Larsen & Toubro Annual Report 2016

Plain-text annual report

TECHNOLOGY LEADERSHIP L&T Annual Report 2015-16 Covers.indd 1-3 13/07/16 4:53 PM 71st Annual Report 2015-2016 L&T Annual Report 2015-16 Covers.indd 4-6 13/07/16 4:53 PM A. M. Naik Group Executive Chairman Dear Shareholders, The year 2015-16 saw the Indian economy charting a measured course towards objectives set out by the Government two years ago. While investment momentum is still muted in some sectors, the positives to have emerged are the incremental but important steps taken by the Government in ﬁ scal correction, inﬂ ation containment, subsidy reduction, efforts to reinvigorate tax administration and a thrust on increased investment in key infrastructure sectors. Private sector and industrial capex, however, remains subdued on account of paucity of funds in the private sector. The global scenario offers less cause for cheer. The world economy encountered challenges at many levels last year. These include signiﬁ cant volatility, Eurozone instability, depression in crude oil and commodity prices, currency depreciation in emerging markets, and a lingering slowdown in China. India’s GDP growth - 7.6% as compared to 7.2% in the previous year - and reduced ﬁ scal deﬁ cit of 3.9% sends out encouraging signals for the future. I believe that the forthcoming year holds promise of improvement as far as investment momentum is concerned. The Government’s focus on a slew of recent initiatives places your company in a favourable position. Our capabilities in high-tech design and manufacture are unmatched in industry. This enables us to extend the ‘Make in India’ theme to the upper end of the technological spectrum, as well as to the strategic sectors of defence, nuclear power and aerospace. Our three-decade long association with national defence 1 organisations ensures that we have the credentials to partner with them in the design and manufacture of defence equipment. We also possess in-house capabilities to design, equip and build the habitats of the future - Smart Cities. Performance Overview While new order acquisitions have been muted due to your Company’s focus on disciplined bidding on infrastructure projects, the ﬁ nancial performance, as a whole, has been encouraging and has been lauded by Capital Markets. Order Inﬂ ows, which are the mainstay of your Company’s dominance in the project business, clocked in at 136,858 crores at the Group level, which represents a decline of 12% over the corresponding inﬂ ows of the Previous Year. The muted inﬂ ows were the outcome of increased competitive price pressures in the power generation and hydrocarbon sectors. The unexecuted Order Book stood at an all-time high of 249,949 crores and represents a 7% growth over the Order Book at the end of the Previous Year. This robust Order Book position provides your Company with multi- year forward visibility on Revenues and Margins. The Company grew revenues in 2015-16 to 102,632 crores, despite challenges faced in project execution in the form of delayed clearances and tardy progress payments from customers. This represents a 12% growth over revenues in the Previous Year. Losses incurred on Hydrocarbon projects in 2014-15 were largely avoided in 2015-16 and Proﬁ ts after Tax at the Group level grew to 5,091 crores representing a growth of 7% over the corresponding Proﬁ t in 2014-15. It gives me pleasure to announce that your Company has recommended a Dividend of 18.25 per equity share on a face value of 2 per share for the year. The corresponding dividend during the previous ﬁ scal was at 16.25 per equity share. Internationalisation GCC countries, our staple international markets, are experiencing ﬁ scal stress due to low oil prices, and opportunities in the hydrocarbon space have been reduced. Core infrastructure such as power transmission & distribution, hospitals, urban infrastructure, roads and rail networks, however, continue to see investment and these areas have yielded signiﬁ cant order wins for us. We 2 are also focusing on select countries in Africa and some parts of South East Asia. We believe that the opportunity basket that is likely to be provided to us in international markets will still be sufﬁ ciently large enough to enable a healthy, geographically-diversiﬁ ed revenue mix. The unexecuted Order Book from international markets stood at over 70,000 crores, which translates to 28% of the total Order Book. This largely comprises orders from diverse infrastructure areas such as metro rail, power transmission & distribution, road & expressways and hydrocarbon sectors. Going Digital at L&T Larsen & Toubro is implementing solutions using digital technologies to make quantum improvements in all key areas of work. A major step in this direction has been the setting up of a Digital Group which will ideate, initiate and implement solutions to deliver results to the business. The areas where solutions are being developed and deployed are Tracking and Monitoring performance on all equipment deployed at construction sites by installing sensors and gateways; improving productivity and safety of workmen through tracking and tagging; optimising logistics and material consumption through GPS and RFID; project monitoring & control through data and visuals captured in real-time, and use of modern geospatial technologies including LiDAR and UAVs for surveys. Another key area is Analytics that will pull in the data from all these initiatives into an Analytics engine to deliver trends, actionable insights and forecast scenarios for proactive and corrective action. As technologies and business processes evolve, the group will continue to develop breakthrough solutions and evangelize the digital transformation. Talent Management Your Company views its people as the cornerstone of business and its Human Resources policy is geared towards developing individuals along with the organisation. The Company has a 7-step leadership development program which aims to build a leadership pipeline at various levels of management. Sustainable Development Your Company is committed to conserving natural resources and enhancing social equity to achieve sustainable progress, while creating value for stakeholders. Signiﬁ cant initiatives have been undertaken in the areas of climate change and water conservation. Your Company’s sustainability performance in energy conservation and carbon emission intensity reduction was showcased in the UN - Paris Climate Change Summit 2015. The Company’s campuses in different parts of the country are focused on becoming water-positive and zero wastewater discharge units. Your Company’s CSR programmes focus on health, education, skill development and water & sanitation interventions to contribute to a better quality of life for the needy. The total spends on CSR initiatives in 2015-16 by your Company amounted to 120 crores under eligible items as deﬁ ned in the Companies Act which translates to 2.36% of the average annual net proﬁ ts of the Company over the last 3 years. Outlook The thrust given by the Government on core infrastructure and ‘Make in India’ initiatives continues to give us a healthy basket of opportunities to tap. Increased allocations by the Centre and States on infrastructure spending, higher levels of outlay by cash-rich Public Sector enterprises and signiﬁ cant funding of infrastructure projects by bi-lateral and multi-lateral lending agencies is propelling the investment momentum forward. Several upcoming projects provide us with a broad perspective of the opportunity horizon opening up for us in 2016-17. Segments that hold promise in FY17 include – 1) Infrastructure: a) Roads – The new political dispensation at the helm of affairs has kick-started investment in roads and FY16 saw a signiﬁ cant uptick in ordering of EPC road contracts by the National Highways Authority of India. We expect this impetus to continue and to be augmented by investments in specialised bridges and tunnels as well as highway orders in some Middle East countries. b) Railways – In FY16, your Company continued to build on its success in bagging orders for the Dedicated Freight Corridor program currently being piloted by the Indian Railways. The balance of orders in this program are likely to be ordered out in FY17 and your Company will participate in those bids as well. Some Middle East countries are also planning investments in conventional rail networks and your Company will participate in those programs as and when the opportunity arises. c) Metro Rail – Your Company has been successfully executing Metro Rail projects in multiple cities over the last few years. Urban development authorities are increasingly viewing metro rail networks as the ideal solution to urban trafﬁ c decongestion and our assessment is that this area is likely to see increased spending in FY17 and beyond, through the launch of new projects in a number of cities across the country. Execution of 2 large metro rail projects won in Saudi Arabia and Qatar in FY14 is progressing well. d) Urban Infrastructure – While private sector investments in Urban Infra have seen lower investments, particularly in residential real estate, your Company continues to see a healthy pipeline of prospects in affordable housing, hospitals, ofﬁ ce space for IT majors and facilities for educational institutions. e) Smart World and Communication – Larsen & Toubro has consistently aligned its capabilities to national priorities. Presently, there is a growing need for creating Digital India and smarter, secure and intelligent solutions to enhance quality of life. This has led to the rise of smart cities, advanced security solutions and communication infrastructure. In response to this, L&T has integrated its range of comprehensive offerings in this sector to set up a dedicated Smart World & Communication business vertical which offers end-to-end solutions as a Master Systems Integrator in the areas of Security Solutions, Communications Network and Telecom Infrastructure and Smart Infrastructure. With adequate data and superior analytics, these smart world solutions will empower city leaders and planners to make better, more informed decisions, anticipate problems to resolve them proactively, coordinate resources to operate more effectively and efﬁ ciently, thereby enhancing the overall quality of life. 3 f) Water Infrastructure – This area has seen relatively poor investments over the last decade and such under-investment in basic water management resources is leading to seasonal water shortages across the country. Recognising this critical need, the Government has increased allocations in this essential sector recently and your Company expects to see a surge in revenues from the increased spends. This will be augmented by the opening up of fresh investment avenues in the allied segments of Waste Water Management and Lift Irrigation programs. processing and associated pipeline networks in the Middle East. 5) Defence Sector: The current Government has made the most credible effort so far, to indigenise the manufacture of defence equipment. For L&T, with its long-standing association with the Ministry of Defence, extensive R&D and manufacturing muscle, this presents a major opportunity. We are participating in several bids for ships and artillery guns, among other programs. Any order wins for naval vessels will help improve the capacity utilisation at the Kattupalli Shipyard. 2) Thermal Power Generation: 6) Heavy Engineering: This sector has been constrained with overcapacity in the manufacturing of boilers and turbines, delayed environmental clearances, dearth of fuel availability, increased difﬁ culty in obtaining water linkages as well as long-term funding. FY16, however, saw a number of projects being ordered which your Company could not win due to intense price competition. FY17 is likely to witness ordering of projects aggregating around 8-10 GW and your Company is hopeful of garnering a signiﬁ cant share. 3) Power Transmission & Distribution: FY16 continued to see strong ordering by Central and State power transmission utilities as well as by countries in the Middle East. Your Company has secured major orders in this sector and expects the investment momentum to continue into FY17. 4) Hydrocarbon: Low oil prices have dampened investments in oil production facilities. Some Government enterprises, however, continue to invest in oil production with a view to bolstering India’s fuel security, offering opportunities for your Company to leverage its EPC capabilities. With India’s commitment made in Paris on climate change, investment in clean fuel projects is likely to give opportunities to the Hydrocarbon business. We are also eyeing opportunities in the domestic fertiliser sector, as plants opt for capacity augmentation. On the international front, your Company is eyeing opportunities in gas production, 4 The domino effect of the fall in crude prices has led to shrinking orders for oil & gas projects globally and under-utilisation of manufacturing facilities for hydrocarbon equipment. The integrated steel-making & forging facility set up to meet the needs of the hydrocarbon and nuclear power sectors has also been negatively impacted. The Civil Liability for Nuclear Damages Act has been a major roadblock and the same is now being resolved with the formation of a 1,500 crore insurance pool, thus opening up opportunities for establishing new nuclear power plants in the near future, for which your Company is well placed. This could spark a resurgence in nuclear power investments which would augur well for your Company’s heavy engineering business. 7) Metallurgical & Material Handling: With global overcapacities in steel and a fall in commodity prices, investment in the ferrous and non-ferrous sectors in India has shrunk considerably. This has adversely affected a business which is already impacted by underutilisation. Fortunately, the outlook is more positive. The green shoots of recovery in the mining sector is expected to provide a ﬁ llip to the Material Handling segment. The business expects to improve utilisation in 2016-17. 8) Electrical & Automation (E&A): The Electrical & Automation business has registered muted growth in 2015-16 due to sluggish demand from the industrial, agriculture and building sectors. The Company’s array of best-in-class low-voltage and medium-voltage products continues to provide a competitive edge, enabling the company to make the most of the expected revival of domestic demand. During the year, your Company launched a series of contemporary Final Distribution products in the categories of MCBs (Miniature Circuit Breakers), RCCBs (Residual Current Circuit Breakers), Control Accessories and Distribution Boards as well as a full programme of Bus-bar trunking systems for modern buildings and Intelligent Controllers for agricultural markets. With a focus on operational excellence, the business expects to continue delivering proﬁ table growth 9) Realty: This business, which was launched by your Company a few years ago, continues to contribute to revenues and margins through delivery of superior quality projects. Projects under execution in Mumbai and Navi Mumbai are progressing well and a residential housing project launched recently in Bangalore has been received favourably by way of advance bookings. The business is slated to shortly launch another project in Chennai as well as the second phase of its project in Powai, Mumbai. With a substantial land bank for development in hand, this business is expected to deliver steady and proﬁ table revenues over the next few years. 10) Information Technology and Technology Services (IT&TS): The IT&TS business vertical continues to grow and prosper and your Company intends to list these businesses through Public Offerings in 2016-17. With the focus on client mining and growth seen in multiple verticals such as BFSI, Automotive, Aerospace, Industrial Products and Process Engineering sectors, the business is slated to register continued growth and proﬁ tability. 11) Financial Services: This business, which was listed in 2011, continues to grow and had a loan book of over 57,000 crores at the end of FY16. The business is focusing on portfolio rationalisation, right-sizing of manpower, and improving the quality of assets in an effort to enhance Return on Equity. 12) Development Projects: Your Company currently has a portfolio of concession assets in the areas of roads, power generation & transmission, and a metro rail. Most of these projects are operational and as such, the infrastructure projects portfolio is going through a major restructuring exercise for the Company to continue its efforts to become more asset light. The metro rail project in Hyderabad, which is one of the largest ‘transit-oriented-development’ projects in the country, is progressing satisfactorily and is likely to be fully comissioned in FY19. 13) Strategic Plans: Your Company has recently concluded deliberations on the strategy for the next 5 years and has ﬁ nalised the contours of this plan. Highlights of this plan include: • Focus on execution of the large Order Book in hand, while selectively participating in new bids • Gearing up to tap emerging opportunities in the Defence, Railways, Mining, Smart Cities and Digital business • Consistently growing revenues over the plan period • Steady reduction of Net Working Capital levels • Exit from the General Insurance business • Monetisation of road, port and power assets within the plan period These steps are expected to result in improved Free Cash Flows, Proﬁ t after Tax and Return on Equity. In conclusion, I would like to thank my fellow Board Members, L&T-ites, customers, vendors and other stakeholders who have collectively enabled sustainable and proﬁ table growth of the business. Thank You A.M.Naik Group Executive Chairman 5 CONTENTS Company Information Organisation Structure Leadership Team L&T Nationwide Network & Global Presence Corporate Social Responsibility Annual Business Responsibility Report (ABRR) 2015-16 Standalone Financials - 10 Year Highlights Consolidated Financials - 10 Year Highlights Graphs Route Map to the AGM Venue AGM Notice 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 Proxy Form Shareholder’s Satisfaction Survey Form – 2016 6 7 8 - 9 10 12 - 13 14 - 17 18 - 35 36 37 38 - 39 40 41 - 63 64 - 134 135 - 220 221 - 227 228 229 230 - 231 232 - 310 312 - 315 316 317 318 - 319 320 - 389 390 - 399 401 - 402 403 - 404 COMPANY INFORMATION BOARD OF DIRECTORS MR. A. M. NAIK Group Executive Chairman MR. S. N. SUBRAHMANYAN Deputy Managing Director & President MR. R. SHANKAR RAMAN Whole-time Director & Chief Financial Officer MR. SHAILENDRA ROY Whole-time Director & Sr. Executive Vice President (Power, Heavy Engg. & Defence) MR. D. K. SEN Whole-time Director & Sr. Executive Vice President MR. M. V. SATISH Whole-time Director & Sr. Executive Vice President (Buildings, Minerals and Metals) (Infrastructure) MR. M. M. CHITALE Independent Director MR. SUBODH BHARGAVA Independent Director MR. M. DAMODARAN Independent Director MR. VIKRAM SINGH MEHTA Independent Director MR. SUSHOBHAN SARKER Nominee of Life Insurance Corporation of India MR. ADIL ZAINULBHAI Independent Director MR. AKHILESH KRISHNA GUPTA Independent Director MR. BAHRAM N VAKIL Independent Director MRS. SUNITA SHARMA Nominee of Life Insurance Corporation of India MR. THOMAS MATHEW T. MR. AJAY SHANKAR Independent Director Independent Director MR. SUBRAMANIAN SARMA Non-Executive Director MRS. NAINA LAL KIDWAI MR. SANJEEV AGA MR. NARAYANAN KUMAR Company Secretary Registered Office Auditors Solicitors Independent Director Independent Director Independent Director Mr. N. Hariharan L&T House, Ballard Estate, Mumbai - 400 001 M/s. Sharp & Tannan and M/s.Deloitte Haskins & Sells LLP M/s. Manilal Kher Ambalal & Co. Registrar & Share Transfer Agents Karvy Computershare Private Limited 71st ANNUAL GENERAL MEETING AT BIRLA MATUSHRI SABHAGAR, 19, MARINE LINES, MUMBAI - 400 020 ON FRIDAY, AUGUST 26, 2016 AT 3.00 P.M. 7 8 9 Leadership Team A. M. Naik Group Executive Chairman S. N. Subrahmanyan Dy. Managing Director & President R. Shankar Raman Chief Financial Ofﬁ cer S. N. Roy Sr. Executive Vice President (Power, Heavy Engineering & Defence) Subramanian Sarma CEO & Managing Director (L&T Hydrocarbon Engineering) D. K. Sen Sr. Executive Vice President (Infrastructure) M. V. Satish Sr. Executive Vice President (Buildings, Minerals & Metals) S. C. Bhargava Sr. Vice President (Electrical & Automation) Hasit Joshipura Head - Corporate Centre 10 www.Larsentoubro.com Engineering Change Partnering Growth L&T partners the nation, industry and people to build a newer, brighter future. In critical sectors, we provide the technology and the engineering and construction expertise to rewrite the rules. And transform glorious vision into glittering reality. Technology I Engineering I Projects Construction I Manufacturing Regd. Ofﬁ ce: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 11 Nationwide Network 12 Global Presence 13 Corporate Social Responsibility Education and skill development are the foundations upon which self-sufficient livelihoods are built. Since the Company’s inception, care and concern for the underprivileged communities has been a core value at L&T. Reaching out to the disadvantaged with a view to positively impacting the quality of their lives is a spontaneous and natural process across L&T’s establishments. Through our CSR programmes, we contribute to the nation’s developmental agenda as well as align with the UN Social Development Goals and address the most pressing needs – water, 1414 sanitation, education, health and skill development. For our CSR programmes, the implementation process is as critical as our goals and their impact. We view our beneﬁ ciaries as partners on a journey towards betterment. Developmental plans are devised in consultation with NGOs who understand their needs best. Architects of their own future, the disadvantaged are intensely motivated to sustain our programmes – and ensure their success. Life is a circle, and the joy we give others is our gift to ourselves. The Joy of Clean Water Many villages in India have to struggle for water and sanitation. The unavailability of safe drinking water leads to increasing morbidity and mortality rates. It also negatively impacts educational attainments, migration and livelihood opportunities. Our Integrated Community Development Programme has been launched in three states, to begin with, and focuses on holistic development in water and sanitation, education, health and skill development, based on need-assessment. We are working towards enabling water-stressed rural communities to be self-sufﬁ cient in water for drinking, sanitation and agriculture. we have built check dams to ensure water supply during the dry months. Cultivating two crops a year instead of one, the villagers now need not migrate to cities for seasonal work. By helping meet the basic need for water and sanitation, we lay the foundation for progress and development. The Joy of Learning In several of Maharashtra’s drought-prone agricultural areas, Our social interventions covering educational initiatives focus on providing education, developing infrastructure and enhancing the learning experience. We enrich education in primary schools through innovative learning methodologies. We enrich the school environment by providing infrastructure ranging from building classrooms and playgrounds as well as equipping them with digital learning tools, beneﬁ tting rural and urban schools serving impoverished communities. After-hours ‘Single 1515 Our initiatives in mother-and-child care, women’s health and skill development help empower underprivileged women. Teacher’ schools help children improve their learning rates. We support pre-schools, set up computer laboratories, provide teaching aids and uniforms and augment teacher capacity. We believe that education is best imbibed when presented in ways that spark interest. We, therefore, infuse joy into learning in many small ways. Our Science-on-Wheels van visits schools, giving children the opportunity to experience the thrill of hands-on experiments. Summer camps and sports activities help pupils develop social skills. Extra-curricular outings help widen children’s horizons. The Joy of Good Health Timely access to quality health care 16 can be the core differential that enables families to lead productive and prosperous lives. Often, economically backward communities are further pushed into poverty due to poor health and the rising costs of medical care. We have set up community health centres at our facilities at Ahmednagar, Chennai, Coimbatore, Kansbahal, Mumbai, Surat and Vadodara. They focus on reproductive health, and conduct diagnostic and clinical camps and programmes that support maternal and child healthcare, immunisation and health education. Regular health check-up camps are held in schools and pre-schools. L&T’s HIV/AIDS management initiatives include awareness camps (particularly for high-risk groups), Anti-Retroviral Therapy, counselling and testing. Artiﬁ cial kidney dialysis centres for the underprivileged have been set up at L&T’s Health Centres at Chennai, Mumbai, Thane and Vadodara. By putting smiles on the faces of mothers and children, by preventing, detecting and curing disease, by educating people on matters pertaining to health, we help spread joy. The Joy of Self-sufﬁ ciency To empower the marginalized youth of the country with marketable skills Learning prepares gen-next for the future. and help the nation to reap the beneﬁ ts of the demographic dividend of having a large young population, L&T has set up vocational institutes and has in place programmes that impart skills in several trades to enhance the employability of underprivileged youth. Our Construction Skills Training Institutes at nine locations impart free training to rural and urban youth in basic construction trades. To empower underprivileged women, we organise vocational training programmes in the areas of tailoring, beautician skills, home nursing and food processing. Trade in hand, they are able to supplement their family income as well as invest in the education and health of their families, especially the children. Vocational training enables these people to become self-sufﬁ cient, elevates their social standing and ﬁ lls their lives with joy. The Joy of L&T-eering We are proud of our employees, our L&Teers, who contribute resources such as time and skills for the beneﬁ t of the underprivileged. All across our facilities, we have been providing employees with more and more opportunities to volunteer and boost employee engagement with a social cause. L&Teers dedicatedly teach English and Maths to children at Community Learning Centres and have been mentoring them as well, encouraging them to realise their potential despite the odds. Short science ﬁ lms have been dubbed into regional languages so that many more children can access quality science education. Educational trips and creativity workshops organised by L&Teers are both entertaining and educational. Blood donations and community health camps saw the participation of many employees. L&T-ites passionately supported various causes through Marathons and melas in which items made by the underprivileged are displayed. Volunteering activities help our people to relate better to each other as well as to the organisation, and gives them a sense of deep satisfaction. 1717 ANNUAL BUSINESS RESPONSIBILITY REPORT 2015-16 Sustainability is our constant endeavour to create products, services and environs that will enable all L&T stakeholders, society and the planet to thrive, today and tomorrow. The Company is focused on meeting the needs of the future with the resources of the present. This report conforms to the Business Responsibility Reporting (BRR) requirement of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR’) and the National Voluntary guidelines (NVG) on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs, India. Furthermore, L&T publishes its sustainability performance in a Sustainability Report which is prepared in accordance with Global Reporting Initiative (GRI) guidelines and is externally assured. All the Sustainability Reports published till date can be accessed at www.Lntsustainability.com. 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: 1st April 2015 - 31st March 2016 7. Sector(s) that the Company is engaged in (industrial activity code-wise): Group Class Sub-Class Description 271 2710 27104 Manufacture of electric motors, generators, transformers and electricity distribution and control apparatus 282 2824 28246 Manufacture of parts and accessories for machinery / equipment used by construction and mining industries 301 3011 30111 Building of commercial vessels, passenger vessels, ferry boats, cargo ships, tankers, tugs, hovercraft (except recreation type hovercraft), etc. 30112 30114 Building of warships and scientiﬁ c investigation ships, etc. Construction of ﬂ oating or submersible drilling platforms 410 421 4100 41001 Construction of buildings carried out on own-account basis or on a fee or contract basis 4210 42101 Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways. 42102 Construction and maintenance of railways and rail-bridges 422 4220 42201 Construction and maintenance of power plants 42202 42901 Construction / erection and maintenance of power, telecommunication and transmission lines Construction and maintenance of industrial facilities such as reﬁ neries, chemical plants, etc. 4659 46594 Wholesale of construction and civil engineering machinery and equipment 6810 68100 Real estate activities with own or leased property 7110 71100 Architectural and engineering activities and related technical consultancy 465 681 711 18 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 services 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) : 186.295 Crores 2. Total Turnover : 60415 Crores 3. Profit after taxes : 5311.46 Crores 4. Total Spending on CSR as a % of Profit after tax (%): 2.25%. 5. List of activities in which expenditure in point 4 above has been incurred: i. Health ii. Education iii. Skill Development iv. Water & Sanitation SECTION C: OTHER DETAILS 1. Does the Company have any Subsidiary Company/ Companies? Yes. 2. 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 they are also encouraged to carry out various activities independently. Major subsidiaries such as Larsen & Toubro Infotech Limited, L&T Hydrocarbon Engineering Limited participate in our Business Responsibility initiatives. 3. 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. 19 SECTION D: BR INFORMATION 1. Details of Director/Directors responsible for BR a) Details of the Director/Directors responsible for implementation of the BR policy/policies • DIN Number: NA • Name: Dr. Hasit Joshipura • Designation: Head - Corporate Centre & Member of the Executive Management Committee (EMC) b) Details of the BR head S. No Particulars 1 2 3 4 5 DIN Number (If applicable) Name Designation Telephone Number Email ID Details Not Applicable Major General Gautam Kar (Retd.) Head Corporate Infrastructure & Administrative Services +91-22-67052447 sustainability-ehs@Larsentoubro.com 2a. 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 (A) Details of Compliances (Reply in Yes/No) P1 P2 P3 P4 P5 P6 P7 P8 P9 Do you have a policy/policies for Has the policy been formulated in consultation with the relevant stakeholders? Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Does the policy conform to any national/ international standards? If yes, specify. (50 words) Yes. The policies are aligned with the principles of NVG guidelines and conform to international standards of ISO 9001, ISO 14001, OHSAS 18001 and ILO principles. Has the policy been approved by the Board? Yes. Has it been signed by MD/Owner/CEO/ Appropriate Board Director? Signed by the Group Executive Chairman Y Y Y Y Y Y Y Y Y 1 2 3 4 20 S. No Questions 5 6 7 8 9 Does the Company have a speciﬁ ed committee of the Board/ Director/Ofﬁ cial to oversee the implementation of the policy? Yes. Indicate the link for the policy to be viewed online? Has the policy been formally communicated to all relevant internal and external stakeholders? Does the Company have in-house struc- ture to implement the policy/policies? Does the Company have a grievance redressal mechanism related to the policy/ policies to address stakeholders’ griev- ances related to the policy/policies? 10 Has the Company carried out independ- ent audit/evaluation of the working of this policy by an internal or external agency? P1 Y P2 Y P3 Y P4 Y P5 Y P6 Y P7 Y P8 Y P9 Y www.Lntsustainability.com Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y 2b. If answer to question at Serial 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) Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable 3. Governance related to BR (a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO meet to assess the BR performance of the Company: Within 3 months, 3-6 months, Annually, More than 1 year: Annually (b) 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 Global Reporting Initiative (GRI) framework since 2008. The sustainability reports are externally assured. We are following GRI – G4 (Fourth Generation) guidelines and the 2015 report is ‘In Accordance – Comprehensive’ report. The reports can be accessed at www.Lntsustainability.com 21 SECTION E: PRINCIPLE 1: BUSINESSES SHOULD CONDUCT AND GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND ACCOUNTABILITY L&T is a professionally managed Indian multinational, committed to total customer satisfaction and enhancing value for all stakeholders. The Company’s philosophy on corporate governance is built on a rich legacy of fair and transparent governance and disclosure practices. This includes respect for human values, individual dignity and adherence to honest, ethical and professional conduct. Our commitment to these values is articulated through the Company’s Vision and policies, which are extended to the operations of all subsidiaries and associate companies. L&T-ites are guided by the Code of Conduct (CoC), which is featured on the Company’s Intranet. Every new employee is introduced to the CoC through a detailed online module of the Company’s Any Time Learning (ATL) System. The critical areas of the CoC are also included in the HR Orientation Training. In a unique initiative, each individual employee of the Company is required to confirm his/her acceptance of the Code of Conduct, Corporate Governance policies and guidelines in writing or online. This is a ‘once a year’ requirement, which creates awareness on the CoC, policies and guidelines, and encourages employees to take responsibility for their actions. 22 The Board members and senior management complies with the CoC. The Group Executive Chairman makes an Annual Declaration to the shareholders on compliance with the Company’s CoC by the senior management. The CoC Apex Committee, constituted by the Executive Management Committee (EMC) of the Company, functions as the Apex Body to interact, inform, advise and coordinate with the EMC on all issues relating to the CoC. It consists of a minimum of five senior members and is required to meet at least twice a year. The Compliance Officer acts as the Ex-Officio Secretary of the Apex Committee. The key function of the Committee is to ensure implementation of the CoC across the Company and deal with instances of non-compliance, apart from overseeing the functioning of the unit-level CoC Committees and advising the EMC. Unit-level CoC Committees consist of at least four members, headed by the Unit Head, along with Head of Accounts, Head of HR and a senior member from Operations. The Unit-level Committees are required to meet at least once in a quarter. The role of the Committee is to create awareness of the CoC, motivate employees to follow it, monitor compliance and investigate instances of non-compliance. Codified policies publicly affirm the organisation’s commitment, govern actions and provide clarity of direction. The Company’s Whistle Blower Policy encourages and enables employees to report, without fear, any wrongdoings or unethical or improper practice which may adversely impact the image and/ or the financials of the Company, through a written report to Whistle Blowing Investigation Committee’s address. The Company has established a vigil mechanism for employees and directors to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s CoC or ethics policy. The management assures maintaining anonymity of the whistleblower at all times. The policy also provides for access to the Chairman of the Audit Committee. The Company has formulated an ‘Environmental & Social Code of Conduct for Suppliers’ covering specific clauses on Ethics and Transparency. More than 400 Suppliers are signatory to this code. Details relating to stakeholder complaints are included in the Director’s Report Section of this Annual Report. The Larsen & Toubro Group of Companies has set benchmarks in implementing good Corporate Governance practices. Imbibed by its employees as a way of life, these practices have created a high governance culture in the Company. PRINCIPLE 2: BUSINESSES SHOULD PROVIDE GOODS AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO SUSTAINABILITY THROUGHOUT THEIR LIFE CYCLE Our portfolio includes products and services for the Infrastructure, Power, Heavy Engineering, Electrical & Automation (E&A), Metallurgical & Material Handling (MMH), Hydrocarbon, IT & Technology Services and Financial Services segments. In all our businesses, it is our endeavour to extend safe goods and services that contribute to sustainability throughout their life- cycle. We ensure that sustainability aspects, risks and opportunities are integrated into our engineering and design. Our construction and infrastructure projects ensure minimal environmental impact and safe operations. All our campuses work towards reducing our environmental footprint, building a culture of safety and enhancing community value. We have 15 Green Buildings, one Green Factory, 8 water-positive campuses, and all 28 major campuses have achieved zero waste-water discharge status. Energy-efficiency and carbon footprint reduction are given substantial importance during the course of production. All the products and projects are accompanied by adequate labels and signage systems as well as Operation & Maintenance manuals. The Company offers comprehensive training to customer personnel as well. Sustainability begins at home. Our facility at Kattupalli is one of the many LEED (Leadership in Energy and Environmental Design) certified green buildings across L&T’s campuses. 23 Apart from these initiatives, the Company has a dedicated and expanding green products and services portfolio which is aimed at helping its customers ‘Go Green’. The portfolio covers Green Buildings, Mass Rapid Transit Systems like metro and mono rail, solar power plants built on EPC basis, fuel switch projects, coal gasifiers, supercritical thermal power plants & equipment, power transmission & distribution systems, energy-saving electrical & automation solutions, etc. The Company’s construction business builds Green Buildings, sourcing most construction material locally, and helps customers to reduce energy and water consumption, and utilise recycled material. Energy-efficient products and systems from the Company’s Electrical & Automation business include Power Management Systems, AC drives, smart metering systems, etc. The Heavy Engineering business manufactures coal gasifiers, utilising coal efficiently. With the aim of extending our sustainability practices to our value chain, we have formulated an Environment and Social Code of Conduct for our suppliers. It advocates environmental footprint reduction, occupational health and safety and socially-responsible business practices. The Company conducted an environmental and social assessment of selected suppliers to help them identify energy, water and resource-saving opportunities. It also conducts capacity-building programmes for vendors and sub-contractors, and provides training and technical expertise to improve operational efficiency. In an effort to enhance local sourcing, around 80% of the Company’s requirements are met by local suppliers. It evaluates various options for cost-effective and sustainable transportation of products and services, and has initiated the capture of carbon emission from material transportation. The Company works with its vendors and sub- contractors to improve and build their capacity and capability in manufacturing complex products L&T’s range of AC Drives helps industries maximize energy-efficiency. 24 and equipment. Introducing sustainability practices in the supply chain is a key step towards improving their environmental and social performance. This year, the Company’s Heavy Engineering business initiated a business-wide environmental and social supplier assessment programme. The Company promotes recycling and the use of alternative materials. Our products are ‘engineered to order’ based on specific customer requirements, limiting the scope for material recycling. We utilise alternative materials such as fly ash, crushed sand and blast furnace slag. Steel scrap, zinc waste, etc., are reclaimed as well. As a part of our sustainability roadmap, we are increasing recycling of products and industrial waste at campuses and project sites. PRINCIPLE 3: BUSINESS SHOULD PROMOTE THE WELL-BEING OF EMPLOYEES Our employees are the force powering the Company’s growth engines. It is the creative energy of our people that powers the Company, and we nurture our people with a continuous loop of training, motivation, leadership development, and growth. The Company’s Corporate Human Resource Policy has a robust framework which inspires innovation and creativity. Apart from this, we have the Corporate Environment, Health & Safety (EHS) Policy, Whistle Blower Policy, Policy for Protection of Women’s Rights at the Workplace and Code of Conduct covering human rights protection. The Leadership Development Academy at Lonavala near Mumbai is one of the few institutions of its kind in India. It provides the springboard for Team L&T to attain the next level of professional growth. Safety techniques need to be scientifically disseminated. L&T has set up a one-of-a- kind Safety Innovation School in Hazira. The Company is a merit-based organisation, and believes in an inclusive approach to employment. No discrimination is made on the basis of caste, religion, region, gender or physical disability. The Company complies with the principles of the United Nations Global Compact, and human rights clauses are also included in the contracts with vendors and partners. The Company directly employs 93 differently-abled persons. The value chain also employs 31 differently-abled persons. The Company recognises Employee Unions and associations affiliated with different trade unions at its manufacturing facilities. 8.34% of permanent employees are covered under this category. During the year, no complaints were received relating to child labour, forced labour, involuntary labour or sexual harassment at the workplace. L&T employees Number of permanent women employees Contract workmen Refer “Standalone ﬁ nancials – 10-year Highlights” section of Annual Report 2,036 3,01,311 Total workforce We provide employees with continuous training in functional and behavioural areas to groom them for the challenges of tomorrow and help realize leadership potential. Our Leadership Development Academy (LDA) at Lonavala, a unique corporate university in India, collaborates with the world’s most reputed institutions to provide a global perspective for L&T’s multi-tier leadership process. Apart from this, a wide range of technical, functional as well as managerial training programmes are held for the employees at Technical Training Centres in Mumbai (Madh, Mahape) and Mysuru, and at Project Management Institutes (Vadodara and Chennai). Safety is a thrust area for the Company. Regular safety training, tool-box talks, mock drills and specific safety interventions help build a safe work culture within the organisation. New employees are given training in multiple disciplines including environment, health and safety, human rights, climate change and sustainable development. All contract workmen receive mandatory safety training before commencing work. Over 2.77 million man-hours of training was provided in FY 2015-16 to the permanent employees. The safety performance of the Company is reviewed by Board of the Company on a quarterly basis. Our ‘Working on Wellness’ programme is targeted at employee health interventions in six critical areas – cancer, diabetes, cardiac disease, obesity, ergonomic issues and stress. Through counselling, awareness sessions, diagnostic camps and workshops across locations we increase awareness on these topics. The Health Risk Index questionnaire is an important tool used to assess employees’ perspective and design preventive healthcare interventions. The Company constantly innovates to be an employee-friendly brand, and, last year, was ranked among the top companies to work for by a Business Today survey. PRINCIPLE 4: BUSINESSES SHOULD RESPECT THE INTERESTS OF, AND BE RESPONSIVE TOWARDS ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE DISADVANTAGED, VULNERABLE AND MARGINALIZED 25 As one of India’s most widely held companies with diverse and transparent shareholding, the Company recognizes that its stakeholders form a vast and heterogeneous community. Our customers, shareholders, employees, suppliers, community, etc., have been guideposts of our decision-making processes. The Company engages with its identified stakeholders on an ongoing basis through business-level engagements and structured stakeholder engagement programmes. We maintain our focus on delivering value to all our stakeholders, especially the disadvantaged communities. The CSR programmes run by the Company are focused primarily on those sections of the local communities which are disadvantaged, vulnerable and marginalized. We are conscious of the impact of our operations on the communities around and strive to contribute positively to improve their standard of living; through our interventions in water & sanitation, heath, education and skill development. Further details of our CSR programmes and approach are listed in Principle 8. The Company has a dedicated Corporate Brand Management & Communications department which facilitates an on-going dialogue between the organisation and its stakeholders. Communication channels include: 26 For External Stakeholders For Internal Stakeholders Stakeholder- engagement sessions Employee- satisfaction surveys Employee engagement surveys for further improvement in employee- engagement processes Circulars, messages from Corporate and Line Management Corporate 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- speciﬁ c, some business-speciﬁ c, a CSR programme newsletter. L&T Helpdesk, toll-free number Client- satisfaction surveys Regular business interaction, supplier, dealer and stockist meets Periodic feedback mechanism Press Releases, Infodesk - an online service, dedicated email id for investor grievances AGM (Shareholders interaction) Investors meet and shareholder visits to works A corporate website that presents an updated picture of capabilities & activities Access to the business media to provide information and respond to queries PRINCIPLE 5: BUSINESSES SHOULD RESPECT AND PROMOTE HUMAN RIGHTS The Corporate Human Resource Policy of the Company is in line with the Universal Declaration of Human Rights, the ILO Core Conventions on Labour Standards and the UN Global Compact. The Policy for Protection of Women’s Rights at the Workplace sets out objectives, applicability and structure of committees and process to redress complaints. The Company is also a member of the Global Compact Network India and is committed to honouring human rights within its operations. Apart from this, the Company complies with the applicable local laws and regulatory requirements,such as the Factories Act 1948, The Building & Other Construction Workers (Regulation of Employment & Conditions of Service) Act 1996, the Central Rules 1998 and the Industrial Disputes Act 1947. We ensure that human rights clauses (including those that deal with child or forced labour) are extended to our sub-contractors as part of their contract documents, and are strictly adhered to within our Subsidiary and Associate companies. Employees are sensitized on human rights through induction training programmes, interactive sessions, intranet, policy manuals and posters. We propagate our values across the supply chain through our ‘Environmental & Social Code of Conduct’ for our suppliers. The assessment of our key suppliers based on their environmental and social performance helps in identification of various resource- saving opportunities, in addition to compliance with applicable environmental and social regulatory requirements. There were no reported complaints related to human rights violations during the year. PRINCIPLE 6: BUSINESS SHOULD RESPECT, PROTECT, AND MAKE EFFORTS TO RESTORE THE ENVIRONMENT The Company recognises the importance of bringing about an equitable future which is in greater harmony with the environment. Our Corporate Environment Health and Safety policy spells our commitment to conserve the environment in all areas of our operations. The Company has established a comprehensive system to identify and assess potential environmental risks and opportunities in its operations and that of its Subsidiary and Associate Companies. Its key suppliers are also encouraged to follow its practices. We are committed to the eight missions of the National Action Plan on Climate Change (NAPCC) instituted by the Government of India. Progressively, we have been investing in products and processes that promote sustainable growth - enhancing energy security, developing low-carbon technologies for building infrastructure, spreading sustainability knowledge and increasing our green cover. The Company is focused on maximising energy-efficiency and reducing greenhouse gas (GHG) emission intensity. Our pursuit of renewable energy solutions has helped us to reduce our carbon footprint across businesses. Our other environment preservation initiatives are promotion of green building construction, enhancement of green cover, provision of solar and renewable energy solutions to customers and capacity-building for environmental management. Since 2009, the Company has been annually reporting its carbon emissions to the Carbon Disclosure Project. The Company adheres to all pollution control standards set by regulatory bodies like Central and State Pollution Control Boards. Environmental regulatory approvals are sought prior to commencement of operations at units and project sites. Regular checks are conducted by internal and independent auditors / assessors to ensure compliance with relevant environmental regulations, and compliance reports are submitted to Central Pollution Control Board (CPCB) / State Pollution Control Boards (SPCB) whereever applicable. The Company has more than 25 Bureau of Energy Efficiency (BEE) Certified energy managers and energy auditors to conduct energy audits at its units. The Company’s Board of Directors has complete access to the information within the organisation. This includes reports on effluents or pollution issues. All manufacturing units and service sites are encouraged to develop and maintain a management system based on ISO 14001 and OHSAS 18001. During the financial year, there are no pending show cause/ legal notices from CPCB/SPCB. As a part of a Company-wide effort to protect the environment, and in accordance with the circular issued by the Ministry of Corporate Affairs, L&T’s solar solutions help harness the unlimited power of the sun. 27 intensity has declined steadily over the years. Across all the Company’s manufacturing locations, various water management initiatives are in place, such as water auditing & footprint mapping, rainwater harvesting, industrial and domestic wastewater treatment and reuse. Eight of the Company’s campuses have been certified as ‘Water Positive’ by an independent assurance provider. All 28 major units continue to be zero- wastewater-discharge units. The Company’s efforts in water conservation are supplemented by its CSR programmes and the Larsen & Toubro Public Charitable Trust by focusing on water management projects in tribal and drought- prone regions of India. Over 200 check dams were constructed in the Dahanu and Talasari blocks of Maharashtra, in collaboration with voluntary organisations. The Company’s Integrated Community Development (ICD) Programmes identified water-stressed locations in Rajasthan, Maharashtra and Tamil Nadu, and initiated watershed development activities in over 30 villages to provide access to drinking water and sanitation for the impacted communities. Fostering Biodiversity This year, the Company planted 3.09 lakh trees across its campuses and project sites, taking its tally to 1.5 million trees in the last five years. The Company has released a guidance document on tree plantation and maintenance for its campuses and project sites. The Company understands the importance of biodiversity and need to protect nature’s precious resources. Studies conducted at six campuses showed that 1565 tonnes of carbon per year are sequestered at these campuses. Several initiatives have been taken to protect biodiversity in and around units, with emphasis on growing native tree species. PRINCIPLE 7: RESPONSIBLE PUBLIC ADVOCACY The Company actively participates in industrial forums and professional bodies to put forth the larger interest of industry. The senior leadership team offers their expertise and insights during public Government of India, shareholders have been given the option of receiving documents related to general meetings, Audited Financial Statements, etc., through e-mail instead of printed copies. Salient features of the Company’s green initiatives include: Increasing use of renewable energy Power Purchase Agreements at our Powai, Hazira and Chennai campuses are in place with Renewable Energy Power Producers to draw renewable energy as a substitute to fossil-fuel-generated electricity. Carbon footprint mapping and reduction Life cycle assessment - from cradle to gate - has been conducted for products manufactured by the Heavy Engineering business, Powai. Results show that 40% of the total carbon footprint is generated during the in-house fabrication process. The rest is caused by activities outside Company premises. Initiatives taken at the Powai campus include: investments in renewable energy, reduction in material consumption and enhancing the product’s energy efficiency. The Company plans to conduct similar studies for the green buildings constructed by its construction business, and plans to extend it to other products and services. In addition to reducing its own carbon footprint, it offers customers a bouquet of green products and services. Sales of green products and services are contributing an increasingly larger share to the Company’s total revenue. Water Conservation The Company’s water consumption All our campuses have a green cover. 28 policy formulation. The Company actively partners with a number of institutions and associations, including: • Association of Business Communicators of India • Associated Chambers of Commerce and Industry of India (ASSOCHAM) • Bombay Chamber of Commerce & Industry (BCCI) • Bureau of Indian Standards (BIS) • Construction Industry Development Council (CIDC) • Confederation of Indian Industry, Centre of Excellence for Sustainable Development (CII-CESD) • CII – Green Business Centre (GBC) • Federation of Indian Chambers of Commerce and Industry (FICCI) • Indian Electrical and Electronics Manufacturers Association • Indian Institute of Chemical Engineers (IIChE) • National Safety Council (NSC) • National Fire Protection Institution (NFPI) The Company also interacts regularly with the Indian Institute of Corporate Affairs (IICA) on CSR-related aspects and with the the Confederation of Indian Industry Centre of Excellence for Sustainable Development on sustainability policies and regulations. We are also part of the working teams on the Environmental & Recycling Council of CII, BCCI - Environment, Health & Safety (EHS) Committee. PRINCIPLE 8: SUPPORT INCLUSIVE GROWTH The Company’s CSR policies are structured around the theme ‘Building India’s Social Infrastructure’ with the objective of maximising their impact. Our Integrated Community Development (ICD) Programme is aligned with the UN’s Sustainable Development Goals, and addresses the most pressing needs – water, sanitation, education, health and skill development. The inclusive growth and development of communities around us are integral to our Corporate Social Responsibility Policy.The Company has identified the following thrust areas: • Health • Education • Skill Development • Water & Sanitation CSR projects are identified and implemented by unit-level CSR teams, area/branch offices and project sites, with guidance of the CSR Committee of L&T Board. The Ladies Clubs, formed by the wives of L&T Employees and Employee volunteers known as ‘L&Teers’ participate in the implementation of the Company’s CSR projects. The Company collaborates with NGOs and society at large to identify the requirements of local communities before initiating any social welfare programme. Periodic impact- assessment helps monitor the benefits received by the community, and leads to augmentation of the CSR project. The Community Development Programmes are either fully adopted or supported by the Company as per the need, on a case-to-case basis. Capacity- building programmes for local administrations are also conducted to successfully run the programmes. Our CSR Snapshot Water & Sanitation The unavailability of safe drinking water results in increasing morbidity and mortality rates. It also negatively impacts educational attainments, migration and livelihood opportunities. For our ICD programmes, locations for interventions were identified as water-stressed on the basis of water availability, quality and uncertainty. Further access to sanitation, health, education, availability of drinking water and Human Development Index (HDI) were also taken into consideration. To begin with, districts and tehsils were identified in the States of Tamil Nadu, Maharashtra and Rajasthan. In these States, ICD Programmes were launched. Replicable and indigenous methods for augmenting water supply are being adopted, such as building check dams, field bunds, and soil and water conservation interventions. In addition, through the Larsen & Toubro Public Charitable Trust, we have constructed 200 check dams, which help in irrigation and ground water recharge at Talasari Block near Mumbai. The programme will also enable the community to build and utilise sanitation facilities. Education Our educational initiatives focus on providing primary education, developing infrastructure and enhancing the learning experience in the vicinity of our units across India. We enrich education in primary schools through innovative learning methodologies. We provide infrastructure support to schools. After-hours ‘Single Teacher’ schools help children improve their learning levels. We support pre-schools, set up computer laboratories, provide teaching aids and uniforms and augment teacher capacity. Our Science-on-Wheels van visits schools, giving children the opportunity to experience the hands-on experiments. Summer camps and sports activities help pupils develop social skills. 29 The social infrastructure we seek to build covers a wide spectrum - water, sanitation, education, health and skill development. Extra-curricular outings help widen children’s horizons. The distribution of colorful school kits is one more step in ensuring that children have resources to study at home. Employees volunteer their time and talent to mentor these children. Currently, the Company is supporting over 250 schools across India and reaching out to over 2 lakh underprivileged children - in addition to undertaking interventions in over 100 balwadis and anganwadis. Health To help the economically weak stay healthy despite the high cost of healthcare, the Company has launched initiatives to provide affordable health and welfare. The Company has set up seven Community Health Centres near its key campuses. They focus on reproductive health and conduct diagnostic and clinical camps to enhance health-seeking behavior of the community. 30 Regular health check-up camps are held in schools and pre-schools. The Company’s HIV/AIDS management initiatives include awareness camps (particularly for high-risk groups), Anti-Retroviral Therapy, counselling and testing. Artificial kidney dialysis centres for the underprivileged have been set up at the Company’s three Health Centres. Our Community Health Centres reach out to over 3 lakh beneficiaries annually. At 13 locations we cater their needs through mobile health vans. Skill Development The Company has set up Construction Skills Training Institutes (CSTIs) at eight locations to impart free training to rural and urban youth in basic construction trades. In addition, the Company has set up vocational institutes and has in place programmes that impart skills in several trades to enhance the employability of underprivileged youth. Currently, the Company runs CSTIs on its own, and has collaborated with 27 ITIs. The CSTIs provide free training in construction skills to rural and urban youth in various trades, such as bar-bending, formwork, carpentry, masonry, scaffolding and welding, etc. This training improves the skill sets of the underprivileged youth and enhances their employability. Units set up in collaboration with ITI impart industry-oriented training. Vocational training programmes in tailoring, beautician’s courses, home nursing and food processing for women are enabling them to become self-reliant. Through the CSTIs and other vocational training programmes, we have reached out to over 45,000 youth and women from underprivileged backgrounds and have provided them with viable skills. The Company spent a sum of 119.89 Crores in FY 2015-16 towards CSR as per the Companies Act, 2013. Organization for Standardization and the International Electro-technical Commission. An established system of addressing customer complaints, comments and suggestions ensures regular personal interaction with clients. The system consists of regular customer meets, customer satisfaction surveys, training programmes for customer representatives and market-based research. All our channel partners, i.e. stockists and dealers, are briefed about new product features and components. The high percentage of repeat orders is a reliable indication of customer satisfaction and confidence in L&T’s products, projects and services. All norms, standards and voluntary codes and guidelines related to marketing communication are adhered to. The brand management guidelines institutionalised by L&T’s Corporate Brand Management & Communications department authenticate communications and help customers identify and distinguish the Company’s products. Regarding unfair trade practices, irresponsible advertising and or anti-competitive behavior, no stakeholder has filed a case against the Company in the last five years, and there are no pending cases as on 31st March 2016. Our R&D efforts focus on meeting customer requirements. 31 PRINCIPLE 9: ENGAGE WITH AND PROVIDE VALUE TO CUSTOMERS We believe our leadership position in most of our major businesses rests on our ability to consistently improve the value we offer to our customers. We engage with our clients to understand requirements, and anticipate needs. We invest in R&D, design facilities, superior manufacturing and testing processes, and set up training centres for our own personnel as well as those of our customers. Health and safety concerns are integrated at the product design stage. Our products carry suitable labeling and are accompanied by Operation & Maintenance manuals in line with relevant codes and specifications. Similar clarity is maintained across all our projects. Products are tested and benchmarked against stringent national and international standards such as the Bureau of Indian Standards, the International ANNEXURE: MAPPING TO THE SEBI FRAMEWORK 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. List three key products/services that the Company manufactures/provides 8. (as in balance sheet) 9. Total number of locations where business activity is undertaken by the Company i. Number of International Locations (Provide details of major 5 ii. Number of National Locations Markets served by the Company – Local/State/National/International Section B: Financial Details of the Company 1. 2. 3. Paid up Capital (INR) Total Turnover (INR) Total proﬁ t after taxes (INR) 4. 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. 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) 3. 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%] 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 AR AR AR AR AR AR AR AR AR AR AR AR AR AR 18 18 18 18 18 19 19 19 19 19 19 19 19 19 19 AR 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, Annually, More than 1 year AR 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 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 22-23 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 environmental 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 transportation)? 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 Director’s Report Section of this Annual Report AR AR AR AR AR Green buildings constructed by the Building & Factories business part of Construction Business help customers to reduce energy and water consumption, utilize recycled material and locally source most of construction material. 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 reduction of GHG emissions from consumption of indirect energy. 23-24 23-24 23-24 23-24 23-24 23-24 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, involuntary labour, sexual harassment in the last ﬁ nancial year and pending, as on the end of the ﬁ nancial year. What percentage of your undermentioned employees were given safety and skill upgradation 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 & marginalized stakeholders? Are there any special initiatives taken by the company to engage with the disadvantaged, 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. Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the ﬁ nancial year being reported? (cid:49)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:75)(cid:82)(cid:90)(cid:3)(cid:70)(cid:68)(cid:88)(cid:86)(cid:72)(cid:18)(cid:3)(cid:79)(cid:72)(cid:74)(cid:68)(cid:79)(cid:3)(cid:81)(cid:82)(cid:87)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:72)(cid:71)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:38)(cid:51)(cid:38)(cid:37)(cid:18)(cid:54)(cid:51)(cid:38)(cid:37)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3) (cid:11)(cid:76)(cid:17)(cid:72)(cid:17)(cid:3)(cid:81)(cid:82)(cid:87)(cid:3)(cid:85)(cid:72)(cid:86)(cid:82)(cid:79)(cid:89)(cid:72)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:86)(cid:68)(cid:87)(cid:76)(cid:86)(cid:73)(cid:68)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:12)(cid:3)(cid:68)(cid:86)(cid:3)(cid:82)(cid:81)(cid:3)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:17) 34 Reference Section Page Number AR 25 AR AR AR AR AR AR AR AR AR No AR AR 25 25 26 26 26 26-27 27 27 27 - 28 28 Principle 7: Policy Advocacy Question 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 improvement 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/ external 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. (cid:43)(cid:68)(cid:89)(cid:72)(cid:3)(cid:92)(cid:82)(cid:88)(cid:3)(cid:87)(cid:68)(cid:78)(cid:72)(cid:81)(cid:3)(cid:86)(cid:87)(cid:72)(cid:83)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:81)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:76)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:3)(cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:76)(cid:87)(cid:76)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:86)(cid:3) (cid:86)(cid:88)(cid:70)(cid:70)(cid:72)(cid:86)(cid:86)(cid:73)(cid:88)(cid:79)(cid:79)(cid:92)(cid:3)(cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:80)(cid:88)(cid:81)(cid:76)(cid:87)(cid:92)(cid:34) Principle 9: Customer Welfare What percentage of customer complaints/consumer cases are pending as on the end of ﬁ nancial year. Reference Section Page Number AR AR AR AR AR AR 29 29 29 29-30 31 29-30 The details related to stakeholder complaints are included in the Director’s Report Section of this Annual Report. 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 behavior during the last ﬁ ve years and pending as of end of ﬁ nancial year? AR AR 31 31 35 STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS Description 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 $$ crore Statement of Profit and Loss Gross revenue from operations PBDIT^^ Profit after tax (excluding 60415 6171 57558 57164 52196 53738 44296 37356 34337 25342 17938 6488 6667 5473 6283 5640 4816 3922 2969 1784 extraordinary/exceptional items) 4766 4699 4905 4169 4413 3676 3185 2709 2099 1385 Profit after tax (including extraordinary/exceptional items) 5311 5056 5493 4384 4457 3958 4376 3482 2173 1403 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 ( ) # 40718 37085 33662 29291 25223 21846 18312 12460 9555 5768 203 13609 54530 363 410 12936 11459 290 8478 133 9896 263 7161 77 48 61 6801 6556 3584 50384 45531 38059 35252 29270 25190 19064 13200 40 2078 7886 10.32 11.38 11.78 10.60 11.82 12.84 13.00 11.56 11.87 10.14 8.89 8.87 9.71 8.50 8.38 9.01 11.82 10.26 8.69 7.97 13.66 0.33:1 18.25 57.07 14.30 17.46 16.06 18.95 19.73 28.49 31.71 29.21 27.19 0.35:1 0.34:1 0.29:1 0.39:1 0.33:1 0.37:1 0.53:1 0.38:1 0.36:1 16.25 54.46 14.25 59.36 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 Book value per equity share ( ) ## 436.97 398.78 362.95 317.09 274.35 238.96 202.46 141.54 108.63 No. of equity shareholders 10,28,541 8,53,824 8,32,831 8,54,151 9,26,719 8,53,485 8,14,678 9,31,362 5,78,177 4,28,504 No. of employees 43,354 44,081 54,579 50,592 48,754 45,117 38,785 37,357 31,941 27,191 ^^ @ $ * # 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 issue of bonus shares/restructuring during the respective years $$ Figures for the year 2006-07 to 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary 36 CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS Description 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 crore Statement of Profit and Loss Gross revenue from operation 103522 92762 85889 75195 64960 52470 44310 40932 29819 20877 PBDIT^^ 12343 11258 10730 9929 8884 7677 6423 5024 3706 2615 Profit attributable to shareholders of Parent Company 4748 4470 4547 4911 4649 4238 3796 3007 2304 1810 (excluding extraordinary/exceptional items) Profit attributable to shareholders of Parent Company 5091 4765 4902 5206 4694 4456 5451 3789 2325 2240 (including extraordinary/exceptional items) Balance Sheet Net worth Minority Interest Deferred tax liability (net) (392) (185) 337 184 82 311 153 131 43992 40909 37712 33860 29387 25051 20991 13988 10831 6922 6769 4999 3179 2653 1753 1026 1087 1059 923 122 646 107 Loan funds Capital employed Ratios and statistics 101307 90571 80330 62672 47150 32798 22656 18400 12120 6200 151676 136294 121558 99369 78372 59186 44887 33578 23996 13875 PBDIT as % of net revenue from operations @ 12.03 12.24 12.60 13.33 13.81 14.75 14.61 12.40 12.58 12.75 PAT as % of net revenue from operations $ 4.96 5.18 5.76 6.99 7.30 8.56 12.40 9.35 7.89 10.92 RONW % ** 12.00 12.13 13.71 16.47 17.26 19.38 31.23 30.64 26.92 38.01 Gross debt:equity ratio 2.30:1 2.21:1 2.13:1 1.85:1 1.61:1 1.31:1 1.08:1 1.32:1 1.12:1 0.90:1 Basic earnings per equity share ( ) # 54.69 51.33 52.97 56.53 51.21 49.04 61.27 43.17 26.96 26.73 Book value per equity share ( ) ## 472.12 439.93 406.65 366.59 319.64 273.97 232.04 158.84 122.87 80.92 Dividend per equity share ( ) ## 18.25 16.25 14.25 12.33 11.00 9.67 8.33 7.00 5.67 4.33 ^^ Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items and other income. @ $ ** RONW [(profit available for appropriation including extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous 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)]. # expenditure)]. Basic earnings per equity share has 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 CONSOLIDATED - ORDER INFLOW L&T CONSOLIDATED - GROSS REVENUE FROM OPERATIONS AND PAT 155367 7.3 136858 7.6 2014-15 2015-16 Order Inflow India GDP growth L&T CONSOLIDATED - ORDER BOOK 232649 7% 249949 170000 – 150000 – 130000 – 110000 – 90000 – 70000 – 50000 – e r o r c 30000 – – 260000 – 240000 – 220000 – 200000 – e r o r c 180000 – 160000 – 140000 – 120000 – 100000 – 80000 – 60000 – – – 9.0 – 8.5 – 8.0 – 7.5 – 7.0 – 6.5 – 6.0 – e g a t n e c r e P 106000 – 104000 – 102000 – 100000 – e r o r c 98000 – 96000 – 94000 – 92000 – 90000 – 88000 – 86000 – – 103522 5091 92762 4765 2014-15 2015-16 – 5500 – 5400 – 5300 – 5200 – 5100 – 5000 – 4900 – 4800 – 4700 – 4600 – e r o r c Gross revenue from operations PAT including exceptional and extraordinary items L&T CONSOLIDATED - PBDIT AS % OF NET REVENUE FROM OPERATIONS 11258 12.2 12343 12.0 e r o r c 13000 – 12000 – 11000 – 10000 – 9000 – 8000 – 7000 – 6000 – 5000 – 4000 – 3000 – – – 16.0 – 14.0 – 12.0 – 10.0 – 8.0 – 6.0 e g a t n e c r e P – 4.0 – 2014-15 2015-16 – 2014-15 2015-16 PBDIT PBDIT as % of net revenue from operations Net revenue from operations and PBDIT exclude exceptional/extraordinary items L&T CONSOLIDATED - SEGMENT-WISE ORDER INFLOW 2015-16 L&T CONSOLIDATED - SEGMENT-WISE REVENUE 2015-16 6128 4% 5137 4% 84817 62% 7540 5% 8956 6% 10447 8% 5175 4% 2295 2% 3661 3% 2702 2% crore Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Hydrocarbon IT & Technology Services Financial Services Developmental Projects Others 6813 7% 5137 5% 48797 47% 7540 7% 8956 9% 8787 8% 4961 5% 3124 3% 2415 2% 6993 7% Total segment wise order inflow 136858 crore Total segment wise revenue 103522 crore crore Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Hydrocarbon IT & Technology Services Financial Services Developmental Projects Others 38 L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK 2015-16 L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK 2014-15 15622 6% 6772 3% 3055 1% 187373 75% 7507 3% 10368 4% 19252 8% crore Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Hydrocarbon Others 13684 6% 7200 3% 3096 1% 166120 71% 8387 4% 10690 5% 23472 10% crore Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Hydrocarbon Others Total segment wise order book 249949 crore Total segment wise order book 232649 crore L&T CONSOLIDATED - SEGMENT-WISE RESULT 2015-16 L&T CONSOLIDATED - SEGMENT-WISE EBIDTA MARGINS* 5274 (49%) 6000 – 5000 – 4000 – 3000 – 2000 – 1000 – e r o r c 0 – 581 (5%) 40 499 (5%) 1698 (16%) 1028 (10%) 622 (6%) 1130 (11%) – – – – – – – – – – – -1000 – r e w o P e r u t c u r t s a r f n I -15 n o b r a c o r d y H & l a c i r t c e l E n o i t a m o t u A (-2%) -192 g n i r e e n g n E i y v a e H & l a c i g r u l l a t e M g n i l d n a H l a i r e t a M s e c i v r e S l y g o o n h c e T & T I s e c i v r e S l a i c n a n i F s r e h t O s t c e o r P j l a t n e m p o e v e D l Total segment wise result 10665 crore Figures in brackets represent percentage of segment result to total segment result L&T CONSOLIDATED - SEGMENT-WISE CAPITAL EMPLOYED 50 – 40 – 30 – 20 – 10 – e g a t n e c r e P 2014-15 2015-16 41.7 16.1 11.1 11.7 11.6 10.5 12.3 14.8 13.9 5.5 2.3 20.421.6 15.4 15.2 26.6 22.9 20.7 0 – – – – – – – – – – – – -0.7 -10 – -20 – r e w o P e r u t c u r t s a r f n I & l a c i g r u l l a t e M g n i l d n a H l a i r e t a M g n i r e e n g n E i y v a e H -15.4 n o b r a c o r d y H & l a c i r t c e l E n o i t a m o t u A s e c i v r e S l y g o o n h c e T & T I s e c i v r e S l a i c n a n i F s r e h t O s t c e o r P j l a t n e m p o e v e D l * Earnings before interest, tax, depreciation and amortisation as percentage of net segment revenue L&T STANDALONE - GROSS REVENUE FROM OPERATIONS AND PAT 35000 – 30000 – 25000 – 20000 – e r o r c 15000 – 10000 – 5000 – 31.03.2015 31.03.2016 0 6 0 1 3 6 4 0 7 2 1 0 1 8 1 5 4 1 4 1 5 8 7 0 1 3 2 4 9 e r o r c 8 3 1 8 0 4 7 7 8 2 2 3 1 9 1 3 4 1 1 4 0 3 2 3 9 4 0 2 1 0 8 2 6 8 8 2 6 5 8 2 0 7 2 2 7 3 0 2 7 7 3 3 2 4 1 3 65000 – 55000 – 45000 – 57558 5056 – 5500 60415 5311 – 5200 e r o r c – 4900 0 – – – – – – – – – – – – r e w o P e r u t c u r t s a r f n I & l a c i g r u l l a t e M g n i l d n a H l a i r e t a M g n i r e e n g n E i y v a e H & l a c i r t c e l E n o i t a m o t u A n o b r a c o r d y H s r e h t s e c i v r e S l y g o o n h c e T & T I s e c i v r e S l a i c n a n i F s t c e o r P j l a t n e m p o e v e D l O 35000 – – Total segment wise capital employed as at 31.03.2015 86430 crore and as at 31.03.2016 92346 crore 2014-15 2015-16 – 4600 – Gross revenue from operations PAT including exceptional and extraordinary items 39 i p a l c M u n i LARSEN & TOUBRO LIMITED Regd. Office : L&T House, Ballard Estate, Mumbai 400 001. CIN : L99999MH1946PLC004768 Email : Igrc@larsentoubro.com • Website: www.larsentoubro.com Tel.: 022-67525656 • Fax : 022-67525893 Notice NOTICE IS HEREBY GIVEN THAT the Seventy First Annual General Meeting of LARSEN & TOUBRO LIMITED will be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 on Friday, August 26, 2016 at 3.00 P.M. to transact the following business :- 1) To consider and adopt the audited financial statements of the Company for the year ended March 31, 2016 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the Reports of the Auditors thereon for the year ended March 31, 2016; 2) To declare a dividend on equity shares; 3) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT Ms. Sunita Sharma (DIN: 02949529) who was appointed as a Director in casual vacancy and holds office upto the date of this Annual General Meeting of the Company, is eligible for appointment and in respect of whom the Company has received a notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing her candidature for the office of Director, be and is hereby appointed as a Director.” 4) To appoint a Director in place of Mr. S.N. Subrahmanyan (DIN: 02255382), who retires by rotation and is eligible for re-appointment; 5) To appoint a Director in place of Mr. A.M Naik (DIN: 00001514), who retires by rotation and is eligible for re-appointment; 6) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT Mr. D.K Sen (DIN: 03554707) who was appointed as an Additional Director and holds office upto the date of this Annual General Meeting of the Company, is eligible for appointment and in respect of whom the Company has received a Notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director.” 7) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT Mr. M.V Satish (DIN: 06393156) who was appointed as an Additional Director and holds office upto the date of this Annual General Meeting of the Company, is eligible for appointment and in respect of whom the Company has received a Notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director.” 8) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT Ms. Naina Lal Kidwai (DIN: 00017806) who was appointed as an Additional Director and holds office up to the date of this Annual General Meeting of the Company, is eligible for appointment, and in respect of whom the Company has received a notice in writing from the Director under the provisions of Section 160 of the Companies Act, 2013 proposing her candidature for the office of Director, be and is hereby appointed as a Director. 41 RESOLVED FURTHER THAT Ms. Naina Lal Kidwai be and is hereby appointed as an Independent Director of the Company to hold office upto February 28, 2021 with effect from March 1, 2016.” 9) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. S.N Subrahmanyan (DIN: 02255382) as the Deputy Managing Director and President of the Company with effect from October 1, 2015 upto and including September 30, 2020. RESOLVED FURTHER THAT Mr. S.N Subrahmanyan in his capacity as the Deputy Managing Director and President, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement.” 10) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if 42 any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. D.K Sen (DIN: 03554707) as the Whole- time Director of the Company with effect from October 1, 2015 upto and including September 30, 2020. RESOLVED FURTHER THAT Mr. D.K Sen in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement.” 11) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. M.V Satish (DIN: 06393156) as the Whole-time Director of the Company with effect from January 29, 2016 upto and including January 28, 2021. RESOLVED FURTHER THAT Mr. M.V Satish in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement.” 12) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to the provisions of Sections 197, 198 and all other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification and re-enactment thereof, for the time being in force) and in supersession of the resolution no. 11 passed by the Members at the 68th Annual General Meeting of the Company held on August 22, 2013, consent of the Company be and is hereby accorded to pay commission with effect from April 1, 2016 to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and the Whole-time Directors of the Company which together with other remuneration will be within the overall limit of 10% of the net profits of the Company. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to approve and fix/ revise suitably the commission payable to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and the Whole-time Directors of the Company within the aforesaid limits fixed by the shareholders.” 13) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the re-appointment of Mr. R. Shankar Raman (DIN: 00019798) as the Whole-time Director of the Company with effect from October 1, 2016 upto and including September 30, 2021. RESOLVED FURTHER THAT Mr. R. Shankar Raman in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement.” 14) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the re-appointment of Mr. Shailendra Roy (DIN: 02144836) as the Whole-time Director of the Company with effect from March 9, 2017 upto and including July 7, 2020. RESOLVED FURTHER THAT Mr. Shailendra Roy in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement.” 15) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT Mr. Sanjeev Aga (DIN: 00022065) who was appointed as an Additional Director and holds office up to the date of this Annual General Meeting of the Company, is eligible for appointment, and in respect of whom the Company has received a notice in writing from the Director under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director, be and is hereby appointed as a Director. RESOLVED FURTHER THAT Mr. Sanjeev Aga be and is hereby appointed as an Independent Director of the Company to hold office upto May 24, 2021 with effect from May 25, 2016.” 16) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT Mr. Narayanan Kumar (DIN: 00007848) who was appointed as an Additional Director and holds office up to the date of this Annual General Meeting of the Company, is eligible for appointment, and in respect of whom the Company has received a notice in writing from the Director under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director, be and is hereby appointed as a Director. RESOLVED FURTHER THAT Mr. Narayanan Kumar be and is hereby appointed as an Independent Director of the Company to hold office upto May 26, 2021 with effect from May 27, 2016.” 17) To consider and, if thought fit, to pass with or without modification(s), as a SPECIAL RESOLUTION the following: “RESOLVED THAT in supersession of the resolution no. 13 passed by the Members at the 70th Annual General Meeting of the Company held on September 9, 2015 in this regard and in accordance with the provisions of Sections 41, 42, 62 and other applicable provisions, if any of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof for the time being in force) as amended from time to time, Foreign Exchange Management Act, 1999, Securities and Exchange Board of India (Issue 43 of Capital and Disclosure Requirements) Regulations, 2009 (‘SEBI Regulations’), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, enabling provisions in the Memorandum and Articles of Association of the Company as also provisions of any other applicable laws, rules and regulations (including any amendments thereto or re-enactments thereof for the time being in force) and subject to such approvals, consents, permissions and sanctions of the Securities and Exchange Board of India (SEBI), Government of India (GOI), Reserve Bank of India (RBI) and all other appropriate and/or concerned authorities, or bodies and subject to such conditions and modifications, as may be prescribed by any of them in granting such approvals, consents, permissions and sanctions which may be agreed to by the Board of Directors of the Company (‘Board’) (which term shall be deemed to include any Committee which the Board may have constituted or hereafter constitute for the time being exercising the powers conferred on the Board by this resolution), the Board be and is hereby authorized to offer, issue and allot in one or more tranches, to Investors whether Indian or Foreign, including Foreign Institutions, Foreign Institutional Investors, Foreign Portfolio Investors, Foreign Venture Capital Fund Investors, Venture Capital Funds, Non- Resident Indians, Corporate Bodies, Mutual Funds, Banks, Insurance Companies, Pension 44 Funds, Individuals or otherwise, whether shareholders of the Company or not, through an issue of convertible bonds and/or equity shares through depository receipts including by way of Qualified Institutions Placement (‘QIP’), to Qualified Institutional Buyers (‘QIB’) in terms of Chapter VIII of the SEBI Regulations, through one or more placements of Equity Shares (hereinafter collectively referred to as “Securities”), whether by way of private placement or otherwise as the Board may determine, where necessary in consultation with the Lead Managers, Underwriters, Merchant Bankers, Guarantors, Financial and/or Legal Advisors, Rating Agencies/Advisors, Depositories, Custodians, Principal Paying/Transfer/ Conversion agents, Listing agents, Registrars, Trustees, Auditors, Stabilizing agents and all other Agencies/Advisors so that the total amount raised through issue of the Securities shall not exceed INR 3600 Crore (Rupees Three Thousand Six Hundred Crore) or US $600 Mn (US Dollars Six Hundred Million), if higher. RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby also authorised to determine the form, terms and timing of the issue(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value, premium amount in issue/conversion/ exercise/ redemption, rate of interest, redemption period, listings on one or more stock exchanges in India or abroad as the Board may in its absolute discretion deems fit and to make and accept any modifications in the proposals as may be required by the authorities involved in such issue(s) in India and/or abroad, to do all acts, deeds, matters and things and to settle any questions or difficulties that may arise in regard to the issue(s). RESOLVED FURTHER THAT in case of QIP issue it shall be completed within 12 months from the date of passing of this resolution. RESOLVED FURTHER THAT in case of QIP issue the relevant date for determination of the floor price of the Equity Shares to be issued shall be - i) ii) in case of allotment of equity shares, the date of Meeting in which the Board decides to open the proposed issue in case of allotment of eligible convertible securities, either the date of the Meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the Equity Shares, as may be determined by the Board. RESOLVED FURTHER THAT the Equity Shares so issued shall rank pari passu with the existing Equity Shares of the Company in all respects. RESOLVED FURTHER THAT the Equity Shares to be offered and allotted shall be in dematerialized form. RESOLVED FURTHER THAT for the purpose of giving effect to any offer, issue or allotment of Securities, the Board, be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things as it may, in absolute discretion, deem necessary or desirable for such purpose, including without limitation, the determination of the terms thereof, for entering into arrangements for managing, underwriting, marketing, listing and trading, to issue placement documents and to sign all deeds, documents and writings and to pay any fees, commissions, remuneration, expenses relating thereto and with power on behalf of the Company to settle all questions, difficulties or doubts that may arise in regard to such offer(s) or issue(s) or allotment(s) as it may, in its absolute discretion, deems fit. RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint Lead Manager(s) in offerings of Securities and to remunerate them by way of commission, brokerage, fees or the like and also to enter into and execute all such arrangements, agreements, memoranda, documents, etc. with Lead Manager(s) and to seek listing of such securities. RESOLVED FURTHER THAT the Company do apply for listing of the new Equity Shares as may be issued with the BSE Limited and/or National Stock Exchange of India Limited or any other Stock Exchange(s). RESOLVED FURTHER THAT the Company do apply to the National Securities Depository Limited and/or Central Depository Services (India) Limited for admission of the Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to create necessary charge on such of the assets and properties (whether present or future) of the Company in respect of Securities and to approve, accept, finalize and execute facilities, sanctions, undertakings, agreements, promissory notes, credit limits and any of the documents and papers in connection with the issue of Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers in such manner as they may deem fit.” 18) To consider and, if thought fit, to pass with or without modification(s), as a SPECIAL RESOLUTION the following: “RESOLVED THAT pursuant to the provisions of Sections 42, 71 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014, SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment thereof, for the time being in force), and subject to the provisions of the Articles of Association of the Company, approval of the members be and is hereby accorded to authorize the Board of Directors of the Company to offer or invite subscriptions for listed/unlisted secured/unsecured redeemable non-convertible debentures, in one or more series/tranches/ currencies, aggregating up to 6000 crore (Rupees Six Thousand Crore only), on private placement basis, on such terms and conditions as the Board of Directors of the Company may, from time to time, determine and consider proper and most beneficial to the Company including as to when the said Debentures be issued, the consideration for the issue, utilization of the issue proceeds and all matters connected with or incidental thereto; RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.” 19) To ratify the appointment of M/s. Sharp & Tannan, as Statutory Auditors and fix their remuneration and for that purpose to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and 45 Auditors) Rules, 2014 (including any statutory modifications or re-enactment thereof for the time being in force) and pursuant to the resolution passed by the members at the 70th Annual General Meeting (AGM) of the Company held on September 9, 2015 in respect of the appointment of the auditors, M/s. Sharp & Tannan, Chartered Accountants, ICAI Registration No. 109982W (S&T), till the conclusion of the 72nd AGM, the Company hereby ratifies and confirms the appointment of S&T as the Joint Statutory Auditors of the Company, to hold office from the conclusion of the 71st AGM till the conclusion of the 72nd AGM and to be jointly and severally responsible with M/s. Deloitte Haskins & Sells LLP during the said period. RESOLVED FURTHER THAT the Board of Directors or the Audit Committee thereof, be and are hereby authorized to decide and finalise the terms and conditions of appointment, including remuneration of the Statutory Auditors.” 20) To ratify the appointment of M/s. Deloitte Haskins & Sells LLP, as Statutory Auditors and fix their remuneration and for that purpose to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modifications 46 or re-enactment thereof for the time being in force) and pursuant to the resolution passed by the Members of the Company at the 70th Annual General Meeting (AGM) held on September 9, 2015 in respect of the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, ICAI Registration No. 117366W/W-100018 (DHS) till the conclusion of the 75th AGM, the Company hereby ratifies the appointment of DHS as the Joint Statutory Auditors of the Company, to hold office from the conclusion of the 71st AGM till the conclusion of the 72nd AGM and to be jointly and severally responsible with M/s. Sharp & Tannan during the said period. RESOLVED FURTHER THAT the Board of Directors or the Audit Committee thereof, be and are hereby authorized to decide and finalise the terms and conditions of appointment, including remuneration of the Statutory Auditors. ” 21) To consider and ratify the remuneration payable to Cost Auditors and for that purpose to pass with or without modification(s), as an ORDINARY RESOLUTION the following: “RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company hereby ratifies the remuneration of 11 lakh plus applicable service tax and out of pocket expenses at actuals for travelling and boarding/ lodging for the financial year ended March 31, 2017 to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2016-17.” By Order of the Board of Directors For LARSEN & TOUBRO LIMITED N. HARIHARAN COMPANY SECRETARY M.NO – A3471 Mumbai, May 25, 2016 Notes: [a] The information required to be provided under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings, regarding the Directors who are proposed to be appointed/ re-appointed and the relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the business under items 3, 6 to 18 and 21 set out above are annexed hereto. [b] A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY, TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND THAT A PROXY NEED NOT BE A MEMBER. Pursuant to Section 105 of the Companies Act, 2013 and Rule 19 of the Companies (Management & Administration) Rules, 2014, a person can act as a proxy on behalf of members not exceeding 50 and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. Proxies, in order to be effective, must be received at the Registered office of the Company at L&T House, Ballard Estate, Mumbai 400 001, not later than forty-eight hours before the commencement of the AGM i.e. by 3.00 p.m. on August 24, 2016. [c] The Register of Members and Transfer Books of the Company will be closed from Saturday, August 20, 2016 to Friday, August 26, 2016 (both days inclusive). [d] Members are requested to furnish bank details, Email address, change of address etc. to Karvy Computershare Private Limited, Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032, who are the Company’s Registrar and Share Transfer Agents so as to reach them latest by Friday, August 19, 2016, in order to take note of the same. In respect of members holding shares in electronic mode, the details as would be furnished by the Depositories as at the close of the aforesaid date will be considered by the Company. Hence, Members holding shares in demat mode should update their records at the earliest. [e] In order to receive copies of Annual Reports and other communication through e-mail, Members are requested to register their e-mail addresses with the Company by sending an e-mail to Lntgogreen@ Larsentoubro.com. [f] All documents referred to in the accompanying Notice and the Explanatory Statement are open for inspection at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. [g] Members/Proxies should bring their attendance slips duly completed for attending the Meeting. [h] Pursuant to Section 205A(5) of the Companies Act, 1956, the unpaid dividends that are due for transfer to the Investor Education and Protection Fund are as follows: Dividend No. Date of Declaration For the year ended Due for Transfer on 80 81 82 83 84 85 86 28.08.2009 31.03.2009 04.10.2016 26.08.2010 31.03.2010 02.10.2017 26.08.2011 31.03.2011 02.10.2018 24.08.2012 31.03.2012 29.09.2019 22.08.2013 31.03.2013 27.09.2020 22.08.2014 31.03.2014 27.09.2021 09.09.2015 31.03.2015 15.10.2022 Members who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/ its Registrar, for obtaining payments thereof atleast 20 days before they are due for transfer to the said fund. [i] Investor Grievance Redressal: The Company has designated an exclusive e-mail id viz. Igrc@ Larsentoubro.com to enable Investors to register their complaints, if any. [j] E-voting The businesses as set out in the Notice may be transacted through electronic voting system and the Company will provide a facility for voting by electronic means. In compliance with the provisions of Section 108 of the Act, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, Secretarial Standard 2 on General Meetings and Reg. 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to offer the facility of voting through electronic means, as an alternate, to all its Members to enable them to cast their votes electronically. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM (remote e-voting) will be provided by National Securities Depository Limited (NSDL). The facility for voting shall be made available at the AGM and the Members attending the Meeting who have not cast their vote through remote e-voting shall be able to exercise their right at the Meeting. Please note that the voting through electronic means is optional for shareholders. 47 A person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date of Friday, August 19, 2016 shall be entitled to avail the facility of remote e-voting or voting at the AGM. Persons who are not members as on the cut-off date should treat this notice for information purposes only. The Notice will be displayed on the website of the Company www.larsentoubro.com and on the website of NSDL. The members who have cast their vote through remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. The remote e-voting period commences on August 23, 2016 at 9.00 A.M and ends on August 25, 2016 at 5.00 P.M. During this period, members of the Company holding shares either in physical or dematerialised form, as on the cut-off date of Friday, August 19, 2016 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter. The Members, whose names appear in the Register of Members/list of Beneficial Owners as on August 19, 2016, i.e. the date prior to the commencement of book closure date are entitled to vote on the Resolutions set forth in this Notice. Eligible members who have acquired shares after the despatch of the Annual Report and holding shares as on the cut-off date i.e Friday, August 19, 2016 may approach the Company for issuance of the User ID and Password for exercising their right to vote by electronic means. However, members who are already registered with NSDL for remote e-voting can use their existing user ID and password for casting their vote. In case they don’t remember their password, they can reset their password by using “Forgot User Details/ Password” option available on www.evoting.nsdl.com The Company has appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (Membership No. 4206) or failing him Mrs. Aparna Gadgil, Practicing Company Secretary, (Membership No. 8430), to act as the Scrutinizer for conducting the voting and remote e-voting process in a fair and transparent manner. Members are requested to follow the instructions below to cast their vote through e-voting: A. In case a Member receives an e-mail from NSDL (for Members whose e-mail addresses are registered with the Company/ Depository Participants): i. Open the e-mail and also open PDF file namely “L&T remote e-voting.pdf” with your Client ID or Folio No. as password. The said PDF file contains your user ID and password for remote e-voting. Please note 48 that the password is an initial password. ii. Open the internet browser and type the following URL: https:// www.evoting.nsdl. com. iii. Click on Shareholder - Login. iv. v. If you are already registered with NSDL for e-voting then you can use your existing user ID and password. If you are logging in for the first time, please enter the user ID and password provided in the PDF file attached with the e-mail as initial password. Click Login. vi. The Password Change Menu will appear on your screen. Change to a new password of your choice, making sure that it contains a minimum of 8 digits or characters or a combination of both. Please take utmost care to keep your password confidential. vii. Once the remote e-voting home page opens, click on Active Voting Cycles. viii. Select “EVEN” (E-Voting Event Number) of Larsen & Toubro Limited. Now you are ready for e-voting as Cast Vote page opens. ix. Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm” when, prompted. x. Upon confirmation, the message “Vote cast successfully” will be displayed. xi. Once the vote on the resolution is cast, the Member shall not be allowed to change it subsequently. xii. Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/ Authority letter etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to scrutinizer@ snaco.net, with a copy marked to evoting@ nsdl.co.in. xiii. In case of any queries, you may refer the Frequently Asked Questions (FAQs) - Shareholders and remote e-voting user manual - Shareholders, available at the downloads section of www.evoting.nsdl. com. B. In case a Member receives physical copy of the Notice of AGM (for Members whose email addresses are not registered with the Company/Depository Participants): i. Initial password, is provided as below, in the enclosed attendance slip: User ID Password EVEN (E-Voting Event Number) ii. Please follow all steps from SI. No. (ii) to SI. No. (xiii) above, to cast vote. Based on the report received from the scrutinizer the Company will submit within 48 hours of the conclusion of the Meeting to the stock exchanges details of the voting results as required under Reg. 44(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A Member can opt for only one mode of voting i.e. either through remote e-voting or at the Meeting. If a Member casts votes by both modes, then voting done through remote e-voting shall prevail. The Scrutinizer will submit his report to the Chairman after completion of the scrutiny. The result of the voting on the Resolutions at the Meeting shall be announced by the Chairman or any other person authorized by him immediately after the results are declared. The results declared alongwith the Scrutinizer’s report, will be posted on the website of the Company www.larsentoubro.com and on the website of NSDL and will be displayed on the Notice Board of the Company at its Registered Office as well as Corporate Office immediately after the declaration of the result by the Chairman or any person authorised by him in writing and will be communicated to the Stock Exchanges. EXPLANATORY STATEMENT As required by Section 102 of the Companies Act, 2013, the following Explanatory Statement sets out material facts relating to the business under items 3, 6 to 18 and 21 of the accompanying Notice dated May 25, 2016. Item No. 3: On the recommendation of the Nomination & Remuneration Committee, Ms. Sunita Sharma (DIN: 02949529) was appointed as a Director in casual vacancy caused due to the resignation of Mr. N. Mohanraj. Pursuant to Section 161(4) of the Companies Act, 2013 Ms. Sunita Sharma will hold office up to the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under the provisions of Section 160 of the Companies Act, 2013 proposing the candidature of Ms. Sunita Sharma as Director. Except Ms. Sharma, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 3. The Directors recommend the Resolution for approval of the shareholders. Item No. 6 & 10: On the recommendation of the Nomination & Remuneration Committee, the Board of Directors appointed Mr. D.K Sen (DIN: 03554707) as an Additional Director 49 with effect from October 1, 2015. In terms of Section 161(1) of the Companies Act, 2013, Mr. Sen holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. The Board of Directors, on the recommendation of the Nomination & Remuneration Committee, appointed Mr. D.K Sen as a Whole- time Director of the Company with effect from October 1, 2015 upto and including September 30, 2020, subject to the approval of the members in the Annual General Meeting. Mr. Sen is Senior Executive Vice President – Infrastructure. Mr. Sen started his tenure at L&T in 1989 as Senior Manager (Civil & Structural Design) in EDRC Kolkata. He is also responsible for the activities of the Transportation Infrastructure business, Heavy Civil Infrastructure business and L&T Geo Structure LLP. He holds a degree in Civil Engineering from IIT Kharagpur and a Post Graduate degree in Business Management from XLRI, Jamshedpur. Prior to joining L&T, Mr. Sen worked for 12 years for a clutch of companies like M/s. Tata Steel, Jamshedpur, M/s. Development Consultants, Kolkata and was involved in a turnkey EPC Transmission line project in Malaysia. His significant contributions are in the Railways sector by securing the CTP 1 & 2 & EMP 4 packages of the Dedicated Freight Corridor. 50 Part III, of Schedule V of the Companies Act, 2013 read with the Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Whole-time Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. D.K Sen during his tenure as Whole-time Director. The Company has entered into an Agreement with Mr. D.K Sen appointing him as a Whole-time Director for the period from October 1, 2015 to September 30, 2020. During the period of this agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary : 7,25,000 (Rupees Seven Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - 75,000 - 10,25,000 - 1,00,000 - 15,25,000 with the annual increment due on April 1 every year. Commission : Upto 0.1% per annum of the operating net profits after tax of the Company from the year 2015-16. The Commission for 2015-16 will be on a pro-rata basis. Such Commission will be excluding extraordinary/exceptional profits or losses arising from sale of business/ assets, sale of shares in Subsidiary & Associate Companies/Special Purpose Vehicles/Joint Ventures and also from sale of strategic investments/ adjustment in valuation of strategic investments. The actual commission will be decided based on parameters set periodically by the Nomination & Remuneration Committee/Board. Perquisites : 12 lakh per annum excluding free furnished accommodation. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Others : Company’s contribution to retirement funds, official use of car/ driver and communication facilities for Company’s business, as per rules of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. The agreement entered into by the Company with Mr. D.K Sen, in respect of his appointment as Whole-time Director, contains the terms and conditions of his appointment including remuneration. The Agreement entered into with Mr. D.K Sen will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. Except Mr. Sen, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 6 & 10. The Directors recommend the Resolutions for approval of the shareholders. Item No. 7 & 11: On the recommendation of the Nomination & Remuneration Committee, the Board of Directors appointed Mr. M.V Satish (DIN: 06393156) as an Additional Director with effect from January 29, 2016. In terms of Section 161(1) of the Companies Act, 2013, Mr. M.V Satish holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. The Board of Directors, on the recommendation of Nomination & Remuneration Committee, appointed Mr. M.V Satish as a Whole-time Director of the Company with effect from January 29, 2016 upto and including January 28, 2021, subject to the approval of the members in the Annual General Meeting. Mr. M.V Satish is Senior Executive Vice President – Buildings, Minerals and Metals. Mr. M.V Satish started his career in L&T as Junior Engineer. He holds a degree in Civil engineering from Bangalore University and has completed a Senior Executive programme from London Business School. Mr. M.V Satish has played a vital role in establishing L&T’s credentials in the GCC region, especially Oman having served as first Chief Executive of L&T Oman LLC. He is credited for having successfully executed the Salalah greenfield airport project and the NMC Hospital in Abu Dhabi. Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Whole-time Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. M.V Satish during his tenure as Whole-time Director. The Company has entered into an Agreement with Mr. M.V Satish appointing him as a Whole-time Director for the period from January 29, 2016 to January 28, 2021. During the period of this agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary : 7,25,000 (Rupees Seven Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - 75,000 - 10,25,000 - 1,00,000 - 15,25,000 with the annual increment due on April 1 every year. Commission : Upto 0.1% per annum of the operating net profits after tax of the Company from the year 2015-16. The Commission for 2015-16 will be on a pro-rata basis. Such Commission will be excluding extraordinary/exceptional profits or losses arising from sale of business/ assets, sale of shares in Subsidiary & Associate Companies/Special Purpose Vehicles/Joint Ventures and also from sale of strategic investments/adjustment in valuation of strategic investments. The actual commission will be decided based on parameters set periodically by the Nomination & Remuneration Committee/Board. Perquisites : 12 lakh per annum excluding free furnished accommodation. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Others : Company’s contribution to retirement funds, official use of car/ driver and communication facilities for Company’s business, as per rules of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. The agreement entered into by the Company with Mr. M.V Satish, in respect of his appointment as Whole-time Director, contains the terms and conditions of his appointment including remuneration. The Agreement entered into with Mr. M.V Satish will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 51 1.00 p.m. up to the date of the Annual General Meeting. Except Mr. M.V Satish, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 7 & 11. The Directors recommend the Resolutions for approval of the shareholders. Item No. 8: On the recommendation of the Nomination & Remuneration Committee, Ms. Naina Lal Kidwai (DIN: 00017806) was appointed as an Additional Director of the Company with effect from March 1, 2016. In terms of Section 161(1) of the Companies Act, 2013, Ms. Kidwai holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from the Director alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing her candidature for the office of Director of the Company. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Ms. Kidwai is proposed to be appointed as an Independent Director up to February 28, 2021, for a period of 5 years from the date of her appointment. Pursuant to the provisions of the Companies Act, 2013 and Reg. 25(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), she is eligible for re-appointment after February 28, 2021. In the opinion of the Board, Ms. Kidwai fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder 52 and LODR Regulations for her appointment as an Independent Director of the Company and is independent of the management. The copy of the letter of appointment of Ms. Kidwai as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board considers that her association would be of immense benefit to the Company and it is desirable to avail services of Ms. Kidwai as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Ms. Kidwai as an Independent Director, for the approval by the shareholders of the Company. Except Ms. Kidwai, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 8. Item No. 9 : Shareholders had approved the appointment of Mr. S.N Subrahmanyan (DIN: 02255382) as Whole-time Director of the Company for a period of five years, with effect from July 1, 2011 upto and including June 30, 2016. On the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at its Meeting held on September 21, 2015, appointed Mr. S. N. Subrahmanyan, as Deputy Managing Director & President of the Company with effect from October 1, 2015 upto and including September 30, 2020, subject to the approval of the members in the Annual General Meeting. Mr. S. N. Subrahmanyan, 55, is a civil engineer with post graduate qualifications in business management. He joined L&T in 1984 starting off as project planning engineer, and was soon handpicked for senior responsibilities. The Buildings & Factories business has grown rapidly under Mr. Subrahmanyan’s leadership, and has executed many prestigious jobs such as construction of ICICI Bank, National Stock Exchange Buildings and Tidel Park. He is also responsible for the activities of other businesses like Power Transmission and Distribution, Water, Smart World and Communication, Metallurgical and Material Handling and Shipbuilding. Additionally he is responsible for overseeing the IT and Technology Services business of L&T and common staff functions across the Construction business. Mr. Subrahmanyan’s notable achievements include playing a pivotal role in securing and managing EPC contracts for construction of four major international airports in India at Bengaluru, Hyderabad, Delhi and Mumbai. Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standards 2 on General Meetings provide that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Deputy Managing Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. S. N. Subrahmanyan during his tenure as Deputy Managing Director and President. The Company has entered into an Agreement with Mr. S.N. Subrahmanyan appointing him as the Deputy Managing Director & President for the period from October 1, 2015 to September 30, 2020. During the period of this agreement and so long as the Deputy Managing Director and President performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary : 12,50,000 (Rupees Twelve Lakh Fifty Thousand only) per month in the scale of 10,00,000 - 1,25,000 – 16,25,000 with the annual increment due on April 1 every year. Commission : Upto 0.25% per annum of the operating net profits after tax of the Company from October 1, 2015. The commission for 2015-16 will be on a pro-rata basis. Such commission will be excluding extraordinary/exceptional profits or losses arising from sale of business/assets, sale of shares in Subsidiary & Associate Companies/ Special Purpose Vehicles/Joint Ventures and also from sale of strategic investments/ adjustment in valuation of strategic investments. The actual commission will be decided, based on parameters set periodically, by the Nomination & Remuneration Committee/Board. Perquisites : 18 lakh per annum excluding free furnished accommodation or house rent in lieu thereof. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Others : Company’s contribution to retirement funds, official use of car/ driver and communication facilities for Company’s business, as per rules of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. The agreement entered into by the Company with Mr. S. N. Subrahmanyan, in respect of his appointment as Deputy Managing Director & President, contains terms and conditions of his appointment including remuneration. Accordingly, the Resolution at Item No. 9 is proposed for approval of the members for appointment of Mr. S. N. Subrahmanyan, as the Deputy Managing Director and President as contemplated by Part III of Schedule V of the Companies Act, 2013 and other applicable provisions, if any. The Agreement entered into with Mr. S. N. Subrahmanyan will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board recommends approval of the appointment and remuneration of Mr. S. N. Subrahmanyan, as Deputy Managing Director and President of the Company. Except Mr. Subrahmanyan, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 9. Item No. 12: At the Annual General Meeting of the Company held on August 26, 2011 the shareholders had approved the overall limit for payment of remuneration to Chairman & Managing Director, Chief Executive Officer & Managing Director, if any, Deputy Managing Director, if any, and Whole-time Directors of the Company within the limits and subject to the terms and conditions set out in the resolution passed at that Meeting read with the explanatory statement. At the Annual General Meeting of the Company held on August 22, 2013 the Shareholders had approved revision in payment of commission payable to the Executive Chairman, Chief Executive Officer and Managing Director, if any, Deputy Managing Director, if any, and Whole-time Directors. The Company has planned for a consistent profitable growth based on an identified strategy and strategic initiatives, including detailed assessment of portfolios, entity and capital structure. Significant opportunities across all business segments have been identified. During the strategic plan for the period 2016-2021 (Lakshya 2021) there will be transition of leadership. The Company needs to attract and retain competent leaders for sustained growth. The Nomination & Remuneration Committee revises the commission payable to the Executive Chairman, Chief Executive Officer & Managing 53 Director, if any, Deputy Managing Director and Whole-time Directors based on overall performance of the Company, the concerned business and the performance of the individual director. Considering the above, it is proposed to give flexibility and authority to the Board to fix/ revise the amount of commission payable to Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors of the Company. The commission payable will, however, continue to be subject to the condition that the total managerial remuneration shall not exceed 5% of the net profits of the Company for each of the Managing/Whole-time Directors of the Company and 10% of the net profits of the Company for all the Managing/Whole-time Directors of the Company. The Board of Directors of the Company appoints/re-appoints the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors on the Board after receiving recommendation from the Nomination & Remuneration Committee, subject to the approval of the members in General Meeting. Specific approval of the members will be sought for appointment/ re-appointment and other remuneration of the Executive Chairman/Chief Executive Officer & Managing Director/Deputy Managing Director/Whole-time Directors individually in General Meetings. In order to fix/revise appropriately the remuneration payable to the 54 Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors from time to time, the Board of Directors recommend passing a Resolution to authorize the Board to approve and fix/revise suitably the commission payable to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors from time to time. In the event of loss or inadequacy of profits in any financial year, the remuneration payable to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors shall not exceed the maximum limits prescribed under Schedule V of the Companies Act, 2013. The Board recommends passing of the Ordinary Resolution set out at Item No. 12 of the Notice convening the Meeting. Mr. A.M. Naik, Group Executive Chairman of the Company, Mr. S. N. Subrahmanyan, Deputy Managing Director & President, Mr. R. Shankar Raman, Mr. Shailendra Roy, Mr. D.K Sen and Mr. M.V Satish who are the Whole-time Directors of the Company, may be deemed to be concerned or interested in the resolution at Item No. 12 insofar as it relates to commission payable to them. Item No. 13: On the recommendation of the Nomination & Remuneration Committee and the Board of Directors of the Company, it is proposed to re-appoint Mr. R. Shankar Raman (DIN: 00019798), as a Whole-time Director of the Company with effect from October 1, 2016 upto and including September 30, 2021, subject to the approval of the members in the Annual General Meeting. Mr. R. Shankar Raman is a Commerce graduate from the University of Madras, Chennai. He qualified as a Chartered Accountant in May 1983 and became a Graduate of the Institute of Cost & Works Accountants of India in 1986. Over the past 33 years of professional work experience, Mr. R. Shankar Raman has worked for leading listed corporations in varied capacities in the field of Finance. Mr. R. Shankar Raman joined L&T Group in 1994 for setting up L&T Finance Limited, a subsidiary of Larsen & Toubro Limited (L&T). After six successful years with L&T Finance Limited, he was inducted into mainstream L&T to oversee the Finance & Accounting functions. Mr. R. Shankar Raman is on the Board of several companies within the L&T Group. He is a member of National CFO Council of Confederation of Indian Industries. He had participated and presented papers in several conventions/ seminars both in India and abroad. Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. At the Annual General Meetings of the Company held on August 26, 2011 and August 22, 2013, the shareholders have fixed the maximum limits within which the Board was delegated authority to decide the remuneration of Whole- time Directors of the Company. The Company will enter into an Agreement with Mr. R. Shankar Raman re-appointing him as a Whole-time Director for the period from October 1, 2016 to September 30, 2021. During the period of the above agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary : 11,25,000 (Rupees Eleven Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - 75,000 - 10,25,000 - 1,00,000 - 15,25,000 with the annual increment due on April 1 every year. Commission : Upon the resolution in item no. 12 coming into effect, the commission will be paid as fixed by the Nomination & Remuneration Committee and the Board of Directors within the overall limits approved by the shareholders of the Company. Perquisites : 12 lakh per annum excluding free furnished accommodation or house rent allowance in lieu thereof. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Others : Company’s contribution to retirement funds, official use of car/ driver and communication facilities for Company’s business, as per rules of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. The agreement to be entered into by the Company with Mr. R. Shankar Raman, in respect of his appointment as Whole-time Director, will contain the terms and conditions of his appointment including remuneration. The draft Agreement to be entered into with Mr. R. Shankar Raman will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board recommends approval of the appointment and remuneration of Mr. R. Shankar Raman, as Whole- time Director of the Company. Except Mr. Shankar Raman, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 13. Item No. 14 : On the recommendation of the Nomination & Remuneration Committee and the Board of Directors of the Company, it is proposed to re-appoint Mr. Shailendra Roy (DIN: 02144836), as a Whole-time Director of the Company with effect from March 9, 2017 upto and including July 7, 2020, subject to the approval of the members in the Annual General Meeting. Mr. Roy is Senior Executive Vice President – Power, Heavy Engineering and Defence. He holds a Bachelor of Technology degree and started his career in 1975 as an Engineer with Bharat Heavy Electricals Limited’s manufacturing unit at Hardwar. Mr. Roy’s notable contribution in the Company includes the Company’s entry into Railway business, Power Development and growth of new business ventures. Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013, the shareholders have fixed the maximum limits within which the Board was delegated authority to decide the remuneration of Whole- time Directors of the Company. The Company will enter into an Agreement with Mr. Shailendra Roy appointing him as a Whole-time Director for the period from March 9, 2017 to July 7, 2020. During the period of the above agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary : 10,25,000 (Rupees Ten Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - 75,000 - 10,25,000 - 1,00,000 - 15,25,000 with the annual increment due on April 1 every year. Commission : Upon the resolution in item no. 12 coming into effect, the commission will be paid as fixed by the Nomination & Remuneration Committee and the Board of Directors within the overall limits approved by the shareholders of the Company. 55 Perquisites : 12 lakh per annum excluding free furnished accommodation. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Others : Company’s contribution to retirement funds, official use of car/ driver and communication facilities for Company’s business, as per rules of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. The agreement to be entered into by the Company with Mr. Shailendra Roy, in respect of his appointment as Whole-time Director, will contain the terms and conditions of his appointment including remuneration. The draft Agreement to be entered into with Mr. Shailendra Roy will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board recommends approval of the appointment and remuneration of Mr. Shailendra Roy, as Whole- time Director of the Company. Except Mr. Roy, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 14 Item No. 15: On the recommendation of the Nomination & Remuneration Committee, Mr. Sanjeev Aga (DIN: 56 00022065) was appointed as an Additional Director of the Company with effect from May 25, 2016. In terms of Section 161(1) of the Companies Act, 2013, Mr. Aga holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from the Director alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Aga is proposed to be appointed as an Independent Director for a term up to May 24, 2021, for a period of 5 years from the date of his appointment. Pursuant to the provisions of the Companies Act, 2013 and Reg. 25(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), he is eligible for re-appointment after May 24, 2021. In the opinion of the Board, Mr. Aga fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his appointment as an Independent Director of the Company and is independent of the management. The copy of the letter of appointment of Mr. Aga as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services of Mr. Aga as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Aga as an Independent Director, for the approval by the shareholders of the Company. Except Mr. Aga, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 15. Item No. 16: On the recommendation of the Nomination & Remuneration Committee, Mr. Narayanan Kumar (DIN: 00007848) was appointed as an Additional Director of the Company with effect from May 27, 2016. In terms of Section 161(1) of the Companies Act, 2013, Mr. Kumar holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from the Director alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Kumar is proposed to be appointed as an Independent Director for a term up to May 26, 2021, for a period of 5 years from the date of his appointment. Pursuant to the provisions of the Companies Act, 2013 and Reg. 25(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), he is eligible for re-appointment after May 26, 2021. In the opinion of the Board, Mr. Kumar fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his appointment as an Independent Director of the Company and is independent of the management. The copy of the letter of appointment of Mr. Kumar as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services of Mr. Kumar as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Kumar as an Independent Director, for the approval by the shareholders of the Company. Except Mr. Kumar, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 16. Item No. 17: The Company requires adequate capital to meet the needs of growing business. While it is expected that the internal generation of funds would partially finance the need for capital and debt raising would be another source of funds, it is prudent for the Company to have approvals to raise a part of the funding requirements for the said purposes as well as for such other corporate purposes as may be permitted under applicable laws through the issue of appropriate securities as defined in the resolution, in Indian or international markets. The fund raising may be through a mix of equity/equity-linked instruments, as may be appropriate. Members’ approval is sought for the issue of equity shares, securities linked to or convertible into Equity Shares or depository receipts of the Company. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also provide that the Company shall, in the first instance, offer all Securities for subscription pro-rata to the Shareholders unless the Shareholders in a General Meeting decide otherwise. Members’ approval is sought for issuing any such instrument as the Company may deem appropriate to parties other than the existing shareholders. Whilst no specific instrument has been identified at this stage, in the event the Company issues any equity linked instrument, the issue will be structured in a manner such that the additional share capital that may be issued would not be more than 5% of the paid-up capital of the Company (as at the date when the Board recommended passing of the Special Resolution). The equity shares, if any, allotted on issue, conversion of Securities shall rank in all respects pari passu with the existing Equity Shares of the Company. The Company may also opt for issue of securities through Qualified Institutions Placement (QIP). A QIP of the shares of the Company would be less time consuming and more economical than other modes of raising capital. Accordingly, the Company may issue securities by way of a QIP in terms of Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (‘SEBI Regulations’). These securities will be allotted only to Qualified Institutional Buyers (QIBs) as per the SEBI Regulations and there will be no issue to retail individual investors and existing retail shareholders. The resolution proposed is an enabling resolution and the exact price, proportion and timing of the issue of the securities will be decided by the Board based on an analysis of the specific requirements after necessary consultations. Therefore the proposal seeks to confer upon the Board the absolute discretion to determine the terms of issue in consultation with the Lead Managers to the Issue. As per Chapter VIII of the SEBI Regulations, an issue of securities on QIP basis shall be made at a price not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the “relevant date.” The Board may, at its absolute discretion, issue equity shares at a discount of not more than five percent or such other discount as may be permitted under applicable regulations to the ‘floor price’ as determined in terms of the SEBI Regulations, subject to Section 53 of the Companies Act, 2013. As the pricing of the offer cannot be decided except at a later stage, it is not possible to state the price of shares to be issued. However, the same would be in accordance with the provisions of the SEBI Regulations, the Companies Act, 2013, or any other guidelines/regulations/ consents as may be applicable or required. In case of issue of convertible bonds and/or equity shares through 57 depository receipts the price will be determined on the basis of the current market price and other relevant guidelines. The “relevant date” for the above purpose, shall be - i) ii) in case of allotment of equity shares, the date of Meeting in which the Board decides to open the proposed issue in case of allotment of eligible convertible securities, either the date of the Meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. The Stock Exchange for the same purpose is the BSE Limited / National Stock Exchange of India Limited. The Shareholders through a resolution passed at their Meeting held on September 9, 2015, had approved issue of Securities for an aggregate sum up to US$600 Million or INR 3600 Crore, if higher. However, Shareholders’ resolution for QIP issuance is valid for a period of 12 months from the date of passing of the resolution. Accordingly, the Shareholders’ approval is sought for the same. The Directors recommend this Resolution for approval of the Shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 17. Item No. 18: The Company is into the business interalia of manufacturing of 58 industrial goods, heavy engineering, infrastructure projects and other activities which require a sizeable investment and continuous expenditure. The Company intends to explore different avenues for garnering this financing requirement including by way of issuance of debt instruments. Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 deals with private placement of securities by a company. Sub-rule (2) of the said Rule 14 states that in case of an offer or invitation for subscription to non-convertible debentures on private placement basis, the Company shall obtain prior approval of its shareholders by means of a special resolution only once in a year for all the offers or invitations for such debentures during the year. In order to meet the financial needs of business in a prudent manner the Company may offer or invite subscription for secured/unsecured/ redeemable/non-convertible debentures, in one or more series/ tranches/currencies on private placement, issuable / redeemable at par or otherwise. The shareholders through a resolution passed at their Meeting held on September 9, 2015, approved issue of debentures upto an amount not exceeding 6000 crore in aggregate. However, such resolution is valid only for a period of 12 months from the date on which the approval is granted by the shareholders. Accordingly, the Shareholders’ approval is sought for the period of next 12 months from the date of passing this resolution. This resolution is an enabling resolution and authorizes the Board of Directors of the Company to offer or invite subscription for non-convertible debentures, as may be required by the Company, from time to time for a year from the date of passing this resolution. The Directors recommend this Resolution for approval of the Shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 18. Item No. 21: In accordance with the provisions of Section 148 of the Companies Act, 2013 (‘the Act’) and the Companies (Audit and Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Amendment Rules, 2014 (‘the Rules’) the Company is required to appoint a cost auditor to audit the cost records of the Company, for products and services, specified under Rules issued in pursuance to the above section. On the recommendation of the Audit Committee, the Board of Directors had approved the appointment of M/s. R. Nanabhoy & Co, Cost Accountants, [Regn. No. 00010] as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2016-17, at a remuneration of 11 lakhs plus applicable service tax and out of pocket expenses at actuals for travelling and boarding/lodging. M/s. R. Nanabhoy & Co., Cost Accountants, have furnished certificates regarding their eligibility for appointment as Cost Auditors of the Company. In accordance with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the cost auditor has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought for the aforesaid purpose. The Directors recommend this resolution for approval of the shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 21. By Order of the Board of Directors For LARSEN & TOUBRO LIMITED, N. HARIHARAN COMPANY SECRETARY M.NO – A3471 Mumbai, May 25, 2016 The route map for the venue of the Annual General Meeting of the Company is given on page 40 of this Annual Report 2015-16 59 (ANNEXURE TO NOTICE DATED MAY 25, 2016) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] Name of the Director Ms. Sunita Sharma Date of Birth Date of Appointment on the Board Qualifications Expertise March 9, 1959 April 1, 2015 Masters Vast Experience in Insurance and Housing Finance 1. LIC Housing Finance Limited LIC Nomura Mutual Fund 2. AMC Ltd. LICHFL Asset Management Company Limited LICHFL Financial Services Limited 4. 3. Mr. A. M. Naik June 9, 1942 November 23, 1989 Mr. D. K. Sen March 19, 1956 October 1, 2015 Mr. M. V. Satish February 12, 1957 January 29, 2016 B.E (Mech.) Diverse and vast experience in general management, Technology and Engineering & Construction 1. 2. Larsen & Toubro Infotech Limited L&T Technology Services Limited 3. L&T Realty Limited B.Sc Engg. (Civil), MBA (Finance) BE (Civil) Vast experience in Design and Engineering, Business Development, Tendering and construction Vast experience in Construction, Business Development, Contracts Management and Property Development in India and GCC region Nil L&T Infrastructure Engineering Limited 5. LICHFL Care Homes Limited 6. Bhushan Steel Limited Chairperson Audit Committee LICHFL Care Homes Limited Stakeholders Relationship Committee Larsen & Toubro Limited Corporate Social Responsibility Committee LICHFL Care Homes Limited Member Nomination & Remuneration Committee LIC Nomura Mutual Fund AMC Limited Stakeholders Relationship Committee LIC Housing Finance Limited Corporate Social Responsibility Committee LIC Housing Finance Limited 7 of 9 Member Corporate Social Responsibility Committee Larsen & Toubro Limited Nil Member Nomination & Remuneration Committee 1. Larsen & Toubro Limited Larsen & Toubro Infotech 2. Limited L&T Technology Services Limited 3. 9 of 9 2 of 2 2 of 2 100* Nil Not Applicable Not Applicable Not Applicable Nil Nil Nil Directorships held in other public companies including private companies which are subsidiaries of public companies (excluding foreign companies) Memberships/ Chairmanships of committees across all companies Number of Meetings attended during the year Shareholding of Non- Executive Directors Relationships between directors inter-se * Jointly with LIC 60 (ANNEXURE TO NOTICE DATED MAY 25, 2016) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] Mr. S. N. Subrahmanyan March 16, 1960 July 1, 2011 Mr. R. Shankar Raman December 20, 1958 October 1, 2011 Mr. Shailendra Roy September 18, 1952 March 9, 2012 Name of the Director Ms. Naina Lal Kidwai Date of Birth Date of Appointment on the Board Qualifications April 16, 1957 March 1, 2016 Bachelor’s in Economics, Chartered Accountant and MBA Vast Experience in the area of Banking 1. Cipla Limited 2. Max Financial Services Limited B.Sc, Engg. (Civil) & MBA Finance Vast Experience in Design and Build (D&B) contracts, PPP Projects, Engineering and Construction Industry 1. Larsen & Toubro Infotech Limited 2. L&T Technology Services 3. Shakti Sustainable Energy Limited Foundation 3. L&T Metro Rail (Hyderabad) 4. Altico Capital India Private Limited Limited Expertise Directorships held in other public companies including private companies which are subsidiaries of public companies (excluding foreign companies) Memberships/ Chairmanships of committees across all companies Member Audit Committee 1. Cipla Limited 2. Altico Capital India Private Limited Nomination & Remuneration Committee 1. Max Financial Services Limited 2. Altico Capital India Private Limited Stakeholders Relationship Committee Cipla Limited Chairman Stakeholders Relationship Committee Larsen & Toubro Infotech Limited Corporate Social Responsibility Committee Larsen & Toubro Infotech Limited Member Audit Committee Larsen & Toubro Infotech Limited Nomination & Remuneration Committee Larsen & Toubro Infotech Limited B.Com, ACA and Grad. CWA B. Tech Vast experience in the Finance, Taxation, Risk Management, Legal and Investor Relations Vast experience in Thermal Power, Heavy Engineering, Defence & Aerospace Industry 1. 2. 3. 4. 5. 6. 7. 8. 9. L&T Infrastructure Development Projects Limited L&T General Insurance Company Limited L&T Finance Holdings Limited L&T Investment Management Limited Larsen & Toubro Infotech Limited L&T Hydrocarbon Engineering Limited L&T Seawoods Limited L&T Realty Limited L&T Metro Rail (Hyderabad) Limited Member Audit Committee 1. 3. 4. 2. L&T Finance Holdings Limited L&T General Insurance Company Limited L&T Infrastructure Development Projects Limited L&T Investment Management Limited 5. L&T Realty Limited 6. L&T Seawoods Limited Nomination & Remuneration Committee 1. L&T Seawoods Limited 2. L&T Realty Limited L&T Investment 3. Management Limited L&T Infrastructure Development Projects Limited 4. Stakeholder Relationship Committee L&T Finance Holdings Limited 1. 2. 3. 4. 5. 6. 7. L&T Power Development Limited L&T-Sargent & Lundy Limited Nabha Power Limited L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited Raykal Aluminium Company Private Limited L&T Special Steels and Heavy Forgings Private Limited L&T-Howden Private Limited 8. 9. L&T Power Limited Member Nomination & Remuneration Committee 1. L&T-Sargent & Lundy Limited 2. L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited L&T Power Development Limited 3. 4. 5. Nabha Power Limited 6. L&T Special Steels and Heavy Forgings Private Limited 7. L&T Howden Private Limited Stakeholders Relationship Committee Larsen & Toubro Limited Corporate Social Responsibility Committee L&T Power Development Limited 61 Name of the Director Ms. Naina Lal Kidwai Mr. S. N. Subrahmanyan Mr. R. Shankar Raman Corporate Social Responsibility Committee 1. Larsen & Toubro Limited 2. L&T Seawoods Limited L&T Investment 3. Management Limited L&T Infrastructure Development Projects 4. Limited 9 of 9 Mr. Shailendra Roy 9 of 9 Not Applicable 8 of 9 100 Nil Not Applicable Not Applicable Not Applicable Nil Nil Nil Number of Meetings attended during the year Shareholding of Non- Executive Directors Relationships between directors inter-se 62 (ANNEXURE TO NOTICE DATED MAY 25, 2016) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] Name of the Director Date of Birth Date of Appointment on the Board Qualifications Expertise Directorships held in other public companies including private companies which are subsidiaries of public companies (excluding foreign companies) Mr. Sanjeev Aga February 1, 1952 May 25, 2016 B.SC (Hons. In Physics), MBA Vast Experience in Telecom Sector 1. UFO Moviez India Limited 2. Pidilite Industries Limited 3. Idea Cellular Limited 4. Mahindra Holidays & Resorts Limited 5. Manjushree Technopak Limited 6. Subex Limited 7. Mahindra Logistics Limited Memberships/ Chairmanships of committees across all companies Chairman Shareholders Grievance Committee 1. Pidilite Industries Limited 2. Idea Cellular Limited 3. Subex Limited Audit Committee 1. Subex Limited 2. Mahindra Holidays & Resorts Limited 3. Mahindra Logistics Limited Nomination & Remuneration Committee 1. Subex Limited 2. Mahindra Logistics Limited Number of Meetings attended during the year Shareholding of Non- Executive Directors Relationships between directors inter-se * Acquired on 10th June, 2016 Not Applicable 3000 Nil Mr. Narayanan Kumar January 28, 1950 May 27, 2016 B.E (Electronics) Industrailist 1. Bharati Infratel Limited 2. Entertainment Network (India) Limited 3. Times Innovative Media Limited 4. MRF Limited 5. Take Solutions Limited 6. Mphasis Limited 7. eG Innovations Private Limited 8. Madhura Kumar Properties Private Limited 9. N.K Trading and Consultancy Private Limited 10. Madhuram Narayanan Centre for Exceptional Children 11. Cubbon Road Properties Private Limited 12. Nani Palkhivala Arbitration Centre 13. Singapore India Partnership Foundation 14. Aegon Life Insurance Company Limited Chairman Audit Committee 1. Mphasis Limited 2. Entertainment Network (India) Limited Nomination & Remuneration Committee 1. Bharati Infratel limited 2. Entertainment Network (India) Limited Corporate Social Responsibility Committee Bharati Infratel Limited Shareholders/Investors Grievance Committee Take Solutions Limited Member Audit Committee 1. Times Innovative Media Limited 2. Aegon Life Insurance Company Limited Nomination & Remuneration Committee 1. Times Innovative Media Limited 2. Aegon Life Insurance Company Limited Not Applicable 1000* Nil 63 Board Report Dear Members, The Directors have pleasure in presenting their 71st Annual Report and Audited Financial Statements for the year ended March 31, 2016. FINANCIAL RESULTS Particulars Profit before depreciation, exceptional and extra ordinary items & tax Less: Depreciation, amortisation, 2015-16 crore 2014-15 crore 7127.71 7352.21 impairment and obsolescence 998.88 1009.74 Add: Transfer from Revaluation Reserve Profit before exceptional and extraordinary items and tax Add: Exceptional Items Profit before tax Less: Provision for tax Profit for the period carried to 6128.83 6342.47 – 1.59 6128.83 560.28 6689.11 1377.65 6344.06 357.16 6701.22 1645.04 Balance Sheet 5311.46 5056.18 3429.11 333.45 2.15 6.14 2.20 86.28 CAPITAL & FINANCE During the year under review, the Company allotted 19,16,784 equity shares of 2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes. The Company issued Non-Convertible Debentures (NCDs) worth 1,000 crore. At maturity, repayment of NCDs worth 600 crore was also made. The Company tied up a long-term foreign currency loan of USD 25 million, and also completed part repayment of a foreign currency long term debt of USD 5.83 million as per schedule. In addition, the Company prepaid foreign currency loans worth USD 50 million. CAPITAL EXPENDITURE As at March 31, 2016 the gross tangible and intangible assets including leased Assets, stood at 13,297.13 crore and the net tangible and intangible assets, including leased assets, at 7,668.59 crore. Capital Expenditure during the year amounted to 776 crore. DEPOSITS The Company does not have any unclaimed deposits as of date. All unclaimed deposits have been transferred to Investor Education & Protection Fund. DEPOSITORY SYSTEM As the members are aware, the Company’s shares are compulsorily tradable in electronic form. As on March 31, 2016, 97.90% of the Company’s total paid up capital representing 91,18,73,781 shares are in dematerialized form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. 2.13 8734.41 29.33 5330.48 TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND 156.50 1699.95 140.88 1997.33 6737.08 1699.95 256.50 1510.54 134.33 1901.37 3429.11 1510.54 The Company sends letters to all shareholders, whose dividends are unclaimed so as to ensure that they receive their rightful dues. During the year, the Company has transferred a sum of 1,51,31,245 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 14,56,60,404 as on March 31, 2016. Add: Balance brought forward from previous year Less: Dividend paid for the previous year (Including dividend distribution tax) Less: Depreciation charged against retained earnings Add: Reversal of deferred tax on depreciation charged against retained earnings Balance available for disposal (which the directors appropriate as follows) Debenture Redemption Reserve Proposed dividend Dividend Tax Balance to be carried forward Dividend The Directors recommend payment of final dividend of 18.25 per share of 2/- each on 93,14,78,845 shares. 64 SUBSIDIARY/ASSOCIATE/JOINT VENTURE COMPANIES During the year under review, the Company subscribed to/acquired equity/preference shares in various subsidiary/ associate/joint venture companies. These subsidiaries include companies in general insurance, power, real estate, infrastructure and manufacturing sectors. The details of investments in subsidiary companies during the year are as under: A) Shares subscribed/acquired during the year: Name of the Company L&T-Valdel Engineering Limited Larsen & Toubro International FZE, United Arab Emirates PNG Tollway Limited JSK Electricals Limited L&T-Chiyoda Limited Name of the company Type of Shares No. of shares Rishi Consfab Private Limited L&T General Insurance Company Limited Equity L&T Global Holdings Limited, United Arab Emirates Equity 8,50,00,000 Salzer Electronics Limited 1,000 Number of shares 11,79,000 1,829 2,15,43,340 21,20,040 45,00,000 27,04,000 26,79,808 L&T Hydrocarbon Engineering Limited L&T Metro Rail (Hyderabad) Limited Preference 26,00,00,000 Equity 4,92,643 L&T Power Development Limited Equity 38,34,00,000 L&T Realty Limited Preference 64,83,00,000 L&T Seawoods Limited Preference 13,22,50,000 L&T Shipbuilding Limited Preference 133,18,60,000 Preference 60,47,50,000 L&T Uttaranchal Hydropower Limited LTH Milcom Limited Larsen & Toubro Saudi Arabia LLC, Saudi Arabia Equity Equity Marine Infrastructure Developer Private Limited Equity 1,13,340 625 9,990 B) Equity shares sold/transferred during the year: The Company has formulated a policy on the identification of material subsidiaries and the same is placed on the website at http://investors.larsentoubro.com/Listing- Compliance.aspx. The Company does not have any material subsidiaries. C) Performance and Financial Position of each subsidiary/associate and joint venture companies: A statement containing the salient features of the financial statement of subsidiary/associate/joint venture companies is provided on pages 390 to 399 of this Annual Report. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided on pages 263 to 265 of this Annual Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy and the same has been uploaded on the Company’s website http:// investors.larsentoubro.com/Listing-Compliance.aspx. Name of the Company L&T Finance Holdings Limited L&T Infocity Limited L&T Natural Resources Limited L&T Powergen Limited L&T Sapura Offshore Private Limited L&T Sapura Shipping Private Limited L&T Solar Limited L&T-Gulf Private Limited Number of shares The Company has a process in place to periodically review and monitor Related Party Transactions. 8,52,26,706 2,40,30,000 50,000 50,000 6,000 9,53,11,850 50,000 40,00,016 All the related party transactions were in the ordinary course of business and at arm’s length. The Audit Committee has approved all related party transactions for the FY 2015-16 and estimated transactions for FY 2016-17. There were no material transactions with related parties during the year. STATE OF COMPANY AFFAIRS The gross sales and other income for the financial year under review were 62,821 crore as against 65 59,841 crore for the previous financial year registering an increase of 5%. The profit before tax from continuing operations including extraordinary and exceptional items was 6,689 crore for the financial year under review as against 6,701 crore for the previous financial year, registering a decrease of 0.18%. The profit after tax from continuing operations including extraordinary and exceptional items of 5,311 crore for the financial year under review as against 5,056 crore for the previous financial year, registering an increase of 5%. AMOUNT TO BE CARRIED TO RESERVE The Company has not transferred any amount to the reserves during the current financial year. DIVIDEND The Directors recommend payment of dividend of 18.25 (912.50%) per equity share of 2/- each on the share capital. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure ‘A’ forming part of this Board Report. RISK MANAGEMENT POLICY The Risk Management Committee comprises of Mr. A. M. Naik, Mr. S. N. Subrahmanyan and Mr. R. Shankar Raman. Mr. A. M. Naik is the Chairman of the Committee. The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. A detailed note on risk management is given under financial review section of the Management Discussion and Analysis on pages 217 to 219 of this Annual Report. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility Committee comprises of Mr. Vikram Singh Mehta, Mr. D. K. Sen and Mr. R. Shankar Raman as the Members. Mr. Vikram Singh Mehta is the Chairman of the Committee. The details of the various projects and programs which can be undertaken by the Company as a part of its CSR policy framework is available on its website http://investors.larsentoubro.com/Listing-Compliance.aspx. The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure ‘C’ forming part of this Board Report. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED DURING THE YEAR Mr. K. Venkataramanan retired as the Chief Executive Officer and Managing Director of the Company on September 30, 2015 pursuant to his superannuation from the services of the Company. The Board places on record its appreciation of the immense contribution by Mr. K. Venkataramanan as the Chief Executive Officer and Managing Director of the Company. Mr. M. V. Kotwal retired as the Whole-time Director of the Company on August 26, 2015 pursuant to his superannuation from the services of the Company. The Board places on record its appreciation of the immense contribution by Mr. M. V. Kotwal as a Whole-time Director of the Company. Mr. Swapan Dasgupta resigned as Nominee Director of the Company on May 15, 2016. The Board places on record its appreciation of the immense contribution by Mr. Swapan Dasgupta as Director of the Company. The Board has appointed Mr. Subramanian Sarma as a Non-Executive Director of the Company w.e.f. August 19, 2015. During the year the Board has appointed Mr. S. N. Subrahmanyan as Deputy Managing Director and President of the Company w.e.f October 1, 2015 for a period of 5 years, subject to approval of the shareholders. The Board has appointed Mr. D. K. Sen as a Whole-time Director w.e.f. October 1, 2015 for a period of 5 years, subject to approval of the shareholders. The Board has appointed Mr. M. V. Satish as a Whole- time Director of the Company w.e.f. January 29, 2016 66 for a period of five years, subject to approval of the shareholders. The Board has appointed Ms. Naina Lal Kidwai as an Independent Director of the Company from March 1, 2016 to February 28, 2021, subject to the approval of the shareholders. Ms. Naina Lal Kidwai, appointed as an Additional Director, will hold office till the ensuing AGM and is eligible for appointment. The Board has appointed Mr. Sanjeev Aga as an Independent Director of the Company from May 25, 2016 to May 24, 2021, subject to the approval of shareholders. Mr. Sanjeev Aga, appointed as Additional Director, will hold office till the ensuing AGM and is eligible for appointment. The Board has appointed Mr. Narayanan Kumar as an Independent Director of the Company at its Meeting dated May 25, 2016 with effect from May 27, 2016 to May 26, 2021, subject to the approval of shareholders. Mr. Narayanan Kumar, appointed as Additional Director, will hold office till the ensuing AGM and is eligible for appointment. Mr. S. N. Subrahmanyan and Mr. A.M Naik retire by rotation at the ensuing AGM and being eligible offers themselves for re-appointment. Mrs. Sunita Sharma who was appointed as a Director in casual vacancy caused due to the resignation of Mr. N. Mohanraj holds office till the conclusion of the ensuing AGM and being eligible offers herself for re-appointment. It is proposed to re-appoint Mr. R. Shankar Raman as a Whole-time Director of the Company for a period of 5 years from October 1, 2016 to September 30, 2021, subject to the approval of the shareholders. It is proposed to re-appoint Mr. Shailendra Roy as a Whole-time Director of the Company for the period March 9, 2017 to July 7, 2020, subject to the approval of the shareholders. The notice convening the AGM includes the proposal for appointment/re-appointment of Directors. The terms and conditions of appointment of the Independent Directors are placed on the website of the Company http://investors.larsentoubro.com/Listing- Compliance.aspx. responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS This information is given in Annexure ‘B’ - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page 79 of this Annual Report. AUDIT COMMITTEE The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure ‘B’ - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 81 to 83 of this Annual Report. COMPANY POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION The Company has in place a Nomination & Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure ‘B’ - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 83 to 85 of this Annual Report. The Committee has formulated a policy on Director’s appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees, composition and the criteria for determining qualifications, positive attributes and independence of a Director. The Committee has formulated a policy on board diversity. DECLARATION OF INDEPENDENCE The Company has received Declarations of Independence as stipulated under Section 149(7) of the Companies Act, 2013 from Independent Directors confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company www.larsentoubro.com The Company has also disclosed on its website http://investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs formulated to educate the Directors regarding their roles, rights and EXTRACT OF ANNUAL RETURN As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of the Annual Return in Form MGT-9 is attached as Annexure ‘F’ to this Board Report. 67 DIRECTORS‘ RESPONSIBILITY STATEMENT The Board of Directors of the Company confirms: evaluation of the performance of the Board, Committees, Chairman and individual directors has to be made. a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) The Directors have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit of the Company for that period; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) The Directors have prepared the Annual Accounts on a going concern basis; e) The Directors have laid down an adequate system of internal financial controls to be followed by the Company and such internal financial controls are adequate and operating efficiently; f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively. ADEQUACY OF INTERNAL FINANCIAL CONTROL The Company has designed and implemented a process driven framework for Internal Financial Controls (“IFC”) within the meaning of the explanation to Section 134(5) (e) of the Companies Act, 2013. For the year ended March 31, 2016, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS The Nomination & Remuneration Committee and the Board have laid down the manner in which formal annual It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, Board composition and its structure, its culture, its effectiveness, its functioning, information availability, etc. These questionnaires also cover specific criteria and the grounds on which all Directors in their individual capacity will be evaluated. The Individual Directors’ responses on the questionnaire on the performance of the Board, Committee(s), Directors and Chairman were analyzed by an independent consultant, to arrive at unbiased conclusions. The inputs given by all the Directors were discussed in the meeting of the Independent Directors held on April 11, 2016, as per Schedule IV of the Companies Act, 2013. The performance evaluation of the Board, Committees, Chairman and Directors was also reviewed by the Nomination & Remuneration Committee and the Board. DISCLOSURE OF REMUNERATION The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure ‘D’ forming part of this Board report. The details of employees receiving remuneration exceeding 5 lakh per month or 60 lakh per annum is provided in Annexure ‘G’ forming part of this report. In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a 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. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings. PROTECTION OF WOMEN AT WORKPLACE The Company has formulated a policy on ‘Protection of Women’s Rights at Workplace’ as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This has been widely disseminated. There were no cases of sexual harassment received by the Company in 2015-16. 68 OTHER DISCLOSURES There has been no material change in the Employee Stock Option Schemes (ESOP Schemes) during the current financial year. The ESOP Schemes are in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014. the Act. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SEBI (Share Based Employee Benefits) Regulations, 2014 are provided on the website of the Company www.larsentoubro.com. The Company has disclosed information about the establishment of the Whistle Blower Policy on its website http://investors.larsentoubro.com/corporategovernance.aspx. During the year, no personnel has been declined access to the Audit Committee, wherever desired. A certificate obtained from the Statutory Auditors, confirming compliance with the Companies Act, 2013 and the above Regulations is reproduced below : 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 Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 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 FIRDOSH D. BUCHIA Partner Membership No.38332 Mumbai, May 25, 2016 Pursuant to the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure ‘B’ forming part of this Board Report. VIGIL MECHANISM As per the provisions of Section 177(9) of the Companies Act, 2013 (‘Act’), the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns. The Company has a Whistle-blower Policy in place since 2004 to encourage and facilitate employees to report concerns about unethical behaviour, actual/suspected frauds and violation of Company’s Code of Conduct or Ethics Policy. The Policy has been suitably modified to meet the requirements of Vigil Mechanism under BUSINESS RESPONSIBILITY REPORTING The Company has been one of the first engineering and construction companies in India to publish its report on Corporate Sustainability. As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Report forms a part of this Annual Report (refer pages 18 to 35). The detailed Corporate Sustainability Report is also available on the Company’s website http://www.larsentoubro.com/corporate/sustainability. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future. CONSOLIDATED FINANCIAL STATEMENTS Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI), in this regard. The Auditors report to the shareholders does not contain any qualification, observation or adverse comment. SECRETARIAL AUDIT REPORT The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co., Practicing Company Secretaries is attached as Annexure ‘E’ to this Board Report. The Secretarial Auditor’s report to the shareholders does not contain any qualification. 69 STATUTORY AUDITORS REPORTING OF FRAUD The Company’s auditors M/s. Sharp & Tannan, (firm registration number 109982W) have already completed more than ten years as Statutory Auditors of the Company. In accordance with provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company had appointed them for a period of two years from conclusion of 70th Annual General Meeting till the conclusion of 72nd Annual General Meeting. A proposal for ratifying their appointment from the conclusion of the 71st AGM till the conclusion of the 72nd AGM has been included in the Notice of the ensuing AGM. In view of the mandatory rotation of auditor requirement and to ensure smooth transition during this period, M/s. Deloitte Haskins & Sells LLP [ICAI Registration No. 117366W/W-100018] was appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 70th Annual General Meeting till the conclusion of 75th Annual General Meeting of the Company. A proposal for ratifying their appointment from the conclusion of the 71st AGM till the conclusion of the 72nd AGM has been included in the Notice of the ensuing AGM. Both the Auditors will be jointly and severally responsible during the financial year 2016-17. Sharp & Tannan and Deloitte Haskins & Sells LLP, have informed the Company that their appointment if made would be within the limits prescribed under Section 141 of the Companies Act, 2013. The Auditors have confirmed that they have subjected themselves to the peer review process of ICAI and hold valid certificate issued by the Peer Review Board of the ICAI. The Auditors have also 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. The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013. COST AUDITORS Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on May 25, 2016, has approved the appointment of M/s R. Nanabhoy & Co., Cost Accountants as the Cost Auditors for the Company for the financial year ending March 31, 2017 at a remuneration of 11 lakhs. The Report of the Cost Auditors for the financial year ended March 31, 2016 is under finalization and will be filed with the MCA within the prescribed period. A proposal for ratification of remuneration of the Cost Auditor for financial year 2016-17 is placed before the shareholders. 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 all the 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 (DIN: 00001514) Mumbai, May 25, 2016 70 Annexure ‘A’ to the Board Report Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014. [A] CONSERVATION OF ENERGY: (i) Steps taken or impact on conservation 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) Maintaining Plant power factor at more than 99% using Automatic Power Factor Correction Unit to get incentive on Energy bill. Replacement of Memco diode based welding machines with zuper arc inverter welding machines at Kancheepuram factory. Automation of shop floor, gangway, street lights to prevent energy wastages. Process cooling tower fan operation converted from manual mode to Automatic mode operation through low cost automation. Compressed air optimization through “Tag your Leak” survey. Installation of dedicated portable compressor at under-carriage shop & detachment of air connection from central compressor to save air consumption. Conducting awareness campaign, observing ‘Walk-to-Work’ day on 2nd Saturday of every month at Kansbahal works. (cid:3)(cid:122) Reactive power compensation to maintain Power Factor at Unity. (cid:3)(cid:122) Maximizing 3rd shift Utilization. (cid:3)(cid:122) Auto switching of Plating tanks heaters to eliminate practice of keeping heaters ’ON‘ in 3rd shift. (cid:3)(cid:122) Movement/presence detectors at shop floor. (cid:3)(cid:122) VFD Installation for Air Compressor (cid:3)(cid:122) Replacement of conventional MH Lamps by LED lamps in working areas at projects as well as for street lights (cid:3)(cid:122) Optimizing Working hours reduced from 17 hrs to 9 hrs (cid:3)(cid:122) Installation of HVLS Fan (cid:3)(cid:122) (cid:3)(cid:122) Auto Timer for Mechanical presses to avoid idle running Use of Flood light LED instead of Halogen in campuses (cid:3)(cid:122) Retrofitting of LED fixtures in place of CFL Fixtures (cid:3)(cid:122) (cid:3)(cid:122) Use of Power Management System for monitoring & control Close monitoring of lighting system by providing dedicated team to avoid unwanted lighting power. (cid:3)(cid:122) Use of natural cooling during winter (cid:3)(cid:122) Synchronization of lifts for effective use (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) Optimization of Air Compressor operation by connecting 200 cfm Air Compressor exclusively for Shot Blasting Operation. Replacing existing aged inefficient Split AC units with energy efficient units Utilization of Chiller for HVAC System – Campus FMD initiated and control the chiller running hour for HVAC need during holidays and extended working hours Automation in Galvanizing Furnace in order to maintain constant Air-Fuel Ratio & Maintain working Temperature Providing Magnetic Resonators in order to increase the combustion Efficiency of Fuel (LPG). Replacement of 20 years old Acid Fumes Blowers (100HPx2Nos.) with Energy Efficient Blowers of 50HPx2Nos with improved suction of Fumes. Replacement of rotor resistance controlled starter to Drive controller starter for EOT cranes resulting smooth operation and energy saving. (cid:3)(cid:122) Introduction of VSD based compressor (cid:3)(cid:122) (cid:3)(cid:122) Conversion of Process cooling tower fan operation from manual mode to automatic mode operation through low cost automation. Installation of diffusers and blowers in waste water treatment plants instead of conventional surface aerators, which will lead to energy savings by 12 - 15%. 71 (cid:3)(cid:122) Use of photo electric sensors for lighting control in Integrated Urban Utility Projects/Industrial Township Projects. (cid:3)(cid:122) To replace old welding machines with new machines with inverter technology to reduce no load loss and overall consumption (cid:3)(cid:122) Installation of solar street lighting in Integrated Urban Utility Projects/Industrial Township Projects. [B] TECHNOLOGY ABSORPTION: (i) Efforts made towards technology absorption: (cid:3)(cid:122) Water conserved compared to previous year & (cid:3)(cid:122) power saved Various models of semi-mobile skid mounted crushing unit (with Feeder Breaker, Roll Crusher & Impactor) have been developed to meet specific applications for crushing. (cid:3)(cid:122) Separation of Sand by air classifier. (cid:3)(cid:122) Adaptation of mobile crushing technology. (cid:3)(cid:122) 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. (cid:3)(cid:122) Development of Pre-Paid Meters, Smart Meters, Protective Relays and Panel Meters. (cid:3)(cid:122) Local RMU manufacturing. (cid:3)(cid:122) (cid:3)(cid:122) Tie-up with Italian company for L&T branded Solar inverter. Strategic alignment with IOmniscient (Australian company) for its video analytics speciality. (cid:3)(cid:122) Introduction of “SMART Comm” solution. (cid:3)(cid:122) Introduction of 52”Hydraulic Tire Curing Press, 45” Tire Curing Press (TCP), 104” Tire Curing Press and 42” Bladder Curing Press. (cid:3)(cid:122) Tyre building machines for Off the road tyres. (cid:3)(cid:122) Large Truck radial Multi stage tire building (cid:3)(cid:122) Tyre plant Automation Systems. (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Development of newer variants of Wheel Loader and Compactors designed for ease of use, simpler handling and easier maintenance. Development of 5.5 M Sensor Asphalt Paver Development. Development of Pneumatic Tire Roller & Skid Steer Loaders. Indigenization of various components for Rubber Processing Machinery by designing, developing specifications and adapting to international conditions. (cid:3)(cid:122) Use of Small Solar Generating sets for area and security post lighting. Also few weigh bridges are powered by solar electric generation sets. (cid:3)(cid:122) Use of Hybrid Lighting Masts thereby saving on fuel and energy. (ii) Steps taken by the Company for utilizing alternate sources of energy: (cid:3)(cid:122) Shift towards usage of windmill power in the place of State Electricity Board at Kancheepuram factory (cid:3)(cid:122) Installing Solar panels on Rooftop (cid:3)(cid:122) Solar street at ESE campus (cid:3)(cid:122) Use of natural lights in cafeteria. (cid:3)(cid:122) Solar Panels installed at project sites. (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Power generation through Solar Roof top PV installation. Annual Power Generation through 1.5 KW solar system (KWHR) & Solar Stand-alone system Shift towards usage of power generated through windmill power (iii) Capital investment on energy conservation equipments: (cid:3)(cid:122) (cid:3)(cid:122) Energy conservation initiatives to be taken in water circulating pumps Explore the opportunities for installation of “Stand by Loss” Automation arrangement for critical plant and machinery (cid:3)(cid:122) Energy conservation in Air handling units Spread awareness campaign for water conservation in line with Energy conservation Proposal for replacing all lamps with LED for High mast towers (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) 72 Installation of Astronomical intelligent controller for light mast towers (cid:3)(cid:122) Mechanistic and volumetric evaluation of asphalt layers of major highway projects in India. (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) Development of cement grouted bituminous macadam for high speed corridors, expressways, aprons and ports. Development of emulsion based cold mixes with recycled aggregates for base and binder courses in highway projects. Industrial scale production of stockpile, all weather cold pot-hole mix for infra project sites. Development of special testing facility for preformed fillers in rigid pavements. Development of alternate curing techniques for conventional concrete. Development air cured, no cement Geo-polymer concrete for structural applications. Development of high strength (M100) Self- Consolidating Concrete. Development of low cement and impermeable Plastic concrete for Dam structures. Development of special testing facility for water proofing sealants. (cid:3)(cid:122) Development of dry mortar for buildings. (cid:3)(cid:122) Development of indigenous cementitious grout for precast application. (cid:3)(cid:122) Mechanical Studies on light weight concrete for structural application. (cid:3)(cid:122) Development of polymer modified mortar for multilevel carparks. (cid:3)(cid:122) Mechanical studies on Grouted bar coupler systems. (cid:3)(cid:122) Mechanical studies on special Macalloy and FRP Rebars. (cid:3)(cid:122) Development of SCC piles for solar power fields (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Development of smart measuring system for application in construction sites. Development of precast sandwich panels for buildings Seismic qualification tests on different types of horizontal connections of precast shear wall panels using splice sleeve coupler and corrugated GI dowel tubes. (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) Horizontal connection system with stretchable PVC hose for horizontal connection of shear wall panels. Project scale production and application of pumpable dry cement mortar at New Delhi. Use of special economical mix design of cold mix with RAP as a substitute of conventional DBM layer in Odisha Project. Use of in-house developed cold pot-hole mix instead of proprietary products for pavement rectification works in the CMRL project site after the Chennai Floods. Use of in-house developed self-compacting concrete in pile foundations of major 3 solar power projects of Tamil Nadu and Andhra Pradesh. Use of impermeable plastic concrete in Dam project, Andhra Pradesh. Release of a comprehensive handbook on precast construction for buildings to promote mass buildings with latest, time and cost effective precast concrete technology. Rectification of distressed concrete structure due to chemical fumes through special SCC. Application of light weight concrete in institutional buildings. Combustion air Blower control through Drive at Galvanizing by replacing the starter with drive control (VFD) so as to adjust motor speed according to the requirements. (cid:3)(cid:122) Magnetic resonators – for Streamlining LPG flow and reducing the consumption (at galvanizing) through Installation of Magnetic resonators in order to increase the combustion Efficiency of Fuel (LPG). (cid:3)(cid:122) (cid:3)(cid:122) Testing of a tower of height 101.3 metres and voltage rating of 380kV for a utility client in Saudi Arabia which stands as the tallest tower tested in India as on date. Installation of Pressure Transducer in Airline through Pressure Transducer and VFD control Air Pressure by modifying the electrical circuit, utilizing feedback of Transducer to control the RPM of Motor through VFD and maintaining 73 constant line pressure of 6 bar in Airline by controlling the Motor RPM. (cid:3)(cid:122) Automatic air fuel ratio & temperature control of galvanizing furnace through Human Machine Interface (HMI) system which comprise automatic LPG flow control valve, VFD controlled Combustion Air Blower, VFD controlled Flue Gas Blower & Temperature sensors (cid:3)(cid:122) Developing in-house design of 70m high reinforced earth wall for Kannur International Airport project. (cid:3)(cid:122) Mechanization of track laying implemented for faster progress of work and better quality with reduced workforce (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) In-house Ballast less track design being successfully implemented. Simulation in Design through initiated adoption of the e-trax Simulation Software for design, analysis, optimization, operation & automation of AC railway traction power systems In-house 3D modelling of Traction Power System using AutoCAD software for electrical clearance study of traction system Automatic Generation of OHE Construction & Traction Supply Control Post Drawing and Bill of Material using Bentley-Power Rail V8i software thereby reduction of 50% of man-days as compared to conventional method and achieving 100% accuracy. Use of renewable energy for powering CCTV cameras, on pilot basis, by integration of solar photovoltaic modules with junction poles at Mumbai City Surveillance Project. Development of an Innovative Test Lab as part of a larger Center of Excellence for testing software applications at Mumbai. Development of printed circuit switch board for CNC Gas cutting machine & assembly of components done in-house. Indigenous development of rewinding process for High frequency grinders for AG7 Model of Fein & Bosch makes. Servicing of Chopper assembly which is a major spare in Hypertherm power source imported from Germany by replacing alternate indigenous spares. 74 (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Introduction of Automatic loading system of 12m ISMC channels in Section shearing machine. Introduction of Common Heater arrangement and single stage regulator in CO2 gas manifold system to reduce the gas consumption. Implementation of Electrically adjustable inverter feed drive instead of mechanical variation system Installation of Impregnate Painting System for Timber Beam Development of De-coiling machine unloading rack opening automation. Development of Prima 12R & Prima 13 Plus machine fixed blade modified with split type to reduce the cost and material. (cid:3)(cid:122) Modification and fixing angular plates through use of triangular and rectangular rings to avoid damage. (cid:3)(cid:122) Water consumption reduced to arrest the leakage and unwanted usage. (E,g. we reduce the water consumption 1,32,000 litres per month compare to previous year) (cid:3)(cid:122) Modified the Prima 12 R machine Bending gear intermediate gear to avoid the frequent breakdown and also reduced cost. (cid:3)(cid:122) Development of Boom Cylinder locking system in Pick and Carry crane to avoid the frequent breakdown and oil leakage. (cid:3)(cid:122) Use of Modular Construction Technology in Nuclear Power Plant Construction (cid:3)(cid:122) Modular construction technology is being adopted for the erection of 6mm thick carbon steel liner panels for IC wall and top dome lining for Kakrapar Nuclear Power Plant in Gujarat. This technology reduced the project duration leading to early commissioning. (cid:3)(cid:122) (cid:3)(cid:122) Development and use of Hinged Launching Girder in metro rail project. A segmental bridge launching girder with hinge mechanism has been developed and adopted in metro construction projects. This Launching girder is capable of erecting bridges in congested urban environment with sharp radius of curvature (radius up to 130m) without need for ground supports and thus leading to efficient design and construction with least disturbance to existing traffic flow. pavement related issues like rutting, pot holes, cracking, etc. (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: (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) Development of new range of products (Sand Plant) to meet specific application requirement for crushing. Development of printed circuit switch board for CNC Gas cutting machine & assembly of components done in-house. Indigenous development of rewinding process for High frequency grinders for AG7 Model of Fein & Bosch makes. Introduction of new products like New 1-phase Meter with IrDA, 3-Phase Meter with IrDA, 1-Phase Pre-Paid Meter (Taurus), 3-phase Pre-Paid Meter (Atria), 1-Phase Smart Meter (Aurora), 3-Phase Smart Meter (Regor), 3-Phase Digital Panel Meter (Nova) , New Trip Supervision Relay (TCS01-nX) & Motor Protection Relay (MPR200). Introduction of L&T’s Outdoor Compact substation- N-Qube following Franchisee model. Introduction of a new variant to the GIS (Gas insulated switchgear) family. Continuous product development in the switchgear business at its various Department of Scientific & Industrial Research, Ministry of Science & Technology accredited R&D facilities in India and filing 114 Patent, 12 Trademark, 37 Design and 1 Copyright applications in India and 2 foreign patent applications. Expansion of switchgear product range and offerings to the infrastructure sector. Identification of major causes of pre-mature failure of asphalt layers of pavements and suggesting suitable preventive and rectification techniques. Development of in-house developed stockpile, all weather cold pot-hole mix which was 25% cheaper than any proprietary product available in the market. (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) Use of Emulsion based cold mixes with Reclaimed Asphalt Pavement materials as they are more environmental friendly over conventional bituminous mixes. Use of alternate curing techniques to reduce/ eliminate the usage of water for concrete curing. Use of Geo polymer concrete which ensures elimination of cement from construction activities. Use of the high strength self-consolidation concrete is very essential for high rise building and congested reinforced section especially in girders and segment of metro rail projects. Use of in-house developed pumpable dry mortar which is found to be 40% cheaper than proprietary products. Use of economical indigenous developed testing gadgets as worthy substitutes for costly foreign imports. Economical and cost effective piles in solar projects thus saving time. Alternate and economical connection systems connections of precast shear wall panels Stretchable PVC hose for horizontal connection of shear wall panels is cost effective and construction friendly Use of Fixed-Bed Biofilm Activated Sludge (FBAS) in Bhatpara Wastewater Treatment Plant, West Bengal. The plant has better aesthetics as the reactor is covered by the plant racks. The plant also has smaller carbon foot print and lower operating cost. Implementation of Ultra Violet (UV) disinfection system for secondary treated wastewater. This is preferred over the conventional chlorination system which has harmful side effects due to the presence of carcinogens in residual chlorine. (cid:3)(cid:122) Use of Vortex Grit Removal in Sewage Treatment Plant which is preferred over the conventional grit removal system for its high grit (cid:3)(cid:122) Use of Cement grouted bituminous macadam as a cost effective and durable solution to many (cid:3)(cid:122) Stopping the loading & unloading function of Air Compressor. 75 (iii) Information regarding technology imported (iv) Expenditure incurred on Research & Development: during the last 3 years: S. No. Technology Imported Year of Import Status of absorption & reasons for non- absorption, if any a) Cone Crusher from ARD (UK) b) Dry Sand Making Systems, Air Screens, Vertical Shaft Impactors (VSI) and Jaw Crushers (STJ) from KEMCO, Japan. 2015-16 Under absorption - The technology transfer for manufacturing and application of cone crusher is underway. Cone crushers as per ARD technology are to be manufactured and put into operation for testing and experiment. 2013-14 Manufacturing Technology of Sand Plant has been absorbed. Application technology is in the process of absorption. Sand manufacturing plant is under manufacturing now. It is to be installed and operation is to be studied for Indian crusher dust. Capital Recurring Total Total R&D expenditure as a percentage of total turnover crore 2015-16 53.93 149.62 203.55 0.34% [C] FOREIGN EXCHANGE EARNINGS AND OUTGO: Foreign Exchange earned Foreign Exchange saved/deemed exports Total Foreign Exchange used crore 2015-16 11089.03 916.28 12005.31 11284.10 76 Annexure ‘B’ 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 fulfill 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 Directors, Non-Executive Directors and Independent Directors. (ii) Executive Management – by the Corporate Management comprising of the Group Executive Chairman, the Deputy Managing Director, 4 Executive Directors, 1 Non-Executive Director, 3 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 to 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 ensuring its effectiveness and enhancement of shareholder value. The Board also 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 benefits across ICs. The key responsibilities of the EMC include approval of policies cutting across IC’s and also at Corporate level, covering 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. 77 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 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, mentoring of senior executives, succession planning and corporate governance. He is the interface for critical Government entities and major customers of the Company and Group Companies. He also provides support to the Company and its Group Companies, wherever necessary. d. 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. e. Non-Executive Directors (NED)/Independent Directors: The Non-Executive Directors/Independent directors play a critical role in enhancing balance to the Board processes with their independent judgment on issues of strategy, performance, resources, standards of conduct, etc., besides providing the Board with valuable inputs. f. Independent Company Board (IC Board): As a part of Lakshya 2016, the Company developed an Organisation Structure to include Hybrid Holding Company. Accordingly, 10 Independent Companies (ICs) (not legal entities) were created. These ICs are managed by their internal “Board” comprising of Senior Executives, Non-Executive Director/Independent Director of the Company’s Board and 2-3 Independent external Members. This structure has enabled the Company to empower people and achieve substantial growth in the business. Looking to the opportunities in International market, especially in GCC countries, Company took an additional initiative of developing the structure, processes and leadership specifically in GCC countries. E. BOARD OF DIRECTORS a. Composition of the Board: The Company’s policy is to have an appropriate mix of Executive, Non-Executive & Independent Directors. As on March 31, 2016, the Board comprised of the Group Executive Chairman, the Deputy Managing Director & President, 4 Executive Directors, 4 Non-Executive Directors (3 representing financial institutions) and 10 Independent Directors. The composition of the Board, as on 31st March, 2016, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in this respect. 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. The Meetings of the Board have been held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year under review, 9 meetings were held on April 3, 2015, April 4, 2015, May 2, 2015, May 30, 2015, May 31, 2015, July 31, 2015, September 21, 2015, October 30, 2015 and January 29, 2016. The Independent Directors held two meetings during the financial year on July 30, 2015 and September 21, 2015 primarily to discuss succession planning and functioning of the ICs and the IC Boards. The Independent Directors also met on April 11, 2016 to discuss the performance evaluation of the Board, Committees, Chairman and the individual Directors. The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group Executive Chairman and circulates the same in advance to the Directors. Every Director is free to suggest 78 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. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when necessary. The Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Group Executive Chairman. Thereafter the minutes are signed by the Chairman of the Board at the next meeting. The following is the composition of the Board of Directors as on March 31, 2016. 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 Mr. A. M. Naik Mr. K. Venkataramanan @ Mr. M. V. Kotwal # Mr. S. N. Subrahmanyan* Mr. R. Shankar Raman Mr. Shailendra Roy Mr. D. K. Sen $ Mr. M. V. Satish % Mr. M. M. Chitale Mr. Subodh Bhargava Mr. M. Damodaran Mr. Vikram Singh Mehta Mr. Sushobhan Sarker (Note 1) Mr. Adil Zainulbhai Mr. Akhilesh Gupta Mr. Bahram Vakil Mr. Swapan Dasgupta (Note 2)! Mrs. Sunita Sharma (Note 1) Mr. Thomas Mathew T. Mr. Ajay Shankar Mr. Subramanian Sarma & Ms.Naina Lal Kidwai^ Meetings held during the year are expressed as number of meetings eligible to attend. Note: 1. Representing equity interest of LIC GEC CEO & MD ED DMD ED ED ED ED ID ID ID ID NED ID ID ID NED NED ID ID NED ID 9 7 6 9 9 9 2 1 9 9 9 9 9 9 9 9 9 9 9 5 3 – No of Board Meetings attended 9 6 6 8 9 9 2 1 9 9 8 8 8 8 8 4 9 7 9 5 3 – Attendance at last AGM YES YES YES NO YES YES NA NA YES NO NO YES YES YES NO NO NO YES YES YES NO NA 2. Representing equity interest of SUUTI & appointed as a Director w.e.f. 19.08.2015 @ retired as a director w.e.f. 30.09.2015 $ appointed as a Director w.e.f. 01.10.2015 ^ appointed as a Director w.e.f. 01.03.2016 GEC – Group Executive Chairman ED – Executive Director NED – Non-Executive Director 1. None of the above Directors are related inter-se. # retired as a director w.e.f. 26.08.2015 * Whole-time Director upto 30.09.2015 and appointed as DMD w.e.f. 01.10.2015 % appointed as a Director w.e.f. 29.01.2016 ! ceased to be a Director w.e.f 15.05.2016 DMD - Deputy Managing Director & President CEO & MD – Chief Executive Officer and Managing Director ID – Independent Director 2. None of the Directors hold the office of director in more than the permissible number of companies under the Companies Act, 2013 or Regulation 25 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. 79 As on March 31, 2016, the number of other Directorships & Memberships/Chairmanships of Committees of the Board of Directors are as follows: Name of Director Mr. A. M. Naik Mr. S. N. Subrahmanyan Mr. R. Shankar Raman Mr. Shailendra Roy Mr. D. K. Sen Mr. M. V. Satish Mr. M. M. Chitale Mr. Subodh Bhargava Mr. M. Damodaran Mr. Vikram Singh Mehta Mr. Sushobhan Sarker Mr. Adil Zainulbhai Mr. Akhilesh Gupta Mr. Bahram Vakil Mr. Swapan Dasgupta@ Mrs. Sunita Sharma Mr. Thomas Mathew T. Mr. Ajay Shankar Mr. Subramanian Sarma Ms. Naina Lal Kidwai No of other company Directorships 3 3 9 9 1 – 9 7 4 6 2 7 1 5 1 6 4 1 1 2 No. of Committee Membership – – 7 3 – – 3 3 5 1 2 2 – 4 1 1 2 1 – 2 No. of Committee Chairmanship – – – – – – 4 1 2 – – 2 – – – 2 – – – – @ ceased to be a Director w.e.f May 15, 2016 (cid:122) Committee memberships include memberships of Audit Committee and Stakeholders’ Relationship Committee in all public limited companies (whether listed or not) and excludes private limited companies, foreign companies and Section 8 companies. (cid:122) The Committee Chairmanships/Memberships are within the limits laid down in Regulation 26 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. c. Information to the Board: The Board of Directors has complete access to the information within the Company, which inter alia includes - (cid:122) Annual revenue budgets and capital expenditure plans (cid:122) Quarterly results and results of operations of ICs and business segments (cid:122) Financing plans of the Company (cid:122) Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee (cid:122) Details of any joint venture, acquisitions of companies or collaboration agreement (cid:122) (cid:122) (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 80 (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/ICs promptly. An Action Taken Report is presented to the Board. F. BOARD COMMITTEES The Board currently has 5 Committees: 1) Audit Committee, 2) Nomination & Remuneration Committee, 3) Stakeholders’ Relationship Committee, 4) Corporate Social Responsibility Committee and 5) Risk Management Committee. The terms of reference of the Board Committees are governed by relevant legislation and/or 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 Company Secretary in consultation with 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) Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment, terms of appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. (cid:3)(cid:122) Approval of payment to statutory auditors for any other services rendered by the statutory auditors. (cid:3)(cid:122) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. (cid:3)(cid:122) Reviewing, with the management, the annual financial statements and the audit report before submission to the board for approval, with particular reference to: 1. Matters required to be included in the Directors‘ Responsibility Statement to be included in the Board’s report in terms of sub- section (5) of Section 134 of the Companies Act, 2013 2. Changes, if any, in accounting policies and practices and reasons for the same 3. Major accounting entries involving estimates based on the exercise of judgment by management 4. Significant adjustments made in the financial statements arising out of audit findings 5. Compliance with listing and other legal requirements relating to financial statements 6. Disclosure of any related party transactions 7. Qualifications in the draft audit report. Reviewing, with the management, the quarterly financial statements before submission to the board for approval. Reviewing, with the management, the statement of uses/application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Reviewing, with the management, performance of statutory and internal 81 auditors, and adequacy of the internal control systems. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage, frequency and performance of internal audit. Discussion with internal auditors about any significant findings and follow up there on. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. To review the functioning of the Whistle Blower Mechanism. Approval of appointment of CFO (i.e., the Whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. The recommendation for appointment, remuneration and terms of appointment of cost auditors of the company. Review and monitor the auditor’s independence and performance, and effectiveness of audit process. Review the management discussion and analysis of financial condition and results of operations. Approval or any subsequent modification of transactions of the company with related parties. (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) Scrutiny of inter-corporate loans and investments. Valuation of undertakings or assets of the company, wherever necessary. Evaluation of internal financial controls and risk management systems. (cid:3)(cid:122) Monitoring the end use of funds raised through public offers and related matters. Minutes of the Audit Committee Meetings are circulated to the Board of Directors and discussed, if necessary. ii) Composition: The Audit Committee of the Board of Directors was formed in 1986 and as on March 31, 2016 comprised three Independent Directors and 1 Non-Executive Director. iii) Meetings: During the year ended March 31, 2016, 8 meetings of the Audit Committee were held on April 11, 2015, May 29, 2015, July 31, 2015, October 29, 2015, November 7, 2015, January 28, 2016, February 15, 2016 and March 18, 2016. In addition to the above, the members of the Audit Committee also meet without the presence of management. The attendance of Members at the Meetings was as follows: Name Status Chairperson Mr. M. M. Chitale Member Mr. M. Damodaran Mr. Akhilesh Gupta # Member Mr. Sushobhan Sarker Member Member Mr. Bahram Vakil @ No. of meetings during the year 8 8 3 8 5 No. of Meetings Attended 8 8 2 6 0 Meetings held during the year are expressed as number of meetings eligible to attend. # ceased to be a member w.e.f. 31.07.2015 @ appointed as a member w.e.f.31.07.2015 All the members of the Audit Committee are financially literate and have accounting or related financial management expertise. 82 The Whole-time Director & Chief Financial Officer and Internal Auditor 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, Cost Accountants and Engineers. 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 is responsible to the Audit Committee. 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. 2) Nomination & Remuneration Committee (NRC) i) Terms of reference: (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 in accordance with the criteria laid down by the Committee; Recommend to the Board appointment and removal of such persons; Formulate criteria for determining qualifications, positive attributes and independence of a director; (cid:3)(cid:122) Devise a policy on Board diversity; (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Formulation of criteria for evaluation of directors, Board and the Board Committees; Carry out evaluation of the Board and directors; Recommend to the Board a policy, relating to remuneration for the directors and key managerial personnel (KMP); (cid:3)(cid:122) Administration of Employee Stock Option Scheme (ESOS). ii) Composition: The Committee has been in place since 1999. As at March 31, 2016, the Committee comprised of 3 Independent Directors and the Group Executive Chairman. iii) Meetings: During the year ended March 31, 2016, 7 meetings of the Nomination & Remuneration Committee were held on April 3, 2015, May 30, 2015, July 31, 2015, September 21, 2015, October 30, 2015, January 29, 2016 and February 23, 2016. The attendance of Members at the Meetings was as follows: Name Status No. of Meetings Attended No. of meetings during the year Mr. Subodh Bhargava Chairperson Mr. A. M. Naik Member Mr. Adil Zainulbhai Member Mr. Thomas Mathew T. $ Member 7 7 7 6 7 7 6 6 Meetings held during the year are expressed as number of meetings eligible to attend. $ appointed as a member w.e.f. 03.04.2015 iv) Board Membership Criteria: While screening, selecting and recommending to the Board new members, the NRC 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 NRC considers the past performance, attendance & participation 83 in and contribution to the activities of the Board by the Director. The Independent Directors comply with the definition of Independent Directors as given under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. While appointing/re-appointing any Independent Directors/Non-Executive Directors on the Board, the NRC considers the criteria as laid down in the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. All the Independent Directors give a certificate confirming that they meet the “independence criteria” as mentioned in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. These certificates have been placed on the website of the Company. v) Remuneration Policy The remuneration of the Board members is based on the Company’s size & global presence, its economic & financial position, industrial trends, compensation paid by the peer companies, etc. Compensation reflects each Board member’s responsibility and performance. The level of 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 NRC, approval of the Board and the shareholders. The commission payable is based on the performance of the business/ function as well as qualitative factors. The commission is calculated with reference to net profits of the Company in the financial year subject to overall ceilings stipulated under Section 197 of the Companies Act, 2013. The Independent Directors/Non-Executive Directors are paid remuneration by way of commission & sitting fees. The Company pays sitting fees of 50,000 per meeting of the Board and 25,000 per meeting of the Committee to the Independent Directors/ Non-Executive Directors for attending the meetings of the Board & Committees. The commission is paid subject to a limit not exceeding 1% p.a. of the profits of the Company as approved by shareholders (computed in accordance with Section 197 of the Companies Act, 2013). The commission to Independent Directors/ Non-Executive Directors 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 Regulation 46 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the criteria for payment to Independent Directors/Non-Executive Directors is made available on the investor page of our corporate website www.larsentoubro.com Performance Evaluation Criteria for IDs: The performance evaluation questionnaire covers specific criteria with respect to the Board & Committee composition, structure, culture, effectiveness of the Board and Committees, functioning of the Board and Committees, information availability, etc. It also contains specific criteria for evaluating the Chairman and individual Directors. vi) Details of remuneration paid/payable to Directors for the year ended March 31, 2016: (a) Executive Directors: The details of remuneration paid/payable to the Executive Directors is as follows: Names Salary Perquisites Retirement Mr. A. M. Naik 3.58 Mr. K. Venkataramanan@ 14.73 38.85 2.77 Benefits 5.75 22.43 crore Commission 17.96 3.37 84 Names Salary Perquisites Retirement Mr. M. V. Kotwal# Mr. S. N. Subrahmanyan Mr. R. Shankar Raman Mr. Shailendra N. Roy Mr. D. K. Sen$* Mr. M. V. Satish%* 8.58 1.63 1.38 1.15 0.44 0.15 Benefits 15.35 3.06 2.18 1.47 0.69 0.24 0.84 7.53 3.23 3.03 0.06 0.05 crore Commission 1.82 9.90 6.90 4.40 2.11 0.73 The above amounts include gratuity, leave encashment, perquisite on ESOP allotment and tax on ESOPs borne by employer # retired as a director w.e.f. 26.08.2015 @ retired as a director w.e.f. 30.09.2015 $ appointed as a Director w.e.f. 01.10.2015 % appointed as a Director w.e.f. 29.01.2016 * remuneration after assuming office as Director (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Notice period for termination of appointment of Deputy 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 provided on the website of the Company www.larsentoubro.com. (b) Non-Executive Directors: The details of remuneration paid/payable to the Non-Executive Directors is as follows: Names Sitting Fees for Board Meeting 0.045 Mr. M. M. Chitale 0.045 Mr. Subodh Bhargava 0.040 Mr. M. Damodaran Mr. Vikram Singh Mehta 0.040 0.040 Mr. Sushobhan Sarker 0.040 Mr. Adil Zainulbhai 0.040 Mr. Akhilesh Gupta 0.020 Mr. Bahram Vakil Mr. Swapan Dasgupta@ 0.045 0.035* Ms. Sunita Sharma 0.045 Mr. Thomas Mathew T. 0.025 Mr. Ajay Shankar NIL Mr. Subramanian Sarma – Ms. Naina Lal Kidwai Sitting Fees for Committee Meeting 0.020 0.017 0.020 0.010 0.015 0.015 0.005 NIL – 0.005* 0.015 0.005 NIL – Commission crore Total 0.455 0.555 0.375 0.352 0.229* 0.435 0.198 0.067 0.150* 0.127* 0.320 0.205 NIL – 0.520 0.618 0.435 0.402 0.284 0.490 0.243 0.087 0.195 0.167 0.380 0.235 NIL – * Payable to respective Institutions they represent. @ ceased to be a Director w.e.f May 15, 2016 Details of shares and convertible instruments held by the Independent Directors/Non-Executive Directors as on March 31, 2016 are as follows: Names Mr. M. M. Chitale Mr. Subodh Bhargava Mr. M. Damodaran Mr. Vikram Singh Mehta Mr. Sushobhan Sarker * Mr. Adil Zainulbhai Mr. Akhilesh Gupta Mr. Bahram Vakil Mr. Thomas Mathew T. Mr. Subramanian Sarma$ Mr. Swapan Dasgupta *@ Ms. Sunita Sharma * Mr. Ajay Shankar Ms. Naina Lal Kidwai No. of Shares held 1,629 750 150 885 150 100 200 4,441 100 100 100 100 100 100 * held jointly with the Institution they represent $ 84,000 stock options were granted during the year @ ceased to be a Director w.e.f May 15, 2016 3) Stakeholders’ Relationship Committee (SRC): i) Terms of reference: The terms of reference of the Stakeholders’ Relationship Committee are as follows: (cid:3)(cid:122) (cid:3)(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, 2016, the Stakeholders’ Relationship Committee comprised of 1 Non- Executive Director, 1 Independent Director and 1 Executive Director. iii) Meetings: During the year ended March 31, 2016, 4 meetings of the Stakeholders’ Relationship Committee were held on May 30, 2015, July 31, 2015, October 30, 2015 and January 29, 2016. 85 The attendance of Members at the Meetings was as follows- meetings during the year and approved the transfer of shares lodged with the Company. Name Status Chairperson Ms. Sunita Sharma Member Mr. Ajay Shankar # Member Mr. Shailendra Roy Mr. S. N. Subrahmanyan @ Member No. of meetings during the year 4 2 4 2 No. of Meetings Attended 2 2 4 2 Meetings held during the year are expressed as number of meetings eligible to attend. @ ceased to be a member w.e.f. 21.09.2015 # appointed as a member w.e.f. 21.09.2015 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. Opening Balance Received Resolved Pending* 4) Corporate Social Responsibility Committee (CSR Committee): 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, 2016, the CSR Committee comprised of 1 Independent Director and 2 Executive Directors. iii) Meetings: During the year ended March 31, 2016, 4 meetings of the CSR Committee were held on April 7, 2015, June 30, 2015, December 11, 2015 and March 22, 2016. The attendance of the Members at the Meetings was as follows- Particulars Complaints: SEBI/Stock Exchange Shareholder Queries: Dividend Related Transmission/ Transfer Demat/Remat 1 50 49 2 Name Status No. of meetings during the year No. of Meetings Attended 174 7899 7632 441 22 2 988 1007 64 66 3 0 * Investor queries shown outstanding as on March 31, 2016 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 Share Transfer Committee of Executives comprising of four Senior Executives. This Committee held 48 86 Mr. Vikram Singh Mehta Chairperson Mr. M. V. Kotwal @ Mr. R. Shankar Raman Mr. D. K. Sen% Member Member Member 4 2 4 2 4 2 4 2 Meetings held during the year are expressed as number of meetings eligible to attend. @ ceased to be a member w.e.f. 26.08.2015 % appointed as a member w.e.f. 01.10.2015 G. OTHER INFORMATION a) Directors’ Familiarisation Programme: 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. The internal newsletters of the Company, the press releases, etc. are circulated to all the Directors so that they are updated about the operations of the Company. This information is also available on the website of the Company www.larsentoubro.com. 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 Pages 80 to 81 in this Annexure to the Directors‘ Report. Presentations are made regularly to the Board/ NRC/Audit Committee (AC) (minutes of AC, NRC, SRC and CSR Committee are circulated to the Board), where Directors get an opportunity to interact with senior managers. Presentations, inter alia, cover business strategies, management structure, HR policy, management development and succession planning, quarterly and annual results, budgets, treasury policy, review of Internal Audit, risk management framework, operations of subsidiaries and associates, etc. Independent Directors have the freedom to interact with the Company’s management. Interactions happen during Board/Committee meetings, when senior company personnel are asked to make presentations about performance of their Independent Company/Business Unit, to the Board. Such interactions also happen when these Directors meet senior management in IC meetings and informal gatherings. c) Risk Management Framework: Please refer to Page 66 of the Board Report. d) Vigil Mechanism/Whistle Blower Policy : Please refer to Page 69 of the Board Report. e) Statutory Auditors: Please refer to Page 70 of the Board Report. f) 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 Group Executive Chairman 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. A. M. Naik Group Executive Chairman Date: May 25, 2016 Place: Mumbai g) 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 2014-2015 September 9, 2015 3.00 p.m. 2013-2014 August 22, 2014 3.00 p.m. 2012-2013 August 22, 2013 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 September 9, 2015: (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 3600 crore. (cid:3)(cid:122) To approve raising of debentures upto 6000 crore. Annual General Meeting held on August 22, 2014: (cid:3)(cid:122) No special resolutions were listed in the agenda for the meeting. 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. 87 h) Disclosures: Website 1. During the year, there were no transactions of material nature with the Directors or the Management or relatives or the related parties 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 274 to 287 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. The same is also available on our website www.larsentoubro.com. 5. There were no instances of non-compliance, penalties, strictures imposed on the Company by the Stock Exchanges on any matter related to the capital markets, during the last three years. 6. The policy for determining material subsidiaries and related party transactions is available on our website www.larsentoubro. com. 7. Details of risk management including foreign exchange risk, commodity price risk and hedging activities form a part of the Management Discussion & Analysis. Please refer to pages 217 to 219 of the Annual Report. 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. 88 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. The quarterly shareholding pattern of the Company is available on the website of the Company as well as the stock exchanges. The entire Annual Report and Accounts of the Company and subsidiaries are available in downloadable formats. The entire Annual Report and Accounts of the Company will also be made available on the websites of the Stock Exchanges. Filing with Stock Exchanges Information to Stock Exchanges is now being also 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, debenture trustee, secretarial auditor, equity analysts, etc. Management Discussion & Analysis This forms a part of the Annual Report which is mailed to the shareholders of the Company. Presentations made to Institutional Investors and Analysts The schedule of analyst/institutional investor meets and presentations made to them on a quarterly basis are displayed on the website. B. UNCLAIMED SHARES The Company does not have any unclaimed shares from any public issue. However certain shares resulting out of the bonus shares issued by the Company are unclaimed by the shareholders. As required under Regulation 39(4) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has already sent reminders in the past to the shareholders to claim these shares. These share certificates are regularly released on requests received from the eligible shareholders after due verification. The balance unclaimed share certificates will be transferred to the Unclaimed Suspense Account as required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 shortly. The eligible shareholders are entitled to claim the shares from the said account upon giving necessary documents. C. GENERAL SHAREHOLDERS’ INFORMATION a) Annual General Meeting: The Annual General Meeting of the Company has been convened on Friday, August 26, 2016 at Birla Matushri Sabhagar, Marine Lines, Mumbai – 400 020 at 3.00 p.m. b) Financial calendar: 1. Annual Results of May 25, 2016 2015-16 2. Mailing of Annual Third week of July, 2016 Reports 3. First Quarter Results g) Stock Code/Symbol: The Company’s equity shares/GDRs are listed on the following Stock Exchanges and admitted for trading in London Stock Exchange: BSE Limited (BSE) : Scrip Code - 500510 National Stock Exchange of India Limited (NSE) : Scrip Code - LT ISIN Reuters RIC : : INE018A01030 LART.BO Luxembourg Exchange Stock Code : 005428157 London Exchange Stock Code : LTOD The Company’s shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the National Stock Exchange of India Limited. During the last week of July 2016 * h) Stock market data for the year 2015-2016: 4. Annual General August 26, 2016 Meeting 5. Payment of Dividend August 30, 2016 6. Second Quarter results During last week of 7. Third Quarter results October 2016 * During last week of January 2017 * * Tentative c) Book Closure: The dates of Book Closure are from Saturday, August 20, 2016 to Friday, August 26, 2016 (both days inclusive) to determine the members entitled to the dividend for 2015-2016. d) Listing of equity shares/shares underlying GDRs on Stock Exchanges: The shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). GDRs are listed on Luxembourg Stock Exchange and traded on London Stock Exchange. e) Listing Fees to Stock Exchanges: The Company has paid the Listing Fees for the year 2016-2017 to the above Stock Exchanges. f) Custodial Fees to Depositories: The Company has paid custodial fees for the year 2016-2017 to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Month L&T BSE Price ( ) High Low Month Close BSE SENSEX High Low Month Close 2015 April May June July 1820.00 1626.75 1632.50 29094.61 26897.54 27011.31 1668.35 1545.35 1655.35 28071.16 26423.99 27828.44 1816.90 1642.10 1782.75 27968.75 26307.07 27780.83 1886.25 1741.05 1789.55 28578.33 27416.39 28114.56 August 1844.15 1575.00 1605.30 28417.59 25298.42 26283.09 September 1630.00 1413.15 1466.70 26471.82 24833.54 26154.83 October 1610.40 1400.00 1411.15 27618.14 26168.71 26656.83 November 1404.00 1325.55 1374.05 26824.30 25451.42 26145.67 December 1383.00 1265.50 1275.65 26256.42 24867.73 26117.54 2016 January 1291.25 1070.00 1102.20 26197.27 23839.76 24870.69 February 1174.65 1016.60 1079.25 25002.32 22494.61 23002.00 March 1248.15 1081.00 1216.20 25479.62 23133.18 25341.86 ) ( 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 15 May 15 Jun 15 Jul 15 Sep 15 Nov Aug 15 15 Daily Closing Price Oct 15 Dec 15 Jan 16 Feb 16 Mar 16 32000 31000 30000 29000 28000 27000 26000 25000 24000 23000 22000 21000 X E S N E S E S B 89 Month 2015 April May June July August September October November December 2016 January February March ) ( E S N - T & L 2000 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 L&T NSE Price ( ) High Low Month Close NIFTY High Low Month Close 1819.95 1669.75 1817.00 1888.00 1844.20 1629.60 1610.00 1404.00 1382.90 1625.60 1543.60 1643.00 1737.85 1575.00 1412.35 1400.00 1326.00 1264.50 1631.30 1654.45 1782.80 1791.25 1602.90 1466.25 1410.75 1374.60 1275.45 8844.80 8489.55 8467.15 8654.75 8621.55 8055.00 8336.30 8116.10 7979.30 8144.75 7997.15 7940.30 8315.40 7667.25 7539.50 7930.65 7714.15 7551.05 1291.00 1174.95 1249.00 7972.55 7600.45 7777.60 1069.10 1016.05 1081.00 1101.65 1076.00 1216.70 Stock Performance L&T NSE ( ) NSE NIFTY 7241.50 6825.80 7035.10 Apr 15 May 15 Jun 15 Jul 15 Sep 15 Nov Aug 15 15 Daily Closing Price Oct 15 Dec 15 Jan 16 Feb 16 Mar 16 8181.50 8433.65 8368.50 8532.85 7971.30 7948.90 8065.80 7935.25 7946.35 7563.55 6987.05 7738.40 9500 9000 8500 8000 7500 7000 6500 6000 Y T F I N E S N i) Registrar and Share Transfer Agents (RTA): Till 31st May 2016: 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. From 1st June 2016: Karvy Computershare Pvt. Ltd. Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana - 500 032 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. 90 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 Regulation 40 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, 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, 2016: No. of Shares Shareholders Number 9,53,125 41,339 18,779 5,857 2,468 1,540 2,851 2,581 % 92.67 4.02 1.83 0.57 0.24 0.15 0.28 0.25 Shareholding Number 7,58,02,734 2,93,65,987 2,64,24,188 1,45,49,239 86,04,177 69,57,960 1,98,17,891 74,99,56,669 % 8.14 3.15 2.84 1.56 0.92 0.75 2.13 80.51 Upto 500 501 – 1000 1001 – 2000 2001 – 3000 3001 – 4000 4001 – 5000 5001 – 10000 10001 & ABOVE TOTAL 10,28,540 100.00 93,14,78,845 100.00 l) Categories of Shareholders is as under: Category Financial Institutions Foreign Institutional Investors Shares underlying GDRs Mutual Funds Bodies Corporate Directors & Relatives L&T Employees Welfare Foundation General Public TOTAL 31.03.2016 No. of Shares 27,55,72,334 15,13,62,292 % 31.03.2015 No. of Shares 29.58 28,00,34,611 16.25 15,61,72,982 % 30.12 16.80 1,92,13,684 2.06 2,12,66,473 2.29 7,67,74,808 6,50,66,088 14,49,515 11,47,52,281 5,44,05,173 8.24 7,29,24,831 6.99 0.16 25,11,947 12.32 11,16,06,174 5.85 7.85 0.27 12.01 22,72,87,843 24.81 93,14,78,845 100.00 92,95,62,061 100.00 24.40 23,06,39,870 Categories of Shareholders as on March 31, 2016 General Public 24.40% L&T Employees Welfare Foundation 12.32% Directors & Relatives 0.16% Bodies Corporate 6.99% Financial Institutions 29.58% Foreign Institutional Investors 16.25% Mutual Funds 8.24% Shares underlying GDRs 2.06% m) Dematerialization of shares & Liquidity: The Company’s Shares are required to be compulsorily traded in the Stock Exchanges in dematerialized form. The Company had sent letters to shareholders holding shares in physical form emphasizing the benefits of dematerialization. The number of shares held in dematerialized and physical mode is as under: No. of shares % of total capital issued 93.63 4.27 2.10 93,14,78,845 100.00 87,20,91,818 3,97,81,963 1,96,05,064 Held in dematerialized form in NSDL Held in dematerialized form in CDSL Physical Total Shares held in Demat / Physical Form as on March 31, 2016 CDSL 3,97,81,963 4.27% Physical 1,96,05,064 2.10% NSDL 87,20,91,818 93.63% n) Except for 11,47,52,281 shares which are held by L&T Employees Welfare Foundation, the remaining shares are freely tradeable in the market. 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, 2016: 0.675% USD 200 million Foreign Currency Convertible Bonds due 2019 (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, 2016 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 63,46,986 shares These Convertible Bonds are listed on the Singapore Exchange Securities Trading Limited. 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 BSE Limited (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, modular fabrication and production are based at multiple locations within India including Ahmednagar, Ankleshwar, Bengaluru, Chennai, Coimbatore, Faridabad, Hazira (Surat), Kattupalli (near Chennai), Kanchipuram, Mumbai, Navi Mumbai, Mysuru, Pithampur, Puducherry, Rajpura, Kansbahal (Rourkela), Talegaon and Vadodara. L&T’s international manufacturing footprint covers the Gulf (Oman, Saudi Arabia, U.A.E), South East Asia (Malaysia and Indonesia) and the U.K. 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) 6752 5656, Fax No. (022) 6752 5893 Shareholder correspondence may be directed to the Company’s Registrar and Share Transfer Agent, whose address is given below: Till May 31, 2016: 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 91 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 From June 1, 2016: 1. Karvy Computershare Pvt. Ltd. Unit : Larsen & Toubro Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana-500 032 Tel : (040) 6716 2222 Toll free number : 1-800-3454-001 Fax : (040) 2342 0814 E-Mail : einward.ris@karvy.com Website : www.karvycomputershare.com 2. Karvy Computershare Pvt. Ltd. Unit : Larsen & Toubro Limited 24-B, Raja Bahadur Mansion, Ground Floor, Ambalal Doshi Marg, Behind BSE Limited, Fort, Mumbai - 400 023. Tel : (022) 6623 5454/5412/5427 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) Securities Dealing Code: Pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has suitably modified its Securities Dealing Code for prevention of insider trading with effect from May 15, 2015. 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. u) The Company has appointed Mr. Arnob Mondal, Vice President (Corporate Accounts & Investor Relations), as Chief Investor Relations Officer. The Company also formulated Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information which is available on Company’s Website www.larsentoubro.com. Awareness Sessions/Workshops on Governance practices: Employees across the Company as well as the group are being sensitized about the various policies and governance practices of the Company. The Company had designed in-house training workshops on Corporate Governance with the help of an external faculty covering basics of Corporate Governance as well as internal policies and compliances under Code of Conduct, Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, SEBI Insider Trading Regulations, etc. Workshops were conducted during the last year to create a batch of trainers across various businesses. These trainers have in turn conducted training/ awareness sessions within their business and covered more than 41,000 employees in supervisory and above cadre since last year. A similar session was also conducted for senior management by external experts on Compliance & Governance. The Company will continue to conduct such workshops/sessions on a regular basis. 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 per SEBI requirements: As stipulated by SEBI, a Qualified Practicing 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 92 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 is manned by competent and experienced professionals. The Company has a system to review and audit its secretarial and other statutory 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. 93 To the Board of Directors of Larsen & Toubro Limited Dear Sirs, Sub: CEO/CFO Certificate [Issued in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015] We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen & Toubro Limited for the year ended March 31, 2016 and that to the best of our knowledge and belief, we state that; (i) these statements do not contain any materially untrue statement or omit any material fact or contain (a) 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 the 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 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. Yours sincerely, R. Shankar Raman Chief Financial Officer A. M. Naik Group Executive Chairman Place: Mumbai Date: May 25, 2016 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 31 March 2016 as stipulated in Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015 (‘the Regulations’). 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 Regulations. 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 25, 2016 94 SHARP AND TANNAN Chartered Accountants Firm’s Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 38332 Annexure ‘C’ to the Board Report website of the Company. Please see the link http://investors.larsentoubro.com/Listing-Compliance.aspx CSR ACTIVITIES FOR 2015-16 1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. The Company’s CSR Policy framework details the mechanisms for undertaking various programmes in accordance with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community. The Company will primarily focus on ‘Building India’s Social Infrastructure’ as part of its CSR programme which will include, amongst others, the following areas, viz. (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) (cid:3)(cid:122) Water & Sanitation – may include but not limited to watershed development -making clean drinking water available, promoting rain water harvesting , soil and moisture conservation, enhancing ground water levels by facilitating community management of water resources for improving conditions related to sanitation, health ,education and livelihoods of communities through an integrated approach . Education - may include but not limited to education infrastructure support to educational Institutions, educational programs & nurturing talent at various levels. Health - may include but not limited to community health centres, mobile medical vans, dialysis centres, general and specialized health camps and outreach programs, support to HIV/ AIDS, Tuberculosis control programs. Skill Development - may include but not limited to vocational training such as skill building, computer training, women empowerment, support to ITI’s, support to specially abled (infrastructure support & vocational training), Construction Skills Training Centres and providing employability skills to women and youth. Governance, Technology and Innovation would be the Key enabling factors across all these verticals. The detailed CSR Policy Framework is given in the Governance section on the 2. Composition of the CSR Committee. The CSR Committee of the Board was re-constituted on September 21, 2015 on account of the vacancy arising due to retirement of Mr M.V. Kotwal and Mr. D.K. Sen was appointed in his place. It comprises of one Independent Director and two Executive Directors. The Company Secretary acts as Secretary to the Committee. The present Committee comprises of Mr. Vikram Singh Mehta as Chairman, Mr. R. Shankar Raman and Mr. D.K. Sen as members and Mr. N. Hariharan as the Secretary of the Committee. 3. Average net profit of the Company for the last three financial years. The average net profit of the Company for the last three financial years is 5073 crore. 4. Prescribed CSR expenditure (two percent of the amount as in item 3 above). The Company was required to spend an amount of 101.46 crore as CSR expenditure during the financial year 2015-16. 5. Details of CSR spent during the financial year: a. Total amount to be spent for the financial year: The Company was required to spend 101.46 crore during the financial year 2015-16. As against this mandate, the Company spent 119.89 crore towards various activities for the benefit of the community. This exceeds the required spend by 18.43 crore. The CSR spend for FY 2015-16 is 2.36% of the average net profit under Section 198 of the Companies Act, 2013. In addition to the above spend, a contribution of 3.78 crore was made by the Company towards the Prime Minister’s National Relief Fund towards earthquake relief efforts at Nepal. b. Amount unspent, if any: Nil c. Manner in which the amount was spent in the financial year is detailed below: As per table enclosed 6. Reasons for not spending the amount during the financial year. NA 95 7. CSR Committee Responsibility Statement: (cid:3)(cid:122) The activities undertaken by the Company as well as the implementation and monitoring mechanisms are in compliance with its CSR objectives and CSR policy. S. N. SUBRAHMANYAN VIKRAM SINGH MEHTA Deputy Managing Director Chairman – CSR Committee The CSR Committee hereby affirms that: (cid:3)(cid:122) The Company has duly formulated a CSR Policy Framework which includes formulation of a CSR Theme, CSR budget and roles and responsibilities of the Committee as well as the various internal committees formed for implementation of the CSR policy; (cid:3)(cid:122) The Company has constituted a mechanism to monitor and report on the progress of the CSR programs; 96 S. No. CSR Project or activity identified 1 2 3 4 School support programme- Enhancing the quality of education and learning levels in government schools/ schools running for children from underprivileged backgrounds (teachers training, play way methods, support for English and Mathematics, capacity building, promoting extra curricular activities) Community based programmes-Study Centres/ balwadis/anganwadis run for developing pre school foundation, promoting healthy and hygienic environment for education, developing the learning levels of children at par with their mainstream grades and providing nutritional supplements Providing infrastructre support for education (drinking water and sanitation facilities,renovation of classrooms, water proofing of school buildings, providing furnitures and light fittings, donation of computers, upgradation of libraries, playground development)" Education Education Providing educational aids to children- books, stationary, sports equipments, uniforms, school bags, shoes, wollen clothes, raincoats etc" Sector in which the project is covered Education Projects or Programes 1. Local Area or other 2. Specify the state and district where projects or program was undertaken Gujarat (Surat, Vadodara), Karnataka (Bangalore, Mysore, Bijapur), Maharashtra (Mumbai, Thane), Faridabad, Odisha (Kansbhal, Sundergarh, Rayagada), Tamil Nadu (Coimbatore, Cuddalore, Nilgiris), Uttar Pradesh (Mirzapur) Amount outlay (budget) project or programe wise ( In Lakh) Direct expenditure on projects or programs ( In Lakh) Overhead ( In Lakh) Cumulative expenditure upto the reporting period ( In Lakh) Amount spent: direct or through implementing agency 513.94 495.11 64.76 559.88 Implementing agencies Education Karnataka (Bangalore), West Bengal (Kolkata), Maharashtra (Mumbai, Thane, Pune), Tamil Nadu (Chennai), Assam (Guwahati) 155.76 154.29 20.46 174.75 Implementing agencies 374.54 333.22 43.72 376.94 Direct 63.72 31.42 4.48 35.90 Direct Andhra Pradesh (Hyderabad, Visakahapatnam, Anantapur), Bihar (Patna), Gujarat (Surat, Ahmedabad, Mahesana, Surendranagar), Jharkhand (Jamshedpur), Karnataka (Mysore, Ramanagar), Kerala (Ernakulam), Madhya Pradesh (Bhopal, Raisen), Maharashtra (Ahmednagar, Pune, Raigad) New Delhi, Odisha (Bhubaneswar), Puducherry, Rajasthan (Jaipur, Jaiselmer, Banswara, Pali, Sojat, Jhunjhunu, Churu, Udaipur), Tamil Nadu (Noombal, Dindigul, Pudukkottai, Katpadi, Tiruchirappalli, Thoothukudi), Uttar Pradesh (Lucknow), West Bengal (Birbhum, North 24 Parganas) Andhra Pradesh(Hyderabad, Visakahapatnam), Bihar (Purnia), Chandigarh, Himachal Pradesh (Solan), Gujarat (Vadodara, Vyara, Kutch), Jharkhand (Sahibganj, Jamshedpur), Karnataka (Magadi), Kerala (Ernakulam), Madhya Pradesh (Khandwa), Maharashtra (Pune, Mumbai, Nagpur, Palghar), New Delhi, Odisha (Angul, Jajpur, Sambalpur), Punjab (Ludhiana), Rajasthan (Banswara, Jaipur, Chittorgarh), Tamil Nadu (Viluppuram, Kancheepuram, Chennai), Uttar Pradesh (Lucknow), West Bengal (Kolkata, Sultanpur) 97 S. No. CSR Project or activity identified 5 6 7 8 Awareness programmes (health and hygiene, road safety, career guidance, personality development) Community Health Centres (running multi-specialty center offering diagnostic services including family planning, gynecological, pediatric, immunization, chest & TB, ophthalmic consultation, dialysis services, HIV/AIDS awareness, detection, treatment, counseling services at free / nominal cost to the community) Health Camps (general, eye, dental, vaccinations) and health awareness Health Health Camps (general, eye, dental, vaccinations) and health awareness Health 9 Blood donation camps Health Sector in which the project is covered Projects or Programes 1. Local Area or other 2. Specify the state and district where projects or program was undertaken Overhead ( In Lakh) Amount outlay (budget) project or programe wise ( In Lakh) Direct expenditure on projects or programs ( In Lakh) Education Maharashtra (Pune), Kerala (Kannur) 3.50 0.18 0.41 Cumulative expenditure upto the reporting period ( In Lakh) Amount spent: direct or through implementing agency 0.59 Implementing agencies Health Maharashtra (Mumbai, Ahmednagar), Gujarat (Surat, Dang) 333.60 298.95 39.26 338.21 Direct 80.92 56.07 7.69 63.76 Direct 69.58 49.52 6.84 56.36 Implementing agencies 7.40 6.35 1.23 7.57 Implementing agencies Andhra Pradesh (Hyderabad, Visakahapatnam), Chhattisgarh (Raigarh), Gujarat (Vadodara, Ahmedabad), Jharkhand (East Singbhum, Jamshedpur), Karnataka (Bengaluru), Madhya Pradesh (Sidhi, Khandwa), Maharashtra (Mumbai, Nagpur, Ahmednagar), New Delhi (Faridabad), Orissa (Bhubaneswar), Rajasthan (Jaipur, Banswara, Churu, Udaipur), Tamil Nadu (Coimbatore, Vellore, Thoothukudi), Uttar Pradesh (Lucknow, Lalitpur), West Bengal (Kolkata) Andhra Pradesh (Hyderabad, Visakahapatnam), Chandigarh (Mohali), Gujarat (Surat), Karnataka (Bangalore), Kerala (Kochi), Madhya Pradesh (Bhopal), Maharashtra (Mumbai, Pune, Palghar), New Delhi, Orissa (Kansbhal), Rajasthan (Jaipur), Tamil Nadu (Chennai, Kancheepuram), West Bengal (Kolkata) Andhra Pradesh (Hyderabad, Visakahapatnam), Chandigarh (Chandigarh), Gujarat (Baroda), Jharkhand (Jamshedpur), Karnataka (Bangalore), Madhya Pradesh (Bhopal, Udaipura), Maharashtra (Ahmednagar, Pune, Thane, Nagpur), Orissa (Bhubaneswar), Tamil Nadu (Chennai, Coimbatore), Uttar Pradesh (Lucknow), West Bengal (Kolkata) 10 Infrastructure support to medical centres Health New Delhi, Maharashtra (Ahmednagar), Kerala (Kannur) 16.50 16.05 2.49 18.54 Direct 98 S. No. CSR Project or activity identified 11 Construction Skill Training Institute - CSTI Sector in which the project is covered Projects or Programes 1. Local Area or other 2. Specify the state and district where projects or program was undertaken Amount outlay (budget) project or programe wise ( In Lakh) Direct expenditure on projects or programs ( In Lakh) Overhead ( In Lakh) Cumulative expenditure upto the reporting period ( In Lakh) Amount spent: direct or through implementing agency Skill Building Andhara Pradesh (Hyderabad), 3456.12 2530.49 446.48 2976.97 Direct Gujarat (Ahmedabad), Maharashtra (Panvel), Karnataka (Bangalore), Orissa (Cuttack), Tamil Nadu (Kanchipuram, Pulicat), Delhi (Pilkhuwa), West Bengal (Kona, Srirampore) 12 Computer training for youth Skill Building Andhara Pradesh (Visakahapatnam), 29.00 28.16 4.06 Gujarat (Surat) 32.22 Implementing agencies 13 Vocational Training Skill Building Gujarat (Vadodara), Madhya 91.79 91.37 12.28 103.64 Implementing Pradesh (Malwa), Rajasthan (Jaipur), Tamil Nadu (Chennai, Nilgiri), Uttar Pradesh (Lucknow), West Bengal (Kolkata) Skill Building Andhra Pradesh (Hyderabad), 11.35 9.58 1.65 67.39 61.07 8.34 agencies 11.23 Implementing agencies 69.41 Implementing agencies 14 Women empowerment through vocational training 15 Skill building for differntly abled Persons with disabilities 16 Basic infrastructure support in the community (Water, Health, Sanitation, roads etc.) Community Development **Integrated Community Development Programme Community Development 17 18 Gujarat (Vadodara), Faridabad, Orissa (Kansbhal, Sundagarh) Andhra Pradesh (Visakahapatnam), Gujarat (Surat), Faridabad, Jharkhand (East Singbhum, Serikela, Kharswan), Karnataka (Bangalore), Kerala (Ernakulam), Madhya Pradesh (Khandwa), New Delhi (Faridabad), Orissa (Kansbhal, Puri), Rajasthan (Jaipur), Tamil Nadu (Chennai, Coimbatore), Uttar Pradesh (Lucknow), West Bengal (Kolkata) Andhra Pradesh (Visakahapatnam), Gujarat (Kutch, Vadodara, Surendranagar), Jharkhand (Jamshedpur), Karnataka (Benguluru), Maharashtra (Ahmednagar, Nagpur), Orissa (Jharsuguda), Rajasthan, Tamil Nadu (Dindigul, Thoothukudi), Uttarakhand (Rudra Prayag, Neemuch) Rajasthan (Rajsamand, Udaipur), Maharashtra (Ahmednagar), Tamil Nadu (Coimbatore) 134.42 114.99 15.35 130.34 Direct 651.00 643.98 83.46 727.44 Implementing agencies Development of gardens and maintenance of public spaces Environment Karnataka (Bangalore), Maharashtra (Ahmednagar, Nashik, Mumbai, Thane), Gujarat (Surat, Vadodara) 319.55 159.26 21.10 180.36 Direct 99 Amount outlay (budget) project or programe wise ( In Lakh) Direct expenditure on projects or programs ( In Lakh) Overhead ( In Lakh) Cumulative expenditure upto the reporting period ( In Lakh) Amount spent: direct or through implementing agency 75.78 62.67 8.55 71.22 Direct S. No. CSR Project or activity identified Sector in which the project is covered Projects or Programes 1. Local Area or other 2. Specify the state and district where projects or program was undertaken 19 Tree plantation and environment protection Environment Andhra Pradesh (Hyderabad,Visakahapatnam), Gujarat (Narmada, Kutch, Surendranagar, Jamnagar, Ahmedabad), Karnataka (Bangalore), Kerala (Ernakulam), Madhya Pradesh (Udaipura, Khandwa, Bhopal), Maharashtra (Mumbai, Ahmednagar, Palgarh, Pune, Nagpur), New Delhi, Orissa (Bhubaneswar), Rajasthan (Jaipur, Baran), Tamil Nadu (Kalpakkam, Chennai, Cuddalore), Uttar Pradesh (Lucknow) 20 Awareness programmes- environment, energy conservation,road safety Environment Jharkhand (East Singbhum, Serikela, Kharswan), Tamil Nadu (Chennai), Maharashtra (Nagpur) 1.15 1.04 0.54 1.58 Implementing agencies 21 Employee Volunteering Employee volunteering PAN India 47.31 45.58 6.33 51.90 Direct 22 Donation to Prime Minister’s Fund for Swachh Bharat Abhiyan 6000.00 6000.00 0 6000.00 Total 12504.32 11189.35 799.46 11988.81 100 Annexure ‘D’ to the Board Report A) Ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2015-16, the percentage increase in remuneration of each Director & Company Secretary during the financial year 2015-16 and comparison of the remuneration of each of the Key Managerial Personnel against the performance of the company Name of the Director/ KMP Designation Total Remuneration 2015-16 Ratio of remuneration of director to the median remuneration $ 1004.77 657.70 403.89 336.04 208.01 152.66 50.01 17.74 7.90 9.39 6.61 6.11 4.31 7.44 3.69 1.32 2.96 2.54 66.14 43.30 26.59 22.12 13.69 10.05 3.29 1.17 0.52 0.62 0.44 0.40 0.28 0.49 0.24 0.09 0.20 0.17 crore Percentage increase in Remuneration Comparison of the Remuneration of the KMP against the performance of the Company 142.14 # ## 72.44 32.12 27.26 * ** 15.56 16.98 2.33 (16.67) (9.68) 40.00 14.29 ### #### #### Profit before tax decreased by 0.2% and Profit after tax increased by 5.0% in the financial year 2015-16 The siting fees were 50,000/- for Board meetings and 25,000/- for Committee meetings during the year. The remuneration policy is given in Annexure ‘B’ of this Board Report. Please refer to page 84 of the Annual Report. A M Naik K Venkataramanan M V Kotwal S N Subrahmanyan R Shankar Raman Shailendra N Roy D K Sen M V Satish M M Chitale Subhodh Bhargava M Damodaran Vikram Singh Mehta Sushobhan Sarker^ Adil Zainulbhai Akhilesh Gupta Bahram N Vakil Swapan Dasgupta Sunita Sharma^ Group Executive Chairman Chief Executive Office & Managing Director Whole-time Director & President (Heavy Engineering) Deputy Managing Director & President Whole-time Director & Chief Financial Officer Whole-time Director & Senior Executive Vice President (Power, Heavy Engineering & Defence) Whole-time Director & Senior Executive Vice President (Infrastructure) Whole-time Director & Senior Executive Vice President (Buildings, Minerals & Metals) Independent Director Independent Director Independent Director Independent Director Nominee of Life Insurance Corporation of India Independent Director Independent Director Independent Director Non-Executive Director Nominee of Life Insurance Corporation of India Independent Director Independent Director Non-Executive Director Independent Director Company Secretary Thomas Mathew T Ajay Shankar Subramanian Sarma Naina Lal Kidwai N Hariharan $ 0.38 0.23 NIL NIL 0.98 Ratio of remuneration of director to the median remuneration is calculated on pro-rata basis for those directors who served for only part of the financial year 2015-16. Details not given as K Venkataramanan was a Director for only part of the financial year 2015-16 i.e. upto 30.09.2015. 5.77 3.57 NIL NIL N.A. @ @@ 9.66 # ## Details not given as M V Kotwal was a Director for only part of the financial year 2015-16 i.e. upto 26.08.2015. ### Details not given as Bahram N Vakil was a Director only from 16.03.2015. #### Details not given as Swapan Dasgupta and Sunita Sharma was a Director from 01.04.2015. @ @@ Details not given as Ajay Shankar was a Director for only part of the financial year 2015-16 i.e. w.e.f. 30.05.2015. ^ * ** Details not given as M V Satish was a Director for only part of the financial year 2015-16 i.e. w.e.f. 29.01.2016. Part of the remuneration has been paid to the financial institution he/she represents. Details not given as D K Sen was a Director for only part of the financial year 2015-16 i.e. w.e.f. 01.10.2015. Details not given as Thomas Mathew T was a Director for only part of the financial year 2015-16 i.e. w.e.f. 03.04.2015. 101 B) Percentage increase in the median remuneration of all employees in the financial year 2015-16: The median remuneration of employees of the Company during the financial year was 6.58 lakh. In the financial year, there was an increase of 9.35% in the median remuneration of employees; C) Number of permanent employees on the rolls of Company as on 31st March 2016 There were 43354 permanent employees on the rolls of Company as on March 31, 2016; D) Explanation on the relationship between average increase in remuneration and company performance The average increase in remuneration per employee was 7.2%.The Profit after Tax for the year 2015-16 increased by 5.0%.The average increase in remuneration per employee is in line with normal pay revisions and variable component forming integral part of remuneration which is linked to individual performance apart from Company’s performance. E) F) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company The remuneration of Key Managerial Personnel for the year increased by 93.6% and the Profit after Tax increased by 5.0%.The remuneration to Key Managerial Personnel is designed to be competitive in the market for highly qualified executives. Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies The market capitalisation as on 31st March, 2016 was 1,11,097 crore ( 1,59,791 crore as on 31st March, 2015). The price earnings ratio of the Company was 21.31 as at 31st March, 2016 and was 31.56 as at 31st March, 2015. The Company had made a public issue of fully convertible debentures in November 1989 @ 300 per debenture. These debentures were fully converted into 5 equity share of 10 each in tranches in 1992. Taking into consideration the adjustments for the demerger of the cement business in June 2004, bonus issues in 1:1 ratio in October 2006 and October 2008 and bonus issue in 1:2 ratio in July 2013, the closing share price of the Company at BSE Limited on 31st March 2016, at 1216.20 per equity share of face value 2 each is 243 times the price of the share issued in 1992. G) Average percentile increase already made in the salaries of the employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration Average percentage increase made in the salaries of employees other than the managerial personnel for the year 2015-16 was 7.5% whereas there is increase in the managerial remuneration by 93.6% because a substantial portion of managerial remuneration is linked to Company performance during the financial year 2015-16 and also includes perquisite value of employee stock options exercised during the year. As stated above, the Profit after Tax for the year 2015-16 increased by 5.0% directly impacting the variable component of managerial remuneration. H) The key parameters for any variable component of remuneration availed by the directors The key parameters for the variable component of remuneration availed by the Key Management Personnel are (a) profit after tax of the Company and (b) profit after tax of the respective business divisions (including subsidiary and associate companies of those business divisions) and (c) leadership initiatives undertaken during the year. The variable component of remuneration also includes perquisite value of employee stock options granted by the company (including subsidiary companies). These parameters are approved by the Board of Directors based on the recommendations of the Nomination & Remuneration Committee and resolution passed by Annual General Meeting as per the Remuneration Policy for Key Management Personnel. The variable component of remuneration of Key Management Personnel is subject to maximum limit approved by the shareholders in the Annual General Meeting. The non-executive directors are paid remuneration by way of commission & sitting fees. The Company pays sitting fees of 50,000 per meeting of the Board and 25,000 per meeting of the Committee to the non-executive directors 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 198 of the Companies Act, 2013). The commission to non-executive directors is distributed broadly on the basis of their attendance, contribution at the Board, the Committee meetings,Chairmanship of Committees and participation in meetings of the business divisions. In the case of nominees of Financial Institutions,the commission is paid to the Financial Institutions. 102 Annexure ‘E’ to the Board Report To, The Members, Larsen & Toubro Limited CIN L99999MH1946PLC004768 L& T House, Ballard Estate, Mumbai –400 001. Our Secretarial Audit Report of even date is to be read along with this letter. Management’s Responsibility 1. It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. Auditor’s Responsibility 2. Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances. 3. We believe that audit evidence and information obtained from the Company’s management is adequate and appropriate for us to provide a basis for our opinion. 4. Wherever required, we have obtained the management’s representation about the compliance of laws, rules and regulations and happening of events etc. Disclaimer 5. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. For S. N. ANANTHASUBRAMANIAN & CO. Company Secretaries Firm Registration No.P1991MH040400 S. N. ANANTHASUBRAMANIAN Partner C.P No: 1774 Date: May 12, 2016 Place: Thane 103 Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016 [Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Larsen & Toubro Limited CIN: L99999MH1946PLC004768 L& T House, Ballard Estate, Mumbai –400 001 We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Larsen & Toubro Limited (hereinafter called ‘the Company’). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2016, complied with the statutory provisions listed hereunder and also that the Company has proper board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2016 according to the provisions of: i. The Companies Act, 2013 (the Act) and the rules made thereunder and the applicable provisions of Companies Act, 1956; ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 upto 14th May 2015/Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (effective 15th May 2015); c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 - Not Applicable as the Company has not issued further capital during the financial year under review; d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review; g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not applicable as the Company has not delisted/proposed to delist its equity shares from any Stock Exchange during the financial year under review; 104 h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable as the Company has not bought back/proposed to buy-back any of its securities during the financial year under review. vi. The Company has informed that there are no laws, which are specifically applicable to the Company. We have also examined compliance with the applicable provisions of the following: (i) Secretarial Standards with regard to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India and made effective 1st July 2015; (ii) The Listing Agreements entered into by the Company with National Stock Exchange of India Limited and BSE Limited and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 made effective 1st December 2015. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. We further report that: - (cid:3)(cid:122) The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. (cid:3)(cid:122) Unanimous decision is carried through hence there are no dissenting members’ views to be captured and recorded as part of the minutes. We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines: - (cid:3)(cid:122) As informed, the Company has responded to notices for demands, claims, penalties etc., levied by various statutory/regulatory authorities and initiated actions for corrective measures, wherever found necessary. We further report that the Company has on 24th September 2015, issued and allotted 10,000 Unsecured Non-Convertible Debentures aggregating to 1000 crore. For S. N. ANANTHASUBRAMANIAN & CO. Company Secretaries Firm Registration No.P1991MH040400 S. N. ANANTHASUBRAMANIAN Partner C.P No: 1774 (cid:3)(cid:122) Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent atleast seven days in advance, and Date: May 12, 2016 Place: Thane 105 Annexure ‘F’ to the Board Report FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on March 31, 2016 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION AND OTHER DETAILS: i) CIN ii) Registration Date iii) Name of the Company iv) Category v) vi) Sub-Category of the Company Address of the Registered office and contact details vii) Whether listed company viii) Name, Address and Contact details of Registrar and Transfer Agent, if any L99999MH1946PLC004768 February 7, 1946 LARSEN & TOUBRO LIMITED PUBLIC LIMITED COMPANY L&T HOUSE, N. M. MARG, BALLARD ESTATE, MUMBAI - 400 001 TEL : 022-6752 5656 FAX: 022-6752 5893 LISTED 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, SAKI NAKA, MUMBAI - 400 072. TEL : 022-6772 0300/6772 0400 FAX: 022-2859 1568/2850 08927 II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- Sl. No. 1 2 3 Name and Description of main products/ services Construction of Buildings Construction of Roads and Railways Construction of Utility Projects NIC Code of the Product/ service 410 421 422 III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES – % to total turnover of the company S. No Name of the Address of the Company CIN/GLN U74899DL1995PLC070704 Holding/ Subsidiary/ Associate SUBSIDIARY % of Shares held Applicable Section 99.90 Section 2(87)(ii) U70101TN2008PTC068877 SUBSIDIARY 100.00 Section 2(87)(ii) U67120DL2001PLC199088 SUBSIDIARY 66.71 Section 2(87)(ii) U74999MH1962PLC012315 SUBSIDIARY 100.00 Section 2(87)(ii) 1 2 3 4 Company BHILAI POWER SUPPLY COMPANY LIMITED CHENNAI VISION DEVELOPERS PRIVATE LIMITED 9TH FLOOR, AMBADEEP BUILDING, 14, KASTURBA GANDHI MARG, CONNAUGHT PLACE, NEW DELHI-110001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 CONSUMER FINANCIAL SERVICES LIMITED UNIT NO.505 & 506, DLF TOWER B, DISTRICT CENTRE, JASOLA, NEW DELHI-110025 EWAC ALLOYS LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 106 S. No Name of the Address of the Company CIN/GLN 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Company FAMILY CREDIT LIMITED TECHNOPOLIS, 7TH FLOOR, A- WING, PLOT NO. - 4, BLOCK - BP, SECTOR - V, SALT LAKE, KOLKATA-700091 GDA TECHNOLOGIES LIMITED NO.9-A, CHINTHAMANI NAGAR, K.K. PUDUR, COIMBATORE-641038 HENIKWON CORPORATION SDN. BHD 2A-03-2, LORONG BATU NILAM 4A, BANDAR BUKIT TINGGI, 41200, KLANG, SELANGOR, MALAYSIA HI-TECH ROCK PRODUCTS & AGGREGATE LIMITED MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 KANA CONTROLS GENERAL TRADING & CONTRACTING COMPANY WLL KESUN IRON AND STEEL COMPANY PRIVATE LIMITED KUDGI TRANSMISSION LIMITED L&T - GULF PRIVATE LIMITED L&T ACCESS DISTRIBUTION SERVICES LIMITED L&T AHMEDABAD- MALIYA TOLLWAY LIMITED L&T ARUNACHAL HYDROPOWER LIMITED L&T AVIATION SERVICES PRIVATE LIMITED L&T BPP TOLLWAY LIMITED L&T CAPITAL COMPANY LIMITED L&T CAPITAL MARKETS LIMITED L&T CASSIDIAN LIMITED L&T CHENNAI TADA TOLLWAYS LIMITED OFFICE NO. 14, 5TH FLOOR, AL-FARWANIYA, BLOCK NO. 44, BLDG. NO. 6, GHASHAM FAHED AL-BASMAN, KUWAIT L&T ENERGY CENTRE, NEAR CHHANI JAKAT NAKA, VADODARA, GUJARAT - 390002 BUILDING NO. 3, 2ND FLOOR, SUDEEP PLAZA, MLU SECTOR-II, POCKET 4, DWARKA, NEW DELHI - 110075 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 Holding/ Subsidiary/ Associate % of Shares held Applicable Section U65910WB1993FLC060810 SUBSIDIARY 66.71 Section 2(87)(ii) U72200TZ1997PLC008145 SUBSIDIARY 94.96 Section 2(87)(ii) 161535-W SUBSIDIARY 100.00 Section 2(87)(ii) U14290TN2008PLC065900 SUBSIDIARY 100.00 Section 2(87)(ii) 10292 SUBSIDIARY 49.00 Section 2(87)(i) U27100GJ2009PTC055901 SUBSIDIARY 95.00 Section 2(87)(ii) U40106DL2012GOI245339 SUBSIDIARY 97.45 Section 2(87)(ii) U74140MH2008PTC177765 SUBSIDIARY 50.0002 Section 2(87)(ii) U65100TN2011PLC083348 SUBSIDIARY 66.71 Section 2(87)(ii) U45203TN2008PLC069211 SUBSIDIARY 97.45 Section 2(87)(ii) U40300MH2010PLC204778 SUBSIDIARY 100.00 Section 2(87)(ii) U62100MH2009PTC196917 SUBSIDIARY 100.00 Section 2(87)(ii) U45203TN2011PLC080786 SUBSIDIARY 97.45 Section 2(87)(ii) U67190MH2000PLC125653 SUBSIDIARY 100.00 Section 2(87)(ii) U67190MH2013PLC240261 SUBSIDIARY 66.71 Section 2(87)(ii) U29253MH2011PLC216258 SUBSIDIARY 74.00 Section 2(87)(ii) U45309TN2008PLC066938 SUBSIDIARY 97.45 Section 2(87)(ii) 107 S. No Name of the Address of the Company CIN/GLN Holding/ Subsidiary/ Associate % of Shares held Applicable Section L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 U29119MH1997PLC109700 SUBSIDIARY 100.00 Section 2(87)(ii) U28920MH1952PLC008893 SUBSIDIARY 100.00 Section 2(87)(ii) U45203TN2011PLC083661 SUBSIDIARY 97.45 Section 2(87)(ii) U45203TN2010PLC075491 SUBSIDIARY 97.45 Section 2(87)(ii) WAREHOUSE NO. FZS2ABO5 262158, JEBEL ALI FREE ZONE, DUBAI, UNITED ARAB EMIRATES 107673 SUBSIDIARY 100.00 Section 2(87)(ii) Company L&T CONSTRUCTION EQUIPMENT LIMITED L&T CUTTING TOOLS LIMITED L&T DECCAN TOLLWAYS LIMITED L&T DEVIHALLI HASSAN TOLLWAY LIMITED L&T ELECTRICAL & AUTOMATION FZE L&T ELECTRICAL AND AUTOMATION SAUDI ARABIA COMPANY LIMITED LLC L&T ELECTRICALS AND AUTOMATION LIMITED L&T FINANCE HOLDINGS LIMITED L&T FINANCE LIMITED L&T FINCORP LIMITED MH-4, PLOT NO. 17+19, IIND INDUSTRIAL CITY, DAMMAM, P.O. BOX 77186, AL KHOBAR 31952, KINGDOM OF SAUDI ARABIA L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T GENERAL INSURANCE COMPANY LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HALOL- SHAMLAJI TOLLWAY LIMITED L&T HIMACHAL HYDROPOWER LIMITED L&T HOUSING FINANCE LIMITED L&T HOWDEN PRIVATE LIMITED MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 RAMA COTTAGE, KANLOG, SHIMLA-171001 UNIT NO.505 & 506, DLF TOWER B, DISTRICT CENTRE, JASOLA, NEW DELHI-110025 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HYDROCARBON ENGINEERING LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T IDPL TRUSTEE MANAGER PTE. LTD. 8 CROSS STREET, #10-00, PWC BUILDING, SINGAPRE (048424) L&T INFORMATION TECHNOLOGY SERVICES (SHANGHAI) CO., LTD. ROOM 1100, BUILDING 2, NO.1388, XINGXIAN ROAD, JIADING DISTRICT, SHANGHAI 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 108 2050051589 SUBSIDIARY 75.00 Section 2(87)(ii) U31501MH2007PLC176667 SUBSIDIARY 100.00 Section 2(87)(ii) L67120MH2008PLC181833 SUBSIDIARY 66.71 Section 2(87)(ii) U65990MH1994PLC083147 SUBSIDIARY 66.71 Section 2(87)(ii) U65910MH1997PLC108179 SUBSIDIARY 66.71 Section 2(87)(ii) U66030MH2007PLC177117 SUBSIDIARY 100.00 Section 2(87)(ii) U45203TN2008PLC069210 SUBSIDIARY 97.45 Section 2(87)(ii) U40102HP2010PLC031697 SUBSIDIARY 100.00 Section 2(87)(ii) U45200DL1994PLC198639 SUBSIDIARY 66.71 Section 2(87)(ii) U31401MH2010PTC204403 SUBSIDIARY 50.10 Section 2(87)(ii) U11200MH2009PLC191426 SUBSIDIARY 100.00 Section 2(87)(ii) 201326418G SUBSIDIARY 97.45 Section 2(87)(ii) 310000400714060 (JIADING) SUBSIDIARY 94.96 Section 2(87)(ii) 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 S. No Name of the Address of the Company CIN/GLN Company L&T INFOTECH FINANCIAL SERVICES TECHNOLOGIES INC 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA 770556-5 Holding/ Subsidiary/ Associate SUBSIDIARY % of Shares held Applicable Section 94.96 Section 2(87)(ii) L&T INFRA DEBT FUND LIMITED 3B, LAXMI TOWERS, C - 25, ‘G’ BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 L&T INFRA INVESTMENT PARTNERS ADVISORY PRIVATE LIMITED 3B, LAXMI TOWERS, C - 25, ‘G’ BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 L&T INFRA INVESTMENT PARTNERS TRUSTEE PRIVATE LIMITED 3B, LAXMI TOWERS, C - 25, ‘G’ BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 L&T INFRASTRUCTURE DEVELOPMENT PROJECTS LANKA (PRIVATE) LIMITED L&T INFRASTRUCTURE DEVELOPMENT PROJECTS LIMITED L&T INFRASTRUCTURE ENGINEERING LIMITED NO.5 – 4/1, 19TH LANE, COLOMBO - 03, SRI LANKA MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T INFRASTRUCTURE FINANCE COMPANY LIMITED MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T INTERSTATE ROAD CORRIDOR LIMITED MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T INVESTMENT MANAGEMENT LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T KOBELCO MACHINERY PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T KRISHNAGIRI THOPUR TOLL ROAD LIMITED L&T KRISHNAGIRI WALAJAHPET TOLLWAY LIMITED MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T METRO RAIL (HYDERABAD) LIMITED 1-Q4-A1, CYBER TOWER, HITEC CITY, MADHAPUR, HYDERABAD, ANDHRA PRADESH-500081 L&T MODULAR FABRICATION YARD LLC PO BOX 236, P.C 322, FALAZ AL QABAIL, SOHAR, SULTANATE OF OMAN L&T MUTUAL FUND TRUSTEE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U67100MH2013PLC241104 SUBSIDIARY 66.71 Section 2(87)(ii) U67190MH2011PTC218046 SUBSIDIARY 66.71 Section 2(87)(ii) U65900MH2011PTC220896 SUBSIDIARY 66.71 Section 2(87)(ii) N(PVS)45877 SUBSIDIARY 93.44 Section 2(87)(ii) U65993TN2001PLC046691 SUBSIDIARY 97.45 Section 2(87)(ii) U74140TN1998PLC039864 SUBSIDIARY 100.00 Section 2(87)(ii) U67190TN2006PLC059527 SUBSIDIARY 66.71 Section 2(87)(ii) U45203TN2006PLC058735 SUBSIDIARY 97.45 Section 2(87)(ii) U65991MH1996PLC229572 SUBSIDIARY 66.71 Section 2(87)(ii) U29253MH2010PTC210325 SUBSIDIARY 51.00 Section 2(87)(ii) U45203TN2005PLC057930 SUBSIDIARY 97.45 Section 2(87)(ii) U45203TN2010PLC075446 SUBSIDIARY 97.45 Section 2(87)(ii) U45300AP2010PLC070121 SUBSIDIARY 97.48 Section 2(87)(ii) 1001910 SUBSIDIARY 65.00 Section 2(87)(ii) U65993MH1996PLC211198 SUBSIDIARY 66.71 Section 2(87)(ii) 109 S. No Name of the Address of the Company CIN/GLN Company L&T OVERSEAS PROJECTS NIGERIA LIMITED 252E, MURI OKUNOLA STREET, VICTORIA ISLAND, LAGOS, NIGERIA 601723 Holding/ Subsidiary/ Associate SUBSIDIARY % of Shares held Applicable Section 100.00 Section 2(87)(ii) 56 57 58 59 L&T PANIPAT ELEVATED CORRIDOR LIMITED L&T PORT KACHCHIGARH LIMITED L&T POWER DEVELOPMENT LIMITED 60 L&T POWER LIMITED 61 L&T RAJKOT- VADINAR TOLLWAY LIMITED 62 L&T REALTY FZE 63 L&T REALTY LIMITED 64 65 66 67 68 69 L&T SAMAKHIALI GANDHIDHAM TOLLWAY LIMITED L&T SAMBALPUR - ROURKELA TOLLWAY LIMITED L&T SAPURA OFFSHORE PRIVATE LIMITED L&T SAPURA SHIPPING PRIVATE LIMITED L&T SEAWOODS LIMITED L&T SHIPBUILDING LIMITED 70 L&T SOLAR LIMITED 71 L&T SOUTH CITY PROJECTS LIMITED 110 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 EXECUTIVE SUITE, P.O.BOX 121576, SAIF ZONE,SHARJAH, U.A.E. L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 GROUND FLOOR, TC-1 BUILDING, L&T CONSTRUCTION CAMPUS, MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 U45203TN2005PLC056999 SUBSIDIARY 97.45 Section 2(87)(ii) U45203TN2008PLC067551 SUBSIDIARY 97.45 Section 2(87)(ii) U40101MH2007PLC174071 SUBSIDIARY 100.00 Section 2(87)(ii) U40100MH2006PLC160413 SUBSIDIARY 100.00 Section 2(87)(ii) U45203TN2008PLC069184 SUBSIDIARY 97.45 Section 2(87)(ii) 02 - 01 - 05714 SUBSIDIARY 100.00 Section 2(87)(ii) U74200MH2007PLC176358 SUBSIDIARY 100.00 Section 2(87)(ii) U45203TN2010PLC074501 SUBSIDIARY 97.45 Section 2(87)(ii) U45206TN2013PLC093395 SUBSIDIARY 97.45 Section 2(87)(ii) U11200TN2010PTC077214 SUBSIDIARY 60.00 Section 2(87)(ii) U61100TN2010PTC077217 SUBSIDIARY 60.00 Section 2(87)(ii) U45203MH2008PLC180029 SUBSIDIARY 100.00 Section 2(87)(ii) U74900TN2007PLC065356 SUBSIDIARY 97.00 Section 2(87)(ii) U40109MH2010PLC205058 SUBSIDIARY 100.00 Section 2(87)(ii) U70101TN2006PLC058866 SUBSIDIARY 51.00 Section 2(87)(ii) S. No Name of the Address of the Company CIN/GLN 72 73 74 75 76 77 78 79 Company L&T SPECIAL STEELS AND HEAVY FORGINGS PRIVATE LIMITED L&T TECHNOLOGY SERVICES LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T TECHNOLOGY SERVICES LLC 200, WEST ADAMS STREET, CHICAGO, ILLINOIS-60606 L&T THALES TECHNOLOGY SERVICES PRIVATE LIMITED L&T TRANSPORTATION INFRASTRUCTURE LIMITED RR V TOWER, 6TH FLOOR, 33A, DEVELOPED PLOTS, SIDCO INDUSTRIAL ESTATE, GUINDY, CHENNAI-600032 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T TRUSTEE COMPANY PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T UTTARANCHAL HYDROPOWER LIMITED VILLAGE BEDUBAGAR, P.O. AUGUSTMUNI, RUDRAPRAYAG, UTTARAKHAND - 246421 L&T VADODARA BHARUCH TOLLWAYS LIMITED MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 80 L&T VALVES LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 81 82 83 84 85 86 87 88 L&T VISION VENTURES LIMITED L&T VRINDAVAN PROPERTIES LIMITED L&T WESTERN ANDHRA TOLLWAYS LIMITED L&T WESTERN INDIA TOLLBRIDGE LIMITED MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 L&T-MHPS BOILERS PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T-MHPS TURBINE GENERATORS PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T-SARGENT & LUNDY LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T-VALDEL ENGINEERING LIMITED NO 19, PRIMROSE ROAD, BANGALORE, KARNATAKA 560025 Holding/ Subsidiary/ Associate % of Shares held Applicable Section U27109MH2009PTC193699 SUBSIDIARY 74.00 Section 2(87)(ii) U72900MH2012PLC232169 SUBSIDIARY 100.00 Section 2(87)(ii) 0479598-9 SUBSIDIARY 100.00 Section 2(87)(ii) U72200TN2006PTC059421 SUBSIDIARY 74.00 Section 2(87)(ii) U45203TN1997PLC039102 SUBSIDIARY 98.12 Section 2(87)(ii) U74990MH2009PTC193936 SUBSIDIARY 100.00 Section 2(87)(ii) U31401UR2006PLC032329 SUBSIDIARY 100.00 Section 2(87)(ii) U45203TN2005PLC058417 SUBSIDIARY 97.45 Section 2(87)(ii) U74999MH1961PLC012188 SUBSIDIARY 100.00 Section 2(87)(ii) U74210TN2006PLC061845 SUBSIDIARY 68.00 Section 2(87)(ii) U70200TN2011PLC081100 SUBSIDIARY 66.71 Section 2(87)(ii) U45203TN2005PLC057931 SUBSIDIARY 97.45 Section 2(87)(ii) U45203TN1999PLC042518 SUBSIDIARY 97.45 Section 2(87)(ii) U29119MH2006PTC165102 SUBSIDIARY 51.00 Section 2(87)(ii) U31101MH2006PTC166541 SUBSIDIARY 51.00 Section 2(87)(ii) U74210MH1995PLC088099 SUBSIDIARY 50.0001 Section 2(87)(ii) U74210KA2004PLC035094 SUBSIDIARY 100.00 Section 2(87)(ii) 111 S. No Name of the Address of the Company CIN/GLN 390357-T Holding/ Subsidiary/ Associate SUBSIDIARY % of Shares held Applicable Section 30.00 Section 2(87)(i) Company LARSEN & TOUBRO (EAST ASIA) SDN. BHD LARSEN & TOUBRO ATCO SAUDIA LLC SUITE 702, 7TH FLOOR, WISMA HANGSAM, JALAN HANG LEKIR, 50000 KUALA LUMPUR, MALAYSIA AL-TURKI BUILDING, KING KHALED STREET, P.O. BOX 91, DAMMAM LARSEN & TOUBRO ELECTROMECH LLC P.O. BOX 1999, RUWI, POSTAL CODE 112, MUSCAT LARSEN & TOUBRO HEAVY ENGINEERING LLC P.O. BOX 281, POSTAL CODE 325, W LIWA, SULTANATE OF OMAN LARSEN & TOUBRO HYDROCARBON INTERNATIONAL LIMITED LLC P.O. BOX 6391, AL KHOBAR 34423, KINGDOM OF SAUDI ARABIA LARSEN & TOUBRO INFOTECH CANADA LIMITED 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA LARSEN & TOUBRO INFOTECH GMBH LARSEN & TOUBRO INFOTECH LIMITED EURO-ASIA BUSINESS CENTRE, MESSE-ALLEE 2, D-04356, LEIPZIG, GERMANY L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 89 90 91 92 93 94 95 96 97 98 99 2050055625 SUBSIDIARY 75.00 Section 2(87)(ii) 1/04445/1 1042928 SUBSIDIARY 65.00 Section 2(87)(ii) SUBSIDIARY 70.00 Section 2(87)(ii) 2051053464 SUBSIDIARY 100.00 Section 2(87)(ii) 1415026 SUBSIDIARY 94.96 Section 2(87)(ii) HRB15958 SUBSIDIARY 94.96 Section 2(87)(ii) U72900MH1996PLC104693 SUBSIDIARY 94.96 Section 2(87)(ii) LARSEN & TOUBRO INFOTECH LLC 1220, N. MARKET ST., SUITE 806, WILMINGTON, DE 19801, USA 270596763 SUBSIDIARY 94.96 Section 2(87)(ii) LARSEN & TOUBRO INTERNATIONAL FZE OFFICE LOB 16 G 08, POST BOX 41558, HAMRIYAH FREE ZONE, SHARJAH, UNITED ARAB EMIRATES 0067 SUBSIDIARY 100.00 Section 2(87)(ii) PLOT NO. 3, BUILDING NO.1, SHARQ, KUWAIT 117668 SUBSIDIARY 49.00 Section 2(87)(i) LARSEN & TOUBRO KUWAIT CONSTRUCTION GENERAL CONTRACTING COMPANY, WITH LIMITED LIABILITY 100 LARSEN & TOUBRO LLC 101 102 103 LARSEN & TOUBRO OMAN LLC LARSEN & TOUBRO QATAR LLC LARSEN & TOUBRO READYMIX AND ASPHALT CONCRETE INDUSTRIES LLC 113, BARKSDALE PROFESSIONAL CENTRE, NEWARK CITY, COUNTRY OF NEW CASTLE, G56 ZIP CODE-19711, U.S.A P.O. BOX 1127, RUWI, POSTAL CODE 112, SULTANATE OF OMAN P.O. BOX 24399, SH. THAMOUR BLDG., MEZZANINE FLOOR, AL-HANDASA AREA, NEAR JAIDAH FLYOVER, B RING ROAD, DOHA, QATAR 6 DEL.C 18-101 SUBSIDIARY 100.00 Section 2(87)(ii) 1/40304/4 SUBSIDIARY 65.00 Section 2(87)(ii) 27454 SUBSIDIARY 49.00 Section 2(87)(i) JEBEL ALI INDUSTRIAL AREA, JEBEL ALI, DUBAI 583119 SUBSIDIARY 49.00 Section 2(87)(i) 104 LARSEN & TOUBRO SAUDI ARABIA LLC P.O. BOX NO.20, RIYADH 11351, KINGDOM OF SAUDI ARABIA 11351 1010154437 SUBSIDIARY 100.00 Section 2(87)(ii) 112 S. No Name of the Address of the Company CIN/GLN Company 2010/018159/07 Holding/ Subsidiary/ Associate SUBSIDIARY % of Shares held Applicable Section 72.50 Section 2(87)(ii) 105 106 107 108 109 110 112 113 114 115 116 117 LARSEN & TOUBRO TANDD SA (PTY) LIMITED 2ND FLOOR, 4 PENCARROW CRESCENT, LA LUCIA RIDGE OFFICE ESTATE, SOUTH AFRICA 4019 LARSEN AND TOUBRO INFOTECH SOUTH AFRICA (PTY) LIMITED 6TH FLOOR, 119 HERTZOG BOULEVARD, FORESHORE, CAPETOWN, SOUTH AFRICA 8001 LARSEN TOUBRO ARABIA LLC MUDIT CEMENT PRIVATE LIMITED NABHA POWER LIMITED PNG TOLLWAY LIMITED 111 PT TAMCO INDONESIA PT. LARSEN & TOUBRO HYDROCARBON ENGINEERING INDONESIA ALMADA TOWER, PRINCE TURKI STREET, AL KHOBAR, SAUDI ARABIA UNIT NO.505 & 506, DLF TOWER B, DISTRICT CENTRE, JASOLA, NEW DELHI-110025 PO BOX NO-28, NEAR VILLAGE NALASH, RAJPURA, PATIALA, PUNJAB-140401 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 JALAN RAYA PASAR SERANG, NO. 15, KANDANG RODA, CIKARANG BEKASI 17330, INDONESIA THE CITY TOWER, 12TH FLOOR, UNIT 1-N, J1.MH., THAMRIN NO.81, CENTRAL JAKARTA, INDONESIA 10310 RAYKAL ALUMINIUM COMPANY PRIVATE LIMITED ANNAPURNA COMPLEX, 559, LEWIS ROAD, BHUBANESWAR, ODIHSA-751014 SERVOWATCH SYSTEMS LIMITED THE WOODROPE BUILDING, WOODROLFE ROAD, TOLLESBURY, MALDONESSEX CM9 8SE, UNITED KINGDOM SPECTRUM INFOTECH PRIVATE LIMITED L&T HOUSE, 38, CUBBON ROAD, BANGALORE, KARNATAKA-560001 TAMCO ELECTRICAL INDUSTRIES AUSTRALIA PTY LTD 31, KITCHEN ROAD, DANDENONG, VICTORIA 3175, AUSTRALIA TAMCO SWITCHGEAR (MALAYSIA) SDN BHD 118 THALEST LIMITED 119 L&T GLOBAL HOLDINGS LIMITED UNIT C508, BLOCK C, KELANA SQUARE, JALAN SS7/26, KELANA JAYA 47301, PETALING JAYA SELANGOR DAR UL EHSAN, MALAYSIA ENDEAVOUR HOUSE, BENTALLS INDUSTRIAL ESTATE, HOLLOWAY ROAD, MALDON, ESSEX, C9 4ER, UNITED KINGDOM UNIT 7, LEVEL 3, GATE PRECINCT, BUILDING 2, DUBAI INTERNATIONAL FINANCIAL CENTRE, P.O BOX 63671, DUBAI, UAE 2011/007226/07 SUBSIDIARY 71.12 Section 2(87)(ii) 2051049523 SUBSIDIARY 75.00 Section 2(87)(ii) U26942DL1990PTC041941 SUBSIDIARY 66.71 Section 2(87)(ii) U40102PB2007PLC031039 SUBSIDIARY 100.00 Section 2(87)(ii) U45203TN2009PLC070741 SUBSIDIARY 72.77 Section 2(87)(ii) C2-18.177.HT.01.01.HT 94 SUBSIDIARY 100.00 Section 2(87)(ii) AHU-0110258.AH.01.09 SUBSIDIARY 95.00 Section 2(87)(ii) U13203OR1999PTC005673 SUBSIDIARY 75.50 Section 2(87)(ii) 2159287 SUBSIDIARY 100.00 Section 2(87)(ii) U72200KA1995PTC018112 SUBSIDIARY 100.00 Section 2(87)(ii) ACN006140512 SUBSIDIARY 100.00 Section 2(87)(ii) 775268-H SUBSIDIARY 100.00 Section 2(87)(ii) 01201246 SUBSIDIARY 100.00 Section 2(87)(ii) CL2106 SUBSIDIARY 100.00 Section 2(87)(ii) 113 S. No Name of the Address of the Company CIN/GLN Holding/ Subsidiary/ Associate % of Shares held Applicable Section Company MARINE INFRASTRUCTURE DEVELOPER PRIVATE LIMITED L&T INFORMATION TECHNOLOGY SPAIN SOCIEDAD LIMITADA L&T NATURAL RESOURCES LIMITED L&T POWERGEN LIMITED L&T INFOTECH AUSTRIA GMBH LLC FEEDBACK INFRAPRIVATE LIMITED GROUND FLOOR, TC 1 BUILDING, L&T CONSTRUCTION COMPLEX, MOUNT POONAMALLE ROAD, MANAPAKKAM, CHENNAI - 600089 C/JOSE ABASCAL, 56 2ND FLOOR, MADRID L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 c/o, OBERHAMMER, RECHTSANWALTE GMBH, KARLSPLATZ, 3/1, VIENNA 311, 3RD FLOOR,VARDHAMAN PLAZA, POCKET 7, PLOT NO. 6, SECTOR 12, DWARKA , NEW DELHI -110078 GUJARAT LEATHER INDUSTRIES LIMITED NO 3001, GIDC INDUSTRIAL ESTATE, ANKLESHWAR, GUJARAT INDIRAN ENGINEERING PROJECTS AND SYSTEMS KISH (LLC) POST BOX 1267, NEHA APARTMENT, BAZAAR-E- DANOOS, KISH ISLAND, IRAN INTERNATIONAL SEAPORTS (HALDIA) PRIVATE LIMITED FLAT NO. 27, 5TH FLOOR, KOHINOOR BUILDING, 105, PARK STREET, KOLKATA 700016 U74999TN2016PTC103769 SUBSIDIARY 100.00 Section 2(87)(ii) B87472072 SUBSIDIARY 94.96 Section 2(87)(ii) U74900MH2008PLC182601 SUBSIDIARY 100.00 Section 2(87)(ii) U40103MH2010PLC209313 SUBSIDIARY 100.00 Section 2(87)(ii) FN435491D SUBSIDIARY 94.96 Section 2(87)(ii) U74899DL1990PTC040630 ASSOCIATE 16.89 Section 2(6) U18104GJ1978SGC003134 ASSOCIATE 50.00 Section 2(6) 3744 ASSOCIATE 50.00 Section 2(6) U45205WB1999PTC090733 ASSOCIATE 21.74 Section 2(6) L&T CAMP FACILITIES LLC P. O. BOX 44357, DUBAI, UNITED ARAB EMIRATES 600640 ASSOCIATE 49.00 Section 2(6) L&T-CHIYODA LIMITED LARSEN & TOUBRO QATAR & HBK CONTRACTING LLC MAGTORQ PRIVATE LIMITED GRAMEEN CAPITAL INDIA PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U28920MH1994PLC083035 ASSOCIATE 50.00 Section 2(6) P. O. BOX 1362, DOHA, QATAR 28634 ASSOCIATE 24.50 Section 2(6) NO. 58-C, SIPCOT INDUSTRIAL COMPLEX, HOSUR, TAMIL NADU 635126 402, 36 TURNER ROAD,BANDRA WEST, MUMBAI - 400050 U02520TZ1989PTC002458 ASSOCIATE 42.85 Section 2(6) U65923MH2007PTC168721 ASSOCIATE 23.87 Section 2(6) 120 121 122 123 124 1 2 3 4 5 6 7 8 9 114 IV. SHARE HOLDING PATTERN i) Category-wise Share Holding Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year A. Promoters (1) Indian a) Individual/HUF b) Central Govt c) State Govt (s) d) Bodies Corp. e) Banks/FI f) Any Other…. Sub-total (A)(1):- (2) Foreign a) NRIs -Individuals b) Other –Individuals c) Bodies Corp. d) Banks/FI e) Any Other…. Sub-total (A)(2):- Total shareholding of Promoter (A) =(A)(1)+(A)(2) B. Public Shareholding 1. Institutions 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 a) Mutual Funds 54,399,863 5,310 54,405,173 5.85 76,771,070 3,738 76,774,808 b) Banks/FI 237,695,842 43,205 237,739,047 25.58 237,142,389 41,177 237,183,566 c) Central Govt d) State Govt(s) e) Venture Capital Funds 609,148 0 0 f) Insurance Companies 42,708,526 0 0 0 0 609,148 0 0 42,708,526 0.07 0.00 0.00 4.59 1,314,715 0 0 41,071,676 0 0 0 0 1,314,715 0 0 41,071,676 g) FIIs 156,132,914 40,068 156,172,982 16.80 101,334,166 40,068 101,374,234 h) Foreign Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.24 25.46 0.14 0.00 0.00 4.41 10.88 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.17 -0.43 0.08 0.00 0.00 -0.19 -5.92 0.00 Sub-total (B)(1):- 491,546,293 88,583 491,634,876 52.89 457,634,016 84,983 457,718,999 49.14 -3.75 2. Non-Institutions a) Bodies Corp. i) Indian ii) Overseas b) Individuals i) Individual shareholders holding nominal share capital upto 1 lakh 74,346,035 304,497 74,650,532 0 3,432 3,432 8.03 0.00 65,995,102 305,763 66,300,865 0 3,432 3,432 7.12 0.00 -0.91 0.00 163,550,672 19,885,971 183,436,643 19.73 182,938,555 18,745,440 201,683,995 21.65 1.92 115 Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year 13,911,234 0 13,911,234 1.50 11,172,991 0 11,172,991 1.20 -0.30 ii) Individual shareholders holding nominal share capital in excess of 1 lakh c) Others (specify) i) Directors & Relatives 2,509,799 2,148 2,511,947 0.27 1,449,165 350 1,449,515 ii) Foreign Nationals 364,782 20,826 385,608 iii) Foreign Portfolio Investors 22,419,444 0 22,419,444 0.04 2.41 392,713 20,826 413,539 49,988,226 0 49,988,226 iv) Non-Residents 7,288,071 447,627 7,735,698 0.83 8,354,814 426,504 8,781,318 v) Trust 111,588,408 17,766 111,606,174 12.01 114,734,515 17,766 114,752,281 vi) Qualified Foreign Investor 0 0 0 0.00 0 0 0 Sub-total (B)(2):- 395,978,445 20,682,267 416,660,712 44.82 435,026,081 19,520,081 454,546,162 887,524,738 20,770,850 908,295,588 97.71 892,660,097 19,605,064 912,265,161 0.16 0.04 5.37 0.94 12.32 0.00 48.80 97.94 -0.11 0.00 2.95 0.11 0.31 0.00 3.97 0.23 21,266,473 0 21,266,473 2.29 19,213,684 0 19,213,684 2.06 -0.23 Total Public Shareholding (B)=(B)(1)+ (B)(2) C. Shares held by Custodian for GDRs & ADRs Grand Total (A+B+C) 908,791,211 20,770,850 929,562,061 100.00 911,873,781 19,605,064 931,478,845 100.00 0.00 (ii) Shareholding of Promoters Sl Shareholders Name Shareholding at the beginning of the year %of Shares No. of Shares Pledged/ encumbered to total shares % of total Shares of the company Shareholding at the end of the year No. of Shares % of total Shares of the company %of Shares Pledged/ encumbered to total shares % change in share holding during the year 1 2 3 4 Total NIL NIL NIL NIL (iii) Change in Promoters’ Shareholding (please specify, if there is no change) Sl. No. Shareholding at the beginning of the year Cumulative Shareholding during the year No. of shares % of total shares of the Company No. of shares % of total shares of the Company At the beginning of the year Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/sweat equity etc): At the End of the year NIL NIL NIL NIL 116 (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 1 LIFE INSURANCE CORPORATION OF INDIA Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 2 3 L&T EMPLOYEES WELFARE FOUNDATION Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) ADMINISTRATOR OF THE SPECIFIED UNDERTAKING OFTHE UNIT TRUST OF INDIA Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) At the beginning of the year 10.04.2015 17.04.2015 22.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 30.06.2015 10.07.2015 17.07.2015 31.03.2016 At the end of the year At the beginning of the year 29.01.2016 31.03.2016 At the end of the year At the beginning of the year 10.04.2015 17.04.2015 22.05.2015 29.05.2015 05.06.2015 31.03.2016 At the end of the year No. of shares 155522285 % of total Shares of the Company 16.73 In crease / Decrease in shareholding Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) No. of shares % of total Shares of the Company (280000) (127466) (60000) (75000) (163000) (393141) (303305) (584014) (114510) (138774) (111068) 155242285 155114819 155054819 154979819 154816819 154423678 154120373 153536359 153421849 153283075 153172007 153172007 153172007 3146107 114752281 114752281 16.69 16.68 16.67 16.66 16.64 16.60 16.57 16.50 16.49 16.48 16.46 16.44 16.44 12.32 12.32 111606174 12.01 75925962 8.17 114752281 12.32 600 (600) 600 (500) 500 75926562 75925962 75926562 75926062 75926562 75926562 75926562 8.17 8.16 8.16 8.16 8.16 8.15 8.15 117 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 No. of shares 19251170 % of total Shares of the Company 2.07 In crease / Decrease in shareholding Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) No. of shares % of total Shares of the Company 4 HDFC TRUSTEE COMPANY LIMITED-HDFC EQUITY FUND Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) At the beginning of the year 10.04.2015 17.04.2015 24.04.2015 01.05.2015 08.05.2015 15.05.2015 22.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 30.06.2015 10.07.2015 17.07.2015 24.07.2015 31.07.2015 07.08.2015 14.08.2015 28.08.2015 04.09.2015 11.09.2015 18.09.2015 25.09.2015 30.09.2015 09.10.2015 16.10.2015 23.10.2015 30.10.2015 06.11.2015 13.11.2015 20.11.2015 27.11.2015 04.12.2015 11.12.2015 18.12.2015 25.12.2015 31.12.2015 08.01.2016 118 376784 (50000) 2165 296592 20000 159990 1073 1883 28 25865 1957 31864 15000 15058 (174125) (96058) (50000) (6906) (36625) (1279) 20352 144729 2298 36 187625 (96194) (4906) 9915 157151 69500 1444 3912 295 829 9156 127326 301606 85112 34661 19627954 19577954 19580119 19876711 19896711 20056701 20057774 20059657 20059685 20085550 20087507 20119371 20134371 20149429 19975304 19879246 19829246 19822340 19785715 19784436 19804788 19949517 19951815 19951851 20139476 20043282 20038376 20048291 20205442 20274942 20276386 20280298 20280593 20281422 20290578 20417904 20719510 20804622 20839283 2.11 2.11 2.11 2.14 2.14 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.17 2.15 2.14 2.13 2.13 2.13 2.13 2.13 2.14 2.14 2.14 2.16 2.15 2.15 2.15 2.17 2.18 2.18 2.18 2.18 2.18 2.18 2.19 2.22 2.23 2.24 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) 15.01.2016 22.01.2016 29.01.2016 05.02.2016 12.02.2016 19.02.2016 26.02.2016 04.03.2016 11.03.2016 18.03.2016 25.03.2016 31.03.2016 31.03.2016 At the end of the year At the beginning of the year 12.06.2015 19.06.2015 26.06.2015 16.10.2015 23.10.2015 12.02.2016 19.02.2016 26.02.2016 04.03.2016 11.03.2016 18.03.2016 25.03.2016 31.03.2016 31.03.2016 At the end of the year At the beginning of the year 10.04.2015 17.04.2015 24.04.2015 01.05.2015 08.05.2015 15.05.2015 Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 5 GENERAL INSURANCE CORPORATION OF INDIA Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 6 ICICI PRUDENTIAL VALUE DISCOVERY FUND Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) No. of shares % of total Shares of the Company 17481186 1.88 6318799 0.68 In crease / Decrease in shareholding (228538) 25339 1090 (280181) 171640 (176723) 381 173803 1866 (49531) (6769) 1397 (2000) (50000) (48000) (31186) (30000) 101930 43751 25000 (10681) (150000) (110000) (60000) (40000) (318995) (100000) (52718) 25261 329611 35004 No. of shares 20610745 20636084 20637174 20356993 20528633 20351910 20352291 20526094 20527960 20478429 20471660 20473057 20473057 20473057 17479186 17429186 17381186 17350000 17320000 17421930 17465681 17490681 17480000 17330000 17220000 17160000 17120000 17120000 17120000 5999804 5899804 5847086 5872347 6201958 6236962 % of total Shares of the Company 2.21 2.22 2.22 2.19 2.20 2.18 2.18 2.20 2.20 2.20 2.20 2.20 2.20 2.20 1.88 1.87 1.87 1.86 1.86 1.87 1.88 1.88 1.88 1.86 1.85 1.84 1.84 1.84 1.84 0.65 0.63 0.63 0.63 0.67 0.67 119 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) 22.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 30.06.2015 10.07.2015 17.07.2015 31.07.2015 07.08.2015 14.08.2015 21.08.2015 28.08.2015 04.09.2015 11.09.2015 18.09.2015 25.09.2015 30.09.2015 09.10.2015 16.10.2015 23.10.2015 30.10.2015 06.11.2015 13.11.2015 20.11.2015 27.11.2015 04.12.2015 11.12.2015 18.12.2015 25.12.2015 31.12.2015 08.01.2016 15.01.2016 22.01.2016 29.01.2016 05.02.2016 12.02.2016 19.02.2016 26.02.2016 04.03.2016 Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 120 No. of shares % of total Shares of the Company In crease / Decrease in shareholding 871 41062 (40844) (15994) (481943) (153248) (76826) (40751) (118) (67000) 27303 (379677) (102926) 116122 351730 48564 507302 500714 700157 184262 58230 (65288) 191738 2074733 717308 588967 57259 166163 481718 1059589 442 489361 437209 1184520 1147196 (137443) (609839) 42273 190378 (193838) 13095 No. of shares 6237833 6278895 6238051 6222057 5740114 5586866 5510040 5469289 5469171 5402171 5429474 5049797 4946871 5062993 5414723 5463287 5970589 6471303 7171460 7355722 7413952 7348664 7540402 9615135 10332443 10921410 10978669 11144832 11626550 12686139 12686581 13175942 13613151 14797671 15944867 15807424 15197585 15239858 15430236 15236398 15249493 % of total Shares of the Company 0.67 0.68 0.67 0.67 0.62 0.60 0.59 0.59 0.59 0.58 0.58 0.54 0.53 0.54 0.58 0.59 0.64 0.70 0.77 0.79 0.80 0.79 0.81 1.03 1.11 1.17 1.18 1.20 1.25 1.36 1.36 1.41 1.46 1.59 1.71 1.70 1.63 1.64 1.66 1.64 1.64 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 11.03.2016 18.03.2016 25.03.2016 31.03.2016 31.03.2016 7 ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) At the end of the year At the beginning of the year 10.04.2015 17.04.2015 24.04.2015 01.05.2015 08.05.2015 15.05.2015 22.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 30.06.2015 10.07.2015 17.07.2015 24.07.2015 07.08.2015 14.08.2015 21.08.2015 28.08.2015 04.09.2015 11.09.2015 18.09.2015 25.09.2015 30.09.2015 09.10.2015 16.10.2015 23.10.2015 30.10.2015 06.11.2015 13.11.2015 No. of shares % of total Shares of the Company In crease / Decrease in shareholding (25772) (318361) (299806) 28251 12360295 1.33 84735 77739 46581 (80396) 280765 589488 33054 (87326) (240718) (138719) 68799 (59918) (74925) 85054 (617204) (281269) 19921 10732 13240 205050 (442863) 117200 (279020) (117400) (14746) (47713) (256168) (8555) 35401 (5158) 15639 No. of shares 15223721 14905360 14605554 14633805 14633805 14633805 12445030 12522769 12569350 12488954 12769719 13359207 13392261 13304935 13064217 12925498 12994297 12934379 12859454 12944508 12327304 12046035 12065956 12076688 12089928 12294978 11852115 11969315 11690295 11572895 11558149 11510436 11254268 11245713 11281114 11275956 11291595 % of total Shares of the Company 1.63 1.60 1.57 1.57 1.57 1.57 1.34 1.35 1.35 1.34 1.37 1.44 1.44 1.43 1.40 1.39 1.40 1.39 1.38 1.39 1.33 1.29 1.30 1.30 1.30 1.32 1.27 1.29 1.26 1.24 1.24 1.24 1.21 1.21 1.21 1.21 1.21 121 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 8 GOVERNMENT OF SINGAPORE Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 20.11.2015 27.11.2015 04.12.2015 11.12.2015 18.12.2015 25.12.2015 31.12.2015 08.01.2016 15.01.2016 22.01.2016 29.01.2016 05.02.2016 12.02.2016 19.02.2016 26.02.2016 04.03.2016 11.03.2016 18.03.2016 25.03.2016 31.03.2016 At the end of the year At the beginning of the year 10.04.2015 24.04.2015 01.05.2015 08.05.2015 05.06.2015 12.06.2015 10.07.2015 24.07.2015 31.07.2015 07.08.2015 21.08.2015 28.08.2015 04.09.2015 11.09.2015 30.09.2015 09.10.2015 23.10.2015 122 No. of shares % of total Shares of the Company 12951043 1.39 In crease / Decrease in shareholding (18582) 87324 57791 (125) 186257 (6071) 99439 (54512) (16389) 218520 75309 269028 929351 584132 39292 15091 56906 4140 178629 27276 45835 (3880) (128461) (58351) 51385 (6411) 220852 (36919) (128114) 127183 (14349) 231981 340697 (136564) 79455 285710 (4814) No. of shares 11273013 11360337 11418128 11418003 11604260 11598189 11697628 11643116 11626727 11845247 11920556 12189584 13118935 13703067 13742359 13757450 13814356 13818496 13997125 14024401 14024401 12996878 12992998 12864537 12806186 12857571 12851160 13072012 13035093 12906979 13034162 13019813 13251794 13592491 13455927 13535382 13821092 13816278 % of total Shares of the Company 1.21 1.22 1.23 1.23 1.25 1.25 1.26 1.25 1.25 1.27 1.28 1.31 1.41 1.47 1.48 1.48 1.48 1.48 1.50 1.51 1.51 1.40 1.40 1.38 1.38 1.38 1.38 1.41 1.40 1.39 1.40 1.40 1.42 1.46 1.45 1.45 1.49 1.49 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 9 ABU DHAABI INVESTMENT AUTHORITY -BEHAVE Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 30.10.2015 06.11.2015 13.11.2015 20.11.2015 27.11.2015 04.12.2015 11.12.2015 18.12.2015 31.12.2015 08.01.2016 15.01.2016 22.01.2016 29.01.2016 05.02.2016 12.02.2016 19.02.2016 04.03.2016 11.03.2016 31.03.2016 31.03.2016 At the end of the year At the beginning of the year 10.04.2015 24.04.2015 22.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 10.07.2015 17.07.2015 24.07.2015 31.07.2015 14.08.2015 28.08.2015 04.09.2015 18.09.2015 25.09.2015 No. of shares % of total Shares of the Company 10181638 1.10 In crease / Decrease in shareholding (387807) (10678) 239574 (7614) (145344) 32751 (21093) (247683) (25647) 80472 (4649) 113894 290947 338508 (51506) (132591) (77996) (63994) 40645 7500 201200 (42900) (312595) (144326) 90991 8385 (7696) 73899 55058 13391 (112500) 46178 (38397) (124561) (37435) (510974) No. of shares 13428471 13417793 13657367 13649753 13504409 13537160 13516067 13268384 13242737 13323209 13318560 13432454 13723401 14061909 14010403 13877812 13799816 13735822 13776467 13776467 13776467 10189138 10390338 10347438 10034843 9890517 9981508 9989893 9982197 10056096 10111154 10124545 10012045 10058223 10019826 9895265 9857830 9346856 % of total Shares of the Company 1.44 1.44 1.47 1.47 1.45 1.46 1.45 1.43 1.42 1.43 1.43 1.44 1.48 1.51 1.51 1.49 1.48 1.48 1.48 1.48 1.48 1.10 1.12 1.11 1.08 1.06 1.07 1.07 1.07 1.08 1.09 1.09 1.08 1.08 1.08 1.06 1.06 1.00 123 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 10 THE NEW INDIA ASSURANCE COMPANY LIMITED Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 16.10.2015 30.10.2015 13.11.2015 20.11.2015 27.11.2015 04.12.2015 15.01.2016 22.01.2016 29.01.2016 05.02.2016 26.02.2016 04.03.2016 18.03.2016 25.03.2016 31.03.2016 At the end of the year At the beginning of the year 17.04.2015 22.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 30.06.2015 10.07.2015 24.07.2015 31.07.2015 07.08.2015 14.08.2015 21.08.2015 11.09.2015 18.09.2015 13.11.2015 20.11.2015 27.11.2015 04.12.2015 11.12.2015 31.12.2015 124 No. of shares % of total Shares of the Company 9012316 0.97 In crease / Decrease in shareholding (69991) 59334 (32076) (20520) (324689) (119632) 10166 78043 (795000) (158500) (19788) (30245) 526742 612015 (5000) (35000) (36000) (44691) (11809) (67500) (70000) (25000) (40000) (2500) (2894) (24900) (18833) (12500) (20000) (36903) 25000 28000 11234 7500 28266 12500 No. of shares 9276865 9336199 9304123 9283603 8958914 8839282 8849448 8927491 8132491 7973991 7954203 7923958 8450700 9062715 9062715 9062715 9007316 8972316 8936316 8891625 8879816 8812316 8742316 8717316 8677316 8674816 8671922 8647022 8628189 8615689 8595689 8558786 8583786 8611786 8623020 8630520 8658786 8671286 % of total Shares of the Company 1.00 1.00 1.00 1.00 0.96 0.95 0.95 0.96 0.87 0.86 0.85 0.85 0.91 0.97 0.97 0.97 0.97 0.96 0.96 0.96 0.95 0.95 0.94 0.94 0.93 0.93 0.93 0.93 0.93 0.93 0.92 0.92 0.92 0.92 0.93 0.93 0.93 0.93 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 08.01.2016 15.01.2016 22.01.2016 29.01.2016 31.03.2016 No. of shares % of total Shares of the Company In crease / Decrease in shareholding 30000 24601 25000 7899 11 HDFC STANDARD LIFE INSURANCE COMPANY LIMITED At the end of the year At the beginning of the year 7838382 0.84 Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 10.04.2015 17.04.2015 24.04.2015 01.05.2015 08.05.2015 15.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 30.06.2015 10.07.2015 17.07.2015 24.07.2015 31.07.2015 07.08.2015 14.08.2015 21.08.2015 28.08.2015 04.09.2015 11.09.2015 18.09.2015 25.09.2015 30.09.2015 09.10.2015 16.10.2015 23.10.2015 30.10.2015 06.11.2015 4471 20092 (43560) 67355 (8829) 33058 16775 (67647) (26044) 25830 (5722) (50859) (89098) 53000 10644 20840 (184897) (54891) 34988 32748 (20742) 33535 (4865) (95154) (61640) (9214) 56 (3040) (19855) (67234) No. of shares 8701286 8725887 8750887 8758786 8758786 8758786 7842853 7862945 7819385 7886740 7877911 7910969 7927744 7860097 7834053 7859883 7854161 7803302 7714204 7767204 7777848 7798688 7613791 7558900 7593888 7626636 7605894 7639429 7634564 7539410 7477770 7468556 7468612 7465572 7445717 7378483 % of total Shares of the Company 0.93 0.94 0.94 0.94 0.94 0.94 0.84 0.85 0.84 0.85 0.85 0.85 0.85 0.84 0.84 0.84 0.84 0.84 0.83 0.83 0.84 0.84 0.82 0.81 0.82 0.82 0.82 0.82 0.82 0.81 0.80 0.80 0.80 0.80 0.80 0.79 125 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 12 SBI LIFE INSURANCE CO. LTD Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 13.11.2015 20.11.2015 04.12.2015 11.12.2015 18.12.2015 25.12.2015 31.12.2015 08.01.2016 15.01.2016 22.01.2016 29.01.2016 05.02.2016 12.02.2016 19.02.2016 26.02.2016 04.03.2016 11.03.2016 18.03.2016 25.03.2016 31.03.2016 31.03.2016 At the end of the year At the beginning of the year 10.04.2015 17.04.2015 24.04.2015 01.05.2015 08.05.2015 15.05.2015 22.05.2015 29.05.2015 05.06.2015 12.06.2015 19.06.2015 26.06.2015 30.06.2015 10.07.2015 17.07.2015 24.07.2015 126 No. of shares % of total Shares of the Company 6831696 0.73 In crease / Decrease in shareholding (105351) 15792 231 (54096) (562878) (220151) 200118 (300689) 39809 (10738) (20000) 344 (64519) (71196) (312608) (128085) (34597) 20901 396 (20000) 33273 (356178) (85263) (185554) (240790) (63089) 24013 (118377) 245159 50015 (2731) 7321 (22) (22044) (64160) (123031) No. of shares 7273132 7288924 7289155 7235059 6672181 6452030 6652148 6351459 6391268 6380530 6360530 6360874 6296355 6225159 5912551 5784466 5749869 5770770 5771166 5751166 5751166 5751166 6864969 6508791 6423528 6237974 5997184 5934095 5958108 5839731 6084890 6134905 6132174 6139495 6139473 6117429 6053269 5930238 % of total Shares of the Company 0.78 0.78 0.78 0.78 0.72 0.69 0.71 0.68 0.69 0.69 0.68 0.68 0.68 0.67 0.63 0.62 0.62 0.62 0.62 0.62 0.62 0.62 0.74 0.70 0.69 0.67 0.64 0.64 0.64 0.63 0.65 0.66 0.66 0.66 0.66 0.66 0.65 0.64 Name of shareholer Sl. No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) No. of shares % of total Shares of the Company Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer/ bonus/ sweat etc.) 31.07.2015 07.08.2015 14.08.2015 21.08.2015 28.08.2015 04.09.2015 11.09.2015 18.09.2015 25.09.2015 30.09.2015 09.10.2015 16.10.2015 23.10.2015 30.10.2015 06.11.2015 13.11.2015 20.11.2015 27.11.2015 04.12.2015 11.12.2015 18.12.2015 25.12.2015 31.12.2015 08.01.2016 15.01.2016 22.01.2016 29.01.2016 05.02.2016 12.02.2016 19.02.2016 26.02.2016 04.03.2016 11.03.2016 18.03.2016 25.03.2016 31.03.2016 31.03.2016 At the end of the year In crease / Decrease in shareholding (118251) (91140) (10108) (40615) 44033 (33394) (259021) (22432) (162674) (5617) 128475 25360 127706 (44914) (123086) 207729 59996 101350 (36061) (24205) 66873 1582 9155 11606 111300 214513 148777 (284906) (310004) (59582) (112230) (76907) (94109) (84251) 2411 (126238) No. of shares 5811987 5720847 5710739 5670124 5714157 5680763 5421742 5399310 5236636 5231019 5359494 5384854 5512560 5467646 5344560 5552289 5612285 5713635 5677574 5653369 5720242 5721824 5730979 5742585 5853885 6068398 6217175 5932269 5622265 5562683 5450453 5373546 5279437 5195186 5197597 5071359 5071359 5071359 % of total Shares of the Company 0.62 0.62 0.61 0.61 0.61 0.61 0.58 0.58 0.56 0.56 0.58 0.58 0.59 0.59 0.57 0.60 0.60 0.61 0.61 0.61 0.62 0.62 0.62 0.62 0.63 0.65 0.67 0.64 0.60 0.60 0.59 0.58 0.57 0.56 0.56 0.55 0.54 0.54 127 (v) Shareholding of Directors and Key Managerial Personnel: Shareholding at the beginning of the year No. of shares At the Beginning of the year 1,025,000 % of total Shares of the Company 0.11 Cumulative Shareholding during the year No. of shares % of total Shares of the Company At the end of the year At the beginning of the year 27.08.2015 (ESOP Exercise) 37,056 35,000 1,025,000 72,056 0.00 0.00 At the End of the year At the beginning of the year 27.08.2015 (ESOP Exercise) 159,000 15,000 0.02 0.00 At the End of the year At the beginning of the year 27.08.2015 (ESOP Exercise) 45,350 10,000 0.00 0.00 72,056 174,000 174,000 55,350 0.11 0.01 0.01 0.02 0.02 0.01 Sl. No. 1 2 3 4 For Each of the top 10 shareholders A. M. NAIK Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): S. N. SUBRAHMANYAN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): R. SHANKAR RAMAN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): SHAILENDRA N. ROY Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 5 D. K. SEN At the End of the year As on date of appointment as Director 30,703 0.00 55,350 0.01 Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 6 M. V. SATISH At the End of the year As on date of appointment as Director 42,875 0.00 30,703 0.00 Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 128 At the End of the year 42,875 0.00 Sl. No. 7 8 9 10 11 12 For Each of the top 10 shareholders M. M. CHITALE Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): SUBODH BHARGAVA Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): M. DAMODARAN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): VIKRAM SINGH MEHTA Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): SUSHOBHAN SARKER jointly with Life Insurance Corporation of India Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): ADIL ZAINULBHAI Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): Shareholding at the beginning of the year No. of shares At the beginning of the year 1,629 % of total Shares of the Company 0.00 Cumulative Shareholding during the year No. of shares % of total Shares of the Company At the End of the year At the beginning of the year 750 0.00 1,629 0.00 At the End of the year At the beginning of the year 150 0.00 750 0.00 At the End of the year At the beginning of the year 885 0.00 150 0.00 At the End of the year At the beginning of the year 150 0.00 885 0.00 At the End of the year At the beginning of the year 100 0.00 150 0.00 - At the End of the year 100 0.00 129 Shareholding at the beginning of the year No. of shares At the beginning of the year 200 % of total Shares of the Company 0.00 Cumulative Shareholding during the year No. of shares % of total Shares of the Company - At the End of the year At the beginning of the year 29.05.2015 3,640 700 0.00 0.00 200 4,340 0.00 0.00 11.11.2015 At the End of the year As on date of appointment as Director 15.05.2015 101 - 100 0.00 0.00 0.00 4,441 4,441 0.00 0.00 100 0.00 At the End of the year 100 0.00 As on date of appointment as Director - 0.00 15.05.2015 100 0.00 100 0.00 Sl. No. 13 14 15 16 For Each of the top 10 shareholders AKHILESH GUPTA Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): BAHRAM VAKIL Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): SWAPAN DASGUPTA jointly with specified undertaking of the Unit Trust of India @ Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): @ ceased to be a Director w.e.f May 15, 2016 SUNITA SHARMA jointly with Life Insurance Corporation of India Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 17 THOMAS MATHEW T. At the End of the year As on date of appointment as Director 100 0.00 100 0.00 Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 130 At the End of the year 100 0.00 No. of shares - 100 - 100 - 100 As on date of appointment as Director 10.07.2015 (Market Purchase) At the End of the year As on date of appointment as Director 07.10.2015 (Market Purchase) At the End of the year As on date of appointment as Director 25.03.2016 (Market Purchase) Shareholding at the beginning of the year Cumulative Shareholding during the year No. of shares % of total Shares of the Company % of total Shares of the Company 0.00 0.00 100 0.00 0.00 0.00 0.00 0.00 100 0.00 100 0.00 100 0.00 100 0.00 At the End of the year At the beginning of the year 23,140 0.00 100 0.00 Sl. No. For Each of the top 10 shareholders 18 AJAY SHANKAR Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 19 SUBRAMANIAN SARMA Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 20 NAINA LAL KIDWAI Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): N. HARIHARAN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 21 V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment At the End of the year 23,140 0.00 Secured Loans excluding deposits Unsecured Loans Deposits crore Total Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) 664.04 12272.55 – 8.62 672.66 – 149.46 12422.01 – – – – 12936.59 – 158.08 13094.67 131 Change in Indebtedness during the financial year Addition Reduction Exchange gain/(loss) Interest accrued but not due Net Change Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) Secured Loans excluding deposits Unsecured Loans Deposits crore Total Indebtedness 8417.70 8572.52 (11.32) 0.08 (143.42) 520.54 – 8.70 529.24 19621.89 19270.17 (463.48) 38.57 853.77 13087.75 – 188.03 13275.78 – – – – – – – – – 28039.59 27842.69 (474.80) 38.65 710.35 13608.29 – 196.73 13805.02 VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. REMUNERATION TO MANAGING DIRECTOR, WHOLE-TIME DIRECTORS AND/OR MANAGER: Sl. no. 1 2 3 4 5 Particulars of Remuneration Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income tax Act, 1961 Stock Option Sweat Equity Commission - as % of profit - others, specify… Others (Contribution to Provident Fund & Superannuation Fund) Total (A) Ceiling as per the Act A M NAIK K VENKATARAMANAN* M V KOTWAL^ S N SUBRAHMANYAN R SHANKAR RAMAN SHAILENDRA ROY D K SEN@ M V SATISH# Name of MD/WTD/Manager Crore Total Amount 3.58 14.73 8.58 1.63 1.38 1.15 0.44 0.15 31.64 38.85 2.77 0.84 7.53 3.23 3.03 0.06 0.05 56.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 17.96 5.75 0.00 0.00 0.00 0.00 3.37 1.82 22.43 15.35 0.00 0.00 9.90 3.06 0.00 0.00 6.90 2.18 0.00 0.00 4.40 1.47 0.00 0.00 2.11 0.69 0.00 0.00 0.00 0.00 0.73 47.19 0.24 51.17 66.14 43.30 26.59 22.12 13.69 10.05 3.29 1.17 186.35 615.88 * Retired as a Director on September 30, 2015 ^ Retired as a Director on August 26, 2015 @ Appointed as a Director w.e.f October 1, 2015 # Appointed as a Director w.e.f January 29, 2016 132 B. REMUNERATION TO OTHER DIRECTORS Sl. no. Particulars of Remuneration Name of Directors Crore Total Amount 1 2 Independent Directors Fee for attending board/ committee meetings Commission Others, please specify Total (1) Other Non-Executive Directors Fee for attending board/ committee meetings Commission * Others, please specify Total (2) Total (B)=(1+2) M M CHITALE SUBODH BHARGAVA M DAMODARAN 0.065 0.455 0.063 0.555 0.060 0.375 VIKRAM SINGH MEHTA 0.050 0.352 SUSHOBHAN SARKER* ADIL ZAINULBHAI AKHILESH GUPTA 0.055 0.435 0.045 0.198 0.338 2.370 0.520 0.618 0.435 0.402 0.490 0.243 2.708 0.520 0.618 0.435 0.402 0.055 0.229 0.284 0.284 0.490 0.243 0.055 0.229 0.284 2.992 Crore Sl. no. Particulars of Remuneration Name of Directors Total Amount BAHRAM VAKIL SWAPAN DASGUPTA* ! SUNITA SHARMA* THOMAS MATHEW T@ AJAY SHANKAR# SUBRMANIAN SARMA$ NAINA LAL KIDWAI^ 0.060 0.320 0.030 0.205 0.000 0.000 0.110 0.592 0.380 0.235 0.000 0.702 0.045 0.150 0.195 0.195 0.040 0.127 0.167 0.167 0.380 0.235 0.000 0.000 0.000 0.000 0.000 0.085 0.277 0.362 1.064 190.406 677.48 1 2 Independent Directors Fee for attending board/ committee meetings Commission Others, please specify Total (1) Other Non-Executive Directors Fee for attending board/ committee meetings Commission * Others, please specify Total (2) Total (B)=(1+2) Total Managerial Remuneration (A) + (B) Overall Ceiling as per the Act 0.020 0.067 0.087 0.087 @ Appointed as a Director w.e.f. April 3, 2015 # Appointed as a Director w.e.f. May 30, 2015 $ Appointed as a Director w.e.f. August 19, 2015 ^ Appointed as a Director w.e.f March 1, 2016 * Commission is payable to the respective Institutions they represent ! Ceased to be a Director w.e.f May 15, 2016 133 C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD Particulars of Remuneration Key Managerial Personnel CEO Company Secretary (N. Hariharan) Crore CFO Total Sl. no. 1 2 3 4 5 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 Value of perquisites u/s 17(2) Income-tax Act, 1961 Profits in lieu of salary under section 17(3) Income tax Act, 1961 (b) (c) Not Applicable Stock Option Sweat Equity Commission - as % of profit - others, specify… Others (Contribution to Provident Fund & Superannuation Fund) Total VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: Type Section of the Companies Act Brief Description A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding 134 0.905 0.008 – – – – 0.063 0.976 Not Applicable 0.905 0.008 – – – – 0.063 0.976 Details of Penalty/ Punishment/ Compounding fees imposed Authority [RD/ NCLT/COURT] Appeal made, if any (give Details) NIL NIL NIL Management Discussion and Analysis 2015-16 Overview of World Economy: World economic output is recovering at a slow pace with the expectations of achieving sub 3% growth in calendar year 2016. Though emerging economies from Asia could continue to drive growth, there is a potential downside risk in terms of continued slow growth in China, weak domestic consumption in Japan, volatile currency movements and sustained level of low commodity prices. There is an uncertainty over the future growth prospects of commodity driven economies like Brazil and Russia. GCC countries are also facing fiscal weakening from low crude oil prices. The world economy is witnessing subdued corporate profits and investments, sluggish exports and manufacturing activities, and lower commodity prices. Credit growth is tepid and accommodative policies adopted by central bankers have not yet yielded the desired outcome. Prevailing fragile business sentiment is also adversely impacted by geopolitical tensions, protectionist policies adopted by some of the countries and climate & environmental concerns. Overview of Indian Economy: Amidst the low global growth environment, the Indian economy showed resilience and grew by 7.6% for the year 2015-16, driven mainly by the service sector. Agriculture, Forestry and Fishing sector, which employs more than 50% of labour force of the country grew by 1.2%. Despite a muted agricultural growth occasioned by poor monsoons, India’s domestic consumption remains strong on the back of favorable demographics. India has been a beneficiary of low oil prices which has helped to improve the Government’s fiscal position and has improved the profitability of PSU oil & gas marketing companies. Decline in the oil prices also underpinned lower Inflation by offsetting higher food inflation caused by poor monsoon in the previous year. Consequently, RBI has reduced interest rates by 75 basis points during 2015-16 as compared to 50 basis points in 2014-15. The INR has depreciated against the US Dollar by around 6.5% (from a level of 62 to a level of 66) during 2015-16. FII flows were net negative in Debt & Equity markets in 2015-16 echoing the anticipation of interest rate hikes by the US Fed. China’s currency devaluation stance added to weakness of the INR. The fall in commodity prices has also had a negative impact on the Indian economy in terms of reduced profitability of metal and mining companies leading to financial stress of several businesses. This has resulted in a curtailment of fresh capital investments and some defaults in servicing debt obligations. Capital investment spending in India has been muted. There is a strong intent from the Government to push investments and growth. However, policy implementation is progressing at a measured pace. 2016-17 appears more promising mainly due to the expectations of a good monsoon and revival of the investment cycle led by favorable government policies such as increased budgetary allocations on infrastructure projects, pushing investment through cash rich PSUs, thrust on ‘Make In India’, increased drive on building a strong domestic manufacturing base for Defence equipment, emphasis on increasing investments in nuclear power, initiatives to revive weak state power distribution utilities through the ‘UDAY’ scheme, focus on build out of Smart Cities, ‘Power for All’ programs and robust plans to increase investments in metro rails and roads. It is also expected that the GST Bill will be passed in parliament in 2016-17. Business Scenario: The Company sees good prospects in the domestic economy with the thrust on infrastructure development. The Company has invested in building up the capacities over the years and has also mapped the emerging opportunities with the internal capabilities. Increase in the pace of implementation of various initiatives by the government and revival of the investment cycle would be 135 conducive for achieving the growth aspirations of the Company. The Company has identified key focus areas and strategic initiatives to make the most out of the upcoming opportunities. Major thrust areas are enumerated below: Key performance themes and focus areas for 2016-17. • Cost competitiveness through operational efficiency: The Company is analysing all the aspects of its operations to improve efficiency and competitiveness on an ongoing basis. Operational Excellence programs are underway for identified areas of cost reduction and productivity improvements without compromising on quality of products and services. Employees and subcontractors play a very vital role in Company’s endeavor on performance improvements and are well sensitised, motivated and connected through a collaborative approach. • Working capital reduction: Working capital requirements have been on the rise given the tight liquidity position and tepid business environment. Special efforts are being taken to release cash blocked in working capital. The aim is to make each project cash positive and self-funded during the execution cycle. The focus will be on faster collections from the customers. • Maximise benefits to the stakeholders through business value unlocking: The Company has invested in building capacities in nuclear power forgings, shipbuilding as well as in some business segments having longer gestation periods such as power plants, ports and roads concessions. It also has created a significant scale in service businesses in the areas of financial services and information technology. All these businesses have a potential to generate promising returns as the growth cycle of Indian economy picks up. The company is continuously exploring opportunities to unlock value from these businesses to maximise returns to its stakeholders. • Project execution within time schedule and costs: The Company has a large order book of close to 2500 billion to be executed over the next few years. On-going projects are led by proficient project managers, project directors and sponsors, ensuring timely project execution within targeted costs. Improved monitoring of projects under execution for achieving profitable growth is one of the major thrust areas. 136 Infrastructure Business Terminal 2, Mumbai International Airport - an iconic structure which integrates world-class design, architecture and operational efficiency. L&T has built several airports in India and in the Middle East. Infrastructure Business Scenario - India: The Indian E&C sector continues to remain highly pro-cyclical. On an aggregate level, some improvements have been witnessed after many quarters of stagnant or negative growth however, interest cost remains high. Government-led CAPEX has just started to pick up through disbursement of new orders. The construction industry appears to be at the far end of the recovery curve with delays for Government investments to trickle down as revenue. Going forward, there is a strong possibility of the CAPEX cycle recovering within 2-3 quarters. Competitive Landscape: Many companies have resorted to the sale of assets to tide over debt obligations. Overall, the industry CAPEX upturn continued to be elusive, given the existing overcapacity and inability to invest further. Overall competition among existing players has become more intensive. Companies with strong balance sheet and execution capabilities are likely to sail through the current scenario. Middle East: Middle East economies are posting lower growth figures. The sustained low and falling oil prices 137 have affected their economies adversely and continue to pose a challenging scenario. Almost all GCC countries are resorting to fiscal consolidation measures, trying to diversify the economy and increase their revenue streams. With oil fiscal breakeven point for balance budget for GCC countries like Saudi Arabia, Oman and UAE hovering around $90~$100/bbl, and Qatar and Kuwait between $50~ $55/bbl, most of the Middle East countries are raising debt from domestic and international sources while preserving their currency peg. Geopolitical uncertainties continue to be the worry spot. However, most of the GCC players including Qatar, UAE, and Oman continue to pursue long term infrastructure development programs which augers well for the construction industry. DLF Mall of India, near Delhi. Global: Current trend shows that the global Construction Industry could continue to perform modestly. There have been marked cancellations of a number of projects in the Middle East owing to lower oil revenues. Global contractors are focusing outside home markets and consequently flocking to select growth markets, resulting in fierce 138 competition. MENA order awards have seen only a moderate pick-up during Q1 of calendar 2016 Y-o-Y and some sluggishness remains. Impact of Digital technologies: Digital technologies have the potential to create new business models, dramatically alter business processes and improve operations. While this has been demonstrated and visible in many consumer facing sectors, the opportunities in construction projects and manufacturing are also significant. L&T proposes to implement digital technology solutions to make significant improvements in the key areas of work. The ‘Digital Group’ has been formed which will extensively focus on conceiving, initiating and implementing digital solutions to facilitate desired business results. Digital solutions are being developed for better project monitoring and controls by installing sensors and gateways on all the equipment deployed at project sites for tracking and monitoring the performance. Other major areas where digital solutions would be implemented are improvement in workmen productivity and safety through tagging and tracking, use of GPS and RFID for tracking to optimise logistics and material consumption, capturing of real-time data and visuals from the project sites through the use of mobile application and modern geospatial technologies including LiDAR & UAVs for surveys, analysis of data pulled in from all the initiatives into digital engine to deliver trend, actionable insights and forecast scenarios. The Group will continue to develop breakthrough solutions for business transformation with the evolving technologies and business processes. BUILDINGS AND FACTORIES Overview: L&T’s Buildings & Factories (B&F) is a business vertical that has the requisite expertise to undertake Engineering, Procurement and Construction (EPC) of airports, IT parks, office buildings, institutional spaces, hospitals, stadiums, hotels, elite residential buildings, high rise structures, mass housing complexes, factory structures, cement plants and industrial warehouses. The business is pioneer in offering Total engineering solutions right from concept to commissioning across all the business lines cited above. The competitive advantages of the business include dedicated engineering design centres, competency cells, advanced formwork systems, mechanised project execution, wide network of consultants and vendors, digitised project control and a talented pool of employees. Business Environment: Year 2015-16 continued to be challenging for the construction industry. Many of the customers of the business deferred their investment plans due to the liquidity crunch and low demand in the realty sector. In the international arena, the dip in crude oil prices had a major impact on investments in GCC region. The slowdown in China due to excess inventory has awards from The Royal Society For Prevention of Accidents (RoSPA). Four projects secured awards from the British Safety Council. Ten projects secured awards from the National Safety Council, India. Two projects secured awards from the Indian Concrete Institute. Two projects secured the Construction Week Smart Project of the Year award. Major Orders Secured and Under Execution: The business has secured prestigious projects in almost all their business lines like IT parks, office buildings, residential, factories, etc. Leadership has been maintained in the construction of IT parks and office spaces in the country. Major projects were secured in the northern and southern parts of India. Major orders were secured from its esteemed customers for the construction of elite high rise residential towers in western and southern India. Some of the key projects commissioned by the business all stakeholders on hazardous project activities and corresponding preventive measures. A safety innovation school was set up to impart the EHS related training. This school is the first-of-its-kind by any construction company in India. A team of experts has been formed to study futuristic businesses and formulate suitable strategies for a competitive edge. The projects executed by the business continued to bag various awards and recognitions during 2015-16. Four projects secured The 1600-bed multi-specialty Safdarjung Hospital, Delhi. impacted the manufacturing sector in India. Initiatives like ‘Make in India’ and ‘Housing for All’ have led to major investment plans. However, the pace of development has been far from satisfactory. Against all odds, Buildings & Factories has registered a steady growth and has continued to maintain its leadership position in the industry and have also expanded footprint in the Middle East to diversify the business portfolio. Significant Initiatives: The business implemented operational excellence initiatives across all levels to enhance profitability, like the introduction of value engineering techniques to cut down costs and improve productivity. Project cycle times were brought down by embracing technology and mechanised execution. The organisation was strengthened to improve the operational efficiency. Safety is imbibed as a ‘way of life‘ and implemented across all projects to educate and sensitise Cognizant Technology Solutions, Chennai. 139 this year are IT facilities and campuses for IT companies, international airports at Chandigarh and Cochin, hospitals and medical colleges for ESIC, NMC and the Government of West Bengal, high rise residential towers in various parts of the country and cement plants for Orient and Wonder Cement. Outlook: The GoI has a deep focus towards improving the country’s infrastructure and has taken some good measures for improving the country’s economy. The business is upbeat on this scenario and well positioned to capture the momentum. A few positive factors are as follows: • The realty sector will stimulate growth in view of easing out of interest rates, relaxation in FDI norms and revival of investor sentiments. • ‘Housing for all‘ coupled with rapid urbanisation and a rising middle class will drive demand for affordable houses. • The ‘Make in India‘ initiative is expected to bolster the manufacturing industry. • Rising healthcare quality and awareness are expected to generate more investments. • Strong IT & BPO industry growth will drive commercial space requirements. In the international arena, though falling oil prices may have some impact on the Middle East economy, the business is hopeful that infrastructure spending will continue 140 Oberoi Sky City at Borivali, Mumbai. L&T builds elite, mass and affordable housing complexes on a turnkey basis. for stadiums, metro systems and healthcare related projects. The business is poised for sustained growth in the forthcoming years against the backdrop of a reviving economy, an improving business climate, a healthy order book, a wide customer network, a strong organisational setup, an efficient supply chain management, requisite resources and a skilled workforce. Larsen & Toubro Oman LLC (LTO): Subsidiary Company LTO, set up in collaboration with Zubair Corporation LLC, has been providing engineering, construction and contracting services for nearly a decade in the 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 a 65% stake in the Company. Against stiff competition from international players, LTO successfully secured a major airport project. The Oil price impact has limited the investment plans in the country. LTO is witnessing limited business prospects in segments like hospitals and commercial buildings. However, considering company’s past performance, it is confident of maintaining the business portfolio in the region. HEAVY CIVIL INFRASTRUCTURE Overview: Heavy Civil Infrastructure business undertakes Design, Engineering, and Construction of projects in the Metro, Nuclear, Hydel, Ports, Special Bridges, Tunnels and Defence segments. The goal of the business is to become a total infrastructure solutions provider, not just in India, but overseas as well. The in-house design strength and unique Construction Methodology Cell gives the business an edge over its competitors and help it serve the customers needs from concept to commissioning. infrastructure industry did not show robust growth due to decline in oil prices. Moreover, GCC is promoting participation of the private sector via PPPs to compensate for the deficit. Bhutan and Bangladesh have proved promising for the Hydro Power and Special Bridge segments. Metro Rail and Defence Sectors: Metro rail projects in India are booming rapidly, especially in Tier 2 cities, but the environment is becoming more challenging due to commoditisation of the elevated metro projects. This has influenced the strategic outlook towards the business resulting in enhanced focus towards underground metro projects. The Chennai Elevated Metro, the Delhi – Badarpur to Faridabad Corridor and the Hyderabad Metro Stage 2 have been successfully handed over. Riyadh and Doha Metro projects which are being operated with a JV structure are progressing reasonably. The Indian Defence industry is a strategically important sector. The current profile of infrastructure L&T’s construction expertise has been offered for the elevated and underground sections of the Chennai Metro, including ballastless track work and a massive depot. One of the goals of the business as part of the new medium term business plan is to revitalise and reinforce core construction operations. Being adaptable to meet market shifts, the business has established a sound construction work system to raise productivity levels. The business plans to leverage the development of an automated system in the construction sector. This will reinforce the competitive advantage of the business and expand the portfolio. In the International market – more particularly in the Middle East – the Business Environment: The current year witnessed a mixed performance by the business. Revenue and order book remained strong regardless of a low-spirited market. Margins have improved overall, driven by strong cost cutting, restructuring and efficiency improvement initiatives. Despite the GoI’s attempts to boost growth through several measures in the infrastructure segment, there was a slump faced primarily due to distressed demand from the infrastructure sector. However, major orders materialised in the third and fourth quarter with the GoI’s boost on foreign funding. The business increased its market share in both the Metros and Special Bridges segments. The business grew faster than its competitors in the sector. A major order from the Bihar State Road Development Corporation Limited (BSRDCL) for the Design & Construction of a Greenfield Six-Lane extra-dosed cable bridge over the river Ganga near Kachchi Dargah (Bihar) was a crowning achievement. Tunnel-boring on the Doha Metro. Tunnel on the Beawar-Pali-Pindwara road project. 141 held by the Indian Armed Forces suggests the Government needs to make serious efforts towards upgrading defence resources, by the modernisation, upgradation and maintenance of the existing setup and that has helped the business to see immense opportunities. With massive investments planned by the Ministry of Defence, opportunities are abundant and the business is well placed and well equipped to offer turnkey design and build proposals for the entire Defence sector. The business has recently bagged an order for a project to resurface and extend the Air force runway at Hyderabad. Nuclear and Special Bridges: India is fast-tracking its shift towards nuclear power. The Government of India has planned to source 25 percent of its electricity from nuclear reactors by 2050. The nuclear business of the company has seen some potential orders - IGCAR for the construction of a Fast Reactor Fuel Cycle Facility at Kalpakkam. There have been developments on the tie-ups of the business with global players since India’s nuclear power agency has cleared a long-delayed nuclear policy for reactors, marking a significant leap in the country’s ambitious plans to become one of the world’s top nuclear power generators. The bridge over the river Ganga in Patna, Bihar, once constructed, will be the longest extra-dosed bridge in India. The business has entered the international market by winning the contract for the construction of the Rupsha Bridge in Khulna, Bangladesh. In the coming years, this segment is poised for further growth. Many bridge projects are expected across India. Hydel, Ports & Tunnels sector: Hydel: Domestic Hydro projects are stuck at various levels due to pending clearances and local protests. However, some opportunities pertaining to construction of barrages are expected in Telangana. A conducive working environment is available at Bhutan where existing projects are progressing well. In Nepal, public sector undertakings and private players are showing interest for the development of Hydro Projects. Tunnels: The GoI is focusing on developing strategic and all weather tunnels. Opportunities may also arise for Underground Storage Caverns for crude oil storage and “Under Sea Tunnels”. Opportunities also exist in the Middle East region but low oil prices may delay these projects. Ports: The GoI has launched the ‘Sagar Mala Project‘ initiative and is focusing on the upgradation and development of new ports. Opportunities are expected for Marine Infrastructure projects involving Dry-docks, Marine intake structures and Defence Naval Base projects as well. The majestic 9.76-km Kachi Dargah Bridge across the mighty Ganga in Bihar will be India’s longest extradosed bridge. The barrage being built on the Kharkai river in Eastern India. 142 certification courses for Project Heads, NEBOSH certification courses for Project EHS In-charges and online EHS certification courses for all technical employees. • EHS Risk Management is an integral part of the EHS management system and the business has revamped the IMS procedure and introduced monthly EHS Risk Management audits to facilitate and monitor implementation across all its projects. • Precast elements lifting strategy was launched with inputs from all stakeholders and training workshops were held at relevant projects to facilitate implementation. Many EHS awards and honours are received at different levels and categories from national and internationally renowned organisations. Workmen Management Centre: During 2015-16, the business trained 8045 subcontractors’ workmen at various sites through ‘On Job Training’ (OJT) programs on form work, bar bending and masonry by experienced trainers to enhance their skill level for speedy and effective execution of jobs while emphasising on safety, quality and productivity. Quality Department: The business aims for excellence in quality, increasing the satisfaction of customers and other stakeholders through effective goal deployment, cost reduction and process improvements. 143 L&T is building the Kakrapar Nuclear Power Plant in Gujarat - the latest in its 5-decade association with India’s nuclear power programme. Significant Initiatives During the year, IC has taken several initiatives to improve operational efficiency as a prime focus as under: Engineering Design and Research Centre: On the Engineering front, the business undertook key initiatives towards digitisation, automation and adoption of modular techniques for construction. Building Information Modelling (BIM) and design automation are being implemented across business segments to provide optimal solutions. Modular construction techniques were successfully implemented in Nuclear Power Plant construction resulting in significant time optimisation. Risk Management: The business emphasises on achieving the corporate strategic objectives by following best practices in Risk Management. A paradigm shift has occurred in the way the business views risk management and the trend has moved towards a holistic view of risk management. The business has developed an efficient Conflict Management System which expedites resolution of issues with clients. The business has also initiated an analysis of mitigated activities depending on project specifics and disputes. The business believes in the re-evaluation of the project status when significant changes occur (scope, delivery method and schedule). Environment Health & Safety (EHS): Striving to achieve a goal of ‘zero harm‘, the business has launched the Corporate EHS Strategic Plan 2015-16 with key EHS deliverables that have been implemented across all its operations. As part of the EHS Strategy, the following significant initiatives were taken up during 2015-16: • Successful recertification of EHS Integrated Management Systems conforming to international standards: OHSAS 18001 & ISO 14001. • Key EHS training initiatives include IOSH Managing Safely The business has started the Quality Management System transition to ISO 9001: 2015, which allows the implementation of best practices in the industry. Monthly direct customer feedback on product quality from projects has been its praxis. A new product of polycarbonate- based admixture for water conservation in concreting, in-house resistance heating techniques for preheating of pipe joints of massive sizes and the use of semiautomatic welding processes in nuclear projects such as GMAW (Gas Metal Arc Welding) were added into its standard practices. Training is a necessary parameter for growth and the business has prioritised the training of its staff on the latest QMS. Also, the setting up of an in-house facility for welder’s qualification instead of testing by external providers has been initiated. People Power: Growth in operations is helping the business to grow people internally and moving towards a role-based organisation. All talent investments are focused on increasing productivity, efficiencies, building a robust leadership pipeline and an orientation towards mega projects. The Frontline Supervisor Trainees program has taken root and continues to add value to the business. The Ganga riverfront project in Bihar. future-ready business. 65 employees have been identified as part of the leadership building initiative for tackling mega projects. Year 2016-17 will be the Year of the People with special focus on engagement and building the leadership pipeline. Outlook The international market has truncated, particularly in the Middle East, which continues to face its adverse impact because of declining oil prices. Unless the GCC countries revamp their business strategies, the construction sector might do a volte-face on its growth plan. On the domestic front, the Union Budget 2016 indicated a positive outlook towards the Infrastructure sector. The budget included the formation of a National Investment and Infrastructure Fund with an annual allocation of USD 3.25 bn. The Organisation Transformation initiative through OD Labs continues and till date, the business has covered around 500 employees. The business has also started the Institution-building initiative ‘THIRD-i‘, which aims to build a The Indian nuclear market has picked up pace both in the implementation of Indigenous PHWR and imported LWR programs. The special bridges market continues to boom. Good business prospects are seen in 144 the Western and Eastern parts of India. The elevated metros market has become commoditised. Though the business sees ample opportunities in Tier-II cities, its participation will be very selective on large size orders. Underground Metros will be the main playing field of the business. The thrust of the Government of India on Defence spending continues and there is an expectation that prospects will materialise. The prospects of hydropower market on the domestic front continues to be bleak with growing concerns of environmental issues, land acquisition problems and local agitations. The underground space is going to be the key market for the business in the years to come. The business expects increased domestic investments for “All Weather Tunnels”. The business is focusing on increased diversity in man power. Diversity is the key to increased involvement, commitment, and a better understanding of the needs of clients and society. The business is confident of achieving the revenue targets for Bulk Terminal Ltd, plastic cut-off wall for Polavaram dam, Andhra Pradesh (secured by Bauer-L&T Geo JV), LNG marine facilities at Ennore for IOCL and General Cargo berth II at Ennore, Tamilnadu. International Infrastructure. It has sustained growth over the past years by securing some prestigious orders in the Roads & Railways sectors despite a slightly sluggish domestic economic growth. 2016-17 backed by a strong order book. The business is resilient on efficiency and cost control which remain key drivers of profit and performance. Major Subsidiary Company L&T Geostructure LLP (LTGS): L&T GeoStructure LLP (LTGS) is a subsidiary entity - a Joint Venture with Transworld Infraprojects Private Limited. The Company has a strong and professional foundation specialist team with the knowledge of design, equipment and methods to execute and supervise sophisticated works. L&T Geostructure was formed in 2012-13 to focus on marine foundations, deep foundation- supported bridges, deep shafts and other ground-related business. LTGS also has expertise in the areas of large diameter piling, diaphragm walls, cut-off walls, secant pile walls, sheet piles, intake structures, ground improvement, hard-rock boring and water retaining structures. Major orders secured in 2015-16 by LTGS include Multi-cargo berth at Ennore for Chettinad International LTGS has achieved 4.5 million safe man-hours during 2015-16. The business has executed first-of-its-kind multi chamber cellular intake well for the river linking using diaphragm wall technology in Pattisam project in Andhra Pradesh. Successful installation of 80 T reinforcement cage was done for a diaphragm wall which is first-of-its-kind in the country. The business also executed shore protection works for a length of 2.2 Km using sheet piles for the river Tapti. TRANSPORTATION INFRASTRUCTURE Overview: Transportation Infrastructure business comprises Roads, Runways (Airside Infrastructure) & Elevated Corridors (RREC), Railways Construction, Railways Systems & The business has vast experience in Project Management, Engineering Design and Construction Management which gives it a competitive edge over its competitors. The business has a pan India presence and also in GCC countries. It has multiple projects, Engineering Design Centres in Mumbai, Faridabad and Chennai and an Offshore Engineering Centre in Mumbai to cater to international projects besides Area Offices in India/GCC countries. In addition, it has a Competency Development centre at Kanchipuram, and also undertakes training of workmen at CSTI, Ahmedabad. Business environment: The Road business (RREC) has been successful in expanding its customer base during the year by securing various orders for the construction of highways. Major orders received by the road business are: • From Kanyakumari to Mukkola (length 87 Km). • 4-Lane road from Yadgiri to Warangal (length 96 Km). • Addahole to Bantawal road project (length 63 Km). • Development of road infrastructure for Dholera smart city. 145 Artist’s impression of the Al Wakrah Bypass Road in Qatar. The Railway Business has been awarded a major order by DFCCIL (Dedicated Freight Corridor Corporation of India Limited) for laying of tracks from Iqbalgarh to Vadodara, a total of 725 TKm (CTP 3R project) and electrification of 897 Tkm from Vadodara to JNPT, Mumbai (EMP 16 project). The Railways business has also secured a major order from DFCCIL for signalling and telecommunications works from Vadodara to JNPT (STP 17) for a length of 897 Tkm. On International front, the Railway Business Group has secured the first external order of Riyadh Metro Line 1&2 Track works for 152 TKm. The projects successfully completed during the year include Hosur- Krishnagiri Road Project (60 Km, 6 Lane Highway in Tamil Nadu), Kandla-Mundra Road Project (71 Km, 4 Lane highway in Gujarat), Samakhiali-Gandhidham Road Project (56 Km, 6 Lane Highway in Gujarat), Manmad-Rahuri - Daund Railway Electrification Project (334 TKm), Rajpura composite works Project (48 TKm), DMRC CE07 Line 2 & 6 OHE (37 Km), KMDA 4 ROBs and Flyover (1.1 Km) in Kolkata and Chennai Metro Stage 1 Track works (38 Km). The new track construction machine is capable of laying 2 km of tracks per day, setting a benchmark in high-speed rail construction on the Western Dedicated Freight Corridor project. During the year, the business secured 8 International Safety awards - 2 RoSPA Gold, 2 RoSPA Silver, 4 British Safety Council awards and 2 prestigious safety awards from National Safety Council (NSC), India. Significant Initiatives: The thrust on operational excellence continued through digitalisation of equipment for quality improvement, timely completion, cost optimisation, efficient resource utilisation and enhancement of safety measures by adopting improved engineering models like Inclinometers, Compactometers, GPS system and LIDAR surveys etc. On the international front, the business is exploring new markets such as East Africa and Kuwait through business tie-ups with local partners. Special focus is being given to the selection of international consortium partners to be pre-qualified for mega projects in the GCC countries. Various strategic initiatives have been undertaken in the international business to strengthen procurement, asset management & cost control teams to provide immediate onshore support to projects. Outlook: With signs of a recovery in the Roads sector, new projects are being awarded. On the domestic front, the prospects for pipeline looks bright. The Government has given a thrust to accelerate the development of infrastructure. Lower oil prices have fulled the growth of the domestic market. The rate of road construction has been targeted to increase from the current rate of A flyover built by L&T. Metro electrification & signaling project. 146 17 Km per day currently to 40 Km per day and the Government has plans of awarding 1,00,000 Km of National Highways which is a 20% rise over last year. The Ministry of Road Transport & Highways has taken up a detailed review to improve road connectivity to coastal / border areas, backward areas, religious places and tourist places under ‘Bharat Mala’ program. In addition, there are Connectivity Improvement Programs for Char- Dham (Kedarnath, Badrinath, Yamunothri and Gangothri in Uttarakhand). Prospects of Navi Mumbai, MoPA Goa and Dholera are also on the horizon. In the Railway Budget, the capital expenditure for 2016-17 has been pegged at 1.21 Lakh crore. The Railway Budget has announced fast tracking of projects like track laying (new/doubling/tripling projects), Railway Electrification projects, gauge conversion, last miles connectivity projects and emphasis on decongesting existing routes mainly targeting port connectivity. Commissioning of the 2,600 Km of Broad Gauge track and 2,000 Km of Railway Electrification is also proposed in 2016-17. Three more new freight corridors (North –South, East – West and East coast) totalling about 5,700 Km with an estimated value of 2.7 Lakh crore have been proposed in the Railway Budget. Metro Rail Projects in Tier 2 cities and high speed railway lines between Ahmedabad and Mumbai will provide more business opportunities for this segment. On the International front, drop in oil prices has affected the construction business. However, it is expected that Qatar and Kuwait will continue to invest in infrastructure development and GCC will invest in rail infrastructure such as long distance rail projects. POWER TRANSMISSION & DISTRIBUTION Overview: L&T’s Power Transmission and Distribution business is a leading EPC player in the field of Power Transmission and Distribution and Solar businesses, offering integrated solutions and end-to-end services ranging from design, manufacturing, supply, installation and commissioning of Transmission Lines, Substations, Underground Cable Networks (both Power and Control), Distribution Networks, Infrastructure Electric Projects, Solar PV plants in both domestic and 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 and Power Plants, EHV Cable Networks, and Utility Power Distribution and Power Quality Improvement works, complete Electrical, Instrumentation & Communication (EI&C) solutions for various infrastructure projects such as airports, metros, OFC networks, etc. Transmission Line business offers turnkey EPC solutions in Overhead lines for Power Evacuation and Transmission, bolstered by its state-of-the-art tower manufacturing units at Puducherry and Pithampur supplying over 1.3 lakh tones of tower components annually. Further capacity enhancement is envisaged at Kanchipuram which is expected to be operationalised by mid of 2016- 17. The Testing and Research station at Kanchipuram accredited by NABL is one of the largest in Asia and is also amongst renowned testing centre in the world. (NABL: National Accreditation Board for Testing and Calibration Laboratories) Solar business provides single point EPC turnkey solution for solar PV related projects. Experience spans across all terrains (sandy, rocky, etc.), all technologies (Thin Film Frameless and Framed, Crystalline, Tracker, etc.) and various contract structures including Turnkey EPC, Integrated Lump sum Turnkey (iLSTK) and Balance of Systems (BoS) Contracts. The business unit provides the Optimised Power Plant Design and are channel partners of MNRE with the highest Rating in the System Integrator and Renewable Energy Service Company (RESCO) categories. The international units of the business in Middle East, Africa and ASEAN offer complete solutions in the field of Power Transmission and Distribution including High Voltage Substations, Power Transmission Lines, Extra High Voltage Cabling and Electrical, Instrumentation and Controls (EI&C) works for Infrastructure projects such as Airports, Oil & Gas Industries etc. in UAE, Qatar, Kuwait, Oman, Saudi Arabia, Bahrain, Algeria, Kenya, Ethiopia, Malaysia and Thailand. 147 Business Environment: In 2015-16, the distribution sector in India maintained the momentum it gained during the past two years backed by several governmental initiatives. Supported by central funding agencies, state utilities have laid emphasis on strengthening their respective distribution networks for better efficiency, accountability and management. The business did well to capitalise on these opportunities and was successful in maintaining its leadership position. The EHV substation related opportunities in 400kV & 765kV GIS/AIS segments were steady as central and select state utilities were concentrating on Power System Strengthening Schemes to meet their demands. Though there were positive signs on the policy front, the general lack of investments in conventional power generation and industry segments continued. The interest shown by major players in transmission corridors awarded through the Tariff based Competitive Bidding (TBCB) process marks the advent of changing clientele from utility-based to investor-based. State Utilities are increasingly concentrating on strengthening the transmission network aided by funding from multilateral agencies. Transmission line projects have been executed for the Central Transmission Utilities like PGCIL, NHPC, etc. and for various State Transmission Utilities like those in Uttar Pradesh, Chhattisgarh, West Bengal, Punjab, Tamil Nadu, etc. The business has dedicated and experienced construction teams to 148 India’s first 1200 kV Air-insulated Substation at Bina in Madhya Pradesh. take up projects at various voltage levels and is presently executing various projects at 765kV AC, 400kV AC & 800kV HVDC levels across the country. Sub-Saharan region, with the business establishing its presence in Algeria, Kenya, Malawi and Ethiopia and selectively pursuing identified focus countries. In the Middle East, though the macro economic and political scenarios were mixed during 2015-16, the business witnessed significant investments aided by FIFA 2022 related investments in Qatar, Expo 2020 related plans in UAE and stable T&D investment plans by Kuwait and Oman. Key focus on Saudi Arabia has resulted in substantial growth for its T&D business as its central power utility has gone ahead with its vast expansion plans so as to meet its demand forecast. Spend cuts induced by the oil price drop and continuing unrest in neighbouring regions caused a sense of anxiety in the business climate. However, the business secured 51 substations, 633 Km of overhead lines and 624 Km of cabling projects in the year. The African market has started opening up in northern and The efforts by the business in the ASEAN market for T&D business yielded results providing breakthrough orders in Malaysia and Thailand. The ASEAN market is steadily opening up opportunities for the business with new power generation and evacuation schemes to meet the electricity demands in the region. The large scale investments made in improving the T&D network in Odisha providing opportunities for major orders for the domestic segment of the business. It could secure several packages in different phases of the Odisha Distribution System strengthening project related works. The urban and rural electrification orders from Uttar Pradesh, West Bengal and Odisha under the erstwhile Restructured Accelerated Power Development and Reforms Program (RAPDRP) and Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY) schemes too are noteworthy. Apart from securing the 765kV Aligarh GIS order, the business also secured a STATCOM order which is a breakthrough project in terms of technology. In the Transmission Line business, major orders have been secured from the private sector in Chattisgarh and Telangana regions. Another major order from KPTCL for the 400kV D/C Quad line in the Bellary region also involves design and testing of towers. An order has been secured from the Tamil Nadu Transmission Corporation Limited (TANTRANSCO) for a 107Km long 400kV D/C Quad line from Kamudhi to Karaikudi. The Kanchipuram Testing centre has been booking orders from reputed global customers like Dominion Virginia Power from USA, Rohas from Malaysia, etc. Having secured orders from Power Grid Corporation of India Limited (PGCIL) and the state utilities of Bihar, Madhya Pradesh and West Bengal, the business has emerged as one of the largest market share holders in 2015-16. The Middle East business sustained its winning streak by securing major EHV GI substation orders in Qatar including 3 packages from its key customer, KAHRAMAA. Another significant order was for design and build of 5 substations with associated cabling from Lusail. The business has also secured several Substation and Transmission Line projects at the 132kV level in Saudi Arabia. EHV GIS orders from private customers were secured in UAE. The business continues to make good strides in its Africa initiative. The business received two major substation orders in the East African market: one for constructing a 400kV AI Substation (AIS) in Addis Ababa, the capital city of Ethiopia from Ethiopian Electric Power and the other for a 400kV Substation at Lilongwe in Malawi from Millenium Challenge Account, an organisation funded by US Government. There were breakthroughs in the ASEAN market through four major orders. In Malaysia, a 500kV Transmission Line order from Tenaga Nasional Berhad (TNB) and two 275kV GI & AI substations from Sarawak Energy Berhad (SEB) were secured. In Thailand, a 500kV Transmission Line order from Electricity Generating Authority of Thailand (EGAT) was received. The business is proud to have been given an opportunity to light up thousands of households in economically backward areas and electrify hundreds of villages. In a large number of towns, it has improved the power quality 230 kV double-circuit transmission line at Abu Ali, Saudi Arabia. L&T is the industry leader in turnkey construction of power transmission and distribution systems in India and the Middle East. 149 One of the many 400 kV Gas-insulated Substations installed by L&T. and significantly reduced AT&C losses through distribution reform projects. The key substation projects commissioned include major EHV substations viz. 765kV GIS at Varanasi, 400kV GIS at Nagapattinam and Narendra for PGCIL; 400 kV AIS at Karamadai and Karavalur for TANTRANSCO; 220kV GIS for HPPTCL. In the Transmission Line business, a major portion of India’s first +/-800kV HVDC corridor project viz. 800kV HVDC TL from Biswanath Chariyali to Tangla was commissioned. 400 kV D/C RAPP - Sujalpur Transmission Line for Sterlite Power Grid Ventures Limited (202Km) was commissioned well ahead of schedule. Other projects commissioned include 765kV Gwalior to Jaipur Transmission Line (TL) of PGCIL (128Kms), 400kV D/C (Quad) Barh - Gorakhpur TL of PGCIL (178Km), 400kV D/C (Quad) Kurukshetra – Jalandhar TL of 150 PGCIL (133Km), 400kV D/C Kutta- Kozhikode TL of PGCIL (99Km) over an extremely hilly and difficult terrain, 220kV D/C Varahi - Kavoor TL of PGCIL (117Km), 220kV Gadag- Bagalkot TL of KPTCL (102Km) and 220 kV & 132kV Lines for MPPTCL (225Km). The TLTRS facility at Kanchipuram achieved a major milestone by successfully testing the Saudi Electricity Company’s tower measuring 101.3m high, the tallest tower ever to be tested. The Solar business commissioned 200 MWp – a rare feat to be accomplished by an EPC in a year. It commissioned India’s largest tracker based solar PV plant in Tamil Nadu. In the International market, the Middle East business commissioned 18 substations, 2 cable projects and an Overhead Transmission Line. Having qualified for the highest voltage levels in its lines of business, it also added five new customers. Significant Initiatives: Having identified Digitalisation as a key enabler, the business rolled out mobility device based project monitoring tools in its Saudi Arabia projects. Several operational excellence initiatives in the areas of on-time delivery, profitability enhancement, effectiveness checks of process implementation, working capital management and risk management were pursued. The domestic back office for engineering and design to cater to international projects has been strengthened. A new Transmission Line Tower manufacturing facility is also proposed. To enhance safety in its operations, the initiatives undertaken include upgrading Safe Operating Procedures (SOPs) for Transmission Lines, EHV Substations and Distribution projects to reflect changing work methods and mechanisation, adoption of Sagging Power Transmission & Distribution business. The improving financial health of State Utilities thanks to the Ujwal DISCOM Assurance Yojana will mean increased distribution opportunities through Integrated Power Development Scheme (IPDS) and Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) schemes. To reduce AT&C losses in general and especially in cyclone affected areas, there is continued focus on converting overhead lines to underground cables. Further, the business expects continued investments in the Extra High Voltage substation segment from PGCIL and select state utilities especially in 765kV & 400 kV levels with thrust on GIS. Some of the states are planning EHV cable links too. Power quality improvement projects such as STATCOM, new clientele out of TBCB players, state utilities strengthening their networks with funding from multilateral funding agencies etc. are expected to provide much needed impetus. However, GoI’s push towards mobilisation of major equipment and material for distribution projects in a centralised manner may significantly reduce the package size available for the EPCs and increase the physical scatter of work scope for a given package size. In the Transmission Business, while the state and central utilities will continue to award routine packages for grid strengthening, major transmission packages shall also be witnessed through Tariff based Competitive Bidding. While intensified competition, strategic median packaging 151 India’s first 765 kV Gas-insulated Substation, at Pune. Bridge (Stringing Working Platform) technique and the use of motorised winch machines in place of tractors, in final sag activities and enhanced training on Behavior-based Safety, Safety Audit and Training the trainers. The Solar business rolled out tracker technology on a large scale in one of its projects. It also tested other technological advancements such as Seasonal Tilt technology and E-W technology. As part of its internationalisation strategy to expand into key African and ASEAN economies, the business has strengthened its talent base to execute ongoing jobs, vigorously pursuing emerging potential and creating corporate brand awareness and preference. The business intends to develop long-term relationships with its customers and fosters strategic partnerships and alliances with key vendors and OEMs. Such initiatives promptly earned awards and recognitions for the business during the year. These include: • Utkrishtata Puraskar award from PGCIL. • Earth Care Award for Innovations in Climate change from JSW - TOI. • Plaque of Honor for successful completion and appreciation certificate for implementation of safety norms from Bengal Aerotropolis Projects Limited (BAPL). • Appreciation Certificate for quality from Karnataka Power Transmission Corporation Limited (KPTCL). • Best Infrastructure Project of the Year Award from Dossier Awards Oman 2015. • RoSPA Safety Awards for 9 projects. • British Safety Council Awards for 6 projects. Outlook: The focus of the Central government on visible results in key programs such as ‘Electricity for All’, ‘Make in India’, etc., augur well for the growth for and reverse auction in PGCIL projects may become a dampener, Transmission Lines for solar parks and lift irrigation schemes, reconductoring packages and multi circuit lines with High Transmission Low Sag (HTLS) conductors are expected to provide new opportunities. Statutory changes in land acquisition will have an impact on the Right of Way clearances in transmission line projects. Commodity prices having bottomed out late in 2015-16, the emerging upward trend may exert pressure on costs. With its experience and expertise, the business is in an ideal position to exploit opportunities in both transmission and distribution. The business is poised to pursue opportune prospects in Solar PV plants in the backdrop of GWs of planned solar capacity addition, solar parks being created by states like Telangana and Karnataka, favourable policy changes through Renewable Energy Act, etc. In the Middle East, the business is cautiously optimistic in its outlook. The slow recovery of the oil price is not expected to hamper investments in the T&D sector though there may be policy measures like taxation and currency de-pegging. Infrastructure development will continue as part of diversifying the economy and aided by events like FIFA 2022. GCC grid formation, upgradation to higher voltage levels, integration of renewable energy sources to the existing power grid and interconnections of transmission networks are expected to fuel growth in power distribution throughout the Middle East. New investment 152 opportunities may unfold with Aramco’s stock divestment plans. Though the de-subsidising of oil prices may increase the input costs in medium term, such expectation hastens decision making on project awards to take advantage of lower commodity prices. While competition from European players may intensify, the established credentials of the business in terms of prequalification and project delivery will help maintain its leadership position. Africa’s economic growth has been impressive and is predicted to remain robust. To sustain and support high growth rates expected for sub-Saharan Africa through economic diversification and industrial development, closing the current gap in power infrastructure will be crucial. Regional integration, such as power pools, system strengthening projects and promotion of renewable generation could shape the energy landscape in sub-Saharan Africa. There are visible commitments from Governments to expand installation capacity and increase electrification access rates substantially. The eagerness from multilateral funding institutions to sponsor infrastructure projects either directly through utilities or through infrastructure developers bodes well. The business has established its presence in some of the key growth economies of Africa and is currently executing Transmission and Distribution projects. The business is concentrating on key economies of Africa that have a clear road map to build Substations and Transmission Lines to meet increasing demand. Power Infrastructure is being ramped up by the ASEAN countries driven by growth prospects attributable to regional economic integration and strategic location. The rising power demand paves the way for significant investments in grid interconnections, grid development and strengthening in countries such as Malaysia, Thailand, Myanmar and Indonesia. The overall outlook for the PT&D sector remains promising on both the domestic and international fronts. The business looks forward to consolidate its position in established markets and gain significantly in new growth areas; ably supported by its initiatives on cost leadership and smart delivery. L&T’s rural electrification expertise has brought electricity to over 24,000 Indian villages. L&T’s capability in executing projects for power distribution includes switchyards. Major Subsidiary Company: Larsen & Toubro Oman LLC (LTO) LTO, set up in collaboration with Muscat Trading Company (Zubair Corporation Group), provides engineering, construction and contracting services in the Sultanate of Oman. LTO made its maiden venture into Oman in 1994 and has completed 22 years, emerging as one of the leading construction companies. During the past year, the Company managed to bag a slew of projects including a major 400kV cabling and OHL project and maintained a healthy order inflow. The business expects a stable political and economic scenario in Oman with growing opportunities in the T&D segment. Larsen & Toubro Saudi Arabia LLC (LTSA) LTSA is a wholly-owned subsidiary providing engineering, construction and contracting services in the sphere of T&D in the Kingdom of Saudi Arabia. During the past year, the Company had secured orders for a sizeable number of projects involving 15 Substations and 2 Overhead Lines from SEC. With a stable political environment and the continuing need for strengthening of Transmission & Distribution network, LTSA is well poised to garner sizeable opportunities in the coming year. WATER & EFFLUENT TREATMENT Overview: The Water & Effluent Treatment (WET) business caters to turnkey infrastructure projects including water supply and distribution, desalination plants, water management systems, wastewater networks, water and wastewater treatment plants, industrial and large water systems, lift irrigation and canal rehabilitation. Over 20 million people in India have benefited from L&T’s water infrastructure projects. With an experience of constructing over 51,000 Kms of water and wastewater pipeline networks and more than 4,000 MLD of water, wastewater and effluent treatment plants, the business is India’s largest water infrastructure organisation. Business Environment: The per capita water availability in the country is rapidly decreasing due to increase in population and consumption. The GoI has plans to prevent the contamination of surface water bodies by stopping the untreated wastewater flowing into it. It also plans to adopt modern irrigation techniques so that the dependency on monsoon can be reduced. Industries are planning to recycle and reuse their effluents by adopting advanced treatment 153 Water pre-treatment plant for a power plant in Sagardighi, West Bengal. technologies thereby reducing the consumption of fresh water requirement for their day to day processes. Projects Commissioned and Orders Received: The Water & Effluent Treatment business has commissioned several important water projects in 2015-16. These include Vellore Combined Water Supply Scheme -(Pkg I) with a 181 MLD Water Treatment Plant for Vellore Corporation which will provide drinking water to 24 lakh people in Vellore District, Jawai Cluster Project comprising water supply from five offtakes which will benefit 5 lakh people; State-of-the-art STP at the President Estate of The President of India for re-use of 20 lakh litres of water for horticulture works, upgradation and rehabilitation of Bhagirathi Treatment Plant (500 MLD) at Delhi; Storm Water Project at Varanasi and Mathura for Uttar Pradesh Jal 154 Nigam Limited, Raw Water Intake & Pipeline Package for JaiPrakash Power Ventures Ltd, and the 241 MLD Doha South Sewage Treatment Plant, Qatar for Public Works Authority (ASHGHAL). The business has also been successful in securing orders from various domains like lift irrigation, drinking water supply, plant water systems, common effluent treatment plants, municipal wastewater collection and treatment and integrated urban infrastructure. On the International front, the business has secured orders in Qatar and Oman. Significant Initiatives: With huge opportunities in integrated water supply prospects, lift irrigation, sewage and effluent treatment space, significant initiatives have been taken to ensure that the business continues to be ahead of the competition, both in terms of market share and profitability. Some of these initiatives are:- Thermal desalination plant. Hanamapur Lift Irrigation Project, Karnataka. creation, distribution, management, field application and extension activities. The Delhi - Mumbai Industrial Corridor (DMIC) is India’s most ambitious infrastructure program aiming to develop new industrial cities as ‘Smart Cities’ and converging next generation technologies across infrastructure sectors. The program envisages the development of infrastructure linkages like power plants, assured water supply, high capacity transportation and logistics facilities. In the International market, opportunities have been identified for desalination and sewage treatment plants in GCC. FIFA 2022 in Qatar and Expo 2020 in UAE are triggering water infrastructure prospects in the Middle East. Similar water infrastructure prospects are also visible in KSA, Kuwait and African countries. SMART WORLD & COMMUNICATION (SWC) Overview: The world is seeking smarter, more secure and intelligent solutions to enhance quality of life. This has led to the rise of smart cities, advanced security solutions and communication infrastructure in several advanced economies. India is also rapidly gearing up to create smart infrastructure that will soon be the backbone of the economy. The Smart World & Communication business provides turnkey services and Operations & Maintenance as a Master Systems Integrator in the areas of city surveillance, intelligent traffic management systems, 155 Water-treatment plant for Vellore Water Supply Scheme, Tamil Nadu. • Foray into Specialised WTP & Desalination with Technology Partnerships. • Participation in Mega Lift Irrigation System tenders, in which water is not transported by natural flow but is lifted with pumps or by other means. • Focus on Zero Liquid Discharge (ZLD) process as along with combined effluent treatment packages in various states and industries across India. • Upcoming medium to large scale STP tenders will improve the quality of urban life. Outlook: Large investments have been proposed by multi-lateral funding agencies for irrigation, integrated urban utilities and CETPs in India. The GoI is committed to accord high priority to water conservation and its management. Nearly 500 cities and towns are expected to be covered under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for the development of urban infrastructure. Coming to irrigation, mega projects have been proposed across major states along with proposals to connect rivers with 15,000 Km of canals. The government has already set in motion an integrated Ganga conservation plan - ‘Namami Gange’ which envisages investments for sewage infrastructure across several urban habitations along the river. Stringent implementation of pollution norms is in place to encourage setting up of common effluent treatment plants. To this effect Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) has been formulated with the vision of extending the coverage of irrigation ‘Har Khet ko Pani’ and improving water use efficiency ‘More Crop per Drop’ in a focused manner with end-to-end solutions for source To create smart cities, L&T offers integrated capabilities from L&T Construction, L&T Electrical & Automation, L&T Infotech and L&T Technology Services. transport & logistics, border security, communication networks, telecom infrastructure, building management systems, smart grids and smart city development. Business Environment: Security Solutions Business The various solutions offered by this business includes City Surveillance Systems, Intelligent Traffic Management Systems (ITMS), Border/Coastal Security Systems, Security and Management Systems for Critical Infrastructure - ports, airports, metros, IT parks and public buildings. Several of these systems have been executed by the infrastructure business in various projects across the country. The business commissioned the prestigious project for the Home Department, Gujarat by installing 156 City Surveillance & Intelligent Traffic Management Systems for three cities – Ahmedabad, Gandhinagar and Vadodara. The business also executed a unique project facilitating better surveillance and management of critical infrastructure at Sabarmati Jail in Gujarat. The business is currently executing India’s largest city surveillance project comprising 6,000 cameras at over 1,500 locations in Mumbai City. The Security Solutions business segment has secured the largest surveillance project in respect to camera installation for Hyderabad and Cyberabad City. The project is city’s first step towards a Safe Smart City. It has also secured the first standalone Intelligent Traffic Management Project implementation for Hyderabad. Communication Network & Telecom Infrastructure Business: This business offers total solutions in areas of Wired and Wireless Networks including OFC, Emergency Response Systems, Fixed Broad Band, Satellite and Microwave RF Links, ICT / Data Centre Infrastructure, Emergency Response Systems including Dial-100, Early Warning Dissemination System and Communication Network for Metro Rails. The business has huge experience in optical fiber cabling projects and enjoys excellent track record of installation of telecom towers and other associated works on a turnkey basis. The business has proven expertise in providing state-of-the-art IT & communication systems for airports, metros, power plants and factories. The business is currently executing the first-of-its- kind communication network at a Communication Network & Telecom Infrastructure Business: The Bharat Net program plans to connect 2.52 lakh Gram Panchayats across the country through high speed digital network. Seven states have offered to come up with a State or SPV approach to take this initiative forward. Apart from this, the plan outlay for the Department of Telecom for 2016-17 includes funds for an OFC based network for the Defence services. This, together with other initiatives of various government departments will provide future opportunities. The Union Budget has a healthy allocation for Metro projects where the business has made an entry with the LMRC project here. The focus here is on communication systems such as Radio equipment, FOTS, PA&PIDS, Clock and other surveillance equipment. The business will be active in this segment. Allied to the communication elements is the ‘Automatic Fare Collection system‘ that requires tie-ups with a few technology players. Metro projects are funded by agencies such as JICA and DMRC, which improves the level of safety in undertaking these jobs. Smart Infrastructure Business: The Plan outlay in the Union Budget 2016 of the Ministry of Urban Development is 21100 crore which includes 7205 crore for Smart Cities and Atal Mission for Rejuvenation & Urban Transformation (AMRUT). The Government has already unveiled the list of cities under the 157 High-technology surveillance systems ensure 24x7 security. pan India level for IAF connecting 131 Air Force locations. This business segment secured the comprehensive Metro communication package for the Lucknow Metro and is also executing the TETRA communication network for the Delhi Metro. Smart Infrastructure Business: This business segment, as a Master Systems Integrator, offers both infrastructure creating expertise, backed by state-of-the-art IT capabilities. The business has executed many projects that include most of the sub systems of the SMART city offerings like CCTV systems, VMS, Video Analytics, Access Control Systems, Telecom Systems and Command Control Centre Systems. These projects, which were being executed independently, have now been brought under one umbrella to create smart infrastructure. The business commissioned India’s First Smart City Project – Jaipur Smart City with Wi-Fi, Cameras, Interactive Kiosks, REGS and Parking Information Systems at selected locations with a central command and control centre. Outlook: Year 2016-17 looks promising for the business, as the new Government has provided a fillip to safe and smart cities and other digital initiatives. Security Solutions Business: The trigger for the surveillance business, will essentially come from the initiatives taken by State Police Departments and State Industrial Development Authorities given that the safety of people is a State subject. Central Government assistance is also committed by MoH to those state governments which take up the ‘safe‘ initiative. Good inroads have been made into this segment in the last three years. ‘Smart Cities Mission‘. Apart from the Government’s Smart Cities Mission, many cities like Naya Raipur and different SEZ corridors have plans for implementation of smart elements. Some of these cities are focusing on pilot smart city projects to secure a qualification. Countries like USA, Japan, Germany and France are eager to provide investments and technological support for the development of many of these smart cities across India. Leveraging the diversity and depth of L&T Construction’s expertise in water supply, wastewater, solar, etc., the Smart Infrastructure business plans to get into new areas like solid waste management and all other smart elements like parking systems, intelligent traffic management systems, etc. The business is well positioned to collaborate with State level municipal corporations and governments to share its experiences in Jaipur which include the safe city initiative and dedicated surveillance projects. 158 Power Business 2x800 MW supercritical thermal power plant at Krishnapatam, Andhra Pradesh. L&T has manufactured critical equipment for supercritical power plants across India. Overview: Power business provides integrated concept-to-commissioning of coal and gas-based power plants on turnkey basis. The business has project management centres in Vadodara, Faridabad and Chennai along with state-of-the-art manufacturing facilities in Hazira for ultra- supercritical / supercritical Boilers, Turbines & Generators, Axial Fans, Air-Preheaters and Electrostatic Precipitators. These factories, coupled with talented staff and decades of unparalleled experience in executing complex projects, are its competitive advantage in building the best-in-class power assets in India and abroad. During the year, capacity worth 2,228 MW built by the business achieved commercial operation. The business has also made significant headway in Bangladesh by winning three prestigious projects for gas-based plants, one each in the last three years. Business Environment: The business environment was a mixed bag during the year with promising as well as challenging developments. The domestic market witnessed a sharp increase in tendering activity 159 in 2015-16. Projects worth 21 GW were decided either through bidding or nomination route. Out of this, close to 10 GW were awarded out, with formal orders for the rest yet to be placed. This increased activity was, however, marred by severe competitive pressures with aggressive pricing by competitors. The year also saw the rise of a trend of multiple state-owned utilities placing orders on nomination basis (Close to 6 GW) bypassing the established norm of inviting competitive bids. During the year, the business fully established its footprint in Bangladesh by securing its third EPC order in as many years for BPDB 400 MW Bibiyana CCPP. In the previous years, it won orders for NWPGCL 360 MW Bheramara CCPP and BPDB 225 MW Sikalbaha CCPP in Bangladesh. The execution of the current coal and gas-based projects on hand also progressed satisfactorily in 2015-16, with internal execution records being surpassed in terms of time taken for achievement of major project milestones like erection of boiler structures and ceiling girder jack-up. Significant Initiatives: The business has recently drawn up Lakshya 2021 – its 5 year strategic plan. Under this exercise, major strategic initiatives have been identified which will lead the business to greater success under the plan period. These initiatives have been drawn up after detailed deliberations and reviews both internally as well as with external consultants to maximise the benefits to the company. 160 Natural-gas-fired combined-cycle power plant built by L&T at Vemagiri in Andhra Pradesh. An aggressive cost reduction exercise has been initiated under this plan, to improve the profitability of its current project portfolio and improve its competitiveness for future bids. Exports – of products, services and projects – have been selected as another major focus area. The business has made significant progress in cultivating overseas customers for its engineering wing as well as supply of boiler and turbine components. During the year, the business also initiated groundwork for firming up technology partnerships in new areas like Flue Gas Desulphurisation (FGD) and Selective Catalytic Reduction (SCR) and is well placed to take advantage of emerging opportunities. to the sector. On the other hand, the increasing focus on nuclear power and renewables like solar can fundamentally alter the power source mix in the nation. Notwithstanding the emergence of these alternative sources, coal will remain the mainstay of the domestic power sector. The primary concern, however, will continue to be the supply glut in the coal power segment. There are prospects worth ~7 GW in the domestic coal market for 2016-17, against the annual domestic manufacturing capacity of 24 GW. While this overcapacity will continue to keep prices under pressure, the business expects the irrational pricing to finally ebb, as competitors may bid responsibly because of the mounting financial distress evident from their books in 2015-16. Outlook: The power sector in the country is in a state of flux today. The country’s growth and proactive government policies are expected to provide much needed boost For 2016-17, the situation is expected to improve on policy and economic fronts. On the policy side, the Government has issued rules on environmental protection relating to curbing the emissions hanger tubes used in super heater and reheater coils of boilers. The Company further strengthened its position in export market with prestigious orders from MHPS, Japan for supplying pulverizers, proving its cost competitiveness while matching global quality standards. LMB is committed to execute the current jobs within schedule and is also focusing on increasing exports jobs for pulverizers and pressure parts. L&T-MHPS TURBINE GENERATORS PRIVATE LIMITED (LMTG): LMTG is a joint venture incorporated in India of L&T and Mitsubishi Hitachi Power Systems Limited (MHPS), Japan and Mitsubishi Electric Corp. (MELCO). L&T has a 51% stake in the joint venture, with MHPS holding 39% and MELCO holding 10% stake. The company has a state-of-the-art manufacturing facility at Hazira, Gujarat for the manufacture of STG equipment of capacity ranging from 500 MW to 1000 MW. The company is engaged in the engineering, design, manufacture, erection and commissioning of ultra-supercritical/ supercritical turbines and generators in India. The year saw satisfactory execution progress as planned for the projects on hand – both domestic and exports. The company has made consistent efforts to reduce costs, product improvisation of bringing in more efficient models, indigenization and optimization of facilities. Today the company is much better equipped to meet the competitive market. Export has become a thrust area for the Company with its high quality 161 Supercritical turbine being assembled at L&T’s Hazira Campus. of coal-based power plants. These are expected to open up new high-value business opportunities for FGD and SCR. The company is getting geared to offer these as part of its product portfolio. The Ujjwal Discom Assurance Yojana (UDAY) implemented by the Central Government is also expected to provide relief to the sector by de-stressing the discom balance sheets and reviving demand. The Government also plans to bid out at least two UMPPs during 2016-17 to developers. This will generate sizeable market for the business in subsequent periods. The domestic gas-based power plant market is not expected to revive in the near future considering the already stranded commissioned capacity. However, the South East Asian market is expected to generate opportunities for gas based plants in the coming year. With the good experience of three Bangladesh projects under execution, the company is preparing to enter these new markets in South East Asia. Major Subsidiary Companies: L&T-MHPS BOILERS PRIVATE LIMITED (LMB): LMB is a joint venture incorporated in India of L&T, with a 51% stake and Mitsubishi Hitachi Power Systems Limited (MHPS) Japan, with 49% stake, for the engineering, design, manufacture, erection and commissioning of ultra-supercritical/ supercritical boilers in India. The manufacturing hub of LMB is at Hazira, Gujarat; while it has established design and engineering centers at Faridabad and Chennai. The company can manufacture ultra-supercritical/supercritical boilers up to a single unit of 1000 MW at its Hazira complex. Projects under execution have achieved several milestones with stamp of quality and performance this year. The manufacturing facility at Hazira has installed and commissioned its first robotic system for boiler component welding. The robotic system is being used to manufacture standards and competitiveness being appreciated. The Company has also been on the lookout for additional revenue streams like spares and services, which is bearing fruit and is well-poised to grow in future. L&T-SARGENT & LUNDY LIMITED (LTSL): The Company is a joint venture of L&T and Sargent & Lundy LLC, USA (S&L), a global consulting firm in power industry. L&T’s stake is just over 50% in the joint venture. LTSL’s main Design Centres are located in Vadodara and Faridabad. LTSL offers the complete gamut of Power Plant Engineering and Consultancy services - from concept to commissioning. Its experience list includes overseas projects in USA, Middle East, Africa, and South East Asia. Besides having considerable expertise in gas-based and sub-critical coal based power projects, LTSL is also involved in engineering of ultra-supercritical/ supercritical coal-based projects and forms the engineering base for L&T’s thrust on turnkey execution of ultra-supercritical/supercritical technology. As of now, it has engineered around 21,000 MW of generation capacity of gas-turbine based power plants and around 22,000 MW of generation capacity of coal-based power plants across the globe. New customers added to its client list this year included a well-known IPP based in Singapore, S. Korean EPC contractor, Turkish EPC contractor, a major European institutional investor, a power investor based in Singapore, two cement manufacturers based in Saudi Arabia and a major Infrastructure player based in Japan. Breakthrough orders were received in new areas of business in international Lender’s Engineering Assignment funded by IFC, Transmission & Distribution, Substation Engineering and Renewables (Solar) and R&M segments. L&T HOWDEN PRIVATE LIMITED (LTH): The Company is a joint venture of L&T and Howden Group, UK. L&T has 50.1% stake in the joint venture. The company supplies high end fans and air pre-heaters for thermal power plants. The Company has a state-of-the-art 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 center at Faridabad. In addition to LMB orders, the Company has bagged major orders from other Boiler OEMs. The Company will continue to pursue fresh equipment prospects from boiler OEMs as well as aftermarket orders from utilities. The recent environmental rules requiring FGDs will further boost demand for the Company’s axial fans. 162 Metallurgical & Material Handling Business Integrated Steel Plant, Kalinganagar, Odisha. Overview: Metallurgical and Material Handling (MMH) business provides EPC (Engineering, Procurement & Construction) solutions for ferrous (beneficiation, iron & steel making), non-ferrous (aluminium, copper, lead and zinc) as well as bulk material handling systems in the power, port, steel and mining sectors. The business also offers specialised conveying systems and Ash Handling Plant (AHP) solutions to the power plants sector. It has comprehensive and robust design and engineering capabilities to cater to EPC needs across all disciplines. It also has in-house facilities which design, manufacture and supply large range of products like surface miners, crushing systems, apron feeders and sand manufacturing plants. It also undertakes customised manufacturing of critical machinery for the steel, power, mining and other industrial sectors. These manufacturing facilities are located at Kansbahal (Odisha) and Kanchipuram (Tamil Nadu). Business Environment: Stagnant growth in demand, coupled with the onslaught of cheap imports from China and East Europe had highly stressed profit margins for Indian steel producers in spite of the low raw material prices. Debt serviceability had been a major 163 concern in the year 2015-16 for a majority of the steel and power companies. All these factors have impacted investments in new projects with no major steel and power plant expansions announced by companies. Recent Government initiatives like Safe Guard Duty (SGD), Minimum Import Price (MIP) and bringing transparency in mining allocation, coupled with an upward trend in global steel prices have brought some hope for the steel and power sectors and investments in the mining sector have commenced. However, there are risks associated with the positive sentiment on steel which include raw material and steel price volatility, removal of regulatory support by the Government under the pressure from WTO, significant rise in domestic utilisation rates and weak demand which can all play spoil sport. Coal India has been able to achieve the production of 536 million MT in 2015-16. The Coal Ministry plans to become self-sufficient in power plant fuel in next two to three years. Major investments in Coal Handling and Washery are likely in the near future by CIL, SCCL, MDOs, etc. India’s iron ore production is expected to reach 199 million MT by 2020, opening opportunities in beneficiation and material handling sectors. Investments are planned for iron ore handling and beneficiation plants by the operators of captive mines namely SAIL and TATA. The emphasis of all steelmakers will be on improving operational efficiencies. This is expected to 164 L&T offers eco-friendly sand-making machinery and systems in consortium with Japanese major Kemco. lead to investments in rebuilds and de-bottlenecking. A thrust on ordering Ultra Mega Power Projects (UMPPs) of 6000- 8000 MW is expected in 2016-17. This will provide opportunities to MMH for Coal Handling Plants (CHPs) and AHPs. Major orders booked and executed during the year: The business managed to stay ahead of its competitors in major bids in 2015-16 which include Beneficiation Plant for SK Mines near Udaipur, Large Tank Package for Emirates Global Aluminium at Abu Dhabi, AHP for NTPC at Tanda and Petcoke handling package for IOCL Paradip and ORPIC Oman. The business is currently executing major metallurgical projects for Tata Steel Limited at Jamshedpur, for SAIL at Rourkela and Bokaro and for SK Mines near Udaipur. Material Handling packages for RRVUNL at Chhabra, NTPC Khargone, NTPC Tanda, MPPGCL Malwa, Reliance Jamnagar, for Adani at Kandla and Mundra, Northern and Mahanadi Coal field jobs at Nighai, Khadia and Lingaraj and 10 other packages are concurrently under execution for various other customers. GCC projects under execution cover customers like ORPIC, EGA, joint venture by SENAAT & JFE and others. Plants commissioned across various business units during the year 2015-16 are Blast Furnace, Coke Oven Battery, Sinter Plant, Steel Melt Shop, Hot Strip Mill, Material Handling Package and Power Distribution System for Tata Steel at Kalinganagar; Material Handling Package for Tata Steel at Jamshedpur; Sinter Plant for SAIL at Bhilai, Emirates Steel HSM storage at Abu Dhabi; Drywall Gypsum Board plant for USG and Zawawi Minerals at Oman, NCL at Block-B; Bucket Wheel Excavators at Neyveli, CHP for NTPL-Tuticorin, UPRVUNL-Anpara, GCEL-Raikheda and BIDCO-Lalitpur. The Product business is fully equipped to manufacture high- end equipment involving heavy fabrication, precision machining and critical assembly and testing. In the year 2015-16, Kansbahal received a repeat order from Rio Tinto for a 1600 TPH rotary breaker type crusher for Mount Thorley Mines at Singleton, Australia. This was based on satisfactory performance of the first machine supplied in 2014-15. Another prestigious international order from Awam Minerals, Oman for custom-built skid mounted gypsum crushing plant was successfully commissioned. L&T Kansbahal introduced the very first surface miners in Northern Coalfields Limited (NCL) coal mines in 2015-16. It also continued to maintain its dominance in supplying Limestone Crushing plants to major cement plants in India. The fabrication shop at Kanchipuram continues to provide the support and strength of critical and heavy fabrication and assembly works for Material Handling Equipment like Stackers, Reclaimers and a host of other mid precision level equipment catering to the Steel, Mining, Power and other process plants. Significant Initiatives: The business has made strategic alliances with leading global technologists as a part of its business line diversification across various segments. The ferrous business has taken strategic initiatives in certain parts of the value chain to develop in-house technology capabilities and position itself as a LSTK player for those process plants. The non- ferrous sector has started to expand its portfolio into by-product plants for Zinc and Copper. As part of a business augmentation drive, MMH has envisaged opportunities in Ash Handling, EPC support for MDO (Mining, Development and Operation) and Material Handling systems. Kansbahal’s manufacturing facility is strategically planning to further augment its product portfolio with the introduction of new products like advanced sand manufacturing plants, cone crushers and mobile crushers. During the year, the business completed the restructuring of its operations by closing cluster offices. The business aggressively pursued optimisation of resources like staff, equipment, materials and formwork along with cost reduction measures to create a lean organisation and improve operational performance. Operational excellence initiatives continued to enhance productivity. Key success factors for the business are customer satisfaction, operational efficiency and consistent performance. The business has also established offices in the Gulf (UAE, Oman and KSA), Africa and South East Asia to address international customer needs and further increase its business potential. Human Resources: During the year, the business continued its thrust to bring in Operation excellence in the areas of site execution and supply chain management. Interventions for advancing the skill levels of the employees were implemented through a string of strategic training programs, both technical and behavioural at various project sites. Going forward, these initiatives will enhance organisational capabilities for meeting emerging challenges on all fronts. Outlook: The Steel sector is currently facing sectoral challenges with global steel prices yet to stabilize and a high level of industry debt across steel players. Some of the positive regulatory interventions such as allocation of coal mines and imposition of SGD and MIP on steel have, however, started to show signs of improvement in the domestic steel sector. The Introduction of the 5:25 refinancing scheme has given some confidence and given a breather to the steel industry. All these factors have raised hopes of an improving profitability trajectory for Indian steel players in Q3 and Q4 of 2016-17. Focus on capacity utilisation, improving efficiency, securing raw material availability and environmental factors are exerting a positive pressure on the steel companies, triggering investment in steel sector (rebuilds and de-bottlenecking). As Zinc has traditionally followed steel, the 165 prospects in Zinc will follow steel investments. Coal under the purview of the environmental concerns, efficiency improvement pressures and mining clearances is going to see investments in 2016-17. Mining clearances and environmental concerns will pave way for Alumina refineries in 2016-17. The Power sector has an investment potential of more than USD 200 Bn. in the next five years. 35-45 GW coal based thermal power capacity order finalisation is expected by 2021. Retrofits and replacement of old sub-critical units by super- critical units are also planned by various power producers. Stringent environmental norms will provide opportunities for the material handling sector. All these initiatives are expected to provide a lot of opportunities for MMH business. The business envisages opportunities overseas in material handling and downstream metal in the near future. 166 Heavy Engineering Business A coal-gasifier being transported. L&T has built the world’s largest coal-gasifier, for export to China. Overview: The Heavy Engineering (HE) business designs, fabricates and integrates custom designed, engineered critical equipment and systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and for Defence applications. The business has a track record of executing large size and complex projects with capabilities that include in-house engineering, equipped fabrication facilities, R&D centres, an experienced project team and a safe work culture. The business is structured into two Strategic Business Groups (SBGs): • Process Plant Equipment and Nuclear • Defence and Aerospace The Process Plant Equipment and Nuclear (PP&N) SBG is involved in the manufacture of large complex equipment such as hydro-processing reactors and high-pressure heat exchangers for process plants and equipment for the nuclear power sector. Heavy manufacturing is undertaken at work centres located in Mumbai, Hazira and Sohar in Oman. Precision fabrication in stainless steel and titanium on the process plant side is handled by the 167 Vadodara manufacturing facility. During the year, the business of fabricating critical piping spools for applications in the power, refinery, petrochemical, fertiliser and chemical sectors (for high-pressure, temperature and corrosive services) was brought within the purview of the Heavy Engineering business, while it was earlier within the purview of Power business. The Piping business unit has a track record of export of piping spools to USA and Canada and forecasts good opportunities in supplies to EPCs in USA, Canada, Japan and Europe. The Defence and Aerospace (D&A) SBG is involved in design, development and realisation of Naval Platforms, Artillery systems, Land & Naval Weapon systems, Fire Control systems, Naval equipment and systems, Engineering systems for Land and Marine forces, Military Bridging systems, Communication systems, Missile sub systems and Rocket Motors for Space launch vehicles. The SBG’s operations span three dedicated work-centres at Talegaon near Pune, Coimbatore and Bengaluru besides production facilities at Hazira for manufacture of critical units for the strategic program, Ranoli for Advanced Composites and Powai for prototype development and testing, besides the site at Vishakhapatnam operated as a GOCO model for a strategic program. Business Environment: During the year 2015-16, the Process Plant Equipment segment has been impacted by a weak global economic scenario triggered by slump in the oil prices, falling commodity prices, depreciation of emerging markets’ currencies 168 End shields for a nuclear power plant being fabricated at L&T’s Hazira facility. vis-à-vis USD, financial market uncertainty, deferred capital investment plans, geo-political situations and delayed policy implementation in India. The sudden and steep drop in oil prices has resulted in the cancellation, suspension and deferment of capital expenditure projects of oil-producing countries. Competitors having idle capacities offered very aggressive pricing in a shrunk market. Localisation policies, preference to local suppliers and mandatory requirement of sourcing equipment from the Export Credit Agencies (ECA) financing countries by EPCs also impacted the Process Plant Equipment business. International sanctions on Russia and Iran deprived the SBG of business opportunities. The nuclear business was affected by the delay in matters related to nuclear liability and insurance as per The Indian Civil Liability for Nuclear Damage Act. PP&N SBG’s order inflow and revenues were therefore adversely impacted. This caused under- utilisation of facilities resulting in under-recovery of fixed expenses. In addition cost over-runs on certain jobs also impacted the profitability of the SBG. Defence and Aerospace is a strategic segment, and Government of India’s (GoI) procurement in this segment follow the Defence Procurement Procedure (DPP). With an aim to achieve self-reliance as well as boost in defence exports in the medium and long term, the GoI has driven several initiatives in fiscal year 2015-16 aimed at attracting investments from both foreign and Indian companies and creating a level playing field for Indian private sector companies in defence. Through structured and detailed consultations with all stakeholders, a simplified DPP 2016 has been released in March 2016, which addresses the requirements of the Ministry of Defence and Industry. Considering the long procurement cycle time, the benefits of the impact of the new DPP would be realised from the year 2017-18 onwards. In fiscal year 2015-16, the continuing linkage to earlier procedures and resultant slower pace of decision making resulted in deferment of repeat orders for Very Low Frequency (VLF) Transmitter project, Pinaka Artillery Systems and Weapons and Equipment package for Indian Navy’s warships, thus resulting in reduced order inflow. However, significant progress has been achieved in certain other programs, orders for which are likely to be concluded in the near term. During the year, the SBG also embarked upon a drive for reducing capital employed in operations with added focus on productivity improvement and efficient execution to shorten the order to cash cycle, resulting in better cash generation. Significant Initiatives: In order to maintain leadership position in the Process Plant and Defence sectors, focussed team initiatives are taken under Organisational Excellence (OE). The OE team facilitates the implementation of identified improvement programs across Heavy Engineering. Initiatives like Productivity Management, Total Productive Maintenance of machines, Six Sigma for process improvements, Workplace Management Systems, Knowledge Management, creation and update of Standards and Procedures and Cost Control measures harness the technical and business acumen of the business. The culture of continuous improvements in operations helps the business attain global benchmarks. In-house competency and leadership development are undertaken through Employee Engagement and Talent Development Programmes. Sustainability and CSR is enshrined in the Vision of the business and has long been a part of its way of giving back to society at large. The sustainability and CSR initiatives are undertaken at each of the units of the business based on the local needs. Developmental programs are identified in keeping with its thrust areas like global warming, conservation of electricity, fuels, water and reuse and recycle of material and resources. More than 50,000 people from underprivileged and economically backward communities have been benefitted through health check-up campaigns and medical care. Over 20,000 children have gained from its education promotion programs by way of building school infrastructure and providing educational aids. Environment, Health and Safety policies and programs help in increasing awareness amongst employees, community and its stakeholders. Product & Technology Development Centres, within Heavy Engineering, focus on new product development and development of improved The inclined Brahmos missile launcher adds another dimension to the country’s fire power. L&T has developed several launchers and weapons systems. 169 manufacturing technology. These Centres are engaged in deploying technologies related to process industries, manufacturing, mechanical systems, defence electronics and submarine designs. The Centres focus specifically on the following technology domains -welding and metallurgy, composite material, heat transfer, hydrodynamics, computational fluid dynamics, stress analysis, drives, microwave and RF, embedded systems, high availability systems and military communication. The steering group, comprising the top management of the business, plans, oversees and monitors all these initiatives through regular review meetings. For the D&A segment, the Product & Technology Development Centres focus on development of niche products and solutions either for internal development projects or through participation in opportunities presented under ‘Make’ & ‘Buy & Make Indian’ category programs. The SBG has also successfully partnered with foreign Original Equipment Manufacturers for engineering, development and realisation of artillery gun systems customised for the requirement of Indian Army. In the Defence segment, the business has collaborated with national laboratories such as DRDO and ISRO as technology partners for indigenous technology development for the various defence and space launch programs, besides in-house programs such as the Autonomous Underwater Vehicle. The business is also a partner to defence public sector undertakings such as Bharat Electronics Limited, Bharat Dynamics Limited, Mazgaon Docks Limited, 170 K 9 Vajra T 155/52-calibre self propelled howitzer, designed for all terrains. Garden Reach Shipbuilders and Engineers Limited etc. for detailed engineering & production of various weapon delivery & engineering systems. This augurs well for the business in future, as it aligns with the GoI’s ‘Make in India’ initiative. Outlook: The business outlook for Process Plant sector looks challenging due to uncertain macro-economic environment coupled with dropping oil prices and cut on capital expenditure across the sector. The overall investment climate remains cautious with the overhang of excess capacity. However, the recent financial distress of Korean and Chinese fabricators may force EPCs to explore other low-cost countries including India. Given its execution capabilities and proven track record, the PP&N SBG is prepared to harness business prospects as they emerge and stay focused on profitable execution. In the refinery space, oil supply has outpaced oil demand growth in 2015-16, putting significant pressure on oil prices. The declining trajectory seems likely to continue in 2016-17 and will gradually rebalance boosting demand and dampening supply. The majority of the investments are likely to be in Asia and Middle East region. However, opportunities are seen in the medium term due to implementation of clean fuel norms in India– Bharat IV by 2017, Bharat VI by 2020 and announcement to set-up new greenfield refinery by PSU oil majors. Overseas opportunities include KNPC-Al Zour Refinery Project in Kuwait, Dangote Refinery Project in Nigeria, Hengli Refinery Project in China, PMB Hengyi Refinery Project in Brunei, TAKREER Refinery Project in the UAE, BAPCO Refinery Project in Bahrain, PEMEX Refinery projects in Mexico, etc. In the petrochemical sector, the uncertainty in the investment is prevailing due to fall in oil prices. US Shale gas has the advantage of lower and shorter investment cycles compared to conventional oil, which makes US shale more responsive to oil prices. Availability of cheap LNG and US shale gas as a feedstock will boost investment in the petrochemical sectors (ethylene capacity additions). In the Fertiliser space, global fertiliser demand is forecasted to expand marginally in fiscal year 2016-17. Greenfield and brownfield projects are expected in USA, Saudi Arabia, Indonesia, Nigeria, Algeria and Russia. Expected domestic greenfield and brownfield investments in the fertiliser sector shall provide business opportunities. Also, opportunities to export for upgradation projects in Iran seem to be opening up. In the Nuclear space, the Indian Nuclear Insurance Pool (INIP) launched in June 2015 and the draft Operator’s Policy and Supplier’s Special Contingency Policy (against ‘Right of Recourse’) is being reviewed by the concerned parties (including foreign technology providers). Further, the government approved the Nuclear Liability Fund of 2000 crore which is an addition to INIP. The Company has entered into strategic teaming agreement / MoU with the concerned foreign technology suppliers and can look forward to a global presence in this industry. Due to stiff competition in international markets, foreign OEMs are looking at cost effective solutions through plant upgrades and de-bottlenecking, and this opens up opportunities for the business. In view of the same, procurement process (re-tendering) for critical equipment is expected to begin in 2016-17. A track record spanning three decades of the D&A SBG with emphasis on indigenous technology development distinctly positions the Company as a market leader, on its own steam and in the forefront in the defence and aerospace sector. With the DPP 2016 coming into effect from 1st April, Defence procurement is expected to gain traction and programs worth 200000 crore are expected to be ordered with preference to the Indian industry. The preference to buy Indigenously Designed Developed and Manufactured (IDDM) products will also result in opportunities in newer domains. With FDI at 49%, competition in the form of foreign OEMs with Indian industry is likely to be increased. Over the next 2 to 3 years, significant opportunities are envisaged in programs for new- build naval platforms, refit of conventional submarines, artillery and air defence guns, close-in- weapon system, military bridging systems, missile programs and sub- systems for space launch vehicles. The business is future-ready to play a proactive role towards self-reliance of our nation through a successful ‘Make in India’ initiative. Major Subsidiary Companies L&T SPECIAL STEELS AND HEAVY FORGINGS PRIVATE LIMITED (LTSSHF): L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) is a joint venture (JV) of Larsen & Toubro Limited (L&T) and Nuclear Power Corporation of India Limited (NCPIL), with L&T and NPCIL holding 74% and 26% stakes respectively. The JV was formed to set up a fully integrated forging facility (from steel scrap to finished forgings of alloy steels, carbon steel & stainless steels) with a capacity to produce a single piece ingot up to 300 MT and forgings up to 120 MT in the first phase. These are required for critical equipment in nuclear power and hydrocarbon industry, for rotors in power industry, blocks for oil & gas segment and for general engineering applications. The JV is a major strategic step towards achieving India’s independence from imports of heavy forgings for hydrocarbon industry and ensuring timely supply of heavy forgings for nuclear power plants. Business Scenario: The demand for heavy forgings is a derived demand dependent on the outlook of the end use segments comprising refineries, petrochemicals, thermal and nuclear power, wind and hydro power and other industries like steel. The Company has been witnessing fierce competition from global established players having excess capacities. This has been aggravated post the Fukushima nuclear disaster. Due to very low crude oil prices, the forging demand from oil & gas sector has also diminished. The Company has been successful in getting approvals and qualifications from many key customers. This opens a window of opportunities going forward in various segments. The Company has been successful in manufacturing of high quality Stainless Steel grade forgings required for International Thermonuclear Experimental Reactor (ITER). In yet other major milestone, the Company has successfully manufactured most of the heavy forgings for steam generators, pressurizers of 700 MW PHWR reactors for NPCIL designed nuclear plants. The Company has also made heavy forgings – shells, tube sheets, dished ends required for refineries, 171 fertiliser plants and heavy shafts for the mining segment. The Company has made successful supplies of Blow out Preventers (BOP) and forged blocks required for oil & gas segment. The Company is focusing on stabilising the production processes and improve manufacturing efficiencies so as to remain competitive in the market. A series of initiatives have been initiated in the area of cost control and improving process efficiencies. A total focus on reduction of fixed costs has brought down the fixed costs by over 30%. The Company has embarked on establishment of Quality Systems in the new facility, complying with ISO 9001. The Company has been accredited by NABL certification for laboratories and also received the U, U2 stamps from ASME, USA. This will help company in getting shop approvals from prospective reputed customers. The strategic focus of the Company, in line with its vision, is to fill the technological and resultant manufacturing gap in the country for critical heavy forgings for the nuclear and other strategic sectors like defence. The Company has demonstrated its capability to manufacture critical forgings for the Indian Pressurized Heavy Water Reactor (PHWR) plants. It has also taken up the development of the critical forgings for the next generation IPWR - nuclear plants. Discussions are at an advanced stage with foreign technology partners for possible development of forgings to meet their specifications for future Indian nuclear installations. 172 L&T’s nuclear-grade forge shop at Hazira (near Surat), one of Asia’s largest. It offers a wide range of finished forgings for the nuclear, hydrocarbon and power sectors. SPECTRUM INFOTECH PRIVATE LIMITED (SIPL): SIPL is a wholly-owned subsidiary of Larsen & Toubro Limited. SIPL undertakes technology development and manufacture of avionics Line Replaceable Units (LRUs) for military applications. SIPL concentrates largely on product development in embedded solutions, sensors, control and signal processing. SIPL is certified by Centre for Military Airworthiness and Certification (CEMILAC) of the Ministry of Defence, India for the same. SIPL has obtained AS9100 Rev C, ISO 9001 and ISO 27001 certifications. SIPL is developing a Frequency- Modulated Continuous-Wave (FMCW) based radar system, which can be utilised in a variety of military and land security applications. The company continues to work with the Ministry of Defence and Hindustan Aeronautics Limited to jointly develop new products. The announcement of new programs in the aircrafts and helicopter domains have opened new business opportunities in avionics. However, increased competition from smaller firms and entry of new players have resulted in a very challenging business environment. LARSEN & TOUBRO HEAVY ENGINEERING LLC: Larsen & Toubro Heavy Engineering LLC is a Joint Venture with Zubair Corporation, established in Sohar, Sultanate of Oman. L&T, through its wholly-owned subsidiary Larsen & Toubro International FZE, holds 70% in the Company. The heavy engineering facility was commissioned in October 2009. 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, Oman’s expected large value investments in the hydrocarbon sector, and revamp prospects in certain ageing refinery projects offer good potential for the facility which has already established itself by producing a variety of complex equipment. Electrical & Automation Business L&T offers India’s widest range of switchgear to a variety of sectors - agricultural, industrial, building and commercial. Overview: The Electrical & Automation (E&A) business of Larsen & Toubro Limited offers a wide range of products and solutions for electricity distribution and control in industries, utilities, infrastructure, buildings and agriculture sectors. Its basket of offerings includes Low and Medium Voltage Switchgear components, Electrical Systems, Marine Switchgear systems, Industrial & Building Automation Solutions, Surveillance Systems, Energy Meters and Protection Relays. The business is supported by its five decades of experience in in-house design and development that facilitates the introduction of contemporary products and a high precision tool manufacturing facility which is a pre-requisite for high quality manufacturing. The business runs six Switchgear Training Centres across the country that impart training and learning on good electrical practices to engineers, consultants, contractors, technicians and electricians. Currently, E&A has manufacturing facilities at Navi Mumbai (Mahape and Rabale), Ahmednagar, Vadodara, Coimbatore and Mysuru in India as well as in Saudi Arabia, Jebel Ali (UAE), Kuwait, Malaysia, Indonesia and the UK. 173 The constituents of E&A business are two Strategic Business Groups (SBGs) and designated subsidiaries. In India both the SBGs have under them two Business Units(BUs) each. The Products SBG includes Electrical Standard Products (ESP) and Metering & Protection System (MPS) business units while Projects SBG comprises Electrical Systems & Equipment (ESE) and Control & Automation (C&A) business units respectively. Business Environment: During the year global economic growth has slowed down from 3.4% to 3.1% on the back of slowdown in China, meltdown of oil prices across globe and concerns of European market still continuing. However,India’s GDP grew by 7.6% notwithstanding the contraction of global exports and two consecutive years of a deficient monsoon on the back of an excellent performance by the services sector. New initiatives like Dindayal Upadhyaya Gram Jyoti Yojana, UDAY, Smart Cities, Smart Grid, Pradhan Mantri Krishi Sinchai Yojana & increased focus on renewable energy taken by government show a promising future. But these initiatives will take time to take root and start generating business for E&A. These initiatives will see incremental revenue for coming five years. The LV switchgear market has been growing at slow pace over the last two years due to a muted investment cycle, weak macroeconomic environment, and a downward trend in the industry and restricted investments in infrastructure and utility projects. 174 L&T’s U-Power Omega ACB range offers enhanced protection in a compact package. The LV Switchgear market is expected to grow at CAGR of 6.5%and is expected to reach 7600 crore in 2020. been stalled or cancelled). This has inturn affected the price-realisations for whatever opportunities existed in these markets. Rising investment in alternative sources of energy is expected to contribute to the growth of MV and LV switchgear used for switching and general protection. Moreover, this application area will also trigger demand for Miniature Circuit Breakers (MCBs) and Molded Case Circuit Breakers (MCCBs). In the International market,huge Infrastructure opportunities are seen in the ASEAN region especially in Indonesia and Thailand. Major investments are seen in Infrastructure development. Also there are opportunities in Infrastructure segment in the Qatar, Saudi Arabia and UAE (metros, airports and hospitals) in the wake of FIFA 2022 (Qatar) and EXPO 2020 (UAE). The infrastructure sector sees a gradual growth over the coming years, however, the impact of lower oil prices is seen on future OPEX plans cancelled by all oil-producing nations (Middle East projects have Significant Initiatives: The business continued to devote its resources and capabilities to Research & Developmental endeavors, which is one of its core strengths. Its in-house design & development capabilities are rated among the best in the industry. The facilities at Powai–Mumbai, Ahmednagar, Mysuru, Mahape and Coimbatore are approved by the Department of Scientific & Industrial Research, Ministry of Science & Technology. These centers network with international labs, testing centers and academic institutions to keep abreast of new technology trends and introduce them to customers in different segments. During the year, E&A filed application for as many as 114 patents, 12 trademarks, 37 designs and 1 copyright in India, as well as 2 foreign patent applications (PCT National Phase applications – in Europe and China). This was the 9th consecutive year of filing more than 100 patent applications. Also the business won the prestigious National IP Award 2015 in the category ‘Top Organizations for Designs‘, from the Department of Industrial Policy & Promotion and Intellectual Property Office, Govt. of India, in association with CII. The honor recognises and rewards organisations across India for their contribution in harnessing the country’s intellectual capital and creating an eco-system that boosts creativity and innovation. During the year, Electrical Standard Products Business put its thrust on ramping up its capabilities to increase the production of its new products such as its new range of modular products and other MCCBs. The two major developments for the year were introduction of AHF (Automatic Harmonic Filter) and the ‘Smart Comm’ solution (powered by iVisionmax – Indigenous automation software). Smart Comm is a unified software platform for supporting all the products of the business including meters, MCCBs, MCBs, relays, releases, ac drives, soft starters, IO modules and building automation products, communicating to a control room through Ethernet, Modbus TCP/IP, IEC 61850 and BACNet. Smart Comm is scalable to meet requirements of all sizes of facilities and plants and it allows integration of third party devices on open standard protocols. In 2015-16, the Metering & Protection System business introduced new products like New 1-phase Meter with IrDA, 3-Phase Meter with IrDA, 1-Phase Pre-Paid Meter (Taurus), 3-Phase Pre-Paid Meter (Atria), 1-Phase Smart Meter (Aurora), 3-Phase Smart Meter (Regor), 3-Phase Digital Panel Meter (Nova), New Trip Supervision Relay (TCS01-nX) & Motor Protection Relay (MPR200). The introduction of the Smart and Prepaid meter will show results in the coming years as India is implementing ‘Smart Cities’ a key initiative taken by the Government. During the year, the Control and Automation business made an entry into the Solar business with help of a tie-up with an Italian Company for L&T-branded Solar inverter completing the portfolio for solar solution. Also, Electrical System and Equipment business developed L&Ts Outdoor Compact substation – N-Qube which will cater to the rapidly growing infrastructure sector. Outlook: Even with the new reforms initiated by the government, the core sectors continue to show no signs of pickup. However, with the launch of schemes like DDUGJY and IPDS which target central procurement of meters throughout the country, there is a hope for a movement toward premium products like AMR, Prepaid and Smart Meters in the coming years. Also, Scheme UDAY will improve health of DISCOMS and will lead to higher investment by the utilities. The overall market will remain competitive as liquidity with major customers continues to be a cause of worry. The business has also witnessed a financial crunch at major industrial houses due to which new plants/expansion are not being announced. Overall the industrial sector shows a muted trend. However, the business sees an upward trend in the infrastructure sector (Metro, Airports, Railways, etc.) and is optimistic that its efforts in launching products for infrastructure sector in 2015-16 will yield result although the margins in infrastructure sector are negligible due to competition from local players. The business also sees an improvement in demand from agro / food processing industries. The Marine business sees a positive sentiment through the ‘Make in India’ initiative taken by the government which emphasises on indigenous content, giving the business an edge over foreign suppliers. Also the Indian Navy has reckoned the company as a strategic partner resulting in thrust on setting up Life Cycle Support facilities in its Navi Mumbai factory. With continuous low oil prices, the business sentiments are being affected on the international front. Projects are expected to be deferred or delayed further. However, social infrastructure projects like hospitals and metros are expected to continue as planned and new high end infrastructure projects are being announced in the Dubai market for Expo 2020 and the Qatar market for FIFA 2022. The dedicated focus of the business on GCC metro projects is expected to yield results in 2016-17. Also,pursuant to unrest in the Middle East and Africa regions, respective government priorities are shifting toward defence related initiatives. The South East Asia market looks attractive as major investments are seen in the building sector in Indonesia and the power sector in Bangladesh. 175 Major Subsidiary Companies TAMCO GROUP OF COMPANIES: TAMCO is the leading manufacturer of Medium Voltage switchgear in South East Asia with manufacturing facilities in Malaysia and Indonesia. Its products are widely used in the 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 lies in the flexibility to develop and adapt products to meet customers’ needs and, therefore, it has a high reference list across the globe. The business environment in 2015-16 was tough with the steep fall in oil prices as TAMCO’s main markets are in oil producing nations. Even the Malaysian market was badly affected with projects getting delayed and the government cutting its OPEX budget. Jobs were few and this affected the price levels too. However, the depreciation of the local currency (Ringgit) gave the company an advantage in the global market and it could protect its market share and margins. The Chairman of Saudi Electricity Company visited the company and encouraged it to build the switchgears in KSA. Consequently TAMCO invested 25% stake in LTEASA and have completed type tests to get its products approved. Also UK approved for the E&A business to opening doors to utility market in the UK. The company’s Australian operations were not able to generate business and were making losses over the last two years. Accordingly, operations in Australia were stopped and 176 Switchboard installation at a power plant. L&T provides power distribution and control solutions across the value chain, from generation to end user. separation of all employees was carried out except the service engineers. The Malaysian economy is showing signs of recovery. The local utility is coming out with a few tenders in the coming year and the Company expects to benefit from this opportunity. Also the outlook for Indonesian economy looks encouraging and a large numbers of infrastructure and power projects are seen in the pipeline. With projects drying up in core markets like UAE, Qatar and Malaysia, the Company saw a need to develop a retrofit solution for these geographies where its product and solution population is high. With some concrete efforts, the Company has developed retrofit solutions to cater to these requirements. Another key strategy for TAMCO would be to foray into European markets, Iran and other South- East Asia countries like Vietnam following an OEM model. L&T ELECTRICAL & AUTOMATION FZE (LTEAFZE): L&T Electrical & Automation FZE (LTEAFZE) is a 100% subsidiary of L&T International FZE based in UAE. The company provides Systems Integration solutions in the Oil & Gas, Power, Water and Waste Water and Infrastructure space like Airports, Hospitals, Stadiums and Transportation segment like Metro and Rail. The solutions are centered around Process Automation and Telecommunication applications catering to customers / contractors in the Middle East, Africa, CIS and Turkey markets. It has a state-of- the-art integration facility in Jebel Ali Free Zone and is accredited with ISO 9001, 18001, 27001 and TUV for functional safety. With the period 2015-16 seeing a steady decline in oil revenues continue to get implemented across industries. LTEAFZE is fast aligning with the new A&T arena with delivery capability as Main Automation or Telecom Contractor, and is poised to leap forward into the next league. L&T ELECTRICALS AND AUTOMATION SAUDI ARABIA COMPANY LIMITED, LLC (LTEASA): L&T Electrical & Automation Saudi Arabia Company Limited was established in 2006 as Limited Liability Company, where, 75% of shares are held by Larsen & Toubro International FZE and 25% by TAMCO Switchgear Malaysia Sdn. Bhd. It manufactures of LV/ MV switchgear/control gear panels of all sorts and undertakes installation and commissioning of these products along with associated products viz., PLCs, Drives, Transformers, cables, etc., to offer a one window solution to customers. The company been approved by almost all major end users in the Kingdom eg SABIC and Saudi Aramco. The Company had a bad year in terms of achievements. During the year 2015-16, LTEASA saw lower order inflow in view of deferment and cancellation of projects which lead to drying up of the order book and lower sales, leading to a negative bottom line. The Saudi economy is expected to grow slowly at 1.9 % in calendar year 2016 down from 3.4% in calendar year 2015. The non-oil private sector will continue to grow albeit at a slower pace, as reduced government spending will most likely have a negative impact on 177 L&T powers Mumbai International Airport’s Network Operations Centre. leading to shortfalls in budgeted incomes for all oil economies in the region compounded with heightened security concerns due to increased political disturbance in the region, there is a general slowdown in pace of O&G project investment. Nevertheless, O&G investments continued in Kuwait and Oman, while Qatar and KSA governments primarily are committed to improving their infrastructure. Airport, Metro / Railway, Hospital related investment continued to gain importance. The Company has had a bad year in terms of achievements. The costs surpassed the estimation on the projects, leading to a negative bottom line. With increasing number of System Integration companies in the market, the markets have become extremely competitive. As a result, LTEAFZE saw drop in Process Automation project opportunities from the O&G and Utility industries. However, it saw considerable scope for Infrastructure Automation with Building Management System along with Extra Low Voltage (ELV), Electronic Security (ESS) and Telecommunication (TCom) Systems. The Automation Product OEMs continue to lobby with end clients / consultants for restricting competition to limited participants through direct OEM bidder nomination or novation. Healthcare, Transport, Power Generation and key event driven development viz. FIFA 2022 in Qatar and EXPO 2020 in Dubai would continue to generate business opportunities through 2016-17. While some countries like UAE show some investment slowdown in energy and infrastructure sector, others like Qatar and Kuwait continue to move forward with earlier announced projects finalised in 2015 and 2016 and have announced new projects that will give opportunities to LTEAFZE in 2017. Projects focused on any process Improvement, Security, Surveillance and / or Environment friendly practices will generally business activity. However, growth in all sectors in the non-oil private economy will remain positive. The fiscal year 2016-17 will be a tough year for LTEASA. The key focus areas for LTEASA during the year would be getting LV and MV approvals from SEC, Aramco and other consultants in KSA, providing better reach in Saudi market. As major growth opportunities will be generated from non-oil markets, the key focus area would be the infrastructure sector, especially mega metro and airport projects. HENIKWON CORPORATION SDN BHD, MALAYSIA: Established in 1982, Henikwon Corporation is leading manufacturer of Low Voltage (LV) & Medium Voltage (MV) bus duct systems. The Henikwon acquisition brought strong customer base of large corporations to E&A’s business and complements its portfolio to make comprehensive offerings for the building and infrastructure segments. It further enhances L&T’s presence in South East Asia, India and Middle East markets. Henikwon offers high quality products that comply with international quality standards. The 12,300 sq.mt. manufacturing unit is located in Selangor state of Malaysia. The overall business environment and market sentiment is cautious. Most of the regional economies are yet to get into higher growth orbit and are presently in the band of 4-5% GDP growth. Significant local opportunities are seen in oil & gas and metro segment. The Company is working on a few metro projects locally as well as within India (Delhi, Chennai) and international markets (Doha, Riyadh). 178 The Company is working to stabilise ‘S-line’ range of bus duct systems, and has initiated marketing efforts in select countries. Further,it is working on development of non- segregated variants, for the LV segment, which is being specified by the oil & gas industry. Qatar remains in focus due to less dependency on oil and the FIFA World Cup 2022. The Company will continue to focus on its existing range (SCM) and strengthen its ADDC and SEWA segment projects. SERVOWATCH SYSTEMS LTD, UK Servowatch is marine automation company based in Maldon Essex UK, acquired by L&T in April 2012. Servowatch is recognized as a world leading system integrator for modern naval platforms, super yacht installations and commercial marine operators. its unique software design allows integration of third-party software into a common operator platform environment. ‘Task Orientation’ for specific user profiles with portability from station to station creates a highly redundant multifunctional operating environment. Typical applications include machinery, navigation, radar, electronic charting, internal and external communications, tactical sensors, auxiliary ship systems, camera networks, mission logging and playback functionality. The highly trained and professional teams at Servowatch offer an extensive range of services. Servowatch partners with leading manufacturers of hardware and software to allow flexibility in meeting project requirements, and providing full through life product support capability. During the year, Servowatch successfully completed FAT for MARS Project (Tankers for Re-fuelling UK Royal Navy built by DSME in South Korea) using indigenous software Winmon 9. The projects included a total of four vessels, first of which underwent sea trials. Successful commission of the first vessel will give Servowatch a huge reference for large naval vessel systems and open doors to other markets. Going into the new financial year, the business is set to consolidate on the financial position achieved during previous year. The business is planning to restructure its sales team to focus on select geographies. Also a permanent business development professional is deployed in its major market of South Korea and the Far East. Products have been aligned/ introduced and priced to meet the market requirements for all sectors. Kana Controls General & Trading Contracting Company W.L.L., Kuwait LTEAFZE acquired the Kuwait-based Kana Controls General Control & Trading Company in September 2013. Kana Controls established in 1990,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 provides a good platform to serve the control and automation business opportunities in Kuwait. Hydrocarbon Business Mumbai High North (MHN) complex of ONGC, executed on EPCI basis. The massive complex comprises a process platform (26,500 MT topside + 13,500 MT jacket) a living quarters platform (6,500 MT topside + 13,500 MT jacket), two flare platforms and four bridges. Overview: The Hydrocarbon business provides ‘design to build‘ turnkey engineering, procurement and construction solutions for the global Oil & Gas Industry including oil & gas extraction, petroleum refining, chemicals & petrochemicals, fertiliser sectors and cross country pipelines. The existing in-house capabilities enable it to deliver complete end-to-end solutions from front end design through detail engineering, procurement, fabrication, project management, construction and installation up to commissioning services. The hydrocarbon business is primarily housed in a wholly owned subsidiary, L&T Hydrocarbon Engineering Limited (LTHE) The business has repeatedly delivered, large, critical and complex projects, globally, by virtue of its experienced and highly skilled project execution team, world- class HSE practices and culture of excellence. The business has a fully integrated capability chain including in-house engineering, R&D centre, engineering joint ventures, world class modular fabrication facilities and offshore installation capabilities. The principles of Company’s business philosophy are striving for excellence in corporate governance, safety standards and quality standards, state-of-the-art IT 179 security practices,on-time delivery and cost competitiveness. The geographic reach of the business spans across Asia,covering Middle-East and South-East Asia. Major facilities in India include Engineering & Project Management Centres at Mumbai, Vadodara, Chennai and Faridabad and Fabrication Yards at Hazira (Surat) and Kattupalli (Chennai).Overseas facilities are located across the Middle East including in UAE (Sharjah), Saudi Arabia (Al-Khobar), Kuwait, Oman (Muscat) and Qatar (Doha). The business also has a major Modular Fabrication Facility at Sohar in Oman held through a subsidiary. The business caters to clients across the hydrocarbon value-chain through its following business verticals: • Hydrocarbon Offshore • Hydrocarbon Onshore • Hydrocarbon Construction Services • Hydrocarbon Modular Fabrication Services • Hydrocarbon Engineering Services Hydrocarbon Offshore: The business offers turnkey solutions to the Global Offshore Oil & Gas industry encompassing well- head platforms, process platforms and modules, subsea pipelines, brown field developments, jack-up rig refurbishment, floating production storage & off-loading (FPSO) topsides and subsea projects. For more than two decades the business has been successfully executing large offshore platforms and pipeline projects in east and west coasts of India, the Middle East, South East Asia and Africa, for 180 Upgrade project executed on an EPC basis for export gas compression facilities of Dolphin Energy, Qatar. global companies such as ONGC, GSPC, British Gas, ADMA OPCO, Bunduq, Qatar Petroleum, Maersk Oil Qatar, PTTEP, Petronas and Songas. The joint ventures with Sapura Crest Petroleum Bhd., Malaysia, viz., L&T Sapura Shipping Private Limited,owns and operates a Heavy Lift Pipe Lay Vessel, and L&T Sapura Offshore Private Limited provides offshore installation services. LTHE’s wholly owned subsidiary, L&T-Valdel Engineering Limited, Bengaluru, renders dedicated engineering services for offshore projects. The business has made a foray into the deepwater segment with a long term co-operation agreement with McDermott International to develop cost-effective solutions for subsea projects off the east coast of India. The Consortium of McDermott and LTHE bagged an offshore contract for development of ONGC’s Vashishta and S1 deepwater fields involving supply and installation of subsea structures in the seabed at water depths ranging from 200 to 700 metres. During the year, the business also secured an EPCI contract from ONGC involving new process platform, well head platform, topside modifications, associated subsea pipelines and a living quarters platform in Bassein Field off India’s west coast. In consortium with EMAS AMC, a Singapore based installation contractor, the Company has signed a six year Long Term Agreement with Saudi Aramco, under which the consortium will execute offshore projects in Kingdom of Saudi Arabia. This will enable the Company to tap the large value opportunities in Saudi Arabia over the medium term. Hydrocarbon Onshore: The business provides EPC solutions for a wide range of hydrocarbon projects covering Refining, Petrochemical, Fertiliser (ammonia & urea complexes), On-shore Oil & Gas Processing plants, and cross country pipelines. FCC reactor regenerator section for IOCL at its Paradip Refinery. The business has a track record of successful simultaneous execution of multiple mega projects having diverse technologies from process licensors like UOP, Axens, Haldor Topsoe, CB&I Lummus, Black & Veatch, Ortloff, ExxonMobil, BOC Parsons, Invista & Davy Process Technologies. The vertical’s in-house Engineering Centres along with joint venture companies – L&T-Chiyoda Limited for onshore engineering and L&T-Gulf Private Limited for Pipeline engineering enable the vertical to offer complete spectrum of FEED, process and detailed engineering to clients. The Company’s subsidiary Larsen Toubro Arabia is registered as In-Kingdom EPC (‘IK-EPC’) company in Saudi Arabia and addresses onshore In-Kingdom opportunities. The business has executed Lump- Sum Turnkey(LSTK) projects in on-shore Oil & Gas Processing, Refinery & Petrochemical applications for various Indian oil majors like IOCL, MRPL, ONGC, OMPL, BPCL, HPCL, Reliance Industries etc., as well as fertiliser companies like NFL, GNFC, RCF and others. In recent years, the business has also diversified into related areas like Cryogenic Terminal projects, LNG tanks and Regasification plants. central Oman, to overcome pressure depletion and maintain potential to sustain production. Internationally, the business group is prequalified by major international oil & gas producers such as Saudi Aramco, Kuwait Oil Company (KOC), Kuwait National Petroleum Company (KNPC), SOCAR, PETRONAS, CNPC, Dragon Oil in Turkmenistan, Lukoil in Uzbekistan and Sonatrach in Algeria. It has a successful track record of project execution with international bellwethers like Abu Dhabi Gas Industries (GASCO), Petroleum Development Oman (PDO), Petronas, Chemanol, KNPC, etc. During the year, the business has received an EPC contract from Gujarat State Fertilisers & Chemicals Limited for setting up 40k MTA Melamine Plant at Vadodara using process technology from Casale SA. Internationally, the business has bagged twin EPC orders from Petroleum Development Oman LLC (PDO) i.e. Saih Nihayadah Depletion Compression Phase 2 & Kauther Depletion Compression Phase 2 in Hydrocarbon Construction Services: The vertical renders turnkey construction services for refineries, petrochemicals, chemical plants, fertilizers, gas gathering stations, crude oil & gas terminals and underground cavern storage systems for LPG and cross country oil & gas pipelines. The vertical’s major capabilities include heavy lift competency, advanced welding technologies and Quality systems. The business has also invested in strategic construction equipment, a range of pipeline spread equipment, automatic welding machines and other plant and machinery for electro-mechanical construction works. The business has executed projects for major private sector customers like Cairn Energy, Reliance Industries, HPCL Mittal Energy as well as major oil PSUs like BPCL, IOCL, ONGC and international customers like 181 Abu Dhabi Company for Onshore Oil Operations (ADCO), Abu Dhabi Oil Refining Company (TAKREER). The Company’s country specific joint ventures with local partners render construction support to international onshore projects – Larsen & Toubro Electromech LLC in Oman, Larsen & Toubro ATCO Saudia LLC in Saudi Arabia, Larsen & Toubro Kuwait Construction General Contracting WLL in Kuwait. During the year, the business received an order for construction of onshore Gas Pipelines & Associated facilities including Pipe-laying works in western part of India. Hydrocarbon Modular Fabrication Services: The Modular Fabrication Services vertical offers comprehensive Engineering, Procurement, Fabrication (EPF) modular solutions primarily in oil & gas and petrochemical sectors, and renders fabrication support to offshore and onshore verticals. The vertical’s two strategically located state-of-the-art fabrication facilities in India, ensure round the year delivery of process platforms, wellhead platforms, modular structures, heavy jackets and oil rigs. The Hazira yard near Surat caters to the west coast of India and Kattupalli yard near Chennai caters to the east coast of India and South East Asia. The Company’s Oman subsidiary caters to opportunities in Middle East arising from UAE, Oman, Qatar and Saudi Arabia. The three yards altogether have a total fabrication capacity of about 150000 MT per year. During the year, the business has received a number of orders for fabrication and supply of Piping systems, Manifold Skids, etc. for supply to international locations ranging from Middle East to the Americas. Hydrocarbon Engineering Services: The Engineering Services vertical offers comprehensive solutions covering the entire spectrum of engineering across the oil & gas value chain, from two Centres of Excellence within India: the Technology Centre in Mumbai and the Engineering Centre at Faridabad near Delhi within the National Capital Region (NCR).The Mumbai Centre primarily focuses on Front End Engineering Design (FEED), advanced engineering solutions, specialised studies and engineering for special applications (such as reformers, cryogenic systems and modular solutions) while the Faridabad Centre specialises in a broad range of detailed engineering and project management functions. 3-D CAD model of a petrochemical complex executed by L&T Hydrocarbon Engineering. 182 The Engineering Services vertical has a large resource pool of over 3.5 million engineering man hours. A large portfolio of industry- standard software tools, robust IT infrastructure and in-house R&D facility further augment its capabilities. Benchmarked through leading certification and accreditation systems, the engineering work processes offer consistent product quality with on-time delivery. Backed by decades of experience and rich domain knowledge, the team is geared to provide value-added services to customers across the hydrocarbon sector. Business Environment: The volatility and sharp fall in crude oil prices during the year created an environment of investment uncertainty for the entire hydrocarbon industry, with international offshore segment being affected the most. New field development plans were deferred and most of the private sector players announced reduction in capex spends. This shrinkage of market opportunities is less pronounced in the Middle East. Gas-based projects have been relatively less affected by the decline in oil prices and national oil companies continue to tender these type of projects. However, there is an increasing thrust on local ‘in-country’ value add by governments and national oil companies. In the domestic sector, the government announced a new Hydrocarbon Exploration & Licencing Policy (HELP) providing for unified open acreage licensing policy, i.e. allowing producers to exploit conventional and unconventional hydrocarbons (CBM/ shale/hydrates) under a single license. Simultaneously, a new gas pricing formula was announced providing for market linked prices for deepwater & Ultra deepwater fields to incentivise exploration activity. During the year, ONGC continued its capex projects notwithstanding the fall in crude prices. However, predatory pricing was seen from a few South East Asian players with idle capacity. On the flip side, lower crude prices have led to a boost in refining and petrochemical expansion plans. Reduced naphtha and gas prices have also led to the revival of LNG Re-gasification Terminal projects & fertiliser projects, primarily, in the nature of upgradation and energy efficiency. In light of the above challenging external environment and multiple headwinds, the business has done well to maintain order inflow at previous year levels of approx. 10000 crore. Significant Initiatives: Fiscal year 2015-16 has been a year of transformation and turnaround for the hydrocarbon business. There were several top leadership changes starting with appointment of Mr. Subramanian Sarma, a veteran in global oil & gas contracting industry, as the CEO & MD of L&T Hydrocarbon Engineering Limited. A business re-organisation and transformation plan was unveiled during the year with a view to avoid silos, reduce costs, improve competitiveness and aid profitable execution. The entire hydrocarbon business operations have been re-grouped as five business verticals with targeted revenue streams, catering to global opportunities across the hydrocarbon value chain, including creation of two new verticals, viz., Modular Fabrication Services & Engineering Services to provide growth impetus for the future. Consolidation of erstwhile geographically dispersed operations into India-centric verticals has been accomplished. A new risk/reward sharing model has been adopted to create better alignment amongst verticals and rationalisation of profit centers. Tie-ups with global majors are under negotiation to address Indian deepwater projects, subsea manifolds, engineering services, augment utilisation of yards, etc. Manpower rationalisation and relocation initiatives are expected to result in annualised savings of over 200 crore from 2016-17 onwards. The business development set-up has been consolidated with distinct focus groups for product as well as geographies. The proposal and estimation group has been centralised and the estimation process has been streamlined to improve bid-win ratio. Initiatives have also been undertaken for consolidating key resources to create centres of excellence and identifying and addressing leadership gaps. As a result of these initiatives, the hydrocarbon segment is poised to improve its bottom-line significantly from 2016-17 onwards. Risk Management & Internal Controls: Pro-active Risk Management has been identified as a key strategic initiative to ensure sustainable 183 growth. Risk Management is an integral part of the overall governance process to identify, segregate, mitigate, control and monitor various risks at business, individual bid and operational levels. The risk management policy and guidelines incorporates global best practices and procedures which enables building the ability to anticipate challenges and opportunities for achieving strategic objectives. The major risks such as limited investments due to falling oil prices, onerous contract terms by client, tight schedule, stringent localization requirements, forex exposure, etc. are mitigated through specific actions like operational excellence initiatives, alliances, cost optimisation, improved customer relationship, compliance with stringent HSE standards, proactive forex hedging, strong contract & claims management and identification of key personnel and talent at the pre-bid stage. All projects undergo a structured pre-bid risk review by the Apex Risk Management Committee (ARMC) at business and at corporate level as per well-defined authorisation limits. This process involves a detailed assessment of risks and deliberation on mitigation measures by the ARMC. Periodically risk reviews are conducted for ongoing projects. Project managers/ selected project team members undergo a certified Risk Induction Programme conducted by ECRI (Engineering & Construction Risk Institute) on a continuous basis to become acquainted with industry’s best practices.During the year, a dedicated Business Assurance 184 Group has been established to institutionalise execution risk management on a pro-active basis. multiple in-house IT capabilities for managing various ‘Hire to Retire’ processes. A strong Internal Control framework is an important part of operations and corporate governance. The management has established internal control systems commensurate with the size and complexity of the business. The internal control manual provides a structured approach for identification, rectification, monitoring and reporting of gaps in the internal control systems and processes. The Group follows well documented Standard Operating Procedures (SOPs) and the operating effectiveness of various controls is periodically tested and deficiencies, if any, are promptly rectified. During the year, an in-depth exercise for evaluating the adequacy of Internal Financial Controls and their Operating Effectiveness was undertaken, as per the provisions of Companies Act 2013. This activity included understanding and testing of Internal Financial Controls and evaluating its operating effectiveness based on the assessed risk factors. Human Resource Development: The Group has a set of unique mix of experienced professionals and young dynamic passionate individuals working in various disciplines. HR efforts are targeted to ensure that the right talent is sourced, selected, trained and are deployed across the organisation. In line with the business transformation, HR has also initiated its transformation exercise. The Group leverages on technology and automation by using SAP & The specially designed ‘Seven Step Leadership Development Programs’ for high potential employees strengthen the leadership pipeline of the organisation at various levels. The Group utilises various state-of-art training infrastructure and resources like L&T Leadership Development Academy, Institute of Project Management and Technical training centres to train its employees on Project management skills, functional and leadership competencies. The business also has tie ups with premier institutes like IIMs, XLRI and IITs for conducting ‘Core Development Programs’, EMBA, M. Tech and e-learning programmes (Harvard, DDI and other certification programme) at regular intervals. The Group continues to foster a high performance culture by recognising and rewarding good performers, and providing them with career development opportunities. The CEO & MD periodically interacts with employees through various forums like ‘Town Hall’, webcast, video conferencing and emails. Various other interventions and initiatives like ICONS, Long Service Awards, Team Building Workshops, non- monetary recognition events, etc. are periodically undertaken to enhance employee motivation. Health Safety Environment (HSE) & Sustainability: Health, Safety & Environment is the cornerstone of the Group’s business philosophy. 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, five projects were safely commissioned without any significant incidents. The business actively participated in Global HSE Conference and Golden Jubilee celebration of Directorate General, Factory Advice Service and Labour Institutes (DGFASLI). During the year, as a part of Corporate HSE Plan, cross-functional HSE audits were initiated across all business units. All HSE Systems and procedures were IT enabled to make them more user friendly. Senior Management involvement and visibility was reinforced through systematic senior management site safety observation. To spread safety awareness, various theme based campaigns were observed on various important dates during the year. Lessons learnt during project execution were shared throughout the organisation by way of well documented HSE Learnings and HSE alerts. Various HSE training programs were held, and motivational schemes were instituted. The Company has released its Sustainability Report – “Journey Begins” in December 2015 which covers various initiatives taken across the Company and highlights need to enhance performance across all sustainability parameters – safety, energy, water conservation and productivity. As a responsible Corporate Citizen, the Group is aware of its responsibility towards social upliftment which is an integral part of the corporate culture. The Group’s CSR Framework lays down the principles and programs for the community at large, in accordance with section 135 of the Companies Act 2013. In-line with Group’s theme “Building India’s Social Infrastructure” L&T Hydrocarbon is committed to implementing projects that will contribute to the quality of life, including schools, hospitals, skill training institutes, water supply and distribution and sanitation facilities. During the year, the business won several national and international accolades from eminent institutions and clients like National Safety Council – Maharashtra Chapter, British Gas, Petronas Carigali Myanmar, Frost and Sullivan (F&S) & The Economic Times India Manufacturing Excellence Award (IMEA). Outlook: Oil prices are expected to hover in the range of USD 40 to 50 per barrel in the near future. In the 900 TPD Ammonia plant modernisation project for National Fertilizers Limited - one of many onshore projects executed on a License+EPC basis. 185 domestic offshore sector, ONGC has indicated that it will be investing close to USD 5 billion in next 4 years on development of its deepwater field KG/98-2 on the east coast of India. This will provide significant opportunities to the Group’s offshore and fabrication verticals over the medium term, given its strategically located Kattupalli yard on the east coast and the recent tie-up with McDermott to develop cost effective subsea solutions. The Long Term Agreement signed with Saudi Aramco is expected to provide large offshore project wins in Middle East in the near future. The Indian Government has recently announced that Bharat Stage-VI (BS-VI) emission norms would be enforced from April 2020 which is a year earlier than the planned roll-out target of 2021. The Government has decided to altogether skip Stage-V and directly adopt BS-VI which are equivalent to Euro 6 norms. To meet these norms, the Public Sector refineries will need to spend an estimated 68000 crore on upgradation projects, providing visibility of order prospects for the next 2 years. The Government has also cleared a comprehensive Urea Policy 2015 which will incentivize indigenous production of urea and promote energy efficiency by encouraging units to adopt the latest technology. Under the policy, the Government has also announced revival of closed Public Sector urea units having capacity of 26 lakh tonnes located across the country like Talcher, Ramagundam, Barauni, Gorakhpur, etc. Private sector companies are also expected to initiate brownfield expansion projects which will provide opportunities over medium term. In the Middle East, gas processing projects are expected to be awarded in UAE, Oman and Saudi Arabia. Large value cross country crude oil & gas pipeline prospects are expected in Saudi Arabia, Kuwait and Oman. Mega Integrated Refining cum Petrochemical Projects are expected in Saudi Arabia, and fertiliser projects in Oman. Further, with the prospective moderation of sanctions, Iran is expected to offer good growth opportunities. Habshan-Ruwais-Shuweihat gas pipeline project built on an EPC basis for GASCO, Abu Dhabi. 186 Information Technology Business L&T Infotech’s global headquarters in Mumbai. The Company’s solutions focus on the convergence of the physical and digital worlds, improving efficiencies for its clients. Overview: The Group’s Information Technology business housed in L&T Infotech Limited (‘L&T Infotech‘) forms part of the IT & Technology Services segment of Larsen & Toubro. L&T Infotech is one of India’s global IT services and solutions companies. In 2015, NASSCOM ranked the Company as the sixth largest Indian IT services company in terms of export revenues. The company was amongst the top 20 IT service providers globally in 2015 according to the Everest Group’s PEAK Matrix for IT service providers. Its clients comprise some of the world’s largest and well-known organisations, including 49 of the Fortune Global 500 companies. L&T Infotech offers an extensive range of IT services to its clients in diverse industries such as banking and financial services, insurance, energy and process, consumer packaged goods, retail and pharmaceuticals, media and entertainment, hi-tech and consumer electronics and automotive and aerospace. Its range of services includes application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions. The company serves its clients across these industries, leveraging 187 its domain expertise, diverse technological capabilities, wide geographical reach, an efficient global delivery model, thought partnership and ‘new age‘ digital offerings. L&T Infotech was incorporated in 1996 and is headquartered in Mumbai, India. It leverages the strengths and heritage of its promoter. The L&T Group provides access to professionals with deep industry knowledge in the sectors in which the Company does business. L&T Infotech has also inherited from L&T group its corporate and business culture and corporate governance practices, which places the Company in good stead in relation to its business. In addition, it benefits from the commonality of business verticals with its promoter. The Company’s growth has been marked by significant expansion of business verticals and geographies in which it does business. Besides India, it provides services globally from North America, Europe, Asia Pacific and the rest of the world. As of March 31, 2016, the Company has 22 Delivery Centres and 44 sales offices globally. The Company serves clients across verticals such as BFS, Insurance, Energy, CPG, Retail & Pharma, Hi-Tec, Media and Entertainment and Audit Aero & Others. Business Environment: The Global IT-BPM Market as noted by NASSCOM saw increasing number of firms using custom application development as a means to enhance customer service with tailored solutions. The need to differentiate their company and 188 competitors and the need to comply with regulations and industry mandates are driving growth in the segment. CADM services are using cloud computing and mobility considered as a strategic tool to enhance business processes and improve customer satisfaction and acquisition. SMAC adoption across industries became all pervasive driving growth in IT services. The year was marked by spinoffs, buyouts, divestitures and focused acquisitions among service providers which helped bolster the bottom line for the vendors and their customers. Technology M&A deals in volume registered a record high of USD 713 Bn. in 2015 on a global basis. Driven by increased competition, some other firms took the restructuring of businesses route to improve profits and reduce costs. Significant Initiatives: • Focus on emerging technologies: L&T Infotech has established business relationships with a number of players in the digital space and, in addition to its existing capabilities, such relationships will further enable it to develop sophisticated ecosystems along with its partners as a value-added proposition to its clients. Further, it plans to invest seed capital in startups, which will allow them to benefit from their innovation capabilities and digital offerings. The Company believes this will help them enhance their digital offerings and in turn, give a platform and opportunity to scale up to startups. In addition, as part of its strategic focus in India, it is inter alia positioning itself to cater to ’Smart Cities‘ opportunities that it has identified therein. L&T Infotech regularly tracks new technologies, industry segments and market trends in the IT solutions market and believes that digitalisation will increasingly become systematically critical in the future. It looks to assist its clients to ‘engage the future’ through its focus on emerging technologies. The Company invests in new technologies and tracks new business trends, and believes that every industry will increasingly adopt digital as a key component of its overall IT solutions and services expenditure. It defines digital business as solutions and services offered to clients through the fusion of ‘new age’ technologies for disruptive business transformations, including as part of its Thought Partnership® program. Such transformations are enabled by creating innovative business models leading to enhancing client experiences and greater operational efficiencies. Over the past few years, the Company has aligned its areas of expertise and have created focused initiatives in developing capabilities in emerging technologies, which it eventually intends to offer under a specific brand. The Company’s investment in the digital practice is focused on providing its clients with a competitive edge, as well as giving them a competitive advantage in the market. Its digital assets have received multiple industry recognitions. • Focus on a targeted client portfolio and higher total contract values: L&T Infotech continues building long-term sustainable clients inter alia using application development, maintenance, support and testing services, which collectively help its clients automate their business processes through customised service delivery plans that are aligned with their business needs and objectives. Similar to its approach in relation to emerging technologies, the Company has agreements with a number of players in delivering its IMS service offerings in a technologically-agnostic way. This approach is beneficial to clients and helps establish its credibility with them with a view to eventually becoming their thought partners and long-term service providers. In addition, the Company is currently looking for strategic acquisition opportunities in relation to its IMS business. It is specifically looking to acquire a complementary business, technology, service or product that can provide it with access to new markets, capabilities or assets in relation thereto. • Expand geographical presence: L&T Infotech markets and distributes its solutions directly through its global delivery model. It has historically been dependent on North America and Europe for most of its revenues. While it intends to continue expanding its presence in the United States and Europe, it also plans to expand its geographical reach in other markets that it has identified as having potential, including Australia, Singapore, Japan, South Africa, India and the Middle East. It is in the process of augmenting its teams in these markets to 189 L&T Infotech’s facility in Bengaluru. business relationships with its clients to generate greater revenues. This involves inter alia increasing the scope of engagements with its existing clients; selling additional services to them; deploying project managers, delivery specialists and other professionals to provide value-added business solutions; and eventually become a thought partner with them in terms of their existing and future business needs by identifying priority solutions in consultation with industry experts.It has a track record of high client retention and as its client relationships matures and deepens, it seeks to expand the scope of services offered to those clients to achieve incremental revenue growth. Its ability to establish and strengthen client relationships and expand the scope of services it offers to clients will help grow its revenues and profits. The Company is targeting clients who have the potential to offer opportunities with large total contract values. It intends to originate large engagements by either identifying opportunities with its client accounts or by targeting new clients whose existing engagements with IT vendors will be up for renewal. It plans to achieve a higher value client portfolio by focusing on annuity applications and infrastructure management service deals, which tend to be long-term in nature. • Expand focus on infrastructure management service (IMS) offerings: L&T Infotech’s IMS service practice offers a wide spectrum of end-to-end services covering IT infrastructure consulting, design, managed services, migration services, operational support, desktop support, and Cloud enablement, hosting and migration. It aims to leverage its ‘Business 1st™’ approach with respect to IMS, which provides extensive services to further explore the opportunities therein. With respect to the Company’s operations in South Africa, the Nordic region and the Middle East, the Company views these regions as gateways to the rest of Africa, Eastern Europe/the Baltic region and the Middle East/ North Africa region, respectively. As such, it intends to allocate resources to these markets not only for pure-play market opportunities therein, but also as stepping-stones to other client opportunities that it can identify through greater regional experience, expertise and client referrals. viz., in South Africa, it recruits local nationals to assist in market penetration efforts, in addition to complying with local regulatory requirements. In the Middle East, the Company intends to leverage the strong presence of the L&T Group, which is engaged in the oil and gas, construction and transportation sectors. The Company has identified Germany, France and the Nordic region as important markets going forward and it would like to enhance its capabilities and address gaps in language capability, industry expertise, technical expertise and geographic coverage in these countries. As such, it is also currently contemplating pursuing strategic acquisitions in these markets. It believes that the foregoing initiatives will allow them to move up the value chain with respect to services offered. • Focus on greater internal operational efficiency: L&T Infotech plans to continue developing and investing in frameworks, accelerators, in-house proprietary solutions and customised software processes to drive efficiencies internally. It also plans to increase its profitability by streamlining cost structure with a focus on high employee utilisation and optimising resource mix. To this end, business process digitalisation is important in streamlining cost structure to make them more operationally efficient. It plans to automate various project delivery processes as well as internal IT service processes to enhance human productivity and once various tools are developed in relation thereto, it plans to institutionalise their usage across its business units, which will provide them with the appropriate business platform to be more efficient. The company also plans to introduce specific business process digitalisation initiatives in relation to its business verticals and service lines for them to realise operational cost savings. Outlook Enterprise applications are becoming increasingly consumer oriented with mobile and ‘on-the-go’ applications’ delivery mechanism shifting to cloud-based environment. Demand for migration, porting and re-platforming of traditional on premise application to SaaS from both clients and ISVs provide significant opportunity. Agile testing is growing in acceptance even though it is yet to fully mature. Crowd-sourced testing is gaining popularity and testing automation as well as data management are adapting to the new technology demands. Key drivers for third party and GICs are cloud based testing, IP-led testing, testing-as-a-service, automated testing and testing in domain-specific niche services along with transformational programs using SMAC and IoT. (Source: NASSCOM Report) With the appropriate mix of initiatives in emerging technologies, client focus and geography expansion, L&T Infotech is optimistic of its prospects in the near to medium term. 190 Technology Services Business Headquartered at Knowledge City, Vadodara, L&T Technology Services has delivery centres in Europe, USA and India. It helps clients gain the competitive edge by building smart products, enabling smart manufacturing and offering smart services. Overview: A leading player in the global Engineering, Research and Development (‘ER&D’) space, L&T Technology Services Limited (LTTS) is a wholly-owned subsidiary of Larsen & Toubro Limited and forms part of Group’s IT & Technology Services business segment. With L&T’s engineering heritage, the Company provides, ‘one-stop shop‘ to its customers across the product engineering life cycle from product conceptualisation, design and engineering to prototype and certification support services. It has long term engagements with a large number of marquee clients across multiple industry segments like Industrial Products, Medical Devices, Transportation, Telecom and Hi-Tech Computing and Product Software and Process industries. It also has differentiated offerings in the Plant Engineering and Sustenance Services which is unique when compared with the other Indian ER&D service providers. The Company is investing significantly in new age technologies like Engineering Analytics, Digital Engineering and Internet of Things (IoT). A well- defined Digital Engineering strategy leverages its unique strengths along with best-of-breed partners and delivers differentiated solutions for building Smart Products, Smart 191 Manufacturing and enabling Smart Services. As part of this, the Company has developed IP led solutions like UBIQWeise, i-BEMS that have been launched in the global market. The Company has also filed around 260 patents, some owned by itself and some co-authored with its customers. L&T Technology Services has a global reach to its customers through its 12 delivery centers and 25 sales offices. It also has set up domain specific labs that replicates customer’s work environment and works closely with the customer R&D wings on product innovation through technology infusion. Its global delivery model of Offshore, Nearshore, Onshore and Client Proximity centres, combined with these labs, provides customers with high quality solutions in reduced timeframes that deliver operating efficiencies and better value for its shareholders. With around 19% CAGR (Financial year 2012 to 2016) and over 170 global customers, the company added 17 new clients to its portfolio while maintaining focus on expanding business among existing clients. Of its total client base, 53 clients are Fortune 500 companies. In the Global R&D Service Providers Rating 2015, Zinnov Consulting has placed L&T Technology Services in the leadership zone in eleven categories. The Zinnov survey also placed eight of the Company’s verticals in the leadership zone – Automotive, Aerospace, Telecommunication, Energy & Utilities, Industrial Automation, Transport, Construction & Heavy Machinery and Medical Industries in 192 addition to technology horizontals like Mechanical Engineering Services and Embedded Systems. Business Environment: India as an engineering services destination has witnessed enormous growth and has become the global hub for outsourced engineering services. As per NASSCOM, the Engineering Research & Development spend has seen a double-digit growth in recent times and is expected to touch total spends worth USD 850-900 Bn. with exports worth USD 30-38 Bn. by 2020. Further, the addressable market for ER&D Globalisation and Services is expected to increase at a CAGR of 4.3% till 2020. Engineering innovation in digitisation, product life-cycle management, and value- engineering services is creating a plethora of new opportunities and business models across industries. As technologies converge and find applications across industries, some mega-trends in the ER&D space have emerged. These include: • Smart Services, Smart Products & Smart Manufacturing - Condition based Monitoring, Remote Guided Services and Smart Wearables, Smart Home Products, Connected Vehicle, Industrial IoT, Augmented Reality and Smart Supply Chain and Logistics. • Energy & Efficiency - Power Electronics, Energy Management and WAGES (Water, Air, Gas, Electric, Steam) Engineering. • Imaging & video - Imaging Algorithms, Edge Detection, Video Surveillance and ADAS (Advanced Driver Assistance Systems). Significant initiatives: The Company has been agile in adopting new technology trends and addressing business challenges of customers. This has resulted in a faster growth trajectory compared to peers in the engineering services industry. Investment in new technologies and labs, account mining, operation improvement programs, global delivery models and continued focus on the multi- vertical strategy have proven to be a great success. LTTS is addressing opportunities in the marketplace through a multi-vertical strategy. Key initiatives include: • Expanding Services footprint: While the Company is focused on growth verticals like Automotive and Consumer Electronics, it is creating competencies in next-gen Computing and ISV which will give it a scalable growth. It is tapping the enormous market potential in digital engineering and green energy that are driving usage of new age technologies across industries. • Investing in new Lab facilities: In line with its philosophy to invest in state-of-the-art for concept design and innovation, the Company has set up a number of cutting edge labs including Smart Manufacturing Lab, Global Internet of Things (IoT) Solutions Centre and Material Testing Lab at its facilities. • Expansion to new geographies and investments in Infrastructure: The Company has established new onshore and nearshore delivery centres in the US and the Middle East. Engineering services that enhance efficiency, while reducing time-to-market and costs. Key HR initiatives: Employees are at the heart of L&T Technology Services’ success. The Company has partnered with the Great Place to Work ™ institute to transform the workplace and create the perfect culture in which big ideas flourish. The Company has also initiated ’Techleap’ a technical career path program for encouraging in-house engineering talent. With the belief system that reflects ‘People are our greatest assets’, HR practices are focused on creating performance driven environment where innovation and collaboration is encouraged, performance is recognised and employees are motivated to realise their potential. HR is at the core of the Company, influencing change, building culture and developing capabilities. The HR processes are continuously evolving and aligning with the changing business requirements. The HR team is structured into specialised units to respond quickly to the needs of the organisation. The employee strength of the Company has grown from 9327 employees in fiscal year 2015 to 9406 employees in 2016. The Company has one of the lowest attrition rate in the industry at around 12%. In the area of talent retention, there is a relentless effort towards developing competencies in technology, domain and processes aligned to customer requirements that helps the Company’s employees to stay relevant and realise their potential. Continuous learning initiatives include an Online Learning Portal and Leadership Development Programs to groom potential leaders right from operational to strategic levels. The state-of-the-art learning centre at Lonavala specialises in personal leadership, building organisational knowledge and ethical business practices. This has created a rich leadership pipeline that supports the fast paced business growth of the company. Awards and Accolades in 2015 – 16: • IT: EMC Transformation Award and ‘Dataquest Business Technology award‘. • The Golden Globe Tigers Award for Excellence in Training & Development. 193 • Recognised by Gartner among ‘Key vendors in the IoT Embedded Space‘. • ‘Certificate of Excellence’ from NASSCOM. • Quality Excellence for Product development at the World Quality Congress. • Wins Supplier of the Year Award from UTC Aerospace Systems; also wins ÚTC Supplier Gold title. • Celebrates a decade of strong partnership with Danaher. • “LTTS’ testing framework is a unique offering to test the interoperability of multiple systems”: IDC. • Zinnov says, ‘most important aspect of LTTS’ success story is nurturing curiosity towards technology innovation within the organisation and among customers‘. • Company has ‘very diversified portfolios among the service providers in terms of industry verticals, service offerings and geographical spread‘: ARC Advisory. Outlook: With growth of ‘IoT’ in both product and plant segments, the market offers huge opportunities for Smart Products, Smart Manufacturing and Smart Services. This market is to set to reach USD 1.7 Tn. by 2020 according to research firm IDC. With the investments LTTS is making in this space, it is all set to tap and capture this market and be one of the leading engineering service providers globally. With its marquee client base across industry segments, the Company is confident of continuing to grow at a robust pace and increasing its market share across geography and industry segments. 194 Financial Services Business L&T Financial Services’ offerings span the geo-socio-economic spectrum and comprise four core business groups – Retail Finance, Wholesale Finance, Investment Management and Wealth Management. The Financial Services business segment comprise retail and corporate finance, housing finance, infrastructure finance, investment and wealth management business carried through the subsidiaries of L&T Finance Holdings Limited. The Financial Services business also includes general insurance which is housed in a wholly-owned subsidiary, L&T General Insurance Company Limited. L&T Finance Holdings L&T Finance Holdings’ business organised under verticals structured as the Retail and Wholesale Platform, Investment Management and Wealth Management business, is carried out through its wholly- owned subsidiaries. The Management’s focus is to achieve a healthy return on equity (ROE) on a sustainable basis. It has been a conscious decision of the Management to have diversified businesses to protect the overall profitability from the cyclicality of individual businesses. Hence, the Company has focused on comprehensive product offerings. Some of these products have been developed as flagship products. While creating the product-mix, three parameters are taken into account: profitability, scalability and the Company’s ability to have clear market advantage in a 195 particular product segment. These three parameters influence the ultimate choice of the Company’s product offerings, for which it has earned admiration in the wider marketplace. Business Environment Retail Platform – Retail, Corporate & Housing Finance Business: The business of the retail platform including retail, corporate and housing finance businesses is carried out by the Company’s wholly-owned subsidiaries, L&T Finance Limited, Family Credit Limited and L&T Housing Finance Limited. These comprise loans for income generation as well as for the purchase of consumer assets, working capital loans for SMEs, term loans for medium and large companies, loans under micro-finance, loans for purchase of homes and loans against property. The product portfolio under the Retail Platform includes: Mid and Large Corporations Loans and leases Loan against securities Housing Finance Microfinance Home loans Joint liability loans Micro individual loans Loan against property Loans for construction Consumer and Auto Loans Farm equipment loans Two-wheeler loans Small & Light Commercial Vehicles’ loans (S&LCV) Car loans Small and Medium Enterprises Supply chain finance Term loans Warehouse Receipt Finance Commercial assets (CE & CV) loans The Company has been realigning its portfolio towards B2C businesses as compared to B2B businesses. The Company believes that through this 196 shift, it will increase yields while at the same time dispersing the risk that is inherent in B2B businesses of being lumpy. 100% – 80% – 41% 36% 60% – 40% – 40% 42% 27% 40% 8% 5% 35% 34% 16% 39% 4% 11% 2% 12% 9% 8% 10% 24% 19% 17% 1% 11% 3% 2% 1% 16% 19% 19% 23% 25% 1% 20% – 0% – – – – – – – – FY11 FY12 FY13 FY14 FY15 FY16 Rural Products MFI Housing Mid-Market+SME 2W/Cars CE/CV During the year 2015-16, with deficient monsoons and mounting delinquencies, the tractor market posed severe challenge to growth. Although the tractor market shrank by 11%, the Company’s market share decreased by 3%. Despite a strong tie-up with notable manufacturers, the slowdown in the tractor market let to this decline in market share. To counteract this, the Company focussed on financing pre-owned tractors and refinancing opportunities. This constituted more than 15% of disbursements during the year. In the area of two-wheeler loans, while the industry volume increased by 3% during 2015-16, the Company’s volumes grew by 14%, leading to an increase in its market share. This performance was facilitated by better penetration in existing locations and active efforts to extend reach to new markets. In a strategic move, the Company de-emphasised its focus on S&LCV and car loans. Given the extant mismatch in the risk-return paradigm of these products, the Company believes that they are not suited to management’s vision of delivering superior return on equity to shareholders. The SME segment, especially the supply chain segment, has been fast emerging as another flagship segment for the Company. During the year under review, the Company undertook appropriate investment in technology for this business to L&T Housing Finance fulfills the desire for home ownership in 44 markets across the country. and financing structure. The FAS Group, which has been consistently stepping up the range and depth of offerings to clients, works in close coordination with the Debt Capital Market (DCM) Desk. The latter provides structured funding solutions to select clients in the form of innovatively structured Non Convertible Debentures (NCDs)/ Bonds that are initially subscribed in full by one or more entities within the Wholesale Platform and subsequently sold down in smaller tranches to eligible investors. During the year, the FAS Group and DCM Desk together generated an income of 100 crore by way of fees and capital gains. The Wholesale Platform team, which possesses the requisite skill set and experience, has over the years, honed its project appraisal skills such that it has emerged as a preferred choice for mid-sized infra players – particularly those setting up solar and wind power projects. Its robust, internally developed risk assessment framework enables the Platform to offer to underwrite entire term debt needs of meritorious renewable power projects. Given that implementation timelines for such projects are rather fine, this offering of one-stop-debt funding solution – with suitably structured tenors, reflective of realistic assessment cash-flows – enables the developers compress their project gestation periods and thus enhance their equity returns. Similarly, under L&T IDF’s lead, successfully operating road projects are offered optimally priced refinance packages – often having extended tenures that are based on conservative estimates of the (residual) economic life of projects. 197 Our micro-finance business has uplifted and empowered over 8,00,000 rural women. be able to deliver an enhanced customer experience. It has already considerably advanced its credit delivery processes by developing parameterised lending models that ensure a fast turnaround time. In the mid and large corporate segment, the Company adopted a selective strategy for its corporate loans and leases and offered credit only to well-rated companies with tight monitoring of loan usage. In the Housing Finance segment, the Company has undertaken several initiatives with an objective to diversify distribution channels, improve customer experience and overall focus on process improvement. It also scaled up the business by increasing geographical spread as well as by increasing its market share in existing markets. The Microfinance segment is another flagship business of the Company. Robust risk control processes and the ability to raise liabilities to match growth aspirations in a timely manner, gives the Company a unique market advantage in this segment. Wholesale Platform: The Wholesale Platform of the Company comprises infrastructure financing and non-infra wholesale financing through three lending entities viz. L&T Infrastructure Finance Company Limited (L&T Infra Finance), L&T FinCorp Limited and L&T Infra Debt Fund Limited (L&T IDF). The Company’s Wholesale Platform offers both fund based and fee based products and services. They are designed to efficiently meet term finance needs of infrastructure and industrial projects/ players in India. The Financial Advisory Services (FAS) Group provides advisory services to customers enabling the raising of debt and equity capital from market sources. The team also provides financial structuring solutions to customers to optimise their capital On the assets quality front, the Wholesale Platform’s management has remained pro-active in dealing with the stressed assets portfolio. However, given the rather slow economic revival coupled with the highly leveraged position of promoters/ borrowers, the challenges being faced by all lenders are not expected to abate in the near term. Nevertheless, the Wholesale Platform’s on-going strategy of pursuing resolutions through closer co-ordination with both promoters and co-lenders – such that credit costs are brought down – will be continued. The Wholesale Platform has evolved from being a corporate lender to a specialised project financier and focused on operating projects to balance the overall risk of the portfolio. 100% – 5% 4% 2% 5% 3% 17% 18% 3% 22% 28% 32% 37% 32% 29% 29% 26% 35% 31% 37% 47% 61% 80% – 60% – 40% – 20% – 0% – – 48% 27% 21% – – – – – – FY11 FY12 FY13 FY14 FY15 FY16 Operational Projects Corporate U / C Projects Equity & Investments Investment Management Business: The Investment Management business of the Company is carried out through L&T Investment Management Limited (L&TIM), a wholly-owned subsidiary. During the period under review, average assets under management (AAUM) grew by 15% to 25945 crore for the quarter ended March, 2016 as compared to 22497 crore for the corresponding period in the previous year. This was achieved through a combination of consistent fund performance, building scale in existing product offerings and improving acceptance in various distribution channels. During 2015-16, the Investment Management business of the Company continued the momentum from 2014-15 and managed to grow at a better pace than the industry. The growth was contributed by equity assets which grew 21% over the previous year while debt assets grew at an encouraging 13%.The equity mix for the company increased to 44% (Equity and Arbitrage) this year from 42% in the previous year thereby leading to an increase in equity market share to 2.59% from 2.4%. The asset growth and increase in market share was a result of strong gross and net sales, acceptance amongst the investor community as well as quality fund performance. The company closed 2015-16 with an overall market share of 2.01%. During the year, the Company’s strategy of building scale in core funds, both on the equity and debt side paid rich dividends as the number of funds with AUM of more than 1000 crore (ex-Liquid and Ultra) increased to 7 (5 equity and 2 debt) from 3 in the previous year. Mutual fund investments are subject to market risks, read all scheme related documents carefully. Wealth Management Business: The Company’s Wealth Management business is carried L&T Infra Finance has emerged as one of India’s leading financiers in key sectors, including renewable energy. Consequently, renewable energy, annuity and toll road and transmission projects – which constitute the Wholesale Platform’s niche business areas – accounted for a major part of the disbursements made during 2015-16. Further, the focus has been on ensuring that operational projects comprise a significantly high proportion of total loan assets so as to contain well the element of underlying risk in the portfolio. Of particular note is the level of new business done by the L&T IDF during the year. Its book has recorded a sharp growth wherein the business assets as at March 31, 2016 crossed the 2350 crore mark as compared to a modest 350 crore as the end of previous year. This was attributable inter alia to more number of operational PPP projects now becoming eligible to seek assistance from L&T IDF – consequent to RBI’s decision to include additional sectors that can be financed by L&T IDF without execution of a tripartite agreement. Notwithstanding this liberalised regulation, it would be L&T IDF’s endeavour to ensure an optimal blend of operational PPP projects in its portfolio so as to preserve its AAA rating. 198 out through L&T Capital Markets Limited – it’s wholly-owned subsidiary, offering services to Ultra High Net worth (UHNI) and High Net Worth Individual (HNI). The Company is present in eight locations in India and one in Dubai. 85 experienced and high skilled relationship managers service clients on their investment needs across asset classes and the spectrum of products in local and international markets. The business has been progressing well led by a robust model built on the fundamental tenets of client centricity, intellectual property and execution efficiency. Average assets under service for the quarter ended March 2016 grew to 9315 crore, accounting for an increase of 33% from 6996 crore for the corresponding period in the previous year. The Wealth Management business has a client base of over 4600 and is operational in Mumbai, Delhi, Bengalure, Chennai, Kolkata, Hyderabad, Ludhiana, Ahmedabad, and Dubai. The Dubai Financial Services Authority (‘DFSA’) granted an upgrade from a Representative Office License to a Category 4 license whereby, L&T Capital L&T Mutual Fund offers investments for every kind of customer through a well-differentiated range of equity and debt funds. Markets Limited, DIFC Branch will be regulated by DFSA to offer Wealth Management Solutions by way of arranging deals in credit and investments, providing advice on financial products and services, including equities, debt, structured products, investments in alternate asset classes etc., to the High Net Worth Individuals based in the UAE and the neighbouring countries. Significant Initiatives: During the year 2015-16, the Company undertook several initiatives with an objective to enhance market reach and customer centricity, build scalability, manage risks effectively, attain process excellence, business continuity, aid cost flexibility and result in providing shareholder their fair returns. • Mobility solutions: Loan origination and collection in the Consumer and Auto Finance as well as Microfinance business are completely based on mobility solutions. Loan origination is carried out through Android based tablets/ mobile handsets that aim to drive sales effectiveness through use of technology for reducing turnaround time. Collections are carried out through mobile phones coupled with thermal Bluetooth printers to issue receipts. • A mobile based rule engine, with a predictable and steady approval rate, has been developed to improve TAT. Minimising human handoff reduces the chances of error based on minimum human underwriting interventions. Productivity, maximising cost efficiency and customer convenience as central themes were embedded into routine business as well as new initiatives during the year. Back-office operations are now consolidated into two hubs viz. Mumbai and Chennai through extensive workflow automation and centralisation to make the branches hub for sales and service. Outlook: Indian rural economy is dependent on monsoon to a large extent. With the expectation of a good monsoon, consensus outlook on the farm industry remains positive for the year 2016-17. There is also a growing trend in the levels of rural income and therefore, demand for ownership of personal vehicles is also rising. The Company is confident of capitalising the expectation of growth in rural economy for its three key retail products – farm equipment finance, two-wheeler finance and microfinance. In the infrastructure space, GOI has taken several steps to speed up decision making and fast-tracked project clearances. Nevertheless, concerns on the asset quality still remain which may take several quarters to resolve. As the norms for recognition of Non-Performing Assets in the coming year gets advanced to 120 days of delinquency as against 150 days of delinquency as per RBI norms, credit costs may remain elevated in the coming year. The Financial Service businesses have implemented a strategy called ‘Transform. Focus. Deliver’. The crux of the strategy is to transform the portfolio by focussing on key businesses in order to deliver superior returns on equity (RoE). The entire portfolio 199 Fire and Engineering) contributed 14% and 23% of the total GWP respectively. L&T General Insurance has a pan India presence with 28 branches. efficiencies resulted in a better productivity levels for the Company. This will further help the Company to optimise its operating costs in future. Business Environment: General insurance industry (excluding specialised insurers such as AIC and ECGC) has reported a growth of 13.63% in the top line from 80584 crore in 2014-15 to 91564 crore in 2015-16. The growth in premium has improved from 9.83% to 13.12% in 2015-16 for private players and from 10.3% to 12.1% in 2015-16 for PSUs. The market share of private players increased marginally from 47% to 48% in 2015-16. All lines of the business except Marine and Fire have shown improvement in the growth rate compared to the previous year. Health, PA and Liability have grown at a higher rate than the market growth rate. The motor segment continues to dominate the market with a 46% share in the overall premium and the share of Health has increased from 25% to 27%. While the top line grew, profitability of the industry was negatively impacted by the devastating floods in Tamilnadu. Significant Initiatives: The Company entered into certain significant arrangements which will help it in augmenting the business in the Motor segment. It also succeeded in improving the portfolio mix for Motor and Health. The extensive use of the robust technology platform coupled with the improvement in process Outlook: With increase in the permissible FDI under the Insurance Laws (Amendment) Act 2015, this year saw many foreign partners increasing their stake in their joint ventures, thereby showing commitment to expand their presence in India. IRDAI has issued several regulations including some revisions aimed at driving the transparency, improving accountability, increasing penetration and creating a favourable ecosystem for all the stakeholders. These regulations amongst others include regulations on corporate agency, point of sale person, insurance marketing firms, expenses of management, surveyor and loss assessor, dismantling of the declined pool, implementation of Indian accounting standards etc. Improving macro parameters, legislative reforms along with above normal rainfall this year are expected to drive the industry growth in 2016-17. With Motor and Health lending support to the current growth drivers, 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. More than 55,000 consumer and auto finance loans originated through tablets. of products was critically studied on parameters of industry attractiveness and our ability to create a distinctive position. As a result, three businesses have been identified as the key growth drivers – rural finance (farm equipment finance, two-wheeler finance and microfinance), housing finance (home loans, loans against property and developer finance) and wholesale finance (infrastructure finance and structured corporate lending). The other products in the portfolio would be de-emphasised. With this strategy, the Financial Services business is expected to deliver top-quartile RoE to shareholders by the year 2019-20. L&T General Insurance Overview: L&T General Insurance’s Gross Written Premium (GWP) grew from 344 crore in 2014-15 to 483 crore in 2015-16, thereby registering a growth of 40% over the previous year. Motor remains the largest contributor to the GWP with a share of 63%. Health and other Commercial lines of the business (primarily 200 Developmental Projects Business The Hyderabad Metro Rail Project - the world’s largest public-private project in the urban transportation sector extends 71 km across three corridors. 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 (PPP) format, toll collection including annuity based road projects, power development and power transmission, development and operation of port facilities and providing related advisory services. Significant cash generating assets have been created under the current business model which are being explored for monetisation on a continuous basis in order to maximise value creation for the benefits of stakeholders. 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 201 business interests across Roads and Bridges, Ports, Metro Rail, Wind energy and emerging sectors such as Power Transmission Lines. As of March 2016, L&T IDPL has a portfolio of 17 projects with 7,800 Km at an estimated project cost of over 186 Bn. L&T IDPL’s portfolio of infrastructure assets also includes the Hyderabad Metro Rail project, a transmission line project in Karnataka, a port berth in Haldia and windmills in Tamil Nadu. Roads & Bridges: : 17 : 7,800 Km 186 Bn : No. of Projects Lane Km Total Project Cost 12 Operational Projects 2 Implementing Projects 3 Projects under Termination Metro: : 1 : 71 Km : No. of Projects Length of Rail Line Total Project Cost Development of Metro Rail and Transit Oriented Development in Hyderabad Port: 170 Bn No. of Projects Capacity Total Project Cost : 1 : 4.5 MTPA 1 Bn : LTIDPL is having 21% stake in Berth No. 4A of Haldia 202 Transmission Line: : 1 : 2,400 MW 14 Bn : No. of Projects Capacity Total Project Cost Transmission System for Power evacuation from NTPC Kudgi (3x800 MW) to Madhugiri in Karnataka 3 sections comprising a total length - 470 Km Total No. of Projects Estimated Project Cost : 371 Bn : 20 Business Environment The high economic growth witnessed by India during the last decade was accompanied by realisation of the need for enhanced investment in infrastructure. Rapid urbanisation and industrial growth led to demand for basic infrastructure such as water supply and sanitation, transportation and energy. Rapid growth in purchasing power in the rural areas simultaneously meant a need for improving connectivity and services for attaining a seamlessly integrated network of logistics and facilities. In order to augment economic growth, the government initiated several policies and enabling measures to support the creation of high-quality infrastructure and efficient delivery of services to its citizens. The recent slowdown of PPP projects could be attributed to a combination of events, namely the global economic slowdown, weak regulatory and institutional frameworks, delay in issue of clearances by authorities, financing issues (over-leveraged debt and paucity of equity), acquisition of land, aggressive bidding by developers, contractual issues, including long drawn out dispute resolution arising in a maturing PPP landscape, inadequate diligence and appraisal by lenders, and lack of flexibility in contractual arrangements. Road Sector L&T BPP Tollway Limited (BPP)> The Beawar - Pali - Pindwara road in Rajasthan is a mega highway project covering a stretch of 244.12 Km traversing three districts in Rajasthan. It provides crucial connectivity between North India and Gujarat. BPP achieved COD on June 11, 2015 for the entire length. L&T Devihalli Hassan Tollway Limited (DHTL) has obtained COD for the residual 2.976 km vide letter dated October 6, 2015 from the independent engineer. With this, the total project length of 77.228 kms is now fully operational and tolled. Construction is in full swing on Deccan Tollways Limited (DTL) in Telangana and Sambalpur Rourkela (SRTL) in Odisha. The two road projects are expected to commence tolling in the financial year 2017-18. L&T Metro Rail (Hyderabad) Limited L&T Metro Rail (Hyderabad) Limited (L&T MRHL) was incorporated on 24th August, 2010 as a special purpose vehicle to undertake the business to construct, operate and maintain the Metro Rail System including the Transit Oriented Development in Hyderabad under Public-Private Partnership model on Design, Build, Finance, Operate and Transfer (DBFOT) basis. The Company entered into a Concession Agreement with the erstwhile Government of Andhra Pradesh on 4th September, 2010. The Metro Rail system is being constructed on three elevated corridors from Miyapur to L.B.Nagar, Jubilee Bus Station to Falaknuma and from Nagole to Shilparamam covering a total distance of 71.16 Km. The concession period of the project is for 35 years including the initial construction period of 5 years. The concession period is extendable for a further period of 25 years subject to the fulfillment of certain conditions by the Company as set out in the Concession Agreement. The estimated project cost is 16375 crore which includes the cost of rail system and 6 million Transit Oriented Development (TOD) which is to be funded by a term loan of 11478 crore, equity share capital of 3439 crore and Viability Gap Fund from Government of 1458 crore. The Company has tied up the entire debt and achieved financial closure on 1st March, 2011. In terms of the Concession Agreement, both the Government of Telangana (State Govt) and L&T MRHL are required to comply with certain conditions precedent for the occurrence of appointed date which shall be the date for commencement of concession period. The State Govt has declared the appointed date as 5th July, 2012 upon fulfillment of the condition precedents (CP) from both the parties i.e., L&T Metro Rail (Hyderabad) Limited and the State Govt. The Company has achieved its 4th Project milestone as per the Concession Agreement and has expended 50% of the project cost by 5th July, 2015. The Company is executing the project covering a total distance of 71.16 Km in three different corridors. This entire distance is further sub-divided into six stages for ease of implementation. CMRS (Commissioner of Metro Rail Safety) approval has been obtained for Stage 1 of the project and is fully ready for commissioning. Stage 2 is expected to be ready by October 2016. The overall physical progress of the project as at 31st March, 2016 is 61%. Construction works in Stages 3, 4 and 5 are going on at a brisk pace. During the year 2015-16, the Company successfully obtained two tranches of Viability Grant of Funding (VGF) amounting to around 660 crore from the Central Kudgi Transmission Limited (a subsidiary of L&T IDPL) is developing the transmission assets required to evacuate power from NTPC’s Kudgi Thermal Power plant in Karnataka. 203 Government. This confirms the certainty of Central Government participating in the project in the form of VGF. There is an encouraging environment for commercial real estate with a few major IT and IT enabled companies announcing big plans during past few months to set up shops or expand their business plans. This would help the project to market its real estate products in retail and office segments at better prices. Significant initiatives: To provide a safe highway to users and to reduce maintenance costs due to overloaded vehicles, Weigh-in-Motion (WIM) system was implemented during December 2015 at L&T BPP Tollway Limited. This calculates the load of each axle of the vehicle which moves on the platform. A penalty is charged at Pay Axis (Toll Booth) if the vehicle is found to be overloaded. Pursuant to the Investment Agreement of June 2014, the Canada Pension Plan Investment Board (CPPIB) made an initial investment of 1000 crore in L&T IDPL in December 16, 2014 and the second tranche of 1000 crore was made in December 15, 2015 by way of subscription to compulsorily convertible preference shares. The Company has entered into a Share Purchase Agreement on April 4, 2016 for sale of its stake in L&T Infrastructure Development Projects Lanka (Private) Limited. The divestment was completed in May 2016 and has received the sale proceeds. 204 Outlook: The recovery in the sector is likely to be gradual as most players are still burdened with leveraged balance sheets even as the volume of stalled or slow moving projects remains sizeable. In addition, aggressive bidding in the past and inability or limited ability to raise equity for Build-Operate-Transfer (BOT) projects have impacted the viability of infrastructure projects and reduced the risk appetite of developers for new projects. Further, structural constraints like uncertainty in land acquisition, delays in approvals and inadequacy of long-term funding avenues, if not tackled expeditiously, can slow down recovery in the infrastructure sector. The pace of recovery in the construction sector is likely to be slow and will be linked to the ground impact of the policy measures taken as well as the availability of funds. The Group is expecting to improve toll revenues by replacing the old tolling system in some of the plazas with more robust systems and by implementation of weight-based tolling in a few more projects. Improvement in traffic is also expected on account of the revival in the economy. However, WPI has been in the negative territory in the second year which has led to reduction in toll rates in some of the projects. The negative trend in WPI is expected to partially offset the benefits accrued from traffic growth and lower interest costs. The Company will also actively participate in policy advocacy to improve and strengthen the PPP sector. The Company will continue to look for opportunity to churn its portfolio and would refinance some of the road projects during the year. Once the termination matters are resolved, the Company is expected to participate in the bids coming up in the road and transmission line sectors. L&T Power Development Group Overview: L&T Power Development Limited (L&T 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. 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 Singoli- Bhatwari Hydro Electric Project Tagurshit Hydro Electric Project Sach-Khas Hydro Electric Project Reoli-Dugli Hydro Electric Project Total State Capacity (MW) Name of Subsidiary Current Status Advanced stage of construction Detailed Project Report submitted 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 870 Thermal Power Projects – Nabha Power Limited (NPL) NPL is a 2X700 MW supercritical thermal power plant at Rajpura, Punjab. This is the first development project and the first power plant to be owned and operated by L&T. All the power generated from this plant is contracted with Punjab State Power Corporation Limited (PSPCL) for a period of 25 years under a Power Purchase Agreement (PPA). The plant is built on super critical technology of Mitsubishi, Japan. It is the first ‘Made in India’ supercritical power plant to be commissioned and operational in India. The plant sources its fuel from South Eastern Coalfields Ltd. (Subsidiary of CIL - Coal India Limited) under a 20 year Fuel Supply Agreement (FSA). The Company also secured approvals to arrange coal from alternative sources to make up for any shortage in supply of coal under the FSA. Bhakra-Nangal distributary is the perennial source of water for the plant under an allocation by the state irrigation. The plant is operated by an in-house experienced team of operations and maintenance professionals. The power plant has been running successfully for over two years with a technical plant availability of over 90%. NPL has been the most reliable source of power for the state of Punjab and has supported the state with an uninterrupted supply during peak season. NPL also happens to be the lowest cost power producer in Punjab with benchmark operational efficiency which is amongst the best in the country. Business Environment: Fiscal year 2015-16 witnessed muted growth in demand for power with an all India plant load factor at around 62%. Punjab state also registered a modest growth in demand. PSPCL undertook power banking transactions creating an additional demand during lean seasons. Punjab joined ‘Ujwal DISCOM Assurance Yojana’ scheme of the Central Government during the year. UDAY scheme is aimed at operational and financial turnaround of the DISCOMs. Coal India Limited ended the financial year with an output of 536.5 million tonnes, 8.6% higher than preceding year. However, the output was short of targeted production by 2.4%. SECL, which supplies coal to NPL, registered a production of 135.6 million tonnes with a growth of 5.8%. Availability of railway rakes for transportation of coal from SECL to NPL’s plant in Punjab improved during the year. Regulatory environment continued to pose challenges to the IPPs (Independent power producers) particularly in tariff related areas. Significant Milestones & Initiatives: • 91.79% availability achieved • Railway siding operational on 4th February, 2016 • Operational efficiency measures implemented and monitored to improve efficiency • Unit start-up procedure optimised to reduce the time and cost • ISO 9001, 14001 and 18001 certification awarded The 56.17-km six-lane stretch of NH 8A between Samakhiali and Gandhidham in Gujarat connects the important port towns of Kandla and Mundra to north India. 205 • Achieved 87% materialization of linkage coal during large part of 2015-16 • NIL availability loss on account of shortage of coal • 99% of dry fly ash disposal achieved • Effective financing strategies and refinancing iterations helped to maintain Interest costs at sub 9% • CSR initiatives in the area of development of village infrastructure, education, skill building, gender equality, health and environment were implemented during the year. Outlook: Increased private participation in the power sector is expected to play an important role in future capacity additions. Lower per capita consumption continues to promise robust long term demand. On the fuel side coal production capacity is expected to further increase in 2016-17 up to around 600 million tonnes registering 11% growth over the preceding year. Punjab is expected to witness a flat growth of around 5% in demand for electricity during 2016-17. NPL is likely to remain the lowest cost power producer amongst the IPPs in the state which will translate into a higher plant load factor in fiscal year 2016-17 at around 70%. Major focus areas for NPL in coming year are maximising plant availability, improving operational efficiency, enhancing fuel quality and settling the regulatory issues. Focus area for the hydel business would be expediting construction activities at its Singoli-Bhatwari hydel project. L&T Shipbuilding Limited: Kattupalli Port Operations L&T Shipbuilding Limited is a joint venture between L&T and Tamil Nadu 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 2015-16, the Company entered into an agreement with Adani Group (a port operator) to demerge the port business and divest the stake in the resulting company. Pending formalities of the demerger process, the operations of the port have been handed over to the operator for a fixed share in revenue. It is planned to complete the transfer of the port ownership in entirety during financial year 2016-17. 206 20.1% y-o-y, as the investment climate remained subdued during the year. While capital spending by private sector was muted on account of lower commodity prices, weak demand and large excess capacities, investments in infrastructure development picked up in the second half of the year. The International segment grew 12.4% y-o-y and contributed 32.1% of total order wins during the year as compared to 25.2% in previous year. Order inflows of Power, Metallurgical & Material Handling and Heavy Engineering businesses were adversely affected. Infrastructure segment contributed 62% of total order inflow during the year at 84817 crore, marginally lower by 1.1% as compared to the previous year. The Group has a robust order book of 249949 crore as at March 31, 2016, at 2.4 times of current revenue providing revenue visibility for next few years. Infrastructure segment contributed 75% of the consolidated order book, comprising mainly Buildings & Factories 22.7%, Transportation Infrastructure 15.8%, Heavy Civil Infrastructure 15.3%, Power Transmission & Distribution 12.3% and Water, Smart World & Communication 8.9%. The order book grew by 7.4% over the previous year. International orders constitute 28.3% of the order book as at March 31, 2016 as compared to 26.2% in the previous year. Financial Review 2015-16 I. L&T CONSOLIDATED A. PERFORMANCE REVIEW The Company’s performance during the year has been satisfactory driven by revenue growth with stable margins despite testing business conditions characterised by global slowdown, declining commodity prices, volatile currency movements and geopolitical uncertainties. Indian economy though growing at relatively faster pace did not witness pick up in investment cycle. The Company has been focusing on conversion of order book and achieving operational excellence, cash conservation and monetising Company’s non-core assets to maximise shareholder value. As at March 31, 2016, L&T Group comprises of 125 subsidiaries, 8 associates and 22 joint venture companies. Most of the group companies are strategic extensions of the project and product businesses of L&T. Majority of the subsidiaries support L&T’s core businesses and enable access to new geographies, products and business segments. While certain distinct service businesses such as Information Technology, Technology Services, Developmental Projects and Financial Services are housed in separate subsidiary and associate companies of L&T, project business catering to the hydrocarbon sector is also housed in a separate group of companies to provide the sector specific focus. Order Inflow & Order Book L&T group secured new orders worth 136858 crore for the year 2015-16, reflecting a decline of 11.9% over the previous year. Domestic order inflow was lower by Revenue from Operations The Group revenue rose by 11.6% y-o-y to 103522 crore during the year 2015-16. The growth was largely contributed by Infrastructure and Power segments on the back of project execution from opening order book. Financial Services, L&T Infotech and L&T Technology Services recorded healthy y-o-y increase in the Revenue. International revenue contributed 32.2% to revenue as compared to 27.9% in the previous year. 207 Sales, Administration & Other expenses increased by 12.7% y-o-y to 6138 crore mainly due to higher provisions towards doubtful debts and non-performing assets (NPAs) and expenses on account of increased international business. The Group operating profit (PBDIT) grew by 9.6% y-o-y at 12343 crore for the year 2015-16, while the operating margin for the year declined by 20 basis points to 12.0%. Depreciation & Amortisation charge Depreciation & Amortisation charge for the year 2015-16 higher by 5.1% at 2756 crore as compared to 2623 crore in the previous year on account of amortisation on newly commissioned road projects during the year. The Depreciation & Amortisation charge for the year also includes impairment charge on the terminated road project. Operating Cost and PBDIT Other Income Manufacturing, Construction and Operating (MCO) expenses increased by 11.5% y-o-y at 74946 crore, in line with revenue growth. These expenses mainly comprise cost of construction material and other raw materials, subcontracting expenses, manpower costs and interest expenses. On a relative basis, the MCO expenses reduced marginally from 73.1% to 73.0% of net revenue led by softer commodity prices during the year. Staff expenses for the year 2015-16 at 9205 crore increased by 14.2% as compared to the previous year mainly on account of annual pay revisions and headcount additions especially in international operations. 208 Other income for the year 2015-16 amounting to 1183 crore grew by 10.1% over 1075 crore of the previous year. This consists largely of the profit on sale of liquid investments, interest and dividend income from treasury investments. Finance cost The interest expense for the year 2015-16 at 3041 crore was higher by 7.1% in comparison to 2840 crore for the previous year with increase in the level of borrowings and cessation of capitalisation of borrowing costs on certain road projects becoming operational. The average borrowing cost for the year 2015-16 was contained at 9.8% p.a. through effective refinancing and judicious selection of type & tenor of the fresh borrowings. Exceptional Items Exceptional items of 343 crore in the Statement of Profit and Loss in current year mainly represent gain on sale of (a) part stake in L&T Finance Holdings Limited, (b) stake in Salzer Electronics Limited and (c) gain on sale of Foundry business. Profit after Tax Consolidated Profit after Tax (PAT) at 5091 crore for the year 2015-16 rose by 6.8% over the previous year. Earnings per share Consolidated Earnings per share (EPS) including exceptional and extraordinary items for the year 2015-16 at 54.69 recorded an increase of 6.5% over the previous year. Fund Flow Statement Particulars Capital expenditure (net) (Purchase)/Sale of other investments Dividend paid Interest paid crore FY 15-16 FY 14-15 (5058) (6095) (124) (1878) (3678) (966) (1603) (3926) (Increase)/Decrease in cash balance (128) (1759) Utilisation of Funds (10866) (14349) *This includes (acquisition)/divestment of businesses, consideration received on disposal of subsidiaries/Joint ventures and net cash flows on loans/deposits made with associate companies & third parties. The total borrowings as at March 31, 2016 stood at 101307 crore as compared to 90571 crore. The gross Debt Equity ratio is 2.30:1 as at March 31, 2016 as compared to 2.21:1 at March 31, 2015. B. SEGMENT WISE PERFORMANCE (GROUP) 1. Infrastructure Segment Infrastructure segment bagged fresh orders worth 84817 crore for the year 2015-16 reflecting marginal drop of 1.1% over the previous year. International order wins led by Power Transmission & Distribution business constituted 28.5% of the total order inflow during the year up from 21.5% in the previous year. The order inflow declined marginally as certain anticipated domestic project awards in Heavy Civil and Transportation Infrastructure were deferred. Buildings & Factories business, though witnessed muted prospects, constituted major portion of the order intake of the Infrastructure segment. Net Worth, Capital employed and Returns The Net Worth of the shareholders at 43992 crore as at March 31, 2016 increased by 3083 crore as compared to the position as at March 31, 2015. Return on Net Worth (RONW) for the year 2015-16 was stable at 12%. Capital employed increased to 92331 crore as compared to 86407 crore as at March 31, 2015. Liquidity and Gearing Stronger underlying business performance contributed higher cash from business operations at 7003 crore. Net borrowings during the year stood at 1159 crore, mainly attributable to Developmental projects business. L&T IDPL raised additional 1000 crore by issuance of compulsorily convertible preference shares to Canada Pension Plan Investment Board (CPPIB) during December 2015. Stake sales in subsidiary companies have also contributed 424 crore largely attributable to divestment of CSJ infrastructure Limited & L&T Infocity Limited. Dividend and treasury income rose to 627 crore during the year owing to efficient treasury management. The Group incurred capital expenditure of 5058 crore during the year 2015-16 vis-à-vis 6095 crore in the previous year, mainly due to lower spend in L&T Hyderabad Metro Rail project. There has been a net increase of 128 crore in the cash balances as at March 31, 2016 as compared to the beginning of the year. Fund Flow Statement Particulars Operating activities Borrowings (net of repayments) Net (investment)/ divestment * Payment (to)/from minority interest (net) Treasury and dividend income Others Sources of Funds crore FY 15-16 7003 1159 424 1583 627 70 10866 FY 14-15 5619 4478 1811 1871 471 99 14349 209 Infrastructure segment clocked gross revenue of 50387 crore for the year 2015-16 registering 12.3% growth over the previous year. Revenue growth was driven by Transportation Infrastructure, Power Transmission & Distribution and Water, Smart World & Communication businesses on the back of the execution of the jobs from the opening order book. Revenue from international operations constituted 28.8% of the total revenues of the segment during the year as compared to 24.1% in the previous year. Infrastructure Segment operating profit was higher by 18.6% y-o-y at 5684 crore for 2015-16. Operating margins improved by 60 basis points at 11.7% during the year 2015-16 owing to improved project execution and settlement of variation claims. The Funds employed by the segment at 18101 crore as at March 31, 2016 increased by 28.0% vis-à-vis March 31, 2015, largely representing net working capital. 2. Power Segment Power segment bagged orders worth 2702 crore as compared to 15125 crore in the previous year. The segment was challenged by intense competition for rather limited opportunities. 210 Segment revenue grew 47.4% y-o-y at 7011 crore, as the jobs under execution achieved substantial progress during the year. Revenue from International projects at 1870 crore represented 26.7% of total revenue. Operating profit margins declined 450 basis points to 11.6% during the year ended March 31, 2016 as compared to 16.1% in 2014-15. Drop in margins reflects changing job mix and the relative status of the stage of completion of the projects. The Funds employed by Power segment remains elevated at 2801 crore as at March 31, 2016 higher by 36.7% as compared to the position as at March 31, 2015. This is mainly due to the increase in the construction work-in-progress, pending completion of contractual billing milestones. 3. Metallurgical and Material Handling Segment (MMH) Funds employed by the segment at 3191 crore as at March 31, 2016 remained at elevated levels due to delay in collecting milestone payments from customers. 4. Heavy Engineering Segment (HE) Heavy Engineering segment recorded order inflow of 2295 crore during 2015-16 reflecting a reduction of 54% y-o-y as domestic order prospects in Process, Plant & Nuclear (PP&N) and Defence & Aerospace (D&A) businesses did not materialise. International orders constituted 62% of the total order inflow. Order Inflow of 3661 crore for the year was lower by 40.3% y-o-y due to sluggish domestic business environment. The soft commodity prices that prevailed through 2015-16 impacted the Capex outlay of MMH segment. MMH segment recorded gross revenue of 2837 crore for the year ended March 31, 2016, a decline of 17.2% over the previous year, due to depleted order book and slower implementation of projects by customers. The Group Segment operating margins for the year declined sharply by 500 basis points to 5.5% due to under recoveries, slower project execution and cost overruns in certain projects. 211 Reflecting depleted order book, the segment gross revenue of 3323 crore fell 8.3% compared to the previous year. Revenue from international operations constituted 42.6% of the total revenue. The segment incurred operating loss of 21 crore for the year against an operating profit of 418 crore in the previous year, due to cost & time overruns in certain jobs in PP&N business, provision for debts doubtful of realisation and continued under-recoveries in Forgings joint venture. Segment operating profit for the year fell 9% y-o-y to 646 crore. Consequently operating profit margins declined by 90 basis points y-o-y to 13.9%. Group’s profitability was adversely impacted by competitive pressures on pricing and losses incurred by Middle East subsidiary companies. Funds employed by the segment decreased by 21.5% y-o-y at 3230 crore as at March 31, 2016 aided by growth in customer advances and higher vendor credit. 5. Electrical & Automation Segment (E&A) E&A segment recorded gross revenue of 5446 crore for 2015-16. Stable top line in conditions of weak demand, tight liquidity and deferment of projects underscored the market acceptability of the products suite. Revenue from international operations continued to be around 31.1% of the total revenue of the segment, same as compared to 31.8% in the previous year. Funds employed by the E&A segment at 2856 crore were contained at previous year’s levels. 6. Hydrocarbon Segment Hydrocarbon segment secured fresh orders aggregating to 10447 crore during the year maintaining the level similar to that of the previous year. Low oil prices, geopolitical uncertainties and currency volatility created a challenging business environment in which capex investments by oil producing companies were either slashed or deferred. Consequently, International orders accounted for 32.8% of total order inflow for 2015-16 as compared to 64.0% in the previous year. Big ticket orders for fertilizer plant and offshore oil field development helped domestic order flows during the year. 212 Manpower strength was reduced to 9406 as compared to 9596 as at March 31, 2015, however, utilisation had improved. The Segment Operating profit rose by 25.2% y-o-y to 1938 crore for the year 2015-16 with operating margin improvement of 120 basis points on account of higher manpower utilisation and favorable currency movement. Segment revenue grew by 18.9% y-o-y at 8840 crore for the year as jobs under execution progressed on expected lines. International revenue contributed 47% of the total revenue of the segment as compared to 51% in the previous year. The segment posted an operating profit of 197 crore as compared to operating loss of 1128 crore in the previous year. Close-out costs in international projects coupled with under-recoveries contained the margin improvement. Funds employed by the segment at 2037 crore as at March 31, 2016 decreased by 10.3% as compared to March 31, 2015. The reduction was aided by lower working capital. 7. IT & Technology Services (IT & TS) IT & TS segment comprises L&T Infotech group of companies and L&T Technology Services group of companies. Segment recorded gross revenue of 9117 crore for the year ended March 31, 2016 with robust growth of 19.1% over the previous year. Most of the revenues of the segment are from international customers. L&T Infotech group recorded gross revenue of 6075 crore during the year ended March 31, 2016, registering 19.9% growth over the previous year. The revenue in USD terms increased by 9.5%. Geographical composition of the revenue includes 69% from North America, 17% from Europe, 8% from India & Asia and 6% from rest of the world. Total manpower as at March 31, 2016 stood at 20072 vis-à-vis 19479 as at March 31, 2015. L&T Technology Services group achieved growth of 17.5% in revenue for 2015-16 at 3042 crore mainly in industrial products and process engineering vertical group. In USD terms the revenue recorded a y-o-y growth of 9.5%. About 62% of revenue are contributed by North America region as compared to 57% in the previous year. The Funds employed by the segment at 3142 crore as at March 31, 2016 is lower by 6.9% as compared to March 31, 2015 at 3377 crore. 8. Financial Services (FS) Financial Services segment comprises of asset financing, mutual funds and asset management businesses housed in L&T Finance Holdings Limited and its subsidiaries. The segment also includes general insurance business. Segment revenue grew 17.8% y-o-y at 7541 crore during the year ended March 31, 2016 aided by good momentum across various businesses. Loan book of Finance business expanded by 22.4% y-o-y to 57831 crore as at March 31, 2016, driven by healthy disbursements in operational projects in renewable energy 213 and roads and retail products. Net interest margins at 5.67% remained stable. Asset management business increased 16.7% y-o-y aided by growth in equity assets with Assets Under Management of 24772 crore as at March 31, 2016. The General Insurance business reported Gross Written Premium (GWP) of 483 crore up by 40% as compared to the previous year. port operations are housed in L&T Shipbuilding Limited, a subsidiary company & other projects are developed by L&T Infrastructure Development Projects Limited. The total estimated cost of projects pegged at 53050 crore as at March 31, 2016, requiring equity commitment of 12976 crore of which equity infusion of 9543 crore was done as at March 2016. The segment recorded revenue of 5146 crore for the year ended March 31, 2016 as compared to 5155 crore in the previous year. Lower toll collections and loss of Dhamra Port revenues (business sold in 2014-15) was compensated by higher revenue from Rajpura power plant. The segment clocked operating profit at 1367 crore for the year 2015-16 declining by 36.3% y-o-y due to lower toll collections as also Dhamra Port divestment gains counted in the previous year. Disbursal of fresh loans and advances of 41765 crore during 2015-16, recorded a growth of 29% over the previous year. Gross Non-performing Assets (GNPA) of the segment at 3.05% of loan assets as at March 31, 2016 improved marginally over March 31, 2015. The Funds employed by the DP segment increased by 14.8% y-o-y at 31060 crore as at March 31, 2016 owing to higher capex outlay for Hyderabad Metro Rail, Transmission and Road projects. L&T IDPL raised 1000 crore by way of compulsorily convertible preference shares subscribed by Canada Pension Plan Investment Board (CPPIB) during December 2015 taking the total investment by CPPIB to 2000 crore. 10. Others Segment Other Segment covers Realty, Shipbuilding, Construction & Mining equipment and Industrial Machinery businesses. Realty business recorded growth of 3.5% in revenue at 1997 crore for the year 2015-16 and achieved operating profit of 1130 crore. Shipbuilding business recorded revenue of 820 crore for the year. The business suffered operating loss of 328 crore for 2015-16 as against operating loss of 208 crore in the previous year as performance was 9. Developmental Projects (DP) The Group has acquired concessions through competitive bidding process for the development of Power projects, Roads, Bridges, Hyderabad Metro Rail, Ports and Power Transmission Lines. Total portfolio of the group consists of 5 power projects, 14 roads & bridges projects (excluding projects under termination), 2 ports, 1 transmission line project & 1 metro rail project. Power projects are developed by L&T Power Development Limited, Kattupalli 214 severely affected by time/cost overruns and under-recovery of overheads due to low capacity utilisation. Construction & Mining equipment and Industrial Machinery businesses recorded growth of 9.7% in revenue at 4318 crore for the year 2015-16. Operating profit declined marginally to 551 crore due to unfavorable product mix, sluggish demand & cost pressures. Segment funds employed reduced by 12.6% to 9423 crore due to improved customer realisation in Realty business and customer advances in Shipbuilding business. II. L&T STANDALONE PERFORMANCE REVIEW The Company’s standalone financials capture performance of Infrastructure, Power, Heavy Engineering, Electrical & Automation, Metallurgical and Material Handling, Construction & Mining equipment and Industrial Machinery and a part of Shipbuilding and Realty businesses. As the headwinds continued to slow economic revival in the country and in most major global markets, the Company focused on profitable execution, optimising working capital and monetisation of non-core assets. Order Inflow & Order Book Order wins during 2015-16 were 85052 crore recording a decline of 22.5% y-o-y, as domestic opportunities have delayed/deferred. Order inflow during the year is mainly contributed by Infrastructure segment at 82.7% as compared to 70.6% in the previous year. Power, Metallurgical & Metal Handling and Heavy Engineering businesses saw significant drop in order intake during the year. International business clocked growth of over 22% with the order inflow at 18693 crore aided by success in commercial buildings space and power transmission & distribution projects. International orders are at 22% of the total order inflow for 2015-16. Order Book as at March 31, 2016 stood at 199040 crore, 78.5% of which is contributed by Infrastructure segment. International orders constituted 16% of the current order book. Order book to revenue ratio at 3.29, gives a good revenue visibility over the next few years. Revenue from Operations The Company achieved Revenue of 60415 crore vis-à-vis 57558 crore in the previous year. Revenue growth was delivered by Power segment and Infrastructure segment inspite of challenging execution conditions and delays in customer clearances. Other major traditional businesses such as Heavy Engineering and Metallurgical and Material Handling had significant decline in the revenue as order book depleted. Electrical & Automation business witnessed sluggish industrial demand and has reported marginal growth in revenue for 2015-16 over the previous year. Operating Cost and PBDIT Manufacturing, Construction and Operating (MCO) expenses comprising cost of construction material, manufacturing materials, components and subcontracting expenses amounted to 46629 crore registering an 215 increase of 5.1%. These costs represent 78% of revenue, an increase of 20 basis points over the previous year. The Staff expenses for the year at 4480 crore increased by 7.6% y-o-y due to annual pay revisions, manpower additions and increased international operations. The Company’s manpower strength stood at 43354 as compared to 44081 as at March 31, 2015. Sales, Administration & Other expenses for the year at 2500 crore increased by 25.9% y-o-y due to increased provision for doubtful debts and advances, outlay on operational excellence initiatives and higher spend on CSR activities. The operating profit margin for the year at 10.3% declined by 110 basis y-o-y. Consequently, Profit before depreciation, interest and tax (PBDIT) stood at 6171 crore for the year, lower by 4.9% over the previous year. Depreciation & Amortisation charge Depreciation & Amortisation charge for the year 2015-16 at 999 crore was broadly in line with the previous year charge of 1008 crore. Other Income Other income for the year 2015-16 amounted to 2406 crore as against 2283 crore for the previous year. It consists of dividend from group companies 1008 crore (previous year: 851 crore), interest on temporary investments in government securities and bonds 198 crore (previous year: 212 crore), interest on inter- corporate deposit given to group companies 268 crore (previous year: 293 crore), profit on sale of long term investments 249 crore (previous year: Nil) and cost recoveries from group companies 323 crore (previous year: 301 crore). Finance cost The interest expenses for the year at 1449 crore were higher by 2.1% vis-à-vis 1420 crore for the previous year. The increase in the interest expenses is attributable 216 to incremental borrowings during the year to finance the working capital needs of the businesses. The average borrowing cost for the year 2015-16 was lower by 50 basis points at 9.0% p.a. led by refinancing of loans and efficient cash management. Exceptional Item Exceptional items of 560 crore in the Statement of Profit and Loss for the current year mainly includes gain on part stake-sale in L&T Finance Holdings Limited, gain on transfer of the Company’s stake in a few subsidiary companies to its wholly-owned subsidiary L&T Hydrocarbon Engineering Ltd as a part of restructuring, gain on divestment of stake in associate Company and gain on sale of Foundry business. The Company has impaired its investment in its subsidiary engaged in the general insurance business. Profit after Tax Profit after Tax (PAT), including exceptional items, for the year 2015-16 grew by 5% to 5311 crore as compared to 5056 crore in the previous year, contributed by higher divestment gains. Earnings per share The Earnings per share (EPS) for the year 2015-16 at 57.07 grew by 4.8% over the previous year. Funds Employed and Returns Funds Employed by the Company at 54530 crore as at March 31, 2016 increased by 4146 crore during the year. The Company incurred 643 crore (net) towards capital expenditure during the year, largely on procurement of plant and equipment for the Infrastructure segment. At the segment aggregate level, net working capital as on March 31, 2016 at 16870 crore increased to 27.9% of revenue as compared to 14938 crore at 26.0% of revenue as on March 31, 2015. Higher net working capital is mainly on account of unbilled construction work-in- progress, pending completion of contractual milestones and delay in realising customer receivables. During the year, investments in and loans to subsidiary and associate companies increased by 2218 crore (net of proceeds from divestment). Major investments have been made in subsidiary companies operating in Power Development, Heavy Engineering and Shipbuilding businesses to support the operations of group companies. Return on Net Worth (RONW) including the extraordinary items for the year 2015-16 is 13.7% as against 14.3% for the previous year. Return on Capital Employed (ROCE) for the year 2015-16 at 11.9% is lower compared to 12.5% of the previous year. The funds deployed in the group companies in capital intensive businesses in the last few years have not yet started yielding adequate returns, resulting in decline in ROCE and RONW. Liquidity and Gearing Business operations generated cash flows of 3256 crore during the year higher than 3118 crore in the previous year. Borrowings during the year (net of repayments) were 233 crore. Dividend and treasury income flows contributed 1551 crore to the cash along with divestment proceeds of 789 crore. Fund Flow Statement crore Particulars Operating activities Borrowings (net of repayments)/ (Repayments) Dividend from group companies and Treasury income Sale / (purchase) of investments Others Sources of Funds 2015-16 2014-15 3256 233 3118 1015 1551 1413 789 70 5898 (916) 99 4729 Fund Flow Statement crore Particulars Capital Expenditure Investments in Group Cos. (net of divestment) Interest paid Dividend paid (Increase) / decrease in cash balance Utilisation of Funds 2015-16 2014-15 (643) (2218) (1223) (1647) (166) (5898) (901) (1480) (1150) (1401) 203 (4729) The total borrowings as at March 31, 2016 stood at 13608 crore as compared to 12937 crore in the previous year. The loan portfolio of the Company comprises a mix of domestic and suitably hedged foreign currency loans. The gross debt equity ratio marginally decreased to 0.33:1 as at March 31, 2016 from 0.35:1 as at March 31, 2015. The Company has a healthy net debt equity ratio of 0.18:1 as at March 31, 2016 after excluding short term investments in liquid funds from debt. III. RISK MANAGEMENT L&T has a comprehensive Enterprise Risk Management (ERM) framework in place for identification, assessment, treatment and reporting of risks. The Company’s risk management processes ensure that the Company accepts risks as per the boundary conditions based on the risk appetite of the organisation. The Audit Committee of the Board oversees the efficacy of the risk management processes. Business level risks and the mitigation plans for each vertical are reviewed periodically by the respective top management/Boards. The Corporate Risk Management Committee appraises critical risks impacting the Company and ensures adherence to policies. The Company is predominantly in project business and has developed robust project risk management processes. The key processes include country clearance for entry into a new country, Pre-bid risk reviews, Execution risk reviews and project close out risk reviews. Pre-bid reviews are carried out based on a bid authorisation matrix as determined by the Risk Management Committees. Execution risk reviews of the projects are held at regular intervals for tracking the project performance, movement of risks in the project and effectiveness of mitigation measures. Close out risk reviews are held to capture key learnings from the projects and what went right/wrong analysis which helps in factoring the learnings in future bids. The Company has been conferred the prestigious ‘Golden Peacock Award for Risk Management’ for 2015 by the 217 Institute of Directors (IoD) in the ‘Diversified’ category. The Company emphasises on continuous learning and has initiated several knowledge based initiatives to improve risk awareness across the organization. One such initiative is launching of an e-learning training program on Enterprise Risk Management (ERM) for employees to enhance capabilities on risk management which will lead to better business performance. It covers topics related to basics of risk management, global risk management frameworks, processes in L&T, case studies on risk management etc. Periodic workshops on risk management are also held across the company to spread awareness & share learnings. The top Enterprise level risks for the Company and the mitigation measures being implemented are: 1. Slow recovery of key sectors: Growth in some of the sectors like Power, Metals & Minerals etc. has been hampered by a number of constraints like fuel shortages, environmental clearances, restrictions on mining etc. Being a diversified conglomerate helps mitigate the risk of such slowdown in some sectors as we see compensating growth in certain other sectors. Government initiatives like Project UDAY, Make in India, revised Defence Procurement Policy (DPP), renewed impetus to Infrastructure sector namely roads and railways provide growth opportunities in the near future. 2. Fall in oil price: It has resulted in budget constraints in Middle Eastern Countries leading to decline/delay in investment with some projects being put on hold. The Company has started focusing on domestic business and selectively foraying into new markets like Africa & South East Asia. 3. Reputation and Brand: Corporate Governance and Compliance policy is in place mandating adherence to Code of conduct and Internal Controls. Regular knowledge sharing across the organisation and review & upgradation of appropriate controls ensure the same. 4. Competition: It has been observed that competition from foreign and domestic players has considerably increased in the past few years. The Company’s engineering, procurement, and construction business derives its competitive strength from its excellence in executing projects of varying sizes, reputation for quality, technology, cost-effectiveness and project management expertise. This helps in gaining an edge over competition. 218 5. Other Operational Risks: a. Execution challenges: Company faces execution challenges like geological developments, availability of work front, land acquisition & right of way (ROW), pending approvals and clearances from Government agencies, working in difficult/ harsh weather conditions/terrains, skilled manpower availability etc. The Company closely tracks the key risks for each project to effect timely mitigation. b. Partner risks: Company partners with different contractors (Joint Venture/consortium projects) across businesses based on technical requirements/local market conditions. Partner’s performance and financial strength is crucial for project success. Learnings from the past projects are incorporated in the inter-se agreement with the partners and clauses on liability of each partner are carefully drafted after a legal due diligence. c. Working capital challenges: Project delays and adverse contractual payment terms lead to increased working capital requirements. Company has strengthened the process for close monitoring of cash flows at the project level. Company ensures regular follow up for delay in payments by client. Improvement in working capital is a key lever for achieving better ROE. d. Claims management: Company maintains a strong documentation and follow up with clients/ sub-contractors/vendors for claims that are submitted. Legal teams and insurance teams are constantly consulted to ensure a robust process of claims management. e. Talent Management: It is critical to fill leadership roles in every project being executed by the Company. Proper processes are in place across the Company for hiring the best talent across the Company and suitable retention policies are constantly reviewed to minimise attrition. The Company has institutionalised the risk management processes to map and monitor the risks across the businesses and respond effectively to achieve the strategic objectives. The Company has been successful in tapping the opportunities both in domestic and international markets. The Company sees risk management as a business enabler and believes that risk is an integral part of every business and promotes a culture of building the ability to anticipate and manage risks effectively and converting them into opportunities. FINANCIAL RISKS 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 even 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 continuing tough economic conditions in 2015-16, 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 deficits caused by the economic/ business/performance downturn, and also to optimise overall Group interest rate risks and costs. The Company continues to maintain adequate liquidity 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 of sourcing liquidity through banking lines, trade finance and capital markets. In line with above, the Company continued to use a mix of short term and long term funding sources for its working capital funding. The Company further optimised the cost of debt by using subsidised export financing scheme of RBI and issuing more of short dated CPs. 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. Foreign Exchange and Commodity Price Risks 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. The business related financial risks, especially involving commodity prices, by and large, are managed contractually through price variation clauses, while the foreign exchange and residual commodity price risks are managed by an appropriate choice of treasury products for balancing risks and at the same time optimising the hedging costs. The financial year 2015-16 was characterised by a strong USD against most of the asset classes (currency / commodities) as well as increased volatility on account of sharp movements in commodity prices and Asian currencies including more particularly the Chinese Yuan. The rupee moved from 62.50 to 68.80 per US Dollar during the year though it ended the year at 66.25. In spite of the two way exchange rate volatility, the impact on the Company was, however, muted given the robust financial risk management process in place. Benign commodity prices along with the analytical risk management framework has benefited the Company. IV. INTERNAL CONTROLS The Company continued its efforts in providing an effective internal control environment where ethical behavior, accountability, controls and assurance are practiced. The Company has a robust framework for Internal Controls, commensurate with the size and complexity of its business. There is a system of periodically apprising the senior management and the Audit Committee of the Board on the internal processes of the Company with respect to Internal Financial Controls, Statutory Compliances and Assurance. Employees are guided by the Company’s ‘Code of Conduct’. The Company’s ‘Whistle Blower’ policy enables the employees to have direct access to the members of the Board of Directors without interference from management. Increasing focus on control and compliance requirements under the Companies Act, 2013 and the new SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 have led to reviewing the control design and effectiveness across the organisation. The Company has laid down Internal Financial Controls as detailed in the Companies Act, 2013. These have been established at the entity and process levels and are designed to ensure compliance to internal control requirements, regulatory compliance and appropriate recording of financial and operational information. The Company has reviewed and ensured sustained effectiveness of internal financial controls by adopting a systematic approach to assess design and operating effectiveness. Heads of businesses and support functions are primarily responsible for design, establishment of internal controls and its operating effectiveness in their respective areas. Operating framework and procedures are in place in individual businesses of the Company in the form of Internal Control Manuals, Standard Operating Procedures, Accounting Guidelines and Authorisation Matrix for financial transactions including regular management reporting and monitoring thereof. Policies and procedures 219 are reviewed periodically and updated to factor in changes in business processes as well as improvements necessitated to strengthen the internal control systems. Internal Control department at the corporate formulates procedures and guidelines for areas of weaknesses which are identified during internal audit or as triggered by process owners or management based on internal or external risk factors. The Company also periodically engages independent professional firms to carry out review of effectiveness of various control processes in businesses and support functions. The assurance function is carried out by the Corporate Audit Services (CAS) which makes independent assessment by conducting audit of all units of the Company and its major subsidiaries at regular intervals. The audit inter alia covers assessment of financial and operational efficiency as part of the process. Further, it conducts operating effectiveness testing of the internal financial controls with the objective of providing an independent and reasonable assurance to the Audit Committee and the Board of Directors. The entire process is reviewed periodically by the senior management and the Audit Committee which oversees the internal audit function. The Company continually aligns to the best practices in the areas of control and compliance, to ensure high standards of governance in both domestic and international businesses. V. INFORMATION TECHNOLOGY The Company recognises the strategic imperative of Information Technology (IT) for efficient conduct of its business operations. The Company leverages IT as a key enabler to improve productivity through collaboration and integrate internal controls with business processes. The Company implemented Enterprise Resource Planning (ERP) and other solutions to run the various business processes. Niche bolt on systems are being deployed for Vendor Invoice Management, CRM on cloud, Advance Planning and Optimisation to provide edge to Business. Simultaneously, IT infra is continuously upgraded to deploy the latest and best in class IT assets and technology. The Company has initiated various ‘Digital & IoT’ projects, in the areas of risk mitigation and manufacturing to make its business processes LEAN and contribute to the Company’s bottom line in today’s ever challenging business scenario. L&T’s dedicated Cloud infrastructure, created a few years ago, is widely deployed across the Group companies. The Company has taken steps to embrace ‘Public Cloud’, and the latest office automation and collaboration applications are being rolled out. The Company has Disaster Recovery (DR) systems which rescued the businesses from disruptions during the heavy rains in Chennai in December 2015. The Company has a program to do a comprehensive review of its security systems and processes to address growing IT/cyber security threats. The corporate IT function of the Company has acquired Certification of ISO 27001 for Information Security Management. ISO 27001 (formally known as ISO/IEC 27001:2005) is a specification for an information security management system (ISMS). An ISMS is a framework of policies and procedures that includes all legal, physical and technical controls involved in an organisation’s information risk management processes. 220 DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th – 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400013. SHARP & TANNAN Chartered Accountants Ravindra Annexe 194, Churchgate Reclamation Dinshaw Vachha Road Mumbai 400 020. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Standalone Financial Statements We have audited the accompanying standalone financial statements of Larsen & Toubro Limited (the “Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the “Act”) with respect to the preparation of these standalone 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 principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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. Auditors’ Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143 (11) of the Act. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the disclosures in the financial statements. The procedures selected depend on the auditors’ 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 auditors’ considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, 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 on the standalone financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date. Other Matters Standalone financial statements include the financial statements/information of 9 jointly controlled entities whose financial statements/ financial information reflect the Company’s share in net assets of 474.73 crore as at March 31, 2016 and share in profit (net) 221.15 crore for the year ended on that date. The financial statements/information of these jointly controlled entities have been audited by the auditors of jointly controlled entities whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these jointly controlled entities, is based solely on the report of such auditors of jointly controlled entities. 221 Standalone financial statements include the financial statements/information of 7 jointly controlled entities whose financial statements/ financial information reflect the Company’s share in net assets of 296.62 crore as at March 31, 2016 and share in profit (net) 24.79 crore for the year ended on that date. These financial statements/information have been furnished to us by management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these jointly controlled entities is based solely on such financial statements/information certified by management. In our opinion and according to the information and explanations given to us by the management, these financial statements are not material to the Company. Our opinion is not modified in respect of this matter. Report on Other Legal and Regulatory Requirements 1. As required by Section 143 (3) of the Act, we report that: a) b) c) d) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable. e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting. g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. ii. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - refer notes (I) , note (II) in Q(14) and Q(15) to the financial statements; The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts-refer note C(II), D(IV) and Q(6)(a) to the financial statements; and iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. 2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (Membership No. 70928) MUMBAI, May 25, 2016 For SHARP & TANNAN Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the “Act”) We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the “Company”) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. 222 Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (Membership No. 70928) MUMBAI, May 25, 2016 For SHARP & TANNAN Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) 223 ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date) (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings (including land whose title deed have been pledged as security against debentures issued by the Company), are held in the name of the Company as at the balance sheet date, except the following: crore Type of asset Total no. of cases Leasehold / freehold Gross block as at March 31, 2016 Net block as at March 31, 2016 Remarks Land Buildings 2 16 Freehold Freehold 0.27 3.94 0.27 1.43 Conveyance deed pending to be executed. Conveyance deed pending to be executed. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. (ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification. (iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which: (a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company’s interest. (b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations. (c) There is no overdue amount remaining outstanding as at the balance sheet date. (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable. (v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of CARO 2016 is not applicable to the Company. (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) According to the information and explanations given to us, in respect of statutory dues: (a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. 224 (b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable. (c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2016 on account of disputes are given below: Name of Statute Nature of Dues Central Sales Tax Act, Local Sales Tax Acts and Works Contract Tax Act Taxability of sub-contractor turnover, rate of tax for declared goods, inter-state sales and non-submission of forms Dispute regarding question of law, non-submission of forms, classification dispute, tax deducted at source at lower rate, sales in transit, high seas sales, labour turnover, local VAT, rate of tax on declared goods and other matters. Non-submission of forms, classification disputes, disallowance of sales occasioning import, arbitrary demand raised, sub-contractors turnover disallowed, pumping and freight charges, inter-state sales turnover, tax deducted at source disallowed, rates of tax of declared goods, classification dispute, disallowance of Entry tax and other matters. Dispute regarding question of law, non-submission of forms, classification dispute, disallowance of setoff, sales in transit and high seas sales, and other matters. Non Submission of Forms and other matters. Dispute regarding question of law, non-submission of forms, classification dispute and disallowances made for credit notes and occasioning imports, Input credit reversals, sales in transit, high seas sales, deficiency in documents, local VAT, rate of tax on declared goods and other matters. Non-submission of forms, additional demands for pending forms, rate of tax dispute, disallowance of branch transfer, sub-contractors turnover, considering supply agreement as Works Contract Tax, disallowance of sales in transit, stock transfer and other matters. Forum where Dispute is Pending Supreme Court High Court Period to which Amount Relates 1991-92, 1995-96, 1997-98, 1999-00 to 2006-07 1986-87 to 1999-00, 2005-06 to 2010-11, 2012-13 Amount Involved ( crore) 15.53 Amount Unpaid ( crore) 3.19 65.23 48.51 Sales Tax/ VAT Tribunal 1989-90 to 2012-13 373.09 326.54 Commissioner (Appeal) Commissioner Additional/ Assistant Commissioner Joint Commissioner Deputy Commissioner (Appeal) 2003-04 to 2011-12 16.42 15.77 2008-09, 2010-11, 2011-12 7.01 4.57 1995-96 to 2012-13 16.32 15.11 1994-95 to 2013-14 139.92 91.71 1996-97 to 2013-14 1,541.53 1,493.20 225 Forum where Dispute is Pending Assessing/ Commercial Tax Officer Period to which Amount Relates 1999-00 to 2015-16 Amount Involved ( crore) 486.02 Amount Unpaid ( crore) 484.76 Supreme Court 1997-98 0.97 0.27 High Court 2003-04, Oct 2005 to Aug 2007 42.48 42.48 CESTAT 1991-92 to 2014-15 611.84 608.98 Commissioner (Appeal) Additional/ Assistant Commissioner Commissioner (Appeal) ITAT 2006-07 to 2014-15 2015-16 4.73 0.14 4.55 0.14 2003-04 to 2011-12 3.94 3.80 2002-03, 2003-04, 2006-07 to 2010-11 1,462.11 833.77 Name of Statute Nature of Dues The Central Excise Act, 1944, Service Tax under Finance Act, 1994 Income-tax Act, 1961 Non-submission of forms, disallowance of sales occasioning imports, rate of tax dispute, deficiency in documents, sales in transit, high seas sales and other matters. Excise Duty dispute on site mix concrete & PSC grinder. Export rebate claim, service tax on commercial construction services, service tax liability against rate change and penalty imposed for wrong availment of CENVAT credit. Demand of excise duty on Fabrication of Cable tray supports/ ED exemption/ Export rebate disallowance / Service Tax on Business Auxiliary Services/ Valuation Dispute pertaining to Excise/ Duty on Supply of Bolts & nuts/ GTA services, site jobs, export rebate disallowance, MRP valuation disputes, CENVAT credit availed, non-maintenance of separate records, and other matters. Disallowance of CENVAT credit, excise duty refund, excise duty on site jobs, short payment of service tax, service tax rate dispute, valuation dispute and other matters. Disallowance of CENVAT Credit. Assessment under section 143(3), Assessment under section 143(3) read with section 147, Assessment under section 143(3) read with section 144C(13) and demand of tax deducted at source on Internet Charges, Reimbursement of Data card expenses and Bank Guarantee Charges. (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders. (ix) In our opinion and according to the information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) and money raised by way of the term loans have been applied by the Company during the year for the purposes for which they were raised. (x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013. 226 (xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable. (xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards. (xiv) According to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable. (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (Membership No. 70928) MUMBAI, May 25, 2016 For SHARP & TANNAN Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) 227 Balance Sheet as at March 31, 2016 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 Due to micro enterprises and small enterprises Due to others 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 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm’s Registration No.109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 228 As at 31-3-2016 As at 31-3-2015 Note crore crore crore crore A B 186.30 40532.03 185.91 36898.67 40718.33 37084.58 8339.27 203.36 152.54 370.23 3881.87 1387.15 134.32 21984.48 17204.54 2693.62 7120.59 138.40 250.69 158.91 4670.98 1888.00 26309.19 1680.91 10205.15 21529.33 8508.60 362.99 119.62 344.83 9065.40 9336.04 3791.08 636.91 117.05 18733.55 14681.55 2523.00 47285.98 97069.71 40483.14 86903.76 7668.59 19897.94 3031.73 74.77 113.12 7981.40 17672.82 3825.30 75.43 65.97 7402.20 85.16 304.54 189.50 5380.08 2270.72 23051.11 1515.80 6490.97 18574.16 66283.56 97069.71 57282.84 86903.76 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 A. M. NAIK Group Executive Chairman (DIN 00001514) R. SHANKAR RAMAN M. M. CHITALE Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) N. HARIHARAN Company Secretary M. No. A3471 SUNITA SHARMA (DIN 02949529) Directors Statement of Profit and Loss for the year ended March 31, 2016 2015-16 2014-15 Note crore crore crore crore 60415.00 635.39 57558.07 540.66 59779.61 2405.97 62185.58 57017.41 2283.37 59300.78 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, 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 expenses Current tax Deferred tax Profit for the period carried to Balance Sheet K L M N O P Q(3) 7396.35 17805.37 1129.18 1448.90 14066.80 114.98 4667.51 998.88 – Q(5) Q(13) 1551.19 (173.54) 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 } Q(12) Q R 5496.79 18426.83 1296.75 1831.46 13240.77 (215.61) 4303.44 1009.74 1.59 1628.74 16.30 46629.09 4480.20 2505.07 1449.04 998.88 56062.28 5.53 56056.75 6128.83 560.28 6689.11 – 6689.11 1377.65 5311.46 57.07 56.80 57.07 56.80 2.00 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm’s Registration No.109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 A. M. NAIK Group Executive Chairman (DIN 00001514) R. SHANKAR RAMAN M. M. CHITALE Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) N. HARIHARAN Company Secretary M. No. A3471 SUNITA SHARMA (DIN 02949529) Directors 44380.43 4162.46 2000.99 1419.65 1008.15 52971.68 14.96 52956.72 6344.06 357.16 6701.22 – 6701.22 1645.04 5056.18 54.46 54.10 54.46 54.10 2.00 229 Cash Flow Statement for the year ended March 31, 2016 A. Cash flow from operating activities: Profit before tax (excluding extraordinary and exceptional items) 6128.83 6344.06 2015-16 crore 2014-15 crore Adjustments for: Dividend received Depreciation, amortisation, impairment and obsolescence (net) Exchange difference on items grouped under financing/investing activities Effect of exchange rate changes on cash and cash equivalents 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 Sale of long term investments (Purchase)/Sale of current investments (net) Deposits/Loans (given)-subsidiaries, associates, joint venture companies and third parties Deposits/Loans repaid-subsidiaries, associates, joint venture companies and third parties Advance towards equity commitment (addition) Advance towards equity commitment refund Interest received Dividend received from subsidiaries Dividend received from other investments Consideration received on transfer of Foundry Business unit Cash received on transfer of Integrated Engineering Services business Cash (used in)/from investing activities (1121.35) 998.88 71.80 2.00 1449.04 (513.32) (83.97) (232.49) 54.67 10.15 6764.24 (8082.09) 355.14 5867.62 4904.91 (1649.19) 3255.72 (775.85) 132.46 (2943.20) 2289.43 106.65 681.89 (12498.99) 9790.42 (5.25) 1070.15 429.18 1007.91 113.44 79.70 – (522.06) (854.19) 1008.15 59.80 (1.48) 1419.65 (565.91) (29.19) (406.63) 51.67 (11.72) 7014.21 (5124.36) (288.17) 3241.35 4843.03 (1725.05) 3117.98 (952.90) 51.75 (2581.79) 434.55 – (915.51) (5084.44) 5980.74 (866.03) 87.56 558.31 850.70 3.49 – 549.49 (1884.08) 230 Cash Flow Statement for the year ended March 31, 2016 (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 (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 2015-16 crore 70.19 1589.22 (1420.79) 64.66 (1512.33) (134.69) (1223.47) (2567.21) 166.45 1591.46 1757.91 2014-15 crore 98.89 5109.83 (3929.44) (164.97) (1322.73) (78.12) (1150.01) (1436.55) (202.65) 1794.12 1591.46 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, see 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 (gain)/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. 2015-16 crore 1680.91 74.77 1755.68 2.23 1757.91 2014-15 crore 1515.80 75.43 1591.23 0.23 1591.46 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm’s Registration No.109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 A. M. NAIK Group Executive Chairman (DIN 00001514) M. M. CHITALE R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) N. HARIHARAN Company Secretary M. No. A3471 SUNITA SHARMA (DIN 02949529) Directors 231 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 31-3-2016 As at 31-3-2015 Number of shares crore Number of shares crore 1,62,50,00,000 325.00 1,62,50,00,000 325.00 93,14,78,845 186.30 92,95,62,061 185.91 A(II) Reconciliation of the number of equity shares and share capital: Particulars 2015-16 2014-15 Number of shares crore Number of shares crore Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 92,95,62,061 185.91 92,69,12,658 185.38 Add: Shares issued on exercise of employee stock options during the year Issued, subscribed and fully paid up equity shares outstanding 19,16,784 0.39 26,49,403 0.53 at the end of the year 93,14,78,845 186.30 92,95,62,061 185.91 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 shareholders Life Insurance Corporation of India L&T Employees Welfare Foundation Administrator of the Specified Undertaking of the Unit Trust As at 31-3-2016 As at 31-3-2015 Number of shares 14,64,19,088 11,47,52,281 Shareholding % 15.72 12.32 Number of shares 15,55,22,285 11,16,06,174 Shareholding % 16.73 12.01 of India 7,59,26,462 8.15 7,59,25,962 8.17 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 # 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) ## As at 31-3-2016 As at 31-3-2015 Number of equity shares to be issued as fully paid 57,93,042 crore (At face value) 1.16 * Number of equity shares to be issued as fully paid 77,08,842 crore (At face value) 1.54 * 63,46,986 1.27 ** 63,46,986 1.27 ** * The equity shares will be issued at a premium of 203.97 crore (previous year: 278.09 crore) ** The equity shares will be issued at a premium of 1215.13 crore (previous year: 1215.13 crore) on the exercise of options by the bond holders # Note A(VIII) for terms of employee stock option schemes ## Note C(I)(b) for terms of foreign currency convertible bonds 232 Notes forming part of the Accounts (contd.) 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, 2016 are 30,82,94,576 (previous period of five years ended March 31, 2015: 30,82,94,576 shares) A(VII) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding five years ended on March 31, 2016: Nil (previous period of five years ended March 31, 2015: 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 summarised below: Sr. no. Series reference 2000 2002 (A) 2002 (B) 2003 (A) 2003 (B) 2006 2006 (A) 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 1 2 3 4 5 6 7 8 9 Grant price ( ) Grant dates Vesting commences on Options granted and outstanding at the beginning of the year Options lapsed during the year Options granted during the year Options exercised during the year Options granted and outstanding at the end of the year Of which Options vested Options yet to vest Weighted average remaining contractual life of options (in years) 2.30 2.30 2.30 2.30 2.30 2.30 11.70 11.70 11.70 11.70 400.70 400.70 400.70 400.70 1-6-2000 1-6-2001 19-4-2002 19-4-2003 19-4-2002 19-4-2003 23-5-2003 onwards 23-5-2003 onwards 1-9-2006 onwards 1-7-2007 onwards 23-5-2004 onwards 23-5-2004 onwards 1-9-2007 onwards 1-7-2008 onwards 25200 25200 32250 32250 59550 59550 47178 47178 585284 499543 304656 510181 6654724 8692214 – – – – – – – – – – – – – – – – – – – – – – 40611 68450 11270 35625 442400 676786 – 150400 337800 – – 344865 935190 – 168154 183609 36020 169900 1712610 2295894 25200 25200 32250 32250 59550 59550 47178 47178 526919 585284 257366 304656 4844579 6654724 25200 25200 32250 32250 59550 59550 47178 47178 96458 100390 257366 304656 2334008 2663571 – Nil – Nil – Nil – Nil – Nil – Nil – Nil – 430461 484894 Nil 5.16 5.38 – Nil – 2510571 3991153 0.03 2.18 3.95 c) The number and weighted average exercise price of stock options are as follows: Particulars 2015-16 2014-15 No. of stock options Weighted average exercise price ( ) No. of stock options Weighted average exercise price ( ) (i) Options granted and outstanding at the beginning of the year (ii) Options granted during the year (iii) Options allotted during the year (iv) Options lapsed during the year (v) Options granted and outstanding at the end of the year (vi) Options exercisable at the end of the year out of (v) supra 77,08,842 4,95,265 19,16,784 4,94,281 57,93,042 28,52,010 362.74 282.57 366.57 368.74 354.10 364.76 98,66,116 12,72,990 26,49,403 7,80,861 77,08,842 32,32,795 374.42 297.48 373.74 366.60 362.74 368.52 233 Notes forming part of the Accounts (contd.) d) Weighted average share price at the date of exercise for stock options exercised during the year is 1543.13 (previous year: 1554.71) 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 2015-16 is 53.51 crore (previous year: 49.11 crore) net of recoveries of 1.16 crore (previous year: 2.56 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 11.75 crore (previous year: 14.60 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 2015-16 would have been higher by 6.13 crore (previous year: 9.10 crore) [excluding 2.61 crore (previous year: 2.05 crore) on account of grants to employees of subsidiary companies] (ii) Basic EPS before extraordinary items would have decreased from 57.07 (previous year: 54.46) per share to 57.00 (previous year: 54.37) per share (iii) Basic EPS after extraordinary items would have decreased from 57.07 (previous year: 54.46) per share to 57.00 (previous year: 54.37) per share (iv) Diluted EPS before extraordinary items would have decreased from 56.80 (previous year: 54.10) per share to 56.72 (previous year: 54.00) per share (v) Diluted EPS after extraordinary items would have decreased from 56.80 (previous year: 54.10) per share to 56.72 (previous year: 54.00) per share h) Weighted average fair values of options granted during the year is 965.39 (previous year: 1190.22) 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 2015-16 2014-15 7.66% 3.86 years 30.52% 62.69 per option 1211.45 per option 282.57 per share 8.57% 4.01 years 33.92% 57.18 per option 1444.51 per option 313.49 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, 2016 is 200.28 crore (net) (previous year: 252.56 crore), including 125.92 crore (previous year: 135.98 crore) for which the options have been vested to employees as on March 31, 2016. A(IX) The Directors recommend payment of final dividend of 18.25 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 93,14,78,845 equity shares outstanding as at March 31, 2016 amounting to 1699.95 crore. 234 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 period Less: Share/bond issue expenses (net of tax) Premium on inflation linked debentures (net of tax) 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 Less: Transferred to general reserve Share options outstanding account: Employee stock options outstanding: As per last Balance Sheet Addition during the year Transferred to general reserve Deduction during the year Deferred employee compensation expense: As per last Balance Sheet Addition during the year Deduction during the year crore 7944.99 181.28 8126.27 0.87 (0.62) 400.01 156.50 150.00 15.57 – 0.39 378.18 46.00 9.84 114.12 (125.62) (46.00) 71.68 Hedging reserve (net of tax): [Note Q(13)] As per last Balance Sheet Transfer pursuant to scheme of arrangement/business transfer agreement Addition/(deduction) during the year (net) (198.25) – 30.30 General reserve: As per last Balance Sheet Add: Transferred from Revaluation reserve Add: Transferred from ESOP Outstanding Add: Transferred from debenture redemption reserve 25044.16 0.39 9.84 150.00 Carried forward As at 31-3-2016 As at 31-3-2015 crore 10.52 crore crore 10.52 7737.80 225.23 7963.03 15.13 2.91 8126.02 7944.99 143.51 256.50 – 406.51 400.01 19.25 1.59 2.09 15.18 15.57 459.23 86.74 11.60 156.19 300.22 378.18 (135.53) (86.74) 96.65 (99.94) (125.62) (122.25) 79.25 (155.25) (167.95) (198.25) 25030.47 2.09 11.60 – 25204.39 33794.95 25044.16 33469.56 235 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 Depreciation charged against retained earnings Reversal of deferred tax on depreciation charged against retained earnings Profit for the year Less: Dividends paid for previous year Additional tax on dividend paid for previous year Transfer to debenture redemption reserve Proposed dividend [Note A(IX)] Additional tax on dividend As at 31-3-2016 As at 31-3-2015 crore crore 33794.95 crore crore 33469.56 3429.11 (6.14) 2.13 5311.46 8736.56 1.79 0.36 156.50 1699.95 140.88 1999.48 333.45 (86.28) 29.33 5056.18 5332.68 1.88 0.32 256.50 1510.54 134.33 1903.57 6737.08 40532.03 3429.11 36898.67 NOTE[C(I)] Long term borrowings Particulars Note Secured Unsecured Total * Secured Unsecured Total * As at 31-3-2016 As at 31-3-2015 Redeemable non-convertible fixed rate debentures Redeemable non-convertible inflation linked debentures 0.675% Foreign currency convertible bonds Term loans from banks Sales tax deferment loan C(I)(a)(i) & (ii) C(I)(a)(iii) C(I)(b) C(I)(c) C(I)(d) crore 400.00 – – – – crore 2050.00 108.81 1325.10 4455.08 0.28 crore 2450.00 108.81 1325.10 4455.08 0.28 crore 400.00 – – – – crore 1600.00 109.76 1250.00 5148.22 0.62 crore 2000.00 109.76 1250.00 5148.22 0.62 400.00 7939.27 8339.27 400.00 8108.60 8508.60 * 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 Face value per debenture ( ) Date of allotment 31-3-2016 crore 31-3-2015 crore Interest for the year 2015-16 Terms of repayment for debentures outstanding as on 31-3-2016 10,00,000 January 5, 2009 400 400 9.15% p.a. payable annually Redeemable at face value at the end of 10th year from the date of allotment. Total 400 400 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. 236 Notes forming part of the Accounts (contd.) C(I)(a) (contd.) (ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed): Date of allotment 31-3-2016 crore 31-3-2015 crore Interest for the year 2015-16 Face value per debenture ( ) 10,00,000 10,00,000 10,00,000 10,00,000 April 10, 2012 May 26, 2010 May 11, 2010 April 13, 2010 10,00,000 August 21, 2014 10,00,000 10,00,000 10,00,000 10,00,000 August 22, 2014 December 11, 2014 February 2, 2015 September 24, 2015 Sr. no. 1 2 3 4 5 6 7 8 9 Total Less: Terms of repayment for debentures outstanding as on 31-3-2016 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. Redeemable at face value at the end of 10th year from the date of allotment. 1250 Bonds redeemable at face value at the end 712th day from date of allotment & 750 bonds redeemable at face value at the end 731st day from date of allotment. Redeemable at face value at the end of 2nd year from the date of allotment. Redeemable at face value at the end of 368th day from the date of allotment. Redeemable at face value at the end of 366th day from the date of allotment. Redeemable at face value at the end of 5th year from the date of allotment. 250 300 300 200 200 250 9.75% p.a. payable annually 300 8.95% p.a. payable annually 300 9.15% p.a. payable annually 200 8.80% p.a. payable annually 200 9.20% p.a. payable annually 350 350 9.15% p.a. payable annually 300 8.42% p.a. payable annually 300 7.80% p.a. payable annually – 8.40% p.a. payable annually 2200 – – 1000 2600 550 2050 600 Current portion of long term borrowings [Note D(II)] 1600 Long term borrowings as disclosed in [Note C(I)] (iii) Unsecured redeemable non-convertible inflation linked debentures: Sr. no. 1 Face value per debenture ( ) 10,00,000 Date of allotment May 23,2013 31-3-2016 crore 108.81* 31-3-2015 crore Interest for the year 2015-16 109.76 # 1.65% p.a. payable on inflation adjusted principal as on the date of coupon payment Terms of repayment for debentures outstanding as on 31-3-2016 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 31-3-2016)/Average reference WPI (as at 23-5-2013)} * Face Value] The principal amount has been calculated as [{Average reference WPI (as at 31-3-2015)/Average reference WPI (as at 23-5-2013)} * Face Value] 237 Notes forming part of the Accounts (contd.) C(I)(b) Foreign currency convertible bonds: 0.675% US$ denominated 5 years & 1 day Foreign Currency Convertible Bonds (FCCB) carried at 1325.10 crore as on March 31, 2016 (previous year: 1250 crore) represent 1000 bonds of US$ 2,00,000 each. The bonds are convertible into the Company’s fully paid equity shares of 2 each at a conversion price of 1916.50 per share at the option of the bond holders at any time on and after December 1, 2014 up to October 15, 2019. 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 22, 2017 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. C(I)(c) Details of term loans (unsecured): foreign currency loans: Sr. no. 31-3-2016 crore 31-3-2015 crore Rate of interest Terms of repayment of term loan outstanding as on 31-3-2016 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Less: 1325.10 1250.00 USD LIBOR + Spread Repayment due on October 21, 2019 662.55 625.00 USD LIBOR + Spread Repayable in 3 installments on (i) November 3, 2018 (ii) November 3, 2019 and (iii) November 3, 2020 331.28 312.50 132.51 125.00 165.64 156.25 USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread Repayment due on July 2, 2018 Repayment due on September 27, 2017 Repayable on July 14, 2017 292.94 276.34 USD LIBOR + Spread Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 404.44 381.52 USD LIBOR + Spread Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 662.55 625.00 USD LIBOR + Spread Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 662.55 625.00 USD LIBOR + Spread Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 370.75 349.74 USD LIBOR + Spread – 312.50 Fixed Interest Rate Repayable in 2 installments on (i) August 30, 2016 and (ii) August 30, 2017 115.95 145.83 USD LIBOR + Spread Repayable in 6 equal installments payable annually from September 18, 2013 to September 18, 2017 with the final installment due on June 18, 2018 165.63 – USD LIBOR + Spread Repayable on October 19, 2018 5291.89 5184.68 836.81 36.46 Current portion of long term borrowings [Note D(II)] 4455.08 5148.22 Long term borrowings as disclosed in [Note C(I)] 238 Notes forming part of the Accounts (contd.) C(I)(d) Sales tax deferment loan (unsecured): Sr. no. As at 31-3-2016 crore As at 31-3-2015 crore Rate of interest Terms of repayment as on March 31, 2016 1 2 3 4 Total Less: 0.24 0.24 0.14 – 0.62 0.34 0.28 0.33 0.36 0.28 0.10 1.07 0.45 0.62 Repayable in 3 annual installments of 0.08 crore ending April 26, 2018 Interest Free Repayable in 2 annual installments of 0.12 crore ending April 26, 2017 Repayable in 1 annual installment of 0.14 crore on April 26, 2016 Current portion of long term borrowings [Note D(II)] Long term borrowings as disclosed in [Note C(I)] 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)] As at 31-3-2016 As at 31-3-2015 crore 125.15 27.39 152.54 crore 86.07 33.55 119.62 As at 31-3-2016 As at 31-3-2015 crore crore 226.78 143.45 – 370.23 202.08 137.89 4.86 344.83 239 Notes forming part of the Accounts (contd.) NOTE [D(I)] Short term borrowings Particulars Secured Unsecured Total* Secured Unsecured Total* As at 31-3-2016 As at 31-3-2015 Loans repayable on demand from banks [Note D(I)(a)] Short term loans and advances from banks [Note D(I)(a)] Commercial Paper Loans from related parties (subsidiary companies) crore 120.54 – – – crore crore – 3252.54 499.54 9.25 120.54 3252.54 499.54 9.25 crore 57.79 206.25 – – crore crore – 2484.04 985.75 57.25 57.79 2690.29 985.75 57.25 120.54 3761.33 3881.87 264.04 3527.04 3791.08 * 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 120.54 crore (previous year: 57.79 crore), short term loans and advances from the banks of Nil (previous year: 206.25 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. NOTE [D(II)] Current maturities of long term borrowings Particulars Unsecured: Redeemable non-convertible fixed rate debentures [Note C(I)(a)(ii)] Term loan from banks [Note C(I)(c)] Sales tax deferment loan [Note C(I)(d)] * Loans guaranteed by directors or others Nil (previous year: Nil) NOTE [D(III)] Trade payables Particulars Due to micro enterprises and small enterprises [Note Q(22)] Due to others Acceptances Due to related parties: Subsidiary companies Associate companies Joint venture companies Due to others 240 As at 31-3-2016 As at 31-3-2015 crore* 550.00 836.81 0.34 1387.15 crore* 600.00 36.46 0.45 636.91 As at 31-3-2016 As at 31-3-2015 crore crore 134.32 crore crore 117.05 660.83 2256.57 5.35 36.81 19024.92 928.48 1782.16 22.81 81.37 15918.73 21984.48 22118.80 18733.55 18850.60 Notes forming part of the Accounts (contd.) NOTE [D(IV)] Other current liabilities Particulars Interest accrued but not due on borrowings Unclaimed dividend Due to customers (construction related activity) Due to customers (property development projects) Advances from customers Forward contract payable Other payables (including sales tax, service tax, excise duty and others) [Note D(IV)(a)] As at 31-3-2016 As at 31-3-2015 crore 196.73 39.33 4795.33 222.18 10712.22 369.37 869.38 17204.54 crore 158.08 33.59 4008.46 365.27 9054.19 347.75 714.21 14681.55 D(IV)(a) Other payables include due to directors 47.83 crore (previous year: 50.61 crore). Particulars As at 31-3-2016 As at 31-3-2015 crore crore crore crore NOTE [D(V)] Short term provisions 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)] Others: Current tax [Net of payment made 1529.13 crore] Proposed equity dividend Additional tax on dividend Other provisions (AS 29 related) [Note Q(15)] 44.27 502.10 16.82 11.30 2.07 1699.95 140.88 276.23 34.01 486.02 13.26 10.04 574.49 543.33 75.69 1510.54 134.33 259.11 2119.13 2693.62 1979.67 2523.00 241 Notes forming part of the Accounts (contd.) NOTE [E(I)] Tangible assets Class of assets As at Land Freehold Leasehold Sub total -Land Buildings Owned Leased out Sub total -Buildings Plant and equipment Owned Leased out 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 & fixtures Vehicles Owned Sub total-Vehicles Other assets Owned Railway sidings Ships Sub total-Other assets Lease Adjustment Total Cost/valuation Depreciation As at 31-3-2016 Up to 31-3-2015 For the year* Deductions Up to 31-3-2016 crore Impairment As at 31-3-2016 Book value As at 31-3-2016 As at 31-3-2015 1-4-2015 Additions Deductions 404.99 90.67 495.66 0.65 0.73 1.38 2839.67 124.31 2963.98 68.29 2.28 70.57 4.10 – 4.10 49.96 – 49.96 7337.57 550.63 – 550.63 22.93 7360.50 178.79 – 178.79 493.22 0.08 493.30 223.38 223.38 87.05 – 87.05 27.97 27.97 25.08 0.08 25.16 5.78 5.78 401.54 91.40 492.94 2858.00 126.59 2984.59 7709.41 22.93 7732.34 555.19 – 555.19 245.57 245.57 – 7.14 7.14 – 1.49 1.49 – – – – 8.63 8.63 505.74 103.25 4.15 13.39 107.40 519.13 11.63 – 11.63 597.36 17.54 614.90 – – – – – – 3331.17 687.49 1.16 688.65 9.67 3340.84 103.99 – 103.99 3914.67 10.83 3925.50 – 6.93 # 6.93 345.65 0.08 345.73 159.13 159.13 75.34 – 75.34 31.34 31.34 22.11 0.08 22.19 4.92 4.92 398.88 – 398.88 185.55 185.55 238.23 238.23 23.81 23.81 8.14 8.14 253.90 253.90 132.16 132.16 22.53 22.53 7.44 7.44 147.25 147.25 218.36 218.36 46.40 46.40 24.19 24.19 240.57 240.57 115.10 115.10 28.71 28.71 16.91 16.91 126.90 126.90 0.25 68.41 68.66 – 12062.07 – – – – 807.81 – – – – 296.12 0.25 68.41 68.66 – 12573.76 0.25 30.39 30.64 – 4649.87 – 4.92 4.92 – 960.38 – – – – 167.08 0.25 35.31 35.56 – 5443.17 401.54 82.77 484.31 2260.64 109.05 2369.69 3794.74 5.17 3799.91 156.31 – 156.31 60.02 60.02 404.99 83.53 488.52 2333.93 110.92 2444.85 4006.40 6.33 4012.73 147.57 – 147.57 64.25 64.25 106.65 106.65 106.07 106.07 113.67 113.67 103.26 103.26 – 33.10 33.10 (3.07) 7120.59 – 38.02 38.02 (3.07) 7402.20 250.69 7371.28 304.54 7706.74 – – – – – – – – – – – – – 6.93 6.93 Previous year 11403.58 1010.37 351.88 12062.07 3832.77 1036.54 219.44 4649.87 Add: Capital work-in-progress # Impairment up to 31-3-2016 * Includes 6.93 crore. During the year Nil 6.14 crore transferred to Retained Earnings pursuant to Schedule II of Companies Act, 2013 1. Cost/valuation of freehold land includes 0.27 crore for which conveyance is yet to be completed. 2. Cost/valuation of buildings includes ownership accommodation: (i) (a) in various co-operative societies, shop-owners’ associations and non-trading corporations 99.84 crore, including 2,570 shares of 50 each, 232 shares of 100 each and 1 share of 250 each. (b) in various apartments 11.20 crore. (c) in various co-operative societies 12.88 crore for which share certificates are yet to be issued. (d) in proposed co-operative societies 0.53 crore. 242 Notes forming part of the Accounts (contd.) NOTE [E(I)] (contd.) (ii) of 3.94 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 5.91 crore (previous year: 18.50 crore) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 on “Borrowing Costs”. Asset wise break-up of borrowing costs capitalised is as follows: Class of assets Building (owned) Plant & equipment (owned) Office equipment (owned) Furniture and fixtures (owned) Capital work-in-progress Total 2015-16 3.13 – – – 2.78 5.91 crore 2014-15 26.30 0.30 0.02 0.03 (8.15) 18.50 4. Depreciation for the year includes obsolescence amounting to 10.45 crore (previous year: 30.68 crore). 5. Own assets given on operating lease have been presented separately in the schedule as per Accounting Standard (AS) 19 on ”Leases”. 6. Cost/valuation as at April 1, 2015 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. In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount of 6.14 crore before tax ( 4.01 crore net of tax of 2.13 crore) has been adjusted against retained earnings as on April 1, 2015. 9. Details of assets where useful life is different from that specified in Schedule II: Category of assets Sub-category of assets Useful life as per Schedule II (in years) Useful life adopted (in years) Sr. no. 1. 2. 3. 4. 5. 6. 7. 8 Sr. no. 1. 2. Non-factory buildings (RCC Frame Structure) Non-factory buildings (other than RCC Frame Structure) Ownership flats Office equipment Air conditioning and refrigeration equipment Laboratory equipment Canteen equipment Motor vehicles Building portion - RCC Frame Structure Multifunctional devices Assets used in Heavy Engineering and Shipbuilding business: Category of assets Sub-category of assets Factory buildings Plant & equipment general Boring/Rolling/Drilling/Milling machines Modular Furnace Other Furnaces Horizontal Autoclaves Load bearing structures Cranes Carpeted Roads-other than RCC 3. Roads 60 30 60 5 15 10 15 8 20-60 10-30 50 4 12 8 8 7 Useful life as per Schedule II (in years) 30 15 5 Useful life adopted (in years) 15-50 10-30 5-15 5-30 10-30 50 10-30 5-15 243 Notes forming part of the Accounts (contd.) NOTE [E(I)] (contd.) Assets used in Electrical & Automation business: Sr. no. 1. Category of assets Sub-category of assets Useful life as per Schedule II (in years) Useful life adopted (in years) Plant & equipment general Specialised machine tools, dies, jigs, fixtures, gauges for electrical business DG sets above 30 kva 15 15 5 12 Assets used in Construction business: Sr. no. 1. 2. Category of assets Sub-category of assets Plant and equipment used in civil construction Photographic equipment Minor plant & equipment of construction activity Assets used in Metallurgical & Material Handling business: Useful life as per Schedule II (in years) Useful life adopted (in years) 12 15 5 5 Sr. no. 1. 2. 3. 4. Category of assets Sub-category of assets Useful life as per Schedule II (in years) Useful life adopted (in years) Plant and equipment used in civil construction Office equipment Air conditioning and refrigeration equipment Photographic equipment Minor plant & equipment of construction activity Office equipment - deployed at project sites Air conditioning and refrigeration equipment - deployed at project sites Photographic equipment - deployed at project sites 12 5 15 15 5 3 3 3 Assets used in Power business: Sr. no. 1. Category of assets Sub-category of assets Plant and equipment Site facilities Useful life as per Schedule II (in years) 15 Useful life adopted (in years) 4 NOTE [E(II)] Intangible assets Class of assets As at Cost/valuation 1-4-2015 Additions Deductions 2.08 17.51 – 3.94 166.24 19.09 As at 31-3-2016 181.67 23.03 Up to 31-3-2015 116.54 15.41 Amortisation For the period Deductions 1.95 18.85 – 1.38 Book value As at 31-3-2016 Up to 31-3-2016 133.44 16.79 48.23 6.24 As at 31-3-2015 49.70 3.68 crore 42.96 228.29 66.11 87.56 – 2.08 109.07 313.77 11.18 143.13 13.96 34.19 – 1.95 25.14 175.37 83.93 138.40 31.78 85.16 Specialised softwares Technical knowhow New product design and development Total Previous year 259.63 37.33 68.67 228.29 145.64 27.64 30.15 143.13 Add: Intangible assets under development # Impairment during the year Nil (previous year: 1.16 crore) 158.91 # 297.31 189.50 274.66 244 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) Particulars Long term investments (Trade Investments unless otherwise specified) (A) Investment in equity instruments (a) Subsidiary companies (b) Associate companies (c) Other investments Less: Provision for diminution in value (B) Investment in preference shares of subsidiary companies 5403.16 (C) Investment in integrated joint ventures As at 31-3-2016 As at 31-3-2015 crore crore crore crore 13802.91 4.98 20.00 151.46 14769.69 30.63 43.00 16.46 2426.00 13676.43 5403.16 818.35 19897.94 14826.86 2426.00 419.96 17672.82 Non-current investments (at cost unless otherwise specified) Particulars Trade investments (unless otherwise specified) (A) Investments in fully paid equity instruments (a) Subsidiary companies: L&T Valves 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 [ L&T Aviation Services Private Limited L&T Capital Company Limited (Capital reduction and face value reduced 1000 (previous year: 1000)] from 4,400 to 10 per share) L&T Cassidian Limited L&T Finance Holdings Limited (quoted) L&T Chennai-TADA Tollway Limited [ L&T Construction Equipment Limited L&T Devihalli Hassan Tollway Limited [ L&T General Insurance Company Limited L&T Halol-Shamlaji Tollway Limited [ L&T Howden Private Limited L&T Infocity Limited L&T Metro Rail (Hyderabad) Limited L&T Infrastructure Development Projects Limited Carried forward 1000 (previous year: 1000)] 1000 (previous year: 1000)] 1000 (previous year: 1000)] Face value per unit Number of units As at 31-3-2016 As at 31-3-2016 crore As at 31-3-2015 crore 100 10 100 10 10 R$ 1 10 10 10 18,00,000 49,950 8,29,440 50,000 9,500 – – 100 4,56,00,000 10 10 10 10 10 10 10 10 10 10 10 10 50,000 37,000 1,16,97,09,304 100 12,00,00,000 100 70,50,00,000 100 1,50,30,000 – 2,03,06,623 31,28,69,096 201.54 0.05 150.24 0.05 0.01 – – – 45.60 0.05 0.04 1468.18 – 84.32 – 705.00 – 15.03 – 20.31 2696.48 5386.90 201.54 0.05 150.24 0.05 0.01 0.27 4.00 – 45.60 22.00 0.04 1575.15 – 84.32 – 620.00 – 15.03 16.02 19.82 2696.48 5450.62 245 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) (contd.) 26000 (previous year: 26000)] 1000 (previous year: 1000)] Particulars (a) Subsidiary companies (contd.) Brought forward L&T Kobelco Machinery Private Limited L&T Krishnagiri Walajahpet Tollway Limited [ L&T-MHPS Boilers Private Limited L&T-MHPS 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 [ 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 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 L&T Technology Services Limited* (see page 249) 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 Larsen & Toubro (Saudi Arabia) LLC PNG Tollway Limited Raykal Aluminum Company Private Limited Spectrum Infotech Private Limited L&T Infrastructure Engineering Limited L&T Cutting Tools Limited L&T Global Holdings Limited Marine Infrastructure Developer Private Limited LTH Milcom Private Limited Less: Provision for diminution in value 246 Face value per unit Number of units As at 31-3-2016 As at 31-3-2016 crore As at 31-3-2015 crore 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 40 10 1 AED 550500 SAR 1000 SAR 1000 USD 1 SAR 1000 10 10 10 10 1000 USD 100 10 10 2,55,00,000 2,600 11,93,91,000 36,24,06,000 – 3,11,27,00,000 51,157 – 100 4,71,60,700 13,000 – – 1,99,95,50,000 81,86,80,000 – 41,92,84,000 50,000 1,08,64,000 27,82,736 1,00,00,50,000 7,50,00,000 – 16,12,50,000 – 7,500 450 50,000 625 2,24,22,660 37,750 4,40,000 36,00,000 68,000 1,000 9,900 1,13,340 5386.90 25.50 – 119.39 362.41 – 3112.70 0.05 – – 47.16 0.01 – – 1999.55 818.68 – 419.28 0.05 10.86 0.82 1000.05 300.00 – 134.25 – 11.08 0.68 0.23 1.06 22.42 0.04 6.80 21.85 0.30 0.67 0.01 0.11 13802.91 135.00 13667.91 5450.62 25.50 – 119.39 362.41 0.05 2729.30 0.05 0.05 – 47.16 0.01 0.01 95.31 1999.55 818.68 0.05 419.28 0.05 10.86 0.82 1000.05 300.00 23.89 134.25 1147.40 11.08 0.68 0.23 – 43.97 0.04 6.80 21.85 0.30 – – – 14769.69 – 14769.69 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) (contd.) Particulars (b) Associate companies: Gujarat Leather Industries Limited JSK Electricals Private Limited L&T-Chiyoda Limited Magtorq Private Limited Rishi Consfab Private Limited Salzer Electronics Limited (quoted) Less: Provision for diminution in value (c) Other investments: International Seaport Dredging Limited Tidel Park Limited Astra Microwave Products Limited (quoted) BBT Elevated Road Private Limited Utmal Multi purpose Service Co-operative Society Limited (B Class) (non-trade investments) [ 30,000 (previous year: 30,000)] Less: Provision for diminution in value Total - (A) = (a)+(b)+(c) (B) Investments in preference shares of subsidiary companies L&T Shipbuilding Limited -12% Cumulative redeemable preference shares, October 22, 2028 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable preference shares, June 24, 2029 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable at par preference shares, April 16, 2030 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, May 28, 2030 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, August 10, 2030 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, September 29, 2030 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, December 8, 2030 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, February 4, 2031 L&T Technology Services Limited -10% Non-convertible non-cumulative redeemable preference shares, February 14, 2024 L&T Technology Services Limited -10% Non-convertible non-cumulative redeemable preference shares, September 21, 2024 Carried forward Face value per unit Number of units As at 31-3-2016 As at 31-3-2016 crore As at 31-3-2015 crore 10 10 10 100 10 10 7,35,000 – – 9,000 – – 10000 10 2 10 100 15,899 40,00,000 – 1,00,000 300 0.56 – – 4.42 – – 4.98 0.56 4.42 15.90 4.00 – 0.10 0.00 0.56 2.12 4.50 4.42 2.70 16.33 30.63 0.56 30.07 15.90 4.00 23.00 0.10 0.00 20.00 15.90 4.10 13676.43 43.00 15.90 27.10 14826.86 10 9,00,00,000 90.00 90.00 10 5,00,00,000 50.00 50.00 10 11,00,00,000 110.00 10 42,18,60,000 421.86 10 25,00,00,000 250.00 10 7,50,00,000 75.00 10 25,90,00,000 259.00 10 21,60,00,000 216.00 – – – – – – 10 40,00,00,000 400.00 400.00 10 35,00,00,000 350.00 2221.86 350.00 890.00 247 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) (contd.) Particulars (B) Investments in preference shares of subsidiary companies (contd.) Brought forward L&T Seawoods Limited -10% Convertible non-cumulative and redeemable preference shares, March 30, 2022 L&T Seawoods Limited -10% Non-cumulative optionally convertible redeemable at par preference shares, May 12, 2022 L&T Seawoods Limited -10% Non-cumulative optionally convertible redeemable at par preference shares, July 14, 2022 L&T Seawoods Limited -10% Non-cumulative optionally convertible redeemable at par preference shares, September 3, 2022 L&T Hydrocarbon Engineering Limited -10% Non-convertible non-cumulative redeemable Number of units As at 31-3-2016 Face value per unit v As at 31-3-2016 v crore As at 31-3-2015 v crore 2221.86 890.00 2 1,03,60,00,000 1,036.00 1036.00 2 2 2 4,80,00,000 48.00 4,22,50,000 42.25 4,20,00,000 42.00 – – – preference shares, February 6, 2029 10 50,00,00,000 500.00 500.00 L&T Hydrocarbon Engineering Limited -12% Non-cumulative optionally convertible redeemable preference shares, October 19, 2030 L&T Hydrocarbon Engineering Limited -12% Non-cumulative optionally convertible redeemable preference shares, March 30, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, May 10, 2030 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, June 8, 2030 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, July 21, 2030 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, October 16, 2030 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, January 10, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, March 17, 2031 10 13,00,00,000 130.00 10 13,00,00,000 130.00 2 52,30,00,000 523.00 2 2 2 2 2 1,65,00,000 16.50 70,00,000 7.00 3,20,00,000 32.00 70,00,000 7.00 1,92,50,000 19.25 L&T Realty Limited - 12% Non-convertible non-cumulative redeemable at par preference shares, May 26, 2025 10 64,83,00,000 648.30 – – – – – – – – – Less: Provision for diminution in value Total (B) (C) Investments in integrated joint ventures Desbuild-L&T Joint Venture HCC-L&T Purulia Joint Venture International Metro Civil Contractors Joint Venture L&T-Eastern Joint Venture L&T-AM Tapovan Joint Venture L&T-Hochtief Seabird Joint Venture L&T Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Group Carried forward 248 5403.16 2426.00 – – 5403.16 2426.00 0.05 0.28 7.18 5.51 0.07 0.28 9.24 5.21 106.74 107.72 23.72 13.46 15.49 172.43 23.72 13.27 14.90 174.41 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 31-3-2016 (C) Investments in integrated joint ventures (contd.) Brought forward Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC 27 Delhi Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture Civil Works Joint Venture L&T Delma Mafraq Joint Venture Larsen & Toubro & NCC Limited L&T–AL-Sraiya LRDP 6 Joint Venture Total (C) Total Non-current Investments (A+B+C) As at 31-3-2016 crore As at 31-3-2015 crore 172.43 174.41 37.15 119.10 23.23 28.32 267.79 144.76 14.28 11.29 56.58 65.26 44.95 21.64 57.12 – – – 818.35 419.96 19897.94 17672.82 * Pursuant to the Scheme of Arrangement approved by the Hon’ble High Court of Bombay vide order dated April 1, 2016, the face value per equity share has been reduced to 2 each from 40 each. 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 151.46 crore (previous year: 16.46 crore) As at 31-3-2016 crore As at 31-3-2015 crore 1468.18 7468.59 1614.48 8060.92 18429.76 16058.34 249 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 Capital advances Inter-corporate deposits-others Other loans and advances (KMPs) Unsecured considered good: Capital advances Loans and advances to related parties: Subsidiary companies: Advances towards equity commitment Inter-corporate deposits [Note Q(1)(a)] Joint venture companies: Others Other loans and advances: Security deposits Earnest money deposits Advances recoverable in cash or in kind NOTE [G(II)] Cash and bank balances Particulars Cash and cash equivalents: Cash and bank balances not available for immediate use [Note G(II)(a)] As at 31-3-2016 As at 31-3-2015 crore crore 1.24 1.15 – – 36.01 5.25 779.72 11.87 90.02 0.63 2105.84 3031.73 2.36 1.63 3.00 0.01 57.46 1986.84 43.97 12.01 68.75 0.46 1648.81 3825.30 As at 31-3-2016 As at 31-3-2015 crore 74.77 74.77 crore 75.43 75.43 crore G(II)(a) Particulars of cash and bank balances not available for immediate use Particulars 1 2 3 Amount received (including interest accrued thereon) 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 (including interest accrued thereon) not available for immediate use being in the nature of security offered for bids submitted, loans availed etc. Total Less: Amount reflected under current assets [Note H(IV)] Amount reflected under non-current assets [Note G(II)] As at 31-3-2016 As at 31-3-2015 21.50 20.72 20.79 16.73 159.58 201.87 127.10 74.77 160.54 197.99 122.56 75.43 250 Notes forming part of the Accounts (contd.) NOTE [G(III)] Other non-current assets Particulars Unamortised expenses Interest accrued on inter-corporate deposits NOTE [H(I)] Current investments Particulars Current investments (1) Government and trust securities Less: Provision for diminution in value (2) Debentures and bonds (a) Subsidiary companies (b) Others Less: Provision for diminution in value (3) Mutual funds Less: Provision for diminution in value As at 31-3-2016 As at 31-3-2015 crore 26.28 86.84 113.12 crore 52.43 13.54 65.97 As at 31-3-2016 As at 31-3-2015 crore crore crore crore 1068.61 2.58 22.75 930.67 10.34 2662.67 0.80 1484.77 2.53 1066.03 1482.24 22.95 838.31 0.84 943.08 860.42 3037.62 0.20 2661.87 4670.98 3037.42 5380.08 Other particulars in respect of current investment mentioned in H(I) 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) 8.15% Government of India Bond 2022 (quoted) 8.33% Government of India Bonds 2026 (quoted) 8.28% Government of India Bond 2027 (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) 6.90% Oil Marketing Companies GOI Special Bonds 2026 9.23% Government of India Bond 2043 (quoted) Carried forward Face value per unit Number of units As at 31-3-2016 As at 31-3-2016 crore As at 31-3-2015 crore 100 100 100 100 100 100 100 100 100 100 100 5,00,000 – – 20,00,000 75,00,000 – 1,24,00,000 4,22,84,000 15,00,000 13,00,000 3,00,00,000 5.14 – – 20.36 79.77 – 128.03 466.27 15.48 12.04 341.52 1068.61 4.91 81.56 20.29 – 79.77 103.75 – 290.10 15.63 – – 596.01 251 Notes forming part of the Accounts (contd.) NOTE [H(I)] Current investments (contd.) Particulars Face value per unit Number of units As at 31-3-2016 (1) Government and trust securities: (contd.) Brought forward 8.83% Government of India Bond 2023 (quoted) 6.90% Oil Marketing Companies GOI Special Bonds 2026 (quoted) 9.23% Government of India Bond 2043 (quoted) 8.17% Government of India Bond 2044 (quoted) 8.27% Government of India Bond 2020 (quoted) Less: Provision for diminution in value Government and trust securities -Total (2) Debentures and bonds: (a) Subsidiary companies: 100 100 100 100 100 – – – – – As at 31-3-2016 crore As at 31-3-2015 crore 1068.61 – – – – – 1068.61 2.58 1066.03 596.01 238.70 12.04 346.02 31.26 260.74 1484.77 2.53 1482.24 L&T Finance Limited - 10.24% Secured Redeemable Non Convertible Debenture September 17, 2019 (quoted) 1,000 2,15,770 22.75 22.95 Less: Provision for diminution in value Subsidiary companies-Total (b) Other debentures and bonds: 6.86% IIFCL Tax Free Bonds Mar 26, 2023 (quoted) 7.18% IRFC Ltd. Tax Free Bonds Feb 19, 2023 (quoted) 10.75% The Tata Power Co. Ltd. NCD Aug 21, 2072 (quoted) 8.00% Indian Overseas Bank Bonds Mar 13, 2016 (quoted) 8.20% PFC Ltd. Tax Free Bonds Feb 01, 2022 (quoted) 8.20% PFC Ltd. Tax Free Bonds Feb 01, 2022 8.46% PFC Ltd. Tax Free Bonds Aug 30, 2028 8.46% PFC Ltd. Tax Free Bonds Aug 30, 2028 (quoted) 1.44% Inflation Indexed Bonds Jun 05, 2023 (quoted) 10.05% HDB Financial Services Ltd. Bonds SR-I/1/5 Dec 20, 2023 (quoted) 10.20% HDB Financial Services Ltd. Bonds Aug 09, 2022 (quoted) 8.41% NTPC Ltd. Tax Free Bonds SR-1A Dec 16, 2023 (quoted) 8.46% REC Ltd. Tax Free Bonds SR-3B Aug 29, 2028 (quoted) ECL Finance Ltd. NCD SR-J5K403 Nov 04, 2015 (quoted) ECL Finance Ltd. NCD SR-L5L402 Dec 15, 2015 (quoted) Edelweiss Finance & Investments Ltd. NCD SR-A6A501 Jan 06, 2016 Edelweiss Finance & Investments Ltd. NCD SR-A6A502 Jan 08, 2016 Edelweiss Finance & Investments Ltd. NCD SR-A6A503 Jan 11, 2016 Edelweiss Finance & Investments Ltd. NCD SR-K5L401 Dec 17, 2015 (quoted) 8.70% PNB Housing Finance Ltd. Bonds SR-III Nov 24, 2024 (quoted) 7.40% Syndicate Bank TI-2 SR-8 NCD Apr 20, 2015 (quoted) ECL Finance Ltd. NCD SR-D6D502A-Apr 26, 2016 ECL Finance Ltd. NCD SR-E6E501A - May 11, 2016 ECL Finance Ltd. NCD SR-C7C601A Mar 22, 2017 1,000 1,000 1,000,000 1,000,000 1,000 1,000 1,000,000 1,000,000 100 1,000,000 1,000,000 1,000 1,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 1,000,000 1,000,000 10,000,000 10,000,000 10,000,000 – – 1,037 – – 6,04,355 227 – 50,00,000 – – 79,162 370 – – – – – – – – 25 25 25 Carried forward 252 22.75 0.27 22.48 – – 109.07 – – 64.89 25.33 – 41.79 – – 8.54 41.56 – – – – – – – – 32.56 28.90 25.00 377.64 22.95 – 22.95 25.00 304.28 109.08 4.51 64.89 – – 25.32 41.79 28.04 2.27 8.54 41.56 25.00 26.28 29.69 29.85 27.20 26.86 15.16 2.99 – – – 838.31 Notes forming part of the Accounts (contd.) NOTE [H(I)] Current investments (contd.) Particulars (b) Other debentures and bonds: (contd.) Brought forward ECL Finance Ltd. NCD SR-C7C601B Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601C Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601D Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601E Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601F Mar 22, 2017 Edelweiss Finance & Investments Ltd.NCD K6K501A Nov 04, 2016 Edelweiss Finance & Investments Ltd. NCD SR-K6K502A Nov 14 ECL Finance Ltd. NCD SR-B7B601A Feb 15, 2017 ECL Finance Ltd. NCD SR-B7B601B Feb 15, 2017 6.86% IIFCL Tax Free Bonds Mar 26, 2023 7.18% IRFC Ltd. Tax Free Bonds Feb 19, 2023 Less: Provision for diminution in value Other debentures and bonds-Total Debentures & bonds-Total (3) Mutual funds: DWS Short Maturity Fund - Direct Plan - Annual Bonus JM Money Manager Fund - Super Plus Plan - Bonus -Bonus Units DWS Treasury Fund - Investment Plan - Direct Plan - Bonus HDFC Liquid Fund - Growth IDFC Cash Fund - Reg - Growth L&T Floating Rate Fund Direct Plan - Growth L&T Liquid Fund - Growth SBI Premier Liquid Fund - Regular Plan - Growth DWS Ultra Short Term Fund - Direct Plan - Annual Bonus Principal Cash Mgmt Fund - Regular Plan - Growth Birla Sun Life Cash Plus - Regular Plan - Growth Pramerica Liquid Fund - Growth L&T Emerging Businesses Fund - Direct Plan - Growth JM Arbitrage Advantage Fund - Direct Plan - Bonus L&T Business Cycles Fund - Direct Plan - Growth DSP BlackRock India Tiger Fund - Reg - Growth IDFC Sterling Equity Fund - Regular Plan - Growth JPMorgan India Liquid Fund - Super IP - Growth BNP Paribas Overnight Fund - Growth DWS Treasury Fund - Cash - Reg - Growth Reliance Liquid Fund - TP - Growth Taurus Liquid Fund - Super IP - Growth UTI Liquid Fund - Cash Plan - IP - Growth LIC Nomura MF Liquid Fund - Growth Carried forward Face value per unit Number of units As at 31-3-2016 As at 31-3-2016 crore As at 31-3-2015 crore 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 10,000,000 2,500,000 10,000,000 10,000,000 1,000 1,000 25 25 25 25 25 25 95 25 25 2,50,000 30,00,000 10 10 10 10 1,000 10 1,000 1,000 10 1,000 100 1,000 10 10 10 10 10 10 1,000 10 1,000 1,000 1,000 1,000 – – – – – – 14,47,599 4,21,417 – – 82,46,063 – 1,00,00,000 – – – – – – – 10,86,336 – – – 377.64 25.00 25.00 25.00 25.00 25.00 25.00 23.75 25.00 25.00 25.00 304.28 930.67 10.07 920.60 943.08 – – – – – – 300.00 100.00 – – 200.00 – 13.71 – – – – – – – 400.00 – – – 1013.71 838.31 – – – – – – – – – – – 838.31 0.84 837.47 860.42 118.26 360.12 21.43 50.00 200.00 25.54 581.09 100.00 37.49 20.00 100.00 20.00 13.71 487.31 12.44 5.23 10.41 50.00 100.00 50.00 100.00 100.00 100.00 50.00 2713.03 253 Face value per unit Number of units As at 31-3-2016 As at 31-3-2016 crore As at 31-3-2015 crore 10 10 1,000 10 10 10 10 1,000 1,000 10 10 10 10 10 – – – – 1,22,80,335 – – 12,09,623 7,68,317 1,03,83,438 47,90,04,370 40,95,42,385 14,38,03,762 99,99,700 1013.71 – – – – 31.73 – – 300.00 130.00 10.76 499.29 453.68 211.50 12.00 2662.67 0.80 2661.87 4670.98 2713.03 50.00 100.00 100.00 10.19 33.00 21.26 10.14 – – – – – – – 3037.62 0.20 3037.42 5380.08 As at 31-3-2016 As at 31-3-2015 crore crore 2009.10 2092.35 2255.94 2342.93 2661.88 3124.14 Notes forming part of the Accounts (contd.) NOTE [H(I)] Current investments (contd.) Particulars (3) Mutual funds: (contd.) Brought forward DWS Ultra Short Term Fund - Direct Plan - Growth ICICI Prudential Money Market Fund - Regular Plan - Growth HSBC Cash Fund - Growth L&T Resurgent India Corporate Bond Fund - Direct Plan-Growth HDFC Small & Midcap Fund - Growth L&T Arbitrage Opportunities Fund - Growth Birla Sun Life Manufacturing Equity Fund - Direct - Dividend Kotak Floater - ST - Growth UTI Money Market - IP - Growth L&T Resurgent India Corporate Bond Fund - Dividend JM Arbitrage Adv Fund - Ann Bonus - Principal - Direct JM Balanced Fund - Quarterly Dividend Payout JM Equity Fund Half Yearly Dividend Payout L&T Business Cycles Fund - Direct Plan - Dividend Payout Less: Provision for diminution in value Mutual funds-Total 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 (c) Aggregate provision for diminution in value of current investments is 13.72 crore (previous year: 3.57 crore) 254 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 7.10 crore (previous year: 21.59 crore)] Components [Includes goods-in-transit 7.98 crore (previous year: 17.73 crore)] Construction material [Includes goods-in-transit 111.96 crore (previous year: 72.87 crore)] Manufacturing work-in-progress [Note Q(24)(e)] Finished goods Stock-in-trade (in respect of goods acquired for trading) [Includes goods-in-transit 34.80 crore (previous year: 35.95 crore)] Stores and spares [Includes goods-in-transit 2.69 crore (previous year: 6.34 crore)] Loose tools Property development related work-in-progress [Note Q(6)(b)] As at 31-3-2016 As at 31-3-2015 crore 356.63 304.27 116.39 372.18 161.68 159.77 104.41 7.84 304.83 1888.00 crore 448.71 394.34 74.80 582.78 261.20 161.13 140.07 6.66 201.03 2270.72 NOTE [H(III)] Trade receivables Particulars Secured: Debts outstanding for more 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 As at 31-3-2016 As at 31-3-2015 crore crore crore crore 0.51 4.71 3283.99 844.89 4128.88 23024.69 3.85 27157.42 848.74 2235.07 565.93 2801.00 20811.33 0.46 23612.79 566.39 26308.68 26309.19 23046.40 23051.11 H(III)(a) Other debts includes 17698.43 crore (previous year: 15105.86 crore) contractually not due. 255 Notes forming part of the Accounts (contd.) NOTE [H(IV)] Cash and bank balances Particulars As at 31-3-2016 As at 31-3-2015 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) 4.64 [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)] 39.33 4.66 127.10 1029.18 446.82 2.28 26.90 921.66 159.74 90.52 175.04 3.00 33.59 9.69 122.56 175.73 1680.91 168.84 1515.80 NOTE [H(V)] Short term loans and advances Particulars Secured considered good: Loans against mortgage of house property Inter-corporate deposits-others Loans and advances to related parties: Subsidiary companies: Inter-corporate deposits [Note Q(1)(a)] Others Associate companies: Advances recoverable Joint Ventures: Others Others considered good: Security deposits Earnest money deposits Advances recoverable in cash or in kind Balances with customs, port trust etc. Carried forward 256 As at 31-3-2016 As at 31-3-2015 crore crore crore crore 0.79 73.00 3696.03 1544.22 5.82 45.11 286.89 50.79 4411.30 91.20 10205.15 0.89 70.00 1723.21 1036.06 3.65 69.33 259.85 63.12 3178.11 86.75 6490.97 Notes forming part of the Accounts (contd.) NOTE [H(V)] Short term loans and advances (contd.) Particulars Brought forward Considered doubtful: Deferred credit against sale of ships Security deposits Other loan and advances Less: Allowance for doubtful loan and advances NOTE [H(VI)] Other current assets Other current assets: Particulars Due from customers (construction and project related activity) Due from customers (property development activity) [Note Q(6)(b)] Interest accrued on investments Interest accrued on inter-corporate deposits Unamortised expenses 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 duty liability that may arise including those in respect of matters in appeal/challenged by the Company in Writ (d) 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 and bank guarantees for performance given on behalf of subsidiary companies As at 31-3-2016 As at 31-3-2015 crore crore 10205.15 crore crore 6490.97 27.55 36.09 104.45 25.99 4.55 140.26 168.09 10373.24 168.09 10205.15 170.80 6661.77 170.80 6490.97 As at 31-3-2016 As at 31-3-2015 crore 21233.74 10.21 30.57 230.48 24.33 21529.33 crore 18250.65 48.68 46.83 203.37 24.63 18574.16 As at 31-3-2016 As at 31-3-2015 crore 1025.52 156.72 60.73 531.84 7327.31 8847.53 crore 883.06 132.13 55.41 826.44 8723.55 9201.96 257 Notes forming part of the Accounts (contd.) NOTE [I] Contingent liabilities (contd.) 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. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Company has determined that the possibility of such levy is remote. In respect of matters at (e), the cash outflows, if any, could generally occur up to eleven 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 at 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. 5. Contingent liability with respect to interest in joint ventures [Note Q(14)] NOTE [J] Commitments Particulars (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) (b) Estimated amount of committed funding by way of equity/loans to subsidiary companies NOTE [K] Revenue from operations As at 31-3-2016 As at 31-3-2015 crore 196.60 1281.00 crore 294.40 2738.00 Particulars Note 2015-16 2014-15 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(24)(a)(iii) Q24(a)(i) Q(6)(b), Q(24)(a)(ii) Q(24)(a)(vi) Q(24)(a)(iv) Q(24)(a)(v) 52022.74 5995.07 843.64 44.74 473.64 137.30 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 Q(14)(b) 77.57 0.36 252.64 71.85 205.77 145.35 144.33 49480.38 5743.51 946.94 3.59 507.93 108.78 59517.13 56791.13 33.39 – 59.78 76.91 292.75 103.24 200.87 897.87 60415.00 766.94 57558.07 258 Notes forming part of the Accounts (contd.) NOTE K (I) Revenue from sales & service include: (a) 544.04 crore (previous year: 1443.57 crore) for price variations net of liquidated damages in terms of contracts with the customers. (b) Shipbuilding subsidy Nil (previous year: Nil) and reversal of shipbuilding subsidy of 4.16 crore (previous year: Nil) NOTE [L] Other Income Particulars 2015-16 2014-15 crore crore crore crore Interest income: 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 investments: Long term investments (net) Current investments (net) Net gain/(loss) on sale of fixed assets Lease rental Miscellaneous income (net of expenses) 2.22 198.20 268.24 44.66 1007.91 0.38 2.15 1010.44 110.91 248.53 (16.04) 3.00 212.44 292.74 57.73 513.32 565.91 850.70 0.58 2.07 853.35 0.84 1121.35 854.19 – 406.63 232.49 83.97 39.90 414.94 2405.97 406.63 29.19 51.57 375.88 2283.37 259 Notes forming part of the Accounts (contd.) NOTE [M] Manufacturing, construction and operating expenses Particulars Materials consumed: Raw materials and components [Note Q(24)(b)] Less: Scrap sales Construction materials Purchase of stock-in-trade [Note Q(24)(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)] 260 2015-16 2014-15 crore crore crore crore 7453.84 57.49 1145.67 (16.49) 161.68 159.77 3167.65 3489.10 261.20 161.13 3181.75 3604.08 (4.91) 831.98 20.62 310.78 573.16 474.91 148.18 395.78 290.51 759.95 49.50 8.08 263.17 123.68 422.12 5496.79 18426.83 1296.75 1831.46 13240.77 7396.35 17805.37 1129.18 1448.90 14066.80 5601.40 104.61 1296.75 – 261.20 161.13 3181.75 3604.08 203.17 117.21 3068.09 3388.47 114.98 (215.61) 10.35 631.14 6.39 338.41 575.38 499.98 149.53 332.42 217.72 652.14 52.42 7.19 221.89 106.93 501.55 4667.51 46629.09 4303.44 44380.43 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 Recoveries on account of deputation charges 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(17)] 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 Contribution to political parties [Note Q(25)] Miscellaneous expenses [Note O(I)] Carried forward 2015-16 2014-15 crore crore crore 116.96 36.86 49.04 116.79 11.83 57.30 3863.60 202.86 54.67 70.49 527.66 (239.08) 4480.20 crore 3423.41 185.92 51.67 41.43 508.96 (48.93) 4162.46 2015-16 2014-15 crore crore crore crore 65.83 104.02 289.40 4.38 38.67 147.38 46.37 261.36 8.95 210.98 0.59 96.03 45.72 40.60 28.33 2.75 18.17 3.09 31.08 59.17 – 392.46 1842.99 54.46 99.59 184.37 3.80 40.54 123.55 34.80 229.13 17.68 205.25 0.52 90.63 52.60 40.33 21.26 52.89 11.00 382.15 1644.55 261 Notes forming part of the Accounts (contd.) NOTE [O] Sales, administration and other expenses (contd.) 2015-16 2014-15 Particulars Brought forward Bad debts and advances written off Less: Allowance for doubtful debts and advances written back crore 121.19 12.96 Company’s share in loss of integrated joint ventures [Note (14)(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 (15)(a)] crore 10.58 4.08 crore 1842.99 108.23 25.05 45.01 293.07 9.85 10.15 151.36 19.36 2505.07 crore 1644.55 6.50 35.81 75.77 114.02 13.99 (11.72) 116.61 5.46 2000.99 NOTE [O(I)] Aggregation of expenses disclosed vide notes M, N and O in respect of specific items as mentioned in schedule III to the Companies Act, 2013, are as follows: Sr. no. Nature of expenses Power and fuel Packing and forwarding Insurance Rent Rates and taxes Travelling and conveyance Repairs to building General repairs and maintenance 1 2 3 4 5 6 7 8 9 Miscellaneous expenses Total NOTE [P] Finance costs Note M 831.98 310.78 148.18 395.78 290.51 759.95 8.08 263.17 422.12 3430.55 2015-16 2014-15 Note N – – 70.49 – – – – – – 70.49 Note O 65.83 104.02 38.67 147.38 46.37 261.36 8.95 210.98 392.46 1276.02 Total 897.81 414.80 257.34 543.16 336.88 1021.31 17.03 474.15 814.58 4777.06 Note M 631.14 338.41 149.53 332.42 217.72 652.14 7.19 221.89 501.55 3051.99 Note N – – 41.43 – – – – – – 41.43 Note O 54.46 99.59 40.54 123.55 34.80 229.13 17.68 205.25 382.15 1187.15 Particulars Interest expenses Other borrowing costs Exchange loss (attributable to finance costs) 262 2015-16 crore 1291.65 27.74 129.65 1449.04 crore Total 685.60 438.00 231.50 455.97 252.52 881.27 24.87 427.14 883.70 4280.57 2014-15 crore 1289.70 22.08 107.87 1419.65 Notes forming part of the Accounts (contd.) NOTE [Q] Q(1) Particulars in respect of loans and advances in the nature of loans as required by the listing agreement: Name of the company (a) Loans and advances in the nature of loans given to subsidiaries: 1 L&T Seawoods Limited 2 L&T Infrastructure Development Projects Limited 3 L&T Realty Limited 4 L&T Finance Holdings Limited 5 L&T Shipbuilding Limited 6 L&T Special Steels & Heavy Forgings Private Limited 7 PNG Tollway Limited 8 EWAC Alloys Limited 9 L&T Hydrocarbon Engineering Limited 10 L&T Technology Services Limited 11 L&T Valves Limited 12 Nabha Power Limited 13 L&T Power Development Limited 14 L&T-MHPS Turbine Generator Private Limited Balance as at Maximum outstanding during 31-3-2016 31-3-2015# 2015-16 2014-15 crore 656.63 524.04 807.36 200.00 371.00 515.20 43.97 5.50 189.00 – – – 246.00 – 185.24 563.41 563.41 – – – 1921.00 371.00 2588.00 779.72 – 16.00 506.18 – – 515.20 43.97 – 779.72 43.97 16.00 148.60 2158.33 1253.23 – – 107.50 15.00 15.00 60.00 878.61 110.00 3225.76 1549.70 – – – – – 41.50 179.00 – Total 4475.75 * 1767.18* (b) Loans and advances in the nature of loans where repayment schedule is not specified/is beyond 7 years: PNG Tollway Limited Total – – 57.51 57.51 – 43.97 *Long term loans and advances [Note G(I)] – 779.72 crore (previous year: 43.97 crore) and short term loans and advances [Note H(V)]- 3696.03 crore (previous year: 1723.21 crore). # Previous year figures have been regrouped for interest accrued on inter-corporate deposits and shown under other non-current assets 13.54 crore and other current assets 203.37 crore as separate line items. 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. 263 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(2) Disclosure pursuant to section 186 of the Companies Act, 2013: Sr. no. Nature of the transaction (loans given/investment made/ guarantee given/security provided) Purpose for which the loan/ guarantee/security is proposed to be utilised by the recipient As at 31-3-2016 Loan and advances: * (i) Subsidiary companies: L&T Realty Limited L&T Seawoods Limited L&T Shipbuilding Limited L&T Special Steels & Heavy Forgings Private Limited PNG Tollway Limited EWAC Alloys Limited L&T Hydrocarbon Engineering Limited Nabha Power Limited L&T Valves Limited Project funding Project funding Working capital and project funding Working capital and project funding Project funding Short term funding Working capital Project funding Short term funding (ii) Others: Boyance Infrastructure Private Limited General corporate purpose Total (i+ii) * Loans & advances represent Inter-corporate deposits (principal amount). Other advances: Subsidiary companies: L&T Power Development Limited L&T Realty Limited L&T Shipbuilding Limited L&T Uttaranchal Hydropower Limited Larsen & Toubro (Saudi Arabia) LLC Guarantees: Subsidiary companies: L&T Aviation Services Private Limited L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited L&T Shipbuilding Limited Nabha Power Limited Larsen & Toubro ATCO Saudia LLC Larsen & Toubro Arabia LLC Towards capital contribution Towards capital contribution Towards capital contribution Towards capital contribution Towards capital contribution Corporate guarantee given for subsidiary’s debt Corporate guarantee given for subsidiary’s debt Corporate guarantee given for subsidiary’s debt Corporate guarantee given for subsidiary’s debt Corporate guarantee given for subsidiary’s debt Corporate guarantee for subsidiary’s project performance Corporate guarantee for subsidiary’s project performance 57.01 64.54 233.97 261.21 548.32 516.80 1331.00 2881.00 5157.00 5000.00 909.51 752.30 1013.25 923.31 crore As at 31-3-2015 563.41 – 371.00 515.20 43.97 – 148.60 110.00 15.00 1767.18 73.00 1840.18 379.40# 648.29# 421.86# 523.00# 14.29 1986.84 185.24 189.00 1921.00 779.72 – 16.00 506.18 878.61 – 4475.75 73.00 4548.75 – – – 5.25# – 5.25 1 2 3 264 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Sr. no. Nature of the transaction (loans given/investment made/ guarantee given/security provided) Larsen & Toubro Infotech Limited L&T Technology Services Limited L&T Electrical & Automation FZE Larsen & Toubro Heavy Engineering LLC Larsen & Toubro (Saudi Arabia) LLC Spectrum Infotech Private Limited L&T Hydrocarbon Engineering Limited L&T-MHPS Boilers Private Limited 4 Investments in fully paid equity instruments and current investments # the shares since allotted Q(3) Exceptional Items [Note R(4)]: Purpose for which the loan/ guarantee/security is proposed to be utilised by the recipient Corporate guarantee for subsidiary’s project performance Corporate guarantee for subsidiary’s project performance (It includes corporate guarantee given for L&T Technology Services LLC) Corporate guarantee for subsidiary’s project performance Corporate guarantee for subsidiary’s project performance Corporate guarantee for subsidiary’s project performance Corporate guarantee for subsidiary’s project performance Corporate guarantee for subsidiary’s project performance Guarantees issued by bank out of the Company’s sanctioned limits to customer of subsidiary for project performance As at 31-3-2016 crore As at 31-3-2015 238.68 231.18 589.79 522.09 19.75 42.06 1197.86 1004.97 2693.04 1339.22 2.90 2.90 2173.23 4374.65 9.52 9.28 16174.84 17925.51 [Note F and Note H(I)] (a) Exceptional items for the year ended March 31, 2016 include the following: (i) Gain of 540.90 crore on sale of the Company’s stake in subsidiary companies viz. L&T-Valdel Engineering Limited – 36.59 crore, L&T-Gulf Private Limited – 6.74 crore, L&T Sapura Shipping Private Limited– 9.18 crore and on sale of the Company’s part stake in L&T Finance Holdings Limited – 488.39 crore; (ii) Gain of 105.86 crore on sale of the Company’s stake in associate companies viz. Salzer Electronics Limited - 57.46 crore and L&T-Chiyoda Limited - 48.40 crore; (iii) Gain of 48.52 crore on sale of the Company’s Foundry Business unit and (iv) Provision for impairment of investment in L&T General Insurance Company Limited - 135.00 crore. (b) Exceptional items for the year ended March 31, 2015 included gain of 357.16 crore on sale of the Company’s part stake in L&T Finance Holdings Limited, a subsidiary company. Q(4) The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 149.62 crore (previous year: 139.44 crore). Further, the company has incurred capital expenditure on research and development activities as follows: (a) on tangible assets of 5.19 crore (previous year: 6.50 crore); (b) on intangible assets being expenditure on new product development of 48.19 crore (previous year: 56.93 crore) [Note R(5) (b)]; and (c) on other intangible assets of 0.55 crore (previous year: 0.69 crore). Q(5) (a) Provision for current tax includes (i) (ii) 6.09 crore (previous year: Nil) in respect of income tax payable outside India. 13.77 crore (previous year: Nil) in respect of income tax for earlier years. 265 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) (b) Tax effect of 0.13 crore (previous year: 9.29 crore) on account of debenture/share/foreign currency convertible bond 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 the 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 the end of iv) the financial year Retention amount by customers for contracts in progress as at the end of the financial year * includes provision for foreseeable loss: 108.82 crore (previous year: 117.64 crore) crore 2015-16 52022.74 2014-15 49480.38 202884.53 * 180512.61 * 9888.46 8338.91 6459.87 5761.50 (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)] 2015-16 843.64 2228.77 15.73 304.83 10.21 crore 2014-15 946.94 1464.96 31.40 201.03 48.68 (c) As part of the periodic review of estimates used in determining the cost of completion of projects, the Company revised certain estimates used in civil construction jobs under execution as on March 31, 2016. As a result, the revenue and profit before tax for the year increased by 395.73 crore. Q(7) Disclosures pursuant to Accounting Standard (AS) 13 “Accounting for Investments” 1. The Company has given, inter alia, the following undertakings in respect of its investments: a. Jointly with L&T Infrastructure Development Projects Limited (a subsidiary of the Company), to the term lenders of its subsidiary companies L&T Transportation Infrastructure Limited (LTTIL): i. ii. not to reduce their joint shareholding in LTTIL below 51% until the 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 . b. 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. c. 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 alongwith L&T Infrastructure Development Projects Limited: (cid:122) (cid:122) 100% stake during the construction period; 51% stake for 5 years from the date of commercial operation or end of construction of the project, whichever is later; and (cid:122) 51% stake during operational period. ii. not to divest the stake in L&T Infrastructure Development Projects Limited until the aforesaid undertakings are valid. d. 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. 266 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) e. f. g. To National Highway Authority of India, that L&T Infrastructure Development Projects Limited will remain as associate of the Company for the entire duration of the Concession Agreement with respect to the six laning of Pimpalgaon-Nasik- Gone section of NH 3 project. 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. h. To the Security Trustee of: (i) (ii) (iii) (iv) 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 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; 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; 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; (v) 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. i. To the Government of Telangana (erstwhile Government of Andhra Pradesh) with respect to shareholding in L&T Metro Rail (Hyderabad) Limited, to hold and maintain along with L&T Infrastructure Development Projects Limited – (i) 51% stake till the second anniversary of the commercial operation date (COD) of the project; (ii) 33% stake till the third anniversary of the COD of the project and (iii) 26% stake or such lower proportion as may be permitted by the Government of Telangana (erstwhile Government of Andhra Pradesh), till the remaining concession period. j. k. l. To hold certain minimum stake in its subsidiary companies namely, L&T-MHPS Boilers Private Limited and L&T-MHPS Turbine Generators Private Limited. These undertakings have been given to the customers/potential customers of the Company and customers/potential customers of L&T-MHPS Boilers Private Limited. The undertakings will remain valid till the end of defect liability period or till such period as prescribed in the related bid documents/contracts. To City and Industrial Development Corporation of Maharashtra Limited (CIDCO) that it shall continue to hold not less than 51% stake in L&T Seawoods Limited (LTSL) until CIDCO executes the lease deed for land in favour of L&T seawoods Limited. To the debenture trustee of L&T Shipbuilding Limited, to maintain atleast 26% stake in L&T Shipbuilding Limited, until any amount is outstanding towards the debentures. m. 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. n. To the Joint Venture partner in L&T Howden Private Limited, to not sell, transfer or dispose off any stake in L&T Howden Private Limited till December 17, 2017 (90 months from date of incorporation). 267 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(8). Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benefits”. i. Defined contribution plans: [Note R(6)(b)(i)] Amount of 102.98 crore (previous year: 82.64 crore) 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 asset 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 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 crore 415.70 44.27 459.97 385.85 – – 74.12 74.12 – 74.12 74.12 – 422.41 34.01 456.42 364.71 (2.08) – 93.79 93.79 – 93.79 93.79 – – 155.57 155.57 – – 0.82 154.75 154.75 – 154.75 11.30 143.45 – 148.90 148.90 – – 0.97 147.93 147.93 – 147.93 10.04 137.89 – 283.25 283.25 – – 39.65 243.60 243.60 – 243.60 16.82 226.78 – 1986.97 215.64 9.87 215.64 1996.84 – 1990.14 – – – 0.30 6.70 215.34 1856.97 27.78 1884.75 1857.15 – – 27.60 27.61 – 27.61 215.34 22.29 – – 215.34 22.29 13.26 22.29 # 22.75 # – 202.08 4.86 b) The amounts recognised in Statement of Profit and Loss are as follows: crore Gratuity plan Company pension plan Post-retirement medical benefit plan Trust-managed provident fund plan 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 83.66 134.54 (134.54) (23.97) – – 72.66 154.87 – (154.87) (28.46) – – 35.04 30.52 (21.98) 25.26 – 2.08 48.63 32.55 (25.15) (5.15) – – 6.29 9.49 – 39.74 0.14 – 10.00 12.05 – (7.88) 0.14 – 4.45 16.44 – 12.46 10.23 – 28.67 0.11 – 1.45 16.40 – 50.88 49.04 1.61 – 70.92 57.30 13.41 – 14.31 1.21 13.09 – 55.66 17.46 38.20 – 43.58 26.13 17.45 – 46.63 0.36 45.12 28.46 72.66 72.66 – 1.28 60.97 83.66 (22.69) 0.11 0.02 0.01 – – – – – 0.12 50.88 31.95 0.19 70.92 53.69 – 14.31 – – 55.66 – – 43.58 – 1.15 46.63 – – 72.66 165.42 – 60.97 140.60 1 2 3 4 5 6 7 I II III IV Particulars Current service cost Interest cost Expected (return) on plan assets Actuarial losses/(gains) Past service cost Amount not recognised as an asset Actuarial gain/(loss) not recognised in books Total (1 to 7) Amount included in “employee benefits expense” Amount included as part of “interest” Amount capitalised on new product development Amount recovered from S&A Companies Total (I+II+III+IV) Actual return on plan assets 268 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: crore Particulars Gratuity plan Post-retirement medical benefit plan Company pension plan Trust-managed provident fund plan As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 Opening balance of the present value of defined benefit obligation Add: Current service cost Add: Interest cost Add: Contribution by plan participants Employer i) ii) Employee iii) 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 456.42 48.63 32.55 – – – 1.65 (79.28) – 376.15 35.04 30.52 – – (12.20) 56.97 (30.06) – 148.90 10.00 12.05 103.57 6.29 9.49 – – – (7.88) (7.50) – – – (3.75) 39.74 (6.44) – 215.64 4.45 16.44 – – – 12.47 (15.33) 49.58 184.25 1884.75 72.66 154.87 1.45 16.40 1791.21 83.66 134.54 – – – 28.66 (15.12) – – 174.70 5.61 (17.91) (277.84) – – 174.50 – (17.91) (281.25) – 459.97 456.42 155.57 148.90 283.25 215.64 1996.84 1884.75 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 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 1784.96 134.54 6.06 63.39 – 149.45 (281.25) 1857.15 364.71 25.15 6.80 68.47 – – (79.28 ) 385.85 1857.15 154.87 10.55 66.22 5.61 173.58 (277.84) 1990.14 323.91 21.98 31.71 29.37 (12.20) – (30.06) 364.71 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 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(8)(ii)(f)(7)] infra. The Company expects to fund 32.31 crore (previous year: 60.06 crore) towards its gratuity plan and 79.93 crore (previous year: 67.07 crore) towards its trust-managed provident fund plan during the year 2015-16. # ~ Employer’s contribution due towards provident fund Amount transferred pursuant to transfer of Integrated Engineering Services Business employees to wholly owned subsidiary L&T Technology Services Limited 269 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 31-3-2016 23% 18% 34% 2% As at 31-3-2015 31% 11% 30% 2% Trust-managed provident fund plan As at 31-3-2016 25% 16% 9% – As at 31-3-2015 24% 15% 8% – – – 14% 9% – 1% 17% 8% 10% – 39% 1% 10% – 42% 1% 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 8 infra) Salary growth rate: a) Gratuity plan b) Company pension plan 5. Attrition rate: As at 31-3-2016 As at 31-3-2015 7.79% 7.79% 7.79% 7.50% 5.00% 5.00% 6.00% 7.83% 7.83% 7.83% 7.50% 5.00% 5.00% 6.00% 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. b) For gratuity plan, the attrition rate varies from 1% to 6% (previous year: 1% to 6%) for various age groups. 6. 7. 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. 8. 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. 9. 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 2015-16 2014-15 2015-16 2014-15 Effect on the aggregate of the service cost and interest cost Effect on defined benefit obligation 4.09 19.61 4.01 18.35 (3.15) (15.54) (3.04) (14.57) crore 270 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) g) The amounts pertaining to defined benefit plans are as follows: Particulars As at 31-3-2016 As at 31-3-2015 As at 31-3-2014 As at 31-3-2013 As at 31-3-2012 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 Less: Amount not recognised as an asset 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) 154.75 (6.14) 459.97 385.85 – (74.12) 0.45 6.80 243.60 11.45 147.93 13.58 102.46 14.10 105.31 1.62 87.01 (6.60) 456.42 364.71 (2.08) (93.79) 22.73 31.29 351.44 323.91 – (27.53) 5.49 (8.72) 364.45 311.80 – (52.65) 26.26 13.01 341.07 291.66 – (49.41) 30.52 (0.45) 215.34 5.45 188.52 (0.22) 198.36 (2.79) 184.03 23.21 Defined benefit obligation Plan assets Surplus/(deficit) 1996.84 1990.14 (6.70) 1884.75 1857.15 (27.60) 1791.21 1784.96 (6.25) 1675.94 1648.23 (27.71) 1544.72 1507.47 (37.25) 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 favorable as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan, which is not material is unfunded and managed within the Company. The unfunded obligation towards gratuity also includes gratuity payable to employees outside India under the applicable local laws. 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 Employees’ 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, the provision of 4.86 crore as on March 31, 2015 based on actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan has been reversed in the current year as the balance in surplus account of the fund is higher than the interest obligation of 9.87 crore as on March 31, 2016. 271 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 Others Elimination Total Result Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation 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) Other information Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Others Total Unallocable corporate assets/liabilities Total assets/liabilities For the year ended 31-3-2016 Inter-segment External For the year ended 31-3-2015 Total External Inter-segment Total crore 40113.41 4452.23 3070.91 3254.08 3871.95 2795.49 – 57558.07 538.55 6.72 231.82 45.18 257.47 32.45 (1112.19) – 41765.78 6449.96 2379.06 2778.54 3919.67 3121.99 – 60415.00 409.50 1.32 377.43 156.32 308.69 32.82 (1286.08) – 42175.28 6451.29 2756.49 2934.86 4228.36 3154.80 (1286.08) 60415.00 5036.61 231.42 42.40 (74.60) 501.01 555.80 6292.64 (11.02) 6281.62 1343.21 7624.83 (1449.04) 513.32 6689.11 (1551.19) 173.54 5311.46 – 5311.46 40651.96 4458.95 3302.73 3299.26 4129.42 2827.94 (1112.19) 57558.07 4443.00 201.49 238.78 336.11 503.87 653.36 6376.61 (3.04) 6373.57 1181.39 7554.96 (1419.65) 565.91 6701.22 (1628.74) (16.30) 5056.18 – 5056.18 crore Segment assets Segment liabilities As at 31-3-2016 40544.47 7267.54 5141.14 4943.50 3015.81 2874.76 63787.22 33282.49 97069.71 As at 31-3-2015 33963.23 6020.23 4927.07 4931.39 3081.41 2795.71 55719.04 31184.72 86903.76 As at 31-3-2016 24099.06 6992.16 1972.31 3294.36 1314.13 1730.31 39402.34 16949.04 56351.38 As at 31-3-2015 21010.27 5796.29 1723.93 2510.35 1385.19 1338.97 33765.00 16054.18 49819.18 272 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Other Information Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Others b) Secondary segments (geographical segments): Capital expenditure For the year ended 31-3-2016 471.45 36.80 10.45 55.85 142.95 12.38 For the year ended 31-3-2015 419.25 35.13 64.39 80.30 222.35 31.92 Depreciation, Amortisation, Impairment & Obsolescence included in segment expense For the year ended 31-3-2016 431.94 58.31 88.91 110.84 123.10 62.24 For the year ended 31-3-2015 415.06 53.88 92.90 124.33 136.33 61.17 crore Non-cash expenses other than depreciation included in segment expense For the year ended 31-3-2016 19.22 2.65 3.19 2.64 4.09 1.74 For the year ended 31-3-2015 21.52 3.95 4.05 3.18 4.41 2.13 crore Particulars External revenue by location of customers Carrying amount of segment assets by location Domestic Overseas Total For the year ended 31-3-2016 49691.58 For the year ended 31-3-2015 48300.19 For the year ended 31-3-2016 10723.42 For the year ended 31-3-2015 9257.88 For the year ended 31-3-2016 60415.00 For the year ended 31-3-2015 57558.07 of assets 53549.47 47861.60 10237.75 7857.44 63787.22 55719.04 Cost incurred on acquisition of tangible and intangible fixed assets 641.58 776.98 88.30 76.36 729.88 853.34 c) Segment reporting: segment identification, reportable segments and definition of each reportable segment: i) Primary/secondary segment reporting format: [a] 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. [b] 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. 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, water & effluent treatment and smart world & communication 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. 273 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) • • 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. • Others segment includes realty, shipbuilding, marketing and servicing of construction & mining machinery and parts thereof, manufacture and sale of rubber processing machinery & castings (up to the date of sale). 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. L&T Cutting Tools Limited 1 Bhilai Power Supply Company Limited 2 L&T-Sargent & Lundy Limited 3 Spectrum Infotech Private Limited 4 L&T-Valdel Engineering Limited @ 5 L&T Shipbuilding Limited 6 7 L&T Electricals and Automation Limited 8 Hi-Tech Rock Products & Aggregates Limited 9 10 11 12 13 14 15 16 Wholly owned subsidiary Subsidiary* Subsidiary* Wholly owned subsidiary Wholly owned subsidiary of L&T Hydrocarbon Engineering Limited Subsidiary* Wholly owned subsidiary Wholly owned subsidiary Wholly owned subsidiary Subsidiary of L&T Hydrocarbon Engineering Limited Subsidiary* Subsidiary* Subsidiary* L&T Seawoods Limited L&T-Gulf Private Limited @ L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited Raykal Aluminium Company Private Limited L&T Natural Resources Limited ^ [Note Q(27)(a)] Wholly owned subsidiary of L&T Capital Company Limited L&T Hydrocarbon Engineering Limited L&T Special Steels and Heavy Forgings Private Wholly owned subsidiary Subsidiary* Transaction entered during the year (Yes/No) Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Limited 17 18 19 20 21 22 23 PNG Tollway Limited### [Note Q(27)(c)] L&T Rajkot-Vadinar Tollway Limited Kesun Iron & Steel Company Private Limited L&T Howden Private Limited L&T Solar Limited ^ [Note Q(27)(a)] L&T Sapura Shipping Private Limited @ L&T Sapura Offshore Private Limited @ [Note Q(27)(b)] L&T Powergen Limited ^ [Note Q(27)(a)] EWAC Alloys Limited L&T Kobelco Machinery Private Limited L&T Realty Limited L&T Asian Realty Project LLP L&T Parel Project LLP 24 25 26 27 28 29 30 Chennai Vision Developers Private Limited 31 32 33 L&T Thales Technology Services Private Limited L&T South City Projects Limited L&T Vision Ventures Limited Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary* Subsidiary* Wholly owned subsidiary of L&T Capital Company Limited Subsidiary of L&T Hydrocarbon Engineering Limited Subsidiary of L&T Hydrocarbon Engineering Limited Wholly owned subsidiary of L&T Capital Company Limited Wholly owned subsidiary Subsidiary* Wholly owned subsidiary Subsidiary of L&T Realty Limited ** Subsidiary of L&T Realty Limited ** Wholly owned subsidiary of L&T Realty Limited Subsidiary of L&T Technology Services Limited Subsidiary of L&T Realty Limited # Subsidiary of L&T Realty Limited # Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes 274 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Name of the related party Relationship Sr. no. L&T Infrastructure Engineering Limited 34 35 CSJ Infrastructure Private Limited $ 36 Information Systems Resource Centre Private Wholly owned subsidiary Wholly owned subsidiary of L&T Realty Limited* Wholly owned subsidiary of Larsen & Toubro Infotech Limited* 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 @@@ 37 38 39 40 41 42 43 Hyderabad International Trade Expositions Limited @@@ Subsidiary* Subsidiary* Wholly owned subsidiary Wholly owned subsidiary Subsidiary Subsidiary of L&T Infocity Limited # Subsidiary of L&T Infocity Limited # Larsen & Toubro Infotech Limited 44 45 GDA Technologies Limited 46 47 48 49 50 51 52 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 53 L&T Infra Investment Partners Trustee Private Limited L&T Vrindavan Properties Limited L&T Access Distribution 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 54 55 56 57 58 59 60 61 62 Nabha Power Limited 63 64 L&T Infrastructure Development Projects Limited L&T Panipat Elevated Corridor Limited 65 L&T Krishnagiri Thopur Toll Road Limited 66 L&T Western Andhra Tollways Limited 67 L&T Vadodara Bharuch Tollway Limited 68 69 L&T Transportation Infrastructure Limited L&T Western India Tollbridge Limited 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 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 No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 275 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Name of the related party Relationship Sr. no. 70 L&T Interstate Road Corridor Limited 71 L&T Port Kachchigarh Limited 72 73 74 75 76 77 78 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 Chennai-Tada Tollway Limited L&T BPP Tollway Limited 79 L&T Deccan Tollways Limited 80 81 82 83 84 85 86 87 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. L&T Technology Services LLC 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 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 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 L&T Technology Services Limited Subsidiary of L&T Infrastructure Development Projects Limited 88 PT Larsen & Toubro Hydrocarbon Engineering Subsidiary* Indonesia 89 L&T IDPL Trustee Manager Pte Ltd. 90 Kana Controls General Trading & Contracting Company W.L.L. Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Subsidiary of L&T Electrical & Automation FZE ## 91 L&T Information Technology Services (Shanghai) Wholly owned subsidiary of Larsen & Toubro Infotech Limited 92 93 94 95 96 97 98 99 100 Co. Ltd. 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 LLC Wholly owned subsidiary of L&T Realty Limited Wholly owned subsidiary of L&T Global Holdings Limited Subsidiary of Larsen & Toubro International FZE # Subsidiary of Larsen & Toubro International FZE # Subsidiary of Larsen & Toubro International FZE # Subsidiary ## Subsidiary of Larsen & Toubro International FZE ## Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE # 101 Larsen & Toubro Kuwait Construction General Subsidiary of Larsen & Toubro International FZE ## Contracting Company, W.L.L. 102 Larsen & Toubro (Qingdao) Rubber Machinery Wholly owned subsidiary of Larsen & Toubro International FZE Company Limited $$ 103 Larsen & Toubro Readymix and Asphalt Concrete Subsidiary of Larsen & Toubro International FZE ## Industries LLC 104 105 Larsen & Toubro Saudi Arabia LLC Larsen & Toubro ATCO Saudia LLC Subsidiary of Larsen & Toubro International FZE ## Subsidiary of Larsen & Toubro International FZE Transaction entered during the year (Yes/No) Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes No No No Yes No No No No No No Yes Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Yes 276 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Name of the related party Relationship Sr. no. Tamco Switchgear (Malaysia) SDN. BHD 106 Tamco Electrical Industries Australia Pty Ltd. 107 PT Tamco Indonesia 108 Larsen & Toubro Heavy Engineering LLC 109 L&T Electrical & Automation FZE 110 Larsen & Toubro Consultoria E Projeto Ltda $$$ 111 Larsen & Toubro T&D SA Proprietary Limited 112 Servowatch System Limited 113 L&T Geostructure LLP 114 115 Larsen & Toubro Arabia LLC 116 Henikwon Corporation SDN. BHD L&T Housing Finance Limited 117 L&T Valves Limited 118 L&T Technology Services Limited 119 120 Consumer Finance Services Limited 121 122 123 124 Mudit Cement Private Limited 125 Family Credit Limited L&T Capital Markets Limited L&T Infra Debt Fund Limited Larsen & Toubro Infotech South Africa (PTY) Limited Thalest Limited L&T Hydrocarbon International LLC L&T Construction Equipment Limited Kudgi Transmission Limited 126 127 128 129 130 L&T Sambhalpur Rourkela Tollway Limited Wholly owned subsidiary of Larsen & Toubro International FZE Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE # Subsidiary of Larsen & Toubro International FZE # Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE # Wholly owned subsidiary of Thalest Limited Subsidiary*** Subsidiary* Wholly owned subsidiary of Tamco Switchgear (Malaysia) SDN. BHD Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary Wholly owned subsidiary Wholly owned subsidiary of L&T Housing Finance 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 Vrindavan Properties Limited Subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary* Wholly owned 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 Larsen & Toubro Infotech Limited Wholly owned subsidiary Wholly owned subsidiary Subsidiary* Wholly owned subsidiary of Larsen & Toubro Infotech Limited No Yes Yes Yes No L&T Infotech Austria GmbH LLC L&T Global Holdings Limited LTH Milcom Private Limited L&T Information Technology Spain SL 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 controls the composition of board of directors or governing body as the case may be The stake has been sold to wholly owned subsidiary The Company has sold its stake on March 31, 2016 131 132 133 Marine Infrastructure Developer Private Limited 134 135 * ** *** @ @@ @@@ The Company has sold its stake on March 31, 2016 in its subsidiary and consequently the stake in sub-subsidiary also does not exist # ## ### ^ ^^ $ $$ $$$ 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 sold part stake to a subsidiary Companies merged with L&T Capital Company Limited with effect from April 1, 2015 Subsidiary is merged with Larsen & Toubro Infotech Limited with retrospective effect from October 17, 2014 The company has sold its stake on November 16, 2015 The company is dissolved w.e.f. June 9, 2015 The Company is dissolved w.e.f. November 6, 2015 Transaction entered during the year (Yes/No) Yes No Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No Yes Yes Yes 277 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: 1 3 5 L&T-Chiyoda Limited @ Feedback Infra Private Limited JSK Electricals Private Limited @@@ Joint ventures (other than associates): Metro Tunneling Group Desbuild-L&T Joint Venture L&T-AM Tapovan Joint Venture L&T ASTCC JV-Doha 1 3 5 7 9 2 4 2 4 6 8 Salzer Electronics Limited @@ Magtorq Private Limited L&T Hochtief Seabird Joint Venture Metro Tunneling Chennai-L&T-Shanghai Urban Construction (Group) Corporation Joint Venture HCC-L&T Purulia Joint Venture L&T-Shanghai Urban Construction (Group) Corporation L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi Joint Venture 10 L&T-Eastern Joint Venture $ 11 Larsen & Toubro Limited-Shapoorji Pallonji & Co. 12 Metro Tunneling Delhi-L&T Shanghai Urban Construction Limited Joint Venture (Group) Corporation Joint Venture 13 15 International Metro Civil Contractors Joint Venture Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber 14 16 Civil Works Joint Venture L&T-Delma Mafraq Joint Venture Engineering 17 Larsen & Toubro Limited and NCC Limited Joint Venture @ The Company has sold its stake on October 19, 2015 to a wholly owned subsidiary @@ The Company has sold its stake in July and August, 2015 @@@ The Company has sold its stake on March 29, 2016 $ The Joint Venture is in the process of dissolution 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. S. N. Roy (Whole-time Director) 7 Mr. D. K. Sen (Whole-time Director) # 8 Mr. M. V. Satish (Whole-time Director) ## * Retired on September 30, 2015 ** Retired on August 26, 2015 # Appointed w.e.f. October 1, 2015 ## Appointed w.e.f. January 29, 2016 278 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) 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: 2760.99 2340.85 2015-16 2014-15 crore L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited Associates & joint ventures, including: Salzer Electronics Limited JSK Electricals Private Limited 536.02 1256.68 74.54 153.46 37.33 27.99 Total 2835.53 2494.31 2 Sale of goods/contract revenue & services Subsidiaries, including: 4771.41 5623.44 L&T Metro Rail (Hyderabad) Limited Nabha Power Limited Larsen and Toubro Saudi Arabia LLC L&T Deccan Tollways Limited L&T Infrastructure Development Projects Limited L&T Seawoods Limited 1395.17 – 628.73 533.50 653.99 477.15 Associates & joint ventures, including: 93.18 86.91 Civil Works Joint Venture L&T- Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Joint Venture Larsen & Toubro Limited and NCC Limited Joint Venture 4.51 34.00 33.41 10.50 10.64 Total 3 Purchase/lease of fixed assets Subsidiaries, including: L&T Construction Equipment Limited Tamco Switchgear (Malaysia) SDN. BHD L&T Technology Services Limited Henikwon Corporation SDN. BHD Larsen and Toubro Infotech Limited Associates & joint ventures: L&T-Chiyoda Limited Total 4864.59 5710.35 15.49 11.03 – – – – 12.49 – – 15.49 0.11 11.14 484.72 1105.64 123.81 24.04 2080.94 661.06 618.03 – – – 50.12 19.09 9.58 – – 1.37 3.29 2.15 1.55 – 0.11 279 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 2015-16 2014-15 crore 4 Sale of fixed assets Subsidiaries, including: Larsen and Toubro Infotech Limited L&T-MHPS Turbine Generators Private Limited Larsen and Toubro (Oman) LLC Key management personnel K. Venkataramanan * M. V. Kotwal ** Total 5 Sale of Receivables Subsidiary: L&T Finance Limited Total 6 Subscription to equity and preference shares (including application money paid) Subsidiaries, including: L&T Seawoods Limited L&T Power Development Limited L&T Technology Services Limited L&T Shipbuilding Limited L&T Realty Limited L&T Uttaranchal Hydropower Limited 2.01 15.78 – 0.26 1.07 8.85 0.44 44.83 – 15.78 276.16 276.16 9.29 11.30 44.83 44.83 3461.13 2428.61 – 383.40 – 1331.86 648.30 604.75 Total 3461.13 2428.61 7 Investment in Integrated joint ventures [Note (R)(21)] Increase in investment, including: 442.60 164.43 Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC 27 Delhi Civil Works Joint Venture L&T-Delma Mafraq Joint Venture – 53.84 210.67 144.76 Total 442.60 164.43 10.34 – – – – 276.16 1529.55 – 547.50 – – – 37.48 52.60 57.12 – 280 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) 2015-16 2014-15 crore Nature of transaction/relationship/major parties Sr. no. Amount Amounts for major parties Amount Amounts for major parties Decrease in investment, including: 44.21 31.30 Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 21.72 – 19.43 12.89 17.18 – Total 8 Purchase of investments from Subsidiary, including: 44.21 31.30 4234.01 4280.66 L&T Capital Company Limited 4233.64 4280.66 Total 9 Sale of investments to Subsidiaries, including: L&T Capital Company Limited L&T Global Holdings Limited 4234.01 4280.66 5542.28 4277.56 4232.03 1147.40 4277.56 – Total 5542.28 4277.56 10 Charges paid for miscellaneous services Subsidiaries, including: 152.49 89.94 Larsen & Toubro Infotech Limited L&T Aviation Services Private Limited L&T Technology Services Limited Associates & joint ventures, including: 2.48 Feedback Infra Private Limited L&T-Chiyoda Limited Civil Works Joint Venture 84.93 23.91 16.49 – 0.59 1.89 1.04 Total 154.97 90.98 11 Rent paid, including lease rentals under leasing/hire purchase arrangements Subsidiaries, including: L&T Electrical & Automation FZE L&T Infocity Limited PT Tamco Indonesia Key management personnel K. Venkataramanan * & Mrs. Jyothi Venkataramanan Total 1.68 1.82 0.86 0.37 0.23 0.01 0.01 1.69 0.01 1.83 33.71 27.37 – 0.77 0.23 – 0.98 0.35 0.30 0.01 281 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 2015-16 2014-15 crore 12 (a) Charges incurred for deputation of employees from related parties Subsidiaries, including: L&T Hydrocarbon Engineering Limited L&T Electricals and Automation Saudi Arabia Company LLC L&T Electrical and Automation FZE Larsen and Toubro Infotech Limited Larsen and Toubro (Oman) LLC PT Tamco Indonesia Total 12 (b) Charges recovered for deputation of employees to related parties Subsidiary, including: L&T Parel Project LLP Associates & joint ventures, including: L&T-Chiyoda Limited Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture Civil Works Joint Venture L&T-Delma Mafraq Joint Venture Total 13 Dividend received Subsidiaries, including: Larsen & Toubro Infotech Limited L&T Technology Services Limited L&T Finance Holdings Limited 13.70 11.19 2.18 2.18 4.43 2.59 – – 25.35 – 32.30 132.21 69.20 526.48 302.00 – 13.70 79.49 252.91 332.40 1007.91 11.19 77.99 21.12 99.11 850.70 Associates & joint ventures, including: 0.38 0.58 Salzer Electronics Limited Magtorq Private Limited 0.38 – Total 1008.29 851.28 14 Commission received, including those under agency arrangements Subsidiaries, including: L&T Kobelco Machinery Private Limited L&T Construction Equipment Limited Total 7.49 7.49 2.64 4.84 3.73 3.73 1.84 1.27 3.48 – 1.28 1.20 22.15 21.06 – – – 480.52 219.93 96.68 0.40 0.18 2.24 1.49 282 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 15 Rent received, overheads recovered and miscellaneous income Subsidiaries, including: 547.14 510.18 2015-16 2014-15 crore Larsen & Toubro Infotech Limited L&T Technology Services Limited L&T Hydrocarbon Engineering Limited Associates & joint ventures, including: Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture Civil Works Joint Venture L&T-Delma Mafraq Joint Venture L&T-Chiyoda Limited Total 16 Guarantee charges recovered from Subsidiaries, including: Nabha Power Limited Larsen and Toubro Saudi Arabia LLC L&T Hydrocarbon Engineering Limited Total 17 Interest received from Subsidiaries, including: L&T Hydrocarbon Engineering Limited L&T Special Steels and Heavy Forgings Private Limited L&T Realty Limited L&T Shipbuilding Limited Nabha Power Limited Associates & joint ventures: The Dhamra Port Company Limited Total 18 Interest paid to Subsidiaries, including: L&T Hydrocarbon Engineering Limited L&T Construction Equipment Limited L&T Infrastructure Development Projects Limited L&T Realty Limited Nabha Power Limited L&T Cutting Tools Limited 77.23 69.89 96.83 6.66 139.45 553.81 18.18 5.60 – – 1.06 9.90 – 6.02 649.63 9.12 18.18 9.12 270.46 286.42 – 270.46 17.76 – 52.58 69.94 90.62 31.50 – 6.31 1.98 3.89 – 4.70 – 9.32 295.74 14.67 Total 17.76 14.67 84.71 68.64 105.86 28.57 72.63 32.02 – 6.36 1.21 1.06 76.00 33.57 104.48 – – 9.32 – 4.11 2.35 1.54 4.76 1.72 283 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 2015-16 2014-15 crore 19 Amount provided for bad debts Subsidiary: Larsen and Toubro (Qingdao) Rubber Machinery Company Limited Total 20 Transfer of business to Subsidiary: L&T Technology Services Limited Total – – – – 21 Payment of salaries/perquisites (other than commission) 36.19 Key management personnel A. M. Naik K. Venkataramanan *^$ M. V. Kotwal**^^ S. N. Subrahmanyan R. Shankar Raman S. N. Roy D. K. Sen # M. V. Satish ## Total 22 Commission to directors @ Key management personnel A. M. Naik K. Venkataramanan * M. V. Kotwal ** S. N. Subrahmanyan R. Shankar Raman S. N. Roy D. K. Sen # M. V. Satish ## Total 23 Capital reduction by Subsidiary: L&T Capital Company Limited Total 36.19 59.93 59.93 21.95 21.95 – – 4.52 15.19 9.60 2.02 1.70 2.31 0.61 0.24 22.81 4.28 2.31 12.57 8.76 5.59 2.68 0.93 21.95 3.09 3.09 549.49 549.49 16.98 16.98 64.27 64.27 – – 3.09 549.49 4.22 4.20 3.01 1.74 1.59 2.22 – – 23.10 9.38 6.24 11.09 8.78 5.68 – – – * Retired on September 30, 2015 # Appointed w. e. f. October 1, 2015 ^ Includes leave encashment payment on retirement of 13.53 crore $ Out of the above, the company has recovered Nil (previous year: 0.75 crore) from L&T Hydrocarbon Engineering Limited which has ** Retired on August 26, 2015 ## Appointed w. e. f. January 29, 2016 ^^ Includes leave encashment payment on retirement of 7.89 crore been included in Note Q(10)(iii)(15) supra 284 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) @ Commission to director comprises: Sr. Particulars no. 1 Commission 2 Contribution to provident fund 3 Contribution to superannuation fund on commission Total 2015-16 47.81 5.04 7.08 59.93 “Major parties” denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. iv. Amount due to/from related parties: crore 2014-15 50.61 6.07 7.59 64.27 crore Nature of transaction/relationship/major parties Sr. no. Amount Amounts for major parties Amount Amounts for major parties As at 31-3-2016 As at 31-3-2015 1 Accounts receivable Subsidiaries, including: Nabha Power Limited L&T Metro Rail (Hyderabad) Limited Larsen and Toubro Saudi Arabia LLC 1462.54 1443.50 – 297.98 202.25 Associates & joint ventures, including: 128.95 – Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Civil Works Joint Venture 36.82 18.91 57.64 Total 1591.49 1443.50 2 Accounts payable (including acceptance & interest accrued) Subsidiaries, including: 2256.57 1782.16 L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited 1042.25 555.34 Associates & joint ventures, including: 42.16 104.19 Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Larsen & Toubro Limited and NCC Limited Joint Venture Salzer Electronics Limited L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Total – – 27.73 – 5.56 2298.73 1886.35 256.39 – 253.41 – – – 830.70 547.20 31.77 18.78 25.20 18.54 – 285 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 As at 31-3-2016 As at 31-3-2015 crore 3 Investment in debt securities Subsidiary: L&T Finance Limited Total 4 Loans & advances recoverable (including interest accrued) Subsidiaries, including: L&T-MHPS Boilers Private Limited L&T Special Steels and Heavy Forgings Private Limited L&T Shipbuilding Limited L&T Realty Limited Nabha Power Limited Associates & joint ventures, including: 62.80 L&T-AM Tapovan Joint Venture Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi L&T-Delma Mafraq Joint Venture Key management personnel K. Venkataramanan * & Mrs. Jyothi Venkataramanan Total 5 Advances against equity contribution Subsidiaries, including: L&T Shipbuilding Limited L&T Realty Limited L&T Power Development Limited L&T Uttaranchal Hydropower Limited Total 6 Unsecured loans (including lease finance) Subsidiaries, including: L&T Construction Equipment Limited L&T Cutting Tools Limited Total 286 22.75 22.75 22.75 22.95 22.95 22.95 6339.66 3021.29 – 877.47 2275.23 – 918.15 11.87 – – 43.48 84.99 – 0.01 6402.46 5.25 5.25 9.25 9.25 – – – – 5.25 – 9.25 3106.29 1986.84 1986.84 57.25 57.25 304.77 564.02 400.18 710.90 – 12.01 23.39 27.94 14.96 0.01 421.86 648.29 379.40 523.00 45.00 12.25 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) As at 31-3-2016 As at 31-3-2015 crore Nature of transaction/relationship/major parties Sr. no. Amount Amounts for major parties Amount Amounts for major parties 7 Advances received in the capacity of supplier of goods/services classified as “advances from customers” in the Balance Sheet Subsidiaries, including: 266.75 586.12 L&T Metro Rail (Hyderabad) Limited L&T Seawoods Limited L&T Deccan Tollways Limited L&T Infrastructure Development Projects Limited Total 8 Due to Whole-time Directors Key management personnel A. M. Naik K. Venkataramanan * M. V. Kotwal ** S. N. Subrahmanyan R. Shankar Raman S. N. Roy D. K. Sen # M. V. Satish ## 266.75 47.83 129.40 – 36.97 68.84 17.96 3.77 2.04 9.90 6.90 4.40 2.13 0.73 586.12 50.61 223.24 82.95 96.03 122.24 18.19 7.39 4.91 8.73 6.91 4.48 – – Total 47.83 50.61 * Retired on September 30, 2015 ** Retired on August 26, 2015 # Appointed w. e. f. October 1, 2015 ## Appointed w. e. f. January 29, 2016 “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, a subsidiary company. As per the terms of the arrangement, the Company is an agent of L&T Construction Equipment Limited to market construction equipment and hydraulic equipment & parts manufactured by L&T Construction Equipment Limited and to provide after sales product support for construction equipment. 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. 287 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 lessee: Operating leases: i. The Company had taken various commercial premises and plant & equipment under cancellable operating leases. Those lease agreements were normally renewed on expiry. ii. a. The Company had taken certain assets like cars, technology assets, etc. on non-cancellable operating leases, the future minimum lease payments in respect of which were 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 Minimum lease payments As at 31-3-2016 As at 31-3-2015 17.60 19.93 – 12.56 8.99 – 37.53 21.55 b. The lease agreements provided for an option to the Company to renew the lease period at the end of the non- cancellable period. There were no exceptional/restrictive covenants in the lease agreements. iii. Lease rental expense in respect of operating leases: 76.97 crore (previous year: 87.14 crore). 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 Accounting Standard (AS) 20 “Earnings per Share”. Particulars Before extraordinary items After extraordinary items 2015-16 2014-15 2015-16 2014-15 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 Weighted average number of shares outstanding for diluted EPS Diluted EPS ( ) Face value per share ( ) A B A/B A B C 5311.46 5056.18 93,07,61,648 92,83,48,310 93,07,61,648 92,83,48,310 54.46 5056.18 5311.46 54.46 57.07 57.07 5311.46 5056.18 93,07,61,648 92,83,48,310 93,07,61,648 92,83,48,310 5056.18 5311.46 43,62,080 62,19,750 43,62,080 62,19,750 D=B+C 93,51,23,728 93,45,68,060 93,51,23,728 93,45,68,060 54.10 54.10 2 2 56.80 2 56.80 2 A/D Note: Potential equity shares that could arise on conversion of FCCBs are not resulting into dilution of EPS. Hence, they have not been considered in working of diluted EPS in accordance with Accounting Standard (AS) 20 “Earnings per share”. 288 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/ (assets) as at 31-3-2015 Less: Transfer out* Charge/ (credit) to Statement of Profit & Loss Charge/ (credit) to opening reserves $ Charge/ (credit) to hedging reserve** Deferred tax liabilities/ (assets) as at 31-3-2016 crore Deferred tax liabilities: Difference between book and tax depreciation 607.31 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 Total Deferred tax (assets): Provision for doubtful debts and advances debited to the Statement of Profit and Loss Loss on derivative transactions to be claimed for tax purposes in the year of transfer to the Statement of Profit and Loss Unpaid statutory liabilities/provision for compensated absences debited to the Statement of Profit and Loss Other items giving rise to timing differences Total Net deferred tax liability/(assets) Previous year 4.71 100.48 233.54 946.04 (236.39) (109.63) (173.52) (63.51) (583.05) 362.99 409.92 – – – – – – – – – – – (48.88) (17.89) (2.13) – 587.29 – 13.17 (61.18) (65.90) (108.72) – (23.82) 24.90 (107.64) (173.54) 16.30 – – – (4.19) 0.52 – – 113.65 172.36 873.82 (2.13) (4.19) – – – – – (2.13) (29.33) – (345.11) 20.23 (89.40) – – 20.23 16.04 (82.78) (197.34) (38.61) (670.46) 203.36 362.99 * Net deferred tax assets of 48.88 crore was transferred pursuant to transfer of business to wholly owned subsidiaries in previous year. ** The amount of (167.95 crore) [previous year: (198.25 crore)] represents net gains/(losses) on effective hedges recognised in hedge reserve, applying the principles of hedge accounting set out in the Accounting Standard (AS) 30 “Financial Instruments: Recognition and Measurement”. The amount is after considering the net deferred tax liability of 16.04 crore (previous year net deferred tax asset: 82.78 crore). $ Reversal of deferred tax on depreciation charged against opening reserves as on April 1, 2015, pursuant to Schedule II of Companies Act, 2013, 2.13 crore [previous year: (29.33 crore)]. Q(14) 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 Name of Joint Venture Description of interest Proportion of ownership interest % Country of residence L&T-Hochtief Seabird Joint Venture Jointly Controlled Entity (Construction of breakwater, Karwar) International Metro Civil Contractors Joint Venture Jointly Controlled Entity (Construction of Delhi Metro Corridor-Phase I Tunnel Project) HCC-L&T Purulia Joint Venture Jointly Controlled Entity (Construction of Pumped Storage Project) 90 26 43 India India India 289 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Sr. no. Name of Joint Venture Description of interest Proportion of ownership interest % Country of residence 4 5 6 7 8 9 Desbuild-L&T Joint Venture Metro Tunneling Group L&T-AM Tapovan Joint Venture Jointly Controlled Entity (Renovation of US Consulate, Chennai) Jointly Controlled Entity (Construction of Delhi Metro Corridor-Phase II Tunnel Project) Jointly Controlled Entity (Construction of Head Race Tunnel for Tapovan Vishnugad Hydro Electric project in Uttaranchal state) L&T-Shanghai Urban Construction (Group) Corporation Joint Venture L&T-Eastern Joint Venture Metro Tunneling Chennai-L&T- Shanghai Urban Construction (Group) Corporation Joint Venture (CMRL) 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) 10 Metro Tunneling Delhi-L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Jointly Controlled Entity (Construction of Delhi Metro Corridor- Tunnel Project-Phase-CC5) 11 12 Larsen &Toubro-Shapoorji Pallonji & Co. Limited Joint Venture Jointly Controlled Entity (Design & Build work for Construction of TCS SEZ at Kolkata, West Bengal) L&T-Shanghai Urban Construction (Group) Corporation Joint venture- CC27 Delhi Jointly Controlled Entity (Design and Construction of Tunnel for Delhi MRTS Project of Phase-III) 13 Civil Works Joint Venture 14 Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture 15 L&T Delma Mafraq Joint Venture 16 17 18 Larsen & Toubro Limited-Scomi Engineering BHD Consortium- Residual Joint Works-Joint Venture Larsen & Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture Larsen & Toubro Limited and NCC Limited Joint Venture 19 L&T-AL-Sraiya LRDP 6 Joint Venture Jointly Controlled Entity (Contract for Detail Design, Construction and Commissioning of Package 2 of The Riyadh Metro Project) Jointly Controlled Entity (Contract for Design & Build Package 3, Gold Line Underground, a part of the construction of the Qatar integrated Railway Project) Jointly Controlled Entity (Improvement of Mafraq to AL Ghwaifat Border Post Highway Section No.4A) Jointly Controlled Entity (Implementation of residual joint works for monorail system in Mumbai) Jointly Controlled Entity (Operation and Maintenance of monorail system) Jointly Controlled Entity (Supply and construction of 2 parallel 2100 mm diameter steel gravity mains conduit pipes from Palra to Bhureka) Execution of the Roads and Infrastructure in Doha Industrial Area 49 26 65 51 65 75 @ 50 @ 29 22 60 60 50 55 75 India India India India UAE India India India India Saudi Arabia Qatar UAE India India India Qatar 290 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Sr. no. 20 Name of Joint Venture Description of interest PESB and Larsen & Toubro Joint Venture Execution of 500 KV Transmission Line Tender in Malaysia Proportion of ownership interest % Country of residence 82.30 Malaysia 21 Daewoo and L&T UJV 22 L&T Sojitz Consortium 23 L&T-KBL (UJV) Hyderabad 24 Patel-L&T Consortium 25 L&T-SVEC Joint Venture 26 L&T-KBL-MAYTAS UJV 27 28 Larsen & Toubro Limited & Bharat Rail Automation Pvt Limited Joint Venture (package II) Larsen & Toubro Limited & Bharat Rail Automation Pvt Limited Joint Venture (package III) 29 IIS-L&T Consortium 50 – – – – – – India India India India India India India – India – India EPC for construction of Greenfield six-Lane Extradosed Cable Bridge over Ganga River Design and construction of special bridge across narmada river structure for Dedicated Freight Corridor Corporation 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 (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) Design & Construction of 8 Special Steel Bridges over water main and railways and across creek & rivers including ulhas damanganga, par & tapi rivers, involving bridge structure, approaches in formation in embankments with 1 major bridge, 3 minor bridges and 1 RUB, guide bunds and protection works including testing and commissioning on design-build lumpsum price basis for JNPT Vadodara section of western dedicated freight corridor (Phase-2) 30 L&T and Scomi Engineering BHD Joint Venture Jointly Controlled Operations (Implementation of monorail system in Mumbai) – India 291 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) Sr. no. Name of Integrated Joint Ventures/Jointly Controlled Entities As at March 31, 2016 Assets Liabilities Company’s share For the Year 2015–16 Tax Expenses Net profit (Note K) Income – (–) 0.14 (–) $ 47.75 (47.75) 2.55 (3.82) 7.55 (7.30) 5.49 (5.12) 1.08 (1.12) 0.62 (0.45) – (0.22) 0.17 (1.26) 2.69 (2.69) 38.87 (40.96) {(0.01)} ((0.3)) 13.04 (12.57) 87.69 – (–) 0.30 (0.23) 106.44 (64.67) (216.66) 0.01 (0.01) 0.08 (0.11) 0.03 ((*)) 0.35 (0.29) 0.01 (–) 0.89 (1.26) – ^ (–) Ω – (0.54) 117.51 (221.20) 71.47 (71.47) 9.73 (13.06) 23.04 (22.20) 18.95 (18.39) 2.98 (2.98) 145.61 (148.68) 0.04 (0.04) 18.55 (17.79) 110.91 (109.62) 104.53 (128.51) 67.39 104.28 (71.94) (140.44) 104.57 (141.69) 49.27 (75.16) 20.96 (53.51) 31.85 (82.55) 36.82 (96.94) 209.23 (261.99) 90.13 191.07 (196.73) (383.54) 189.22 (384.73) 694.85 (553.11) 694.85 1005.85 1005.85 (553.11) (–) (–) 2091.26 (1799.47) 321.01 (125.92) 1823.47 (1742.36) 176.25 1568.47 (57.10) 380.15 (125.92) (106.78) 1363.96 (–) 349.92 (106.78) – (–) 0.09 (–) 0.41 (0.36) 0.08 (0.05) – (–) – (–) – ((0.02)) – (–) 0.87 ((0.40)) – (–) – (–) – (–) – (–) – (–) – (–) 1 2 3 4 5 6 7 8 L&T-Hochtief Seabird Joint Venture International Metro Civil Contractors Joint Venture Metro Tunneling Group L&T-Shanghai Urban Construction (Group) Corporation 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 11 Metro Tunneling Chennai -L&T-Shanghai Urban Construction (Group) Corporation Joint Venture-CMRL 10 Metro Tunneling Delhi -L&T Shanghai Urban Construction (Group) Corporation Joint Venture Larsen & Toubro Limited- Shapoorji Pallonji & Co. Ltd Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture-CC27 Delhi Aktor-Larsen & Toubro- Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture Civil Works Joint Venture 13 12 14 15 L&T Delma Mafraq Joint Venture 292 crore Net loss (Note O) 0.01 (0.01) 0.03 (0.11) – (–) – (–) 0.01 (–) 0.72 (–) – # (–) – (0.31) 11.94 (4.14) – (–) – (–) 0.64 (0.76) 0.19 (0.11) – (0.22) – (–) – (0.02) 0.30 (–) – (–) – (–) 0.29 (1.25) – (–) 4.97 (14.39) 1.85 (–) – (1.19) – (–) 204.51 (57.10) 30.23 (–) – (–) – (–) – (–) Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Sr. no. Name of Integrated Joint Ventures/Jointly Controlled Entities 16 17 18 19 20 21 L&T Scomi Monorail Joint Venture-Main L&T Scomi Monorail Joint Venture-O&M Larsen & Toubro Limited & NCC Limited Joint Venture Larsen & Toubro Limited and Al Sraiya Trading & Contracting Company Joint Venture PESB and Larsen & Toubro Joint Venture Daewoo-L&T Joint Venture Total Entities Share of Net Assets in Jointly Controlled entities Company’s share As at March 31, 2016 Assets Liabilities Income For the Year 2015–16 Tax Expenses Net profit (Note K) 3.50 (2.14) 8.76 (7.60) 97.62 (72.10) 7.45 (27.56) 7.80 (7.11) 158.15 (41.35) 6.81 (25.45) 14.83 (21.52) 143.87 (41.35) 165.71 (–) 24.29 (–) 24.34 (–) – (–) – (–) 3354.26 – (–) – (–) 3588.11 (3009.99) (1066.37) – (–) – (–) 3359.07 (1041.87) – (0.54) – (–) – (–) – (–) – (–) – (–) 1.45 (0.53) 3.50 (2.14) 8.76 (7.60) 111.90 (72.10) 177.00 (–) – (–) – (–) 4172.59 (3430.23) 818.33 (420.24) crore Net loss (Note O) – (–) 7.03 (14.41) – (–) 0.64 (1.57) – (–) 14.28 (–) – (–) 0.05 (–) – (–) – (–) 252.64 (59.78) – (–) – (–) 25.05 (35.81) Amounts less than 0.01 Crore: 8416, # Current year: ^ Previous year: * 2634, $ 3352, Ω 8258 8416, @: On scope of respective activities under the contract as mutually agreed between Joint Venture partners Notes: i. Figures in brackets ( ) relate to previous year, figures in (( )) represents negative amounts in previous year, figures in {( )} represents negative amounts in the current year ii. Contingent liabilities, if any, incurred in relation to interest in Joint Ventures as at March 31, 2016 is 4170.76 crore (previous year: 3248.49 crore) and share in contingent liabilities incurred jointly with other ventures as at March 31, 2016 is Nil (previous year: Nil) iii. Share in contingent liabilities of Joint Ventures themselves for which the company is contingently liable as at March 31, 2016 is 58.18 crore (previous year: 80.13 crore) iv. Contingent liabilities in respect of liabilities of other ventures’ of Joint Ventures as at March 31, 2016 is 8006.19 crore (previous year: 10840.81 crore) v. Capital commitments, if any, in relation to interest in Joint Ventures as at March 31, 2016 is Nil (previous year: Nil) vi. Share in capital commitments of Joint Ventures themselves for which the Company is contingently liable as at March 31, 2016 is 2.61 crore (previous year: 159.34 crore) 293 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(15) Disclosures pursuant to Accounting Standard (AS) 29 “Provisions, Contingent Liabilities and Contingent Assets”: a) Movement in provisions: Sr. no. 1 2 3 4 Particulars Balance as at 1-4-2015 Additional provision during the year Provision used/reversed during the year # & Balance as at 31-3-2016 (4=1+2-3) Class of Provisions Product warranties 10.72 10.25 (10.35) 10.62 Expected tax liability in respect of indirect taxes 93.42 39.33 (1.15) 131.60 Litigation related obligations 8.27 – – 8.27 Contractual rectification cost - construction contracts 146.70 121.21 (142.16) 125.75 crore Total 259.11 170.79 (153.66) 276.23 # & includes provision used during the year 1.84 crore (previous year: 4.58 crore) includes sale of foundry business 0.39 crore (previous year: Nil) 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, 2016 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 two to 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 (I) to the Balance Sheet. Q(16) 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, 2016 are as under: Category of Derivative Instruments i) For hedging foreign currency risks and interest rate 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 and interest rate swaps d) Option contracts ii) For hedging commodity price risks a) Commodity futures iii) For hedging Investment in mutual fund and bonds a) Stock market index futures b) Interest rate swaps 294 crore Amount of exposures hedged As at 31-3-2016 As at 31-3-2015 5067.38 4501.34 14922.13 2848.01 – 10825.77 2958.95 204.23 457.38 242.52 671.58 900.00 – 200.00 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) b) Unhedged foreign currency exposures as at March 31, 2016 are as under: Unhedged Foreign Currency Exposures crore As at 31-3-2016 As at 31-3-2015 i) Receivables including firm commitments and highly probable forecasted transactions 39082.98 27042.70 ii) Payables including firm commitments and highly probable forecasted transactions 32145.54 26158.82 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 excludes exposures [(Receivables amounting to 2385.28 crore (previous year: 1646.07 crore) and payables amounting to 1801.09 crore (previous year: 1142.08 crore)] with respect to currencies such as Bhutan Ngultrum (BTN). Q(17) Auditors’ remuneration (excluding service tax): Particulars a. For Audit fees b. For Taxation matters c. For Company law matters d. For Other services: (i) Limited review of standalone and consolidated financial statements on a quarterly basis (ii) Other services including certification work e. For reimbursement of expenses crore 2015-16 2014-15 1.70 0.48 0.25 1.30 0.51 0.14 1.25 0.30 – 1.25 0.88 * 0.20 * Note: The above figures include fees paid for FCCB issue amounting to Nil (previous year: 0.08 crore) charged to securities premium account during the year. Q(18) Value of imports (on C.I.F. basis): Particulars Particulars Raw materials Construction material Components and spare parts Capital goods Q(19) Expenditure in foreign currency: On overseas contracts Royalty and technical know-how fees Interest Professional/consultation fees Other matters crore 2015-16 2014-15 473.56 1262.50 1178.96 120.88 2015-16 7562.21 32.90 104.75 127.52 385.10 643.38 769.47 1074.52 219.69 crore 2014-15 6224.63 5.67 126.97 170.32 408.68 295 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(20) Dividends remitted in foreign currency: Dividend for the year ended March 31, 2015 to: Particulars i. 11 non-resident shareholders on 20,826 shares held by them (previous year: 11 non- residents on 20,826 shares) on September 2, 2015 ii. Custodian of global depositary receipts on 2,19,62,105 shares (previous year: 2,10,12,316 shares) on September 2, 2015 Q(21) Earnings in foreign exchange: Particulars crore 2015-16 2014-15 0.03 0.03 35.69 29.94 crore 2015-16 2014-15 Export of goods [including 846.77 crore on FOB basis (previous year: 672.93 crore)] 878.06 687.45 Construction and project related activities Export of services Commission Interest received Other receipts * 9652 9693.94 8431.36 129.33 128.71 8.61 0.87 5.69 0.00 * 378.22 187.51 Q(22) The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2016. The disclosure pursuant to the said Act is as under: Principal amount due to suppliers under MSMED Act Particulars crore 2015-16 2014-15 121.14 106.94 Interest accrued, due to suppliers under MSMED Act on the above amount and unpaid 2.90 4.17 Payment made to suppliers (other than interest) beyond the appointed day during the year 264.03 193.61 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 Amount of further interest remaining due and payable even in the succeeding years – 0.01 7.83 13.16 1.20 – 0.45 2.52 4.03 – Q(23) There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2016. 296 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(24) Details of sales, raw materials and components consumed, manufacturing work-in-progress and purchase of stock-in-trade: a) Sales: (i) Manufacturing and trading activity: Class of goods Switchgear, all types Earthmoving and agriculture machinery and spares Industrial machinery Electricity meters Rubber processing machinery and accessories Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery, 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 Ship auxiliaries and components of mechanised sailing vessels Nuclear purpose equipment, de-aerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate Power plant & machinery components Others Total (ii) Property development activity (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, 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 vessels, high pressure heat exchangers and high pressure heaters in aggregate 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] 2015-16 crore 2434.48 876.22 323.51 427.99 310.85 27.17 66.78 80.48 12.94 7.79 134.68 180.68 1.81 14.05 1.01 88.81 1005.82 5995.07 843.64 2014-15 crore 2446.26 807.55 353.08 416.28 193.96 35.92 77.20 33.55 21.65 110.92 107.63 73.86 – – 1.94 – 1063.71 5743.51 946.94 42754.40 6211.82 41930.17 4264.89 1018.48 1212.37 281.53 645.18 25.68 1.13 – 33.73 113.82 936.97 559.82 517.37 117.89 – 6.78 – – 871.09 52022.74 49480.38 473.64 137.30 44.74 507.93 108.78 3.59 59517.13 56791.13 297 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) 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] ii) Classification of goods: 2015-16 crore 4033.91 102.37 12.46 831.09 687.10 40.89 175.49 384.24 35.01 1151.28 7453.84 57.49 7396.35 2014-15 crore 2196.20 147.04 19.70 891.25 708.52 33.60 195.73 386.41 64.07 958.88 5601.40 104.61 5496.79 Classification of goods Imported (including through canalising agencies) Indigenous Total 2015-16 2014-15 % to total consumption 19 81 100 crore 1422.32 5974.03 7396.35 % to total consumption 25 75 100 crore 1390.20 4106.58 5496.79 c) Purchases of stock-in-trade: Class of goods 2015-16 2014-15 Electronic, medical & other instruments, accessories and spares Earthmoving & agricultural machinery and spares Industrial machinery Others Sub-total Less: Value of stock-in-trade transferred on sale of business Total [Note M] d) Stores and spare parts consumed: Classification of goods Imported (including through canalising agencies) Indigenous Total 298 crore 733.27 355.49 16.12 40.79 1145.67 16.49 1129.18 crore 828.61 354.20 11.22 102.72 1296.75 – 1296.75 2015-16 2014-15 % to total consumption 16 84 crore 189.12 987.01 % to total consumption 18 82 crore 258.17 1189.99 100 1176.13 100 1448.16 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) e) Details of manufacturing work-in-progress: Class of goods 2015-16 2014-15 Industrial machinery Defence equipment, all types Steel structural fabrication Switchgear, all types Transmission line tower Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery, solvent extraction plants, evaporator and crystallizer 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 Servicing of construction machinery AC drives, DC drives, programmable logic controllers Meters and protection systems Others crore 58.43 6.95 51.31 41.44 57.25 0.82 65.69 – 29.76 11.20 – 6.44 13.17 2.96 0.63 26.13 crore 43.52 42.96 34.25 46.87 73.88 6.50 100.41 16.62 20.51 21.48 7.46 111.41 12.28 2.79 0.47 41.37 Total [Note H(II)] 372.18 582.78 Q(25) Contribution to political parties include: Contribution to political parties aggregating to Nil (Previous year: 11.00 crore made during the year as follows: Indian National Congress: 5.00 crore, Bharatiya Janata Party: 5.00 crore and Shiv Sena: 1.00 crore). Q(26) a) Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year: 101.46 crore. b) The amount recognised as expense in the Statement of Profit and Loss on CSR related activities is 119.89 crore, which comprises of: Particulars Sr. no. Disclosed under 2015-16 2014-15 In Cash Yet to be paid in cash Total In Cash Yet to be paid in cash crore Total i) ii) Construction/acquisition of assets charged to the Statement of Profit and Loss For purposes other than (i) above Total Note O 5.53 0.33 5.86 10.71 2.43 13.14 Note O Note N 95.71 14.09 115.33 4.01 0.22 4.56 99.72 14.31 40.68 15.76 119.89 67.15 6.96 – 9.39 47.64 15.76 76.54 299 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(27) During the year, the Company transferred at book value the equity investments held by it: a) to facilitate the merger with wholly owned subsidiary company viz. L&T Capital Company Limited: Sr. no. 1 2 3 Name of the company L&T Natural Resources Limited L&T Powergen Limited L&T Solar Limited Details of investments No. of shares Face value per share ( ) Book value ( crore) 50,000 50,000 50,000 10 10 10 0.05 0.05 0.05 b) to a wholly owned subsidiary company viz. L&T Hydrocarbon Engineering Limited: Name of the company Details of investments No. of shares Face value per share ( ) L&T Sapura Offshore Private Limited 6,000 10 Sr. no. 1 Book value ( crore) 0.01 c) to a subsidiary company viz. L&T Infrastructure Development Projects Limited: Details of investments Sr. no. 1 Name of the company PNG Tollway Limited No. of shares Face value per share ( ) 2,15,43,340 10 Book value ( crore) 21.54 Q(28) 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, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs in respect of section 133 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 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 Schedule III to the Companies Act, 2013 (“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 Schedule III 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 300 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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 III. 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 a. Sales & Service i. ii. Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers, are not taken into account. Revenue from sale of 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; 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 & equipment is recognised as follows: a. Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer. b. 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. 301 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. v. Revenue from contracts for the rendering of engineering design services and other 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”], is 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. 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. 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. The technical feasibility of completing the intangible asset so that it will be available for use or sale 302 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. 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. 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. 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. 303 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 7. 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 & 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. 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 on assets carried at revalued amount i.e., values determined by valuers is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. With effect from April 1, 2015 the difference between depreciation provided on revalued amount and on historical cost is transferred from revaluation reserve to general reserve. 304 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) ii. Assets carried at historical cost: Depreciation on assets carried at historical costs is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. The carrying amount of the assets as on April 1, 2014 is depreciated over the remaining useful life. Where the useful life of the asset has expired, the carrying amount as on April 1, 2014 has been charged to the retained earnings as on April 1, 2014. Where cost of a part of the asset (“asset component”) is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount as on April 1, 2015 has been charged to the retained earnings as on April 1, 2015. 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. 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 II to the Companies Act, 2013, 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 based on the useful life prescribed under Schedule II to the Companies Act, 2013 or based on the useful life 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. Specialised software: over a period of six years. b. 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. 305 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 11. 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). 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. 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 306 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. Expenses incurred on issue of shares ii. Expenses (net of tax) incurred on issue of debentures/bonds iii. Premium (net of tax) 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. The amount recognised as expense each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve. 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) supra. 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. 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. 307 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) e. 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. 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 operational revenue 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 the intrinsic value of the employee stock options which is accounted as employee compensation cost [see Note R(17)] 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. 308 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. ii. Company’s share in profits or losses of integrated joint ventures is accounted on determination of the profits or losses by the joint ventures. Investments in integrated joint ventures are carried at cost net of Company’s share in recognised profits or losses. b. Incorporated jointly controlled entities: i. ii. 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. Joint venture interests accounted as above, other than investments in incorporated jointly controlled entities, are included in the segments to which they relate. 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. 309 Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. 310 NOTES 311 Consolidated Financial Statements 2015-16 DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th – 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400013. SHARP & TANNAN Chartered Accountants Ravindra Annexe 194, Churchgate Reclamation Dinshaw Vachha Road Mumbai 400 020. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of LARSEN & TOUBRO LIMITED (hereinafter referred to as the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as the “Group”), its associates and jointly controlled entities, comprising of the Consolidated Balance Sheet as at 31st March, 2016, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the “consolidated financial statements”). Management’s Responsibility for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the “Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its associates and jointly controlled entities in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act, as applicable. The respective Boards of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ 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 financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated 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 312 accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and jointly controlled entities as at 31st March, 2016, and their consolidated profit and their consolidated cash flows for the year ended on that date. Other Matters (a) The consolidated financial statements include the financial statements of 66 subsidiaries, and 9 jointly controlled entities, whose financial statements reflect total assets of 39,471.90 crore as at 31st March, 2016, total revenues of 14,391.76 crore and net cash flows amounting to 746.23 crore for the year ended on that date which have not been audited by us. The consolidated financial statements also include the Group’s share of net profit of 7.93 crore for the year ended 31st March, 2016, as considered in the consolidated financial statements, in respect of 7 associates, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, is based solely on the reports of the other auditors. (b) The consolidated financial statements include the financial statements / financial information of 5 subsidiaries and 8 jointly controlled entities, whose financial statements / financial information reflect total assets of 766.86 crore as at 31st March, 2016, total revenues of 437.92 crore and net cash flows amounting to 148.54 crore for the year ended on that date which have not been audited by us. The consolidated financial statements also include the Group’s share of net loss of 0.27 crore for the year ended 31st March, 2016, as considered in the consolidated financial statements, in respect of 4 associates, whose financial statements / financial information have not been audited by us. These financial statements / financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, is based solely on such unaudited financial statements / financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements / financial information are not material to the Group. Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements / financial information certified by the Management. Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, we report, to the extent applicable, that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements. b) c) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards prescribed under Section 133 of the Act, as applicable. e) On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2016, taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies, associate companies and jointly controlled entities incorporated in India, none of the directors of the Group companies, its associate companies and jointly controlled entities incorporated in India is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164 (2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our Report in “Annexure A”, which is based on the auditors’ reports of the Holding Company, subsidiary companies, associate companies and jointly controlled entities incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Holding Company’s, subsidiary companies’, associate companies’, jointly controlled entities’ incorporated in India, internal financial controls over financial reporting. g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and jointly controlled entities - refer notes I, Q(15)(VI), Q(16) and Q(21) to the consolidated financial statements; 313 ii. Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - refer notes C(II), D(IV), Q(7)(a) to the consolidated financial statements; and iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company and its subsidiary companies, associate companies and jointly controlled entities incorporated in India. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (Membership No. 70928) MUMBAI, May 25, 2016 For SHARP & TANNAN Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph “f” under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2016, we have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (hereinafter referred to as the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associates and jointly controlled entities incorporated in India, as of that date. Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Holding Company, its subsidiaries, its associates and jointly controlled entities incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective group’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiaries, associates and joint controlled entities, incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, 314 is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion to the best of our information and according to the explanations given to us, the Holding Company, its subsidiaries, its associates and jointly controlled entities incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 24 subsidiaries and 3 associates incorporated in India, is based on the corresponding reports of the other auditors of such companies incorporated in India. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 1 subsidiary and 2 associates incorporated in India, whose financial statements / financial information are unaudited and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as these financial statements / financial information are not material to the Group. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (Membership No. 70928) MUMBAI, May 25, 2016 For SHARP & TANNAN Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) 315 Consolidated Balance Sheet as at March 31, 2016 As at 31-3-2016 As at 31-3-2015 Note crore crore crore crore A B 186.30 43805.43 C(I) Q(20) Q(13) C(II) C(III) 73753.71 10839.86 411.15 1615.98 788.32 D(I) 17007.98 Q(20) D(II) D(III) D(IV) D(V) 210.50 10544.91 166.33 29224.64 28510.79 3690.04 43991.73 6768.78 40909.07 4998.62 185.91 40723.16 65537.18 2931.58 539.56 1276.11 574.38 87409.02 70858.81 16729.39 127.23 8304.17 151.86 24497.78 23684.89 3543.81 89355.19 227524.72 77039.13 193805.63 17385.08 23724.84 6486.21 11003.72 18810.53 13712.53 4883.03 10109.75 58599.85 2171.67 1974.36 802.96 4517.99 53441.03 101.58 460.36 47515.84 2215.00 1646.80 724.20 3525.78 43932.02 99.31 369.41 8105.67 5361.95 35989.94 5901.59 9383.19 12368.41 28344.17 7965.32 6508.40 30089.37 5756.21 7679.22 11434.85 24343.90 105454.92 227524.72 93777.27 193805.63 E(I) E(II) E(I) E(II) E(III) F Q(13) 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 (DIN 00001514) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) M.M.CHITALE VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) 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 Due to micro enterprises and small enterprises Due to others 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 Current assets Goodwill on consolidation Non-current investments Deferred tax assets (net) Long term loans and advances Long term loans and advances towards financing activities Cash and cash equivalents Other non-current assets Current investments Inventories Trade receivables Cash and cash equivalents Short term loans and advances Short term loans and advances towards financing activities Other current assets TOTAL CONTINGENT LIABILITIES COMMITMENTS (capital and others) OTHER NOTES FORMING PART OF THE ACCOUNTS SIGNIFICANT ACCOUNTING POLICIES In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm’s Registration No.109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 316 N.HARIHARAN Company Secretary M. No. A3471 SUNITA SHARMA (DIN 02949529) Directors Consolidated Statement of Profit and Loss for the year ended March 31, 2016 Note crore crore crore crore 2015-16 2014-15 103522.23 890.54 92761.66 757.08 102631.69 1183.03 103814.72 92004.58 1074.74 93079.32 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 Finance cost of financial services business and finance lease activity 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) K L M N O P Q(4) 10451.17 20091.51 1426.56 2501.80 17426.16 (712.68) 8026.38 4158.13 3871.42 2624.54 1.59 13546.91 20036.82 1333.44 1935.55 19565.57 862.98 8224.78 4828.91 4611.32 2755.99 – 74946.28 9204.84 6146.68 3041.22 2755.99 96095.01 8.84 96086.17 7728.55 358.10 8086.65 – 8086.65 Q(6) Q(13) 2764.19 (215.71) 2661.91 (408.67) 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 Profit for the year attributable to the shareholders of the Company 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 } Q(12) Q R 2548.48 5538.17 0.18 5537.99 (2.51) 5535.48 (444.95) 5090.53 54.69 54.44 54.69 54.44 2.00 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm’s Registration No.109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 A. M. NAIK Group Executive Chairman (DIN 00001514) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) M.M.CHITALE VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) N.HARIHARAN Company Secretary M. No. A3471 SUNITA SHARMA (DIN 02949529) Directors 67240.45 8059.89 5471.40 2840.05 2622.95 86234.74 24.96 86209.78 6869.54 347.70 7217.24 – 7217.24 2253.24 4964.00 – 4964.00 2.14 4966.14 (201.32) 4764.82 51.33 50.98 51.33 50.98 2.00 317 Consolidated Cash Flow Statement for the year ended March 31, 2016 A. Cash flow from operating activities: Profit before tax (excluding minority interest, exceptional and extraordinary items) Adjustments for: Dividend received Depreciation (including obsolescence), amortisation and impairment Exchange difference on items grouped under financing/investing activities Effect of exchange rate changes on cash and cash equivalents Interest expense Interest income (Profit)/loss on sale of fixed assets (net) (Profit)/loss on sale of investments (net) (Profit)/loss on sale of stake in subsidiary and joint venture companies of Developmental Projects and Realty Segments 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 B. 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 associate companies and third parties (net) Interest received Dividend received from associates Dividend received from other investments Consideration received on transfer of Foundry Business Unit Consideration received on disposal of subsidiaries (including advance received) Consideration received on disposal of joint venture Consideration paid on acquisition of subsidiaries Cash & cash equivalents acquired pursuant to acquisition of subsidiaries Cash & cash equivalents discharged pursuant to disposal of subsidiaries/joint ventures Net cash (used in)/from investing activities (after extraordinary items) 318 2015-16 crore 2014-15 crore 7728.55 6869.54 (198.86) 2755.99 194.31 (20.07) 3041.22 (418.24) (62.79) (386.52) (276.69) 51.69 77.92 12486.51 (11810.90) 117.58 9528.52 10321.71 (10232.34) 89.37 (3318.27) (3228.90) (5264.11) 205.89 (525.57) 333.28 68.05 (0.58) 422.06 5.63 198.86 79.70 410.30 – (32.36) – (33.14) (4131.99) (79.56) 2622.95 51.92 39.06 2840.05 (404.74) (19.58) (444.23) (1381.76) 68.47 35.39 10197.51 (9736.74) (982.56) 9119.69 8597.90 (6984.04) 1613.86 (2979.24) (1365.38) (6252.46) 157.80 (830.03) 841.41 (976.96) 579.53 387.07 4.24 79.56 – 220.80 1120.51 (106.78) 8.76 (11.60) (4778.15) Consolidated Cash Flow Statement for the year ended March 31, 2016 (contd.) C. 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)- including sale proceeds on divestment of part stake in subsidiary companies and issue of preference shares by subsidiary companies to external parties Dividends paid Additional tax on dividend Interest paid (including cash flows on account of interest rate swaps) Net cash (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents (A + B + C) Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 2015-16 crore 70.19 32721.06 (21445.82) 116.19 1582.68 (1512.33) (365.25) (3678.25) 7488.47 127.58 5845.90 5973.48 2014-15 crore 98.89 29480.30 (20836.14) 2817.68 1871.10 (1322.73) (280.10) (3926.14) 7902.86 1759.33 4086.57 5845.90 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, see Note G(II) and H(IV). 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)] Cash and bank balances available for immediate use Others (b) Cash and cash equivalents disclosed under non-current assets [Note G(II)] Cash and bank balances not available for immediate use 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. 2015-16 crore 5745.99 155.60 5901.59 101.58 6003.17 (29.69) 5973.48 2014-15 crore 5607.12 149.09 5756.21 99.31 5855.52 (9.62) 5845.90 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm’s Registration No.117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm’s Registration No.109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 A. M. NAIK Group Executive Chairman (DIN 00001514) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) M.M.CHITALE VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) N.HARIHARAN Company Secretary M. No. A3471 SUNITA SHARMA (DIN 02949529) Directors 319 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 31-3-2016 As at 31-3-2015 Number of shares crore Number of shares crore 1,62,50,00,000 325.00 1,62,50,00,000 325.00 93,14,78,845 186.30 92,95,62,061 185.91 A(II) Reconciliation of the number of equity shares and share capital: Particulars 2015-16 2014-15 Number of shares crore Number of shares crore Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 92,95,62,061 185.91 92,69,12,658 185.38 Add: Shares issued on exercise of employee stock options during the year 19,16,784 0.39 26,49,403 0.53 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 93,14,78,845 186.30 92,95,62,061 185.91 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 As at 31-3-2016 As at 31-3-2015 Number of shares 14,64,19,088 11,47,52,281 Shareholding % 15.72 12.32 Number of shares 15,55,22,285 11,16,06,174 Shareholding % 16.73 12.01 of India 7,59,26,462 8.15 7,59,25,962 8.17 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 # 0.675% 5 years & 1 day US$ denominated Foreign Currency As at 31-3-2016 As at 31-3-2015 Number of equity shares to be issued as fully paid 57,93,042 crore (At face value) 1.16 * Number of equity shares to be issued as fully paid 77,08,842 crore (At face value) 1.54 * Convertible Bonds (FCCB) 63,46,986 1.27 ** 63,46,986 1.27 ** * The equity shares will be issued at a premium of 203.97 crore (previous year: 278.09 crore) ** The equity shares will be issued at a premium of 1215.13 crore (previous year: 1215.13 crore) on the exercise of options by the bond holders # Note A(VIII) for terms of employee stock option schemes 320 Notes forming part of the Consolidated Accounts (contd.) 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, 2016 are 30,82,94,576 (previous period of five years ended March 31, 2015: 30,82,94,576 shares) 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, 2016 – Nil (previous period of five years ended March 31, 2015: Nil) A(VIII) Stock option schemes of Parent Company:- 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 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 summarised below: Sr. No. Series reference 2000 2002 (A) 2002 (B) 2003 (A) 2003 (B) 2006 2006 (A) 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 1 2 3 4 5 6 7 8 9 Grant price - Grant dates Vesting commences on Options granted and outstanding at the beginning of the year Options lapsed during the year Options granted during the year Options exercised during the year Options granted and outstanding at the end of the year Of which Options vested Options yet to vest Weighted average remaining contractual life of options (in years) 2.30 2.30 2.30 2.30 2.30 2.30 11.70 11.70 11.70 11.70 400.70 400.70 400.70 400.70 1-6-2000 1-6-2001 19-4-2002 19-4-2003 19-4-2002 19-4-2003 23-5-2003 onwards 23-5-2003 onwards 1-9-2006 onwards 1-7-2007 onwards 23-5-2004 onwards 23-5-2004 onwards 1-9-2007 onwards 1-7-2008 onwards 25200 25200 32250 32250 59550 59550 47178 47178 585284 499543 304656 510181 6654724 8692214 – – – – – – – – – – – – – – – – – – – – – – 40611 68450 11270 35625 442400 676786 – 150400 337800 – – 344865 935190 – 168154 183609 36020 169900 1712610 2295894 25200 25200 32250 32250 59550 59550 47178 47178 526919 585284 257366 304656 4844579 6654724 25200 25200 32250 32250 59550 59550 47178 47178 96458 100390 257366 304656 2334008 2663571 – – – – – – – – 430461 484894 – – 2510571 3991153 Nil Nil Nil Nil Nil Nil Nil Nil 5.16 5.38 Nil 0.03 2.18 3.95 c) The number and weighted average exercise price of stock options are as follows: Particulars (i) Options granted and outstanding at the beginning of the year (ii) Options granted during the year (iii) Options allotted during the year (iv) Options lapsed during the year (v) Options granted and outstanding at the end of the year (vi) Options exercisable at the end of the year out of (v) supra 2015-16 2014-15 No. of stock options 77,08,842 4,95,265 19,16,784 4,94,281 57,93,042 28,52,010 Weighted average exercise price ( ) 362.74 282.57 366.57 368.74 354.10 364.76 No. of stock options 98,66,116 12,72,990 26,49,403 7,80,861 77,08,842 32,32,795 Weighted average exercise price ( ) 374.42 297.48 373.74 366.60 362.74 368.52 d) Weighted average share price at the date of exercise for stock options exercised during the year is 1543.13 (previous year: 1554.71) per share. 321 Notes forming part of the Consolidated Accounts (contd.) 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. f) Weighted average fair value of options granted during the year is 965.39 (previous year: 1190.22) per option. g) 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 2015-16 2014-15 7.66% 3.86 years 30.52% 62.69 per option 1211.45 per option 282.57 per share 8.57% 4.01 years 33.92% 57.18 per option 1444.51 per option 313.49 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. h) The balance in share option outstanding account as on March 31, 2016 is 200.28 crore (net) (previous year: 252.56 crore), including 125.92 crore (previous year: 135.98 crore) for which the options have been vested to employees as on March 31, 2016. A(IX) The Directors recommend payment of final dividend of 18.25 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 accounts for 93,14,78,845 equity shares outstanding as at March 31, 2016 amounting to 1699.95 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), 24,32,766 options are outstanding as at March 31, 2016. 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 1 each. All vested options can be exercised on the First Exercise Date. The Nomination & Remuneration Committee had decided September 28, 2015 as the First Exercise Date. The details of the grants under the aforesaid scheme are summarised below: Sr. No. ESOP Series 1 Face value ( ) 2 Grant price ( ) 3 Options granted and outstanding at the beginning of the year 4 Options reinstated during the year * 5 Options granted during the year 6 Options cancelled/lapsed during the year 7 Options exercised and shares allotted during the year 8 Options granted and outstanding at the end of the year of which Options vested Options yet to vest I,II & III IV – XXI 2015-16 1 5 19,65,015 3,500 – 34,000 18,51,855 82,660 2014-15 5 25 3,93,003 – – – – 3,93,003 2015-16 1 2 93,67,335 4,54,580 – 10,64,326 64,07,483 23,50,106 2014-15 5 10 18,80,484 – – 7,017 – 18,73,467 82,660 – 3,93,003 – 3,40,666 20,09,440 9,70,917 9,02,550 * The subsidiary had lapsed unvested options with the employees who had resigned from the company. Based on legal advice, the subsidiary has exercised its discretion in determining that the former employees in the United States will 322 Notes forming part of the Consolidated Accounts (contd.) be allowed to exercise their deferred options and accordingly, 2,58,080 options at face value of 1 (erstwhile 51,616 options at face value of 5) exercisable by such former employees have been reinstated and vested. * The subsidiary had erroneously lapsed 2,00,000 options at face value of 1 (erstwhile 40,000 options at face value of 5). Subsequently, the subsidiary has decided that these options be restored and vested. 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 options 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 1 each at an exercise price of USD 2.4 per share. Under the said plan, options granted and outstanding as at the end of the year are 1,43,650, all vested. Employees Stock Options granted and outstanding as at the end of the year on unissued share capital represent options 25,76,416 (previous year: 1,17,82,850) at face value of 1 each. 2. L&T Finance Holdings Limited Stock option scheme (ESOP 2010 & ESOP 2013) The subsidiary has formulated Employee Stock Option Schemes 2010 (ESOP Scheme-2010), 2010-A (ESOP Scheme 2010-A) and 2013 (ESOP Scheme 2013). 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 for schemes 2010 and 2010A. The options granted under scheme 2013 can be exercised within a period of 8 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 grants under the aforesaid schemes are summarised below: Sr. No. Series reference 2010 - 2010-A 2013 2015-16 2014-15 2015-16 2014-15 1 Grant price ( ) 44.20 67.85 2 Options granted and outstanding at the beginning of the year 68,02,519 91,06,625 2,63,50,000 – 3 Options granted during the year 9,00,000 2,50,000 – 2,63,50,000 4 Options cancelled/lapsed during the year 3,17,841 7,17,181 28,00,000 5 Options exercised and shares allotted during the year 12,75,680 18,36,925 – – – 6 Options granted and outstanding at the end of the year 61,08,998 68,02,519 2,35,50,000 2,63,50,000 of which Options vested Options yet to vest 40,95,548 43,39,694 – – 20,13,450 24,62,825 2,35,50,000 2,63,50,000 7 Weighted average remaining contractual life of options (in years) 5.40 5.95 6.56 6.57 Weighted average fair value of options granted during the year is 32.02 (previous year: 25.40) per option. 323 Notes forming part of the Consolidated Accounts (contd.) 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 2015-16 2014-15 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 7.52% 7.90% 3.68 years 4.34 years 31.78% 33.15% 2.94 per option 3.47 per option 65.73 per option 67.84 per option 44.20 per option 67.63 per option Expected volatility is based on the historical volatility of the subsidiary’s shares price applicable to the expected life of each option. The balance in share option outstanding account as on March 31, 2016 is 6.20 crore (net) (previous year: 6.31 crore), including 4.16 crore (previous year: 4.16 crore) for which the options have been vested to employees as on March 31, 2016. A(XI) 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 2015-16 would have been higher by 30.31 crore (previous year: 11.15 crore) (ii) Basic EPS before extraordinary items would have decreased from 54.69 (previous year: 51.33) per share to 54.37 (previous year: 51.21) per share (iii) Basic EPS after extraordinary items would have decreased from 54.69 (previous year: 51.33) per share to 54.37 (previous year: 51.21) per share (iv) Diluted EPS before extraordinary items would have decreased from 54.44 (previous year: 50.98) per share to 54.10 (previous year: 50.86) per share (v) Diluted EPS after extraordinary items would have decreased from 54.44 (previous year: 50.98) per share to 54.10 (previous year: 50.86) per share 324 Notes forming part of the Consolidated Accounts (contd.) NOTE [B] Reserves and surplus Particulars As at 31-3-2016 As at 31-3-2015 crore crore crore crore Capital reserve As per last Balance Sheet Addition during the year (net) Capital reserve on consolidation As per last Balance Sheet Addition during the year Deduction during the year Capital redemption reserve As per last Balance Sheet Securities premium account [Note Q(6)(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) 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 Less: Transferred to Statement of Profit and Loss Less: Transferred to retained earnings Share options outstanding account Employee share options outstanding account As per last Balance Sheet Addition during the year Less: Transferred to retained earnings Deduction during the year Deferred employee compensation expense As per last Balance Sheet Addition during the year Deduction during the year Reserve u/s 45 IC of the Reserve Bank of India Act, 1934 As per last Balance Sheet Add: Transferred from retained earnings Carried forward 967.00 (19.49) 270.63 0.41 1.07 3.27 7944.99 181.28 8126.27 0.87 (0.62) 876.08 175.37 456.97 15.57 – 0.39 432.54 48.34 10.17 155.38 (127.44) (47.94) 73.17 863.28 359.21 964.89 2.11 947.51 967.00 270.57 0.06 – 269.97 270.63 3.27 3.27 3.27 7737.80 225.23 7963.03 15.13 2.91 8126.02 7944.99 521.38 – 354.70 1157.68 876.08 19.25 1.59 2.09 15.18 15.57 514.83 87.77 11.66 158.40 315.33 432.54 (138.04) (87.77) 98.37 (102.21) (127.44) 722.52 140.76 1222.49 11955.24 863.28 11245.92 325 Notes forming part of the Consolidated Accounts (contd.) NOTE [B] Reserves and surplus (contd.) Particulars Brought forward 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) Add/(less): Transferred to Statement of Profit and Loss on dissolution 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(13)] As per last Balance Sheet Addition/(deduction) during the year (net) Retained earnings As per last Balance Sheet Depreciation charged against retained earnings Reversal of deferred tax on depreciation charged against retained earnings Profit for the year Add/(less): Transferred from/(to): Debenture redemption reserve Revaluation reserve Employee share options outstanding account Reserve u/s 45 IC of the Reserve Bank of India 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 Other appropriation: Dividend paid for previous year Additional tax on dividend paid for previous year Proposed dividend Additional dividend tax [Note Q(19)] Less: 326 As at 31-3-2016 As at 31-3-2015 crore 20.39 11.61 11.75 4.52 489.83 65.77 (6.26) 251.50 113.13 (382.27) (101.15) 29086.04 (6.14) 2.13 5090.53 34172.56 (281.60) 0.39 10.17 (359.21) (11.61) (4.52) (113.13) 1.79 0.36 1699.95 339.58 crore 11955.24 crore crore 11245.92 32.00 6.89 13.50 9.98 1.77 20.39 16.27 11.75 571.42 (81.53) (0.06) 549.34 489.83 203.52 47.98 364.63 251.50 (631.10) 248.83 (483.42) (382.27) 26749.05 (115.58) 38.54 4764.82 31436.83 (354.70) 2.09 11.66 (140.76) (13.50) (1.77) (47.98) 1.88 0.32 1510.54 293.09 31371.37 43805.43 29086.04 40723.16 Notes forming part of the Consolidated Accounts (contd.) NOTE [C(I)] Long term borrowings Particulars Secured Unsecured Total * Secured Unsecured Total * As at 31-3-2016 As at 31-3-2015 Redeemable non-convertible fixed rate debentures Redeemable non-convertible floating rate debentures Redeemable non-convertible inflation indexed debentures 0.675% Foreign currency convertible bonds Term loans from banks Term loans from others Loans from financial institutions Long term maturities of finance lease obligations Sales tax deferment loan Perpetual debts crore 14834.47 220.00 – – 31607.64 337.22 216.95 – – – crore 11218.50 – 108.81 1325.10 13376.72 57.85 250.00 0.17 0.28 200.00 crore 26052.97 220.00 108.81 1325.10 44984.36 395.07 466.95 0.17 0.28 200.00 crore crore 14847.58 190.00 – – crore 8540.00 23387.58 190.00 – 109.76 109.76 1250.00 1250.00 28366.05 10888.72 39254.77 409.78 734.39 0.28 0.62 200.00 72.53 250.00 0.28 0.62 200.00 337.25 484.39 – – – 47216.28 26537.43 73753.71 44225.27 21311.91 65537.18 * 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 31-3-2016 As at 31-3-2015 crore 279.95 749.86 586.17 1615.98 crore 205.47 573.01 497.63 1276.11 C(II)(a) Other long term liabilities – others include Advance of 14.30 crore received from M/s. Sical Logistics Limited (SLL) against sale of 1,43,00,000 equity shares of 10/- each in M/s Sical Iron Ore Terminals Limited (SIOTL) at cost to SLL 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 SIOTL as per clause 18.2.2 (i) (d) of the License Agreement dated September 23, 2006 between SIOTL and M/s. Ennore Port Limited (EPL). SIOTL has not been able to commence commercial operation as of March 31, 2016 due to the ban of export of iron ore from the State of Karnataka. SIOTL has sought necessary approvals from EPL and Government of India for handling alternate commodities. NOTE [C(III)] Long term provisions Particulars Provision for employee benefits: Employee pension schemes [Note Q(8)(ii)(a)] Post-retirement medical benefit plan [Note Q(8)(ii)(a)] Interest rate guaranteed-provident fund [Note Q(8)(ii)(a)] Others Others: Periodic major maintenance [Note Q(16)] As at 31-3-2016 As at 31-3-2015 crore 231.08 175.27 0.61 11.53 369.83 788.32 crore 207.70 165.53 10.43 4.67 186.05 574.38 327 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 31-3-2016 As at 31-3-2015 Loans repayable on demand: From banks Loans from related parties Other loans and advances: 1897.70 – 176.24 30.00 2073.94 30.00 1731.08 – 234.79 30.00 1965.87 30.00 From banks Commercial paper Redeemable non-convertible fixed rate debentures From others 1231.13 – – – 4564.31 7819.10 1200.00 89.50 5795.44 7819.10 1200.00 89.50 1490.96 – – – 3716.93 8958.40 500.00 67.23 5207.89 8958.40 500.00 67.23 3128.83 13879.15 17007.98 3222.04 13507.35 16729.39 * 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* As at 31-3-2016 As at 31-3-2015 Redeemable non-convertible fixed rate debentures Term loans from banks Term loans from others Loans from financial institutions Finance lease obligation [Note Q(11)(ii)(a)(ii)] Sales tax deferment loan crore crore crore crore crore crore 4794.24 3886.64 – 40.71 – – 550.00 1142.36 130.51 – 0.11 0.34 5344.24 5029.00 130.51 40.71 0.11 0.34 2318.46 5100.52 – 67.10 – – 600.00 217.48 – – 0.16 0.45 2918.46 5318.00 – 67.10 0.16 0.45 8721.59 1823.32 10544.91 7486.08 818.09 8304.17 * Loans guaranteed by Directors or others Nil (previous year: Nil) NOTE [D(III)] Trade payables Particulars Due to micro enterprises and small enterprises Due to others: Acceptances Due to related parties: Associate companies Due to others 328 As at 31-3-2016 As at 31-3-2015 crore crore 166.33 crore crore 151.86 951.46 15.19 28257.99 1447.42 31.88 23018.48 29224.64 29390.97 24497.78 24649.64 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 Forward contract payable Other payables (including sales tax, service tax, excise duty and others) [Note D(IV)(a)] D(IV)(a) Other current liabilities - other payables include Due to Directors 47.83 crore (previous year: 50.61 crore) NOTE [D(V)] Short term provisions Particulars Provision for employee benefits: Gratuity [Note Q(8)(ii)(a)] Compensated absences Employee pension schemes [Note Q(8)(ii)(a)] Post-retirement medical benefit plan [Note Q(8)(ii)(a)] Provision for interest rate guarantee Others: Current taxes [net of payments made 2152.52 crore (previous year: 2057.49 crore)] Proposed dividend [Note A(IX)] Additional tax on dividend Reserve for unexpired risks Other provisions [Note Q(16)] As at 31-3-2016 As at 31-3-2015 crore 1977.68 40.96 39.33 17.22 5776.24 768.58 15413.21 669.02 3808.55 28510.79 crore 1300.16 6.93 33.59 10.31 4497.65 637.70 13366.26 731.10 3101.19 23684.89 As at 31-3-2016 As at 31-3-2015 crore crore crore crore 145.00 864.54 16.82 17.22 – 91.15 1699.95 172.46 222.42 460.48 143.90 819.06 13.47 14.59 0.13 1043.58 991.15 260.84 1510.54 148.35 155.64 477.29 2646.46 3690.04 2552.66 3543.81 329 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 Leasehold Improvements Sub total - Other assets Lease adjustment Total As at 1-4-2015 1058.85 763.00 1821.85 5231.26 687.13 5918.39 13603.92 524.96 14128.88 1111.37 18.27 2.47 1132.11 511.78 2.78 514.56 630.73 18.98 649.71 517.88 213.77 731.65 0.25 119.08 787.11 1641.73 637.72 23.53 3209.42 – 28106.57 Cost/valuation Depreciation Impairment Book value crore Pursuant to acquisition of subsidiaries Foreign currency Additions fluctuation Deductions Pursuant to acquisition of subsidiaries As at 31-3-2016 Up to 31-3-2015 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 1.29 7.29 8.58 396.18 20.16 416.34 1044.49 4.88 1049.37 179.31 1.92 – 181.23 75.09 – 75.09 71.06 4.01 75.07 85.49 24.89 110.38 – – – – 0.84 53.54 54.38 – 1970.44 1.40 1.36 2.76 22.78 – 22.78 56.42 – 56.42 2.10 – – 2.10 3.95 – 3.95 6.79 – 6.79 9.46 – 9.46 406.08 – 406.08 196.65 533.11 729.76 655.46 771.65 1427.11 5453.57 174.18 5627.75 – 52.04 52.04 865.21 48.80 914.01 694.02 14010.81 529.42 694.44 14540.23 0.42 5533.18 224.36 5757.54 51.76 – 2.34 54.10 32.45 0.86 33.31 65.73 4.30 70.03 1241.02 20.19 0.13 1261.34 558.37 1.92 560.29 642.85 18.69 661.54 804.29 18.07 2.44 824.80 359.11 0.84 359.95 329.72 6.63 336.35 50.86 60.99 111.85 561.97 177.67 739.64 296.66 76.55 373.21 – – – – – – – – 104.26 – – – – – 5.38 5.38 – 2104.95 0.25 119.08 787.11 1641.73 638.56 71.69 3258.42 – 28076.32 0.25 26.32 195.78 173.58 46.22 8.49 450.64 – 9068.54 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Foreign currency fluctuation Deductions Up to 31-3-2016 As at 31-3-2016 As at 31-3-2016 As at 31-3-2015 – 0.71 0.71 7.86 – 7.86 – – – – 66.41 66.41 28.68 36.82 65.50 1053.65 24.44 1078.09 25.04 – 25.04 267.13 0.22 267.35 6365.36 235.14 6600.50 1.48 – – 1.48 3.66 – 3.66 3.49 – 3.49 6.97 – 6.97 – – – – – – – – 49.21 47.40 – 2.34 49.74 29.39 0.19 29.58 48.67 0.23 48.90 927.45 18.65 0.13 946.23 407.59 1.10 408.69 355.02 8.22 363.24 36.26 30.06 66.32 326.40 74.26 400.66 – – – – – 4.10 4.10 – 0.25 32.99 236.03 239.46 59.78 31.07 599.58 – 531.49 10463.40 6.58 – 6.58 – – – – 6.93 6.93 – – – – – – – – – – – – – 648.88 1052.64 705.24 710.96 1354.12 1763.60 4399.92 4366.05 638.33 149.74 4549.66 5004.38 7645.45 8070.74 287.35 293.67 7932.80 8364.41 313.57 1.54 – 315.11 307.08 0.20 0.03 307.31 150.78 0.82 151.60 152.66 1.94 154.60 287.83 10.47 298.30 301.01 12.35 313.36 235.57 103.41 338.98 221.22 137.22 358.44 – – – – – – – – – – 92.76 86.09 551.08 591.33 1402.27 1468.15 591.50 578.78 15.04 40.62 2658.84 2758.78 (239.36) (239.36) 13.51 # 17360.05 18785.52 For the period @ – 13.66 13.66 209.26 12.46 221.72 1074.27 11.00 1085.27 169.08 0.58 0.03 169.69 74.21 0.45 74.66 70.48 1.82 72.30 59.03 27.77 86.80 – 6.67 40.25 65.88 13.56 26.68 153.04 – 1877.14 Previous year 28562.37 25.55 1837.60 50.45 2369.41 28106.56 7508.26 21.53 2181.97 12.52 655.75 9068.53 13.15 Add: Asset held for sale Add: Capital work-in-progress 25.03 25.01 17385.08 18810.53 6486.21 4883.03 23871.29 23693.56 @ Includes # Impairment upto 31-3-2016 6.14 crore transferred to retained earnings pursuant to Schedule II of Companies Act, 2013. 13.51 crore, 0.37 crore pertains to foreign currency translation adjustments, 0.01 crore deductions during the year. 330 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 Pursuant to acquisition of subsidiaries – – As at 1-4-2015 990.32 127.84 Cost/valuation Foreign currency Additions 99.39 13.26 fluctuation Deductions 3.35 – 13.76 0.10 Pursuant to acquisition of subsidiaries – – As at 31-3-2016 1100.12 141.20 Up to 31-3-2015 577.16 68.08 86.60 – 77.89 0.74 0.45 164.78 30.24 131.24 14051.17 1.53 15388.70 – – – 10698.95 – – 10889.49 – 6.33 – – 20.93 – 137.57 7.18 24742.94 1.53 26288.14 – 10.98 44.34 955.97 0.38 1676.17 – – – – – Amortisation Impairment Book value crore Foreign currency fluctuation Deductions 3.13 – 7.45 0.10 For the period 163.27 24.88 Up to 31-3-2016 744.75 93.06 As at 31-3-2016# – – As at 31-3-2016 As at 31-3-2015 355.37 413.16 59.76 48.14 18.84 0.23 0.40 48.91 – 115.87 56.36 14.85 445.86 0.15 667.85 2.26 – – 10.04 – 1.53 – 5.06 61.45 1400.30 0.53 2349.00 – 214.30 – 214.30 76.12 86.90 23128.34 13095.20 1.15 23724.84 13712.53 1.00 Previous year 10729.61 11.92 4751.01 (60.14) 43.70 15388.70 1312.76 10.45 408.04 (17.96) 37.12 1676.17 – Add: Intangible assets under development 11003.72 10109.75 34728.56 23822.28 # Impairment upto 31-3-2016 214.30 crore, during the year 214.30 crore. NOTE [E(III)] Goodwill on consolidation Particulars Goodwill on consolidation Previous year As at 1-4-2015 2263.10 2184.27 Additions 25.32 108.56 Cost/valuation Foreign currency fluctuation 5.10 (29.73) Impairment Book value crore Deductions 73.75 – As at 31-3-2016* 2219.77 2263.10 As at 31-3-2016 48.10 # 48.10 As at 31-3-2016 2171.67 2215.00 As at 31-3-2015* 2215.00 2136.17 # Impairment upto 31-03-2016 48.10 crore, during the year Nil. * Goodwill represents consideration paid in excess of share in net worth of subsidiaries acquired during the year. It also includes goodwill purchased on acquisition of business of 60.30 crore (previous year: 39.61 crore). Notes: 1 Cost/valuation of: (i) Freehold land includes: (a) 1.17 crore for which conveyance is yet to be completed. (ii) Leasehold land includes: (a) 414.54 crore representing 1148.40 acres of land taken on lease from M/s Tamilnadu Industrial Development Corporation Limited (TIDCO) on various dates for development of port and shipyard. (b) 0.47 crore representing 4.728 hectares of forest land in dist. Rudryaprayag, State of Uttarakhand, taken on lease for 30 years w.e.f. 10.09.2007. (c) 0.77 crore representing 34.341 hectares of forest land in dist. Rudryaprayag, State of Uttarakhand, taken on lease for 30 years w.e.f. 24.09.2009. (d) 73.92 crore added during the year in respect of which lease agreements are yet to be executed. 331 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: 127.58 crore, including 2595 shares of 50 each, 232 shares of 100 each and 1 share of 250 each. (b) in various apartments: 11.20 crore. (c) in proposed co-operative societies: 0.53 crore. (d) in various co-operative societies and apartments and shop-owners’ associations: 14.60 crore, for which share certificate are yet to be issued. (ii) of 4.07 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 Depreciation, amortisation, impairment and obsolescence for the year on fixed assets includes 13.26 crore (previous year: 30.27 crore) on account of obsolescence and 214.30 crore (previous year: 138.60 crore) on account of impairment. 4 Owned assets given on operating lease have been presented separately under tangible assets [Note E(I)] as per Accounting Standard (AS) 19 “Leases”. 5 Cost/valuation as at April 1, 2015 of individual assets has been reclassified, wherever necessary. 6 7 In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount of 6.14 crore before tax ( 4.01 crore net of tax of 2.13 crore) has been adjusted against retained earnings as on April 1, 2015. Additions during the year and capital work-in-progress/intangible assets under development include 1089.69 crore (previous year: 1352.98 crore) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 ”Borrowing Costs” as specified under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. Asset wise break-up of borowing costs capitalised is as follows: Asset Class Tangible Building owned Plant & equipment owned Office equipment owned Furniture and fixture owned Toll collection rights Capital work-in-progress Intangible assets under development Total 2015-16 3.13 – – – 13.20 318.20 755.16 1089.69 crore 2014-15 26.30 0.30 0.02 0.03 3.65 505.84 816.84 1352.98 332 Notes forming part of the Consolidated Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) Particulars Long term investments: Trade investments: Investments in equity instruments Investments in associates: [Note F(I)] As at 31-3-2016 As at 31-3-2015 crore crore crore crore Fully paid equity shares of associate companies 67.81 Add/(less): 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 divestment of stake in associates Add/(less): Share in profit/(loss) (net) of associate companies- during the period Share in depreciation, net of deferred tax, charged against accumulated profits Share in non-statutory reserves 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 Investments in others: Fully paid equity shares Less: Provision for diminution in value Other investments: Investments in equity instruments Less: Provision for diminution in value Investments in cumulative redeemable preference shares Investments in Government and trust securities Less: Provision for diminution in value Investments in debentures and bonds Less: Provision for diminution in value Investments in mutual funds Investments in security receipt Investment in units of fund 61.87 – (11.55) 118.13 (2.51) – (3.32) 3.82 (5.63) – (0.56) 20.00 15.90 296.35 0.61 214.01 0.03 861.52 54.96 85.05 74.57 (14.43) 4.50 149.69 2.14 (0.64) – 2.73 (4.24) (1.33) (0.56) 43.00 15.90 67.80 28.32 180.00 0.02 772.72 – 109.93 4.10 295.74 71.72 213.98 806.56 13.32 237.96 221.05 1974.36 147.79 27.10 39.48 93.75 179.98 772.72 1.70 245.85 138.43 1646.80 333 Notes forming part of the Consolidated Accounts (contd.) F(I) Investments in associates include goodwill of 23.90 crore (previous year: 23.95 crore) and is further net of capital reserve of Nil (previous year: 0.25 crore). NOTE [G(I)(a)] Long term loans and advances Particulars Secured considered good: Loans against mortgage of house property Capital advances Inter-corporate deposits including interest accrued Other loans and advances (KMPs) Unsecured considered good: Capital advances Loan and advances to related parties: Associate companies: Advances recoverable As at 31-3-2016 As at 31-3-2015 crore crore crore crore 1.24 31.50 – – 226.08 2.37 30.97 3.00 0.01 267.97 18.79 17.73 18.79 17.73 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 637.21 crore (previous year: 426.42 crore)] Minimum Alternate Tax (MAT) credit entitlement Considered doubtful: Other loans and advances Less: Allowance for doubtful loans and advances 323.63 4.79 2915.28 604.50 392.18 0.34 4240.72 0.34 254.24 3.95 2472.17 261.17 212.20 3.01 3206.74 3.01 NOTE [G(I)(b)] Long term loans and advances towards financing activities Particulars As at 31-3-2016 As at 31-3-2015 crore crore crore crore 4240.38 4517.99 3203.73 3525.78 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 334 37655.64 32.46 3873.05 528.13 42089.28 528.13 60.88 369.85 30487.13 68.31 2514.08 386.22 33455.74 386.22 119.02 290.79 41130.42 41130.42 32659.71 32659.71 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 Less: Provision for standard assets As at 31-3-2016 As at 31-3-2015 crore crore 41130.42 crore crore 32659.71 2073.91 9805.89 440.20 31.09 12351.09 31.09 9.39 – 1341.10 9645.00 293.22 54.34 11333.66 54.34 4.08 2.93 12310.61 53441.03 11272.31 43932.02 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 cash equivalents: 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 As at 31-3-2016 As at 31-3-2015 crore 101.58 101.58 crore 99.31 99.31 As at 31-3-2016 As at 31-3-2015 crore 358.13 79.89 22.34 460.36 crore 263.56 97.20 8.65 369.41 As at 31-3-2016 As at 31-3-2015 crore crore crore crore 81.79 72.57 73.15 31.60 9.22 9.22 41.55 41.55 335 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 Less: Provision for diminution in value Other investments Share application money (b) Current portion of long term investments: Preference shares Investment property NOTE [H(II)] Inventories (at cost or net realisable value whichever is lower) Particulars Raw materials [including goods-in-transit 46.10 crore (previous year: 45.26 crore)] Components [including goods-in-transit 15.84 crore (previous year: 24.10 crore)] Construction materials [including goods-in-transit 113.43 crore (previous year: 75.60 crore)] Manufacturing work-in-progress Finished goods [including goods-in-transit 0.04 crore (previous year: Nil)] Stock-in-trade (in respect of goods acquired for trading) [including goods-in-transit 34.82 crore (previous year: 36.02 crore)] Stores and spares [including goods-in-transit 3.54 crore (previous year: 7.66 crore)] Loose tools [including goods-in-transit 0.04 crore (previous year: 0.05 crore)] Property development projects (including land) [Note Q(7)(c)] Completed property [Note Q(7)(c)] 336 As at 31-3-2016 As at 31-3-2015 crore 1069.13 2.62 1371.58 10.07 5609.71 0.80 – 7.56 crore 1485.30 2.57 1263.22 0.84 5104.89 0.20 34.00 14.38 crore 9.22 1066.51 1361.51 5608.91 18.49 33.47 7.56 8105.67 crore 41.55 1482.73 1262.38 5104.69 23.19 2.40 48.38 7965.32 As at 31-3-2016 As at 31-3-2015 crore 1069.64 637.79 374.71 912.55 295.11 179.99 347.34 18.41 1526.41 – 5361.95 crore 1151.48 639.22 344.70 1145.74 403.80 178.02 327.87 14.37 2211.39 91.81 6508.40 Notes forming part of the Consolidated Accounts (contd.) NOTE [H(III)] Trade receivables Trade receivables Secured: Particulars As at 31-3-2016 As at 31-3-2015 crore crore crore crore Debts outstanding for more than 6 months: Considered good Other debts: Considered good Unsecured: Debts outstanding for more than 6 months: Considered good Considered doubtful Other debts: Considered good Considered doubtful Less: Allowance for doubtful debts 0.51 4.60 5223.68 1044.09 6267.77 30761.15 4.55 37033.47 1048.64 4.71 8.85 5.11 13.56 3509.03 673.49 4182.52 26566.78 0.46 30749.76 673.95 35984.83 35989.94 30075.81 30089.37 NOTE [H(IV)] Cash and bank balances Particulars As at 31-3-2016 As at 31-3-2015 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: 4161.01 544.40 46.79 439.72 3526.15 272.27 119.60 850.44 Fixed deposits with banks including interest accured thereon [includes 5.91 crore (previous year: 3.40 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 497.28 39.39 17.40 155.60 794.48 33.59 10.59 149.09 709.67 5901.59 987.75 5756.21 337 Notes forming part of the Consolidated Accounts (contd.) NOTE [H(V)] Short term loans and advances Particulars As at 31-3-2016 As at 31-3-2015 crore crore crore crore 0.86 73.00 0.90 70.00 73.86 70.90 7.45 0.32 0.35 0.67 523.01 52.52 8548.50 176.51 27.55 36.31 152.12 9516.52 215.98 6.37 0.83 3.17 – 8.79 10.37 434.92 64.71 6879.51 218.81 25.99 4.58 186.62 7815.14 217.19 9300.54 9383.19 7597.95 7679.22 Secured considered good: Loans against mortgage of house property: Others Inter-corporate deposits including interest accrued Unsecured: Loans and advances to related parties: Considered good: Associates: Advance recoverable Others Joint ventures: Advance recoverable Advances to suppliers Others: Considered good: Security deposits Earnest money deposit Advances recoverable in cash or in kind Balance with customs,port trust, etc. Considered doubtful: Deferred credit against sale of ships Security deposits Other loans and advances Less: Allowance for doubtful loans and advances 338 Notes forming part of the Consolidated Accounts (contd.) NOTE [H(V)(a)] Short term loans and advances towards financing activities Particulars As at 31-3-2016 As at 31-3-2015 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 Debentures 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(7)(c)] Interest accrued on investments and others Interest accrued on inter-corporate deposit Unbilled revenue Unamortised expenses Accrual of fee income Billed interest and other receivable Others 7625.67 45.48 123.73 7794.88 132.53 4369.76 345.08 18.23 4733.07 27.01 7830.08 63.66 59.78 7953.52 32.53 7662.35 7920.99 3189.63 295.75 40.00 3525.38 11.52 4706.06 12368.41 3513.86 11434.85 As at 31-3-2016 As at 31-3-2015 crore 26526.43 178.64 778.28 2.62 545.09 69.21 1.71 118.80 123.39 crore 22854.72 129.88 711.89 – 325.75 66.02 2.13 147.85 105.66 28344.17 24343.90 339 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/custom duty/entry tax/stamp duty/ municipal cess liability that may arise, including those in respect of matters in appeal/challenged by the Company in Writ (d) Income tax liability (including penalty) that may arise in respect of which the Company is in appeal As at 31-3-2016 As at 31-3-2015 crore 2462.02 222.34 881.16 767.85 crore 1596.25 217.42 227.24 1170.01 Notes: 1 2 3 The Company expects reimbursements of 27.09 crore 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. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Company has determined that the possibility of such levy is remote. Particulars of contingent liabilities in respect of joint ventures is given in Note Q(15). NOTE [J] Commitments Particulars Estimated amount of contracts remaining to be executed on capital account (net of advances) * As at 31-3-2016 As at 31-3-2015 crore 9041.92 crore 23044.13 * Particulars of capital commitments in respect of joint ventures are given in Note Q(15). NOTE [K] Revenue from operations Particulars 2015-16 2014-15 crore crore crore crore Sales & service: Construction and project related activity [Note Q(7)(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(7)(c)] 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) 68620.17 10091.25 3017.55 5824.66 8081.97 1444.76 1477.65 626.66 155.00 88.54 199.39 340.80 1960.36 297.83 60702.03 9514.69 2592.42 4941.83 7050.69 1559.17 1006.41 693.01 140.10 100.15 169.16 139.17 1531.79 206.14 Carried forward 340 102226.59 102226.59 90346.76 90346.76 Notes forming part of the Consolidated Accounts (contd.) NOTE [K] Revenue from operations (contd.) Particulars Brought forward Other operational revenue: 2015-16 crore crore 102226.59 2014-15 crore crore 90346.76 Income from hire of plant & equipment Lease rentals Property maintenance recoveries Facility management income Premium earned (net) on related forward exchange contract Profit on sale of SPVs of Developmental Projects and Realty Business Miscellaneous income 27.34 191.92 14.23 34.54 401.97 276.69 348.95 0.45 242.22 14.02 47.86 262.11 1381.76 466.48 1295.64 103522.23 2414.90 92761.66 K(I) Revenue from sales and service includes 403.61 crore (previous year: 1324.37 crore) for price variations net of liquidated damages in terms of contracts with the customers. NOTE [L] Other income Interest income: Particulars 2015-16 2014-15 crore crore crore crore Interest income on long term investments Interest income on current investments Interest income on others: Joint venture & associate companies Others Dividend income: 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) 44.97 199.36 10.05 163.86 2.15 82.54 84.69 114.17 86.44 300.08 34.88 212.41 10.33 147.12 418.24 404.74 2.07 74.74 76.81 2.75 198.86 79.56 (0.47) 444.70 386.52 62.79 2.18 114.44 1183.03 444.23 19.58 0.62 126.01 1074.74 341 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 consumed Purchase of stock-in-trade Value of stock-in-trade transferred on sale of business Stores, spares and tools consumed Sub-contracting charges 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 Stock-in-trade Work-in-progress 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 & equipment and others Bank guarantee charges Insurance claim incurred (net) Engineering, professional, technical and consultancy fees Insurance [Note O(I)] Carried forward 342 2015-16 2014-15 crore crore crore crore 13644.22 97.31 1349.93 (16.49) 295.11 179.99 4586.33 1196.93 – 323.73 6582.09 403.80 178.02 4560.05 1901.16 91.81 310.23 7445.07 (1.40) 1212.81 48.58 388.41 999.78 134.33 218.96 1268.75 200.48 10451.17 20091.51 1426.56 2501.80 17426.16 13546.91 20036.82 1333.44 1935.55 19565.57 10596.92 145.75 1426.56 – 403.80 178.02 4560.05 1901.16 91.81 310.23 7445.07 349.31 126.67 4193.05 1658.63 120.11 284.62 6732.39 862.98 (712.68) 18.72 968.23 22.14 414.65 1116.73 146.47 147.65 1149.76 237.76 4470.70 57281.27 4222.11 51184.52 Notes forming part of the Consolidated Accounts (contd.) NOTE [M] Manufacturing, construction and operating expenses (contd.) Particulars Brought forward Rent [Note O(I)] Rates and taxes [Note O(I)] Travelling and conveyance [Note O(I)] Repairs to plant & 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)] crore 51184.52 2015-16 2014-15 crore 4470.70 517.81 347.28 1075.47 91.25 21.52 376.03 12.62 51.14 1260.96 crore 57281.27 crore 4222.11 408.08 254.37 967.49 18.14 26.15 352.05 41.28 59.37 1677.34 Finance cost of financial services business and finance lease activity: Interest and other financing charges [Note O(I)] 4828.91 4158.13 8224.78 8026.38 Staff expenses for software development business:[Note O(I)] Salaries, wages and bonus Contribution to and provision for: Provident fund and pension fund Superannuation/employee pension schemes Gratuity funds [Note Q(8)(ii)(b)] Expenses on employee stock option scheme [Note A(VIII)(e)] Staff welfare expenses 4828.91 4158.13 4356.11 3634.90 53.77 5.21 14.54 (10.98) 192.67 47.94 4.47 19.61 4.29 160.21 4611.32 74946.28 3871.42 67240.45 343 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(8)(ii)(b)] Expenses on employee stock option scheme [Note A(VIII)(e)] Employee medical & other insurance premium expenses [Note O(I)] Staff welfare expenses Recoveries on account of deputation charge 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/(reversal) for standard assets Other provisions [Note Q(16)(a)] 344 2015-16 crore crore 8006.37 2014-15 crore crore 6822.42 186.65 57.45 101.75 178.06 26.15 105.40 2015-16 crore 235.90 6.49 394.03 14.86 345.85 62.67 109.90 839.72 (159.67) 9204.84 crore 123.06 186.56 109.45 520.22 160.16 631.25 21.50 417.63 586.46 3.21 218.10 187.96 75.36 242.39 128.73 45.29 686.62 379.17 12.63 778.91 77.82 77.92 170.24 97.29 208.75 6146.68 2014-15 crore 119.74 15.10 392.17 8.78 309.61 64.18 70.64 841.97 (48.93) 8059.89 crore 106.25 193.14 128.83 449.98 143.09 556.10 22.04 399.47 598.59 2.43 202.44 179.60 72.73 134.84 121.13 75.78 766.08 383.39 5.84 433.97 (19.34) 35.39 175.39 56.57 247.67 5471.40 Notes forming part of the Consolidated Accounts (contd.) NOTE [O(I)] Aggregation of expenses disclosed vide notes M, N , O and P in respect of specific items is as follows: Nature of expenses 2015-16 2014-15 Note M Note N Note O Note P Total Note M Note N Note O Note P Total crore Power and fuel 1212.81 Packing and forwarding 388.41 – – 123.06 186.56 200.48 109.90 109.45 Insurance Rent Rates and taxes 517.81 347.28 Travelling and conveyance 1075.47 Repairs to buildings 21.52 – – – – – – – 1335.87 968.23 574.97 414.65 – – 106.25 193.14 419.83 237.76 70.64 128.83 1038.03 408.08 507.44 254.37 1706.72 967.49 43.02 26.15 – – – – 449.98 143.09 556.10 – 1074.48 – – – – 607.79 437.23 858.06 397.46 – 1523.59 22.04 – 48.19 General repairs and maintenance 376.03 – 417.63 – 793.66 352.05 – 399.47 – 751.52 Sr. No. 1 2 3 4 5 6 7 8 – – – – 520.22 160.16 631.25 21.50 – – – 13706.26 3871.42 7989.25 – – 11860.67 3041.22 7870.13 4158.13 686.62 – 1947.58 1677.34 – – – 2840.05 6998.18 766.08 – 2443.42 9 Employee benefit expenses 4611.32 9094.94 10 Finance costs 4828.91 11 Miscellaneous expenses 1260.96 – – NOTE [P] Finance costs Particulars Interest expenses Other borrowing costs Exchange loss (attributable to finance costs) NOTE [Q] Q(1) Basis of preparation 2015-16 crore 2841.98 33.00 166.24 3041.22 2014-15 crore 2664.40 25.59 150.06 2840.05 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. 345 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Q(2) The list of subsidiaries, associates and joint ventures included in the Consolidated Financial Statements are as under:- Name of subsidiary company Sr. No. As at 31-3-2016 As at 31-3-2015 Country of incorporation Proportion of ownership interest (%) Proportion of voting power held (%) Proportion of ownership interest (%) Proportion of voting power held (%) Domestic Subsidiaries L&T Cutting Tools 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 Limited L&T-Gulf Private Limited L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited Raykal Aluminium Company Private Limited L&T Natural Resources Limited @@ L&T Hydrocarbon Engineering 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 L&T Realty Limited L&T Asian Realty Project LLP L&T Parel Project LLP Chennai Vision Developers Private Limited L&T South City Projects Limited L&T Vision Ventures Limited CSJ Infrastructure 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 Housing Finance Limited Consumer Financial Services Limited Family Credit Limited L&T Finance Limited L&T Capital Markets 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 48 49 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 346 100.00 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 74.00 72.11 95.00 50.10 – 60.00 60.00 – 100.00 51.00 74.00 100.00 100.00 100.00 100.00 100.00 51.00 68.00 – 99.99 74.00 100.00 100.00 – – – 94.96 94.96 66.71 66.71 66.71 66.71 66.71 66.71 100.00 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 74.00 72.11 95.00 50.10 – 60.00 60.00 – 100.00 51.00 74.00 100.00 100.00 100.00 100.00 100.00 51.00 68.00 – 99.99 74.00 100.00 100.00 – – – 94.96 94.96 66.71 66.71 66.71 66.71 66.71 66.71 100.00 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 72.77 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 68.00 100.00 99.99 74.00 100.00 100.00 89.00 65.86 51.72 100.00 100.00 72.95 72.95 72.95 72.95 72.95 72.95 100.00 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 72.77 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 68.00 100.00 99.99 74.00 100.00 100.00 89.00 65.86 51.72 100.00 100.00 72.95 72.95 72.95 72.95 72.95 72.95 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of subsidiary company Sr. No. Country of incorporation L&T Investment Management Limited L&T Mutual Fund Trustee 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 L&T Access Distribution Services Limited 50 51 52 53 54 55 56 57 58 59 Mudit Cement Private Limited L&T Capital Company Limited 60 L&T Trustee Company Private Limited 61 L&T Power Development Limited 62 L&T Uttaranchal Hydropower Limited 63 L&T Arunachal Hydropower Limited 64 L&T Himachal Hydropower Limited 65 Nabha Power Limited 66 L&T Infrastructure Development Projects Limited 67 L&T Panipat Elevated Corridor Limited 68 L&T Krishnagiri Thopur Toll Road Limited 69 L&T Western Andhra Tollways Limited 70 L&T Vadodara Bharuch Tollway Limited 71 L&T Transportation Infrastructure Limited 72 L&T Western India Tollbridge Limited 73 L&T Interstate Road Corridor Limited 74 L&T Port Kachchigarh Limited 75 L&T Ahmedabad-Maliya Tollway Limited 76 L&T Halol-Shamlaji Tollway Limited 77 L&T Krishnagiri Walajahpet Tollway Limited 78 L&T Devihalli Hassan Tollway Limited 79 L&T Metro Rail (Hyderabad) Limited 80 L&T Chennai-Tada Tollway Limited 81 L&T BPP Tollway Limited 82 L&T Rajkot-Vadinar Tollway Limited 83 L&T Deccan Tollways Limited 84 L&T Samakhiali Gandhidham Tollway Limited 85 Kudgi Transmission Limited 86 L&T Sambalpur-Rourkela Tollway Limited 87 L&T Technology Services Limited 88 L&T Construction Equipment Limited 89 L&T Infrastructure Engineering Limited 90 L&T Thales Technology Services Private Limited 91 92 Information Systems Resource Centre Private Limited @ 93 Marine Infrastructure Developer Private Limited ^ 94 * The Group sold its stake on November 16, 2015 ** The Group sold its stake on March 31, 2016 @ The subsidiary is merged with Larsen & Toubro Infotech Limited w.e.f. October 17, 2014 @@ The subsidiary is merged with L&T Capital Company Limited w.e.f. April 1, 2015 ^ The company is incorporated on January 22, 2016 ^^ The company is incorporated on August 17, 2015 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 LTH Milcom Private Limited ^^ As at 31-3-2016 As at 31-3-2015 Proportion of ownership interest (%) 66.71 66.71 66.71 66.71 66.71 66.71 66.71 66.71 66.71 66.71 100.00 100.00 100.00 100.00 100.00 100.00 100.00 97.45 97.45 97.45 97.45 97.45 98.12 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 97.45 100.00 100.00 100.00 74.00 – 100.00 56.67 Proportion of voting power held (%) 66.71 66.71 66.71 66.71 66.71 66.71 66.71 66.71 66.71 66.71 100.00 100.00 100.00 100.00 100.00 100.00 100.00 97.45 97.45 97.45 97.45 97.45 98.12 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 97.45 100.00 100.00 100.00 74.00 – 100.00 56.67 Proportion of ownership interest (%) 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 100.00 100.00 100.00 100.00 100.00 100.00 100.00 97.45 97.45 97.45 97.45 97.45 98.12 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 97.45 100.00 100.00 100.00 74.00 100.00 – – Proportion of voting power held (%) 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 100.00 100.00 100.00 100.00 100.00 100.00 100.00 97.45 97.45 97.45 97.45 97.45 98.12 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 97.45 100.00 100.00 100.00 74.00 100.00 – – 347 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of subsidiary company Sr. No. As at 31-3-2016 As at 31-3-2015 Country of incorporation Proportion of ownership interest (%) Proportion of voting power held (%) Proportion of ownership interest (%) Proportion of voting power held (%) Foreign subsidiaries Larsen & Toubro LLC Larsen & Toubro Infotech GmbH Larsen & Toubro Infotech Canada Limited Larsen & Toubro Infotech LLC L&T Infotech Financial Services Technologies Inc. USA Germany Canada USA Canada Larsen & Toubro Infotech South Africa (PTY) Limited South Africa L&T Information Technology Services (Shanghai) Co. Ltd. China L&T Infrastructure Development Projects Lanka (Private) Sri Lanka Limited L&T IDPL Trustee Manager Pte Ltd. L&T Realty FZE Larsen & Toubro International FZE Larsen & Toubro Hydrocarbon International Limited LLC Thalest Limited Servowatch Systems Limited Larsen & Toubro (Oman) LLC 16 Larsen & Toubro Electromech LLC 17 L&T Modular Fabrication Yard LLC Larsen & Toubro (East Asia) Sdn.Bhd. ## Larsen & Toubro Qatar LLC ## L&T Overseas Projects Nigeria Limited Singapore UAE UAE Kindgom of Saudi Arabia UK UK Sultanate of Oman Sultanate of Oman Sultanate of Oman Malaysia Qatar Nigeria 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 18 19 20 21 22 100.00 100.00 94.96 94.96 94.96 94.96 71.12 94.96 93.48 97.45 100.00 100.00 100.00 100.00 100.00 65.00 65.00 65.00 30.00 49.00 100.00 95.00 100.00 94.96 94.96 94.96 94.96 71.12 94.96 93.48 97.45 100.00 100.00 100.00 100.00 100.00 65.00 65.00 65.00 100.00 100.00 100.00 95.00 100.00 100.00 100.00 100.00 100.00 100.00 74.90 100.00 93.47 97.45 100.00 100.00 100.00 100.00 100.00 65.00 100.00 100.00 100.00 100.00 100.00 74.90 100.00 93.47 97.45 100.00 100.00 100.00 100.00 100.00 65.00 65.00 65.00 65.00 65.00 30.00 49.00 100.00 95.00 75.00 100.00 100.00 100.00 95.00 75.00 PT Larsen & Toubro Hydrocarbon Engineering Indonesia Indonesia L&T Electricals & Automation Saudi Arabia Company LLC Kindgom of Saudi Arabia 23 Larsen & Toubro Kuwait Construction General Contracting Kuwait 49.00 75.00 49.00 75.00 Company, WLL ## 24 Larsen & Toubro Readymix & Asphalt Concrete Industries UAE 49.00 100.00 49.00 100.00 LLC ## 25 Larsen & Toubro Saudi Arabia LLC 26 Larsen Toubro Arabia LLC 27 Larsen & Toubro ATCO Saudia LLC ## 28 29 30 Tamco Switchgear (Malaysia) Sdn. Bhd. Henikwon Corporation Sdn. Bhd. Tamco Electrical Industries Australia Pty Ltd. 348 Kindgom of Saudi Arabia Kindgom of Saudi Arabia Kindgom of Saudi Arabia Malaysia Malaysia Australia 100.00 100.00 100.00 100.00 75.00 75.00 100.00 100.00 100.00 75.00 75.00 100.00 100.00 100.00 75.00 75.00 75.00 75.00 100.00 100.00 100.00 100.00 100.00 100.00 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Sr. No. 31 32 33 34 35 36 37 38 39 40 41 Name of subsidiary company PT Tamco Indonesia Larsen & Toubro Heavy Engineering LLC L&T Electrical & Automation FZE Kana Controls General Trading & Contracting Company W.L.L. ## Larsen & Toubro Consultoria E Projeto Ltda * Larsen & Toubro T&D SA (Proprietary) Limited L&T Technology Services LLC Larsen &Toubro (Qingdao) Rubber Machinery Company Limited ** L&T Infotech Austria GmbH LLC ^ L&T Global Holdings Limited ^^ L&T Information Technology Spain SL $ Country of incorporation Indonesia Sultanate of Oman UAE Kuwait Brazil South Africa USA Peoples Republic of China Austria UAE Spain As at 31-3-2016 As at 31-3-2015 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 70.00 70.00 70.00 70.00 100.00 49.00 – 72.50 100.00 – 94.96 100.00 94.96 100.00 100.00 – 72.50 100.00 – 94.96 100.00 94.96 100.00 49.00 100.00 72.50 100.00 100.00 – – – 100.00 100.00 100.00 72.50 100.00 100.00 – – – ## The Parent Company, together with its subsidiaries controls the composition of Board of Directors * The company is dissolved on November 6, 2015 ** The company is dissolved on June 9, 2015 ^ The company is incorporated on June 18, 2015 ^^ The company is incorporated on February 24, 2016 $ The company is incorporated on February 1, 2016 Name of associate company Sr. No. Country of incorporation L&T-Chiyoda Limited Gujarat Leather Industries Limited @ International Seaports (Haldia) Private Limited Vizag IT Park Limited * Salzer Electronics Limited ** Larsen & Toubro Qatar & HBK Contracting LLC L&T Camp Facilities LLC Feedback Infra Private Limited JSK Electricals Private Limited # Rishi Consfab Private Limited $ 1 2 3 4 5 6 7 8 9 10 11 Magtorq Private Limited 12 Grameen Capital India Limited ^ India India India India India Qatar UAE India India India India India As at 31-3-2016 As at 31-3-2015 Proportion of ownership interest (%) 50.00 50.00 21.74 – – 50.00 49.00 15.74 – – 42.85 23.87 Proportion of voting power held (%) 50.00 50.00 21.74 – – 50.00 49.00 15.74 – – 42.85 23.87 Proportion of ownership interest (%) 50.00 50.00 21.74 23.14 26.06 50.00 49.00 16.89 26.00 26.00 42.85 – Proportion of voting power held (%) 50.00 50.00 21.74 23.14 26.06 50.00 49.00 16.89 26.00 26.00 42.85 – @ The company is under liquidation ^ The group has acquired stake in July, 2015. Investment in the associate company has been accounted in accordance with Accounting Standard (AS) 13, “Accounting for Investments” and not as per Accounting Standard (AS) 23, “Accounting for Investments in Associates in Consolidated Financial Statements”, as the associate company operates under severe long term restrictions that significantly impair its ability to transfer funds to the Company. * The Group has sold its stake on March 31, 2016 ** The Group has sold its stake in July and August 2015 # The Group has sold its stake on March 29, 2016 $ The Group has sold its stake on December 21, 2015 349 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of joint venture Sr. No. Country of incorporation As at 31-3-2016 Proportion of ownership interest (%) As at 31-3-2015 Proportion of ownership interest (%) 65.00 26.00 49.00 43.00 26.00 90.00 51.00 75.00 60.00 50.00 68.00 60.00 50.00 55.00 50.00 50.00 65.00 50.00 29.00 22.00 60.00 75.00 82.30 65.00 26.00 49.00 43.00 26.00 90.00 51.00 75.00 60.00 50.00 68.00 60.00 50.00 55.00 – – 65.00 50.00 29.00 22.00 60.00 – – 1 2 3 4 5 6 7 8 9 10 11 12 a) 12 b) 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Jointly controlled entities - Indian joint ventures L&T-AM Tapovan Joint Venture International Metro Civil Contractors Joint Venture 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 Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group) Corporation Joint Venture Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint Works Joint Venture Larsen and Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture Larsen & Toubro Limited & NCC Limited Joint Venture Bauer-L&T Geo Joint Venture * DAEWOO and L&T Joint Venture ** Jointly controlled entities - Foreign joint ventures L&T-Eastern Joint Venture @ Indiran Engineering Projects and Systems Kish PJSC Civil Works Joint Venture Aktor- Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering Joint Venture L&T-Delma Mafraq Joint Venture L&T-AL-Sraiya LRDP 6 Joint Venture $ PESB and Larsen & Toubro Joint Venture $$ Jointly controlled operations - Indian joint ventures L&T Sojitz Consortium L&T-KBL (UJV) Hyderabad Patel–L&T Consortium L&T-SVEC Joint Venture L&T–KBL – MAYTAS Joint Venture Larsen and Toubro Limited & Bharat Rail Automation Pvt. Ltd. Joint Venture (part 2) Larsen and Toubro Limited & Bharat Rail Automation Pvt. Ltd. Joint Venture (part 3) IIS - L&T Consortium L&T and Scomi Engineering BHD. Joint Venture Consortium of L&T Hydrocarbon Engineering Limited & Toyo Engineering Company Consortium of L&T Hydrocarbon Engineering Limited and Pipavav Defence & Offshore Engineering Company @ The joint venture is in process of liquidation * The joint venture has been entered into on January 16, 2015 ** The joint venture has been entered into on November 7, 2015 $ The joint venture has been entered into on August 30, 2015 $$ The joint venture has been entered into on April 29, 2015 India India India India India India India India India India India India India India India India UAE Iran Kingdom of Saudi Arabia Qatar UAE Qatar Malaysia India India India India India India India India India India Q(3) Reserves and Surplus shown in the Consolidated Balance Sheet include the Group’s share in the respective reserves of subsidiaries and proportionate reserves of joint ventures. Reserves attributable to minority stakeholders are 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. 350 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Q(4) Exceptional items [Note R(5)]: a. b. c. d. Profit on divestment of the Group’s part stake in a subsidiary 263.89 crore (previous year: 203.81 crore) Profit on divestment of the Group’s stake in an associate company 45.69 crore (previous year: Nil) Profit on sale of Foundry Business Unit 48.52 crore (previous year: Nil) Exceptional items for the previous year ended March 31, 2015 included profit on sale of shares held as equity investment by a subsidiary 143.89 crore Q(5) The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 187.33 crore (previous year: 165.07 crore). Further, the Company has incurred capital expenditure on research and development activities as follows: a) on tangible assets 5.68 crore (previous year: 7.41 crore) b) on intangible assets being expenditure on new product development 48.19 (previous year: 56.93 crore) [Note R(6)(b)] and c) on other intangible assets 6.80 crore (previous year: 5.79 crore) Q(6) a) Provision for current tax includes: i) Provision for income tax in respect of earlier years 48.98 crore (net loss) [previous year: 0.06 crore (net gain)] ii) Credit for Minimum Alternate Tax (MAT) entitlement 198.25 crore (previous year: 96.76 crore) under section 115JB of the Income Tax Act, 1961 iii) Translation effect on account of non-integral foreign operation 0.66 crore (net gain) [previous year: 0.10 crore (net loss)] b) Tax effect of 0.13 crore (previous year: 9.29 crore) on account of debenture/share/foreign currency convertible bond issue expenses and premium on inflation linked debentures has been credited to securities premium account. Q(7) (a) Disclosures pursuant to Accounting Standard (AS) 7 (Revised) “Construction Contracts”: Particulars i) ii) iii) 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 iv) Retention amounts by customers for contracts in progress as at the end of the financial year *Includes provision for foreseeable loss - 288.89 crore (previous year: 212.32 crore) 2015-16 68620.17 crore 2014-15 60702.03 256239.21 222933.58 26600.83 9206.14 12432.59 6431.24 (b) As part of periodic review of estimates used in determining cost of completion of projects, the Company revised certain estimates used in civil construction jobs under execution as on March 31, 2016. As a result, the revenue and profit before tax for the year increased by 395.73 crore. (c) 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) iii) iv) v) 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 Amount of customer advances received Amount of work-in-progress and the value of inventories [Note H(II)] Excess of revenue recognised over actual bills raised (unbilled revenue) [Note H(VI)] 2015-16 1444.76 4005.78 60.27 1526.41 178.64 crore 2014-15 1559.17 2510.94 62.86 2303.20 129.88 Q(8) Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benefits” i. Defined contribution plans: [Note R(7)(b)(i)] Amount of 158.25 crore (previous year: 110.69 crore) is recognised as an expense. Out of above, 156.49 crore (previous year: 109.27 crore) is included in “employee benefits expense” [Note N] in the Statement of Profit and Loss and 1.76 crore (previous year: 1.42 crore) is included in capital work-in-progress. 351 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: crore Particulars Gratuity plan Post-retirement medical benefit plan Company pension plan Trust-managed provident fund plan As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 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) Amounts reflected in the Balance Sheet B) 626.08 145.00 771.08 572.93 – 4.76 595.41 143.90 739.31 518.60 – 4.33 – 193.31 193.31 – 0.82 – – 181.08 181.08 – 0.96 – – 287.56 287.56 – 39.66 – – 3083.59 221.47 12.19 221.47 3095.78 – 3102.10 – 10.48 0.30 – 2799.77 30.89 2830.66 2811.65 – – 202.91 225.04 192.49 180.12 247.90 221.17 4.16 19.01 Liabilities Assets Net liability/(asset) Net liability/(asset) - current Net liability/(asset) - non-current 202.91 – 202.91 202.91 – 225.04 – 225.04 225.04 – 192.49 – 192.49 17.22 175.27 180.12 – 180.12 14.59 165.53 247.90 – 247.90 16.82 231.08 221.17 – 221.17 13.47 207.70 4.16 – 4.16 3.55 0.61 b) The amounts recognised in Statement of Profit and Loss are as follows: 19.01 – 19.01 8.58 10.43 crore Particulars Gratuity plan Post-retirement medical benefit plan Company pension plan Trust-managed provident fund plan 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 1 2 3 4 5 6 7 8 9 10 Translation adjustments 11 Amount capitalised out of the above I II Total (1 to 11) Amount included in “employee benefits expense” Amount included as part of “manufacturing construction and operating expenses” Amount included as part of “finance cost” III IV Amount capitalised on new product development Total (I+II+III+IV) Actual return on plan assets 352 31-3-2016 31-3-2015 31-3-2016 31-3-2015 31-3-2016 31-3-2015 31-3-2016 31-3-2015 180.76$ 201.44 (202.50) (24.99) – – – – 0.10 – – 154.81 88.08 131.96 237.71 (239.08) (34.37) – – – – 35.43 – – 131.65 105.94 85.42 44.58 (33.00) 36.39 0.53 – – (0.89) 2.14 (0.30) (0.60) 134.27 105.40 111.43 48.16 (36.63) (2.83) 0.06 – (0.16) (0.53) 0.53 (0.34) (0.93) 118.76 101.75 10.42 12.20 – 38.80 0.14 – – – – – – 61.56 23.18 1.58 16.83 – 29.25 0.11 – – – – – – 47.77 1.82 14.86 14.91 – (9.30) 0.14 – – – – – – 20.61 4.56 4.61 16.90 – 10.33 10.22 – – – – – – 42.06 26.15 14.54 19.61 – – – – 25.71 19.00 2.36 0.11 9.25 0.01 118.76 48.99 134.27 66.00 16.05 – 20.61 – 38.38 – 61.56 – 15.91 – 42.06 – 45.95 – 47.77 – – – 47.73 – 131.65 258.42 154.81 210.50 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 Post-retirement medical benefit plan Company pension plan Trust-managed provident fund plan As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 crore 739.31 111.43 48.16 583.41 85.42 44.58 181.09 14.86 14.91 126.93 10.42 12.19 221.47 4.61 16.90 188.93 2830.66 2465.71 1.58 131.96 $ 180.76 $ 201.44 16.82 237.71 – – – 9.54 (143.75) 0.16 – – – 69.27 (45.28) 0.53 0.51 (1.19) 1.40 5.51 0.39 0.33 – 0.66 – – – (9.30) (8.25) – – – – – – – – 38.80 (7.12) – (0.14) – – – – – – 10.33 (15.32) 49.57 – – – 313.24 – – 29.25 (17.60) (15.11) (388.17) – – – 350.52 – (22.25) (343.40) – – – – – – (11.19) – – (0.83) – – – (2.12) – – – 771.08 739.31 193.31 181.08 287.56 221.47 3095.78 2830.66 d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: crore Particulars Gratuity plan As at 31-3-2016 518.60 36.63 12.36 147.93 – – (143.75) (0.20) 1.36 572.93 As at 31-3-2015 456.76 33.00 32.99 36.94 – – (42.14) 0.82 0.23 518.60 Trust-managed provident fund plan As at 31-3-2016 2811.65 239.08 19.34 124.91 – 309.27 (396.03) 12.05 (18.17) 3102.10 As at 31-3-2015 2444.74 202.50 8.00 158.75 – 322.15 (324.49) – – 2811.65 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 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 10(ii)(f)(7)] infra. The Company expects to fund 66.85 crore (previous year: 91.43 crore) towards its gratuity plan and 145.15 crore (previous year: 198.84 crore) towards its trust-managed provident fund plan during the year 2015-16. Employer’s and employees’ contribution paid in advance Employer’s contribution to provident fund # $ 353 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 Trust-managed provident fund plan As at 31-3-2016 23% 18% 34% 2% As at 31-3-2015 31% 11% 30% 2% As at 31-3-2016 25% 16% 9% – As at 31-3-2015 24% 15% 8% – – – 14% 9% – 1% 17% 8% 9% – 39% 1% 10% – 42% 1% f) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): 1 2 3 4 Discount rate: a) Gratuity plan b) Company pension plan c) Post-retirement medical benefit plan Expected return on plan assets: Annual increase in healthcare costs (see Note 8 below) Salary Growth rate: a) Gratuity plan b) Company pension plan 5. Attrition Rate: As at 31-3-2016 As at 31-3-2015 7.79% 7.79% 7.79% 7.50% 5.00% 5.00% 6.00% 7.83% 7.83% 7.83% 7.50% 5.00% 5.00% 6.00% 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. b) For gratuity plan the attrition rate varies from 1% to 6% (previous year: 1% to 6%) for various age groups. 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 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. 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. 6. 7. 8. 9. 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 2015-16 2014-15 2015-16 2014-15 Effect on the aggregate of the service cost and interest cost Effect on defined benefit obligation 5.83 25.94 5.54 23.88 (4.30) (19.61) (4.27) (18.94) crore 354 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) g) The amounts pertaining to defined benefit plans are as follows: 1 2 3 4 Particulars As at 31-3-2016 As at 31-3-2015 As at 31-3-2014 As at 31-3-2013 As at 31-3-2012 Post-retirement medical benefit plan (unfunded) Defined benefit obligation Experience adjustment plan liabilities 192.49 (6.69) 180.12 12.60 125.82 14.76 117.70 0.69 92.64 (6.62) crore Gratuity plan (funded/unfunded) Defined benefit obligation Plan assets Surplus/(deficit) Experience adjustment plan liabilities Experience adjustment plan assets Post-retirement pension plan (unfunded) Defined benefit obligation Experience adjustment plan liabilities Trust managed provident fund plan (funded) Defined benefit obligation Plan assets Surplus/(deficit) 771.08 572.93 (198.15) 4.18 7.11 739.31 518.60 (220.71) 19.88 34.41 558.11 456.76 (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) 247.90 11.45 221.17 5.13 188.52 (0.22) 198.36 (2.79) 184.03 23.21 3095.78 3102.10 (4.16) 2830.66 2811.65 (19.01) 2465.71 2444.74 (20.97) 2058.91 2027.93 (30.98) 1833.45 1791.04 (42.41) 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. The unfunded obligation towards gratuity also includes gratuity payable to employees outside India under the applicable local laws. 2. Post-retirement medical care 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 9.87 crore (previous year: provision of 28.80 crore) has been reversed based on actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan. 355 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Q(9) Disclosure pursuant to Accounting Standard (AS) 17 ‘’Segment Reporting’’ a) Primary segments (business segments) Particulars REVENUE Infrastructure Power Metallurgical and Material Handling Heavy Engineering Electrical & Automation Hydrocarbon IT & Technology Services Financial Services Developmental Projects Others Elimination Total Revenue RESULT Infrastructure Power Metallurgical and Material Handling Heavy Engineering Electrical & Automation 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 expenses 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 associate companies Minority interest in (income)/losses Profit after tax, minority interest and share in profit of associates 356 For the year ended 31-3-2016 Inter-segment External For the year ended 31-3-2015 Total External Inter-segment Total crore 48797.10 6992.85 2414.66 3123.80 4960.84 8786.55 8955.92 7540.08 5137.32 6813.11 – 103522.23 1589.77 17.83 422.33 199.40 485.48 53.23 160.70 1.08 8.78 321.61 (3260.21) – 50386.87 7010.68 2836.99 3323.20 5446.32 8839.78 9116.62 7541.16 5146.10 7134.72 (3260.21) 103522.23 43426.31 4738.49 3181.77 3459.34 5060.81 7351.41 7588.63 6393.07 5148.03 6413.80 – 92761.66 1428.10 17.43 244.73 164.44 398.81 80.11 65.78 7.43 7.38 251.14 (2665.35) – 5274.05 580.58 40.11 (192.03) 498.90 (15.43) 1698.25 1028.46 621.88 1130.08 10664.85 (68.86) 10595.99 113.64 10709.63 (3041.22) 418.24 8086.65 – 8086.65 (2764.19) 215.71 5538.17 (0.18) (2.51) (444.95) 5090.53 44854.41 4755.92 3426.50 3623.78 5459.62 7431.52 7654.41 6400.50 5155.41 6664.94 (2665.35) 92761.66 4247.26 539.48 238.98 227.00 549.23 (1342.80) 1316.46 1015.84 1674.40 1192.13 9657.98 (63.07) 9594.91 57.65 9652.56 (2840.05) 404.73 7217.24 – 7217.24 (2661.91) 408.67 4964.00 – 2.14 (201.32) 4764.82 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Other information Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Hydrocarbon IT & Technology Services Financial Services Developmental Projects Others Unallocable corporate assets/liabilities Total assets/liabilities Other information Infrastructure Power Metallurgical & Material Handling Heavy Engineering Electrical & Automation Hydrocarbon IT & Technology Services Financial Services Developmental Projects Others (b) Secondary segments (geographical segments) Segment assets Segment liabilities crore As at 31-3-2016 48366.19 9905.93 5227.02 6960.42 4607.25 6609.29 4926.99 63365.38 52972.79 14274.37 217215.63 10309.09 227524.72 As at 31-3-2015 39552.78 8329.70 4966.66 6986.53 4792.55 6670.56 4660.58 52561.84 40436.86 14951.80 183909.86 9895.77 193805.63 As at 31-3-2016 30265.13 7105.18 2035.53 3730.87 1750.93 4572.61 1784.74 55227.64 21912.37 4851.72 133236.72 43527.49 176764.21 As at 31-3-2015 25407.53 6280.23 1738.63 2872.09 1906.94 4400.50 1284.04 44822.09 13390.88 4166.86 106269.79 41628.15 147897.94 crore Capital Expenditure For the year ended 31-3-2016 874.55 96.72 10.45 73.23 187.98 41.01 256.70 137.04 12142.03 1408.22 For the year ended 31-3-2015 439.27 68.23 64.38 127.93 269.28 129.29 281.20 117.00 5202.18 615.71 Depreciation, amortisation, impairment & obsolescence included in segment expenses For the year ended 31-3-2016 479.28 230.78 89.72 171.17 146.93 212.88 239.71 114.21 744.93 223.37 For the year ended 31-3-2015 607.22 218.72 93.01 191.04 160.77 214.62 231.66 110.00 472.51 223.21 Non-cash expenses other than depreciation included in segment expenses For the year ended 31-3-2016 19.22 4.92 3.19 2.79 4.09 4.18 – 1.33 – 1.83 For the year ended 31-3-2015 21.52 7.14 4.05 3.35 4.37 5.73 – 0.92 – 2.09 crore Particulars External revenue by location of customers Carrying amount of segment assets by location of assets Domestic Overseas Total For the year ended 31-3-2016 70220.17 192306.88 For the year ended 31-3-2015 66835.47 164851.54 For the year ended 31-3-2016 33302.06 24908.75 For the year ended 31-3-2015 25926.19 19058.32 For the year ended 31-3-2016 103522.23 217215.63 For the year ended 31-3-2015 92761.66 183909.86 Cost incurred on acquisition of tangible and 14668.27 6733.23 559.67 581.25 15227.94 7314.48 intangible fixed assets 357 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] 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. b] 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. ii) 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, smart world and communication 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, control & automation products. Electrical & Automation also included medical equipment business in the previous year (upto the date of sale). 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 segment includes realty, shipbuilding, manufacture and sale of industrial valves, welding and cutting equipment, manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof, manufacture and sale of rubber processing machinery & castings, ready-mix concrete, asphalt & paving materials, mining and aviation. 358 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Q(10) 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 3 Magtorq Private Limited 5 Vizag IT Park Limited ** 7 International Seaports (Haldia) Private Limited 9 Rishi Consfab Private Limited@@ 2 Salzer Electronics Limited * 4 JSK Electricals Private Limited @ 6 Feedback Infra Private Limited 8 L&T Camp Facilities LLC * The Group has sold its stake on July and August 2015. @ The Group has sold its stake on March 29, 2016. ** The Group has sold its stake on March 31, 2016. @@ The Group has sold its stake on December 21, 2015 Joint ventures: 1 Metro Tunneling Group 3 Desbuild-L&T Joint Venture 5 L&T-AM Tapovan Joint Venture 7 L&T ASTCC Joint Venture – Doha$$ 9 Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint venture 11 Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture 13 International Metro Civil Contractors Joint Venture 15 Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture 2 L&T-Hochtief Seabird Joint Venture 4 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 6 HCC-L&T Purulia Joint Venture 8 Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture 10 L&T-Eastern Joint Venture $ 12 L&T Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi 14 Civil Works Joint Venture 16 L&T-Delma Mafraq Joint Venture 17 Larsen & Toubro Limited and NCC Limited Joint Venture 18 Indiran Engineering Projects and Systems Kish PJSC $ The Joint Venture is in the process of dissolution $$ The Joint Venture has been entered into on August 30, 2015 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) ** 5 Mr. S. N. Subrahmanyan [Deputy Managing Director and 4 Mr. R. Shankar Raman (CFO & Whole-time Director) 6 Mr. S. N. Roy (Whole-time Director ) President] 7 Mr. D. K. Sen (Whole-time Director) # 8 Mr. M. V. Satish (Whole-time Director) ## * Retired on September 30, 2015. # Appointed as DMD w. e. f. October 1, 2015. ** Retired on August 26, 2015. ## Appointed w. e. f. January 29, 2016. 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- Chiyoda Limited JSK Electricals Private Limited Salzer Electronics Limited Magtorq Private Limited Total 99.29 187.56 2015-16 2014-15 Amount Amounts for major parties Amount Amounts for major parties crore 99.29 187.56 16.96 27.99 37.33 10.16 23.42 24.04 123.81 – 359 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) 2015-16 2014-15 Amount Amounts for major parties Amount Amounts for major parties crore 93.18 87.33 Sr. No. 2 Nature of transaction/relationship/major parties Sale of goods/contract revenue & services Associates & joint ventures, including: Larsen & Toubro Limited and NCC Limited Joint Venture Civil Work Joint Venture Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Joint Venture L&T- Shanghai Urban Construction (Group) Joint Venture CC27 Delhi Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture 10.64 – 10.50 34.00 33.41 Total 93.18 87.33 3 4 5 Purchase/lease of fixed assets Associates & joint ventures, including: L&T- Chiyoda Limited Total Sale of fixed assets Key management personnel K. Venkataramanan * M. V. Kotwal ** Total Receiving of services from related parties Associates & joint ventures, including: L&T-Chiyoda Limited Feedback Infra Private Limited Civil Work Joint Venture Total 6 Charges paid for miscellaneous services 7 8 Feedback Infra Private Limited L&T-Chiyoda Limited Civil Work Joint Venture Total Rent paid Key management personnel K. Venkataramanan * & Mrs. Jyothi Venkataramanan Total Charges for deputation of employees to related parties Associates & joint ventures, including: L&T-Chiyoda Limited Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture Civil Work Joint Venture L&T-Delma Mafraq Joint Venture – – 9.29 9.29 8.49 8.49 2.48 2.48 0.01 0.01 – 8.85 0.44 6.60 – 1.89 – 0.59 1.89 0.01 0.11 0.11 – – 3.01 3.01 1.04 1.04 0.01 0.01 252.91 21.12 – 32.30 132.31 69.20 Total 252.91 21.12 360 – 50.12 19.09 – 9.58 0.11 – – 2.21 0.77 – 0.77 0.23 – 0.01 21.06 – – – Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Sr. No. 9 Nature of transaction/relationship/major parties Dividend received Associates & joint ventures, including: International Seaports (Haldia) Private Limited Feedback Infra Private Limited Vizag IT Park Limited Salzer Electronics Limited Total 10 Rent received, overheads recovered and miscellaneous income Associates & joint ventures, including: L&T-Chiyoda Limited Civil Work Joint Venture L&T Delma Mafraq Joint Venture Aktor-Larsen&Toubro-Yapi Merkezi-stfa-AL Jaber Engineering Joint Venture Total 11 Interest Received Associates & joint ventures, including: The Dhamra Port Company Limited Feedback Infra Private Limited Total 12 Payment of salaries/perquisites (other than commission) Key management personnel: 13 A.M. Naik K. Venkataramanan *^ M.V. Kotwal **^^ S.N. Subrahmanyan R. Shankar Raman S. N. Roy D. K. Sen # M. V. Satish ## Total Commission to directors @ Key management personnel: A.M. Naik K. Venkataramanan * M.V. Kotwal ** S.N. Subrahmanyan R. Shankar Raman S. N. Roy D. K. Sen # M. V. Satish ## Total 2015-16 2014-15 Amount Amounts for major parties Amount Amounts for major parties crore 5.63 4.24 5.63 9.45 9.45 7.69 7.69 36.19 36.19 59.93 4.24 143.21 143.21 15.67 15.67 16.98 16.98 64.27 2.46 0.57 2.22 – 3.85 – – 5.60 – 7.69 4.52 15.19 9.60 2.02 1.70 2.31 0.61 0.24 22.81 4.28 2.31 12.57 8.76 5.59 2.68 0.93 1.97 0.76 0.94 0.40 8.78 72.63 32.02 28.57 9.32 6.32 4.22 4.20 3.01 1.74 1.59 2.22 – – 23.10 9.38 6.24 11.09 8.78 5.68 – – 59.93 64.27 * Retired on September 30, 2015. # Appointed w. e. f. October 1, 2015. ^ Includes leave encashment payment 13.53 cr. ** Retired on August 26, 2015. ## Appointed w. e. f. January 29, 2016. ^^ Includes leave encashment payment 7.89 cr. 361 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) @ Commision to Directors comprises : Sr. No. 1 Commission 2 Contribution to provident fund 3 Contribution to superannuation fund on commission Particulars Total 2015-16 47.81 5.04 7.08 59.93 2014-15 50.61 6.07 7.59 64.27 “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: Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T Shanghai Urban Construction ( Group) Corporation Joint Venture Civil Work Joint Venture Feedback Infra Private Limited Total 2 Accounts Payable (including acceptance & interest accrued) Associates & joint ventures, including: L&T- Chiyoda Limited Magtorq Private Limited Salzer Electronics Limited Total 3 Unsecured loan Joint ventures: Metro Tunneling Group Total 2015-16 2014-15 Amount Amounts for major parties Amount Amounts for major parties crore 128.95 40.00 36.82 18.91 57.64 – 6.42 7.79 – 30.00 128.95 15.19 31.87 30.00 30.00 40.00 31.87 31.87 30.00 30.00 – – – 40.00 8.19 – 18.54 30.00 17.92 6.73 – 0.01 4 Loans & advances recoverable (Including loans and advances towards financing activities) Associates & joint ventures, including: 87.58 28.10 L&T Camp Facilities LLC L&T- Chiyoda Limited Feedback Infra Private Limited Key management personnel K. Venkataramanan * & Mrs. Jyothi Venkataramanan Total 19.18 – 60.00 0.01 0.01 87.59 0.01 28.11 362 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Sr. No. 5 Nature of transaction/relationship/major parties Due to Whole-time Directors (Key Management Personnel) A.M. Naik K. Venkataramanan * M.V. Kotwal ** S.N. Subrahmanyan R. Shankar Raman S.N. Roy D. K. Sen # M. V. Satish ## Total * Retired on September 30, 2015. # Appointed w. e. f. October 1, 2015. 2015-16 2014-15 Amount Amounts for major parties Amount Amounts for major parties crore 47.83 50.61 17.96 3.77 2.04 9.90 6.90 4.40 2.13 0.73 18.19 7.39 4.91 8.73 6.91 4.48 – – 47.83 50.61 ** Retired on August 26, 2015. ## Appointed w. e. f. January 29, 2016. “Major parties” denote entities who account for 10% or more of the aggregate for that category of transaction during respective period. Q(11) Disclosure in respect of Leases pursuant to Accounting Standard (AS) 19 ‘’Leases’’: i. Where the Company is a Lessor: (a) Finance leases: i) ii) 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. The total gross investment in these leases as on March 31, 2016 and the present value of minimum lease payments receivable as on March 31, 2016 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 (1+2+3) Less: Unearned finance income Present value of minimum lease payments receivable crore As at 31-3-2016 As at 31-3-2015 1505.22 6644.52 973.64 6994.20 19696.08 20390.00 27845.82 28357.84 18319.95 19065.23 9525.87 9292.61 363 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) (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, 2016 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 31-3-2016 As at 31-3-2015 58.62 74.66 9.68 142.96 74.49 100.53 13.99 189.01 i) Assets acquired on finance lease comprises of motor vehicles. The leases have a primary period, which is fixed and non-cancellable. 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, 2016 and the present value as at March 31, 2016 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 (b) Operating leases: crore Present value of minimum lease payments As at 31-3-2016 0.11 0.17 – 0.28 As at 31-3-2015 0.16 0.28 – 0.44 Minimum lease payments As at 31-3-2016 0.12 0.19 – 0.31 0.03 0.28 As at 31-3-2015 0.18 0.31 – 0.49 0.05 0.44 i) The Company has taken various commercial premises and plant & 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, 2016 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 31-3-2016 As at 31-3-2015 69.89 171.30 94.07 335.26 91.00 190.11 115.43 396.54 [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: 262.54 crore (previous year: 173.78 crore) iv) Contingent rent recognised in the Statement of Profit and Loss: 0.60 crore (previous year: 0.30 crore) 364 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Q(12) 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 2015-16 2014-15 2015-16 2014-15 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 5090.53 4764.82 5090.53 4764.82 93,07,61,648 92,83,48,310 93,07,61,648 92,83,48,310 54.69 51.33 54.69 51.33 5090.53 4764.82 5090.53 4764.82 93,07,61,648 92,83,48,310 93,07,61,648 92,83,48,310 43,62,080 62,19,750 43,62,080 62,19,750 Weighted average number of shares outstanding for D=B+C 93,51,23,728 93,45,68,060 93,51,23,728 93,45,68,060 diluted EPS Diluted EPS ( ) Face value per share ( ) A/D 54.44 50.98 54.44 50.98 2 2 2 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 workings of diluted EPS in accordance with Accounting Standard (AS) 20 ‘’Earnings per Share’’. 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 31-3-2015 Charge/ (credit) to Statement of Profit and Loss Effect due to acquisition/ disposal Charge/ (credit) to opening retained earnings* crore Charge/(credit) to reserves Deferred tax liabilities/ (assets) as at 31-3-2016 Hedging reserve** Foreign currency translation reserve Difference between book and tax depreciation 1210.79 371.22 (2.13) (85.77) 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 38.49 10.06 102.11 346.00 1697.39 14.00 (10.08) 385.20 – – – – – 2.34 (2.13) (83.43) – – – 1.21 1.21 – 1494.11 (8.83) 39.72 – – 116.11 339.47 (8.83) 1989.41 365 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Particulars Deferred tax liabilities/ (assets) as at 31-3-2015 Charge/ (credit) to Statement of Profit and Loss Effect due to acquisition/ disposal Charge/ (credit) to opening retained earnings* Deferred tax (assets): Provision for doubtful debts, advances and non-performing assets 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 business losses Difference between book and tax depreciation Other items giving rise to timing differences Total (512.24) (236.57) (223.41) (0.01) (237.60) (35.07) (781.12) (333.64) (10.31) (117.35) 3.61 0.77 (1882.03) (600.91) – – – – – – – 0.71 – 0.05 17.88 – – 18.64 Net deferred tax liability/(assets) (184.64) (215.71) (2.13) (64.79) Charge/(credit) to reserves Deferred tax liabilities/ (assets) as at 31-3-2016 Hedging reserve** Foreign currency translation reserve – – – – – (1.68) (1.68) (0.47) – (748.10) 84.76 (138.66) – – – – (272.62) (1096.88) (6.70) (118.26) 84.76 (2381.22) 75.93 (391.81) Previous year 337.46 (408.67) (39.39) (8.33) (0.85) (64.86) (184.64) *Represents reversal of deferred tax on depreciation charged against opening retained earnings as on April 1, 2015, pursuant to Schedule II of Companies Act 2013. ** The amount of 483.42 crore (previous year: 382.27 crore) representing net losses on effective hedges is recognised in 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 75.93 crore during the year (previous year: deferred tax asset (net) 64.86 crore). Q(14) 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 Name of company L&T Infotech Austria GMBH LLC Marine Infrastructure Developer Private Limited L&T Global Holdings Limited LTH Milcom Private Limited L&T Information Technology Spain SL Total Effect on Group profit/(loss) after minority interest for the year ended March 31, 2016 Net Assets/ (liabilities) as at March 31, 2016 crore (0.05) – (0.51) (0.05) (0.06) (0.67) 0.21 0.01 0.15 0.11 0.30 0.78 366 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) b) Disposals: Sr. No. 1 2 3 4 5 6 Name of company CSJ Infrastructure Private Limited Larsen &Toubro (Qingdao) Rubber Machinery Company Limited Larsen & Toubro Consultoria E Projeto Ltda L&T Infocity Limited L&T Hitech City Limited Hyderabad International Trade Expositions Limited Total Effect on Group profit/(loss) after minority interest for the year ended March 31 2015-16 (2.25) (1.77) 2014-15 16.61 (6.11) – 7.20 2.22 5.38 10.78 0.09 5.29 (1.41) 1.82 16.29 Net Assets/ (liabilities) as at the date of disposal (during 2015-16) crore Net assets as at March 31, 2015 245.11 0.23 247.36 2.00 (0.05) (0.05) 143.62 57.48 38.41 135.53 54.11 28.01 484.80 466.96 Q(15) 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: I Assets Particulars 1 Non-current assets Fixed Assets (a) Tangible assets (b) Intangible assets (c) Capital work-in-progress 2 Deferred tax assets (net) 3 Long term loans and advances Current assets 1 Current investments 2 3 4 Cash and bank balances 5 6 Other current assets Inventories Trade receivables Short term loans and advances II Liabilities Non-current liabilities 1 Long term borrowings 2 Other long term liabilities Current liabilities Short term borrowings Trade payables 1 2 Current maturities of long term borrowings 3 4 Other current liabilities 5 1 2 Hedging reserve 3 1 2 Other income Short term provisions Foreign currency translation reserve Retained earnings Revenue from operations III Reserves IV Income 31-3-2016 crore 31-3-2015 448.91 0.18 1.20 – 0.02 7.56 67.12 657.11 1831.10 543.47 691.37 9.88 115.14 346.04 33.84 1202.78 2183.90 0.24 7.42 0.17 348.25 3593.69 21.04 205.25 – 81.19 0.45 – 14.38 12.44 376.19 1437.16 583.58 710.34 – 1.39 247.39 – 732.88 2317.57 0.02 1.10 (0.25) 105.62 1987.80 6.78 367 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) V Expenses VI Contingent Liability Particulars 1 Operating expenses Staff expenses 2 Sales, administration and other expenses 3 4 Interest expense 5 Depreciation 6 1 Contingent liabilities, if any, incurred in relation to interests in joint Provision for tax 2 ventures Share in contingent liabilities of joint ventures themselves for which the Company is contingently liable 31-3-2016 2774.59 422.17 178.39 11.76 (1.48) 1.53 4170.76 crore 31-3-2015 1463.90 196.90 107.13 53.64 165.96 (0.88) 3248.49 58.18 80.13 3 Contingent liabilities in respect of liabilities of other venturers of joint 8006.19 10840.81 ventures VII Capital Commitments 1 Capital commitments, if any, in relation to interests in joint ventures Share in capital commitments of joint ventures themselves for which 2 the Company is contingently liable – 2.61 – 159.34 Q(16) Disclosures pursuant to Accounting Standard (AS) 29 “Provisions, Contingent Liabilities and Contingent Assets”: a) Movement in provisions: Sr. No. 1 2 3 4 5 Particulars Balance as at 01-04-2015 Additional provision during the year Provision used/reversed during the year # Translation adjustments Balance as on 31-03-2016 (5=1+2-3+4) Product warranties/ liquidated damages Expected tax liability in respect of indirect taxes 140.99 97.31 (116.58) 0.30 122.02 111.73 46.52 (1.30) – 156.95 Class of provisions Litigation related obligations Periodic major maintenance 10.35 – (0.36) 0.04 10.03 213.72 182.65 (22.94) – 373.43 Contractual rectification cost - construction contracts 186.55 148.49 (167.30) 0.14 167.88 # includes provision used during the year 42.26 crore (previous year: 171.36 crore) b) Nature of provisions: crore Total 663.34 474.97 (308.48) 0.48 830.31 i. Product warranties/liquidated 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, 2016 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. Liquidated 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. 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). 368 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) 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(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, 2016 are as under: Category of derivative instruments i) For hedging foreign currency and interest rate 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 and interest rate swaps d) Option contracts For hedging commodity price risks: Commodity futures ii) iii) For hedging investment in mutual fund and bonds: a) Stock market index futures b) Interest rate swaps b) Unhedged foreign currency exposures as at March 31, 2016 are as under: Unhedged foreign currency exposures i) Receivables, including firm commitments and highly probable forecasted transactions ii) Payables, including firm commitments and highly probable forecasted transactions crore Amount of exposures hedged As at 31-3-2016 As at 31-3-2015 16813.93 16665.89 19381.84 15338.11 3528.69 285.36 3931.51 578.48 486.90 289.36 671.58 900.00 – 200.00 As at 31-3-2016 62936.93 53132.13 crore As at 31-3-2015 43427.97 40724.60 Note: As per 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 excludes exposures [Receivables amounting to 2385.28 crore (previous year: 1646.07 crore) and payables amounting to 1801.09 crore (previous year: 1142.08 crore)] with respect to currencies such as Bhutan Ngultrum (BTN). Q(18) 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 1741.44 crore (previous year: 2659.37 crore) and 174.61 crore (previous year: 324.20 crore) respectively [Note R(3)(A)(a)(ix)]. Long term loans and advances towards financing activities include 293.43 crore (previous year: 305.05 crore) being cumulative construction costs incurred including related margins in respect of annuity based Build-Operate-Transfer (BOT) projects. 369 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) d) Short term Loans and advances towards financing activities include 41.28 crore (previous year: 75.48 crore) being cumulative construction costs incurred including related margins in respect of annuity based Build-Operate-Transfer (BOT) projects. Q(19) In terms of provisions of sub-section 1A of section 115O of the Income Tax Act 1961, dividend distribution tax payable by the Parent Company of 140.88 crore, is net of dividend distribution tax paid by its subsidiary companies amounting to 198.70 crore, relating to dividend of 1007.91 crore declared by them. Q(20) Deferred payment liability of 11050.36 crore (previous year: 3058.82 crore) represents: (a) Negative grant/additional concession fee of 11017.96 crore (previous year: 2999.47 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 32.40 crore (previous year: 34.40 crore) as per the joint venture agreement entered into with NHDA. (c) Deferred conversion fee liability of Nil (previous year: 24.94 crore) towards conversion of land from Industrial to commercial use as per the approval from Chandigarh Housing Board (CHB). (d) In respect of the total amount of 11050.36 crore, an amount of 210.50 crore (previous year: 127.23 crore) is payable within a period of one year. Q(21) 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 Road Transport and Highways, Government of India, (MORTH). The ground of termination was Government of India’s subsequent intention to go for four-laning of the existing two lane road. The subsidiary had 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 had been constituted as provided in the concession agreement. The Arbitral Tribunal has pronounced the award on December 12, 2014 in favour of the Company. The Tribunal has also awarded, interalia, compensation to be paid to the Company for loss of revenue at Athupalam Bridge and suitable extension of the concession period. The MORTH has challenged the award of March 12, 2015 seeking stay of the aforesaid Tribunal award before the Delhi High Court. Since the matter is sub-judice, the compensation has not been recognised in the financial statements. Q(22) There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2016. Q(23) Additional information pursuant to Schedule III to the Companies Act, 2013 Name of the entity Larsen and Toubro Limited Indian Subsidiaries Infrastructure: Hi-Tech Rock Products & Aggregates Limited L&T Geostructure LLP L&T Infrastructure Engineering Limited Power: L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited L&T Howden Private Limited L&T-Sargent & Lundy Limited 370 Net Assets, i.e., total assets minus total liabilities As % of consolidated net assets 92.56% Amount ( crore) 40718.33 0.01% 0.00% 0.08% 1.71% 0.46% 0.08% 0.13% 5.01 1.98 35.01 754.08 201.65 36.33 57.03 Share in profit or loss As % of consolidated profit or loss 104.34% 0.05% 0.95% 0.02% 5.06% (1.70%) 0.32% 0.33% Amount ( crore) 5311.46 2.38 48.37 0.87 257.53 (86.67) 16.16 16.69 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of the entity Heavy Engineering: L&T Cassidian Limited L&T Special Steels and Heavy Forgings Private Limited Spectrum Infotech Private Limited LTH Milcom Private Limited Marine Infrastructure Developer Private Limited Hydrocarbon: L&T Hydrocarbon Engineering Limited L&T Sapura Offshore Private Limited L&T Sapura Shipping Private Limited L&T-Gulf Private Limited L&T-Valdel Engineering Limited IT & Technology Services: GDA Technologies Limited Larsen & Toubro Infotech Limited L&T Technology Services Limited L&T Thales Technology Services Private Limited Financial Services: Consumer Financial Services Limited Family Credit Limited L&T Access Distribution Services Limited L&T Capital Company Limited L&T Capital Markets Limited L&T Finance Holdings Limited L&T Finance Limited L&T FinCorp Limited L&T General Insurance Company Limited L&T Housing Finance 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 Infrastructure Finance Company Limited L&T Investment Management Limited L&T Mutual Fund Trustee Limited L&T Trustee Company Private Limited L&T Vrindavan Properties Limited Mudit Cement Private Limited Developmental projects: Kudgi Transmission Limited L&T Ahmedabad-Maliya Tollway Limited L&T BPP Tollway Limited L&T Chennai-Tada Tollway Limited Net Assets, i.e., total assets minus total liabilities As % of consolidated net assets Amount ( crore) 0.00% (1.16%) 0.04% 0.00% 0.00% 2.90% 0.00% 0.45% 0.05% 0.16% 0.08% 4.24% 2.54% (0.01%) 0.00% 1.44% (0.03%) 0.01% 0.02% 11.79% 4.85% 2.32% 0.32% 1.35% 1.64% 0.02% 0.00% 6.51% 1.11% 0.00% – 0.21% (0.02%) 0.43% 0.14% 0.44% 0.10% 0.04 (508.17) 17.79 0.11 0.01 1275.87 0.87 198.41 22.68 71.41 37.08 1863.27 1116.25 (3.16) 0.39 631.97 (11.24) 6.40 6.96 5187.34 2134.87 1019.47 142.29 594.40 721.50 8.18 0.05 2863.36 490.45 1.57 – 90.34 (8.15) 190.45 62.80 195.75 41.81 Share in profit or loss As % of consolidated profit or loss – (5.58%) 0.02% (0.00%) – 1.70% 0.02% 0.43% 0.04% 0.22% 0.04% 18.43% 8.53% (0.04%) – 1.72% (0.09%) 0.08% (0.47%) 7.43% 4.07% 3.60% (2.00%) 1.14% 0.77% 0.12% 0.00% 4.72% (1.02%) 0.00% – (0.48%) (0.11%) (0.01%) (1.06%) (0.94%) – Amount ( crore) – (284.27) 1.26 (0.09) – 86.47 0.96 22.05 1.99 11.36 1.84 938.13 434.24 (1.85) – 87.40 (4.65) 4.17 (23.73) 378.04 207.22 183.37 (102.02) 58.04 39.29 5.91 0.01 240.04 (51.90) 0.03 – (24.30) (5.66) (0.60) (54.01) (47.66) – 371 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of the entity L&T Deccan Tollways Limited L&T Devihalli Hassan Tollway Limited L&T Halol-Shamlaji Tollway Limited L&T Infrastructure Development Projects Limited L&T Interstate Road Corridor Limited L&T Krishnagiri Thopur Toll Road Limited L&T Krishnagiri Walajahpet Tollway Limited L&T Metro Rail (Hyderabad) Limited L&T Panipat Elevated Corridor Limited L&T Port Kachchigarh Limited L&T Rajkot-Vadinar Tollway Limited L&T Samakhiali Gandhidham Tollway Limited L&T Sambalpur-Rourkela Tollway limited L&T Transportation Infrastructure Limited L&T Vadodara Bharuch Tollway Limited L&T Western Andhra Tollways Limited L&T Western India Tollbridge Limited PNG Tollway Limited Power Develoment: L&T Arunachal Hydropower Limited L&T Himachal Hydropower Limited L&T Power Development Limited L&T Uttaranchal Hydropower Limited Nabha Power Limited Realty: Chennai Vision Developers Private Limited CSJ Infrastructure Private Limited Hyderabad International Trade Expositions Limited L&T Asian Realty Project LLP L&T Hitech City Limited L&T Infocity Limited L&T Parel Project LLP L&T Realty Limited L&T Seawoods Limited L&T South City Projects Limited L&T Vision Ventures Limited Construction Equipment and Others (Valves and Welding Equipment): L&T Construction Equipment Limited L&T Cutting Tools Limited L&T Kobelco Machinery Private Limited 372 Amount ( crore) Net Assets, i.e., total assets minus total liabilities As % of consolidated net assets 0.34% 0.54% 0.06% 11.34% 0.15% (0.05%) 0.18% 4.60% (0.50%) (0.00%) (0.09%) 0.15% 0.49% 0.36% (0.65%) (0.04%) 0.07% (0.17%) 150.30 238.63 24.23 4987.01 67.03 (23.64) 78.18 2024.18 (219.69) (0.44) (41.74) 63.80 213.40 156.57 (285.22) (17.43) 32.78 (76.92) 0.09% 0.45% 7.08% 1.75% 6.73% (0.00%) (0.01%) 0.02% (0.00%) 0.01% 0.02% 0.25% 1.70% 7.23% 0.30% (0.01%) 0.54% 0.08% 0.08% 40.21 195.81 3115.71 772.04 2959.29 (0.01) (2.25) 10.40 (1.49) 3.37 8.09 110.30 747.27 3178.96 134.06 (4.60) 235.88 36.87 33.21 Share in profit or loss As % of consolidated profit or loss (0.02%) (0.29%) (1.90%) (10.98%) (0.35%) 0.21% (0.10%) (0.14%) (0.57%) (0.00%) (1.11%) (1.15%) (0.02%) 0.40% 0.15% (0.06%) 0.04% (2.84%) – (0.01%) 0.02% 0.01% 3.85% 0.00% (0.04%) 0.20% (0.01%) 0.07% 0.16% 1.60% 5.54% 0.22% 0.11% (0.00%) 0.01% 0.33% 0.07% Amount ( crore) (1.13) (14.66) (96.91) (558.94) (17.67) 10.55 (4.85) (7.14) (29.06) (0.03) (56.64) (58.64) (1.08) 20.27 7.85 (2.94) 1.95 (144.67) – (0.26) 0.80 0.69 196.21 0.01 (2.25) 10.40 (0.26) 3.37 8.09 81.50 282.06 11.41 5.70 (0.02) 0.59 16.55 3.63 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of the entity L&T Valves Limited Ewac Alloys Limited Shipbuilding: L&T Shipbuilding Limited Others: Bhilai Power Supply Company Limited L&T Electricals and Automation Limited L&T Power Limited Kesun Iron & Steel Company Private Limited L&T Aviation Services Private Limited Raykal Aluminium Company Private Limited Foreign Subsidiaries Infrastructure: Larsen & Toubro (Oman) LLC Larsen & Toubro Qatar LLC Larsen & Toubro Saudi Arabia LLC Larsen & Toubro T&D SA (Proprietary) Limited Heavy Engineering: Net Assets, i.e., total assets minus total liabilities As % of consolidated net assets 1.18% 0.22% 520.64 95.88 Amount ( crore) Share in profit or loss As % of consolidated profit or loss 2.71% 0.68% Amount ( crore) 137.91 34.40 0.23% 100.32 (13.54%) (689.08) 0.00% 0.00% 0.01% (0.00%) 0.10% 0.00% 0.84% 0.00% (0.04%) 0.01% 0.05 0.03 4.64 (0.25) 44.17 0.41 369.11 0.28 (19.16) 2.29 – – 0.00% – 0.00% (0.00%) 1.48% (0.01%) 2.40% (0.00%) – – 0.21 – 0.09 (0.03) 75.13 (0.33) 122.22 (0.03) Larsen & Toubro Heavy Engineering LLC (0.05%) (20.15) (0.18%) (9.03) Hydrocarbon: Larsen & Toubro Hydrocarbon International Limited LLC L&T Modular Fabrication Yard LLC L&T Overseas Projects Nigeria Limited Larsen Toubro Arabia LLC Larsen & Toubro ATCO Saudia LLC Larsen & Toubro Electromech LLC Larsen & Toubro Kuwait Construction General Contracting Company, WLL PT Larsen & Toubro Hydrocarbon Engineering Indonesia IT & Technology Services: L&T Information Technology Services (Shanghai) Co. Ltd. L&T Infotech Financial Services Technologies Inc. Larsen & Toubro Infotech Canada Limited Larsen & Toubro Infotech LLC Larsen & Toubro Infotech South Africa (PTY) Limited Larsen & Toubro Infotech GmbH LLC L&T Infotech Austria GmbH L&T Information Technology Spain SL Larsen & Toubro LLC L&T Technology Services LLC (0.00%) (0.23%) 0.00% (0.39%) (1.10%) (0.29%) (0.00%) – 0.00% 0.74% 0.02% 0.03% 0.00% 0.06% 0.00% 0.00% 0.01% (0.05%) (0.24) (102.16) 0.05 (169.63) (484.12) (126.37) (0.94) – 0.52 327.10 10.03 11.26 2.07 28.18 0.21 0.30 2.43 (22.07) (0.01%) (0.63%) (0.00%) (2.95%) (2.53%) (1.20%) (0.09%) – 0.01% 0.38% 0.06% 0.02% 0.01% 0.11% (0.00%) (0.00%) 0.00% (0.33%) (0.36) (31.87) (0.01) (149.95) (128.96) (61.01) (4.54) – 0.29 19.35 3.08 1.25 0.52 5.68 (0.05) (0.06) 0.06 (16.74) 373 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of the entity Developmental projects: L&T IDPL Trustee Manager Pte Ltd. L&T Infrastructure Development Projects Lanka (Private) Limited Realty: L&T Realty FZE Construction Equipment and Others (Valves and Welding Equipment): Larsen &Toubro (Qingdao) Rubber Machinery Company Limited Electrical & Automation: Henikwon Corporation Sdn. Bhd. Kana Controls General Trading & Contracting Company W.L.L. L&T Electrical & Automation FZE L&T Electricals & Automation Saudi Arabia Company LLC PT Tamco Indonesia Servowatch Systems Limited Tamco Electrical Industries Australia Pty Ltd. Tamco Switchgear (Malaysia) Sdn. Bhd. Thalest Limited Others: Larsen & Toubro (East Asia) Sdn.Bhd. Larsen & Toubro Consultoria E Projeto Ltda Larsen & Toubro International FZE L&T Global Holdings Limited Larsen & Toubro Readymix & Asphalt Concrete Industries LLC Total Subsidiaries Minority interests in all subsidiaries Indian Associates L&T-Chiyoda Limited Gujarat Leather Industries Limited International Seaports (Haldia) Private Limited Vizag IT Park Limited Feedback Infra Private Limited JSK Electricals Private Limited Salzer Electronics Limited Rishi Consfab Private Limited Magtorq Private Limited Grameen Capital India Limited Foreign Associates Larsen & Toubro Qatar & HBK Contracting LLC L&T Camp Facilities LLC Total Associates 374 Net Assets, i.e., total assets minus total liabilities As % of consolidated net assets Amount ( crore) Share in profit or loss As % of consolidated profit or loss Amount ( crore) 0.89 (0.02%) (0.80) 67.54 – – 9.55 (0.00%) (0.10) 0.00% 0.15% 0.02% (0.00%) (0.02%) (0.00%) 0.31% 0.01% (0.10%) (0.01%) 0.03% 1.31% 0.02% 0.00% – 1.91% 0.00% (0.04%) (1.77) (9.88) (1.27) 138.48 5.83 (45.70) (5.99) 13.49 574.41 8.13 0.63 – 838.75 0.15 (16.02) (15.39%) 40650.76 (6768.78) 0.10% – 0.03% – 0.09% – – – 0.01% 0.01% – 0.00% 42.31 – 14.67 – 38.96 – – – 5.88 6.00 – 2.11 109.93 (0.03%) 0.06% (0.04%) (1.00%) (0.46%) (0.11%) 0.03% (0.22%) 1.32% (0.01%) (0.00%) – (7.95%) (0.01%) 0.01% (8.74%) (0.20%) – (0.00%) 0.01% 0.02% 0.00% 0.04% (0.00%) 0.00% – 0.01% 0.07% (1.77) 2.94 (2.14) (50.74) (23.27) (5.79) 1.49 (11.25) 67.18 (0.30) (0.02) – (404.82) (0.51) 0.69 899.82 (444.95) (10.16) – (0.25) 0.52 0.96 0.22 2.27 (0.24) 0.09 – 0.31 3.77 (2.51) Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Name of the entity Jointly controlled entities - Indian joint ventures L&T-AM Tapovan Joint Venture International Metro Civil Contractors Joint Venture 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 Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Larsen and Toubro Limited - Shapoorji Pallonji & Co. Ltd. Net Assets, i.e., total assets minus total liabilities As % of consolidated net assets Amount ( crore) (0.09%) (0.00%) 0.00% 0.01% 0.04% 0.17% 0.02% 0.01% 0.00% (38.84) (0.09) 0.69 3.89 16.20 74.84 7.90 2.62 0.78 Share in profit or loss As % of consolidated profit or loss (0.01%) (0.00%) – (0.00%) 0.01% (0.00%) 0.00% Amount ( crore) (0.72) (0.03) – (0.01) 0.64 (0.01) 0.19 (0.23%) (11.94) (0.01%) Joint Venture (0.03%) (15.05) (0.10%) L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint works Joint Venture Larsen and Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture Larsen & Toubro Limited & NCC Limited Joint Venture DAEWOO and L&T Joint Venture Bauer-L&T Geo Joint Venture Jointly controlled entities - Foreign joint ventures L&T-Eastern Joint Venture Civil Works Joint Venture Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture L&T-Delma Mafraq Joint Venture L&T-AL-Sraiya LRDP 6 Joint Venture PESB and Larsen & Toubro Joint Venture Indiran Engineering Projects and Systems Kish PJSC Total Joint Ventures CFS adjustment and elimination Total 0.01% 0.01% (0.05%) 0.03% – 0.00% 0.01% 0.61% – 0.07% (0.00%) – (0.00%) (70.64%) 4.56 2.21 (21.44) 14.28 – 0.15 5.51 267.60 – 30.60 (0.05) – (0.13) 356.23 (31074.74) 43991.73 0.04% 0.01% (0.14%) 0.28% – 0.00% 0.01% 4.02% – 0.59% (0.00%) – 0.00% (17.70%) (0.29) (4.96) 1.84 0.64 (7.03) 14.28 – 0.15 0.30 204.52 – 30.23 (0.05) – 0.02 227.77 (901.06) 5090.53 Q(24) 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, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs in respect of section 133 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 override the same requiring a different treatment. 375 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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 read with Rule 7(1) of the Companies (Accounts) Rules, 2014, 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 Schedule III to the Companies Act, 2013 (“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 Schedule III 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 SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. 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 III. 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 a. Sales & service i. ii. iii. Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers, are not taken into account. Revenue from sale of 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. 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 atleast 25% of the total of such cost; c. Atleast 25% of the saleable project area is secured by contracts or agreements with buyers; 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. 376 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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 & 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. v. Revenue from contracts for rendering of engineering design services and other 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. 377 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) x. In respect of information technology (IT) and technology services, revenue from contracts awarded on time and material basis is recognised when services are rendered and related costs are incurred. Revenue from fixed price contracts is recognised using the proportionate completion method. 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 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. 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 reinsurance 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 378 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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 unrealised 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. 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. 379 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. 380 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. 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 & 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 381 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. 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 on assets carried at revalued amount i.e., values determined by valuers is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. With effect from April 1, 2015, the difference between depreciation provided on revalued amount and on historical cost is transferred from revaluation reserve to retained earnings. ii. Assets carried at historical cost: Depreciation on assets carried at historical cost is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. The carrying amount of the assets as on April 1, 2014 is depreciated over the remaining useful life. Where the useful life of the asset has expired, the carrying amount as on April 1, 2014 has been charged to the retained earnings as on April 1, 2014. Where cost of a part of the asset (“asset component”) is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount as on April 1, 2015 has been charged to the retained earnings as on April 1, 2015. 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. 382 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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 II to the Companies Act, 2013, 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 based on the useful life prescribed under Schedule II to the Companies Act, 2013 or based on the useful life adopted by the Company for similar assets. iii. Leasehold improvements: Leasehold improvements are amortised over the period of lease. iv. 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 lives. 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 seven to 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 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 are amortised over the period of concession using the revenue based amortisation method prescribed under Schedule II to the Companies Act, 2013. Under the revenue based amortisation 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 383 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. 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 realisable at cost if the finished goods in which they will be used, are expected to be sold at or above cost; 384 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. Expenses incurred on issue of shares; ii. 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. The amount recognised as expense each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve. 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. 385 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Non-monetary items, carried at historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing rate are: i. adjusted in the cost of 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) supra. 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 supra. 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. 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 386 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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: i. Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a) inter segment revenue and (b) profit on sale of stake in the subsidiary and/or joint venture companies under Developmental projects segment and Realty business grouped under “Others” segment. ii. Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect of (a) Financial Services Segment and (b) certain projects under Developmental Projects segment viz. power generation projects & power transmission system projects which are classified as finance lease and annuity based road projects, the interest expenses on borrowings are accounted as segment expenses. 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. In respect of (a) financial services segment, and (b) certain projects under developmental projects segment viz. power generation projects & power transmission system projects which are classified as finance lease and annuity based road projects, segment liabilities include borrowings as the interest expenses on borrowings are accounted as segment expenses in respect of the segment and projects. 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. 387 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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 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. 388 Notes forming part of the Consolidated Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 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. 389 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” crore Sr. no. Particulars Sr. no. Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference % of share holding 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Sr. no. Particulars Sr. no. Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference % of share holding 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 390 1 L&T Cutting Tools Limited 31-Mar-16 2 Bhilai Power Supply Company Limited 31-Mar-16 3 L&T-Sargent & Lundy Limited 4 Spectrum Infotech Private Limited 5 L&T-Valdel Engineering Limited 6 L&T Shipbuilding Limited 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 7 L&T Electricals and Automation Limited 31-Mar-16 8 Hi-Tech Rock Products & Aggregates Limited 31-Mar-16 – – – – – – – – 6.80 0.05 5.57 0.44 1.18 2315.86 0.05 0.05 30.07 44.82 81.69 81.69 0.01 159.00 20.52 3.97 16.55 (14.28) – – – 100.00 – 8.81 8.86 8.86 – – – – – – – – – 99.90 51.47 72.58 129.62 129.62 64.90 131.29 24.14 7.45 16.69 (19.16) – – – 50.0001 17.35 13.31 31.10 31.10 – 17.04 1.89 0.63 1.26 – – – – 100.00 70.23 27.14 98.55 98.55 0.35 123.23 18.34 6.90 11.44 – – – – 100.00 9 L&T Seawoods Limited 10 L&T-Gulf Private Limited 11 L&T-MHPS Boilers Private Limited 12 L&T-MHPS Turbine Generators Private Limited 13 Raykal Aluminium Company Private Limited 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 (2215.54) 4873.58 4973.90 4973.90 8.39 548.05 (689.08) – (689.08) – – – – 97.00 14 L&T Special Steels and Heavy Forgings Private Limited 31-Mar-16 (0.02) 0.03 0.06 0.06 – – – – – – – – – 100.00 15 PNG Tollway Limited 4.27 43.85 48.17 48.17 – 145.87 3.33 1.27 2.06 – – – – 100.00 16 Kesun Iron & Steel Company Private Limited 31-Mar-16 31-Mar-16 – – – – – – – – 2233.20 8.00 234.10 710.60 0.05 566.60 292.22 0.01 945.76 383.18 3562.14 3562.14 0.64 229.21 14.51 3.10 11.41 – – – – 100.00 14.68 6.12 28.80 28.80 0.39 19.33 3.04 1.05 1.99 – – – – 50.0002 519.98 2669.02 3423.10 3423.10 457.34 1711.70 362.86 105.33 257.53 – – – – 51.00 (508.95) 2440.45 2642.10 2642.10 – 718.27 (86.98) (0.31) (86.67) – – – – 51.00 0.36 0.53 0.94 0.94 – – (0.03) – (0.03) – – – – 75.50 (1074.77) 2119.99 1611.82 1611.82 – 94.63 (284.27) – (284.27) – – – – 74.00 (369.14) 1737.75 1660.83 1660.83 0.09 84.90 (144.67) – (144.67) – – – – 72.11 (0.26) 0.26 0.01 0.01 – – – – – – – – – 95.00 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” (contd.) crore Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding 17 L&T Howden Private Limited 18 L&T Sapura Shipping Private Limited 19 L&T Sapura Offshore Private Limited 20 Ewac Alloys Limited 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 21 L&T Kobelco Machinery Private Limited 31-Mar-16 22 L&T Valves Limited 23 L&T Realty Limited 31-Mar-16 31-Mar-16 24 Chennai Vision Developers Private Limited 31-Mar-16 – – – – – – – – 30.00 158.85 0.01 8.29 50.00 18.00 695.46 0.01 6.33 126.10 162.43 162.43 – 137.98 27.53 11.37 16.16 – – – – 50.10 39.56 491.27 689.68 689.68 – 198.93 22.57 0.52 22.05 – – – – 60.00 0.86 13.76 14.63 14.63 – 6.28 1.22 0.26 0.96 – – – – 60.00 87.59 74.88 170.76 170.76 20.42 220.64 52.41 18.01 34.40 (25.05) – – – 100.00 (16.79) 58.57 91.78 91.78 2.00 100.08 3.64 0.01 3.63 – – – – 51.00 502.64 739.18 1259.82 1259.82 – 1465.32 208.75 70.84 137.91 – – – – 100.00 51.81 297.76 1045.03 1045.03 80.25 294.85 328.17 46.11 282.06 – – – – 100.00 (0.02) 0.02 0.01 0.01 – – 0.01 – 0.01 – – – – 100.00 25 L&T South City Projects Limited 26 L&T Vision Ventures Limited 27 L&T Power Limited 28 L&T Cassidian Limited 29 L&T General Insurance Company Limited 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 30 L&T Aviation Services Private Limited 31-Mar-16 31 Larsen & Toubro Infotech Limited 32 GDA Technologies Limited 31-Mar-16 31-Mar-16 – – – – – – – – 56.48 0.05 0.05 0.05 705.00 45.60 16.98 0.17 77.58 208.92 342.98 342.98 – 0.74 (5.55) (11.25) 5.70 – – – – 51.00 (4.65) 10.84 6.24 6.24 – – (0.02) – (0.02) – – – – 68.00 4.59 0.07 4.71 4.71 4.69 – 0.21 – 0.21 – – – – 99.99 (0.01) – 0.04 0.04 – – – – – – – – – 74.00 (562.71) 581.23 723.52 723.52 595.11 288.69 (102.02) – (102.02) – – – – 100.00 (1.43) 62.65 106.82 106.82 – 27.58 0.03 (0.06) 0.09 – – – – 100.00 1846.29 1374.76 3238.03 3238.03 322.36 5569.52 1153.17 215.04 938.13 (546.73) – (44.15) – 94.96 36.91 0.01 37.09 37.09 36.19 – 1.91 0.07 1.84 – – – – 94.96 391 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” (contd.) crore Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding 392 33 L&T Finance Holdings Limited 34 L&T Housing Finance Limited 31-Mar-16 31-Mar-16 35 Consumer Financial Services Limited 31-Mar-16 36 Family Credit Limited 37 L&T Finance Limited 38 L&T Capital Markets Limited 31-Mar-16 31-Mar-16 31-Mar-16 39 L&T Investment Management Limited 31-Mar-16 40 L&T Mutual Fund Trustee Limited 31-Mar-16 – – – – – – – – 3084.86 121.40 1.00 204.31 238.42 47.75 251.82 0.15 2102.47 767.52 5954.85 5954.85 5571.01 348.50 368.09 (9.95) 378.04 (0.06) (162.07) (140.27) – 66.71 473.00 6987.03 7581.43 7581.43 638.83 657.85 89.29 31.25 58.04 – – – – 66.71 (0.61) – 0.39 0.39 – 0.01 – – – – – – – 66.71 427.66 4771.56 5403.53 5403.53 43.61 776.22 134.32 46.92 87.40 – – – – 66.71 1896.45 13107.21 15242.08 15242.08 143.07 2338.45 317.59 110.37 207.22 (301.98) – – – 66.71 41 L&T FinCorp Limited 42 L&T Infrastructure Finance Company Limited 43 L&T Infra Debt Fund Limited 31-Mar-16 31-Mar-16 31-Mar-16 44 L&T Infra Investment Partners Advisory Private Limited 31-Mar-16 45 L&T infra Investment Partners Trustee Private Limited 31-Mar-16 (40.79) 7.59 14.55 14.55 5.28 28.97 (23.73) – (23.73) – – – – 66.71 238.63 30.78 521.23 521.23 79.37 245.19 (51.90) – (51.90) – – – – 66.71 46 L&T Vrindavan Properties Limited 47 L&T Access Distribution Services Limited 1.42 0.03 1.60 1.60 1.34 0.05 0.04 0.01 0.03 – – – – 66.71 48 Mudit Cement Private Limited 31-Mar-16 31-Mar-16 31-Mar-16 – – – – – – – – 272.97 846.25 570.97 5.00 0.10 18.75 6.00 2.10 746.50 6398.38 7417.85 7417.85 325.26 773.19 279.06 95.69 183.37 – – – – 66.71 2017.11 21367.89 24231.25 24231.25 2037.34 2382.00 353.51 113.47 240.04 – – – – 66.71 150.53 1896.03 2617.53 2617.53 181.75 81.47 39.29 – 39.29 – – – (5.02) 66.71 3.18 2.55 10.73 10.73 8.59 11.88 8.56 2.65 5.91 – – – – 66.71 (0.05) 0.02 0.07 0.07 0.07 0.03 0.01 – 0.01 – – – – 66.71 71.59 411.15 501.49 501.49 19.10 10.87 (21.70) 2.60 (24.30) – – – – 66.71 (17.24) 15.77 4.53 4.53 – 4.87 (0.41) 4.24 (4.65) – – – – 66.71 (10.25) 44.58 36.43 36.43 – – (3.95) 1.71 (5.66) – – – – 66.71 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” (contd.) crore Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding 49 L&T Capital Company Limited 50 L&T Trustee Company Private Limited 51 L&T Power Development Limited 52 L&T Uttaranchal Hydropower Limited 53 L&T Arunachal Hydropower Limited 54 L&T Himachal Hydropower Limited 55 Nabha Power Limited 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 56 L&T Infrastructure Development Projects Limited 31-Mar-16 – – – – – – – – 0.05 0.01 3112.70 287.25 40.01 196.08 2397.60 2321.06 6.35 6.57 12.97 12.97 5.56 2.97 5.23 1.06 4.17 – – – – 100.00 (0.01) – – – – – – – – – – – – 100.00 3.01 1.92 3117.63 3117.63 3105.40 11.41 1.27 0.47 0.80 – – – – 100.00 484.79 31.23 803.27 803.27 1.51 – 0.75 0.06 0.69 – – – – 100.00 0.20 0.54 40.75 40.75 0.05 – – – – – – – – 100.00 (0.27) 0.97 196.78 196.78 0.06 – (0.26) – (0.26) – – – – 100.00 561.69 8406.51 11365.80 11365.80 – 3298.35 250.64 54.43 196.21 – – – – 100.00 2665.95 1174.33 6161.34 6161.34 4652.83 1013.50 (557.01) 1.93 (558.94) – – – – 97.45 57 L&T Panipat Elevated Corridor Limited 31-Mar-16 58 L&T Krishnagiri Thopur Toll Road Limited 31-Mar-16 59 L&T Western Andhra Tollways Limited 31-Mar-16 60 L&T Vadodara Bharuch Tollway Limited 31-Mar-16 61 L&T Transportation Infrastructure Limited 31-Mar-16 62 L&T Western India Tollbridge Limited 31-Mar-16 63 L&T Interstate Road Corridor Limited 31-Mar-16 64 L&T Port Kachchigarh Limited 31-Mar-16 – – – – – – – – 84.30 78.75 56.50 43.50 41.40 13.95 57.16 4.16 (303.99) 659.03 439.34 439.34 14.96 59.07 (29.06) – (29.06) – – – – 97.45 (102.39) 573.85 550.21 550.21 29.05 128.19 13.41 2.86 10.55 – – – – 97.45 (73.93) 258.21 240.78 240.78 27.88 63.25 (2.94) – (2.94) – – – – 97.45 (328.72) 1028.22 743.00 743.00 44.37 282.13 9.86 2.01 7.85 – – – – 97.45 115.17 106.54 263.11 263.11 5.30 25.78 17.93 (2.34) 20.27 – – – – 98.12 18.83 0.15 32.93 32.93 0.50 – 2.49 0.54 1.95 – – – – 97.45 9.87 408.86 475.89 475.89 72.93 86.42 (17.44) 0.23 (17.67) – – – – 97.45 (4.60) 0.44 – – – – (0.03) – (0.03) – – – – 97.45 393 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” (contd.) crore Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding Sr. no. Particulars Sr. no. Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference % of share holding 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 394 65 L&T Ahmedabad -Maliya Tollway Limited 31-Mar-16 66 L&T Halol -Shamlaji Tollway Limited 31-Mar-16 67 L&T Krishnagiri Walajahpet Tollway Limited 31-Mar-16 68 L&T Devihalli Hassan Tollway Limited 31-Mar-16 69 L&T Metro Rail (Hyderabad) Limited 70 L&T Chennai -Tada Tollway Limited 71 L&T BPP Tollway Limited 72 L&T Rajkot -Vadinar Tollway Limited 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 – – – – – – – – 346.32 389.52 90.00 90.00 2030.66 42.00 247.20 228.04 (283.52) 1375.99 1438.79 1438.79 40.19 152.84 (53.98) 0.03 (54.01) – – – – 97.45 (365.29) 1208.75 1232.98 1232.98 – 74.80 (96.91) – (96.91) – – – – 97.45 (11.82) 1046.58 1124.76 1124.76 4.80 124.28 (4.85) – (4.85) – – – – 97.45 148.63 317.25 555.88 555.88 1.80 37.68 (14.64) 0.02 (14.66) – – – – 97.45 (6.48) 8080.89 10105.07 10105.07 29.26 – (7.14) – (7.14) – – – – 97.48 (0.19) 390.80 432.61 432.61 – – – – – – – – – 97.45 (51.45) 10381.57 10577.32 10577.32 26.72 242.37 (47.66) – (47.66) – – – – 97.45 73 L&T Deccan Tollways Limited 31-Mar-16 74 L&T Samakhiali Gandhidham Tollway Limited 31-Mar-16 75 Kudgi Transmission Limited 31-Mar-16 76 L&T Sambalpur- Rourkela Tollway Limited 31-Mar-16 77 L&T Technology Services Limited 78 L&T Construction Equipment Limited 79 L&T Infrastructure Engineering Limited 31-Mar-16 31-Mar-16 31-Mar-16 (269.78) 1036.98 995.24 995.24 1.21 91.76 (56.64) – (56.64) – – – – 97.45 80 L&T Thales Technology Services Private Limited 31-Mar-16 – – – – – – – – 152.50 126.03 192.60 215.85 1050.00 120.00 3.60 2.05 (2.20) 652.93 803.23 803.23 7.05 – (1.13) – (1.13) – – – – 97.45 (62.23) 3423.18 3486.98 3486.98 0.14 110.68 (58.64) – (58.64) – – – – 97.45 (2.15) 1155.71 1346.16 1346.16 7.47 – (0.59) 0.01 (0.60) – – – – 97.45 (2.45) 466.33 679.73 679.73 2.63 – (1.08) – (1.08) – – – – 97.45 66.25 706.48 1822.73 1822.73 61.63 2894.04 552.01 117.77 434.24 (227.00) (75.00) – – 100.00 115.88 293.31 529.19 529.19 35.30 460.51 1.02 0.43 0.59 – – – – 100.00 31.41 20.74 55.75 55.75 – 39.79 1.37 0.54 0.83 – – – – 100.00 (5.21) 28.88 25.72 25.72 – 36.75 (1.82) – (1.82) – – – – 74.00 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” (contd.) crore Sr. no. Particulars Sr. no. Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference % of share holding 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding 82 Larsen & Toubro LLC 81 L&T Hydrocarbon Engineering Limited 83 Larsen & Toubro Infotech GmbH 84 Larsen & Toubro Infotech Canada Limited 85 Larsen & Toubro Infotech LLC 86 L&T Infotech Financial Services Technologies Inc. 87 Larsen & Toubro Infotech South Africa (PTY) Limited 31-Mar-16 – 31-Dec-15 USD 66.16 31-Mar-16 EURO 75.37 31-Mar-16 CAD 51.22 31-Mar-16 USD 66.25 31-Mar-16 CAD 51.22 31-Mar-16 ZAR 4.49 88 L&T Information Technology Services (Shanghai) Co. Ltd. 31-Dec-15 CNY 10.23 1760.05 0.35 0.11 – – 280.00 0.27 1.10 (484.17) 4350.46 5626.34 5626.34 228.74 7111.24 127.02 40.55 86.47 – – – – 100.00 89 L&T Infrastructure Development Projects Lanka (Private) Limited 31-Mar-16 LKR 0.46 2.07 0.52 2.94 2.94 – 7.95 0.25 0.05 0.20 – – – – 100.00 28.07 10.50 38.68 38.68 – 93.41 6.50 0.82 5.68 – – – – 94.96 10.04 5.23 15.27 15.27 – 67.56 4.06 0.98 3.08 – – – – 94.96 11.26 0.54 11.80 11.80 – 13.35 1.25 – 1.25 – – – – 94.96 91 L&T Realty FZE 90 L&T IDPL Trustee Manager Pte Ltd. 92 Larsen & Toubro International FZE 93 Larsen & Toubro Hydrocarbon International Limited LLC 47.11 26.44 353.55 353.55 – 235.50 27.09 7.74 19.35 – – – – 94.96 94 Thalest Limited 1.80 22.26 24.33 24.33 – 56.41 0.79 0.27 0.52 – – – – 71.12 (0.60) 1.91 2.41 2.41 – 4.19 0.22 – 0.22 – – – – 94.96 95 Servowatch Systems Limited 96 Larsen & Toubro (Oman) LLC 31-Mar-16 SGD 49.24 31-Dec-15 AED 18.01 31-Mar-16 USD 66.25 31-Dec-15 SAR 17.64 31-Mar-16 GBP 95.45 31-Mar-16 GBP 95.45 31-Dec-15 OMR 171.83 70.25 6.16 16.21 1817.50 0.88 1.28 24.34 25.04 (2.71) 26.89 94.43 94.43 – – 1.18 0.06 1.12 – – – – 93.48 (5.28) 0.04 0.92 0.92 – – (0.80) – (0.80) – – – – 97.45 (6.20) 0.13 10.14 10.14 – – 0.34 – 0.34 – – – – 100.00 (981.99) 461.43 1296.94 1296.94 382.29 – (389.88) – (389.88) – – – – 100.00 (0.93) 5.98 5.93 5.93 – – (0.51) – (0.51) – – – – 100.00 6.85 0.06 8.19 8.19 – – (0.24) 0.06 (0.30) – – – – 100.00 (30.33) 48.86 42.87 42.87 – 87.67 1.49 – 1.49 – – – – 100.00 313.47 2436.57 2775.08 2775.08 – 2930.84 3.81 2.04 1.77 – – – – 65.00 395 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” (contd.) crore Sr. no. Particulars Sr. no. 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding Sr. no. Particulars Sr. no. 104 Larsen & Toubro Readymix & Asphalt Concrete Industries LLC 97 Larsen & Toubro Electromech LLC 98 L&T Modular Fabrication Yard LLC 99 Larsen & Toubro (East Asia) Sdn. Bhd. 100 Larsen & Toubro Qatar LLC 101 L&T Overseas Projects Nigeria Limited 102 L&T Electricals & Automation Saudi Arabia Company LLC 31-Dec-15 OMR 171.83 5.15 31-Dec-15 OMR 171.83 49.57 31-Mar-15 MYR 16.88 1.27 31-Dec-15 QAR 18.17 0.36 31-Dec-15 NGN 0.34 0.34 31-Mar-16 SAR 17.66 31.78 (95.93) 366.63 275.85 275.85 – 479.05 (16.31) 0.16 (16.47) – – – – 65.00 (155.68) 361.55 255.44 255.44 – 342.24 (36.97) – (36.97) – – – – 65.00 (0.64) 4.91 5.54 5.54 – 2.31 (0.39) – (0.39) – – – – 30.00 0.32 0.78 1.46 1.46 – 0.65 0.02 – 0.02 – – – – 49.00 (0.29) 0.03 0.08 0.08 – – – – – – – – – 100.00 (25.95) 126.61 132.44 132.44 – 72.23 (21.23) – (21.23) – – – – 100.00 103 Larsen & Toubro Kuwait Construction General Contracting Company, WLL 31-Dec-15 KWD 217.54 43.51 (43.77) 33.91 33.65 33.65 – – (6.66) – (6.66) – – – – 49.00 105 Larsen & Toubro Saudi Arabia LLC 106 Larsen Toubro Arabia LLC 107 Larsen & Toubro ATCO Saudia LLC 108 Tamco Switchgear (Malaysia) Sdn. Bhd. 109 Henikwon Corporation Sdn. Bhd. 110 Tamco Electrical Industries Australia Pty Ltd. 111 PT Tamco Indonesia 112 Larsen & Toubro Heavy Engineering LLC 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding 396 31-Mar-16 31-Dec-15 31-Dec-15 31-Dec-15 31-Mar-16 31-Mar-16 31-Mar-16 31-Dec-15 31-Dec-15 OMR 171.83 AUD 50.95 MYR 16.99 SAR 17.64 MYR 16.99 SAR 17.64 SAR 17.64 AED 18.03 IDR 0.01 1.80 25.36 17.64 1.76 169.87 10.96 83.92 0.25 97.34 (17.66) 106.73 90.87 90.87 – 115.85 0.85 – 0.85 – – – – 49.00 (162.78) 969.47 832.05 832.05 – 1621.27 11.79 2.77 9.02 – – – – 100.00 (71.11) 493.89 440.42 440.42 – 775.61 (45.82) – (45.82) – – – – 75.00 (437.33) 723.77 288.20 288.20 – 312.89 217.96 – 217.96 – – – – 75.00 404.53 323.89 898.29 898.29 – 787.50 76.62 9.44 67.18 – – – – 100.00 (20.84) 29.16 19.28 19.28 – 55.49 2.96 0.02 2.94 – – – – 100.00 (70.43) 4.40 17.89 17.89 – 10.89 (11.25) – (11.25) – – – – 100.00 (43.58) 102.68 59.35 59.35 – 52.56 4.95 0.12 4.83 – – – – 100.00 (117.32) 464.63 444.65 444.65 – 266.72 (13.72) 1.49 (15.21) – – – – 70.00 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: “Subsidiaries” (contd.) crore Sr. no. Particulars Sr. no. 113 L&T Electrical & Automation FZE 115 Larsen & Toubro T&D SA (Proprietary) Limited 114 Kana Controls General Trading & Contracting Company W.L.L. 116 L&T Technology Services LLC 117 L&T Infotech Austria GMBH LLC 118 Marine Infrastructure Developer Private Limited 119 L&T Global Holdings Limited 120 LTH Milcom Private Limited 121 L&T Information Technology Spain SL 1 Financial year ending on Currency Exchange rate on the last day of financial year Share capital (including share application money pending allotment) Reserves Liabilities Total liabilities Total assets Investments Turnover Profit before taxation Provision for taxation Profit after taxation Interim dividend - equity Interim dividend - Preference Proposed dividend - equity Proposed dividend - preference 2 3 4 5 6 7 8 9 10 11 12 13 14 15 % of share holding 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 EURO 75.37 KWD 219.31 USD 66.25 EURO 75.37 USD 66.25 AED 18.03 ZAR 4.49 – – 1.80 2.19 3.37 0.07 0.26 0.01 0.66 0.20 0.37 136.24 240.08 378.12 378.12 – 275.43 (50.84) – (50.84) – – – – 100.00 (3.47) 21.36 20.08 20.08 – 20.62 (2.14) – (2.14) – – – – 49.00 (1.08) 0.40 2.69 2.69 – – (0.03) – (0.03) – – – – 72.50 (22.13) 124.06 102.00 102.00 – 184.86 (15.93) 0.81 (16.74) – – – – 100.00 (0.05) 0.04 0.25 0.25 – – (0.04) 0.01 (0.05) – – – – 94.96 – – 0.01 0.01 – – – – – – – – – 100.00 (0.51) 1159.59 1159.74 1159.74 1136.29 – (0.51) – (0.51) – – – – 100.00 (0.09) 0.09 0.20 0.20 – – (0.09) – (0.09) – – – – 56.67 (0.06) 0.11 0.42 0.42 – – (0.08) (0.02) (0.06) – – – – 94.96 397 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part B: ”Associates/Joint ventures” Sr. no. 1 2 3 4 5 6 7 Name of Associates/Joint ventures Sr. no. Feedback Infra Private Limited L&T-Chiyoda Limited L&T Camp Facilities LLC International Seaports (Haldia) Private Limited Rishi Consfab Private Limited Vizag IT Park Limited JSK Electicals Private Limited Latest audited Balance Sheet date 31-Mar-16 31-Mar-16 31-Mar-15 31-Dec-15 31-Mar-15 31-Mar-16 31-Mar-15 Shares of Associate/Joint Ventures held by the company at the year end Number 37,90,000 45,00,000 98,30,000 Amount of Investment in Associates/Joint Venture ( Crore) 37.90 4.50 9.83 2,450 4.42 – – – – – – Total No of shares Extent of Holding % Description of how there is significant influence Reason why the Associate/Joint Venture is not consolidated Networth attributable to Shareholding as per latest audited Balance Sheet ( Crore) Profit/Loss for the year ( Crore) 1,63,61,704 90,00,000 4,40,58,020 5,000 1,04,00,000 90,00,000 81,54,000 15.74% 50.00% 21.74% 49.00% – – – Refer Note 1 Refer Note 5 Refer Note 5 Refer Note 5 11.88 41.63 15.32 1.70 – – – Considered in Consolidation 12.60 (20.33) Not Considered in Consolidation – – 3.26 – 5.85 (0.92) – – 3.75 – 0.94 – 1 2 3 4 5 6 398 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part B: ”Associates/Joint ventures” (contd.) Sr. no. 8 9 10 11 12 13 Name of Associates/Joint ventures Sr. no. Larsen & Toubro Qatar & HBK Contracting LLC Salzer Electronics Limited Magtorq Private Limited Gujarat Leather Industries Limited Grameen Capital India Limited Indiran Engineering Projects and Systems Kish PJSC 1 2 3 4 5 6 Latest audited Balance Sheet date 31-Dec-15 31-Mar-15 31-Mar-16 31-Mar-15 31-Mar-16 Shares of Associate/Joint Ventures held by the company at the year end Number Amount of Investment in Associates/Joint Venture ( Crore) 100 0.18 – – 9,000 4.42 7,35,000 21,26,000 0.56 2.13 Total No of shares Extent of Holding % 200 1,02,83,737 21,003 Refer Note 4 81,77,887 50.00% – 42.85% 50.00% 23.87% 875 0.39 1,750 50.00% Description of how there is significant influence Reason why the Associate/Joint Venture is not consolidated Networth attributable to Shareholding as per latest audited Balance Sheet ( Crore) Profit/Loss for the year ( Crore) Considered in Consolidation Not Considered in Consolidation Refer Note 1 Refer Note 5 Refer Note 4 Refer Note 3 Refer Note 2 (3.59) – 4.58 0.30 – 5.66 – 0.21 – – – – – – (0.26) (0.30) (0.54) – Notes: 1. Significant influence is demonstrated by holding 20% or more of the voting power of the investee (Para 4 of AS 23 - Accounting for Investments in Associates) The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered for 2. consolidation. The associate company operates under severe long term restrictions that significantly impair its ability to transfer funds to the company and hence the same has not been considered for consolidation. 3. 4. The associate company is under liquidation process and investment is fully provided in the accounts. 5. The Group has sold its stake in the associate companies during FY 2015-16. A. M. NAIK Group Executive Chairman (DIN 00001514) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) M.M.CHITALE (DIN 00101004) VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) SUNITA SHARMA (DIN 02949529) Directors 399 Mumbai, May 25, 2016 N.HARIHARAN Company Secretary M. No. A3471 NOTES 400 PROXY FORM [Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules 2014] LARSEN & TOUBRO LIMITED CIN : L99999MH1946PLC004768 Regd. Office : L&T House, Ballard Estate, Mumbai 400 001. Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: Igrc@larsentoubro.com, Website: www.larsentoubro.com Name of the member(s) Registered Address Email ID Folio No./Client ID DP ID I/We, being the member(s) of ___________ shares of LARSEN & TOUBRO LIMITED, hereby appoint: 1) 2) 3) of of of having e-mail id having e-mail id having e-mail id or failing him or failing him and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Seventy First Annual General Meeting of the Company, to be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 on Friday, August 26, 2016 at 3.00 p.m. and at any adjournment thereof in respect of such resolutions as are indicated below: ** I wish my above Proxy to vote in the manner as indicated in the box below: Item No. Resolutions For Against 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Adoption of audited financial statements for the year ended March 31, 2016 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the reports of the auditors thereon for the year ended March 31, 2016. Dividend on equity shares for the financial year 2015-16. Appoint Ms. Sunita Sharma (DIN: 02949529) as a Director liable to retire by rotation. Appoint Mr. S. N. Subrahmanyan (DIN: 02255382) as a Director liable to retire by rotation. Appoint Mr. A. M. Naik (DIN: 00001514) as a Director liable to retire by rotation. Appoint Mr. D. K. Sen (DIN: 03554707) as a Director liable to retire by rotation. Appoint Mr. M. V. Satish (DIN: 06393156) as a Director liable to retire by rotation. Appoint Ms. Naina Lal Kidwai (DIN: 00017806) as an Independent Director. Appoint Mr. S. N. Subrahmanyan (DIN: 02255382) as the Deputy Managing Director & President of the Company. Appoint Mr. D. K. Sen (DIN: 03554707) as a Whole-time Director of the Company. Appoint Mr. M. V. Satish (DIN: 06393156) as a Whole-time Director of the Company. Payment of commission to the Executive Chairman, Chief Executive Officer and Managing Director, if any, Deputy Managing Director and Whole-time Directors. Appoint Mr. R. Shankar Raman (DIN: 00019798) as a Whole-time Director of the Company. Appoint Mr. Shailendra N. Roy (DIN: 02144836) as a Whole-time Director of the Company. Appoint Mr. Sanjeev Aga (DIN: 00022065) as an Independent Director. Item No. Resolutions For Against 16 17 18 19 20 21 Appoint Mr. Narayanan Kumar (DIN: 00007848) as an Independent Director. Raise funds through issue of convertible bonds and/or equity shares through depository receipts and including by way of Qualified Institution Placement (‘QIP’), to Qualified Institutional Buyers (‘QIB’) for an amount not exceeding 3600 crore or US $ 600 million, whichever is higher. Issue listed/unlisted secured/unsecured redeemable non-convertible debentures, in one or more series/tranches/ currencies, aggregating up to 6000 crore. Ratification of appointment of M/s. Sharp & Tannan as Joint Statutory Auditors of the Company. Ratification of appointment of M/s. Deloitte Haskins & Sells LLP as Joint Statutory Auditors of the Company. Ratification of remuneration payable to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010) for the financial year 2016-17. Signed this ........................ day of ............... 2016 Signature of shareholder : .......................................... Revenue Stamp Affix a 1 Rupee Signature of proxy holder(s) Note: (1) (2) (3) This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting. A Proxy need not be a member of the Company. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder. **(4) This is only optional. Please put a ‘X’ in the appropriate column against the resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. (5) (6) Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes. In the case of jointholders, the signature of any one holder will be sufficient, but names of all the jointholders should be stated. LARSEN & TOUBRO LIMITED Regd. Office : L&T House, Ballard Estate, Mumbai 400 001. CIN: L99999MH1946PLC004768 Shareholder’s Satisfaction Survey Form – 2016 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 M. No. A3471 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 403 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 2015-16 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 404 NOTES 405 www.Larsentoubro.com Pursuing Dreams Partnering Growth L&T partners the nation, industry and people to build a newer, brighter future. We offer talented young people the opportunity to grow professionally and augment our engineering and construction offerings to critical sectors, transforming glorious vision into glittering reality. Technology I Engineering I Projects Construction I Manufacturing Regd. Ofﬁ ce: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 www.Larsentoubro.com Developing Smarter Technology Partnering Growth L&T partners the nation, industry and people to build a newer, brighter future. As India’s largest producer of low-tension switchgear, we develop smarter solutions to meet emerging needs. And transform glorious vision into glittering reality. Technology I Engineering I Projects Construction I Manufacturing Regd. Ofﬁ ce: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 NOTES 408 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 L&T Annual Report 2015-16 Covers.indd 4-6 13/07/16 4:53 PM CBMC/07/2016/PRD Printed by Burda Druck India Pvt. Ltd. L&T Annual Report 2015-16 Covers.indd 1-3 13/07/16 4:53 PM

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