.58
4875.40
20.81
4854.59
9.25
4863.84
38.16
4902.00
53.04
52.72
52.97
52.65
2.00
K
L
M
N
O
P
Q(5)
Q(6)
Q(8)
Q(15)
Q(14)
Q
R
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
231
Consolidated Cash Flow Statement for the year ended March 31, 2014
A. Cash flow from operating activities:
Profit before tax (excluding minority interest, exceptional and extraordinary items)
Adjustments for:
Dividend received
Depreciation, amortisation, obsolescence and impairment (net)
Exchange difference on items grouped under financing/investing activities (net)
Effect of exchange rate changes on cash and cash equivalents
Expenditure on voluntary retirement scheme
Interest expense
Interest income
(Profit)/loss on sale of fixed assets (net)
(Profit)/loss on sale of investments (net)
Employee stock option - discount forming part of staff expenses
Provision/(reversal) for diminution in value of investments
Operating profit before working capital changes
Adjustments for:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in trade payables and customer advances
Cash generated from operations before financing activities
(Increase)/decrease in loans and advances towards financing activities
Cash generated from operations
Direct taxes refund/(paid) (net)
Net cash (used in)/from operating activities
Cash flow from investing activities:
Purchase of fixed assets
Sale of fixed 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)
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 item)
Extraordinary item:
Insurance claim received against loss due to flood
Cash received (net of expenses) on sale of medical business
Net cash (used in)/from investing activities (after extraordinary item)
Cash flow from financing activities:
Proceeds from issue of share capital
Proceeds from long term borrowings
Repayment of long term borrowings
Proceeds from other borrowings (net)
Payment (to)/from minority interest (net)
Dividends paid
Additional tax on dividend
Interest paid (including cash flows on account of interest rate swaps)
Net cash (used in)/from financing activities
B.
C.
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
2013-14
crore
7148.99
(51.11)
1445.82
297.05
(21.07)
–
3141.44
(488.29)
(90.74)
(299.79)
75.69
24.15
11182.14
(13684.53)
(209.08)
5143.43
2431.96
(6448.22)
(4016.26)
(2947.06)
(6963.32)
(6967.85)
289.18
(674.27)
183.58
1269.41
(186.95)
498.73
10.13
51.11
2.48
(32.73)
31.83
(11.49)
(5536.84)
25.00
–
(5511.84)
144.05
22277.70
(10992.53)
5959.79
890.25
(1140.85)
(277.50)
(3902.76)
12958.15
482.99
3603.58
4086.57
2012-13
crore
7223.05
(68.65)
1637.07
302.87
43.20
(38.34)
2124.29
(478.71)
(202.25)
(292.54)
99.21
(9.85)
10339.35
(7284.76)
(675.81)
1680.63
4059.41
(5882.45)
(1823.04)
(2531.72)
(4354.76)
(7832.32)
394.58
(273.17)
984.04
(263.06)
(84.82)
509.24
4.61
68.65
292.98
(1116.27)
355.24
(14.41)
(6974.71)
–
52.36
(6922.35)
163.14
18760.13
(6829.16)
2587.39
803.27
(1012.79)
(187.98)
(2854.64)
11429.36
152.25
3451.33
3603.58
Notes:
1. Cash Flow Statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 “Cash Flow Statements” as specified in the Companies (Accounting
Standards) Rules, 2006.
Purchase of fixed assets includes movement of capital work-in-progress during the year.
For cash and cash equivalents not available for immediate use as on the Balance Sheet date, see Note G(II) and H(IV).
2.
3.
4. Cash and cash equivalents are reflected in the Balance Sheet as follows:
(a) Cash and cash equivalents disclosed under current assets [Note H(IV)]
(b) Cash and cash equivalents disclosed under non-current assets [Note G(II)]
Total cash and cash equivalents as per Balance Sheet
(c) Unrealised exchange loss/(gain) on cash and cash equivalents
Total cash and cash equivalents as per Cash Flow Statement
5.
Previous year’s figures have been regrouped/reclassified wherever applicable.
2013-14
crore
4096.57
38.68
4135.25
(48.68)
4086.57
2012-13
crore
3566.14
65.05
3631.19
(27.61)
3603.58
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
232
Notes forming part of the Consolidated Accounts
NOTE [A]
Share capital
A(I) Share capital authorised, issued, subscribed and paid up:
Particulars
Authorised:
Equity shares of 2 each
Issued, subscribed and fully paid up:
Equity shares of 2 each
As at 31-3-2014
As at 31-3-2013
Number of
shares
crore
Number of
shares
crore
1,62,50,00,000
325.00 1,62,50,00,000
325.00
92,69,12,658
185.38
61,53,85,981
123.08
A(II) Reconciliation of the number of equity shares and share capital:
Particulars
As at 31-3-2014
As at 31-3-2013
Number of
shares
crore
Number of
shares
crore
Issued, subscribed and fully paid up equity shares outstanding
at the beginning of the year
61,53,85,981
123.08
61,23,98,899
122.48
Add: Shares issued on exercise of employee stock options
during the year
Add: Shares issued as bonus on July 15, 2013
Issued, subscribed and fully paid up equity shares outstanding
32,32,101
30,82,94,576
0.65
61.65
29,87,082
–
0.60
–
at the end of the year
92,69,12,658
185.38
61,53,85,981
123.08
A(III) Terms/rights attached to equity shares:
The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is
entitled to one vote per share.
A(IV) Shareholders holding more than 5% of equity shares as at the end of the year:
Name of the shareholder
Life Insurance Corporation of India
L&T Employees Welfare Foundation
Administrator of the Specified Undertaking of the
Unit Trust of India
As at 31-3-2014
As at 31-3-2013
Number of
shares
15,75,56,473
11,16,06,174
7,59,25,962
Shareholding
%
17.00
12.04
8.19
Number of
shares
10,12,52,038
7,44,04,116
5,06,17,308
Shareholding
%
16.45
12.09
8.23
A(V) Shares reserved for issue under 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 (FCCB)
As at 31-3-2014
As at 31-3-2013
Number of
equity shares to
be issued as
fully paid
98,66,116 @
73,60,864 @
crore
(At face value)
Number of
equity shares to
be issued as
fully paid
1.97 * 87,45,451 @
1.47 ** 49,07,243
crore
(At face value)
1.75 *
0.98 **
*
**
#
@
The equity shares will be issued at a premium of 367.43 crore (previous year: 491.96 crore)
The equity shares will be issued at a premium of 934.93 crore (previous year: 935.42 crore) on the exercise of options by the
bond holders
Refer Note A(VIII) for terms of employee stock option schemes
The number of options have been adjusted consequent to bonus issue wherever applicable
A(VI) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended
March 31, 2014 are 30,82,94,576 (previous period of five years ended March 31, 2013: 29,25,92,054 shares)
233
Notes forming part of the Consolidated Accounts (contd.)
A(VII) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding
five years ended March 31,2014 – Nil (previous period of five years ended March 31, 2013: Nil)
A(VIII) Stock option schemes
a)
Terms:
i.
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 fulfillment of certain conditions.
ii. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue
of equity shares. Management has discretion to modify the exercise period.
b)
The details of the grants under the aforesaid schemes under various series are summarized below:
Series reference
Sr.
No.
1 Grant price ( )
2 Grant dates
3
4 Options granted and outstanding at
Vesting commences on
2000
2003 (A)
2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13
601.00
601.00 400.70*
17.50 400.70*
2002 (A)
2006 (A)
2002 (B)
2003 (B)
11.70*
11.70*
2.30*
2006
3.50
3.50
3.50
1-6-2000
1-6-2001
2.30*
19-4-2002
19-4-2003
2.30*
19-4-2002
19-4-2003
17.50
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
the beginning of the year
5 Options lapsed prior to bonus
6 Options granted prior to bonus
7 Options exercised prior to bonus
8 Options granted and outstanding as
9
on July 13, 2013**
Adjusted options as on July 13,2013
* *consequent to bonus issue
10 Options lapsed post bonus issue
11 Options granted post bonus issue
12 Options exercised post bonus issue
13 Options granted and outstanding at
the end of the year
of which -
14 Options vested
15 Options yet to vest
16 Weighted average remaining
16800
–
–
–
16800
25200
–
–
–
16800
–
–
–
–
–
–
–
–
21500
–
–
–
21500
32250
–
–
–
21500
–
–
–
–
–
–
–
–
39700
–
–
–
39700
59550
–
–
–
39700
–
–
–
–
–
–
–
–
31452
–
–
–
31452
47178
–
–
–
31452 435202 647302 911468 2026751 7289329 8645349
42513 201054 781908
2746
1115 1072250
–
770285 1646362
3400
62150
4500 118000
–
45750 267950 387135 1072770
–
–
–
– 390552
– 521587
– 6319105
– 585829
–
10950
93300
–
– 168636
– 782390
–
21311
–
–
– 250898
– 9478918
-
530097
– 1352790
- 1609397
–
–
–
–
–
25200
16800
32250
21500
59550
39700
47178
31452 499543 435202 510181 911468 8692214 7289329
25200
–
16800
–
32250
–
21500
–
59550
–
39700
–
47178
–
31452 127015 109802 510181 911468 3096418 2135578
– 5595796 5153751
– 372528 325400
–
contractual life of options (in years)
Nil
Nil
Nil
Nil
Nil
*Current year grant price restated pursuant to the issue of bonus shares
Nil
Nil
**Record date July13, 2013
Nil
4.87
5.12
0.08
0.51
4.17
4.39
c)
The number and weighted average exercise price of stock options for the following group of options are as follows:
Particulars
(i) Options granted and outstanding at the beginning of the year
(ii) Options granted pre bonus issue
(iii) Options allotted pre bonus issue
(iv) Options lapsed pre bonus issue
(v) Options granted and outstanding prior to bonus issue
(vi) Adjusted options consequent to bonus issue
(vii) Options granted post bonus issue
(viii) Options allotted post bonus issue
(ix) Options lapsed post bonus issue
(x) Options granted and outstanding at the end of the year
(xi) Options exercisable at the end of the year out of (x) supra
2013-14
2012-13
No. of stock
options
87,45,451
5,615
12,03,170
2,07,200
73,40,696
1,10,11,315
14,46,090
20,28,931
5,62,358
98,66,116
38,97,792
Weighted
average
exercise price
( )
564.54
133.37
578.81
591.43
561.11
374.10
375.60
368.37
393.13
374.42
371.36
No. of stock
options
1,14,28,854
11,90,250
29,87,082
8,86,571
–
–
–
–
–
87,45,451
32,66,300
Weighted
average
exercise price
( )
562.27
543.15
548.66
560.10
–
–
–
–
–
564.54
561.50
d) Weighted average share price at the date of exercise for stock options exercised during the period is 1120.61 (previous year:
1452.14) per share.
e)
In respect of stock options granted pursuant to the Company’s 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
over the vesting period.
234
Notes forming part of the Consolidated Accounts (contd.)
f) Had fair value method been adopted for expensing the compensation arising from employee share-based payment plans:
a.
The employee compensation charge debited to the Statement of Profit and Loss for the year 2013-14 would have been
higher by 26.75 crore (previous year: 32.15 crore).
b. Basic EPS before extraordinary items would have decreased from 53.04 per share to 52.75 per share.
c.
Basic EPS after extraordinary items would have decreased from 52.97per share to 52.68 per share.
d. Diluted EPS before extraordinary items would have decreased from 52.72 per share to 52.43 per share.
e. Diluted EPS after extraordinary items would have decreased from 52.65 per share to 52.36 per share.
g) Weighted average fair values of options granted during the year is 556.06 (previous year: 606.23*) per option.
h)
The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to
estimate the fair value of options granted during the year are as follows:
Particulars
Sr.
No.
(i) Weighted average risk-free interest rate
(ii) Weighted average expected life of options
(iii) Weighted average expected volatility
(iv) Weighted average expected dividends over the life of the option
(v) Weighted average share price
(vi) Weighted average exercise price
(vii) Method used to determine expected volatility
2013-14
2012-13
8.88%
4.34 years
38.00%
53.42 per option
834.48 per option
379.45 per share
8.05%
4.26 years
39.38%
46.83* per option
878.54* per option
362.10* per share
Expected volatility is based on the historical
volatility of the Company’s share price applicable
to the total expected life of each option.
i)
The balance in share option outstanding account as on March 31, 2014 is 323.70 crore (net) (previous year: 393.96 crore),
including 148.22 crore (previous year: 154.32 crore) for which the options have been vested to employees as on March 31, 2014.
*Previous year figures have been restated pursuant to the issue of bonus shares.
A(IX) The Directors recommend payment of final dividend of 14.25 per equity share of 2 each on the number of shares outstanding as
on the record date.
Provision for final dividend has been made in the books of account for 92,69,12,658 equity shares outstanding as at March 31, 2014
amounting to 1320.85 crore.
A(X) Stock ownership schemes of subsidiary companies:
1.
Larsen & Toubro Infotech Limited
a)
Employee Stock Ownership Scheme (‘ESOS Plan’)
Under the Employee Stock Ownership Scheme (ESOS), 2,273,487 options are outstanding as at March 31, 2014. 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.
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:
Grant Price ( )
Series reference
Sr.
No.
1
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 – XXI
2013-14
25.00
393003
–
–
–
393003
393003
–
2012-13
25.00
393003
–
–
–
393003
393003
–
2013-14
10.00
2155197
–
274713
–
1880484
970917
909567
2012-13
10.00
2179953
–
24756
–
2155197
970917
1184280
235
Notes forming part of the Consolidated Accounts (contd.)
b)
Employees Stock Ownership Scheme – 2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’)
The subsidiary had instituted the Employees Stock Ownership Scheme – 2006 U.S. Stock Option Sub-Plan (‘Sub-Plan’) for the
employees and Directors of its subsidiary, GDA Technologies, Inc, USA. 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 five years, subject to fulfillment of certain conditions specified 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 per share. Under the said plan, options granted and outstanding as at the end of the year are
90,100 options, all vested.
Employees Stock Options granted and outstanding as at the end of the year on unissued share capital represent options 23,63,587
(previous year: 26,38,300)
2.
L&T Investment Management Limited
Employee Stock Option Plan 2008 (ESOP 2008)
The Employee Stock Option Plan 2008 of the subsidiary is designed to provide stock options to employees in a specific category. All
grants under the Plan are to be issued and allotted by the Allotment Committee of the Board of the Company. 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 Company 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-defined number of equity shares against each option and the options will vest over a period of
five years from the date of grant at a pre-defined percentage of the total vesting, which shall each be subject to the condition that
the employees will secure specific annual performance ratings for every allotment and Company achieving certain performance target
and vesting of shares can be carried forward to maximum 2 years.
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
2013-14
2012-13
No. of stock
options
Weighted
average
exercise price
( )
No. of stock
options
Weighted
average
exercise price
( )
Options granted and outstanding at the beginning of the year
60,000
10.50
3,20,000
10.50
Options granted during the year
Options forfeited/lapsed 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
Weighted average remaining contractual life of options
(comprising the vesting period and the exercise period)(in years)
–
60,000
–
–
–
–
Nil
–
–
–
–
–
–
–
2,60,000
–
–
–
–
60,000
10.50
–
60,000
6.33
–
–
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 Statement of Profit and Loss.
236
Notes forming part of the Consolidated Accounts (contd.)
3.
L&T Finance Holdings Limited
Stock Option Scheme(ESOP 2010)
The subsidiary has formulated Employee Stock Option Scheme 2010 (ESOP Scheme-2010) and 2010-A (ESOP Scheme 2010-A).The
grant of options to the employee under the Stock Options Scheme is on the basis of their performance and other eligibility criteria.
The options are vested over a period of 4 years in ratio of 15%, 20%, 30% and 35% respectively from the date of grant, subject to
the discretion of the management and fulfillment of certain conditions. Options can be exercised within a period of 7 years from the
date of grant and would be settled by way of equity. Management has discretion to modify the exercise period.
The details of the grant under the aforesaid scheme are summarised below:
2010
2013-14
2012-13
44.20
November 30, 2010 onwards
November 30, 2011 onwards
Series reference
Sr.
No.
Grant price ( )
Grant date
Vesting commence on
1
2
3
4
5
6
7
8
Options granted and outstanding at the beginning of the year
1,11,25,955
1,35,72,440
Options granted during the year
Options cancelled/lapsed 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
9,83,000
9,05,000
13,13,887
13,52,565
16,88,443
19,98,920
28,39,131
14,98,419
62,67,494
96,27,536
9 Weighted average remaining contractual life of options (in years)
4.33
5.03
Weighted average fair values of options granted during the year is 34.53 (previous year: 15.37) per option.
The Fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate
the fair value of options granted during the year are as follows:
Sr.
No.
Particulars
2013-14
2012-13
a) Weighted average risk-free interest rate
b) Weighted average expected life of options
c) Weighted average expected volatility
d) Weighted average expected dividends
e) Weighted average share price
f) Weighted average exercise price
g) Method used to determine expected volatility
8.43%
8.17%
2.85 years
3.68 years
35.46%
33.82%
2.14 per option
1.84 per option
69.51 per option
44.30 per option
44.20 per share
44.20 per share
Expected volatility is based on the
historical volatility of the Company’s
shares price applicable to the expected
life of each option.
237
Notes forming part of the Consolidated Accounts (contd.)
NOTE [B]
Reserves and surplus
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Capital reserve
As per last Balance Sheet
Addition during the year
Capital reserve on consolidation
As per last Balance Sheet
Addition during the year
Capital redemption reserve
As per last Balance Sheet
Securities premium account [Note Q(8)(b)]
As per last Balance Sheet
Addition during the year
Less: Share/bond issue expenses (net of tax)
Premium on inflation linked debentures (net of tax)
Issue of bonus shares
Reversal of recoveries credited in previous years
Debenture redemption reserve
As per last Balance Sheet
Less: Transferred to retained earnings
Add: Transferred from retained earnings
Revaluation reserve
As per last Balance Sheet
Addition during the year
Less: Transferred to Statement of Profit and Loss
Share options outstanding account
Employee share options outstanding account
As per last Balance Sheet
Addition during the year
Deduction during the year
Deferred employee compensation expense
As per last Balance Sheet
Addition during the year
Deduction during the year
Carried forward
238
943.59
21.30
145.78
124.79
3.27
7512.11
291.50
7803.61
0.63
3.53
61.65
–
428.46
68.75
161.67
20.20
–
0.95
641.61
69.20
195.98
(194.69)
(69.20)
125.85
833.30
110.29
964.89
943.59
15.52
130.26
270.57
145.78
3.27
3.27
3.27
7206.36
309.04
7515.40
0.57
–
–
2.72
7737.80
7512.11
651.00
321.00
98.46
521.38
428.46
24.57
10.27
14.64
19.25
20.20
767.99
92.54
218.92
514.83
641.61
(284.81)
(92.54)
182.66
(138.04)
9893.95
(194.69)
9500.33
Notes forming part of the Consolidated Accounts (contd.)
NOTE [B]
Reserves and surplus (contd.)
Particulars
Brought forward
Reserve u/s 45 IC of the RBI Act, 1934
As per last Balance Sheet
Add: Transferred from retained earnings
Reserve u/s 29C of National Housing Bank Act, 1987
As per last Balance Sheet
Add: Transferred from retained earnings
Tonnage tax reserve
As per last Balance Sheet
Add: Transferred from retained earnings
Foreign currency translation reserve
As per last Balance Sheet
Addition during the year (net)
Less: Transferred to Statement of Profit and Loss on
divestment of stake in subsidiaries
Reserve u/s 36(1)(viii) of Income Tax Act, 1961
As per last Balance Sheet
Add: Transferred from retained earnings
Hedging reserve (net of tax) [Note Q(15)]
As per last Balance Sheet
Addition/(deduction) during the year (net)
Retained earnings
As per last Balance Sheet
Profit for the year
Add/(less): Transferred from/(to):
Debenture redemption reserve
Reserve u/s 45 IC of the RBI Act, 1934
Reserve u/s 29C of National Housing Bank Act, 1987
Tonnage tax reserve
Reserve u/s 36(1)(viii) of Income Tax Act, 1961
Less:
Other appropriation:
Dividend paid for previous year
Additional tax on dividend paid for previous year
Proposed dividend
Additional dividend tax [Note Q(21)]
As at 31-3-2014
As at 31-3-2013
crore
557.68
164.84
0.04
6.85
4.50
5.47
416.99
154.63
0.19
139.12
64.40
(611.70)
(19.40)
23729.65
4902.00
28631.65
(92.92)
(164.84)
(6.85)
(5.48)
(64.40)
2.38
0.40
1320.85
224.48
crore
9893.95
crore
crore
9500.33
360.40
197.28
722.52
557.68
6.89
9.97
–
0.04
4.48
0.02
296.35
130.16
9.52
0.04
4.50
571.43
416.99
46.86
92.26
203.52
139.12
(581.79)
(29.91)
(631.10)
(611.70)
19920.80
5205.67
25126.47
222.54
(197.28)
(0.04)
(0.02)
(92.26)
2.33
0.38
1138.47
188.58
26749.05
37526.23
23729.65
33736.61
239
Notes forming part of the Consolidated Accounts (contd.)
NOTE [C(I)]
Long term borrowings
Particulars
Secured Unsecured
Total *
Secured Unsecured
Total *
As at 31-3-2014
As at 31-3-2013
Redeemable non-convertible fixed rate debentures
Redeemable non-convertible floating rate debentures
Redeemable non-convertible inflation indexed debentures
3.50% Foreign currency convertible bonds
Term loans from banks
Term loans from others
Loans from financial institutions
Long term maturities of finance lease obligations
[Note Q(13)(ii)(a)(ii)]
Sales tax deferment loan
Refinance from National Housing Bank
Perpetual debts
crore
9262.56
410.00
–
–
31037.18
337.29
626.71
–
crore
crore
–
105.34
–
crore
4206.48 13469.04
410.00
105.34
–
crore
crore
8215.42 3566.04 11781.46
400.00
–
1085.70 1085.70
8376.00 39413.18 23597.14 8772.59 32369.73
812.11
341.52
733.93
733.93
0.25
–
1219.08
626.71
2.85
400.00
–
–
470.59
–
0.25
881.79
–
2.85
–
–
–
–
–
1.07
–
200.00
1.07
–
200.00
–
0.71
–
8.25
–
200.00
8.25
0.71
200.00
41673.74 13773.53 55447.27 33288.72 14103.42 47392.14
* Loans guaranteed by Directors or others Nil (previous year: Nil)
NOTE [C(II)]
Other long term liabilities
Forward contract payable
Interest accrued but not due
Others [Note C(II)(a)]
Particulars
As at 31-3-2014
As at 31-3-2013
crore
162.14
547.50
270.34
979.98
crore
603.08
386.68
171.09
1160.85
C(II)(a) Other long term liabilities – others include
Advance received against sale of investments representing advance of
14.30 crore from M/s. Sical Logistics Limited against sale of
1,43,00,000 equity shares of 10 each in M/s. Sical Iron Ore Terminals Limited at cost to M/s. Sical Logistics Limited vide agreement for
share sale and purchase dated December 17, 2008. The sale is subject to the condition that it can be completed only after three years from
the date of commencement of commercial operations by M/s. Sical Iron Ore Terminals Limited as per clause 18.2.2 (i) (d) of the license
agreement dated September 23, 2006 between M/s. Sical Iron Ore Terminals Limited and M/s. Ennore Port Limited.
As of March 31, 2014, M/s. Sical Iron Ore Terminals Limited is yet to commence commercial operations.
NOTE [C(III)]
Long term provisions
Particulars
Provision for employee benefits:
Employee pension schemes [Note Q(10)(ii)(a)]
Post-retirement medical benefit plan [Note Q(10)(ii)(a)]
Interest rate guaranteed-provident fund [Note Q(10)(ii)(a)]
Others:
Periodic major maintenance [Note Q(18)]
240
As at 31-3-2014
As at 31-3-2013
crore
175.52
110.13
39.97
40.50
366.12
crore
186.38
102.70
0.69
56.90
346.67
Notes forming part of the Consolidated Accounts (contd.)
NOTE [D(I)]
Short term borrowings
Particulars
Secured Unsecured
Total*
Secured Unsecured
Total*
crore
crore
crore
crore
crore
crore
As at 31-3-2014
As at 31-3-2013
Loans repayable on demand:
From banks
Loans from related parties
Other loans and advances:
From banks
Commercial paper
From others
1723.68
–
567.23
30.00
2290.91
30.00
1637.58
–
286.08 1923.66
30.00
30.00
1397.13
–
698.86
5164.81
3968.48
128.48
6561.94
3968.48
827.34
988.57 1593.59 2582.16
3404.47 3404.47
25.47
25.47
–
–
3819.67
9859.00 13678.67
2626.15 5339.61 7965.76
* Loans guaranteed by Directors or others Nil (previous year: Nil)
NOTE [D(II)]
Current maturities of long term borrowings
Particulars
Secured Unsecured
Total*
Secured Unsecured
Total*
crore
crore
crore
crore
crore
crore
As at 31-3-2014
As at 31-3-2013
Redeemable non-convertible fixed rate debentures
Redeemable non-convertible floating rate debentures
3.50% Foreign currency convertible bonds
Term loans from banks
Term loans from others
Loans from financial institutions
Finance lease obligation [Note Q(13)(ii)(a)(ii)]
Sales tax deferment loan
Refinance from National Housing Bank
1866.60
250.00
–
6564.83
–
54.16
–
–
0.40
100.00
–
1198.30
985.18
–
–
0.33
7.17
–
1966.60
250.00
1198.30
7550.01
–
54.16
0.33
7.17
0.40
1428.50
–
–
4614.79
–
58.35
–
–
0.93
–
–
349.00 1777.50
–
–
854.61 5469.40
–
58.35
0.26
7.29
0.93
–
–
0.26
7.29
–
8735.99
2290.98 11026.97
6102.57 1211.16 7313.73
* Loans guaranteed by Directors or others Nil (previous year: Nil)
NOTE [D(III)]
Trade payables
Acceptances
Due to related parties:
Associate Companies
Micro and small enterprises
Due to others
Particulars
As at 31-3-2014
As at 31-3-2013
crore
564.04
31.86
94.71
20179.97
20870.58
crore
610.96
45.61
91.61
17305.47
18053.65
241
Notes forming part of the Consolidated Accounts (contd.)
NOTE [D(IV)]
Other current liabilities
Particulars
Interest accrued but not due on borrowings
Interest accrued and due on borrowings
Unclaimed dividend
Unclaimed interest on debentures
Due to customers (construction and project related activity)
Due to customers (property development projects)
Advances from customers
Other payables (including sales tax,service tax,excise duty and others)
[Note D(IV)(a)]
As at 31-3-2014
As at 31-3-2013
crore
767.91
15.01
28.01
8.19
5461.19
98.37
9221.54
4131.62
crore
573.94
16.27
23.85
7.96
4500.87
–
8449.38
3933.33
19731.84
17505.60
D(IV)(a) Other current liabilities–other payables include
(i) Advance received against sale of investments representing advance from M/s. JRE Tank Terminals Private Limited (JRETTPL) under an
agreement dated August 24, 2007 towards sale of 67,87,500 equity shares of 10 each at cost in M/s. Ennore Tank Terminals Private
Limited (ETTPL) to be transferred on completion of three calendar years from the date of commencement of commercial operations.
The said project has commenced commercial operations on January 15, 2009. The Company has already initiated the share transfer
process and the approval is awaited from M/s. Ennore Port Limited.
(ii) Due to Directors 52.90 crore (previous year: 40.80 crore) on account of commission.
NOTE [D(V)]
Short term provisions
Particulars
Provision for employee benefits:
Gratuity [Note Q(10)(ii)(a)]
Compensated absences
Employee pension schemes [Note Q(10)(ii)(a)]
Post-retirement medical benefit plan [Note Q(10)(ii)(a)]
Bonus provision
Others:
Current taxes [net of payments made 511.86 crore
(previous year: 1822.78 crore)]
Proposed dividend [Note A(IX)]
Additional tax on dividend
Reserve for unexpired risks
Other provisions [Note Q(18)]
242
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
78.36
654.52
13.00
15.69
22.66
116.28
1320.85
104.72
105.78
498.92
70.01
565.28
11.98
15.00
22.17
784.23
684.44
32.26
1138.47
136.52
86.71
461.02
2146.55
2930.78
1854.98
2539.42
Notes forming part of the Consolidated Accounts (contd.)
NOTE [E(I)]
Tangible assets
Particulars
Land
Freehold
Leasehold
Sub total - Land
Buildings
Owned
Leased out
Sub total - Buildings
Plant & equipment
Owned
Leased out
Sub total - Plant & equipment
Computers
Owned
Leased out
Taken on lease
Sub total - Computers
Office equipment
Owned
Leased out
Sub total - Office equipment
Furniture and fixtures
Owned
Leased out
Sub total - Furniture & fixtures
Vehicles
Owned
Leased out
Sub total - Vehicles
Other assets
Owned
Railway sidings
Aircraft
Ships
Dredged channel
Breakwater structures
Sub total - Other assets
Lease adjustment
Total
Cost/valuation
Foreign
currency
Additions
fluctuation Deductions
Pursuant to
acquisition
of
subsidiaries
As at
31-3-2014
Up to
31-3-2013
Pursuant to
acquisition
of
subsidiaries
Depreciation
Impairment
Book value
crore
Foreign
currency
fluctuation Deductions
Up to
31-3-2014
As at
31-3-2014
As at
31-3-2014
As at
31-3-2013
As at
1-4-2013
1094.04
946.81
2040.85
4989.74
887.93
5877.67
32.42
–
32.42
75.71
–
75.71
2.17
38.98
41.15
185.41
18.32
203.73
12041.58
544.59
12586.17
130.85
–
130.85
1137.27
49.14
1186.41
899.61
46.88
2.58
949.07
399.27
0.72
399.99
517.60
18.30
535.90
420.57
206.67
627.24
292.33
119.08
790.17
2018.12
637.24
3856.94
6.49
–
–
6.49
2.18
–
2.18
3.48
–
3.48
0.55
–
0.55
–
–
–
–
–
–
160.07
0.25
–
160.32
63.80
1.50
65.30
82.25
–
82.25
65.28
56.58
121.86
2.07
–
–
2.03
0.48
4.58
2.07
3.24
5.31
29.57
–
29.57
69.50
–
69.50
2.49
–
–
2.49
4.54
–
4.54
7.63
–
7.63
10.59
–
10.59
–
–
–
–
–
–
114.26
7.48
121.74
116.78
41.67
158.45
1016.44
981.55
1997.99
5163.65
864.58
6028.23
–
50.32
50.32
546.71
34.86
581.57
154.27
28.61
182.88
13224.93
565.12
13790.05
3465.33
224.37
3689.70
44.60
10.48
–
55.08
9.69
0.13
9.82
22.52
1.39
23.91
29.36
37.00
66.36
–
–
1.92
–
–
1.92
1024.06
36.65
2.58
1063.29
460.10
2.09
462.19
588.44
16.91
605.35
467.63
226.25
693.88
294.40
119.08
788.25
2020.15
637.72
3859.60
541.34
30.90
2.49
574.73
210.66
0.19
210.85
239.39
4.48
243.87
199.36
55.35
254.71
28.84
12.98
117.70
49.85
8.34
217.71
–
–
–
19.89
–
19.89
94.61
–
94.61
5.32
–
–
5.32
1.01
–
1.01
2.25
–
2.25
0.35
–
0.35
–
–
–
–
–
–
For the
year
–
21.38
21.38
140.48
12.90
153.38
1026.51
13.45
1039.96
140.81
5.12
0.03
145.96
53.46
0.19
53.65
54.36
1.21
55.57
59.05
32.88
91.93
11.72
6.67
39.93
94.55
24.34
177.21
–
1.13
1.13
8.15
–
8.15
29.79
–
29.79
1.52
–
–
1.52
2.92
–
2.92
3.27
–
3.27
7.52
–
7.52
–
–
–
–
–
–
–
0.08
0.08
18.85
8.35
27.20
67.70
12.34
80.04
41.54
7.70
–
49.24
7.03
0.07
7.10
16.50
0.32
16.82
18.34
16.85
35.19
–
–
1.11
–
–
1.11
–
72.75
72.75
696.38
39.41
735.79
4548.54
225.48
4774.02
647.45
28.32
2.52
678.29
261.02
0.31
261.33
282.77
5.37
288.14
247.94
71.38
319.32
40.56
19.65
156.52
144.40
32.68
393.81
6.11
–
6.11
–
–
–
–
6.93
6.93
–
–
–
–
0.01
–
0.01
–
–
–
–
–
–
1010.33
908.80
1919.13
4467.27
825.17
5292.44
8676.39
332.71
9009.10
376.61
8.33
0.06
385.00
199.07
1.78
200.85
305.67
11.54
317.21
219.69
154.87
374.56
1088.13
896.49
1984.62
4421.90
852.38
5274.28
8573.28
313.29
8886.57
358.27
15.98
0.09
374.34
188.61
0.53
189.14
278.14
13.82
291.96
221.21
151.32
372.53
–
–
–
–
–
–
253.84
99.43
631.73
1875.75
605.04
3465.79
(239.36)
13.05 # 20724.72
263.49
106.10
672.47
1968.27
628.90
3639.23
(239.36)
20773.31
26873.83
251.68
1865.60
129.63
620.16
28500.58
5823.46
123.43
1739.04
54.30
216.78
7523.45
Previous year
18804.71
174.17 8399.32
76.36
580.73 26873.83
4500.73
112.37 1428.15
30.38
248.17 5823.46
37.70
Add : Asset held for sale
Add : Capital work-in-progress
#
Impairment upto 31-3-2014
crore pertains to deductions in respect of a subsidiary sold during the year
13.05 crore, out of which
0.41 crore pertains to reversal of impairment loss during the year,
42.74
20767.46
4262.56 ##
25030.02
42.87
20816.18
4061.08
24877.26
0.61 crore pertains to foreign currency translation adjustments during the year,
24.86
## Capital work-in-progress is net of impairment of Nil upto 31-3-2014, during the year Nil, deductions in respect of entity sold during the year 7.94 crore
243
Notes forming part of the Consolidated Accounts (contd.)
NOTE [E(II)]
Intangible assets
Particulars
Specialised softwares
Technical knowhow
New product design and
development
Customer contracts and relationship
Toll collection rights
Utility right to use
Total
Previous year
Add: Intangible assets under development
Cost/valuation
Amortisation
Impairment
Book value
crore
Pursuant to
acquisition of
subsidiaries
4.86
2.87
–
As at
1-4-2013
804.05
85.54
18.05
–
–
–
7.73
110.67
8079.12
1.53
9098.96
5453.05
Additions
168.54
34.66
12.18
–
1431.20
–
1646.58
25.24
3779.02
Foreign
currency
fluctuation
(4.45)
(0.13)
2.41
1.73
–
–
(0.44)
18.95
Deductions
48.64
10.41
2.41
As at
31-3-2014
924.36
112.53
30.23
–
2.20
–
63.66
112.40
9508.12
1.53
10689.17
Pursuant to
acquisition of
subsidiaries
3.69
2.63
–
–
–
–
6.32
Up to
31-3-2013
376.70
36.78
5.75
24.90
1201.46
0.08
1645.67
For the
year
129.32
13.59
3.61
11.24
(465.95)
0.15
(308.04)
Foreign
currency
fluctuation
(1.29)
(0.13)
0.94
0.39
–
–
(0.09)
Deductions
40.02
3.46
2.41
–
0.16
–
46.05
Up to
31-3-2014
468.40
49.41
7.89
36.53
735.35
0.23
1297.81
177.30
9098.96
1219.90
18.47
565.00
1.87
159.57
1645.67
As at
31-3-2014
–
–
–
–
–
–
–
–
As at
31-3-2014
455.96
63.12
22.34
75.87
8772.77
1.30
9391.36
As at
31-3-2013
427.35
48.76
12.30
85.77
6877.66
1.45
7453.29
10018.43
7289.44
19409.79 14742.73
During the quarter and year ended March 31, 2014, the Company has revised its accounting policy of amortisation of Intangible assets [Toll based projects executed under Build-Operate-
Transfer (BOT) mode] for more appropriate presentation of the financial statements [Note R (11)(f)] . Accordingly, toll collection rights will be subjected to Revenue based method of
amortisation and will not be amortised based on straight line method. Consequently, the difference between the accumulated amortisation computed as per the straight line method
and the accumulated amortisation as per revenue based method has been credited to Statement of Profit and Loss in the Consolidated Financial Statements.
Had the Company continued to follow the accounting policy of amortisation based on straight line method for such assets, the profit for the year in the Consolidated Financial Statements
would have been lower by 954.97 crore as follows:
Particulars
The difference between the accumulated amortisation computed as per the straight line method and the accumulated amortisation as per revenue based method
as on April 1, 2013 credited to the Consolidated Statement of Profit and Loss.
Additional amortisation charge for the year 2013-14 had the company continued to follow straight line method of amortization.
Impact of change in accounting policy of amortisation
NOTE [E(III)]
Goodwill on consolidation
crore
Amount
664.11
290.86
954.97
crore
Particulars
Goodwill on consolidation
Previous year
Cost/valuation
Foreign
currency
fluctuation
16.23
17.28
As at
1-4-2013
2187.49
1454.53
Additions*
6.26
727.92
Deductions
25.71
12.24
As at
31-3-2014
2184.27
2187.49
Up to
31-3-2013
–
359.35
For the
year
–
(341.64)
Amortisation
Impairment
Book value
Foreign
currency
fluctuation
–
(12.85)
Deductions
–
4.86
Up to
31-3-2014
As at
31-3-2014
–
–
48.10 #
67.74
As at
31-3-2014
2136.17
2119.75
As at
31-3-2013
2119.75
1047.08
# Impairment upto 31-3-2014 48.10 crore, after deduction of 19.64 crore on account of sale of a subsidiary.
*Additions in goodwill represents consideration paid in excess of share in net worth of subsidiaries acquired during the year.
Notes:
1 Cost/valuation of:
(i)
Freehold land includes 1.17 crore (previous year: 0.14 crore) for which conveyance is yet to be completed.
(ii)
Leasehold land includes:
(a)
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.
(b)
76.86 crore (previous year: Nil) added during the year in respect of which lease agreements are yet to be executed.
244
Notes forming part of the Consolidated Accounts (contd.)
2 Cost/valuation of buildings includes ownership accommodation:
(i)
(a)
in various co-operative societies and apartments and shop-owners’ associations: 110.35 crore, including 2440 shares of
50 each, 232 shares of 100 each and 1 share of 250.
(b)
in proposed co-operative societies 12.36 crore.
(c)
in various co-operative societies and apartments and shop-owners’ associations: 20.78 crore, for which share certificates
are yet to be issued.
(ii) of 4.39 crore in respect of which the deed of conveyance is yet to be executed.
(iii) of 8.48 crore representing undivided share in a property at a certain location.
3 Cost/valuation of buildings includes
50.52 crore for building constructed on leasehold land of 52.79 acres (out of 90.36 acres of
leasehold land, 37.57 acres have been taken back by the lessor) on a 66 years lease agreement entered with National Academy of
Construction (NAC) dated October 1, 2001 yet to be registered with appropriate authority.
4 Depreciation, amortisation, impairment and obsolescence for the year includes 24.64 crore (previous year: 16.38 crore) on account
of obsolescence and reversal of impairment 0.41 crore (previous year impairment loss: 5.54 crore).
5 Owned assets given on operating lease have been presented separately under tangible assets [Note E(I)] as per Accounting Standard
(AS) 19 “Leases”.
6
7
Cost/valuation as at April 1, 2013 of individual assets has been reclassified, wherever necessary.
Additions during the year and capital work-in-progress/intangible assets under development include
914.00 crore (previous year:
903.57 crore) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 “Borrowing Costs” as specified in
the Companies (Accounting Standards) Rules, 2006. Asset wise break-up of borrowing costs capitalised is as follows:
Asset Class
2013-14
2012-13
crore
Tangible
Leasehold land
Dredged channel
Breakwater structures
Building owned
Leased out building
Plant & equipment owned
Computer owned
Office equipment owned
Furniture and fixture owned
Vehicle owned
Railway sidings
Intangible
Specialised softwares
Lumpsum fees for technical knowhow
Toll collection rights
Capital work-in-progress
Intangible assets under development
Total
– 0.60
0.21 1.20
– 2.79
2.08 29.68
– 3.17
0.15 26.54
– 1.09
– 0.05
0.01 0.86
– 0.01
– 0.17
– 0.04
– 0.14
94.08 0.49
284.71 483.39
532.76 353.35
914.00
903.57
245
Notes forming part of the Consolidated Accounts (contd.)
NOTE [F]
Non-current investments (at cost unless otherwise specified)
Particulars
Long term investment
Trade investments:
Investments in equity instruments
Fully paid equity shares
Less: Provision for diminution in value
Investment in associates: [Note F(I)]
Fully paid equity shares of associate companies
Add/(deduct):
Accumulated share in profit/(loss) of the associate companies
at the beginning of the year
Adjustment pursuant to an associate becoming subsidiary
Adjustment pursuant to dilution/divestment of stake in
associates
Add/(deduct):
Share in profit/(loss) (net) of associate companies-during the
period
Commitment to fresh infusion of equity
Dividend received from associate companies during the period
Unrealised profits in respect of transactions with associate
companies
Provision for diminution in value
Other investments:
Other fully paid equity shares
Less: Provision for diminution in value
Fully paid preference shares
Government and trust securities
Debentures and bonds
Mutual funds
Security receipt
Investment in units of fund
Share application money pending allotment
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
43.00
15.90
91.17
218.82
(143.40)
0.03
166.62
9.25
2.73
(10.13)
(1.35)
(0.55)
189.13
10.06
42.90
15.90
27.10
27.00
150.81
363.77
(175.84)
(2.93)
335.81
38.43
2.75
(4.61)
(48.57)
(0.55)
166.57
323.26
205.63
0.54
179.07
159.00
81.57
582.67
0.20
121.97
114.65
–
1432.80
205.09
210.00
86.96
312.84
44.00
8.67
2.00
4.37
1224.19
F(I) Investments in associates include goodwill of
0.25 crore (previous year: 0.25 crore).
23.95 crore (previous year: 23.95 crore) and is further net of capital reserve of
246
Notes forming part of the Consolidated Accounts (contd.)
NOTE [G(I)(a)]
Long term loans and advances
Particulars
Secured considered good:
Loans against mortgage of house property
Capital advances
Rent deposit (KMP’s)
Unsecured considered good:
Capital advances
Loans and advances to related parties:
Associate companies
Advances recoverable
Joint ventures
Inter-corporate loans
Advance recoverable
Other loans and advances:
Security deposits
Earnest money deposits
Advances recoverable in cash or in kind
Income tax receivable of current year [net of provision for tax of
128.07 crore (previous year: 159.50 crore)]
Balance with customs, port trust, etc.
Lease receivables
Considered doubtful:
Capital advances
Other loans and advances
Less: Allowance for doubtful loans and advances
NOTE [G(I)(b)]
Long term loans and advances towards financing activities
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
3.77
32.10
–
93.96
crore
5.62
34.38
0.01
138.47
0.01
490.27
–
253.63
7.79
1866.05
45.17
0.04
1.04
–
0.45
2174.17
0.45
12.11
453.37
0.29
490.28
465.77
213.32
6.09
1375.24
18.26
0.32
1.16
1.86
0.45
1616.70
2.31
2173.72
2793.83
1614.39
2258.64
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Secured loans:
Considered good:
Term loans
Finance lease
Debentures
Considered doubtful:
Term loans [Note G(I)(b)(i)]
Less: Allowance for non-performing assets
Less: Contingent provisions against standard assets
Less: Provision for standard assets
Carried forward
25087.14
83.72
1812.38
324.27
27307.51
324.27
90.28
201.58
20442.28
91.68
768.33
168.44
21470.73
168.44
72.26
87.50
26691.38
26691.38
21142.53
21142.53
247
Notes forming part of the Consolidated Accounts (contd.)
NOTE [G(I)(b)]
Long term loans and advances towards financing activities (contd.)
Particulars
Brought forward
Unsecured loans:
Considered good:
Term loans
Finance lease
Debentures
Considered doubtful:
Term loans [Note G(I)(b)(i)]
Less: Allowance for non-performing assets
Less: Contingent provisions against standard assets
As at 31-3-2014
As at 31-3-2013
crore
crore
26691.38
crore
crore
21142.53
854.64
4956.70
100.00
29.19
5940.53
29.19
3.85
661.18
–
40.00
83.57
784.75
83.57
2.98
5907.49
32598.87
698.20
21840.73
G(I)(b)(i) Loans and advances towards financing activities are classified as doubtful to the extent of provision made following prudential
norms for provisioning of assets prescribed by the Reserve Bank of India.
NOTE [G(II)]
Cash and bank balances
Particulars
Cash and bank balances not available for immediate use
NOTE [G(III)]
Other non-current assets
Particulars
Interest accrued on investments and others
Unamortised expenses
Others
NOTE [H(I)]
Current investments
Particulars
(a) Current investments:
Fully paid equity shares
Less: Provision for diminution in value
Carried forward
248
As at 31-3-2014
As at 31-3-2013
crore
38.68
38.68
crore
65.05
65.05
As at 31-3-2014
As at 31-3-2013
crore
85.19
98.52
1.23
184.94
crore
55.51
92.68
–
148.19
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
24.09
2.64
11.05
2.00
21.45
21.45
9.05
9.05
Notes forming part of the Consolidated Accounts (contd.)
NOTE [H(I)]
Current investments (contd.)
Particulars
Brought forward
Government and trust securities
Less: Provision for diminution in value
Debentures and bonds
Less: Provision for diminution in value
Mutual funds
Other investments
Less: Provision for diminution in value
Collateral Borrowing and Lending Obligation (CBLO)
(b) Current portion of long term investments:
Preference shares
Mutual funds
Investment property
NOTE [H(II)]
Inventories (at cost or net realisable value whichever is lower)
Particulars
Raw materials
[including goods-in-transit 44.97 crore (previous year: 43.42 crore)]
Components
[including goods-in-transit 23.57 crore (previous year: 77.64 crore)]
Construction materials
[including goods-in-transit 89.60 crore (previous year: 0.33 crore)]
Manufacturing work-in-progress
Finished goods
[including goods-in-transit 0.98 crore (previous year: Nil)]
Stock-in-trade (in respect of goods acquired for trading)
[including goods-in-transit 6.07 crore (previous year: 32.98 crore)]
Stores and spares
[including goods-in-transit 8.46 crore (previous year: 4.19 crore)]
Loose tools
[including goods-in-transit 0.03 crore (previous year: Nil)]
Property development projects (including land) [Note Q(9)(b)]
Completed property [Note Q(9)(b)]
As at 31-3-2014
As at 31-3-2013
crore
949.78
15.34
687.07
0.06
14.77
–
33.00
144.00
14.85
crore
113.89
0.92
989.35
0.26
2294.22
0.23
33.00
25.00
–
crore
21.45
934.44
687.01
4552.02
14.77
274.63
191.85
6676.17
crore
9.05
112.97
989.09
4080.21
2293.99
–
58.00
7543.31
As at 31-3-2014
As at 31-3-2013
crore
1116.93
501.13
336.15
726.87
349.18
126.67
294.01
13.16
1943.25
120.11
5527.46
crore
810.92
542.54
397.96
811.56
282.20
189.54
157.18
6.47
1801.84
169.25
5169.46
249
Notes forming part of the Consolidated Accounts (contd.)
NOTE [H(III)]
Trade receivables
Trade receivables
Secured
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Debts outstanding for more than 6 months
Considered good
Considered doubtful
Other debts
Considered good
Less: Allowance for doubtful debts
Unsecured
Debts outstanding for more than 6 months
Considered good
Considered doubtful
Other debts
Considered good
Less: Allowance for doubtful debts
18.24
10.21
28.45
7.31
35.76
10.21
2919.08
537.27
3456.35
23439.92
26896.27
537.27
0.12
3.59
3.71
4.71
8.42
3.59
25.55
4.83
1857.95
548.15
2406.10
21148.54
23554.64
548.15
26359.00
26384.55
23006.49
23011.32
NOTE [H(IV)]
Cash and bank balances
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Cash and cash equivalents:
Balance with banks
Cheques and drafts on hand
Cash on hand
Fixed deposits with banks (maturity less than 3 months)
2092.19
429.83
22.80
1057.38
1272.31
424.11
19.59
645.25
Other bank balances:
Fixed deposits with banks including interest accured thereon
320.48
1002.52
3602.20
2361.26
[includes 3.40 crore (previous year: 80.14 crore) of bank
deposit with more than 12 months maturity]
Earmarked balances with banks-unclaimed dividend
Earmarked balances with banks-others
Cash and bank balances not available for immediate use
including margin money deposits
Bank balances subject to restriction on repatriation
28.00
8.88
137.01
–
23.85
14.82
154.75
8.94
494.37
4096.57
1204.88
3566.14
250
Notes forming part of the Consolidated Accounts (contd.)
NOTE [H(V)]
Short term loans and advances
Particulars
Secured considered good:
Loans against mortgage of house property
Key management personnel
Rent deposit KMP’s
Inter corporate deposits including interest accrued
Unsecured:
Loans and advances to related parties
Considered good:
Associates:
Advance recoverable
Joint ventures:
Inter corporate deposits including interest accrued
Advance recoverable
Others
Considered good:
Security deposits
Earnest money deposit
Advances recoverable in cash or in kind
Income tax receivable of current year
[net of provision for tax of 1786.00 crore
(previous year: 288.74 crore)]
Balance with customs,port trust etc.
Lease receivables
Unamortised expenses
Considered doubtful:
Deferred credit against sale of ships
Security deposits
Other loans and advances
Less: Allowance for doubtful loans and advances
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
1.09
0.01
100.00
19.40
50.06
0.35
377.31
65.89
6212.06
348.22
152.69
0.08
24.92
1.49
183.83
7366.49
210.24
1.80
–
–
101.10
1.80
6.69
–
0.04
69.81
6.73
477.48
72.57
5445.48
62.22
104.73
0.49
22.58
1.50
131.79
6318.84
155.87
7156.25
7327.16
6162.97
6171.50
251
Notes forming part of the Consolidated Accounts (contd.)
NOTE [H(V)(a)]
Short term Loans and advances towards financing activities
Particulars
As at 31-3-2014
As at 31-3-2013
crore
crore
crore
crore
Secured loans:
Considered good:
Term loans
Finance lease
Debentures
Less: Contingent provision against standard assets
Unsecured loans:
Considered good:
Term loans
Finance lease
Less: Contingent provision against standard assets
NOTE [H(VI)]
Other current assets
Particulars
Due from customers (construction and project related activity)
Due from customers (property development activity) [Note Q(9)(b)]
Interest accrued on investments and others
Unbilled revenue
Unamortised expenses
Accrual of fee income
Billed interest and other receivable
Others
8362.69
54.59
136.90
8554.18
26.55
2278.78
35.70
2314.48
6.51
7978.81
55.76
182.99
8217.56
25.77
8527.63
8191.79
1973.61
–
1973.61
5.34
2307.97
10835.60
1968.27
10160.06
As at 31-3-2014
As at 31-3-2013
crore
24139.60
156.63
539.82
209.93
52.30
2.88
128.06
40.51
crore
19351.80
1.83
395.70
161.64
29.82
4.35
62.64
21.92
25269.73
20029.70
252
Notes forming part of the Consolidated Accounts (contd.)
NOTE [I]
Contingent liabilities
Particulars
(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/Customs/Entry Tax/Municipal Cess liability
that may arise in respect of matters in appeal/challenged by the
Company in WRIT
(d) Custom duty demands against the Group has filed appeals
before Appellate Autorities which are pending disposal
Income-Tax liability (including penalty) that may arise in respect
of which the Company is in appeal
(e)
(f) Corporate Guarantee for debt given on behalf of an associate
company
As at 31-3-2014
As at 31-3-2013
crore
354.69
163.82
209.81
3.51
758.78
3.68
crore
319.49
124.96
54.43
0.21
535.63
–
Notes:
1.
2.
3.
4.
The Company does not expect any reimbursements in respect of the above contingent liabilities.
It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (e) above pending resolution of the
arbitration/appellate proceedings.
In respect of matters at (f), the cash outflows if any could generally occur upto one year being the period over which the validity of
the guarantee exists.
Particulars of contingent liabilities in respect of joint venture is given in Note Q(17)
NOTE [J]
Commitments:
Particulars
Estimated amount of contracts remaining to be executed on capital
account (net of advances) *
* Particulars of capital commitments in respect of joint ventures is given in Note Q(17)
NOTE [K]
Revenue from operations
As at 31-3-2014
As at 31-3-2013
crore
26537.35
crore
26611.46
Particulars
2013-14
2012-13
crore
crore
crore
crore
Sales & service:
Construction and project related activity [Note Q(9)(a)]
Manufacturing and trading activity
Engineering and service fees
Software development products and services
Income from financing activity/annuity based projects and finance
income from lease of power plant
Property development activity [Note Q(9)(b)]
Toll collection and related activity
Servicing
Commission
Income from port services
Charter hire income
Investment/portfolio management and trusteeship fees
Fees for operation and maintenance of power plant
Premium earned (net)
61617.69
8809.46
1677.42
4730.72
4990.58
970.83
788.31
726.12
129.55
280.46
176.00
94.82
85.38
176.91
Carried forward
55880.96
7629.29
1293.81
3760.20
3971.62
228.92
720.32
570.96
158.84
198.14
137.37
33.11
–
111.70
85254.25
85254.25
74695.24
74695.24
253
Notes forming part of the Consolidated Accounts (contd.)
NOTE [K]
Revenue from operations (contd.)
Particulars
Brought forward
Other operational revenue:
Income from hire of plant and equipment
Technical fees
Lease rentals
Property maintenance recoveries
Facility management income
Premium earned (net) on related forward exchange contract
Miscellaneous income
2013-14
crore
4.64
–
232.22
17.46
8.68
24.80
346.99
crore
85254.25
2012-13
crore
crore
74695.24
7.75
0.24
107.31
15.16
14.17
165.82
189.62
634.79
85889.04
500.07
75195.31
K(I) Revenue from sales and service includes:
(a)
(b)
1431.48 crore (previous year: 691.51 crore) for price variations net of liquidated damages in terms of contracts with the
customers.
Shipbuilding subsidy
7.22 crore).
Nil (previous year: 10.02 crore) and reversal of shipbuilding subsidy of
31.54 crore (previous year:
NOTE [L]
Other income
Interest income
Particulars
Interest Income on long term investments
Interest Income on current investments
Interest Income on others
Joint venture & associate companies
Others
Dividend income
From long term investments
Trade investments
Others
From current investments
Net gain/(loss) on sale of investments
Long term investments (net)
Current investments (net)
Net gain/(loss) on sale of fixed assets (net)
Lease rental
Miscellaneous income (net of expenses)
254
2013-14
2012-13
crore
28.45
268.67
48.63
142.54
2.03
47.47
49.50
1.61
16.74
283.05
crore
crore
crore
25.51
305.49
41.62
106.09
488.29
478.71
2.22
54.82
57.04
11.61
51.11
68.65
22.46
270.08
299.79
90.74
1.46
50.52
981.91
292.54
202.25
2.55
10.98
1055.68
Notes forming part of the Consolidated Accounts (contd.)
NOTE [M]
Manufacturing, construction and operating expenses
Particulars
Materials consumed:
Raw materials and components
Less: Scrap sales
Construction materials
Purchase of stock-in-trade
Stores, spares and tools consumed
Sub-contracting charges
Value of stock transferred on disposal of subsidiary/business
Change in inventories of finished goods, work-in-progress and
stock-in-trade:
Closing stock:
Finished goods
Stock-in-trade
Work-in-progress
Cost of built up space and property development land:
Work-in-progress
Completed property
Property development land
Less: Opening stock:
Finished goods (includes 48.61 crore on associate
becoming a subsidiary)
Stock-in-trade
Work-in-progress (includes 43.00 crore on associate
becoming a subsidiary)
Cost of built up space and property development land:
Work-in-progress
Completed property
Property development land
Other manufacturing, construction and operating expenses:
Excise duty
Power and fuel [Note O(I)]
Royalty and technical know-how fees
Packing and forwarding [Note O(I)]
Hire charges-plant and equipment and others
Bank guarantee charges
Insurance claim incurred (net)
Engineering, professional, technical and consultancy fees
Carried forward
2013-14
2012-13
crore
crore
crore
crore
9773.42
144.34
10661.42
155.36
9629.08
17957.92
2057.16
2699.52
16914.10
–
10506.06
15562.64
2179.87
2709.56
14516.43
(51.23)
349.18
126.67
4171.35
1658.63
120.11
284.62
6710.56
305.03
189.54
3717.58
1556.78
169.25
245.06
6183.24
11.63
1054.49
26.12
342.82
1104.31
111.31
151.13
1061.79
3863.60
256.42
189.54
3674.58
1556.78
169.25
245.06
6091.63
304.83
220.48
2080.90
1279.55
26.65
218.33
4130.74
(527.32)
(1960.89)
(6.52)
890.49
49.36
283.67
1303.45
78.60
109.17
863.51
48730.46
3571.73
43462.44
255
Notes forming part of the Consolidated Accounts (contd.)
NOTE [M]
Manufacturing, construction and operating expenses (contd.)
Particulars
Brought forward
Insurance [Note O(I)]
Rent [Note O(I)]
Rates and taxes [Note O(I)]
Travelling and conveyance [Note O(I)]
Repairs to plant and equipment
Repairs to buildings [Note O(I)]
General repairs and maintenance [Note O(I)]
Port operation expenses
Operating cost of shipping business
Miscellaneous expenses [Note O(I)]
Finance cost of financial services business and finance lease activity:
Interest and other financing charges
Staff expenses for software development business:
Salaries, wages and bonus
Contribution to and provision for
Provident fund and pension fund
Superannuation/employee pension schemes
Gratuity funds [Note Q(10)(ii)(b)]
Expenses on employee stock option scheme
Staff welfare expenses
crore
43462.44
2013-14
2012-13
crore
3863.60
169.14
364.18
272.23
866.40
79.53
25.09
334.08
121.41
52.36
1251.59
crore
48730.46
crore
3571.73
163.93
319.41
264.30
743.49
69.24
10.65
321.32
67.28
54.04
1304.52
7399.61
3135.46
6889.91
2353.22
2299.36
1872.99
27.80
3.87
5.19
0.12
92.89
25.79
5.63
9.41
0.50
68.87
2429.23
61694.76
1983.19
54688.76
M(I) Other manufacturing, construction and operating expenses include
2350.74 crore (previous year: 2964.62 crore) towards
construction of 1400 MW power plant at Rajpura, Punjab.
256
Notes forming part of the Consolidated Accounts (contd.)
NOTE [N]
Employee benefits expense
Particulars
Salaries, wages and bonus
Contribution to and provision for
Provident fund and pension fund
Superannuation/employee pension schemes
Gratuity funds [Note Q(10)(ii)(b)]
Expenses on employee stock option scheme
Employee medical & other insurance premium expenses [Note O(I)]
Staff welfare expenses
NOTE [O]
Sales, administration and other expenses
Particulars
Power and fuel [Note O(I)]
Packing and forwarding [Note O(I)]
Insurance [Note O(I)]
Rent [Note O(I)]
Rates and taxes [Note O(I)]
Travelling and conveyance [Note O(I)]
Repairs to buildings [Note O(I)]
General repairs and maintenance [Note O(I)]
Professional fees
Directors’ fees
Telephone, postage and telegrams
Advertising and publicity
Stationery and printing
Commission:
Distributors and agents
Employees and others
Bank charges
Discount on sales
Miscellaneous expenses [Note O(I)]
Bad debts and advances written off
Less: Allowances for doubtful debts and advances written back
Receivable discounting charges - non-recourse
Allowances for doubtful debts,advances and non-performing assets (net)
Provision/(reversal) for foreseeable losses on construction contracts
Provision/(reversal) for diminution in value of investments(net)
Exchange (gain)/loss
Provision for standard assets
Other provisions [Note Q(18)(a)]
2013-14
crore
176.55
45.84
46.21
2013-14
crore
75.93
18.01
183.49
57.96
crore
6719.39
268.60
75.57
85.79
878.29
8027.64
crore
103.20
202.13
89.99
345.24
159.05
547.28
28.09
359.82
526.52
1.47
211.75
129.64
71.55
93.94
84.94
74.41
691.15
125.53
0.20
276.95
29.34
24.15
378.57
72.85
61.68
4689.44
2012-13
crore
crore
5162.45
146.07
54.92
73.07
2012-13
crore
40.96
9.38
353.69
116.58
274.06
98.71
62.44
646.98
6244.64
crore
100.04
234.85
37.29
275.11
143.55
439.85
20.83
338.38
363.84
1.99
176.03
140.10
62.36
50.34
86.17
72.17
427.45
237.11
0.08
5.64
14.77
(9.85)
485.27
58.68
(75.62)
3686.43
257
Notes forming part of the Consolidated Accounts (contd.)
NOTE O(I) Aggregation of expenses disclosed vide notes M, N and O in respect of specific items are as follows:
crore
Sr.
No.
1
2
3
Nature of expenses
2013-14
2012-13
Note M
Note N
Note O
Total
Note M
Note N
Note O
Total
Power and fuel
Packing and forwarding
1054.49
342.82
–
–
103.20
1157.69
890.49
202.13
544.95
283.67
–
–
100.04
990.53
234.85
518.52
Insurance
169.14
85.79
89.99
344.92
163.93
62.44
37.29
263.66
4 Rent
5 Rates and taxes
6
Travelling and conveyance
7 Repairs to buildings
364.18
272.23
866.40
25.09
8 General repairs and maintenance
334.08
9 Miscellaneous expenses
1251.59
–
–
–
–
–
–
345.24
709.42
319.41
159.05
431.28
264.30
547.28
1413.68
743.49
28.09
53.18
10.65
359.82
693.90
321.32
691.15
1942.74
1304.52
–
–
–
–
–
–
275.11
594.52
143.55
407.85
439.85 1183.34
20.83
31.48
338.38
659.70
427.45 1731.97
NOTE [P]
Finance costs
Particulars
Interest expenses
Other borrowing costs
Exchange loss (attributable to finance costs)
2013-14
crore
3005.01
27.18
109.25
3141.44
2012-13
crore
2000.24
18.22
105.83
2124.29
NOTE [Q]
Q(1) The Balance Sheet as on March 31, 2014 and the Statement of Profit and Loss for the year ended March 31, 2014 are drawn and
presented as per the revised Schedule VI to the Companies Act, 1956.
Q(2) 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 specified in the Companies
(Accounting Standards) Rules, 2006 [Note R(1)]. The CFS comprises the financial 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 including significant 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.
258
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Q(3) The list of subsidiaries, associates and joint ventures included in the Consolidated Financial Statements are as under:
Name of subsidiary company
Sr.
No.
Indian Subsidiaries
L&T Cutting Tools Limited
(formerly known as 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
Hi-Tech Rock Products & Aggregates Limited
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 Hydrocarbon Engineering Limited
(formerly known as L&T Technologies Limited)
L&T Special Steels and Heavy Forgings Private Limited
PNG Tollway Limited
Kesun Iron & Steel Company Private 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
L&T Geostructure LLP
L&T Valves Limited (formerly known as Audco India Limited)
L&T Realty Limited
L&T Asian Realty Project LLP
L&T Parel Project LLP
Chennai Vision Developers Private Limited
L&T Urban Infrastructure Limited ^
L&T South City Projects Limited
L&T Siruseri Property Developers Limited^^
L&T Vision Ventures Limited
L&T Tech Park Limited
L&T Bangalore Airport Hotel Limited*
CSJ Infrastructure Private Limited
CSJ Hotels Private Limited
L&T Chennai Projects Private Limited **
L&T Power Limited
L&T Cassidian Limited
L&T General Insurance Company Limited
L&T Aviation Services Private Limited
L&T Infocity Limited
L&T Hitech City Limited
Hyderabad International Trade Expositions Limited
1
2
3
4
5
6
7
8
9
10
11
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
42
43
44
45
46
47
As at 31-3-2014
As at 31-3-2013
Country of
incorporation
Proportion
of ownership
interest (%)
Proportion of
voting power
held (%)
Proportion
of ownership
interest (%)
Proportion of
voting power
held (%)
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
India
India
India
India
India
India
100.00
100.00
100.00
100.00
99.90
50.0001
100.00
100.00
97.00
100.00
100.00
100.00
50.0002
51.00
51.00
75.50
100.00
100.00
74.00
72.11
95.00
50.10
100.00
60.00
60.00
100.00
100.00
51.00
74.00
100.00
100.00
50.00
100.00
100.00
–
51.00
51.00
68.00
51.00
–
82.00
82.00
–
99.99
74.00
100.00
100.00
89.00
65.86
51.72
99.90
50.0001
100.00
100.00
97.00
100.00
100.00
100.00
50.0002
51.00
51.00
75.50
100.00
100.00
74.00
72.11
95.00
50.10
100.00
60.00
60.00
100.00
100.00
51.00
74.00
100.00
100.00
55.00
100.00
100.00
–
51.00
51.00
68.00
51.00
–
82.00
82.00
–
99.99
74.00
100.00
100.00
89.00
65.86
51.72
99.90
50.0001
100.00
100.00
97.00
100.00
100.00
100.00
50.0002
51.00
51.00
75.50
100.00
100.00
74.00
72.11
95.00
50.10
100.00
60.00
60.00
100.00
100.00
51.00
74.00
100.00
100.00
50.00
100.00
100.00
100.00
51.00
51.00
68.00
51.00
74.00
82.00
82.00
100.00
99.99
74.00
100.00
100.00
89.00
65.86
51.72
99.90
50.0001
100.00
100.00
97.00
100.00
100.00
100.00
50.0002
51.00
51.00
75.50
100.00
100.00
74.00
72.11
95.00
50.10
100.00
60.00
60.00
100.00
100.00
51.00
74.00
100.00
100.00
55.00
100.00
100.00
100.00
51.00
51.00
68.00
51.00
74.00
82.00
82.00
100.00
99.99
74.00
100.00
100.00
89.00
65.86
51.72
259
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
As at 31-3-2014
As at 31-3-2013
Name of subsidiary company
Country of
incorporation
Sr.
No.
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
Larsen & Toubro Infotech Limited
GDA Technologies Limited
L&T Finance Holdings Limited
L&T Housing Finance Limited
Consumer Financial Services Limited
Family Credit Limited
L&T Finance Limited
L&T Capital Markets Limited
L&T Investment Management Limited
L&T Mutual Fund Trustee Limited
L&T Trustee Services Private Limited
L&T Fund Management Private Limited ***
L&T FinCorp Limited
L&T Infrastructure Finance Company Limited
L&T Infra Debt Fund Limited
L&T Infra Investment Partners Advisory Private Limited
L&T Infra Investment Partners Trustee Private Limited
L&T Vrindavan Properties Limited
(formerly known as L&T Unnati Finance Limited)
L&T Access Distribution Services Limited (formerly known as
L&T Access Financial Advisory Services Limited)
67 Mudit Cement Private Limited
L&T Capital Company Limited
68
L&T Trustee Company Private Limited
69
L&T Power Development Limited
70
L&T Uttaranchal Hydropower Limited
71
L&T Arunachal Hydropower Limited
72
L&T Himachal Hydropower Limited
73
Nabha Power Limited
74
L&T Infrastructure Development Projects Limited
75
L&T Panipat Elevated Corridor Limited
76
Narmada Infrastructure Construction Enterprise Limited
77
L&T Krishnagiri Thopur Toll Road Limited
78
L&T Western Andhra Tollways Limited
79
L&T Vadodara Bharuch Tollway Limited
80
L&T East-West Tollway Limited
81
L&T Great Eastern Highway Limited
82
L&T Transportation Infrastructure Limited
83
L&T Western India Tollbridge Limited
84
L&T Interstate Road Corridor Limited
85
International Seaports (India) Private Limited
86
L&T Port Kachchigarh Limited
87
L&T Ahmedabad-Maliya Tollway Limited
88
L&T Halol-Shamlaji Tollway Limited
89
L&T Krishnagiri Walajahpet Tollway Limited
90
L&T Devihalli Hassan Tollway Limited
91
L&T Metro Rail (Hyderabad) Limited
92
L&T Transco Private Limited
93
L&T Chennai-Tada Tollway Limited
94
L&T BPP Tollway Limited
95
L&T Rajkot-Vadinar Tollway Limited
96
L&T Deccan Tollways Limited
97
L&T Samakhiali Gandhidham Tollway Private Limited
98
260
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
India
India
India
India
India
India
India
India
India
India
Proportion
of ownership
interest (%)
100.00
100.00
76.61
76.61
76.61
76.61
76.61
76.61
76.61
76.61
76.61
–
76.61
76.61
76.61
76.61
76.61
76.61
Proportion of
voting power
held (%)
100.00
100.00
76.61
76.61
76.61
76.61
76.61
76.61
76.61
76.61
76.61
–
76.61
76.61
76.61
76.61
76.61
76.61
76.61
76.61
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.48
97.45
97.45
97.45
97.45
97.45
97.45
76.61
76.61
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.48
97.45
97.45
97.45
97.45
97.45
97.45
Proportion
of ownership
interest (%)
100.00
100.00
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
Proportion of
voting power
held (%)
100.00
100.00
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
82.54
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.48
97.45
97.45
97.45
97.45
97.45
97.45
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.48
97.45
97.45
97.45
97.45
97.45
97.45
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Sr.
No.
99
100
101
102
Name of subsidiary company
Kudgi Transmission Limited
L&T Sambalpur Rourkela Tollway Limited
L&T Technology Services Limited
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited) @
Country of
incorporation
India
India
India
India
As at 31-3-2014
As at 31-3-2013
Proportion
of ownership
interest (%)
97.45
97.45
100.00
100.00
Proportion of
voting power
held (%)
97.45
97.45
100.00
100.00
Proportion
of ownership
interest (%)
–
–
100.00
50.00
Proportion of
voting power
held (%)
–
–
100.00
50.00
L&T Tejomaya Limited
103
^ The Company has been merged with L&T Realty Limited w.e.f. April 1, 2012 pursuant to High Court order
^^The Company is in the process of being wound up
*The Group has sold its stake on January 24, 2014
** The Group has sold its stake on October 3, 2013
*** The company has been merged with L&T Investment Management Limited w.e.f. November 22, 2013
@ Associate became wholly owned subsidiary w.e.f. April 15, 2013
India
51.00
51.00
51.00
51.00
Name of subsidiary company
Sr.
No.
Foreign Subsidiaries
Larsen & Toubro LLC
1
Larsen & Toubro Infotech, GmbH
2
Larsen & Toubro Infotech Canada Limited
3
Larsen & Toubro Infotech LLC
4
L&T Infotech Financial Services Technologies Inc.
5
GDA Technologies Inc ^
6
Larsen & Toubro Infotech South Africa (PTY) Limited
7
L&T Information Technology Services (Shanghai) Co., Ltd.
8
L&T Infrastructure Development Projects Lanka (Private) Limited
9
L&T IDPL Trustee Manager Pte. Ltd.
10
11
Peacock Investments Limited*
12 Mango Investments Limited*
13
14
15
16
17
18
Lotus Infrastructure Investments Limited*
L&T Diversified India Equity Fund
L&T Asset Management Company Limited*
L&T Realty FZE
Larsen & Toubro International FZE
Larsen & Toubro Hydrocarbon International Limited LLC
19
20
21
22
23
24
25
26
27
28
29
30
31
Thalest Limited
Bond Instrumentation & Process Control Limited **
Servowatch Systems Limited
Larsen & Toubro (Oman) LLC
Larsen & Toubro Electromech LLC
L&T Modular Fabrication Yard LLC
Larsen & Toubro (East Asia) SDN.BHD ##
Larsen & Toubro Qatar LLC ##
L&T Overseas Projects Nigeria Limited
PT Larsen & Toubro Hydrocarbon Engineering Indonesia
L&T Electricals & Automation Saudi Arabia Company LLC
Larsen & Toubro Kuwait Construction General Contracting
Company, W.L.L. ##
Larsen & Toubro (Qingdao) Rubber Machinery Company Limited
As at 31-3-2014
As at 31-3-2013
Country of
incorporation
Proportion
of ownership
interest (%)
Proportion of
voting power
held (%)
Proportion
of ownership
interest (%)
Proportion of
voting power
held (%)
USA
Germany
Canada
USA
Canada
USA
South Africa
China
Sri Lanka
Singapore
Mauritius
Mauritius
Mauritius
Mauritius
Mauritius
UAE
UAE
Kindgom of Saudi
Arabia
UK
UK
UK
Sultanate of Oman
Sultanate of Oman
Sultanate of Oman
Malaysia
Qatar
Nigeria
Indonesia
Kingdom of Saudi
Arabia
Kuwait
Peoples Republic of
China
100.00
100.00
100.00
100.00
100.00
–
74.90
100.00
93.44
97.45
–
–
–
100.00
–
100.00
100.00
95.00
100.00
–
100.00
65.00
65.00
65.00
30.00
49.00
100.00
95.00
75.00
49.00
100.00
100.00
100.00
100.00
100.00
–
74.90
100.00
93.44
97.45
–
–
–
100.00
–
100.00
100.00
95.00
100.00
–
100.00
65.00
65.00
65.00
100.00
100.00
100.00
95.00
75.00
75.00
100.00
100.00
100.00
100.00
100.00
100.00
74.90
–
93.44
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
65.00
65.00
65.00
30.00
49.00
100.00
–
75.00
100.00
100.00
100.00
100.00
100.00
100.00
74.90
–
93.44
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
65.00
65.00
65.00
100.00
100.00
100.00
–
75.00
49.00
75.00
100.00
100.00
100.00
100.00
261
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Name of subsidiary company
Sr.
No.
32
Qingdao Larsen & Toubro Trading Company Limited @
33
34
Larsen & Toubro Readymix Concrete Industries LLC ##
Larsen & Toubro Saudi Arabia LLC
35
Larsen Toubro Arabia LLC
36
Larsen & Toubro ATCO Saudi LLC
37
38
39
40
41
42
43
44
45
Tamco Switchgear (Malaysia) SDN. BHD
Henikwon Corporation SDN. BHD
Tamco Electrical Industries Australia Pty Limited
PT Tamco Indonesia
Larsen & Toubro Heavy Engineering LLC
L&T Electrical & Automation FZE
Kana Controls General Trading and Contracting
Company W.L.L. ##
Larsen & Toubro Consultoria E Projeto Ltda
Larsen & Toubro T&D SA Proprietary Limited
Country of
incorporation
Peoples Republic of
China
UAE
Kingdom of Saudi
Arabia
Kingdom of Saudi
Arabia
Kingdom of Saudi
Arabia
Malaysia
Malaysia
Australia
Indonesia
Sultanate of Oman
UAE
Kuwait
Brazil
South Africa
As at 31-3-2014
As at 31-3-2013
Proportion
of ownership
interest (%)
100.00
Proportion of
voting power
held (%)
100.00
Proportion
of ownership
interest (%)
100.00
Proportion of
voting power
held (%)
100.00
49.00
100.00
75.00
75.00
100.00
100.00
100.00
100.00
70.00
100.00
49.00
100.00
72.50
100.00
100.00
75.00
75.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
100.00
72.50
49.00
100.00
75.00
49.00
100.00
100.00
100.00
100.00
70.00
100.00
–
100.00
72.50
100.00
100.00
75.00
75.00
100.00
100.00
100.00
100.00
70.00
100.00
–
100.00
72.50
## The Parent Company, together with its subsidiaries controls the composition of Board of Directors
^The Company has been liquidated w.e.f. March 28, 2014
* The Company has been liquidated w.e.f. December 2, 2013
** The Company has been liquidated w.e.f. August 20, 2013
@ The Company is in the process of being wound up
Name of associate company
Sr.
No.
Country of
incorporation
1
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited) *
2
3
4
5
6
7
8
9
10
L&T-Chiyoda Limited
L&T-Ramboll Consulting Engineers Limited
Gujarat Leather Industries Limited @
NAC Infrastructure Equipment Limited
International Seaport (Haldia) Private Limited
Vizag IT Park Limited
Larsen & Toubro Qatar & HBK Contracting LLC
L&T Camp Facilities LLC
Feedback Infra Private Limited (formerly known as Feedback
Infrastructure Services Private Limited)
India
India
India
India
India
India
India
Qatar
UAE
India
JSK Electricals Private Limited
Salzer Electronics Limited #
Rishi Consfab Private Limited
11
12
13
14 Magtorq Private Limited
15
AIC Structural Steel Construction (India) Private Limited ^
*Associate became wholly owned subsidiary w.e.f. April 15, 2013
@ The Company is under liquidation
# The Company’s accounts have been consolidated for twelve months period ended December 31, 2013
^ The Company has sold its stake on May 27, 2013
India
India
India
India
India
262
As at 31-3-2014
As at 31-3-2013
Proportion
of ownership
interest (%)
–
Proportion of
voting power
held (%)
–
Proportion
of ownership
interest (%)
50.00
Proportion of
voting power
held (%)
50.00
50.00
50.00
50.00
22.98
21.74
23.14
24.50
49.00
17.74
26.00
26.06
26.00
42.85
–
50.00
50.00
50.00
22.98
21.74
23.14
50.00
49.00
17.74
26.00
26.06
26.00
42.85
–
50.00
50.00
50.00
24.76
21.74
23.14
24.50
49.00
19.12
26.00
26.06
26.00
42.85
26.00
50.00
50.00
50.00
24.76
21.74
23.14
50.00
49.00
19.12
26.00
26.06
26.00
42.85
26.00
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Name of joint venture
Sr.
No.
Country of
residence
As at 31-3-2014
Proportion
of ownership
interest (%)
As at 31-3-2013
Proportion of
ownership interest
(%)
Jointly controlled entities-Indian joint ventures
L&T-AM Tapovan Joint Venture
International Metro Civil Contractors
Desbuild L&T Joint Venture
HCC-L&T Purulia Joint Venture
Metro Tunneling Group
L&T-Hochtief Seabird Joint Venture
L&T-Shanghai Urban Construction (Group) Corporation Joint Venture
Metro Tunneling Chennai L&T SUCG Joint Venture
The Dhamra Port Company Limited
1
2
3
4
5
6
7
8
9
10 Metro Tunneling Delhi-L&T SUCG Joint Venture
11
12
L&T-Shapoorji Pallonji & Company Limited Joint Venture -TCS
L&T-Shanghai Urban Construction (Group) Joint Venture CC27 Delhi
Jointly controlled entities-foreign joint ventures
L&T-Eastern Joint Venture
Indiran Engineering Projects and Systems
Civil Works Group-Riyadh Metro*
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering**
L&T-Delma Mafraq JV***
Jointly controlled operations-Indian joint ventures
L&T-HCC Joint Venture
Patel–L&T Consortium
L&T-BRAPL Joint Venture – package II
L&T-BRAPL Joint Venture – package III
L&T-KBL (UJV) Hyderabad
Consortium of Toyo Engineering Company and L&T Hydrocarbon Engineering Limited
L&T-SVEC Joint Venture
L&T-KBL-MAYTAS UJV
L&T and Scomi Engineering BHD. Joint Venture
Consortium of L&T Hydrocarbon Engineering Limited and Pipavav Defence &
Offshore Engineering Company
65.00
26.00
49.00
43.00
26.00
90.00
51.00
75.00
48.72
60.00
50.00
68.00
65.00
50.00
29.00
22.00
60.00
65.00
26.00
49.00
43.00
26.00
90.00
51.00
75.00
48.72
60.00
50.00
68.00
65.00
50.00
–
–
–
India
India
India
India
India
India
India
India
India
India
India
India
UAE
Iran
Kingdom of Saudi
Arabia
Qatar
UAE
India
India
India
India
India
India
India
India
India
India
*The joint venture has been entered on October 1, 2013
**The joint venture has been entered on November 24, 2013
*** The joint venture has been entered on March 16, 2014
Q(4) 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 Statement of Profit and Loss.
Q(5) Exceptional items [Note R(5)]:
a.
b.
c.
d.
Profit on divestment of the Group’s part stake in a subsidiary 361.47 crore (previous year: profit on divestment of the Group’s
part stake in a subsidiary 1.89 crore).
Loss on divestment of the Group’s stake in two subsidiaries 21.26 crore (net) [previous year: profit on divestment of Group’s
stake in three subsidiaries 181.16 crore (net)].
Profit on divestment of the Group’s stake in an associate company 0.03 crore (previous year: profit on divestment of the Group’s
stake in associate company 6.56 crore).
Exceptional items for the previous year ended March 31, 2013 also include:
i.
ii.
iii.
Profit on sale of shares held as equity investment by a subsidiary 237.93 crore.
Expenses incurred amounting to 38.34 crore on voluntary retirement scheme.
Loss on impairment of Group’s share in net worth of a subsidiary 52.44 crore.
263
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Q(6) a.
Extraordinary item [Note R(5)] for the year ended March 31, 2014 represents loss due to unprecedented floods at project site
on June 16, 2013 6.25 crore (net of insurance claim).
b.
Extraordinary items for the previous year ended March 31, 2013 include:
i.
Reversal of 52.89 crore being provision made in earlier years in respect of the Company’s investment in shares of Satyam
Computer Services Limited (SCSL).
ii. Gain of 25.22 crore (net of tax 18.72 crore) on sale of the Company’s medical equipment business unit. Tax of 6.50
crore included under current tax.
Q(7) The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 132.70 crore
(previous year: 106.96 crore). Further, the Company has incurred capital expenditure on research and development activities as
follows:
a)
on tangible assets 5.88 crore (previous year: 19.26 crore)
b) on intangible assets being expenditure on new product development 60.73 (previous year: 43.76 crore) [Note R(6)(b)] and
c)
on other intangible assets 5.11 crore (previous year: 13.64 crore)
In addition, the Company has carried out work of a developmental nature of
fully paid for by the customers.
Q(8) a)
Provision for current tax includes:
Nil (previous year: 21.27 crore) which is partially/
i)
Net reversal of provision for income tax in respect of earlier years 9.67 crore (previous year: 8.23 crore)
ii) Credit for Minimum Alternate Tax (MAT) entitlement
40.53 crore (previous year: 34.49 crore) under section 115JB of
the Income Tax Act, 1961.
iii) Translation effect on account of non-integral foreign operation 0.36 crore (net loss) [previous year: 0.01 crore (net gain)]
b)
Tax effect of 2.00 crore (previous year: 0.17 crore) on account of debenture issue expenses and premium on inflation linked
debenture has been credited to securities premium account.
Q(9) (a) Disclosures pursuant to Accounting Standard (AS) 7 (Revised) “Construction Contracts”
Particulars
i)
ii)
iii)
iv)
Contract revenue recognised for the financial year [Note K]
Aggregate amount of contract costs incurred and recognised profits (less recognised losses) as
at the end of the financial year for all contracts in progress as at that date
Amount of customer advances outstanding for contracts in progress as at the end of the financial
year
Retention amounts due from customers for contracts in progress as at the end of the financial year
2013-14
61617.69
crore
2012-13
55880.96
196608.59
167087.08
7703.15
6811.22
7199.49
6597.60
(b) Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions (Revised 2012) issued by the Institute of
Chartered Accountants of India
Particulars
i)
ii)
Amount of project revenue recognized for the financial year [Note K]
Aggregate amount of costs incurred and profits recognised as at the end of the financial
year
iii) Amount of customer advances received
iv) Amount of work-in-progress and the value of inventories [Note H(II)]
v)
Excess of revenue recognised over actual bills raised (unbilled revenue) [Note H(VI)]
2013-14
970.83
589.79
76.77
2063.36
156.63
crore
2012-13
228.92
70.24
327.29
1971.09
1.83
Q(10) Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benefits”
i.
Defined contribution plans: [Note R(7)(b)(i)] Amount of 94.45 crore (previous year: 114.15 crore) is recognised as an expense
and included in “employee benefits expense” [Note N] in the Statement of Profit and Loss.
264
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
ii. Defined benefit plans: [Note R(7)(b)(ii)]
a)
The amounts recognised in Balance Sheet are as follows:
Gratuity plan
Post-retirement
medical benefit plan
Company pension plan
Trust-managed
provident fund plan
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
crore
479.75
78.36
558.11
456.76
–
8.77
442.48
70.01
512.49
382.83
0.14
4.11
–
126.93
126.93
–
1.11
–
–
118.95
118.95
–
1.25
–
–
188.93
188.93
–
0.41
–
– 2403.95
198.89
61.76
198.89 2465.71
– 2444.74
–
–
0.53
–
2047.41
11.50
2058.91
2027.93
–
–
110.12
133.63
125.82
117.70
188.52
198.36
20.97
30.98
Particulars
A)
Present value of defined benefit
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 (asset)
B) Amounts reflected in the Balance Sheet
Liabilities
Assets
Net liability/(asset)
Net liability/(asset)-current
Net liability/(asset)-non-current
110.12
–
110.12
110.12
–
133.63
–
133.63
133.63
–
125.82
–
125.82
15.69
110.13
117.70
–
117.70
15.00
102.70
188.52
–
188.52
13.00
175.52
198.36
–
198.36
11.98
186.38
30.98
–
30.98
24.08
–
24.08
(15.89) # 30.29 ##
39.97
0.69
b)
The amounts recognised in Statement of Profit and Loss are as follows:
Particulars
Gratuity plan
Post-retirement medical
benefit plan
Company pension plan
Trust-managed provident
fund plan
crore
1
2
3
4
5
6
7
8
9
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
Business Combination
Actuarial gain/(loss) not recognised in
books
Translation adjustments
Amount capitalized out of the above
10
11
Total (1 to 11)
i
ii
Amount included in employee benefits
expense
Amount included as part of “manufacturing
construction and operating expenses”
Amount included as part of “finance cost”
Amount capitalised on new product
development
Total (i+ii+iii+iv)
iii
iv
Actual return on plan assets
2013-14
55.85
39.36
(29.57)
(26.67)
0.07
3.32
–
–
0.88
(2.18)
(0.39)
40.67
46.21
5.19
(10.87)
0.14
40.67
19.39
2012-13
44.00
33.51
(23.31)
30.36
0.33
–
(0.06)
(0.03)
–
5.71
(0.78)
89.73
73.07
9.41
7.18
0.07
89.73
38.08
2013-14
10.25
10.35
–
(8.35)
0.14
–
–
–
–
–
–
12.39
24.08
2012-13
7.33
8.50
–
9.13
3.77
–
–
–
–
–
–
28.73
8.29
–
4.87
(11.69)
–
12.39
–
15.57
–
28.73
–
2013-14
1.83
15.69
–
(14.38)
0.11
–
–
–
–
–
–
3.25
6.78
–
(3.53)
–
3.25
–
2012-13
2013-14
2012-13
0.98 160.21 $ 138.23 $
15.45 173.42
– (173.58)
57.08
–
–
–
–
(17.03)
138.32
(138.54)
(19.11)
–
–
–
2.00
–
9.14
0.11
–
–
–
–
–
–
–
–
25.68 200.10
(0.27) 160.21
–
–
120.90
138.23
–
–
–
25.95
–
39.89
–
(17.33)
–
25.68 200.10
– 165.48
120.90
148.53
265
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
c)
The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances
thereof are as follows:
Particulars
Opening balance of the present value of
defined benefit obligation
Add: Current service cost
Add: Interest cost
Add: Contribution by plan participants
i)
ii)
iii)
Employer
Employee
Transfer-in/(out)
Add/(less): Actuarial losses/(gains)
Less: Benefits paid
Add: Past service cost
Add: Liabilities assumed on transfer of
employees
Add: Business combination/acquisition
Add: Adjustment for earlier years
Add/(less): Translation adjustments
Closing balance of the present value of
defined benefit obligation
Gratuity plan
As at
31-3-2014
As at
31-3-2013
Post-retirement medical
benefit plan
As at
31-3-2014
As at
31-3-2013
Company pension plan
Trust-managed
provident fund plan
As at
31-3-2014
As at
31-3-2013
As at
31-3-2014
As at
31-3-2013
crore
512.49 432.29
55.85 44.00
39.36 33.51
118.95
10.25
10.35
–
–
–
–
–
0.26 ~
(36.84) 45.13
(33.86) (68.58)
0.33
0.02
–
–
15.37 22.75
–
2.80
–
5.72
–
–
–
(8.35)
(6.85)
–
–
2.58
–
–
94.07
7.33
8.50
–
–
–
9.13
(5.33)
3.59
–
1.66
–
–
198.89
1.83
15.69
–
–
–
(14.38)
(13.10)
–
–
–
–
–
184.67 2058.91
1833.45
0.98 160.21 $ 138.23 $
138.32
15.45 173.42
–
–
– 257.71
–
–
48.98
9.14
(11.35) (233.52)
–
–
–
–
–
–
–
–
–
–
–
232.13
–
(9.12)
(287.51)
–
–
13.41
–
–
558.11 512.49
126.93
118.95
188.93
198.89 2465.71
2058.91
d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as
follows:
Gratuity plan
Trust-managed
provident fund plan
crore
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: Benefits paid
Add: Business combination/disposal (net)
Add: Adjustment for earlier years
Closing balance of the plan assets
Notes: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts
As at
31-3-2013
322.04
23.31
14.77
68.47
(0.28)
–
(68.58)
23.09
0.01
382.83
As at
31-3-2014
2027.93
173.58
(8.10)
201.44
–
283.41
(233.52)
–
–
2444.74
As at
31-3-2013
1791.04
138.54
9.99
131.92
–
230.66
(287.51)
13.29
–
2027.93
As at
31-3-2014
382.83
29.57
(10.17)
77.97
–
–
(33.86)
10.42
–
456.76
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. [Note Q(10)(ii)(f)(7)] infra.
The Company expects to fund 25.10 crore (previous year: 59.65 crore) towards its gratuity plan and 149.93 crore
(previous year: 146.47 crore) towards its trust-managed provident fund plan during the year 2014-15.
Employer’s and employees’ contribution paid in advance.
#
## Employer’s and employees’ contribution (net) for March is paid in April.
$
~
Employer’s contribution to provident fund
Amount transferred out on sale of business undertakings (net) Nil (previous year: 0.26 crore)
266
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (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
As at
31-3-2014
30%
11%
29%
2%
–
As at
31-3-2013
29%
15%
26%
2%
–
Trust-managed provident
fund plan
As at
31-3-2014
24%
15%
8%
–
12%
As at
31-3-2013
24%
13%
7%
–
14%
1%
20%
7%
1%
20%
7%
–
41%
–
–
42%
–
f)
Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):
1
2
3
4
Post-retirement medical benefit plan
Discount rate:
a) Gratuity plan
b) Company pension plan
c)
Expected return on plan assets
Annual increase in healthcare costs (see note below)
Salary growth rate:
a) Gratuity plan
b) Company pension plan
5. Attrition Rate:
As at
31-3-2014
As at
31-3-2013
9.19%
9.19%
9.19%
7.50%
5.00%
5.00%
6.00%
8.09%
8.09%
8.09%
7.50%
5.00%
5.00%
6.00%
a)
For post-retirement medical benefit plan and 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 6%) for various age groups.
6.
7.
8.
9.
The estimates of future salary increases, considered in actuarial valuation, take into account inflation, 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 Statement of Profit and Loss as actuarial losses.
The obligation of the Company under the post-retirement medical benefit 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 defined benefit obligation:
crore
Particulars
Effect of 1% increase
Effect of 1% decrease
2013-14
2012-13
2013-14
2012-13
Effect on the aggregate of the service cost and
interest cost
Effect on defined benefit obligation
3.77
14.62
3.47
13.02
(2.90)
(11.64)
(2.66)
(10.32)
267
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
g)
The amounts pertaining to defined benefit plans are as follows:
Particulars
As at
31-3-2014
As at
31-3-2013
As at
31-3-2012
As at
31-3-2011
As at
31-3-2010
crore
1
Post-retirement medical benefit plan (unfunded)
Defined benefit obligation
Experience adjustment plan liabilities
125.82
14.76
117.70
0.69
92.64
(6.62)
2
Gratuity plan (funded/unfunded)
Defined benefit obligation
Plan assets
Surplus/(deficit)
Experience adjustment plan liabilities
Experience adjustment plan assets
3
4
Post-retirement pension plan (unfunded)
Defined benefit obligation
Experience adjustment plan liabilities
Trust managed provident fund plan (funded)
558.11
456.76
(101.35)
1.42
(8.11)
512.49
382.83
(133.64)
26.18
(13.96)
432.29
322.04
(110.39)
30.18
(0.19)
188.52
(0.22)
198.36
(2.79)
184.03
23.21
95.99
7.91
389.90
327.89
(61.99)
30.37
4.38
162.14
17.46
82.55
5.73
358.27
294.56
(63.71)
30.67
2.29
135.61
(4.11)
Defined benefit obligation
Plan assets
Surplus/(deficit)
2465.71
2444.74
(20.97)
2058.91
2027.93
(30.98)
1833.45
1791.04
(42.41)
1615.09
1583.61
(31.48)
1364.97
1350.42
(14.55)
h) General descriptions of defined benefit plans:
1. Gratuity plan:
The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to
fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or
retirement whichever is earlier. The benefit vests after five 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 benefit plan:
The Post-retirement medical benefit 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 notified 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 benefit under this plan vests immediately on rendering of service.
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
recognized immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment
risk and actuarial risk associated with the plan is also recognized as expense or income in the period in which such loss/
gain occurs. Further, an amount of 39.28 crore (previous year: reversal of 20.61 crore) has been provided based
on actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan.
268
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Q(11) Disclosure pursuant to Accounting Standard (AS) 17 ‘’Segment Reporting’’
a)
Primary segments (business segments):
Particulars
REVENUE
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Elimination
Total Revenue
RESULT
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Total Segment
Inter segment margin on capital jobs
Unallocated corporate income/(expenditure) (net)
Operating Profit (PBIT)
Interest expense
Interest income
Profit before tax (PBT) (before extraordinary items)
Profit from extra ordinary items
Profit before tax (PBT) (after extraordinary items)
Provision for current tax
Provision for deferred tax
Profit after tax
Additional tax on dividend distributed/proposed
by subsidiary companies
Share in profit/(loss) of associates
Minority interest in (income)/losses
Profit after tax, minority interests and share of
profit of associates
For the year ended 31-3-2014
Inter-segment
External
Total
For the year ended 31-3-2013
Inter-segment
External
Total
crore
29527.11
8892.40
5996.61
2883.07
4314.03
2742.77
10246.85
4961.84
4079.78
1014.35
536.50
75195.31
1512.84
2.76
524.74
145.35
531.90
137.17
3.43
36.94
–
25.42
64.21
(2984.76)
–
36652.34
5862.63
5523.44
4438.35
4804.89
3412.24
10032.36
6353.21
5170.87
1704.49
1934.22
85889.04
1327.32
17.32
208.70
84.01
327.80
114.61
22.33
63.63
9.98
9.00
43.41
(2228.11)
–
37979.66
5879.95
5732.14
4522.36
5132.69
3526.85
10054.69
6416.84
5180.85
1713.49
1977.63
(2228.11)
85889.04
3663.33
1187.71
826.92
499.80
542.54
383.63
99.54
1239.57
646.45
1090.97
133.24
10313.70
(97.00)
10216.70
(74.32)
10142.38
(3141.44)
488.29
7489.23
(6.25)
7482.98
(2501.64)
(105.94)
4875.40
(20.81)
9.25
38.16
4902.00
31039.95
8895.16
6521.35
3028.42
4845.93
2879.94
10250.28
4998.78
4079.78
1039.77
600.71
(2984.76)
75195.31
2855.19
1123.13
975.92
391.68
546.53
457.75
1005.43
1107.31
848.08
247.14
(51.10)
9507.06
(104.87)
9402.19
(196.80)
9205.39
(2124.29)
478.71
7559.81
78.11
7637.92
(2241.79)
(143.75)
5252.38
(12.96)
38.43
(72.18)
5205.67
269
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Other information
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Total
Unallocable corporate assets/liabilities
Total assets/liabilities
Segment assets
Segment liabilities
crore
As at
31-3-2014
29954.65
7689.11
5108.56
7149.86
4149.25
2580.62
8850.92
3910.80
44698.42
35030.16
10228.67
159351.02
10671.71
170022.73
As at
31-3-2013
23795.44
7146.60
5077.15
6220.05
3669.52
2145.19
7139.08
3177.70
36593.69
26949.28
10151.36
132065.06
11057.17
143122.23
As at
31-3-2014
17044.84
5864.63
2065.46
2873.59
1748.43
1292.57
4947.69
1284.72
37708.33
4443.59
2145.06
81418.91
47713.03
129131.94
As at
31-3-2013
14228.02
5074.88
2475.07
2356.07
1539.90
942.38
4877.77
870.18
30142.67
4343.60
2402.37
69252.91
37356.76
106609.67
crore
Capital expenditure
Depreciation, amortisation,
impairment & obsolescence
included in segment
expense
Non-cash expenses other
than depreciation included
in segment expense
Other information
For the year
ended
For the year
ended
31-3-2014
717.39
101.29
19.39
92.86
215.44
38.12
246.95
185.67
250.66
4026.31
336.33
Current year depreciation includes reversal of accumulated amortisation of Toll collection rights of 664.11 crore
Previous year depreciation includes reversal of accumulated amortisation of Goodwill on consolidation of 341.64 crore under respective segments
For the year
ended
31-3-2014 31-3-2013**
379.56
139.82
76.47
138.59
(2.30)
26.65
178.42
85.28
78.14
451.29
49.44
Infrastructure
Power
Metallurgical & Material Handling
Heavy Engineering
Electrical & Automation
Machinery & Industrial Products
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects *
Others
*
**
For the year
ended
31-3-2013
682.83
508.84
13.27
310.67
238.51
193.53
265.14
236.99
774.85
4523.21
1417.33
For the year
ended
31-3-2013
105.76
8.40
–
0.44
5.63
1.98
1.30
6.76
2.92
–
1.79
For the year
ended
31-3-2014
25.86
9.41
6.00
5.81
4.44
1.62
9.21
4.48
1.45
–
2.54
435.02
165.58
81.80
192.22
101.59
56.20
198.18
169.36
96.29
(280.88)
170.06
b)
Secondary segments (geographical segments):
Particulars
External revenue by location of customers
Carrying amount of segment assets by location
of assets
Cost incurred on acquisition of tangible and
intangible fixed assets
Domestic
Overseas
Total
For the year
ended
31-3-2014
61885.01
143610.84
For the year
ended
31-3-2013
55313.36
120566.97
For the year
ended
31-3-2014
24004.03
15740.18
For the year
ended
31-3-2013
19881.95
11498.09
For the year
ended
31-3-2014
85889.04
159351.02
For the year
ended
31-3-2013
75195.31
132065.06
crore
6107.20
8739.69
237.82
425.47
6345.02
9165.16
270
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
c)
Segment reporting: segment identification, reportable segments and definition of each reportable segment:
i)
Primary/secondary segment reporting format:
a]
b]
The risk-return profile 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 identified its geographical segments as (i) domestic
and (ii) overseas. The secondary segment information has been disclosed accordingly.
ii)
Segment identification
Business segments have been identified on the basis of the nature of products/services, the risk-return profile of individual
businesses, the organisational structure and the internal reporting system of the Company.
The operations of the Engineering and Construction segment which were hitherto reported as part of one single segment till
previous year have been reclassified into different segments based on internal restructuring and granular clarity of segment
information.
Further, the business of development of urban infrastructure which was hitherto reported as part of Developmental Projects
segment has been included as part of Realty business and reported under “Others” segment.
iii) Reportable segments
Reportable segments have been identified as per the criteria specified in Accounting Standard (AS) 17 “Segment Reporting”.
iv) Segment composition
•
•
Infrastructure segment comprises engineering and construction of building and factories, transportation
infrastructure, heavy civil infrastructure, power transmission & distribution and water & renewable energy projects.
Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power
generation equipment with associated systems and/or balance-of-plant packages.
• Metallurgical & Material Handling segment comprises turnkey solutions for ferrous (iron & steel making) and
non-ferrous (aluminium, copper, lead & zinc) metal industries, bulk material & ash handling systems in power, port,
steel and mining sector including manufacture and sale of industrial machinery and equipment.
•
•
Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment
& systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear
Power, Aerospace and Defence.
Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear
components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems
and control & automation products. Electrical & Automation also included medical equipment business in the previous
year (upto the date of sale).
• Machinery & Industrial Products segment comprises manufacture and sale of rubber processing machinery
& castings, manufacture and marketing of industrial valves, construction equipment & industrial products and
manufacture and sale of welding and cutting equipment. It also includes manufacture and sale of plastic processing
machinery (upto date of sale of stake) and manufacture and sale of undercarriage assemblies in the previous year.
•
•
•
•
Hydrocarbon segment comprises complete EPC solutions for the global Oil & Gas Industry from front-end design
through detailed engineering, modular fabrication, procurement, project management, construction, installation and
commissioning.
IT & Technology Services segment comprises information technology and integrated engineering services.
Financial Services segment comprises retail and corporate finance, housing finance, infrastructure finance, general
insurance, asset management of mutual fund schemes and related advisory services.
Developmental projects segment comprises development, operation and maintenance of basic infrastructure
projects, toll collection including annuity based projects, power development, development and operation of port
facilities and providing related advisory services.
• Others include realty, shipbuilding, ready-mix concrete, mining and aviation.
271
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Q(12) Disclosure of related parties/related party transactions pursuant to Accounting Standard (AS) 18 ‘’Related Party Disclosures’’:
i.
Names of the related parties with whom transactions were carried out during the year and description of relationship:
Associate companies:
1 L&T-Chiyoda Limited
2 Salzer Electronics Limited
3 L&T-Ramboll Consulting Engineers Limited
4 Magtorq Private Limited
5 JSK Electricals Private Limited
6 Vizag IT Park Limited
7 Feedback Infra Private Limited (formerly known as
Feedback Infrastructure Services Private Limited)
8 International Seaports (Haldia) Private Limited
9 Rishi Consfab Private Limited
10 L&T Camp Facilities LLC
Joint ventures:
1 Metro Tunneling Group
3 Desbuild L&T Joint Venture
2 L&T Hochtief Seabird Joint Venture
4 L&T-Shanghai Urban Construction (Group) Corporation
Joint Venture
5 L&T-AM Tapovan Joint Venture
6 HCC-L&T Purulia Joint Venture
7 The Dhamra Port Company Limited
8 Metro Tunneling Delhi-L&T SUCG Joint Venture
9 Metro Tunneling Chennai L&T SUCG Joint Venture
10 L&T-Eastern Joint Venture
11 L&T - Shapoorji Pallonji & Co. Ltd. Joint Venture - TCS
12 L&T - Shanghai Urban Construction (Group) Joint
Venture CC27 Delhi
13 International Metro Civil Contractors
Key management personnel & their relatives:
1 Mr. A.M. Naik (Group Executive Chairman)
2 Mr. K. Venkataramanan (CEO & Managing Director)
Mrs. Jyothi Venkataramanan (wife)
3 Mr. M. V. Kotwal (Whole-time Director)
4 Mr. R. Shankar Raman (CFO & Whole-time Director)
5 Mr. S. N. Subrahmanyan (Whole-time Director )
6 Mr. S. N. Roy (Whole-time Director )
ii. Disclosure of related party transactions:
Sr.
No.
1
Nature of transaction/relationship/major parties
Purchase of goods & services (including commission paid)
Associates & joint ventures, including:
L&T Valves Limted
(formerly known as Audco India Limited)
L&T- Chiyoda Limited
JSK Electricals Private Limited
Salzer Electronics Limited
2013-14
2012-13
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
198.55
830.64
–
34.58
26.73
120.11
587.68
–
–
118.75
Total
198.55
830.64
272
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
2013-14
2012-13
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
Sr.
No.
2
3
4
5
6
Nature of transaction/relationship/major parties
Sale of goods/contract revenue & services
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
Purchase/lease of fixed assets
Associates:
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
Total
Subscription to equity and preference shares (including
application money paid and investment in joint ventures)
Associates:
AIC Steel Structure (India) Private Limited
Total
Receiving of services from related parties
Associates & joint ventures, including:
L&T-Chiyoda Limited
Total
Rent paid, including lease rentals under leasing/hire purchase
arrangements including loss sharing on equipment finance
Associates:
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
L&T Valves Limited
(formerly known as Audco India Limited)
Key management personnel
Total
7
Charges for deputation of employees to related parties
Associates & joint ventures, including:
L&T Valves Limited
(formerly known as Audco India Limited)
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
L&T-Chiyoda Limited
47.75
47.75
3.76
3.76
0.03
0.03
6.65
6.65
2.01
0.01
2.02
58.32
5.07
5.07
–
–
–
–
8.20
8.20
–
0.01
0.01
25.65
5.06
–
–
7.63
–
–
–
–
25.22
Total
25.65
58.32
43.17
3.76
0.03
6.48
1.35
0.66
16.31
5.93
35.34
273
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
8
Dividend received
2013-14
2012-13
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
Associates & joint ventures, including:
10.13
4.61
International Seaports (Haldia) Private Limited
Feedback Infra Private Limited (formerly known as
Feedback Infrastructure Services Private Limited)
L&T- Ramboll Consulting Engineers Limited
Vizag IT Park Limited
Salzer Electronics Limited
Magtorq Private Limited
5.90
–
1.80
1.12
0.32
–
–
0.66
1.80
1.19
–
0.63
Total
10.13
4.61
9
Commission received, including those under agency
arrangements
Associates:
L&T Construction Equipment Limited
(formerly known as L&T-Komatsu Limited)
Total
10
Rent received, overheads recovered and miscellaneous income
Associates & joint ventures, including:
L&T-Chiyoda Limited
Total
11
Interest Received
Joint ventures:
The Dhamra Port Company Limited
Total
12
Payment of salaries /perquisites (other than commission)
Key Management Personnel:
–
–
4.48
4.48
48.63
48.63
13.32
A. M. Naik
K. Venkataramanan
V. K. Magapu*
M. V. Kotwal
Ravi Uppal**
S. N. Subrahmanyan
R. Shankar Raman
S. Shailendra Roy
138.68
–
138.68
138.68
6.02
6.02
41.62
41.62
21.72
4.47
48.63
3.92
2.85
–
2.06
–
1.63
1.48
1.38
3.56
41.62
3.61
2.58
7.40
1.89
2.05
1.52
1.37
1.30
Total
13.32
21.72
274
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
17.45
10.47
2.82
3.64
1.71
7.01
5.53
3.19
2012-13
40.80
4.90
6.12
51.82
Sr.
No.
13
Nature of transaction/relationship/major parties
Commission to directors @
Key management personnel :
A. M. Naik
K. Venkataramanan
V. K. Magapu *
M. V. Kotwal
Ravi Uppal **
S. N. Subrahmanyan
R. Shankar Raman
S. Shailendra Roy
2013-14
2012-13
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
67.18
51.82
24.50
9.18
–
6.65
–
11.63
9.31
5.91
Total
67.18
51.82
*
Retired w.e.f. the close of working hours of September 30, 2012.
** Ceased to be a director w.e.f. the close of working hours of September 15, 2012
@ Commission to Directors comprises :
Sr.
No.
1
2
3
Particulars
Commission
Contribution to provident fund on commission
Contribution to superannuation fund on commission
Total
2013-14
52.90
6.35
7.93
67.18
“Major parties” denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period.
iii. Amount due to/from related parties
Sr.
No.
1
Nature of transaction/relationship/major parties
Accounts receivable
Associates & joint ventures, including:
The Dhamra Port Company Limited
Total
2
Accounts payable (including acceptance & interest accrued)
Associates & joint ventures, including:
L&T- Chiyoda Limited
Salzer Electronic Limited
Total
2013-14
2012-13
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
66.63
66.63
31.86
31.86
66.61
10.31
13.37
71.98
71.98
45.61
45.61
70.81
16.43
18.87
275
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Sr.
No.
3
4
5
Nature of transaction/relationship/major parties
Unsecured loan
Joint venture:
Metro Tunneling Group
Total
Loans & advances recoverable
Associates & joint ventures, including:
The Dhamra Port Company Limited
Key Management personnel
Total
Due to whole time directors
Key Management Personnel
A.M. Naik
K. Venkataramanan
V.K. Magapu *
M.V. Kotwal
Ravi Uppal **
S.N. Subrahmanyan
R. Shankar Raman
S.N. Roy
Total
2013-14
2012-13
Amount Amounts for
major parties
Amount Amounts for
major parties
crore
30.00
30.00
560.09
0.01
560.10
52.90
30.00
540.36
19.29
7.23
–
5.24
–
9.16
7.33
4.65
30.00
30.00
472.50
0.01
472.51
40.80
30.00
453.41
13.74
8.24
2.22
2.87
1.35
5.52
4.35
2.51
52.90
40.80
* Retired w.e.f. the close of working hours of September 30, 2012.
** Ceased to be a director w.e.f. the close of working hours of September 15, 2012
“Major parties” denote entities who account for 10% or more of the aggregate for that category of transaction during respective
period.
Q(13) Disclosure in respect of Leases pursuant to Accounting Standard (AS) 19 ‘’Leases’’:
i. Where the Company is a Lessor:
(a) Finance leases:
i)
The Company has given certain assets on finance leases. The leases have a primary period that is fixed and non-
cancellable and a secondary period. There are no exceptional/restrictive covenants in the lease agreement.
276
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
ii)
The total gross investment in these leases as on March 31, 2014 and the present value of minimum lease payments
receivable as on March 31, 2014 is as under:
Particulars
1. Receivable not later than 1 year
2. Receivable later than 1 year and not later than 5 years
3. Receivable later than 5 years
Gross investment in lease (i+ii+iii)
Less: Unearned finance income
Present value of minimum lease payments receivable
crore
As at
31-3-2014
As at
31-3-2013
735.94
2992.08
11460.21
15188.23
10250.99
4937.24
64.56
112.66
0.24
177.46
31.68
145.78
iii)
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 securitized.
(b) Operating leases:
i)
The Company has given assets under non-cancellable operating lease, the future minimum lease payments receivable
in respect of which, as at March 31, 2014 are as follows:
Particulars
1. Receivable not later than 1 year
2. Receivable later than 1 year and not later than 5 years
3. Receivable later than 5 years
Total
ii. Where the Company is a Lessee:
(a) Finance leases:
crore
As at
31-3-2014
As at
31-3-2013
148.80
220.10
17.80
386.70
73.36
109.09
0.12
182.57
i)
Assets acquired on finance lease mainly comprise plant and equipment, vehicles and personal computers. The leases
have a primary period, which is fixed 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, 2014 and the present value as at March 31, 2014 of minimum lease
payments in respect of assets acquired under finance leases 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
Less: Future finance charges
Present value of minimum lease payments
crore
Present value of minimum
lease payments
As at
31-3-2014
0.33
2.85
–
3.18
As at
31-3-2013
0.26
0.25
–
0.51
Minimum lease payments
As at
31-3-2014
0.37
2.91
–
3.28
0.10
3.18
As at
31-3-2013
0.30
0.29
–
0.59
0.08
0.51
iii)
Contingent rent recognised/(adjusted) in the Statement of Profit and Loss in respect of finance leases: Nil (previous
year: Nil).
277
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
(b) Operating leases:
i)
The Company has taken various commercial premises and plant and equipment 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, 2014 are as follows:
Particulars
1.
2.
3.
Payable not later than 1 year
Payable later than 1 year and not later than 5 years
Payable later than 5 years
Total
crore
As at
31-3-2014
As at
31-3-2013
70.04
212.66
180.58
463.28
54.69
129.31
150.54
334.54
[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: 155.40 crore (previous year: 145.42 crore)
iv) Contingent rent recognised in the Statement of Profit and Loss: 0.12 crore (previous year: Nil)
Q(14) 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
2013-14
2012-13#
2013-14
2012-13#
Basic
Profit after tax as per accounts ( crore)
Weighted average number of shares outstanding
Basic EPS ( )
Diluted
Profit 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
A
B
A/B
A
B
C
4908.25
5134.06
4902.00
5205.67
92,54,16,187 92,08,89,827 92,54,16,187 92,08,89,827
53.04
55.75
52.97
56.53
4908.25
5134.06
4902.00
5205.67
92,54,16,187 92,08,89,827 92,54,16,187 92,08,89,827
56,56,640
75,76,279
56,56,640
75,76,279
Weighted average number of shares outstanding
D=B+C 93,10,72,827 92,84,66,106 93,10,72,827 92,84,66,106
for diluted EPS
Diluted EPS ( )
Face value per share ( )
A/D
52.72
2
55.30
2
52.65
2
56.07
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’’.
#
The basic and diluted EPS for the year 2012-13 have been restated pursuant to the issue of bonus equity shares in the ratio of
1:2 [one bonus equity share of 2 each for every two equity shares of 2 each held].
278
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Q(15) Major components of deferred tax liabilities and deferred tax assets pursuant to Accounting Standard (AS) 22‘’Accounting for Taxes
on Income‘’:
Particulars
Deferred tax liabilities:
Deferred tax
liabilities/
(assets) as at
31-3-2013
Charge/(credit)
to Statement
of Profit and
Loss
Effect due to
acquisition/
disposal
Charge/(credit) to reserves
Foreign currency
translation
reserve
Hedging
reserve *
crore
Deferred tax
liabilities/
(assets) as at
31-3-2014
Difference between book and tax depreciation
1038.68
153.82
(3.56)
Gain on derivative transactions to be offered
for tax purposes in the year of transfer to
Statement of Profit and Loss
Disputed statutory liabilities paid and claimed
as deduction for tax purposes but not
debited to Statement of Profit and Loss
Other items giving rise to timing differences
Total
Deferred tax (assets):
Provision for doubtful debts and advances
debited to Statement of Profit and Loss
Loss on derivative transactions to be claimed
for tax purposes in the year of transfer to
Statement of Profit and Loss
Unpaid statutory liabilities/provision for
compensated absences debited to
Statement of Profit and Loss
Unabsorbed depreciation/brought forward
23.61
(1.48)
82.32
171.07
13.02
67.53
–
–
–
1315.68
232.89
(3.56)
(280.68)
(47.11)
(0.07)
(196.46)
1.83
–
(186.35)
(6.68)
(1.31)
business losses
(321.43)
(26.54)
Difference between book and tax depreciation
(17.63)
10.76
Other items giving rise to timing differences
(129.46)
(59.21)
Total
(1132.01)
(126.95)
Net deferred tax liability/(assets)
183.67
105.94
–
–
–
(1.38)
(4.94)
–
–
–
0.22
0.22
–
–
–
–
–
–
–
–
1188.94
11.34
33.47
–
–
95.34
238.82
11.34
1556.57
–
(327.86)
41.23
(153.40)
–
–
–
–
(194.34)
(347.97)
(6.87)
(188.67)
41.23
(1219.11)
0.22
52.57
337.46
Previous year
81.84
143.75
(13.58)
(0.27)
(28.07)
183.67
631.10 crore (Previous year: 611.70 crore) representing net(gains)/losses on effective hedges is recognised in
* The amount of
hedge reserve, applying the principles of hedge accounting set out in Accounting Standard (AS) 30 ‘’Financial Instruments: Recognition
and Measurement’’. The amount is after considering the net deferred tax liability of
52.57 crore during the year (previous year:
deferred tax asset (net) 28.07 crore)
279
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Q(16) The effect of acquisitions (including newly incorporated subsidiaries) and disposals during the year on the Consolidated Financial
Statements is as under:
a) Acquisitions(including newly incorporated entities):
Sr.
No.
1
2
3
4
5
6
7
Name of company
L&T Construction Equipment Limited
(formerly known as L&T-Komastu Limited)
Larsen & Toubro Hydrocarbon International Limited LLC
L&T Information Technology Services (Shanghai) Co. Ltd.
Kudgi Transmission Limited
L&T Sambalpur Rourkela Tollway Limited
L&T IDPL Trustee Managers PTE Limited
Kana Controls General Trading and Contracting Company
W.L.L.
8 Mudit Cement Private Limited
9
PT. Larsen & Toubro Hydrocarbon Engineering Indonesia
Total
b) Disposals:
Effect on Group profit/(loss)
after minority interest for the
year ended March 31, 2014
Net assets/
(liabilities) as at
March 31, 2014
crore
11.52
(1.02)
(0.35)
(0.55)
(0.07)
(0.05)
(0.01)
(0.78)
–
8.69
79.87
(0.27)
0.34
52.43
0.48
1.14
4.13
2.85
–
140.97
Sr.
No.
1
2
Name of company
L&T Chennai Projects Private Limited
L&T Bangalore Airport Hotel Limited
Total
Effect on Group profit/(loss) after
minority interest for the period
ended March 31
2013-14
(13.05)
(48.99)
(62.04)
2012-13
(41.28)
(32.99)
(74.27)
Net assets/
(liabilities) as at the
date of disposal
(during 2013-14)
crore
Net assets
as at March
31, 2013
(7.36)
(21.97)
(29.33)
5.69
27.02
32.71
Q(17) 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 Financial Statements are:
Particulars
Non-current assets
Fixed assets
(a) Tangible assets
(b) Intangible assets
(c) Capital work-in-progress
Deferred Tax Asset (net)
Long term loans and advances
Cash and bank balances
Other non-current assets
Current Assets
Current investments
Inventories
Trade receivables
Cash and bank balances
Short term loans and advances
Other current assets
1
2
3
4
5
1
2
3
4
5
6
I
Assets
280
31-3-2014
crore
31-3-2013
1664.68
1.74
138.88
0.01
40.38
2.05
8.18
14.84
17.12
294.55
87.22
204.29
238.61
1740.94
2.46
48.50
–
49.09
–
0.38
–
17.35
187.30
153.52
185.56
116.49
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
II
Liabilities
1
2
1
2
3
4
5
1
2
1
2
3
4
5
6
1
2
3
1
2
III
IV
V
Reserves
Income
Expenses
VI
Contingent
liability
VII
Capital
commitments
Particulars
Non-current Liabilities
Long term borrowings
Other long term liabilities
Current Liabilities
Short term borrowings
Current maturities of long term borrowings
Trade payables
Other current liabilities
Short term provisions
Revenue from operations
Other Income
Operating expenses
Staff expenses
Sales administration and other expenses
Interest expense
Depreciation and amortisation
Provision for tax
Contingent liabilities, if any, incurred in relation to interests in joint
ventures
Share in contingent liabilities of joint ventures themselves for which
the Company is contingently liable
Contingent liabilities in respect of liabilities of other ventures of joint
ventures
Capital commitments, if any, in relation to interests in joint ventures
Share in capital commitments of joint ventures themselves for which
the Company is contingently liable
Q(18) Disclosures pursuant to Accounting Standard (AS) 29 “Provisions, Contingent Liabilities and Contingent Assets”:
a) Movement in provisions:
31-3-2014
crore
31-3-2013
1690.85
113.96
104.86
6.40
442.20
402.76
0.14
(326.74)
1216.94
14.67
809.23
33.54
72.81
211.59
142.10
8.65
–
1672.35
58.23
32.63
2.10
333.38
401.98
2.64
(143.78)
676.65
9.68
490.86
23.87
40.57
201.82
106.90
4.77
–
68.68
67.48
–
2.14
–
–
8.55
37.18
crore
Total
Sr.
No.
1
2
3
4
5
6
Particulars
Balance as at 01-04-2013
Additional provision during the year
Provision used/reversed during the year
Adjustments pursuant to acquisition of a
subsidiary
Translation adjustments
Balance as on 31-03-2014 (6=1+2-3+4+5)
Product
warranties/
liquidity
damages
Expected
tax liability
in respect of
indirect taxes
55.71
30.40
(40.44)
1.00
–
46.67
79.84
24.30
(15.04)
–
–
89.10
# includes provision used during the year 41.24 crore (previous year: 1.80 crore)
b) Nature of provisions:
Class of provisions
Litigation
related
obligations
Periodic major
maintenance
Contractual
rectification
cost-
construction
contracts
10.27
–
–
–
0.06
10.33
56.89
177.32
(33.26)
–
–
200.95
315.21
127.54
(250.38)
–
517.92
359.56
(339.12) #
1.00
–
192.37
0.06
539.42
i.
Product warranties/liquidity damages: 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, 2014
represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the
outflows is expected to be within a period of five years from the date of Balance Sheet. Liquidity damages represent the
estimated cost the company is likely to incur due to delay in delivery as per its contract obligations and accrued on the
basis of advice from distributors/customers.
281
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
ii.
Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-
collection of declaration forms for the period prior to five years.
iii. Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in
appeal.
iv.
Periodic major maintenance represents provision made for resurfacing obligations in accordance with the terms of concession
agreement with National Highway Authority of India (NHAI).
v. Contractual rectification 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”.
c) Disclosures in respect of contingent liabilities are given as part of Note[I] to the Balance Sheet.
Q(19) In line with the Company’s risk management policy, the various financial 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, 2014 are as under:
Category of derivative instruments
For hedging foreign currency risks:
a)
Forward contracts for receivables including firm commitments and highly probable
forecasted transactions
Forward contracts for payables including firm commitments and highly probable
forecasted transactions
b)
c) Currency swaps
d) Option contracts
For hedging interest rate risks:
Interest rate swaps
For hedging commodity price risks:
Commodity futures
i)
ii)
iii)
b) Unhedged foreign currency exposures as at March 31, 2014 are as under:
Unhedged foreign currency exposures
i)
ii)
Receivables, including firm commitments and highly probable forecasted transactions
Payables, including firm commitments and highly probable forecasted transactions
crore
Amount of exposures hedged
As at
31-3-2014
As at
31-3-2013
10342.23
12109.45
12691.90
11855.20
3258.66
208.11
4949.06
217.42
–
251.45
464.40
242.59
As at
31-3-2014
57606.65
50697.78
crore
As at
31-3-2013
36051.91
32288.98
Note: As per the Royal Monetary Authority of Bhutan, Bhutan’s national currency is pegged to the Indian rupee at parity.
Accordingly, the unhedged foreign currency exposures reported above exclude exposures [Receivables amounting to
345.34 crore (previous year: 982.00 crore) and payables amounting to 121.46 crore (previous year: 701.25 crore)]
with respect to Bhutan Ngultrum (BTN)
Q(20) a.
The Group has undertaken various projects on Design-Build-Finance-Operate-Transfer (DBFOT)/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 profits before tax (net) recognised during the year in respect of construction services
related to BOT/DBFOT projects is 3717.83 crore (previous year: 3057.11 crore) and 585.47 crore (previous year: 361.48
crore) respectively [Note R(3)(A)(a)(ix)].
Loans and advances include 417.27 crore (previous year: 420.50 crore) being cumulative construction costs incurred including
related margins in respect of annuity based Build-Operate-Transfer (BOT) projects.
282
Notes forming part of the Consolidated Accounts (contd.)
NOTE [Q] (contd.)
Q(21) 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 amounting to 146.68 crore, relating to dividend of 863.06 crore
declared by them.
Q(22) Deferred payment liability of 3481.88 crore (previous year: 3953.98 crore) represents:
a. Negative grant/additional concession fee of
3065.48 crore (previous year: 3154.73 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
7.42 crore (previous year: 6.99
crore) as per the joint venture agreement entered into with NHDA.
c. Deferred conversion fee liability of
47.98 crore (previous year: 69.26 crore) towards conversion of land from Industrial to
commercial use as per the approval from Chandigarh Housing Board (CHB).
d.
Lease premium amounting to
361.00 crore (previous year: 723.00 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 3481.88 crore, an amount of 515.13 crore (previous year: 472.53 crore) is payable within a
period of one year.
Q(23) 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 had also filed an application opting for arbitration for resolution of disputes and an Arbitral Tribunal has been constituted
as provided in the concession agreement. The Company has submitted the Statement of Claims before the Arbitral Tribunal and
hearings were concluded on November 30, 2013 and Award from Arbitral Tribunal is awaited.
Q(24) There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2014.
Q(25) Figures for the previous year have been regrouped/reclassified wherever necessary.
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES
1. Basis of accounting
The Company maintains its accounts on accrual basis following the historical cost convention, except for the revaluation of certain
fixed assets, in accordance with generally accepted accounting principles [“GAAP”] in compliance with the provisions of the Companies
Act, 1956 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013
and relevant provisions of the Companies Act, 1956 read with the General Circular No. 1/19/2013 dated April 4, 2014 of the Ministry
of Corporate Affairs in respect of the relevant provisions/schedules/rules of the Companies Act, 2013. Further, the guidance notes/
announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the
extent where compliance with other statutory promulgations viz. SEBI guidelines, override the same requiring a different treatment.
The preparation of financial 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 financial statements. Examples of such estimates include the
useful lives of tangible and intangible fixed assets, allowance for doubtful debts/advances, future obligations in respect of retirement
benefit 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 specified 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 Financial
Statements.
2. Presentation of financial statements
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the revised Schedule VI
to the Companies Act, 1956 (“the Act”). The Cash Flow Statement has been prepared and presented as per the requirements of
Accounting Standard (AS) 3 “Cash Flow Statements”. The disclosure requirements with respect to items in the Balance Sheet and
283
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
Statement of Profit and Loss, as prescribed in the revised Schedule VI to the Act, are presented by way of notes forming part of
accounts along with the other notes required to be disclosed under the notified Accounting Standards and the Listing Agreement.
Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places
in line with the requirements of revised Schedule VI. Per share data are presented in Indian Rupees to two decimal places.
3. 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. Revenue from operations
Sales & service
i.
a.
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.
ii.
Revenue from sale of manufactured and traded goods is recognised when the substantial risks and rewards of
ownership are transferred to the buyer under the terms of the contract.
iii. Revenue from property development activity which are in substance similar to delivery of goods, is recognised when all
significant 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 those property development activities which have the same economic substance as construction contract
is recognised based on the ‘Percentage of Completion method’ (POC) when the outcome of a real estate project can
be estimated reliably upon fulfillment of all the following conditions:
a. All critical approvals necessary for commencement of the project have been obtained;
b.
When the stage of completion of the project reaches a reasonable level of development i.e. contract costs for
work performed bears a reasonable proportion to the estimated total contract costs. For this purpose, a reasonable
level of development is treated as achieved only if the cost incurred (excluding cost of land/developmental rights
and borrowing cost) is at least 25% of the total of such cost;
c. At least 25% of the saleable project area is secured by contracts or agreements with buyers;
d.
At least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents are
realised at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties
to such contracts will comply with the payment terms as defined in the contracts.
The costs incurred on property development activities are carried as “Inventories” till such time the outcome of the
project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project
can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity
is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of
completion is determined based on the proportion of actual cost incurred to the total estimated cost of the project.
For this purpose, actual cost includes cost of land and developmental rights but excludes borrowing cost.
Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of
the stage of completion of the contract.
iv. Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and
equipment is recognised as follows:
a.
b.
Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as
agreed with the customer.
Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome
of the job cannot be ascertained reliably. When the outcome of the contract is ascertained reliably contract
revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage
of completion method. Percentage of completion is the proportion of cost of work performed to-date to the
total estimated contract costs.
Government grants in the nature of subsidy related to customer contracts are recognised as revenue from operations
in the Statement of Profit and Loss, on a prudent basis, in proportion to work completed when there is reasonable
assurance that the conditions for the grant of subsidy will be fulfilled. 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 are taken into consideration.
284
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
v.
Revenue from contracts for rendering of services which are directly related to the construction of an asset is recognised
on similar basis as stated in (iv) supra.
vi. Revenue 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.
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 specific contracts. Unbilled revenue represents value of
services performed in accordance with the contract terms but not billed.
viii. 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 financing activities
is accounted on accrual basis. Income from interest-bearing assets is recognised on accrual basis over the life of the
asset based on the constant effective yield. Loan origination income i.e. processing fees and other charges collected
upfront, are recognised at the inception of the loan. Income including interest or any other charges on non-performing
asset is recognised only when realised. Any such income recognised before the asset became non-performing and
remaining unrealised is reversed.
ix. Revenue relatable to construction services rendered in connection with Build-Operate-Transfer (BOT) projects
undertaken by the Group is recognised during the period of construction using percentage of completion method.
After the completion of construction period, 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 Statement of Profit and Loss over the
concession period of the respective projects based on the implicit rate of return embedded in the projected cash flows.
Such income is duly adjusted for any variation in the amount and timing of the cash flows in the period in which such
variation occurs.
x.
Revenue from service related activities is recognised using either the proportionate completion method or completed
service contract method, whichever is considered appropriate.
xi. Commission income is recognised as and when the terms of the contract are fulfilled.
xii. Revenue from engineering and service fees is recognised as per the terms of the contract.
xiii. Income from investment management fees is recognised in accordance with the Investment Management Agreement
and SEBI regulations based on average Assets Under Management (AUM) of mutual fund schemes over the period
of the agreement in terms of which services are performed. Portfolio management fees are recognised in accordance
with Portfolio Management Agreement entered with respective clients over the period of the agreement in terms of
which the services are rendered. 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.
xiv. Revenue from port operation services including rail infrastructure is recognised on completion of respective services.
xv. Revenue from charter hire is recognised based on the terms of the time charter agreement.
xvi. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement
is recognised on accrual basis.
xvii. 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 deficiency, if any. Premium deficiency, 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 recognised 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 fire,
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% 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.
285
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
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 recognised as income on ceding of reinsurance premium.
Profit commission under re-insurance treaties, wherever applicable, is recognised in the year of final determination of
the profits.
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 specific claim settlement costs such as survey/legal fees and
other directly attributable costs.
Claims (net of amounts receivable from reinsurers/co-insurers) 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. 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 certified by the appointed actuary of
the Company. IBNR/IBNER has been created on reinsurance accepted from Indian Motor Third Party Insurance Pool
(IMTPIP) based on actuarial estimates received from the IMTPIP.
b. Other operational revenue
Other operational revenue represents income earned from the activities incidental to the business and is recognised when
the right to receive the income is established as per the terms of the contract.
B. Other income
a.
Interest income is accrued at applicable interest rate.
b. Dividend income is accounted in the period in which the right to receive the same is established.
c.
Other Government grants, which are revenue in nature and are towards compensation for the related costs, are recognised
as income in the Statement of Profit and Loss in the period in which the matching costs are incurred.
d. Other items of income are accounted as and when the right to receive arises.
4. Principles of consolidation
a. The financial 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 profits/losses on intra-group transactions, and are presented to the extent possible, in the same manner as the
Parent Company’s independent financial statements.
b.
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. The unrealized
profits/losses on transactions with associate companies are eliminated by reducing the carrying amount of investment.
c. Goodwill on consolidation represents the difference between the Group’s share in the net worth of a subsidiary, an associate or
a joint venture, and the cost of acquisition at each point of time of making the investment in the subsidiary, the associate or the
joint venture as per Accounting Standard (AS) 21 “Consolidated Financial Statements”. For this purpose, the Group’s share of net
worth is determined on the basis of the latest financial statements, prior to the acquisition, after making necessary adjustments
for material events between the date of such financial statements and the date of respective acquisition. Capital reserve on
consolidation represents negative goodwill arising on consolidation. Goodwill arising on consolidation as per Accounting Standard
(AS) 21”Consolidated Financial Statements“ is not amortised, however, it is tested for impairment. In the event of cessation of
operations of a subsidiary, associate or joint venture, the unimpaired goodwill is written off fully.
d. Minority interest represents that part of the net profit or loss and net assets of subsidiaries attributable to interests which are
not owned, directly or indirectly, by the Group. Further, Preference shares issued by the subsidiaries to stakeholders outside the
Group together with dividend accruals thereon also form part of minority interest in the Consolidated Financial Statements.
286
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
e.
The gains/losses in respect of part dilution of stake in subsidiary companies pursuant to issue of additional shares to minority
shareholders are recognised directly in capital reserve under reserves and surplus in the Balance Sheet. The gains/losses in respect
of part divestment of stake in subsidiary companies pursuant to sale of shares by the holding company are recognised in the
Statement of Profit and Loss.
f.
The Company’s interests in joint ventures are consolidated as follows:
Type of joint venture
Jointly controlled operations
Jointly controlled assets
Jointly controlled entities
Accounting treatment
Company’s share of revenues, common expenses, assets and liabilities are included in revenues,
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 benefits, if any, from use of the assets are
reflected 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 profits/losses on intra-group transactions.
Joint venture interests accounted as above are included in the segments to which they relate.
5. 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
classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any
external event beyond the control of the Company, significantly 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 classified as an
exceptional item and accordingly disclosed in the notes to accounts.
6. 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.
The technical feasibility of completing the intangible asset so that it will be available for use or sale
ii. The Company has intention to complete the intangible asset and use or sell it
iii. The Company has ability to use or sell the intangible asset
iv. The manner in which the probable future economic benefits 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
v. The availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset and
vi. The Company has ability to measure the expenditure attributable to the intangible asset during its development reliably
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.
7. Employee benefits
a. Short term employee benefits:
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee
benefits. The benefits 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.
b. Post-employment benefits:
i. Defined contribution plans: The Company’s superannuation scheme, state governed provident fund scheme, employee state
insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the
schemes is recognised during the period in which the employee renders the related service.
ii. Defined benefit plans: The employees gratuity fund schemes, post-retirement medical care scheme, pension scheme and
provident fund scheme managed by trust are the Company’s defined benefit plans. The present value of the obligation
under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.
287
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining
the present value of the obligation under defined benefit plans, is based on the market yield on government securities of
a maturity period equivalent to the weighted average maturity profile of the related obligations at the Balance Sheet date.
Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.
The interest element in the actuarial valuation of defined benefit plans, which comprises the implicit interest cost and the
impact of changes in discount rate, is classified under finance cost and balance charge is recognised as employee benefit
expenses in the Statement of Profit and Loss. In case of funded plans, the fair value of the plan assets is reduced from the
gross obligation under the defined benefit plans to recognise the obligation on a net basis.
Gains or losses on the curtailment or settlement of any defined benefit 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
benefits become vested.
c.
Long term employee benefits:
The obligation for long term employee benefits such as long term compensated absences, long service award etc. is recognised
in the similar manner as in the case of defined benefit plans as mentioned in (b)(ii) supra.
d. Termination benefits:
Termination benefits such as compensation under voluntary retirement cum pension scheme are recognised as expense in the
period in which they are incurred.
8. Tangible fixed assets
Tangible fixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation 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 and cumulative impairment. Assets acquired on hire purchase basis are stated at their cash values. Specific know-how
fees paid, if any, relating to plant and equipment is treated as part of cost thereof.
Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or
bringing the fixed assets to working condition are allocated and capitalised as a part of the cost of the fixed assets.
Own manufactured assets are capitalised at cost including an appropriate share of overheads.
Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “capital work-in-progress”.
(Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions infra.)
9. 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 the Statement of Profit and Loss.
b. 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 classified as
finance 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.
ii. Assets given under leases where the Company has transferred substantially all the risks and rewards of ownership to lessee,
are classified as finance leases. Where under a contract, the Company has agreed to manufacture/construct an asset and
convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-determined
consideration, such arrangement is also accounted as finance lease.
iii. Assets given under a finance 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.
288
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
iv.
Initial direct costs relating to assets given on finance leases are charged to the Statement of Profit and Loss.
Operating leases:
i. Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.
ii. Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease term.
(Also refer to policy on depreciation infra.)
10. Depreciation
A.
Indian companies
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
the Statement of Profit and Loss.
ii. 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. For the assets acquired thereafter, 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.
iii. Depreciation for additions to/deductions from owned assets is calculated pro-rata. 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.
ii.
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 finance 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.
iii.
Leasehold land:
Land acquired under long term lease is classified under “tangible assets” and is depreciated over the period of lease.
B. Foreign companies
Depreciation has been provided on methods and at the rates required/permissible by the local laws so as to write off the assets
over their useful life.
11. Intangible assets and amortisation
Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative
impairment. Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset
will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are amortised as follows:
a. Specialised software: over a period of three to ten years;
b.
Technical know-how: over a period of three to seven years;
c. Development costs for new products: over a period five years;
d. Customer contracts and relationships: over a period of ten years;
e. 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
289
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
are capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins
(refer to policy on revenue recognition supra) 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 intangible assets under development. The
revenue towards collection of toll/other income during the period of construction is reduced from the cost of intangible asset
under development.
Toll collection rights in respect of road projects, for the year ended March 31, 2013, were amortised based on the straight line
method over the period of rights given under the concession agreement. For the year ended March 31, 2014, toll collection
rights in respect of road projects are amortised over the period of concession using the revenue based amortisation method
prescribed under Schedule XIV to the Companies Act, 1956. Under the revenue based method, amortisation is provided based
on proportion of actual revenue earned till the end of the year to the total projected revenue from the intangible assets expected
to be earned over the concession period. Total projected revenue is reviewed at the end of each financial year and is adjusted
to reflect changes in earlier estimate vis-à-vis the actual revenue earned till the end of the year so that the whole of the cost of
the intangible asset is amortised over the concession period.
f.
Exploration and evaluation expenditure incurred for potential mineral reserves is recognised and reported as part of “intangible
assets under development” 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 significant 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.
g. Utility right to use costs are amortised over the period of ’agreement to use‘, but not exceeding 10 years.
Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are
allocated and capitalised as a part of the cost of the intangible assets.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “intangible assets under
development”.
Amortisation on impaired assets is provided by adjusting the amortisation charges in the remaining periods so as to allocate the
assets‘ revised carrying amount over its remaining useful life.
12. Impairment of assets
As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine:
a.
the provision for impairment loss, if any; and
b.
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.
in the case of an individual asset, at the higher of the net selling price and the value in use;
b.
in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), 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 flows from the continuing use of an asset and from its
disposal at the end of its useful life.)
13. Investments
Trade investments comprise investments in entities in which the Company has strategic business interest.
Investments, which are readily realisable and are intended to be held for not more than one year from the date of acquisition, are
classified as current investments. All other investments are classified as long term investments.
Long term investments (other than associates) including trade investments 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.
Investment in associate companies is accounted using “equity method” [Note R(4)(b)]. Purchase and sale of investments are recognised
based on the trade date accounting.
290
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
14. Inventories
Inventories are valued after providing for obsolescence, as under:
a. Raw materials, components, construction materials, stores, spares and loose tools at lower of cost or net realisable value. However,
these items are considered to be realizable at cost if the finished goods in which they will be used, are expected to be sold at
or above cost;
b. Manufacturing work-in-progress at lower of cost including related overheads or net realisable value. In some cases, manufacturing
work-in-progress is valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost
also includes applicable borrowing costs vide policy relating to borrowing costs;
c.
Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of cost or net realisable value. Cost includes
related overheads and excise duty paid/payable on such goods; and
d. Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically
identifiable cost or net realisable value.
Cost of inventories is computed either on a weighted average or on First-in-First-out (FIFO) basis.
15. Cash and bank balances
Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances
which have restrictions on repatriation. Short term and liquid investments being not free from more than insignificant risk of change
in value, are not included as part of cash and cash equivalents.
16. Government grant of capital nature
Grants received/receivable from NHAI in the nature of “promoter contribution” are credited to “capital reserve”.
17. Securities premium account
a. Securities premium includes:
i.
The difference between the market value and the consideration received in respect of shares issued pursuant to Stock
Appreciation Rights Scheme; and
ii.
The discount allowed, if any, in respect of shares allotted pursuant to Stock Options Scheme.
b. The following expenses are written off against securities premium account:
i.
ii.
Expenses incurred on issue of shares;
Expenses (net of tax) incurred on issue of debentures/bonds; and
iii. Premium (net of tax) on redemption of debentures/bonds.
18. Borrowing costs
Borrowing costs include interest, commitment charges, amortisation of ancillary costs, amortisation of discounts/premium related to
borrowings, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency
borrowings, to the extent they are regarded as an adjustment to interest costs.
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventorised
as part of cost of such asset till such time 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.
19. 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.
20. Foreign currency transactions, foreign operations, forward contracts and derivatives
a. The reporting currency of the Company is Indian Rupee.
b. 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:
291
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
i.
adjusted in the cost of fixed assets specifically financed by the borrowings contracted upto March 31, 2004 to which the
exchange differences relate;
ii. adjusted in the cost of fixed assets specifically financed 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. Closing inventories at rates prevailing at the end of the year.
ii.
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.
iii. Other assets and liabilities at rates prevailing at the end of the year.
iv. Net revenues at the average rate for the year.
d. 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.
e. 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 amortisation is accounted at the same
rate at which assets are converted.
ii.
Revenues and expenses at yearly average exchange rates prevailing during the year.
Exchange differences arising on translation of non-integral foreign operations are accumulated in the foreign currency translation
reserve until the disposal of such operations.
f.
Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly
probable forecasted 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 firm
commitments and highly probable forecasted transactions, are recognised in the financial statements at fair value as on the
Balance Sheet date, in pursuance of the announcement of the ICAI dated March 29, 2008 on accounting of derivatives. In
addition, the derivative arrangements embedded in the contracts entered in the course of business are accounted separately if
the economic characteristics and risks of the embedded derivatives are not closely related to economic characteristics and risks
of the host contract. [Note Q(24)(a)].
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 (including embedded derivatives)
covered under Accounting Standard (AS) 30 “Financial Instruments: Recognition and Measurement” are recognised in the
Statement of Profit and Loss or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge
in respect of off-balance sheet items is effective, the gains or losses are recognised in the “hedging reserve” which forms part
of “reserves and surplus” in the Balance Sheet. The amount recognised in the “hedging reserve” is transferred to the Statement
of Profit and Loss in the period in which the underlying hedged item affects the Statement of Profit and Loss. Gains and losses
in respect of ineffective hedges are recognised in the Statement of Profit and Loss in the period in which such gains or losses
are incurred.
h. The premium paid/received on a foreign currency forward contract is accounted as expense/income over the life of the contract.
21. Segment accounting
a.
Segment accounting policies
Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting
policies have been followed for segment reporting:
292
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
i.
Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment
revenue.
ii. Expenses that are directly identifiable 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”.
iii.
Income which relates to the Company as a whole and not allocable to segments is included in “unallocable corporate
income”.
iv. Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the
Company.
v. Segment assets and liabilities include those directly identifiable 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.
vi. Segment non-cash expenses forming part of segment expenses include the intrinsic value of the employee stock options
which is accounted as employee compensation cost [Note R(19)] and is allocated to the 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.
22. 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 income accounted in financial statements and the taxable income
for the year, and quantified 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 sufficient 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 sufficient
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.
23. 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.
the Company has a present obligation as a result of a past event
b. a probable outflow of resources is expected to settle the obligation and
c.
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.
a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the
obligation
b. a present obligation arising from past events, when no reliable estimate is possible
c. a possible obligation arising from past events, where the probability of outflow 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.
24. Commitments
Commitments are future liabilities for contractual expenditure.
Commitments are classified and disclosed as follows:
a. Estimated amount of contracts remaining to be executed on capital account and not provided for
b. Uncalled liability on shares and other investments partly paid
293
Notes forming part of the Consolidated Accounts (contd.)
NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.)
c.
Funding related commitments to associate and joint venture companies and
d. Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management.
Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details.
25. Operating cycle for current and non-current classification
Operating cycle for the business activities of the Company covers the duration of the specific project/contract/product line/service
including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies)
within the agreed credit period normally applicable to the respective lines of business.
26. Deferred payment liabilities
The obligation towards additional concession fee payable to NHAI is recognised as deferred payment liability when the Company, in
its capacity of Concessionaire, becomes entitled to exercise the right and collect toll in accordance with the terms of the concession
agreement on Commercial Operations Date.
27. Cash flow statement
Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method. Under the indirect method, the net profit is adjusted for the effects of:
a.
transactions of a non-cash nature
b. any deferrals or accruals of past or future operating cash receipts or payments and
c.
items of income or expense associated with investing or financing cash flows
Cash and cash equivalents (including bank balances) are reflected as such in the Cash Flow Statement. Those cash and cash equivalents
which are not available for general use as on the date of Balance Sheet are also included under this category with a specific disclosure.
As per our report attached
SHARP & TANNAN
Chartered Accountants
Firm’s Registration No.109982W
by the hand of
MILIND P. PHADKE
Partner
Membership No.33013
Mumbai, May 30, 2014
A. M. NAIK
Group Executive Chairman
K. VENKATARAMANAN
Chief Executive Officer &
Managing Director
R. SHANKAR RAMAN
Chief Financial Officer &
Whole-time Director
S. RAJGOPAL
A. K. JAIN
VIKRAM SINGH MEHTA
M. M. CHITALE
M. DAMODARAN
N. HARIHARAN
Company Secretary
Directors
Mumbai, May 30, 2014
294
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
L&T
Investment
Management
Limited
L&T Mutual
Fund Trustee
Limited
L&T General
Insurance
Company
Limited
L&T Finance
Limited
L&T Finance
Holdings
Limited
L&T Fincorp
Limited
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
L&T
Infrastructure
Finance
Company
Limited
31-03-2014
crore
L&T Aviation
Services
Private
Limited
31-03-2014
–
–
–
–
–
–
–
–
1 Share capital (including share application
235.86
0.15
495.00
238.42
2,718.45
272.97
829.23
45.60
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
317.59
74.87
628.32
628.32
68.50
85.90
(69.92)
–
(69.92)
–
–
–
–
(0.09)
0.01
0.07
0.07
–
0.05
(0.01)
–
(0.01)
–
–
–
–
GDA
Technologies
Limited
Larsen
& Toubro
Infotech
Limited
31-03-2014
31-03-2014
(366.83)
340.84
469.01
469.01
293.83
(113.28)
(100.18)
–
(100.18)
–
–
–
–
Larsen
& Toubro
Infotech,
GmbH
31-03-2014
Euro
–
–
82.69
1,954.61
14294.26
16487.29
16487.29
86.32
2199.82
304.78
103.55
201.23
–
–
98.95
–
1,808.51
806.44
5333.40
5333.40
198.44
257.57
196.89
0.51
196.38
–
75.98
128.88
–
464.31
3602.64
4339.92
4339.92
127.29
364.39
86.66
29.00
57.66
–
–
–
–
1,639.53
14637.01
17105.77
17105.77
1710.81
1794.80
397.24
105.11
292.13
105.73
–
–
(0.20)
74.60
120.00
120.00
–
28.87
0.72
(1.27)
1.99
–
–
–
–
Larsen
& Toubro
Infotech
Canada
Limited
31-03-2014
Canadian
Dollar
54.27
Larsen
& Toubro
Infotech LLC
31-03-2014
USD
59.92
L&T Infotech
Financial
Services
Technologies
Inc.
31-03-2014
Canadian
Dollar
54.27
L&T Capital
Company
Limited
L&T Trustee
Company
Private
Limited
31-03-2014
31-03-2014
–
–
1 Share capital (including share application
0.17
16.13
0.11
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
33.20
0.29
33.66
33.66
28.57
0.33
2.15
(0.18)
2.33
–
–
–
–
1,452.92
1037.74
2506.79
2506.79
140.21
4,643.94
1,145.46
243.15
902.31
551.48
–
–
–
19.24
13.28
32.63
32.63
–
91.70
6.16
0.78
5.38
–
–
–
–
0.00
6.02
1.28
7.30
7.30
–
40.74
0.49
0.11
0.38
–
–
–
–
–
280.00
22.00
0.01
8.86
1.68
10.54
10.54
–
26.51
1.86
–
1.86
–
–
–
–
114.91
42.69
437.60
437.60
–
248.51
15.12
2.42
12.70
–
–
–
–
6.42
0.10
28.52
28.52
5.55
1.92
2.08
2.26
(0.18)
–
–
–
–
(0.01)
–
–
–
–
–
–
–
–
–
–
–
–
295
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of financial year
1 Share capital (including share application money pending
allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
L&T
Diversified
India Equity
Fund
Hyderabad
International
Trade
Expositions
Limited
L&T Infocity
Limited
L&T Hitech
City Limited
L&T South
City Projects
Limited
L&T Siruseri
Property
Developers
Limited
CSJ
Infrastructure
Private
Limited
31-12-2013
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
crore
USD
61.81
0.26
(0.51)
0.25
0.00
0.00
–
–
(0.01)
–
(0.01)
–
–
–
–
–
17.01
8.03
28.67
53.71
53.71
–
20.97
6.76
1.65
5.11
–
–
–
–
–
27.00
109.64
121.79
258.43
258.43
2.34
42.08
91.94
40.53
51.41
20.25
–
–
–
–
75.00
(18.76)
6.17
62.41
62.41
–
0.84
(0.85)
0.85
(1.70)
–
–
–
–
–
56.48
77.50
111.02
245.00
245.00
–
2.79
(6.64)
0.65
(7.29)
14.12
–
–
–
–
0.05
(0.05)
0.00
0.00
0.00
–
–
–
–
–
–
–
–
–
–
45.89
114.25
1300.72
1460.86
1460.86
–
228.31
0.40
19.43
(19.03)
–
–
–
–
L&T Vision
Ventures
Limited
L&T Tech
Park Limited
L&T Chennai
– Tada
Tollway
Limited
L&T
Samakhiali
Gandhidham
Tollway
Limited
L&T Transco
Private
Limited
L&T
Infrastructure
Development
Projects
Limited
L&T Panipat
Elevated
Corridor
Limited
Narmada
Infrastructure
Construction
Enterprise
Limited
Financial year ending on
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
Currency
Exchange rate on the last day of
financial year
–
–
–
–
–
–
–
–
1 Share capital (including share application
0.05
6.50
42.00
80.54
0.01
321.06
84.30
47.35
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
296
(4.62)
10.81
6.24
6.24
–
–
(0.03)
–
(0.03)
–
–
–
–
7.00
0.75
14.25
14.25
–
–
(0.36)
–
(0.36)
–
–
–
–
(0.19)
325.87
367.68
367.68
2.49
(0.04)
3235.33
3315.83
3315.83
35.86
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(17.75)
2,692.69
(248.15)
17.79
0.05
0.05
–
0.00
–
–
–
–
–
–
–
1680.55
4694.30
4694.30
355.95
172.05
(11.74)
(1.42)
(10.32)
–
–
–
–
707.71
543.86
543.86
25.96
51.87
(46.56)
–
(46.56)
–
–
–
–
157.23
0.86
205.44
205.44
–
–
17.99
3.74
14.25
–
–
–
–
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
L&T
Krishnagiri
Thopur Toll
Road Limited
L&T Western
Andhra
Tollways
Limited
L&T Vadodara
Bharuch
Tollway
Limited
L&T Interstate
Road Corridor
Limited
L&T Western
India
Tollbridge
Limited
L&T
Transportation
Infrastructure
Limited
Financial year ending on
Currency
Exchange rate on the last day of
financial year
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
31-03-2014
–
–
–
–
–
–
L&T
Infrastructure
Development
Projects Lanka
(Private)
Limited
31-03-2014
Sri Lankan
Rupee
0.46
crore
International
Seaports
(India) Private
Limited
31-03-2014
–
1 Share capital (including share application
78.75
56.50
43.50
57.16
13.95
41.40
65.52
2.50
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
(102.33)
692.26
668.68
668.68
35.97
105.98
(26.68)
–
(26.68)
–
–
–
–
(58.51)
301.12
299.11
299.11
27.65
50.36
(35.78)
–
(35.78)
–
–
–
–
(336.64)
1215.52
922.38
922.38
–
248.94
(84.95)
–
(84.95)
–
–
–
–
31.93
417.77
506.86
506.86
49.53
86.42
0.97
0.19
0.78
–
–
–
–
15.68
0.05
29.68
29.68
0.71
–
0.96
0.19
0.77
–
–
–
–
83.76
138.22
263.38
263.38
8.20
24.29
42.16
17.55
24.61
–
–
–
–
0.95
26.80
93.27
93.27
–
–
–
–
–
–
–
–
–
(3.95)
1.46
0.01
0.01
–
–
(0.01)
–
(0.01)
–
–
–
–
L&T
Krishnagiri
Walajahpet
Tollway
Limited
L&T Devihalli
Hassan
Tollway
Limited
L&T
Metro Rail
(Hyderabad)
Limited
L&T Halol
- Shamlaji
Tollway
Limited
31-03-2014
31-03-2014
31-03-2014
31-03-2014
L&T
Ahmedabad
- Maliya
Tollway
Limited
31-03-2014
L&T Port
Kachchigarh
Limited
L&T
Uttaranchal
Hydropower
Limited
Nabha Power
Limited
31-03-2014
31-03-2014
31-03-2014
–
–
–
–
–
–
–
–
1 Share capital (including share application
90.00
90.00
1,155.40
130.50
149.00
4.16
161.05
2,325.00
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
3.70
829.32
923.02
923.02
4.75
–
1.14
0.37
0.77
–
–
–
–
178.10
247.58
515.68
515.68
0.17
10.35
(3.28)
(0.30)
(2.98)
–
–
–
–
(3.07)
2722.56
3874.89
3874.89
13.03
0.00
(0.19)
0.03
(0.22)
–
–
–
–
(152.66)
1302.36
1280.20
1280.20
13.90
77.02
(26.86)
–
(26.86)
–
–
–
–
(130.39)
1500.67
1519.28
1519.28
45.85
113.21
(45.32)
–
(45.32)
–
–
–
–
(4.53)
0.37
–
–
–
–
(0.03)
–
(0.03)
–
–
–
–
(1.50)
498.63
658.18
658.18
47.94
–
(4.72)
0.02
(4.74)
–
–
–
–
(115.34)
7321.03
9530.69
9530.69
5.92
2,833.89
(23.07)
–
(23.07)
–
–
–
–
297
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
L&T Power
Development
Limited
L&T
Arunachal
Hydropower
Limited
L&T
Himachal
Hydropower
Limited
Larsen
& Toubro
(Oman) LLC
Larsen &
Toubro (East
Asia) SDN.
BHD
Larsen
& Toubro
International
FZE
Larsen &
Toubro Qatar
LLC
Financial year ending on
Currency
31-03-2014
31-03-2014
31-03-2014
31-12-2013
Omani Rial
Exchange rate on the last day of
financial year
–
–
–
160.53
31-12-2013
Malaysian
Ringgit
18.85
31-12-2013
USD
31-12-2013
Qatari Rial
61.81
16.98
crore
L&T
Overseas
Projects
Nigeria
Limited
31-12-2013
Nigerian
Naira
0.39
1 Share capital (including share application
2,802.30
36.24
169.11
17.95
1.41
1,695.62
0.24
0.33
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
1.89
2.54
2806.73
2806.73
21.05
16.46
0.22
0.06
0.16
–
–
–
–
0.20
2.06
38.50
38.50
0.38
–
0.03
0.00
0.03
–
–
–
–
(0.02)
11.75
180.84
180.84
1.33
–
0.09
0.01
0.08
–
–
–
–
Larsen
& Toubro
Electromech
LLC
L&T
Electricals &
Automation
Saudi Arabia
Company,
LLC
L&T
Electrical &
Automation
FZE
Financial year ending on
Currency
31-12-2013
Omani Rial
31-12-2013
Saudi Riyal
31-03-2014
UAE Dirham
445.36
1541.53
2004.84
2004.84
–
2257.51
(79.73)
(0.36)
(79.37)
–
–
–
–
Larsen
& Toubro
Kuwait
Construction
General
Contracting
Company,
WLL
31-12-2013
Kuwaiti
Dinar
Exchange rate on the last day of
financial year
160.53
16.48
16.31
218.94
0.13
1.41
2.95
2.95
–
1.37
0.20
–
0.20
–
–
–
–
(406.64)
0.20
1289.18
1289.18
4.52
1.86
40.02
–
40.02
–
–
–
–
0.40
0.60
1.24
1.24
–
–
30.10
0.12
29.98
–
–
–
–
(0.27)
0.04
0.10
0.10
–
–
(0.01)
–
(0.01)
–
–
–
–
Larsen
&Toubro
(Qingdao)
Rubber
Machinery
Company
Limited
31-12-2013
Chinese
Yuan
Renminbi
10.13
Qingdao
Larsen &
Toubro Trading
Company
Limited
Larsen
& Toubro
Readymix
Concrete
Industries
LLC
L&T Modular
Fabrication
Yard LLC
31-12-2013 31-12-2013
UAE
Dirham
Chinese Yuan
Renminbi
31-12-2013
Omani Rial
10.13
16.83
160.53
1 Share capital (including share application
3.56
22.29
1.09
32.02
57.86
0.54
1.27
32.75
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
298
108.25
430.02
541.83
541.83
–
788.20
(68.33)
–
(68.33)
–
–
–
–
(2.74)
91.42
110.97
110.97
–
73.72
(2.85)
–
(2.85)
–
–
–
–
157.61
195.58
354.28
354.28
–
354.64
46.59
–
46.59
–
–
–
–
12.25
153.94
198.21
198.21
–
144.50
1.50
0.10
1.40
–
–
–
–
(58.90)
107.91
106.87
106.87
–
52.96
(33.92)
–
(33.92)
–
–
–
–
0.51
0.59
1.64
1.64
–
–
(0.10)
0.00
(0.10)
–
–
–
–
(2.23)
67.65
66.69
66.69
–
35.96
(7.61)
–
(7.61)
–
–
–
–
27.01
258.00
317.76
317.76
–
341.77
(53.50)
–
(53.50)
–
–
–
–
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
Larsen &
Toubro Saudi
Arabia LLC
Larsen &
Toubro ATCO
Saudia LLC
Larsen &
Toubro Heavy
Engineering
LLC
Tamco
Switchgear
(Malaysia)
SDN BHD
Financial year ending on
Currency
31-12-2013
Saudi Riyal
31-12-2013
Saudi Riyal
31-12-2013
Omani Rial
Exchange rate on the last day of
financial year
16.48
16.48
160.53
31-12-2013
Malaysian
Ringgit
18.85
Tamco
Electrical
Industries
Australia Pty
Ltd.
31-12-2013
Australian
Dollar
55.09
crore
PT Tamco
Indonesia
Larsen
& Toubro
Consultoria E
Projeto LTDA
Larsen &
Toubro T&D
Proprietary
LTD
31-12-2013
Indonesian
Rupiah
0.01
31-12-2013
Brazilian
Real
26.14
31-03-2014
South
African Rand
5.65
1 Share capital (including share application
18.64
1.08
68.49
119.18
45.20
0.22
2.53
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
(129.07)
542.02
431.59
431.59
–
228.85
(39.74)
–
(39.74)
–
–
–
–
L&T Realty
Limited
(6.70)
452.50
446.88
446.88
–
541.28
(3.19)
0.05
(3.24)
–
–
–
–
Chennai
Vision
Developers
Private
Limited
(119.54)
343.36
292.31
292.31
–
198.60
(3.15)
–
(3.15)
–
–
–
–
341.27
313.36
773.81
773.81
–
681.78
64.20
16.84
47.36
–
–
–
–
(12.93)
20.76
53.03
53.03
–
84.37
1.75
–
1.75
–
–
–
–
(34.25)
89.01
54.98
54.98
–
60.64
3.71
–
3.71
–
–
–
–
(2.72)
0.22
0.03
0.03
–
0.56
(0.96)
–
(0.96)
–
–
–
–
L&T Realty
FZE
L&T Power
Limited
L&T-Valdel
Engineering
Limited
L&T Natural
Resources
Limited
HI Tech Rock
Products &
Aggregates
Limited
–
2.86
0.32
3.18
3.18
–
–
0.10
–
0.10
–
–
–
–
L&T Cutting
Tools Limited
(formerly
known
as Tractor
Engineers
Limited)
31-03-2014
Financial year ending on
Currency
Exchange rate on the last day of
financial year
31-03-2014
31-03-2014
–
–
31-12-2013
UAE Dirham
16.83
1 Share capital (including share application
746.16
0.01
9.66
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
(228.77)
883.66
1401.05
1401.05
–
1.71
(57.32)
0.92
(58.24)
–
–
–
–
(0.02)
0.01
–
–
–
–
–
–
–
–
–
–
–
(0.72)
0.03
8.97
8.97
–
–
0.33
–
0.33
–
–
–
–
31-03-2014
31-03-2014
31-03-2014
31-03-2014
–
0.05
4.18
0.04
4.27
4.27
4.25
–
0.24
–
0.24
–
–
–
–
–
–
–
–
1.18
0.05
0.05
6.80
48.63
20.49
70.30
70.30
0.84
81.56
0.68
0.50
0.18
–
–
–
–
(6.32)
6.38
0.11
0.11
–
–
(0.01)
–
(0.01)
–
–
–
–
1.98
14.56
16.59
16.59
–
59.33
0.91
0.25
0.66
–
–
–
–
22.96
56.15
85.91
85.91
1.77
96.34
14.30
–
14.30
6.12
–
–
–
299
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Bhilai
Power
Supply
Company
Limited
31-03-2014
L&T-Sargent
& Lundy
Limited
Spectrum
Infotech
Private
Limited
31-03-2014
31-03-2014
–
–
–
Larsen &
Toubro LLC
L&T
Shipbuilding
Limited
L&T-Gulf
Private
Limited
crore
Raykal
Aluminium
Company
Private
Limited
31-03-2014
L&T
Electricals
and
Automation
Limited
31-03-2014
31-03-2014
31-03-2014
31-12-2013
USD
61.81
–
–
–
–
1 Share capital (including share application
0.05
5.57
0.44
0.24
1,355.86
8.00
0.05
0.05
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
–
8.81
8.86
8.86
–
–
–
–
–
–
–
–
–
57.13
23.84
86.54
86.54
46.29
101.83
9.60
2.42
7.18
–
–
–
–
15.08
50.94
66.46
66.46
–
42.89
4.51
1.47
3.04
0.88
–
–
–
L&T
Seawoods
Private
Limited
L&T Rajkot
- Vadinar
Tollway
Limited
Kesun Iron
& Steel
Company
Private
Limited
31-03-2014
31-03-2014
31-03-2014
1.62
1.88
3.74
3.74
–
5.25
0.22
0.04
0.18
–
–
–
–
L&T
Hydrocarbon
Engineering
Limited
(formerly
known
as L&T
Technologies
Limited)
31-03-2014
10.36
5.10
23.46
23.46
0.38
21.11
7.19
2.32
4.87
–
–
–
–
0.43
0.45
0.93
0.93
–
–
(0.01)
–
(0.01)
–
–
–
–
(0.02)
0.02
0.05
0.05
–
–
–
–
–
–
–
–
–
L&T
Howden
Private
Limited
L&T Solar
Limited
L&T Sapura
Shipping
Private
Limited
(871.29)
4047.90
4532.47
4532.47
11.77
532.64
(648.38)
(0.87)
(647.51)
–
–
–
–
L&T Special
Steels and
Heavy
Forgings
Private
Limited
31-03-2014
31-03-2014
31-03-2014
31-03-2014
–
–
–
–
–
–
–
–
1 Share capital (including share application
1,506.00
110.00
0.01
1,500.05
566.60
30.00
0.05
158.85
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
300
1.18
1420.88
2928.06
2928.06
8.83
–
7.00
1.57
5.43
–
–
–
–
(141.95)
1063.39
1031.44
1031.44
0.10
69.28
(12.53)
–
(12.53)
–
–
–
–
(0.25)
0.24
–
–
–
–
–
–
–
–
–
–
–
(19.41)
4793.26
6273.90
6273.90
–
8,715.90
163.83
58.10
105.73
–
–
–
–
(507.94)
1624.77
1683.43
1683.43
3.30
64.85
(334.48)
–
(334.48)
–
–
–
–
(11.82)
110.95
129.13
129.13
–
79.26
(1.69)
(0.55)
(1.14)
–
–
–
–
(0.01)
0.01
0.05
0.05
–
–
–
–
–
–
–
–
–
9.30
577.11
745.26
745.26
–
204.76
27.42
0.55
26.87
–
–
–
–
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
L&T Sapura
Offshore
Private
Limited
L&T
Powergen
Limited
Ewac Alloys
Limited
31-03-2014
31-03-2014
31-03-2014
L&T
Kobelco
Machinery
Private
Limited
31-03-2014
L&T - MHI
Boilers
Private
Limited
31-03-2014
L&T - MHI
Turbine
Generators
Private
Limited
31-03-2014
–
–
–
–
–
–
0.05
8.29
50.00
234.10
380.60
169.10
0.05
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
1 Share capital (including share application
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
–
0.01
0.49
12.61
13.11
13.11
–
0.54
0.09
0.02
0.07
–
–
–
–
(0.01)
0.01
0.05
0.05
–
–
–
–
–
–
–
–
–
78.95
83.64
170.88
170.88
–
268.47
52.31
17.65
34.66
19.41
–
–
–
(22.54)
74.98
102.44
102.44
3.00
35.62
(6.81)
0.05
(6.86)
–
–
–
–
155.16
2577.82
2967.08
2967.08
326.11
1,254.93
155.05
54.90
100.15
–
–
–
–
(281.94)
2395.64
2494.30
2494.30
–
747.79
(71.85)
13.66
(85.51)
–
–
–
–
L&T BPP
Tollway Limited
L&T Deccan
Tollways
Limited
L&T Infra
Investment
Partners
Advisory
Private Limited
L&T infra
Investment
Partners
Trustee Private
Limited
L&T Vrindavan
Properties
Limited
(Formerly
known as L&T
Unnati Finance
Limited)
L&T Access
Distribution
Services Limited
(Formerly
known as L&T
Access Financial
Advisory
Services
Limited)
31-03-2014
–
–
PNG
Tollway
Limited
crore
L&T
Cassidian
Limited
31-03-2014
31-03-2014
-
–
(0.01)
–
0.04
0.04
–
–
–
–
–
–
–
–
–
CSJ Hotels
Private Limited
(70.85)
1604.91
1703.16
1703.16
–
37.08
(32.39)
–
(32.39)
–
–
–
–
L&T Valves
Limited
(formerly
known as
Audco India
Limited)
Financial year ending on
Currency
Exchange rate on the last day of
financial year
31-03-2014
–
–
31-03-2014
–
–
31-03-2014
–
–
31-03-2014
–
–
31-03-2014
–
–
31-03-2014
–
–
31-03-2014
–
–
1 Share capital (including share application
5.00
0.10
18.75
6.00
247.20
25.68
15.63
0.01
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
(7.12)
18.95
16.83
16.83
6.77
8.88
(0.62)
(3.42)
2.80
–
–
–
–
(0.06)
0.02
0.06
0.06
–
0.02
(0.01)
–
(0.01)
–
–
–
–
(19.27)
480.94
480.42
480.42
88.91
1.63
(22.32)
(3.32)
(19.00)
–
–
–
–
(10.22)
12.29
8.07
8.07
–
6.11
(0.69)
(0.01)
(0.68)
–
–
–
–
(3.69)
1617.59
1861.10
1861.10
–
–
(2.06)
–
(2.06)
–
–
–
–
(1.03)
5.19
29.84
29.84
3.57
–
(0.02)
–
(0.02)
–
–
–
–
183.41
764.68
963.72
963.72
–
912.71
140.53
43.41
97.12
64.88
–
–
–
(0.01)
0.01
0.01
0.01
–
–
–
–
–
–
–
–
–
301
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
L&T
Housing
Finance
Limited
31-03-2014
–
–
Consumer
Financial
Services
Limited
31-03-2014
–
–
Family
Credit
Limited
L&T Capital
Markets
Limited
31-03-2014
–
–
31-03-2014
–
–
L&T Trustee
Services
Private
Limited
31-03-2014
–
–
L&T Infra
Debt Fund
Limited
31-03-2014
–
–
L&T
East-West
Tollway
Limited
31-03-2014
–
–
crore
L&T Great
Eastern
Highway
Limited
31-03-2014
–
–
1 Share capital (including share application
81.42
1.00
204.31
16.75
0.01
304.00
27.98
22.16
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
Particulars
Sr.
no.
Financial year ending on
Currency
Exchange rate on the last day of
financial year
221.63
1853.89
2156.94
2156.94
250.62
133.75
15.05
4.98
10.07
–
–
–
–
(0.62)
0.01
0.39
0.39
–
0.00
0.02
–
0.02
–
–
–
–
268.56
2780.30
3253.17
3253.17
185.00
448.30
65.36
(11.00)
76.36
–
–
–
–
L&T
Technology
Services
Limited
L&T
Tejomaya
Limited
31-03-2014
–
31-03-2014
–
–
–
Larsen
& Toubro
Infotech
South Africa
(PTY) Limited
31-03-2014
South
African Rand
5.65
(12.93)
5.93
9.75
9.75
4.30
18.05
(11.34)
–
(11.34)
–
–
–
–
Thalest
Limited
1.64
0.01
1.66
1.66
–
–
0.10
0.03
0.07
–
–
–
–
18.88
0.20
323.08
323.08
–
0.00
23.48
4.60
18.88
–
–
–
–
(0.47)
2.96
30.47
30.47
–
–
(0.04)
–
(0.04)
–
–
–
–
Servowatch
Systems
Limited
Larsen
Toubro
Arabia LLC
Henikwon
Corporation
Sdn Bhd
(0.30)
4.85
26.71
26.71
–
6.85
(0.02)
–
(0.02)
–
–
–
–
Mudit
Cement
Private
Limited
31-12-2013
British
Pound
102.14
31-12-2013
British
Pound
102.14
31-12-2013
Saudi Riyal
16.48
31-12-2013
Malaysian
Ringgit
18.85
31-03-2014
1 Share capital (including share application
502.72
26.34
0.27
1.37
10.44
14.77
11.26
2.10
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
302
(17.82)
151.99
636.89
636.89
–
126.17
11.55
5.34
6.21
–
–
–
4.93
3.78
67.63
97.75
97.75
–
16.35
4.88
2.58
2.30
–
–
–
–
0.52
17.97
18.76
18.76
–
51.42
0.47
0.16
0.31
–
–
–
–
(14.07)
45.09
32.39
32.39
–
35.14
(13.51)
–
(13.51)
–
–
–
–
(18.79)
35.20
26.85
26.85
–
30.99
(12.36)
–
(12.36)
–
–
–
–
(1.33)
140.21
153.65
153.65
–
46.68
(2.51)
0.07
(2.58)
–
–
–
–
(25.15)
40.76
26.87
26.87
–
63.49
(3.48)
–
(3.48)
–
–
–
–
(1.07)
29.48
30.51
30.51
–
–
(1.04)
–
(1.04)
–
–
–
–
Information on Subsidiary Companies
(for the financial year ended or as on, as the case may be)
Particulars
Sr.
no.
Kudgi
Transmission
Limited
L&T
Sambhalpur
Rourkela
Tollway limited
L&T
Information
Technology
Services
(Shanghai) Co.
Ltd.
L&T
Construction
Equipment
Limited
(formerly
known as
L&T Komatsu
Limited)
crore
L&T IDPL
Trustee
Manager Pte
Ltd.
Larsen
& Toubro
Hydrocarbon
International
Limited LLC
PT Larsen
& Toubro
Hydrocarbon
Engineering
Indonesia
Kana Controls
General Trading
& Contracting
Company
W.L.L.
Financial year ending on
31-03-2014
31-03-2014
31-03-2014
31-12-2013
31-03-2014
31-12-2013
31-12-2013
31-12-2013
Currency
Exchange rate on the last day of
financial year
Chinese
Yuan
Renminbi
Singapore
Dollar
Saudi Riyal
Indonesian
Rupiah
Kuwaiti
Dinar
10.13
47.58
16.48
0.01
218.94
1 Share capital (including share application
53.00
0.55
120.00
0.22
1.19
0.75
money pending allotment)
2 Reserves
3 Liabilities
4 Total liabilities
5 Total assets
6 Investments (details on pages 304 to 320)
7 Turnover
8 Profit before taxation
9 Provision for taxation
10 Profit after taxation
11 Interim dividend - equity
12 Interim dividend - Preference
13 Proposed dividend - equity
14 Proposed dividend - preference
(0.57)
13.02
65.45
65.45
0.01
–
(0.57)
–
(0.57)
–
–
–
–
(0.07)
0.83
1.31
1.31
–
–
(0.07)
–
(0.07)
–
–
–
–
94.80
143.50
358.30
358.30
–
510.02
16.14
4.62
11.52
96.00
–
–
–
(0.40)
(0.05)
(0.98)
0.35
0.17
0.17
–
0.15
(0.40)
–
(0.40)
–
–
–
–
0.03
1.17
1.17
–
–
(0.05)
–
(0.05)
–
–
–
–
8.83
8.60
8.60
–
–
(1.00)
–
(1.00)
–
–
–
–
–
–
–
0.00
0.00
–
–
–
–
–
–
–
–
–
1.94
(0.51)
5.92
7.35
7.35
–
7.94
(1.11)
–
(1.11)
–
–
–
–
303
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Finance Limited
Long term investment:
Government and trust securities:
12% National saving certificates 2002 ( 4000)
40
100
LTFL Securitisation Trust 2002 ( 1000)
Fully paid equity shares:
–
–
Unquoted
Unquoted
Invent Assets Securitisation & Reconstruction Private Limited
71,00,000
Alpha Micro Finance Consultants Private Limited
2,00,000
10
10
15.97
Unquoted
0.20
Unquoted
Security receipts:
Phoenix ARC Private Limited :
Phoenix ARF Scheme 6
Phoenix ARF Scheme 7
Phoenix ARF Scheme 9
Phoenix ARF Scheme 10
Phoenix ARF Scheme 11
Phoenix ARF Scheme 13
Phoenix ARF Scheme 14
Phoenix ARF Scheme 15
Mutual funds:
9,843
23,238
6,612
18,889
44,208
27,404
34,882
10,691
1000
257
970
1000
1000
1000
1000
1000
0.98
Unquoted
0.60
Unquoted
0.64
Unquoted
1.89
Unquoted
4.42
Unquoted
2.74
Unquoted
3.49
Unquoted
1.07
Unquoted
KKR India debt Opportunities Fund III
72,500
1000
7.25
Unquoted
Other company:
Fully paid equity shares:
Metropoli Overseas Limited
Anil Chemicals and Industries Limited
Elque Polyesters Limited
Monnet Industries Limited
Monnet Ispat And Energy Limited
Monnet Project Developers Limited
Glodyne Technologies Limited
Intergrated Digital Info Services Limited
SUB -TOTAL
Long term investment:
Debentures and bonds:
99,400
40,000
1,94,300
5,640
3,008
11,280
3,19,262
3,83,334
10
10
10
10
10
10
6
10
IDFC Ltd (M+150bps) 16 May 2017
400
1000000
SUB -TOTAL
Less: Provision for diminution in value
TOTAL
0.15
Unquoted
0.08
Unquoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
0.19
0.02
0.01
0.04
0.23
0.12
40.10
46.84
46.84
0.62
86.32
304
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
Name of the Company
Larsen & Toubro Infotech Limited
Current investments:
Mutual funds:
Liquid investments:
L&T Ultra Short Fund -IP-DDR
L&T Liquid Super IP DDR
IDFC Money Manager - Treasury Plan -DDR
IDBI Ultra Short Term Fund- DDR
Kotak Banking & PSU Debt Fund-DDR
L&T Cash Fund- DDR
Templeton India Ultra Short Bond Fund - Super IP-D
Fixed Maturity Plans:
Birla Sun Life FTP-Series KG (367 D)-Growth
DSP BlackRock FMP-Series 146 12M-Regular-Growth
DSP BlackRock FMP-Series 144 12M-Regular-Growth
HDFC FMP- 370D January 2014(1)-Growth
HDFC FMP- 371D January 2014(2)-Growth
ICICI Prudential FMP Series 72-370 Days- Plan G-Growth
ICICI Prudential FMP Series 72-366 Days- Plan K-Growth
ICICI Prudential Interval Fund Series VII Annual Plan C
ICICI Prudential FMP Series 73-366 Days- Plan A-Growth
IDBI FMP-Series IV-368 Days February 2014-Growth
IDBI FMP-Series IV-366 Days (February 2014) E-Growth
IDFC Fixed Term Plan Series 65 Direct Plan- Growth
Kotak FMP Series 105-370 Days -Growth
Kotak FMP Series 111-370 Days
Kotak FMP Series 138-370 Days-Direct-Growth
Kotak FMP Series 139-371 Days -Growth
L&T FMP Series-10-Plan K-Dividend Payout
L&T FMP Series-10-Plan L-Growth
L&T FMP Series-VIII-Plan D Growth
L&T FMP Series-VIII-Plan G
L&T FMP Series-10-Plan A-Growth
L&T FMP Series X-Plan D (367 Days)-Growth
L&T FMP Series-10-Plan N-Growth
Religare FMP Series 22-Plan G (370 Days)-Growth
19,77,104
5,24,389
49,70,782
49,947
30,35,243
48,948
53,56,912
20,00,000
20,00,000
20,00,000
30,00,000
20,00,000
20,00,000
20,00,000
20,00,000
20,00,000
20,00,000
20,00,000
20,00,705
20,00,000
20,00,000
20,00,000
20,00,000
50,00,000
20,00,000
20,00,000
20,00,000
20,00,000
40,00,000
20,00,000
20,00,000
Religare Invesco FMP Series 22-Plan O (370 Days)-Growth
20,00,000
UTI Fixed Term Income Fund Series XVII-X(367D) Growth
UTI FTIF Series XVII-XVI (367 days)-Growth
20,00,000
20,00,000
UTI Fixed Term Income Fund Series XVI-1(366 Days) Growth
20,00,000
TOTAL
10
1000
10
1000
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
2.00
52.91
5.00
5.00
3.00
5.00
5.30
2.00
2.00
2.00
3.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
5.00
2.00
2.00
2.00
2.00
4.00
2.00
2.00
2.00
2.00
2.00
2.00
140.21
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
305
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
Larsen & Toubro International FZE (as at 31-12-2013)
Long term investment:
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
Current investments:
Mutual funds:
Aggregating
to US Dollar
667164
4.00
Unquoted
875
Irani Riyal
1000000 each
0.52
Unquoted
4.52
Axis Treasury Advantage Fund- Daily Dividend Reinvestment
42,971
L&T FMP-VII (Feb 419 Day A)
L&T Liquid Fund Super IP
L&T Ultra STF -Daily Dividend Reinvestment Plan
DSP BlackRock Liquidity Fund-Institutional Plan-DDR
Birla Sunlife Floating Rate Fund Short Term Plan-DDR
L&T Liquid Fund-Direct Plan-DDR
L&T FMP-Series 10 -Plan N- Direct Growth
DWS Fixed Maturity Plan Series 50- Direct Plan -Growth
L&T FMP-Series X 91 Day -Growth
UTI Banking & PSU Debit Fund -Direct Plan-Growth
40,00,000
17,380
12,52,040
39,091
5,17,648
67,875
40,00,000
20,00,000
60,00,000
69,61,988
1000
10
1000
10
1000
1000
1000
10
10
10
10
4.30
Unquoted
4.00
Unquoted
1.76
Unquoted
1.27
Unquoted
3.91
Unquoted
5.18
Unquoted
6.87
Unquoted
4.00
Unquoted
2.00
Unquoted
6.00
Unquoted
7.00
Unquoted
46.29
TOTAL
306
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Infrastructure Development Projects Limited
Long term investment:
Associate companies:
Fully paid equity shares:
International Seaports Haldia (Private) Limited
98,30,000
10
9.83
Unquoted
Jointly controlled entity:
Fully paid equity shares:
The Dhamra Port Company Limited
32,39,99,960
10
324.00
Unquoted
Other companies:
Fully paid equity shares:
SICAL Iron Ore Terminals Limited
Second Vivekananda Bridge Tollway Company
Private Limited ( 10000)
Current investments (at cost):
Fully paid equity shares:
1,43,00,000
1,000
10
10
14.30
Unquoted
–
Unquoted
Ennore Tank Terminals Private Limited
67,87,500
10
6.79
Unquoted
Mutual funds:
SBI Premier Liquid Fund-Regular Plan-Growth Fund
5,166
2000
1.03
Quoted
TOTAL
L&T Capital Company Limited
Current investments:
Mutual funds:
Kotak Floater Short Term -Growth
Kotak Floater Short Term -Direct Plan-Growth
Kotak Bond Scheme Plan A -Direct Plan- Growth
1,605
11,934
8,61,621
1000
1000
10
355.95
Quoted
Quoted
Quoted
0.30
2.35
2.90
5.55
–
5.55
Less: Provision for diminution in value ( 42000)
TOTAL
Larsen & Toubro Infotech,GmbH
Long term investment:
Other company:
Fully paid equity shares:
Pan Health,USA
TOTAL
1,00,000
USD 1
Unquoted
–
–
307
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
Larsen & Toubro Qatar LLC
Long term investment:
Jointly controlled entity:
Fully paid equity shares:
Larsen & Toubro Qatar & HBK Contracting Co WLL -JV
100 QTR 100000
SUB -TOTAL
Less: Provision for diminution in value
TOTAL
L&T Infrastructure Finance Company Limited
Long term investment:
Associate companies:
Fully paid equity shares:
Unquoted
0.16
0.16
0.16
–
Feedback Infrastructure Services Private Limited
37,90,000
100
37.90
Unquoted
Other company:
Fully paid equity shares:
BSCPL Infrastructure Limited
Tikona Digital Networks Private Limited
Bhoruka Power Corporation Limited
Bhoruka Power Holdings Private Limited ( 2000)
Mission Holdings Private Limited ( 1000)
Coastal Projects Limited
Hanjer Biotech Energies Private Limited
Compulsory Convertible Debentures:
Tikona Digital Networks Private Limited
Bhoruka Power Corporation Limited
Multiple Option Exchangeable Debentures (MOEDs):
Mission Holdings Private Limited
Cumulative Redeemable Preference Shares:
Anrak Aluminium Limited
KSK Energy Ventures Limited
Venture Capital Units:
LICHFL Urban Development Fund
L&T Infra Investments Partner Fund
Class B
Class C
Class D
Investment in Security Receipts:
Phoenix ARC Private Limited
Current investments:
Fully paid equity shares:
C&C Construction Limited
B.L. Kashyap & Sons Limited
ICOMM Tele Limited
Fully paid preference shares:
KSK Energy Ventures Limited
Mutual funds:
L&T Liquid Fund Direct Plan - Growth
L&T Ultra Short Term Fund Direct Plan - Growth
L&T Floating Rate Fund Direct Plan - Growth
SUB-TOTAL
Less: Provision for diminution in value
TOTAL
308
10,47,916
605
100
100
100
3,28,526
2,08,716
10
10
10
10
10
10
10
60.05
0.17
0.01
–
–
14.82
9.44
Unquoted
Unquoted
Unquoted
Unquoted
Unquoted
Unquoted
Unquoted
5,41,040
15,336
2840
100000
153.66
153.36
Unquoted
Unquoted
5,500
100000
55.00
Unquoted
12,50,00,000
3,40,00,000
10
10
125.00
34.00
Unquoted
Unquoted
2,870
10000
2.87
Unquoted
99,51,689
5,00,000
10,000
100
100
10
99.52
5.00
0.01
Unquoted
Unquoted
Unquoted
10,61,435
1000
106.14
Unquoted
8,77,081
78,82,522
41,667
3,30,00,000
31,58,759
10,03,23,515
4,80,92,723
10
1
10
10
1000
10
10
2.08
4.14
-
Quoted
Quoted
Unquoted
33.00
Unquoted
Unquoted
Unquoted
Unquoted
555.00
209.08
60.00
1720.25
9.44
1710.81
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Power Limited (formerly known as L&T Power Projects Limited)
Current investments:
Mutual funds:
L&T Liquid Fund - Institutional Plan Plus- DDR
42,031
1000
4.25
Unquoted
TOTAL
4.25
L&T - MHI Boilers Private Limited
Current investments:
Mutual funds:
Short term debt plan:
BSL Floating Rate Fund STP Growth- Direct
BSL Short Term Fund _Growth- Direct
ICICI Prudential Liquid - Direct Plan- Growth
Kotak Floater Short Term - Direct Plan -Growth
5,69,008
1,41,96,224
17,51,480
1,89,414
Reliance Liquidity Fund- Treasury Plan- Direct Growth Plan
21,060
Reliance Medium Term Fund - Direct Growth Plan
1,76,59,065
SBI Short Term Debt Fund - Direct Plan- Growth
3,70,89,006
UTI Short Term Income Fund - Institutuional Option
6,30,85,960
- Direct Plan- Growth
TOTAL
L&T-Valdel Engineering Limited
Current investments:
Mutual funds:
100
10
100
1000
1000
10
1000
10
8.95
Quoted
61.87
Quoted
30.35
Quoted
36.34
Quoted
6.00
Quoted
43.00
Quoted
50.10
Quoted
89.50
Quoted
326.11
JP Morgan India Liquid Fund
5,11,820
10
0.84
Unquoted
TOTAL
0.84
L&T Power Development Limited
Long term investment:
Other companies:
Fully paid equity shares:
Konaseema Gas Power Limited
2,10,00,000
10
21.05
Unquoted
TOTAL
21.05
309
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
L&T Finance Holdings Limited
Long term investments:
Associate company:
Fully paid equity shares:
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
NAC Infrastructure Equipment Limited
45,00,000
10
4.50
Unquoted
Current investments:
Mutual funds:
L&T Ultra Short Term Fund Direct Plan -Growth
L&T Flexi Bond Fund - Direct Plan -Growth
7,27,23,711
2,06,77,541
10
10
151.56
Unquoted
26.88
Unquoted
L&T Liquid Fund -Direct Plan -Growth
1,13,806
1000
20.00
Unquoted
SUB -TOTAL
Less: Provision for diminution in value
TOTAL
L&T Investment Management Limited
Current investments:
Mutual funds:
202.94
4.50
198.44
L&T Liquid Fund Direct Plan- Growth
2,64,599
1000
46.50
Unquoted
L&T FMP Series 8-Plan J- Direct Growth
L&T FMP Series 10-Plan L- Direct Growth
20,00,000
2,00,00,000
10
10
2.00
Unquoted
20.00
Unquoted
TOTAL
Nabha Power Limited
Current investments:
Mutual funds:
Axis Liquid Fund - Direct Plan – DDR
Birla Sun Life Cash Plus – DDR
Birla Sun Life Cash Plus - Direct Plan – DDR
ICICI Prudential Flexible Income Plan – DDR
ICICI Prudential Liquid Fund – DDR
ICICI Prudential Liquid Fund – Direct Plan – DDR
L&T Liquid Fund - Direct Plan – DDR
L&T Ultra STF Institutional – Direct Plan – DDR
HDFC Liquid Fund DDR
TOTAL
310
68.50
109
7,096
8,086
14,353
6,638
1,624
53,614
54,885
32,068
1000
0.01
Unquoted
100
100
100
100
100
0.07
Unquoted
0.08
Unquoted
0.15
Unquoted
0.07
Unquoted
0.02
Unquoted
1000
5.43
Unquoted
10
10
0.06
Unquoted
0.03
Unquoted
5.92
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T General Insurance Company Limited
Long term investment:
Government securities:
7.80% GOI CG 03-05-2020
8.19% GOI CG 16-01-2020
8.20% GOI CG 15-02-2022
8.20% GOI CG 24-09-2025
8.26% GOI CG 02-08-2027
8.33% GOI CG 09-07-2026
8.85% MH SDL SG 2022
8.91% Gujarat State Government SG 2022
8.97% GOI CG 05-12-2030
9.15% GOI CG 14-11-2024
Debentures and bonds:
10.06% L&T IDPL BS 27-04-2015 C
10.06% L&T IDPL BS 28-04-2014
7.70% NHPC BS 31-03-2018
8.79% HDFC LTD NCB 21-07-2020
8.80% GAIL BS 13-12-2018
8.80% GAIL BS 13-12-2019
8.84% PGC BS 21-10-2014
8.84% PGC NCB 21-10-2020
8.90% PGC BS 25-02-2015
8.95% IBS LTD NCD 15-09-2020
9.25% HDFC NCB 26-02-2018
9.35% PGC BS 29-08-2016 A
9.35% PGC DB 29-08-2020
9.40% NHB BS 10-01-2015
9.63% PFC BS 15-12-2014
9.68% HDFC LTD BS 09-02-2015
9.84% LIC HF NCD 29-11-2016
9.85% LIC HF DB 03-05-2014
11.69% Tata Teleservices NCD 14-08-2025
10.10% HDB NCD 30-11-2015
5,00,000
5,00,000
15,00,000
10,00,000
5,00,000
5,00,000
10,00,000
5,00,000
10,00,000
10,00,000
5,00,000
2,50,000
1,00,000
4,00,000
5,00,000
5,00,000
10,00,000
5,00,000
50,000
1,30,000
5,00,000
3,00,000
2,00,000
5,00,000
5,00,000
5,00,000
5,00,000
5,00,000
3,00,000
5,00,000
10.10% Shriram Transport Finance DB 23-09-2014
10,00,000
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
5.05
Quoted
5.01
Quoted
15.22
Quoted
9.58
Quoted
4.95
Quoted
5.03
Quoted
9.93
Quoted
5.21
Quoted
10.77
Quoted
10.81
Quoted
4.99
Quoted
2.50
Quoted
0.95
Quoted
3.98
Quoted
4.93
Quoted
4.93
Quoted
9.95
Quoted
5.01
Quoted
0.50
Quoted
1.25
Quoted
5.03
Quoted
3.00
Quoted
2.01
Quoted
5.00
Quoted
5.02
Quoted
5.00
Quoted
5.00
Quoted
4.99
Quoted
3.06
Quoted
5.00
Quoted
9.90
Quoted
Carried forward
173.56
311
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
Debentures and bonds: (contd.)
Brought forward
10.40% TISCO DB 15-05-2019
10.60% Shriram Transport Finance DB 05-06-2018
11.80% TISCO BS 18-03-2021
9.00% ICICI BANK DB 04-06-2018
9.35% IOC NCB 30-04-2017 XII
9.40% NABARD BS 30-03-2014
9.55% HINDALCO BS 27-06-2022
9.55% HINDALCO DB 27-06-2022
9.75% GE SHIPPING DB 20-08-2019
Current investments:
Government securities:
364 D TB 17-04-2014
Other Securities (Short Term)
Allahabad Bank CD 02-06-2014
ICICI Bank CD 03-06-2014
Mutual funds:
Birla Sun Life Cash Plus - Growth
Birla Sun Life Cash Plus-OI ( 12000)
JM High Liquidity Fund
JM High Liquidity Fund-OI ( 13000)
JP Morgan India Liquid Fund-DIR Growth
JP Morgan Liquid Fund DIR-Growth-OI
L&T Cash Fund-DIR-G-OI
L&T Liquid Fund DIR G-OI
L&T Liquid Fund Direct Growth
SBI Magnum Instacash (Cash) Direct-OI
TOTAL
L&T Infocity Limited
Long term investment:
Associate company:
Fully paid equity shares:
Vizag IT Park Limited
TOTAL
312
5,00,000
10,00,000
10,00,000
15,00,000
15,00,000
10,00,000
5,00,000
5,00,000
10,00,000
5,00,000
10,00,000
5,00,000
1,64,586
57
4,27,583
362
7,13,156
20,34,388
39,929
1,752
5,850
13,150
100
100
100
100
100
50
100
100
100
100
100
100
100
100
10
10
10
10
1000
1000
1000
1000
173.56
5.32
Quoted
10.00
Quoted
10.76
Quoted
15.00
Quoted
15.04
Quoted
5.02
5.21
5.05
Quoted
Quoted
Quoted
10.42
Quoted
4.98
Quoted
9.85
4.93
Quoted
Quoted
3.39
Quoted
–
Quoted
1.50
Quoted
–
Quoted
1.19
3.38
4.16
0.31
1.03
3.73
293.83
Quoted
Quoted
Quoted
Quoted
Quoted
Quoted
23,40,000
10
2.34
Unquoted
2.34
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
GDA Technologies Limited
Current investments:
Mutual funds:
Birla Sunlife Floating STP -Direct Reinvestment
Franklin India Treasury Mgmt Super IP
Franklin Templeton IUSFB-Super IP
L&T Liquid Fund-DDR
TOTAL
L&T Uttaranchal Hydropower Limited
Current investments:
Mutual funds:
5,81,056
32,950
20,72,048
1,71,597
100
1000
10
1000
5.82
Quoted
3.30
Quoted
2.08
Quoted
17.37
Quoted
28.57
L&T Ultra STF Direct Plan-DDR
4,64,27,669
10
47.94
Quoted
TOTAL
47.94
L&T Arunachal Hydropower Limited
Current investments:
Mutual funds:
L&T Freedom Income Fund ST/IP/DDR
3,77,888
10
0.38
Quoted
TOTAL
0.38
L&T Himachal Hydropower Limited
Current investments:
Mutual funds:
L&T Freedom Income Fund ST/IP/DDR
12,85,060
10
1.33
Quoted
TOTAL
1.33
L&T Infra Investment Partners Advisory Private Limited
Long term investment:
L&T Infra Investment Partners Fund ( 10000)
100
100
–
Unquoted
Current investments:
Mutual funds:
ICICI Prudential Flexible Income- Direct Plan- Daliy Dividend
6,38,993
100
6.77
Unquoted
TOTAL
6.77
313
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Special Steels and Heavy Forgings Private Limited
Current investments:
Mutual funds:
ICICI Prudential Flexible Income DDR Plan
ICICI Prudential Liquid Regular DDR Plan
1,57,746
1,62,658
100
100
TOTAL
L&T Capital Markets Limited
Current investments:
Mutual funds:
Unquoted
Unquoted
1.67
1.63
3.30
L&T Liquid Fund Direct Plan -Growth
24,775
1000
4.30
Unquoted
TOTAL
L&T Kobelco Machinery Private Limited
Current investments:
Mutual funds:
L&T Liquid Fund Direct Plan Growth
Reliance Liquid Fund- Treasury Plan- Growth
IDFC Money Manager Fund- Treasury Plan- Growth
L&T Ultra Short Tem Fund Direct Plan- Growth
587
1,946
6,52,948
4,76,568
1000
1000
10
10
4.30
0.10
0.60
1.31
0.99
3.00
Quoted
Quoted
Quoted
Quoted
TOTAL
L&T Metro Rail (Hyderabad) Limited
Current investments:
Mutual funds:
SBI Mutual Fund- Daily Dividend
L&T Liquid Fund-Daily Dividend
TOTAL
L&T Vrindavan Properties Limited
(formerly known as L&T Unnati Finance Limited)
Long term investment:
Fully paid equity shares:
City Union Bank Limited
Current investments:
Mutual funds:
99,763
29,820
1000
1000
10.01
Quoted
3.02
Quoted
13.03
1,91,95,012
1
38.91
Quoted
L&T Liquid Fund- Direct Plan-Growth
2,84,515
1000
50.00
Unquoted
88.91
TOTAL
314
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Gulf Private Limited
Long term investment:
Mutual funds:
L&T-FMP Series 10-Plan S- Growth
2,00,000
10
0.20
Quoted
Current Investments:
Mutual funds
L&T Liquid Fund Direct Plan Daily Dividend Reinvestment Plan
L&T- Cash Fund
TOTAL
L&T Housing Finance Limited
Long term investment:
Fully paid equity shares:
The Kalyan Janatha Sahakari Bank Limited
The Malad Sahakari Bank Limited ( 1000)
Current investments:
Government Securities:
7.50% Government of India Stock 2034
6.13% Government of India Stock 2028
Bonds:
7.30% Food Corporation of India Bonds 2015
Mutual funds:
1,263
50,000
10
10
0.13
Unquoted
0.05
Quoted
0.38
20,000
100
14,000
40,000
10,000
25
10
100
100
100
0.05
Unquoted
–
Unquoted
0.14
Quoted
0.38
Quoted
0.10
Quoted
L&T Ultra Short Term Fund Direct Plan - Growth
L&T Liquid Fund Direct Plan - Growth
2,40,19,843
11,38,060
10
1000
50.06
Unquoted
200.00
Unquoted
SUB -TOTAL
Less: Provision for diminution in value
TOTAL
L&T Seawoods Private Limited
Current investments:
Mutual funds:
250.73
0.11
250.62
L&T Liquid Fund Direct Plan Daily Dividend Reinvestment Plan
87,291
1000
8.83
Unquoted
TOTAL
8.83
315
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Shipbuilding Limited
Current investments:
Mutual funds:
IDFC Cash Fund Growth Plan
SBI Premier Liquid Fund- Growth Plan
L&T Cash Fund Growth Plan
TOTAL
10,489
40,867
23,871
1000
1000
1000
1.49
Quoted
8.00
Quoted
2.28
Quoted
11.77
L&T Cutting Tools Limited (formerly Tractor Engineers Limited)
Current investments:
Mutual funds:
L&T Ultra STF Direct Plan - Daily Dividend
17,15,761
10
1.77
Unquoted
TOTAL
L&T Fincorp Limited
Long term investment:
Fully paid equity shares:
Jaypee Infratech Limited
Current investments:
Fully paid equity shares:
VMC Systems Limited
Mutual funds:
1.77
37,85,221
10
13.31
Quoted
4,60,492
10
8.98
Unquoted
L&T Liquid Fund Direct Plan -Growth
5,97,482
1000
105.00
Unquoted
TOTAL
127.29
L&T Chennai Tada Tollway Limited
Current investments:
Mutual funds:
HDFC Cash Management Fund -Savings Plan
IDFC Cash Fund -Growth (Regular Plan)
Baroda Pioneer Liquid Fund- Plan A Growth
TOTAL
316
72,967
11,405
3,631
10
1000
1000
0.19
Quoted
1.77
Quoted
0.53
Quoted
2.49
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Samakhiali Gandhidham Tollway Limited
Current investments:
Mutual funds:
Reliance Liquidity Fund-Growth Plan ISIN
IDFC Cash Fund Plan-Super Institutional Plan B-Growth
Tata Liquid Plan A Growth
SBI Premier Liquid Fund-Super Institutional -Growth
L&T Liquid Fund-Growth
TOTAL
L&T Panipat Elevated Corridor Limited
Current investments:
Mutual funds:
Religare Invesco Liquid Fund Growth
Kotak Liquid Plan A Growth
9,908
30,791
10,029
1,12,160
24,936
9,095
580
HDFC Cash Management Fund-Saving Growth
19,36,897
IDFC Cash Fund Plan A Growth
SBI Premier Liquid Fund-Super Intitutional -Growth
L&T Liquid Fund-Growth
TOTAL
L&T Krishnagiri Thopur Tollroad Limited
Current investments:
Mutual funds:
57,202
24,985
30,070
DSP BlackRock Liquidity Fund - Institutional - Growth
38,464
HDFC Cash Management Fund - Savings Plan - Growth
19,19,185
IDFC Cash Fund - Growth -(Regular Plan)
SBI Premier Liquid Fund -Regular Plan-Growth
Reliance Liquid Fund - Growth Plan Growth Option
Tata Liquid Fund Plan A - Growth
L&T Liquid Fund - Growth
Religare Liquid Fund - Growth Plan
Kotak Liquid Institutional Premium Plan Growth
TOTAL
24,562
23,757
14,024
31,999
7,190
8,294
10,376
1000
1000
1000
1000
1000
1000
1000
10
1000
1000
1000
1000
10
1000
1000
1000
1000
1000
1000
1000
1.90
Quoted
4.73
Quoted
2.33
Quoted
22.56
Quoted
4.34
Quoted
35.86
1.60
Quoted
0.15
Quoted
5.15
Quoted
8.81
Quoted
5.00
Quoted
5.25
Quoted
25.96
6.95
Quoted
5.03
Quoted
3.77
Quoted
4.71
Quoted
2.68
Quoted
7.45
Quoted
1.26
Quoted
1.44
Quoted
2.68
Quoted
35.97
317
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
L&T Western Andhra Tollways Limited
Current investments:
Mutual funds:
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Liquid fund - Growth
12,333
HDFC Cash Management Fund - Savings Plan - Growth
27,87,803
Reliance Liquid Fund - Growth Plan Growth Option
Religare Invesco Liquid Fund - Growth Plan
Kotak Liquid Scheme Plan A - Growth INF174K01NI9
SBI Premier Liquid Fund - Regular Plan - Growth
DSP BlackRock Liquidity Fund - Institutional Plan - Growth
TFG1 TATA Liquid Fund Plan A - Growth - INF277K01MA9
Birla Sun Life Ultra Short Term Fund - Institutional Daily
Dividend - Close ended
TOTAL
L&T Interstate Road Corridor Limited
Current investments:
Mutual funds:
Birla Sun Life Cash Plus Regular Growth
IDFC Cash Fund Plan -Super Institutional Plan C -Growth
HDFC Cash Management Fund-Saving Growth
Tata Liquid Plan A Growth
SBI Premier Liquid Fund-Super Institutional -Growth
L&T Liquid Fund-Growth
TOTAL
L&T Western India Tollbridge Limited
Current investments:
Mutual funds:
40,303
801
2,863
28,451
4,243
6,719
79,829
82,098
75,986
6,98,251
36,118
44,737
97,463
1000
10
1000
1000
1000
1000
1000
1000
100
100
1000
10
1000
1000
1000
2.15
Quoted
7.35
Quoted
7.69
Quoted
0.14
Quoted
0.74
Quoted
5.67
Quoted
0.77
Quoted
1.57
Quoted
1.57
Quoted
27.65
1.61
Quoted
11.69
Quoted
1.78
Quoted
8.45
Quoted
9.00
Quoted
17.00
Quoted
49.53
HDFC Cash Management Fund-Saving Plan-Growth
2,89,012
10
0.71
Quoted
0.71
TOTAL
318
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Transportation Infrastructure Limited
Current investments:
Mutual funds:
L&T Liquid Growth Fund
IDFC Cash Fund Growth (Regular Plan)
25,178
24,316
1000
1000
4.42
Quoted
3.78
Quoted
8.20
69,995
2,191
1000
1000
13.50
Quoted
0.40
Quoted
13.90
TOTAL
L&T Halol - Shamlaji Tollway Limited
Current investments:
Mutual funds:
Reliance Liquidity Fund-Growth Plan
DSP BlockRock Mutual Fund
TOTAL
L&T Devihalli Hassan Tollway Limited
Current investments:
Mutual funds:
IDFC Cash Fund -Growth (Regular Plan)
1,092
1000
0.17
Quoted
TOTAL
0.17
L&T Ahmedabad - Maliya Tollway Limited
Current investments:
Mutual funds:
HDFC Cash Management Fund-Saving Plan -Growth
IDFC Cash Fund -Growth-(Regular Plan)
L&T Liquid Fund-Growth
Baroda Life Liquid Fund
TOTAL
L&T Rajkot - Vadinar Tollway Limited
Current investments:
Mutual funds:
93,979
55,572
1,98,468
14,374
10
1000
1000
1000
0.25
Quoted
8.65
Quoted
34.85
Quoted
2.10
Quoted
45.85
L&T Liquid Fund-Growth
570
1000
0.10
Quoted
TOTAL
0.10
319
Annexure to Information regarding Subsidiary Companies
Details of Investments as at 31-03-2014/31-12-2013
Name of the Company
No. of Shares/
Units/Bonds
Face Value
( )
Book Value
( crore)
Quoted/
Unquoted
L&T Deccan Tollways Limited
Current investments:
Mutual funds:
L&T Liquid Fund-Growth
20,464
1000
3.57
Quoted
TOTAL
Family Credit Limited
Current investment:
Mutual funds:
3.57
L&T Liquid Fund-Direct Plan-Growth
10,52,706
1000
185.00
Unquoted
185.00
57
1000
0.01
Quoted
0.01
8,026
9,817
3,129
18,963
2,997
1000
1000
1000
100
1000
1.24
Quoted
1.88
Quoted
0.73
Quoted
0.37
Quoted
0.53
Quoted
4.75
TOTAL
Kudgi Transmission Limited
Current investments:
Mutual funds:
L&T Liquid Fund-Growth
TOTAL
L&T Krishnagiri Walajahpet Tollway Limited
Current investments:
Mutual funds:
IDFC Cash Fund-Growth (Regular Plan)
Reliance Liquidity Fund-Growth Plan-Growth Option
Tata Liquid Plan A Growth
Birla Sun Life Cash Plus Growth Regular Plan
L&T Liquid Fund Plan A -Growth
TOTAL
320
LARSEN & TOUBRO LIMITED
Regd. Office : L&T House, Ballard Estate, Mumbai 400 001.
CIN: L99999MH1946PLC004768
Dear Shareholders,
Green Initiative in Corporate Governance
Issue copies of documents in Electronic Form
You are aware that the provisions of Companies Act, 2013 have been made effective. Pursuant to Section 101 and Section
136 of the Companies Act, 2013 read with relevant Rules issued thereunder, companies can serve Annual Reports and
other communications through electronic mode to those shareholders who have registered their email address either with
the Company or with the Depository.
Larsen & Toubro Limited, in its constant endeavour to enhance the sustainability of the environment and cutting down on
consumption of paper, proposes to give an option to it’s shareholders to receive all documents like General Meeting Notices
(Including AGM), Audited Financial Statements, Directors’ Report, Auditors’ Report, ECS Intimations, etc. in electronic
form at their e-mail addresses registered with their respective Depository Participant (DP) accounts {in the records of the
Depositories, viz. National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd (CDSL)}. Shareholders
holding shares in physical form will receive the documents as stated above at their e-mail address registered with/provided
to the Company’s Registrar & Transfer Agent (RTA).
We request you to join us in this noble initiative by registering your e-mail id and giving consent to receive the
documents as stated above in electronic form. Please give your consent in the format given below, through e-mail to
LNTGOGREEN@LARSENTOUBRO.COM.
Dear Sir,
Larsen & Toubro Limited ; Consent of shareholder to receive documents like General Meeting Notices (including
AGM), Audited Financial Statements, Directors’ Report, Auditors’ Report, ECS Intimations, etc. in Electronic
Form
I refer to your circular dated 30.05.2014 on the above subject and give my consent to receive the documents as stated
above in electronic form at my e-mail address registered with the Depository/RTA.
Name
:
Folio No./DPID/Client ID :
E-mail ID
:
In case of any updations/changes in your registered e-mail address, you are requested to promptly update the same with
your DP. Shareholders holding shares in physical form have to send their updations/changes to the RTA, M/s Sharepro
Services (India) Pvt. Ltd., by sending email to LNTGOGREEN@LARSENTOUBRO.COM
Please note that the Annual Report will also be available on the Company’s website www.Larsentoubro.com for your ready
reference. The shareholders of the Company are entitled to request and receive, free of cost, a printed copy of the annual
report and other documents of the Company.
We are sure that you would appreciate the “Green Initiative” taken by your Company and opt for receiving documents as
stated above in electronic form.
N. Hariharan
Company Secretary
Date: 30.05.2014
LARSEN & TOUBRO LIMITED
Regd. Office : L&T House, Ballard Estate, Mumbai 400 001.
CIN: L99999MH1946PLC004768
Shareholder’s Satisfaction Survey Form – 2014
Dear Shareholders,
It has been our constant endeavor to provide best of the services to our valuable shareholders and maintain
highest level of Corporate Governance in this Company. In order to further improve shareholder service
standards, we seek your inputs through this survey.
We would be grateful, if you could spare your valuable time to fill the questionnaire given below and send it
back to us at the Registered Office address mentioned above. Alternatively, a softcopy of the questionnaire
can be downloaded from the Investors section on our website www.Larsentoubro.com. The duly filled in
questionnaire can be sent by e-mail to IGRC@Larsentoubro.com.
Thank You,
N. Hariharan
Company Secretary
Name & Address of the
Shareholder
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Folio No. / DP ID / Client ID ________________________________________________________________________
Kindly put a tick in relevant columns below.
ATTRIBUTES
Please indicate your satisfaction level
Delighted
Satisfi ed
Dissatisfi ed
Transfer/Transmission/Demat/Remat of Shares
Issue of Duplicate Share Certifi cates
Issue of shares – on demerger/bonus – 2004,
2006, 2008 & 2013
ATTRIBUTES
Please indicate your satisfaction level
Delighted
Satisfi ed
Dissatisfi ed
Issue of duplicate dividend warrants
Dividend through ECS/ Warrants/
Demand Drafts
Responses to queries/complaints
Interaction with Company/
R&T Agent personnel
Presentation of information on
Company’s website
Quality and Contents of Annual Report
2013–14
Please give your overall rating of our investor
service (1 to 5 where 1 = highly dissatisfi ed and
5 = highly statisfi ed)
Did you fi nd the e-mail id IGRC@Larsentoubro.com
for Redressal of Investors’ Grievances useful?
Give details of outstanding
grievances, if any
Any suggestions ?
Date :
YES / NO
Disclaimer: L&T will keep the information provided by you as confi dential and it will not be used in any way that
is detrimental to you.
____________________
Signature
AWARDS &
RECOGNITION
Every year, L&T and its people receive a number of national and international
awards that acknowledge its varied accomplishments. Presented by the media,
industry associations, independent bodies and academia, they honour the
Company’s contribution in various spheres of business, technology, fi nancial
performance, growth and environmental protection.
For details of recent awards, please visit www.Larsentoubro.com
CBMC/07/2014/RP
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