TECHNOLOGY
for
SUSTAINABLE
GROWTH
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, financial performance, growth and environmental protection.
For details of recent awards, please visit www.Larsentoubro.com
CHAiRMAN’S STaTEmEnT
annuaL rEporT 2019-20
A.M. NAik
Group Chairman
This is the opportune
moment for the
Government of India
and Indian industry
to act in unison
towards minimising
our external
dependencies,
enhancing
self-reliance and
making ‘aatma
nirbhar Bharat’ a
reality.
Dear Shareholders
self-dependence achieves the desired
outcomes swiftly, it is essential
i am addressing you at a time when
for the Government to introduce
the nation is grappling with a global
much-needed reforms in several
pandemic, while simultaneously
areas including Land acquisition,
gearing itself for a phased reopening
Competency & Skill Building. in
of the economy, and preparing
tandem, the administration would
for life beyond Covid-19. Further,
do well to streamline processes
simmering tensions along our
and accelerate the pace of decision
northern border have precipitated
making.
an anti-China sentiment within the
country. The world too is witnessing
a growing groundswell of opinion
against China, and seeking viable
alternative sources of supply. i believe
this is the opportune moment for
the Government of india and indian
industry to act in unison to minimise
our external dependencies and
enhance self-reliance.
our hon’ble prime minister’s call
for ‘aaatma nirbhar Bharat’ has
resonated across the country. To
ensure that the pm’s thrust on
We are confident that if these
measures are adopted and if
the nation remains united, our
determination and resolve will enable
us to overcome the challenges ahead.
Your company, as always, stands by
the country and its leadership in this
hour of need.
right from the onset of the
pandemic, L&T adopted stringent
safety measures to ensure the safety
and wellbeing of its people and
stakeholders. as a good corporate
1
CHAiRMAN’S STaTEmEnT
annuaL rEporT 2019-20
citizen with a social conscience, we responded to the
These steps did lead to some encouraging results. The
humanitarian crisis caused by the virus with monetary and
onset of the pandemic however, negated these gains,
material assistance. L&T, at the group level, contributed
R 150 crore for the pm CarES fund in FY 2019-20, and
further donated medical equipment including personnel
protective Equipment worth R 40 crore to states across the
country.
amid widespread concerns about the plight of daily wage
earners, we took it upon ourselves to ensure that the
1,60,000 contract workmen at our project sites received
good care. We continued to pay them their wages, provide
food, shelter and medical assistance while maintaining
prescribed Covid 19 preventive & containment protocols.
This has involved an outlay of approximately R 500 crore per
month.
as india’s leading technology, engineering and construction
company, we are also extending expert assistance for the
cause. our construction business has converted hospitals to
CoViD care centres at six locations around the country. our
dragging real GDp growth down to 4.2% for FY 2019-20
as a whole. The lockdown imposed towards the end of
FY 2019-20, has dealt a severe blow to both demand and
supply. in response, the Government has initiated a wide
range of stimulus measures. Booster doses of fiscal and
monetary resources aimed at improving liquidity have been
announced, providing relief to stressed sections of society
and revitalizing economic activity. While these measures are
stemming the slide, it is likely that economic growth will still
take a few more quarters to revive fully.
on the global front, the world is bracing itself for growing
insularity and economic uncertainty. We see a marked
slowdown in manufacturing and trade, and heightened
geo-political tensions. The domino effect of the uS-China
trade dispute is being felt in different geographies as more
countries begin to view international relations through
a bipolar lens. increasingly, countries are adopting a
array of smart solutions helps civic administrators in different
protectionist stance in an attempt to safeguard their own
cities to monitor crowds and alert the authorities. Your
economies. meanwhile, oil prices remained soft due to
company’s public spirited initiatives have been appreciated
shifting demand-supply positions and rapidly changing
by various state governments.
geopolitical alignments. This has led to fiscal imbalances in
Economic Scenario
oil producing countries.
The year witnessed faltering economic growth and under-
utilization of capacity due to a combination of contributory
factors. private sector investments, already under stress,
it is this volatile situation which the onslaught of the
pandemic has roiled further. Lockdowns in country after
country have stalled the world’s growth engine casting a
were further affected by fiscal slippages at the Centre and
long shadow of economic uncertainty for some time to
States and tight liquidity conditions. Consumption spends,
come. a few countries are now on the road to recovery
which hitherto had been a robust driver of economic
and have sought to re-boot growth by injecting stimulus
growth, lost momentum in FY 2019-20. Expectedly, both
measures through a combination of monetary and fiscal
export earnings and tax collections were weak. in its bid
resources. These accommodative fiscal and monetary
to revive the economy, the Government initiated several
policies are likely to continue through 2020.
monetary and fiscal measures. amongst them were a
reduction in corporate tax rates, re-capitalisation of banks
National infrastructure Pipeline (NiP)
and consolidation within the banking sector, initiatives to
improve credit availability, faster resolution of stressed assets
and the announcement of packages for sectors like real
estate and exports.
The Government has formulated a national infrastructure
project pipeline of R 111 lac crore over a 6-year period.
although inadequate given the scale of india’s infrastructure
2
deficit, this is a step forward. This project pipeline consists
special ‘Shramik’ trains and buses arranged by the Central
of around 6,500 projects to be collectively funded by
Government in coordination with State Governments have
Central Government and State Governments to the extent
been imprinted on our minds through mainstream and
of 79%. The remaining 21% is envisaged to come from
social media. While L&T on its part has taken measures to
the private sector. a reading of the nip indicates that the
provide relief to workmen at our project sites, we have not
next few years are likely to see increased public spends
been immune to the impact of labour disruption. From a
in areas of water, metro rail networks, roads, renewable
sub-contracted labour force of around 2,25,000 working at
energy, power transmission and distribution as well as urban
project sites prior to the Covid-19 outbreak, the workforce
infrastructure. projected investments by the private sector,
came down to 1,60,000 at the beginning of the lockdown
however, appear a bit optimistic, despite corporate tax cuts.
and dropped further as project sites were progressively
Since infrastructure investments serve the twin benefits of
reopened. normalcy is being gradually restored and is
improving productivity and generating employment, we
expected to stabilise to near regular levels in the second
believe that the underlying macro drivers for investments
quarter of FY 2020-21
in india remain intact and that the Company is poised to
capitalise on these opportunities in the future.
Performance 2019-20
Group performance overview
in a year overshadowed by uncertainty, your Company
turned in a creditable performance and registered growth
For most of the year, L&T exhibited growth and strength
in key performance parameters. order inflows which enable
on all key performance parameters – even in the face
the core EpC business to flourish and grow, expanded by
of a stressed economic environment. Your Company’s
9% over the previous year. revenues which demonstrate
strategically diversified business portfolio, geographical
the ability of the Company to execute and deliver on
dispersion, robust Balance Sheet, strong order Book position
customer commitments grew by 8%. Shareholder value
and execution strengths have stood L&T in good stead.
Covid-19 impact: The period leading up to the lockdown
and the subsequent stoppage of all economic activity from
25th march, 2020 has adversely affected your Company’s
operations in late FY 2019-20 as well as the better part of
Q1 FY 2020-21. The lockdown was progressively lifted from
14th april, 2020, with the initial resumption of operations
being conducted under restrictions imposed by local
authorities. Currently most of these project sites are active,
and execution of jobs is progressing with a reasonable level
of labour workforce.
Sub-contracted labour force
The sections of society hardest hit by the prolonged
lockdown are daily wage earners and contract labour.
images of migrant workers returning to their homes, some
on foot, some by hitch-hiking and a large number through
was delivered through healthy profit after Tax which stood
at R 9,549 crores representing a growth of 7% over the
previous year. The total order Book of R 303,857 crores as
on 31st march, 2020 grew by 4% over the previous year-end
and provides multi-year revenue visibility to the Company.
revenue growth in the core business was provided by
infrastructure, hydrocarbon, heavy Engineering and Defence
Engineering Segments. Businesses in the iT and Technology
Services Segment, which could transition, with relative ease,
to a ‘work from home’ environment grew significantly,
aided by inclusion of revenues from an acquisition made
in FY 2019-20. The Financial Services business also
registered modest growth, even while grappling with
constraints of tight liquidity, stoppage of disbursements in
end-march, 2020 and the dominant risk-averse sentiment of
the lending community.
it gives me great pleasure to inform you that the Board
of Directors has recommended a Dividend of R 18.00 per
3
CHAiRMAN’S STaTEmEnT
annuaL rEporT 2019-20
share including interim dividend of R 10.00 paid before
under the overarching theme of improving the Consolidated
31st march, 2020.
international business
return on Equity (roE). The impact of the pandemic and
additional provisions in Financial Services business has,
however, depressed the roE for FY 2019-20. We are also
The Company has, over the years, expanded its international
incubating new age businesses which are expected to
footprint through a geographical diversification and de-
provide growth in the coming years.
risking strategy. While the middle East region has obviously
remained an area of focus, the Company has turned its
Sustainable development
attention to north and East africa. We have also looked at
Your Company takes a 360-degree view of sustainable
Bhutan, Sri Lanka, Bangladesh and other South East asian
development that encompasses the social, economic,
countries to steadily augment our international business. as
governance and financial aspects of an organisation. We
things stand, the middle East region constitutes 57% of the
international order Book of R 75,038 crores.
Talent management and succession planning
have been disclosing our sustainability performance through
our annual Sustainability / integrated reports which are
being published for the last 12 years. The reports, which
serve as ESG progress score cards, also adhere to the
people continue to be the fulcrum of your Company’s
Global reporting initiative (Gri) Standards and Sustainable
operations and focused attention is given to retention and
Development Goals (SDGs), and are independently verified
professional development of talent at all levels. L&T has a
by a third-party assurance agency.
well-structured 7-step leadership development program
designed to develop leadership at multiple levels spanning
junior through middle to top management. Several
initiatives including monetary and non-monetary rewards are
in place to incentivise performance and provide our people
the impetus to surpass themselves. The top management
devotes considerable attention to ensuring that employees
are given opportunities for professional development and
are able to grow along with the businesses they work for.
Business Developments
During the year, your Company acquired a majority
stake in mindtree Ltd., an iT-enabled services company.
This acquisition has helped the services segment of the
L&T Group to expand and contribute to higher revenues
and profits. Going forward, we are confident that the
contribution of the services businesses will exceed 40 per
cent of Group turnover. The process of integrating the staff
of mindtree and aligning common interests was completed
through the active engagement of top management. This is
now paying off through improved performance and growth.
L&T has been steadfastly following its 5-year Strategic plan
our approach covers a wide spectrum – ranging from
progressive reduction of carbon emission intensity at
our campuses and project sites, water conservation at
the locations we operate in and the phased induction of
alternative and recycled substitutes in our operations. The
health, safety and well-being of your Company’s staff and
all those who work at our factories and project sites are
accorded the highest priority.
Wherever we are and whatever we do, we make sure that
the communities around us see a tangible and durable
benefit from our presence. They see it in the shape of better
access to potable water, an improved level of sanitation,
and facilities for health, education and skill building. We
believe each of these steps contribute to building a happier
community which in turn will lead to a more harmonious
society.
Outlook
The Covid-19 pandemic and its fallout makes it difficult to
forecast the future with any degree of certainty. While we
4
are hopeful that the 2nd half of FY 2020-21 will herald
We are all passing through a crisis of unprecedented
better economic and business activity in terms of tendering,
magnitude, and i would like to thank Team L&T as well
good liquidity and revival of labour and supply chains, it
as our customers, vendors and other stakeholders for the
would be premature to predict the Company’s business
confidence and trust they have reposed in us. i also thank
outcomes for FY 2020-21. The company is putting in
my fellow Board members for their invaluable support in
enormous efforts to mitigate the impact of the pandemic,
guiding the Company and enabling another year of growth.
and register enhanced performance in FY 2021-22.
at this point in time, we see prospects in the areas of
Government buildings, data centres, healthcare infra,
airports, metro railways, water projects including waste-
Thank You
water treatment and irrigation, hydel projects, expressways
as well as onshore and offshore hydrocarbon projects. We
a.m. naik
are uncertain, however, of the timelines when these projects
will take off.
5
CONTENTS annuaL rEporT 2019-20
CONTENTS
6
Company information
organisation Structure
Leadership Team
Executive Committee
L&T nationwide network
& Global presence
Corporate Social
responsibility
annual Business
responsibility report
(aBrr) 2019-20
Standalone Financials -
10 Year highlights
Consolidated Financials
- 10 Year highlights
Graphs
aGm notice
Board report
7
8-9
10
11
12-13
14-20
22-43
44
45
46-47
48-69
70-181
management Discussion
& analysis
182-335
auditors’ report on
Standalone Financial
Statements
Balance Sheet
Statement of
profit and Loss
337-349
350-351
352-353
Statement of Changes
in Equity
354-355
Cash Flow Statement
356-357
notes Forming part of the
Financial Statements
358-458
auditors’ report on
Consolidated Financial
Statements
Consolidated Balance
Sheet
459-469
470-471
Consolidated Statement
of profit and Loss
472-473
Consolidated Statement
of Changes in Equity
474-475
Consolidated Cash Flow
Statement
476-477
notes Forming part of
the Consolidated Financial
Statements
478-593
information regarding
Subsidiary Companies
594-606
Shareholder’s
Satisfaction Survey Form
– 2019-20
607-608
COMPANY inFormaTion
annuaL rEporT 2019-20
MR. A. M. NAIK
Group Chairman
MR. ADIL SIRAJ ZAINULBHAI
independent Director
MR. S. N. SUBRAHMANYAN
Chief Executive officer and managing Director
MRS. SUNITA SHARMA
nominee of Life insurance Corporation of india
MR. R. SHANKAR RAMAN
Whole-time Director & Chief Financial officer
MR. SUBRAMANIAN SARMA
non-Executive Director
MR. SHAILENDRA NARAIN ROY
Whole-time Director & Sr. Executive Vice president
(power)
MRS. NAINA LAL KIDWAI
independent Director
MR. D. K. SEN
Whole-time Director & Sr. Executive Vice president
(infrastructure)
COMPANY
INFORMATION
MR. M. V. SATISH
Whole-time Director & Sr. Executive Vice president
(Buildings, minerals and metals)
MR. SANJEEV AGA
independent Director
MR. NARAYANAN KUMAR
independent Director
MR. HEMANT BHARGAVA
nominee of Life insurance Corporation of india
BoarD oF
DirECTorS
(as on 5th June 2020)
MR. JAYANT DAMODAR PATIL
Whole-Time Director & Sr. Executive Vice president
(Defence & Smart Technologies)
MR. M. M. CHITALE
independent Director
MR. SUBODH BHARGAVA
independent Director
MR. M. DAMODARAN
independent Director
MR. VIKRAM SINGH MEHTA
independent Director
Company Secretary
mr. Sivaram nair a
Registered Office
L&T house, Ballard Estate, mumbai - 400 001
Auditors
m/s.Deloitte haskins & Sells LLp
Registrar & Share Transfer Agents
KFin Technologies private Limited
75th annual General meeting through Video Conferencing or other audio Visual means
on Thursday, 13th august 2020 at 3.30 p.m. iST
7
ORGANISATION STRUCTURE ANNUAL REPORT 2019-20
88
99
LEADERSHiP TEam annuaL rEporT 2019-20
LEADERSHIP
TEam
A. M. Naik
Group Chairman
S. N. Subrahmanyan
CEO & Managing Director
R. Shankar Raman
Whole-time Director &
Chief Financial Officer
Subramanian Sarma
Non-Executive Director, L&T
CEO & Managing Director
(L&T Hydrocarbon Engineering)
S. N. Roy
Whole-time Director &
Sr. Executive Vice President
(Power & Corporate Affairs)
D. k. Sen
Whole-time Director &
Sr. Executive Vice President
(Infrastructure)
M. V. Satish
Whole-time Director &
Sr. Executive Vice President
(Buildings, Minerals & Metals)
J. D. Patil
Whole-time Director &
Sr. Executive Vice President
(Defence & Smart Technologies)
10
ExEcutivE
Committee (eCom)
S. N. Subrahmanyan
CEO & Managing Director
R. Shankar Raman
Whole-time Director &
Chief Financial Officer
Subramanian Sarma
Non-Executive Director, L&T
CEO & Managing Director
(L&T Hydrocarbon Engineering)
S. N. Roy
Whole-time Director &
Sr. Executive Vice President
(Power & Corporate Affairs)
D. K. Sen
Whole-time Director &
Sr. Executive Vice President
(Infrastructure)
M. V. Satish
Whole-time Director &
Sr. Executive Vice President
(Buildings, Minerals & Metals)
J. D. Patil
Whole-time Director &
Sr. Executive Vice President
(Defence & Smart Technologies)
Hasit Joshipura
Sr. Vice President & Head
Electrical & Automation
T Madhava Das
Sr. Vice President & Head
Power Transmission & Distribution
S. V. Desai
Sr. Vice President & Head
Heavy Civil Infrastructure
Shrikant joshi
CEO & Managing Director
L&T Realty Limited
Yogi Sriram
S. Rajavel
Y. S. Trivedi
11
NATiONWiDE nETWorK & GLoBaL prESEnCE annuaL rEporT 2019-20
NATIONWIDE
nETWorK
Rajpura
Chandigarh
New Delhi
Faridabad
Jaipur
Udaipur
Ahmedabad
Jamnagar
Vadodara
Bhopal
Pithampur
Lucknow
Guwahati
Varanasi
Durgapur
Ranchi
Jamshedpur
Serampore
Kolkata
Hazira
Madh
Mumbai
Panvel
Lonavala
Ahmednagar
Talegaon
Pune
Nagpur
Raipur
Rourkela
Cuttack
Bhubaneswar
Visakhapatnam
Hyderabad
Vijayawada
Pulicat
Kattupalli
Chennai
Kancheepuram
Puducherry
Bengaluru
Mysuru
Coimbatore
Kochi
Registered Office
Campus+
Power Plant
Shipyards
Offices
Knowledge City
Leadership Development Academy
Corporate Technology and Engineering Academy
Construction Skills Training Institutes*
+ ‘Campus’ denotes facilities for design and manufacture
* Part of L&T’s Corporate Social Initiatives
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12
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13
CORPORATE
SOCIAL
RESPONSIBILITY
Anicut in Rajasthan - to help ease water stress in the area.
Building india’s Social infrastructure
L&T’s deep concern for the underprivileged stems from a philosophy of inclusive, sustainable growth and
development. Long before CSr was mandated by the Companies act 2013, L&T was providing health and educational
services to the underprivileged around its facilities. Today, L&T’s CSr programmes are well-entrenched, focusing on
areas that align with the global and national matrices of development: water & sanitation, health, education and skill-
building
WATER & SANiTATiON
Through its integrated Community Development
programme (iCDp), which L&T started in 2014-15,
water for drinking, sanitation and agriculture has been
made available to 5 formerly water-stressed locations in
rajasthan, maharashtra and Tamil nadu covering 25875
households across 11596 hectares.
infrastructure
The affected communities were involved in the
implementation of the solutions to their problems. Their
contributions, such as labour, were used to construct
water-harvesting structures. now, water for household
use is available for 2-3 extra months in a year for 95% of
the households as compared to 54% families in 2014. The
ground water level has increased in project locations by 2
metres on an average. resilience against fluctuating rainfall
cycles has been built. The project has been extended
to another 4 water-stressed locations covering 50,965
households since 2018.
Depth of water from ground surface (mtrs)
120
100
80
60
40
20
0
4.5
262
204
6.5
366
305
6
8
28
30
pathardi
Chettipalayam pappampatti
Kumbhalgarh
Bhim
Baseline
achievement
14
CORPORATE SOCIAL RESPONSIBILITYANNUAL REPORT 2019-20 increase in arable land (ha)
Percentage of households with access to Water
248
140
450
282
1474
1769
428
502
2014-15
2019-20
10000
1000
100
10
1
Chettipalayam
pappampatti
Kumbhalgarh
Bhim
Baseline
achievement
Fallow land brought under cultivation (ha)
54%
95%
pathardi
0%
100%
Chettipalayam
Percentage of households with Toilets
2014-15
2019-20
32%
68%
Treated fallow land
remaining fallow land
Kumbhalgarh
0%
Sanitation drives
34%
91%
pappampatti
25%
75%
100%
Treated fallow land
remaining fallow land
Bhim
28%
72%
Treated fallow land
remaining fallow land
The Government’s Swachha Bharat programme provided
an impetus to L&T’s existing rural sanitation drive. L&T
constructed over 1000 well-designed toilet-cum-bathrooms
using local skills and material. Community-based
monitoring committees ensured that these villages became
free of open-defecation. Today, 91% households have
toilets in the iCDp area, compared to 34% in 2014-15.
WASH initiative
as many schools in the project area lacked proper
sanitation facilities, L&T provided adequate Water,
Sanitation and hygiene (WaSh) infrastructure for over
3000 children and trained them in using toilets and keeping
their schools clean and hygienic.
Capacity Building
The communities concerned were trained to facilitate
optimum, equitable and efficient water use and implement
other agricultural methods and technology to increase their
yield.
15
Awareness programmes in schools help children to understand the
importance of water & sanitation
Farm field training sessions improve crop quality
Farm field training trained the farmers in
• Horticulture
• Zero-budget natural farming
Today, all the project areas have access to drinking water
and sanitation, as well as water to cultivate fodder for
livestock and extra crops.
Case study:
• Best practices on grains, pulse, vegetable nursery and
Barren land blossoms
fruit orchards.
• Sustainable agricultural practices
indigenous knowledge on managing livestock was revived,
and youth and women trained in ethno-veterinary care.
Women’s groups were given training in the retention of the
nutritional value of food and in kitchen gardening.
Workshops are held on participatory hydrological
monitoring for ground water resource estimation and
water budgeting for ensuring optimum, equitable and most
efficient use of water
Sustainability
Community groups were set up to maintain and regulate
the use of the structures and resources created through the
project and democratically manage the community fund.
Capacity building of these groups is undertaken regularly.
60-year-old mithu Singh, a farmer, lives with his family in
Kookra in Bhim rajasthan, in a house overlooking the 2.5
to 3 bighas of land he owns and cultivates fruit on. it was
barren, until an anicut was built next to it, recharging the
well on his field. Lush green vegetation has sprung up,
despite the poor rainfall this year.
over the last three years, mithu’s yield has risen from 20 kg
to 100 kg, due to the watershed management, seeds and
training provided by L&T.
EDUCATiON
The backbone of social development is education. it has
been accorded priority as part of L&T’s efforts towards
inclusive development. L&T enhances the quality of
education in resource-stressed slums, rural and tribal
schools, by strengthening the concrete infrastructure as
well as improving the quality of education in many ways.
a sustainability index indicating the maturity and readiness
of the local committees to sustain project efforts was
computed.
Technology-related interventions: L&T has provided
computer laboratories and digital classrooms to several
rural schools.
16
CORPORATE SOCIAL RESPONSIBILITYANNUAL REPORT 2019-20 Computers enhance learning in resource poor schools.
Digital classrooms make learning interactive.
STEM Project: most future jobs will involve digital
technology comprising skills in Science, Technology,
Engineering and mathematics (STEm), which intimidate
students from resource-poor schools. Therefore, this year,
L&T introduced the STEm ‘Engineering Futures’ project
in 103 upper primary Government schools. Teachers in
these schools were trained in collaborative and interactive
teaching methods to replace rote learning with experiential
learning. Students were encouraged to participate in
science exhibitions and competitions. parents were
encouraged to persuade their daughters to participate in
order to bridge the gender gap in STEm-related careers.
The STEM programme impacted 103 schools, 465
teachers and 23000 students this year.
infrastructure: L&T constructed and repaired classrooms,
toilet blocks and water stations for basic hygiene facilities,
kitchens and sports grounds. L&T has developed school
infrastructure that is child-friendly, learning-based and
fun-based.
Educational supplies: Supplies are provided to schools in
remote rural and tribal villages.
Balwadis: L&T improves the quality of balwadis and
anganwadis in urban slums and rural areas.
After-school community study centres: These centres
offer supplementary education to underprivileged children,
monitoring learning levels.
Capacity Building: Teacher training programmes are held
in Government schools.
Overall development: underprivileged children benefit
from life skills, extra-curricular activities, educational and
recreational outings, health camps and health education
sessions.
Creating a home learning environment: School
committees and parents are encouraged to dialogue and
assume responsibility to maintain the infrastructure and
create a learning environment at home.
Case study: ‘Engineering Futures’ opens up a
whole new world
Gulrez is in Std.7 in one of the 25 schools undertaking
L&T’s Engineering Futures project.
Born with dwarfism, 11-year-old Gulrez does not let his
physical limitations hamper his enthusiasm.
17
L&T TB Clinic at Koldongri, Andheri, Mumbai
Cancer awareness and detection camps are held in and around L&T’s
construction sites in Mumbai, Aurangabad and Tamil Nadu.
he believes the project brought about positive changes in
his academic and social life, boosting his self-confidence
and popularity.
Gulrez revealed, “my dream is to be an Engineer one day.
using models to learn improves my critical thinking, and i
believe this approach will help me achieve my dream.’’
HEALTH
To make health care accessible and affordable to the
underprivileged, L&T undertakes several initiatives.
Health Centres: L&T’s 12 multi-speciality health Centres
are professionally staffed and equipped to provide
outpatient and tertiary health services. Focus is laid on
preventing infant, child and maternal mortality.
Psychological health: psychiatric opDs and counselling
clinics provide services for mental health and stress-related
issues.
infrastructure: L&T provides medical equipment and
construction/refurbishment services to health centres and
hospitals run by the Government or charitable trusts.
Health Camps: mobile vans take L&T’s health services to
the underprivileged. Specialised health camps cover eye
care, dental, paediatric and gynaecological care. Camps
on reproductive health are conducted for disadvantaged
children and adolescents.
HiV/AiDS programmes: L&T has a comprehensive
programme for hiV/aiDS management and state-of-the-
art diagnostic and counselling facilities. it provides the
Government’s free anti-retroviral Therapy (arT) at its arT
health centre in mumbai in association with the national
aiDS Control organisation (naCo). This Centre is an
example of successful public-private collaboration.
Tuberculosis (TB) services: L&T takes preventive and
curative steps towards the control and management of TB.
Dialysis Centres: L&T runs artificial kidney dialysis centres
for the underprivileged at highly subsidised rates at its
health Centres at mumbai, Thane, Vadodara, Surat and
Chennai.
Cancer camps: Camps on preventive education and early
diagnosis are held – especially for women, with a focus on
breast and cervical cancers. mammography and pap smear
services are also provided.
Case study: Koldongri TB Clinic at Mumbai
L&T runs an exclusive TB clinic in Koldongri in partnership
with the municipal Corporation of Greater mumbai
(mCGm). This partnership started in 1981. in 2005, L&T set
up a modern integrated centre for TB and arT.
While the mCGm provided the land and the building
space, L&T ensures that the services of specialist physicians
18
CORPORATE SOCIAL RESPONSIBILITYANNUAL REPORT 2019-20 Smart City Skill Development Centre at Hyderabad
Trainees at Smart City Skill Development Centre
and counselors are available. L&T ensures the high quality
of diagnostics and treatment. procedures are nationally
standardised. Trained community health workers make
follow-up home visits to ensure treatment completion.
Families and communities are educated in preventing TB
and supporting patients.
in FY 19-20, the clinic registered 1449 patients. 408
patients sought consultation for TB. 263 were put on
DoTS treatment and counselled. For those provided
CaT i, ii and iV treatments, a cure rate of 85-90% was
achieved. 550 cases of multi Drug resistant Tuberculosis
registered and started treatment.
SkiLL DEVELOPMENT
a key strategy to realize the potential of india’s
demographic advantage is skill development. L&T
helps to create the human resources to improve india’s
competitiveness and growth – especially in construction
skills – by training underprivileged youth.
L&T’s Construction Skills Training institutes (CSTis) provide
free standardized industrial training to prepare the large
unorganised workforce to meet the demand for skilled
workers in india and abroad. The skills imparted include
bar-bending, formwork, electrical work, tiling, masonry,
welding, carpentry and solar electrical work.
With an emphasis on technology and innovation, new
courses have been introduced at the Smart City Skill
Development Center, hyderabad.
integral elements of all the skill-training deliverables are
digital training, digital study material, micro-learning
modules on mobile apps, augmented reality / Virtual
reality Training, safety, quality standards and soft skills
training. periodic online assessments are undertaken.
The hands-on training and the L&T certificate prepare the
trainees to earn and support their families. many have
found jobs abroad. L&T thus helps to bridge the schism
between the skill demands of industry and the aspirations
of the youth.
L&T has 9 CSTis in 8 states – Tamil nadu, maharashtra,
uttar pradesh, Telangana, orissa, Karnataka, Gujarat and
West Bengal.
This year, 10033 youth completed various courses at these
CSTis of which 7109 (71%) were employed.
Case Study: Skilling for success
Despite a monthly salary of only R 6000, uttam mahato’s
farm labourer father managed to give him an iTi education.
however, uttam was unable to find a job. informed by
a friend about L&T’s CSTis, he registered for a 3-month
formwork course, which also instilled in him a sense
19
Hands-on training fosters job-readiness.
L&T’s employee volunteers - L&Teers - conduct an HIV-awareness
camp for construction workers.
of excellence, motivating him to develop the values
and attitudes to meet his challenges with maturity and
confidence. uttam secured ‘a’ grade and now works as a
technician, earning a monthly salary about R 13,500.
“L&T’s skill training changed my life”, he emphasises.
range from augmenting the running of urban community
learning centres, to aiding the visually challenged,
conducting awareness on social issues, among others.
This year 7122 employees volunteered 51,422 hours for
various social initiatives.
Other initiatives
L&T imparts education and vocational training to
underprivileged youth and women to enable them live with
self-reliance, dignity and respect.
Over 1.38 million beneficiaries
(including L&T Public Charitable Trust)
Case study: Empowerment of Tribal Girls
in partnership with a hospital in Gujarat, L&T organized
a nursing aide course for tribal girls of Dangs and Surat
District.
a year later, their transformation is visible. Gone are the shy
faces, timid voices, low self-esteem and fear of the future.
They have emerged as a powerhouses, with confidence,
ambition, communication abilities, and technological
know-how. The course has equipped them with the subject
knowledge as well as the ethics, values and sensitivity to
carve out successful careers and sustain the futures.
Employee Volunteering
L&T’s employee volunteers, or L&T-eers, play a crucial role in
fostering the Company’s CSr tradition. agents of change,
they facilitate development activities. L&T-eering initiatives
Water & Sanitation
1,31,988 Beneficiaries
Education
3,63,377 Beneficiaries
Health
7,95,736 Beneficiaries
Skill Development
84,240 Beneficiaries
20
CORPORATE SOCIAL RESPONSIBILITYANNUAL REPORT 2019-20
ANNUAL BUSiNESS RESPONSiBiLiTY REPORT 2019-20
L&T is committed to fulfilling its economic,
environmental and social responsibilities while
conducting its business. The Company is conscious of
its impact on the society within which it operates, and
has systems to either eliminate or control any adverse
impacts of its operations. The Company works towards
resource conservation, improving social relations
within the communities where it operates and works
towards generating value for all stakeholders. L&T’ s
Sustainability roadmap 2021 aligned with its Business
plan, LaKShYa 2021, has produced encouraging
results, including outcomes obtained through various
digitalization initiatives.
The Business responsibility report (Brr) is prepared
in accordance with the national Voluntary Guidelines
on Social, Environmental and Economic responsibilities
of the Business (nVG – SEE) released by the ministry
of Corporate affairs, Government of india. The Brr
complies with the regulations 34 (2) (f) of the Securities
Exchange Board of india (SEBi) (Listing obligation and
Disclosure requirements) regulations 2015. Last year,
L&T published its 2nd integrated report () 2018-19, in
line with the international integrated reporting Council
(iirC) reporting framework. The externally assured
was also in accordance with the Global reporting
initiative (Gri) Standards ‘Comprehensive’ option.
From FY2018, the has replaced the sustainability
reports of the organization. The integrated report
and previous sustainability reports 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 2019 - 31st March 2020
7. Sector(s) that the Company is engaged in (industrial activity code-wise):
Group Class Sub Class Description
271
2710
282
2824 28246
301
3011 30111
manufacture of electric motors, generators, transformers and electricity distribution and
control apparatus
manufacture of parts and accessories for machinery / equipment used by construction and
mining industries.
Building of commercial vessels, passenger vessels, ferry boats, cargo ships, tankers, tugs,
hovercraft (except recreation type hovercraft), etc.
30112
30114
Building of warships and scientific investigation ships, etc.
Construction of floating 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 refineries, chemical plants, etc.
22
Group Class Sub Class Description
465
681
711
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.
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 : 31 (excluding listed subsidiaries and limited life project sites)
- the listed iT and Technology Services subsidiaries operate from another additional 81 international
locations
ii. Number of National Locations : 51
(The above locations exclude limited life project sites)
10. markets served by the Company – Local/State/national/international/: all
SECTiON B: FiNANCiAL DETAiLS OF THE COMPANY
1. paid up Capital (inr) : R 280.78 crore
2. Total Turnover (inr) : R 82,383.65 crore [revenue from operations]
3. Total profit after taxes (inr) : R 6,679.21 crore
4. Total Spending on Corporate Social responsibility (CSr) as percentage of profit after tax (%): 2.18%
as per Section 135 of the Companies act, 2013, the CSr spend is 2.01% of the average net profits of the previous three
financial years.
5. List of activities in which expenditure in 4 above has been incurred: our focus areas in Corporate Social responsibility are
as follows:
i. health
ii. Education
iii. Water & Sanitation
iv. Skill Building
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 participate in Business responsibility initiatives of the parent organization. in addition,
companies like L&T Finance holdings, L&T infotech, L&T Technology Services (Listed entities) will have their separate
Business responsibility report (Brr) as a part of the annual report. L&T hydrocarbon Engineering and other subsidiary
companies participate in our Business responsibility initiatives.
23
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 suppliers are critical to the organization’s operation and supply chain sustainability issues can impact its
operations. The Company promotes Br initiatives in its value chain. at present, less than 30% of its suppliers/distributors
participate in Br initiatives.
SECTiON D: BR iNFORMATiON
1. Details of Director/Directors responsible for BR
a) Details of the Director/Directors responsible for implementation of the Br policy/policies
• DIN Number : NA
• Name : Dr. Hasit Joshipura
• Designation : Senior Vice President & Head – Electrical & Automation
b) Details of the Br head
S. No
Particulars
Details
1.
2.
3.
4.
5.
Din number (if applicable)
name
Designation
Telephone number
Email iD
Not Applicable
Mr. Anup Sahay
Head – Corporate Strategy & Special initiatives
+91-22-61238666
Sustainability-ehs@Larsentoubro.com
2. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N)
name of principles:
p1 – Businesses should conduct and govern themselves with Ethics, Transparency and accountability
p2 – Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle
p3 – Businesses should promote the well-being of all employees
p4 – Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are
disadvantaged, vulnerable and marginalized
p5 – Businesses should respect and promote human rights
p6 – Businesses should respect, protect, and make efforts to restore the environment
p7 – Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner
p8 – Businesses should support inclusive growth and equitable development
p9 – Businesses should engage with and provide value to their customers and consumers in a responsible manner
S. No Questions
1.
2.
3.
Do you have a policy / policies for the following
principles?
has the policy been formulated in consultation with the
relevant stakeholders?
Does the policy conform to any national /international
standards? if yes, specify? (50 words)
P1
P2
P3
P4
P5
P6
P7
P8
P9
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
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.
24
4.
5.
6.
7.
8.
9.
S. No Questions
has the policy being approved by the Board?
Yes.
if yes, has it been signed by mD/owner/CEo/appropriate
Board Director?
Signed by the Group Chairman
Does the Company have a specified committee of the
Board/ Director/official to oversee the implementation of
the policy?
Yes.
has the policy been formally communicated to all
relevant internal and external stakeholders?
Does the Company have an in-house structure to
implement the policy/policies?
Does the Company have a grievance redressal
mechanism related to the policy/policies to address
stakeholders’ grievances related to the policy/policies?
10.
has the Company carried out independent audit/
evaluation of the 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
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
Y
Y
Y
Y
Y
Y
Y
Y
Y
indicate the link for the policy to be viewed online?
www.Lntsustainability.com
2a. if answer to S. no. 1 against any principle, is ‘no’, please explain why: (Tick up to 2 options) Not Applicable
P2
P3
P4
P5
P6
P7
P8
P9
S. No Questions
1.
2.
3.
4.
5.
6.
The Company has not understood the principles
The Company is not at a stage where it finds itself in
a position to formulate and implement the policies on
specified principles
The Company does not have financial 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)
P1
-----
-----
-----
-----
-----
-----
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
Annually
•
Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently
it is published?
Yes, the Company has been publishing its Sustainability performance annually as per the Global
Reporting initiative (GRi) framework since 2008. From 2017-18, the Sustainability Reports have been
replaced by an integrated Report (iR) which follows GRi Standards as well as international integrated
Reporting Council (iiRC) framework. The integrated Report is externally assured. We are following GRi
Standard and 2019-20 report was ‘in Accordance – Comprehensive’ report. The reports can be accessed at
https://www.Lntsustainability.com/integrated-report/.
25
SECTiON E:
Principle 1: Businesses should conduct
and govern themselves with Ethics,
Transparency and Accountability
at Larsen & Toubro, Corporate Governance is fundamental
to the business and core to its existence. The philosophy
is based on the transparent governance and disclosure
practices, respect for human rights, individual dignity and
adherence to norms of moral and professional conduct.
L&T is a professionally managed indian multi-national and
committed to total customer satisfaction and enhanced
value creation. The vision of the Company is inclusive with
a culture of caring and trust supplemented with corporate
policies. These are also applicable to all its subsidiary and
associate companies.
The Company has laid down its Code of Conduct (CoC),
which is applicable to Board members, senior management
and employees. The objective is to remain committed and
vigilant towards ethical conduct of business processes and
instil a sense ownership of the Company. all designated
employees including Board members need to adhere to
and provide an annual declaration of their compliance with
the CoC.
a separate detailed CoC is in force for all other employees
covering supervisory, executive and management staff.
apart from a preamble explaining principles of honesty,
ethics and integrity, the Code covers all aspects of
functioning including anti-trust behaviour, information
security, insider trading rules, professional engagements,
use of Company assets and brand logo, intellectual
property, respect for human rights, overarching corporate
hr philosophy including equal opportunity employment,
prohibited items, social media code of conduct, use of
information technology assets, anti-bribery policies and
other aspects of individual governance codes. The Code
incorporates reporting structures and a graded escalation
matrix to be followed in case any breaches are noticed or
pointed out, including reference to the Whistle Blower
investigation Committee in appropriate cases. The Code is
also applicable to unlisted subsidiaries.
The CoC is available at https://investors.Larsentoubro.com/
CodeofConduct.aspx. periodic training is conducted for
relevant stakeholders to make them aware of the CoC
and amendments thereof. all new employees undergo
training on the CoC in induction / orientation programmes.
The training module on the CoC is also hosted on the
Company’s intranet-based ‘any Time Learning’ (aTL) portal.
newly inducted Graduate Engineering Trainees (GETs) and
post Graduate Engineering Trainees (pGETs) also learn
about the CoC in their ‘praYaG’ and ‘SWaGaT’ (special
orientation) training modules.
Whistle Blower Policy
The policy was formulated in 2004 and has been reviewed
and updated periodically. The policy aims to offer an
impartial vigilance mechanism in place for directors, senior
management and employees to report their concerns about
potential, suspected and actual frauds, unethical behaviour,
and violations of the CoC. The Whistle Blower policy is
an effective method available to employees to report –
without fear – any wrong practices, unethical behaviour or
non-compliance which may have a detrimental effect on
the organization, including financial damage and impact on
brand image.
During 2019-20, a total of 55 complaints were received
through the whistle-blower mechanism, all of which
were scrutinized and addressed in accordance with the
Company’s protocol. 54 complaints were resolved and one
complaint is in the process of being resolved. The Whistle
Blower investigation committee and management maintain
the anonymity of the whistle-blower at all times. The
stakeholder complaints are included in the Director’s report
section of the annual report.
The Whistle-blower policy has also been extended to
suppliers and contractors, which enables them to report
their concerns about unethical behaviour, misconduct,
violation of legal and other requirements, improper
practices, actual or suspected fraud by Company officials
- without the fear of unfair treatment or punishment
(including loss of business).
The senior management and the audit Committee of the
Board are apprised of the internal processes on a periodical
basis, which covers internal controls, statutory compliance
and assurance.
26
The Company has established a separate Code of Conduct
for suppliers and vendors which covers various aspects
such as compliance with environmental regulations,
health and safety, labour practices, human rights aspects,
minimum wages rule, freedom of association and collective
bargaining, prohibition on child labour, forced and
compulsory labour, ethical behaviour, reducing the negative
impact on society due to their operations, transparency in
business processes and environment conservation.
including one Green Factory and a certified Green Campus
(viz., the Leadership Development academy at Lonavala).
our 24 campuses have adopted the zero-wastewater
discharge approach and continue to ensure water positive
status. Energy efficiency programmes and climate change
mitigation measures are extensively implemented across
L&T, contributing to greener campuses and project sites.
renewable energy is harnessed at campuses and project
sites as well.
Every new supplier needs to sign this CoC when he/she
wants to do business with the Company. So far, more than
43,000 suppliers have signed this CoC. Training workshops,
including capability-building programmes are periodically
conducted for vendors and sub-contractors, and cover
topics such as Environment, health & Safety (EhS), human
rights, business process improvements and sustainability.
The Company ensures compliance by its vendors and
suppliers to the CoC through periodic quality appraisals,
EhS audits and assessments.
Principle 2: Businesses should provide
goods and services that are safe and
contribute to sustainability throughout
their life cycle
L&T ensures that environment, health, and safety aspects
are taken into consideration at the design stage itself while
manufacturing products or providing services to customers.
it is our endeavour to provide safe and sustainable goods
and services to our clients. our business portfolio consists
of infrastructure, energy (oil & gas/power), defence, heavy
engineering, electrical & automation products, hydrocarbon
projects, iT, Technology Services and Financial Services.
Sustainability aspects, including lower emissions and
resource conservation, are integrated into our engineering
and design. The Company also provides training to
customers and customers’ personnel in the safe use and
handling of products.
L&T offers conservation-based products and projects,
such as green buildings, wastewater treatment, recycling
plants and solar pV-based power plants. These help our
clients contain pollution and conserve resources. at our
own campuses, we have 17 certified green buildings
our green product and services portfolio consists of metro
rail projects, efficient power transmission and distribution
systems, small hydro-electric power stations, solar pV-
based power plants, green buildings, energy efficient
equipment (power management systems, aC drives, smart
metering), water treatment & distribution infrastructure,
supercritical and ultra-supercritical thermal power plants
and equipment, emission control equipment and coal
gasifiers. our green portfolio is focused on minimizing
environmental impact, e.g. reduced water consumption,
carbon emissions, material consumption and reduced waste
generation. These help our clients to move onto the low-
carbon economy path.
The Company extensively participates in the ‘make in india’
programme and promotes local sourcing of products and
services. The transportation of material at the project sites
is optimized based on the project execution stage. many
of our infrastructure projects are at remote locations,
and therefore goods and services are procured from local
producers and surrounding areas as far as possible. L&T
has adopted the 3r (reduce, recycle & recover) principle
for material conservation. material recycling and the use
of alternative materials (in place of natural materials) are
extensively practiced by our infrastructure business. The
Sustainability roadmap 2021 targets increasing recycling /
use of recycled material by 5%.
Fly ash is used as a substitute to cement in construction,
crushed sand is used in place of natural sand, and blast
furnace slag is used. These are some of the conservation
methods practiced at project sites. however, since most
of our products are ‘engineered to order’ and based on
customer-specific requirements, the potential for use of
recycled material for products is limited.
27
L&T’s 24-acre Leadership Development Academy at
Lonavala, near Mumbai
L&T’s Switchgear Training Centres promote good electrical
practices
Principle 3: Business should promote the
well-being of employees
The Company’s growth depends upon the growth of the
employees within the organization. The commitment,
enthusiasm and dedication of employees has helped L&T
become a large organisation of repute within india and
in other geographies where we operate. The Company
nurtures and motivates its talent pool through its
leadership programmes and other forms of monetary and
non-monetary incentives. The Company recognises that
employees spend a better part of their working lives at their
workplace. The organisation hence provides workplace
infrastructure that is conducive to the well being of staff
- this includes good iT infrastructure, ergonomic seating,
recreation areas, high standards of hygiene and other
services such as basic medical care facilities. The policies
of the Corporate human resources Department forms a
strong framework for workforce management. Fostering a
culture of caring and trust is embedded in various corporate
policies like the Environment, health & Safety (EhS) policy,
Whistle-Blower policy, protection of Women’s rights at
Workplace policy and the CoC.
L&T does not discriminate against employees based on
caste, religion, region, gender or physical disability, and
the merit of candidates is always accorded top priority for
selection and promotion. L&T adheres to the unGC (united
nation Global Compact) principles which include human
rights clauses. These clauses are part of our contracts with
suppliers, partners and nGos, and are extended across our
supply chain.
The Company recognizes the employees’ right to form
unions and associations affiliated with trade unions at its
manufacturing campuses. 5.67% of permanent employees
are covered under the unionized employee category.
L&T has provided direct employment to 83 persons With
Disabilities (pWDs) and the supply chain has employed 43
persons With Disabilities. in 2019-20, the Company did
not receive any complaint in respect of child labour, forced
/ involuntary labour or about sexual harassment at the
workplace.
Total workforce
L&T employees
refer “Standalone financials –
10-year highlights” section of
annual report
number of permanent
women employees
2,756
number of contract
workmen
246,502
Training and skill-building are the pillars which support
L&T’s skill development agenda. regular training and
exposure to the challenges of the future are vital parts of
28
Ta hazard?
P
S
S
P
T
an accident!
L&T Safety Day July 4, 2019
If you see a safety hazard, don’t walk past it!
Fix it,
if you can
Inform the
Safety Officer
Alert
passers-by
Promoting safety best-practices through
communication across L&T’s facilities
mysuru and project management institutes at Vadodara
and Chennai.
Safety of the workforce is given high priority in all
activities across facilities and project sites. Every task,
job or assignment is mandated to be performed in a
safe manner – which forms the bedrock of our work
execution philosophy. We have a structured approach
towards safety, with assigned individual objectives. The
management’s commitment to safety is demonstrated
through our approach and is visible while taking business
decisions. We focus on effective implementation of
health and safety practices in line with our ‘Zero-Accident
Vision’. it aims to create a safer work environment for
our employees, contractors, and customers through
rigorous systems, procedures, and firm implementation.
This is extended to our supply chain partners as well.
our Corporate Environment, health & Safety (EhS) policy
articulates our commitment towards building a safe
workplace and defines protocols to be followed by each
business across india and abroad. The safety performance
of the Company is reviewed on a quarterly basis by the
Company’s Board. regular safety training is undertaken,
including Tool Box Talks, emergency mock drills, and
specific safety interventions. new employees are introduced
to the aspects of safety and all contract workmen receive
mandatory safety training before the commencement of
work. L&T is the first corporate organization in india to be
29
L&T’s unique Safety Innovation School fosters a ‘safety culture’
an employee’s career progression. L&T trains employees
in new skills and emerging fields in addition to continual
training in functional and behavioural areas. Employees
are given opportunities for higher education through
sponsorship in reputed colleges and by way of corporate
tie-ups with renowned management institutes.
L&T’s e-learning portal – any Time Learning (aTL) – is
available for employees anytime and at any place. The
training modules are diverse. They are prepared by subject
matter experts and culled from various knowledge sources.
aTL courses are interactive, engaging and user-friendly.
aTL-next, a learning process automation and analytical
platform has been hosted on the Company’s intranet
portal since the last two years. This intelligent and adaptive
learning platform makes learning personal and compelling.
The Leadership Development academy (LDa) at Lonavala
has been identified as a unique corporate university in
india. it is a symbol of value for L&T as it helps people
develop and grow by providing the right infrastructure
and services to aid and enhance learning. The LDa has
been recognized as a ‘research Centre’ by Symbiosis
international university and it also enables employees
to pursue their ph.D. programmes. in addition, various
functional, technical and managerial training programmes
are provided to employees through technical training
centres from mumbai (located at madh and mahape),
L&T’s education initiatives in resource-stressed schools
make learning more enriching
L&T’s many agricultural initiatives help farmers and their
crops thrive
accredited as ‘Course provider’ by national Examination
Board in occupational Safety & health (nEBoSh),
uK, for delivering the course on international General
Certificate by the institution of occupational Safety &
health (ioSh), uK.
more than 5.1 million man-hours of safety training were
provided in FY 2019-20 to our workforce. our wellness
programme ‘Working on Wellness’ is a unique initiative
undertaken by Corporate health and Welfare Department,
which conducts counselling, awareness sessions, health
programmes, diagnostics camps and health workshop
activities aimed at enhancing employees’ wellness and
well-being at office. These health interventions are grouped
into six critical areas like cancer, diabetes, cardiac disease,
obesity, ergonomic issues, and stress.
Principle 4: Business should respect the
interests of and be responsive towards
all stakeholders, especially those who
are disadvantaged, vulnerable and
marginalized
our responsibility to stakeholders is reflected in the way
we conduct our business. The contribution of shareholders
and investors to the growth of the Company is deeply
valued, and we strive to ensure that we deliver value to all
stakeholders.
L&T maps both internal and external stakeholders
along with vulnerable, marginalized and disadvantaged
stakeholders. This large and mixed community has
varied and extended expectations, and L&T strives to
match or exceed expectations from all stakeholders.
active engagement with a large and varied ecosystem of
stakeholders (shareholders, employees, customers, bankers,
vendors, government, communities, society at large et al) is
done through a multiple touch points.
L&T is a pioneer in providing a counselling helpline for its
employees and their families in india, in collaboration with
Tata institute of Social Science (TiSS).
our Corporate Social responsibility (CSr) department
runs specific programmes focused on providing livelihood
opportunities to vulnerable and marginalized stakeholders,
both near and away from our campuses and project sites
to ensure that the benefits reach the maximum number of
beneficiaries.
one of our flagship CSr programmes is the integrated
Community Development (iCD) programme, which focuses
on improving the quality of life of communities living in
the ‘water-stressed’ regions of india. The iCD programme
works towards providing access to clean drinking water,
sanitation facilities and water for agriculture in these
30
We are committed to enhancing the
holistic health and wellness of Team L&T.
We will actively work towards:
•
•
•
Promotion & propagation of Preventive
Health Care
Enhancement of Employees Health Index
Fostering of addiction-free workplaces at
all our campuses
Consistent practice of these precepts will
benefit employees, their family members
as well as the community at large.
th17 September 2012
A M NAIK
Chairman & Managing Director
Supplier Meets help stakeholders understand new concepts and products better
L&T’s policies ensure the holistic
well-being of its employees and the
community at large
regions. it is followed by CSr interventions in health,
education and skill-building.
For internal stakeholders
Employees Employee satisfaction surveys
We use the following communication channels to engage
with various stakeholders:
External Stakeholders
Stakeholders
Shareholders
and investors
Engagement modes
press releases, info desk - an online
service, dedicated email id for investor
Grievances, Quarterly results, annual
reports, Sustainability / integrated
reports, aGm (Shareholders interaction),
Quarterly investor presentations,
investors meets and shareholder visit to
works, corporate website.
regular supplier, dealer and stockist
meets
press releases, Quarterly results, annual
reports, Sustainability / integrated
reports, aGm (Shareholders interaction),
access to information & responses to
queries
periodic feedback mechanism
regular business interactions, Client
satisfaction surveys
press releases, Quarterly results, annual
reports, Sustainability / integrated
reports, Stock Exchange filings, issue
specific meetings
Suppliers /
Contractors
media
Community
Customers
Government
Employee engagement surveys for
improvement in employees’ engagement
process
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-specific,
some business-specific), a CSr programme
newsletter
L&T helpdesk, toll-free number
Principle 5: Business should respect and
promote Human Rights
L&T is an indian multi-national Company (mnC) with a
presence in 47 countries and is exposed to human rights
issues. L&T publishes an annual Communication on
progress (Cop) as part of its compliance to un Global
Compact (unGC) and is a member of Global Compact
network india (GCni). The policies and practices related
to human rights are extended to subsidiary and associate
31
L&T regularly organises tree-plantation drives at its
premises, project sites and allotted public areas
L&T’s green portfolio includes green buildings and several
eco-friendly products, systems and solutions
companies as well. L&T’s human resource policy covers
human rights aspects and iLo conventions. prohibition
of child labour, the prohibition of forced and compulsory
labour, non-discrimination, freedom of collective
bargaining, etc. are covered in our Code of Conduct for
employees and human resource policy.
L&T believes that every employee should have the
opportunity to work in an environment free from any
conduct which can be considered as Sexual harassment.
The Company is committed to treating every employee with
dignity and respect and hence has laid out a policy based
on the laws and regulations in india. The policy is applicable
to all L&T establishments located in india.
This policy encompasses the following objectives:
• To define Sexual Harassment
• To lay down the guidelines for reporting acts of Sexual
harassment at the workplace, and
• To provide the procedure for the resolution and redressal
of complaints of Sexual harassment.
To ensure implementation and compliance with the
provisions of the Sexual harassment of Women at the
Workplace (prevention, prohibition & redressal) act &
rules 2013 and ensure coverage across all locations in
india, two apex Committees have been constituted whose
jurisdictions are separate based on coverage of business
verticals and geographies.
a detailed procedure for making a complaint and initiating
an enquiry to the redressal process and finally the process
of preparation of a report within a stipulated timeline is
laid out in the policy document. The policy also covers
Disciplinary action for Sexual harassment.
The policy is a part of the Company’s Code of Conduct.
Training programmes for the members and awareness
sessions for its employees are organised throughout the
year. There programmes are created on a digital platform
as well. During 2019-20, a total of 104 workshops were
conducted across the Company on awareness of Sexual
harassment at the Workplace.
Principle 6: Business should respect,
protect and make efforts to restore the
environment
Environment protection and the conservation of natural
resources are part of L&T’s business philosophy. our
Corporate Environment, health & Safety (EhS) policy lays
emphasis on incorporating environmental consideration
into all business processes. as a part of our Sustainability
programme, we set quantifiable targets with a timeline
and action plan to achieve sustainability goals. our
Sustainability roadmap 2021 is aligned with our business
plan, LaKShYa 2021, which incorporates measurable
targets and key initiatives. The Sustainability roadmap
32
Elevated Storage Reservoirs at Pune, Maharashtra
is extended to Subsidiary & associate Companies and
they are encouraged to set similar targets and roadmaps.
Environmental risks and opportunities from operations are
periodically identified and addressed at the business level.
a separate Code of Conduct has been extended to vendors
and service providers which covers the need for compliance
with environmental regulations, health and safety, labour
practices, human rights aspects, minimum wages, freedom
of association, collective bargaining, prohibition of child
labour, forced and compulsory labour, ethical behaviour,
transparency in business processes and environment
conservation. all new vendors / service providers need to
sign this combined CoC as part of the initial empanelment
process. So far more than 43,000 vendors have signed the
Code.
We continue to conduct water assessment surveys at
our campuses. all 24 campuses maintained their ‘Water
positive’ status in 2019-20. Water conservation and
rainwater harvesting are practiced within our premises;
additionally, our community interventions consist of
rainwater harvesting, check dam construction, creation
of farm ponds, soil moisture conservation programmes,
etc. The outcomes have been encouraging so far. all our
24 campuses have been maintaining zero-wastewater-
discharge status since 2014.
our climate-change interventions programme focuses on
climate change mitigation and abatement. We focus on
controlling / reducing the energy consumption intensity
(GJ/billion turnover), implementing energy conservation
projects and increasing the use of renewable energy in
our operations. We also maintained Carbon neutrality in
two of our campuses, i.e. powai (mumbai) and Chennai
in 2019-20 as well. We have aligned our practices
with the Government of india’s national action plan
on Climate Change (napCC) and its eight missions,
and continue to report progress on this front in our
Sustainability / integrated reports. increased energy
efficiency, developing low emission technologies, building
sustainable infrastructure, increasing the green cover, and
dissemination of sustainability knowledge are some of
the measures adopted by the organization. We also invest
in lower emission and clean energy programmes, thus
promoting sustainable growth.
our green product and services portfolio helps our
clients to reduce their carbon footprint. We comply with
applicable environmental regulatory requirements from
the State pollution Control Board (SpCB) and Central
pollution Control Board (CpCB). Compliance with these
pollution control norms is also covered by the statutory
compliance certificates submitted by Business heads on a
quarterly basis. Sustainability assurance by an independent
33
L&T’s water conservation efforts have turned all 24 of its
campuses water-positive
L&T’s Integrated Report 2018-19 won a silver at Asia
Sustainability Reporting Awards
assurance agency on an annual basis covers compliance
with environmental regulations, including submission of
compliance reports to regulatory agencies. During 2019-
20, there were no pending or unresolved show cause /
legal notices from CpCB / SpCB. renewable energy at
manufacturing campuses is utilized, wherever feasible.
Currently, eight campuses are sourcing renewable energy
(wind and solar) from external sources, and all 24 campuses
are generating renewable energy onsite.
Fully-grown trees are natural carbon sinks, and biodiversity
plays an important role in the sustenance of human lives on
this planet. L&T undertakes tree plantation both within and
outside its premises (as part of our CSr programme) and
we engage with agencies / nGos to conduct plantation
at public places, national parks and on Government land.
During the year 2019-20 more than 14 lakh trees were
planted by our people in project locations across india.
We continue to nurture self-sustaining mini forests at
four locations in india through the miyawaki technique
and green areas like public gardens are developed and
maintained.
through active dialogue with the Government, be it on
new policy consultations or presenting views of different
stakeholders. They provide their expertise and business
acumen during public policy consultations and present
views of industry at large.
industrial forums and institutes where L&T actively
participates include:
• 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
• 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 (iEEma)
Principle 7: Responsible Public Advocacy
• Indian Institute of Chemical Engineers (IIChE)
We engage with multiple business and trade organizations
and professional bodies. our senior executives participate
• National Safety Council
• National Fire Protection Institution
34
An L&T employee volunteer teaches children to make the most out of waste
- conservation and creativity!
L&T’s employee volunteers help make resource-
stressed schools more inviting
The Company interacts regularly with the Confederation
of indian industry – Centre of Excellence for Sustainable
Development (Cii - CESD) on Sustainability and integrated
reporting policies, regulations, and L&T is a member
of lab india. The Federation of indian Chambers of
Commerce and industry (FiCCi) engages with L&T for CSr
and india Sanitation Coalition. L&T regularly interacts with
the indian institute of Corporate affairs (iiCa) on CSr-
related aspects as well. L&T is also an active member of
committees such as Environment & recycling Council by Cii
– Green Business Centre (GBC), Cii EhS Council (Western
region), Corporate Social responsibility (CSr), etc.
Principle 8: Support inclusive growth
The Company spent R 145.29 Crore in 2019-20 towards
CSr activities as per the Companies act 2013 and
additionally contributed R 150 crores at the group level
towards the pm Cares Fund in 2019-20.
The following corporate policies of L&T put emphasis
on inclusive growth, by empowering communities and
accelerating sustainable development.
• Corporate Social Responsibility Policy
• Corporate Human Resource Policies
• Corporate Environment, Health & Safety (EHS) Policy
• Sustainability Policy
nation-building and community development are
integral to L&T ‘s Strategic vision. The company’s CSr
programmes are based on the theme ‘Building india’s Social
infrastructure’. The objective is to contribute positively to
society, improve the quality of life of those who are at the
bottom of the pyramid, provide sustainable solutions and
make a meaningful impact on people’s lives.
The CSr interventions of the Company are based on the
CSr policy and in line with the Companies act 2013 and
CSr rules 2014. The CSr Committee of the Board oversees
the implementation of CSr programmes at the corporate
level. They are ably supported by Sustainability and CSr
coordinators from all businesses.
We strive to provide access to essential services in health
and education for the underprivileged and provide for
equality of opportunity by empowering people through
capability-building and skill development. We believe that
with access to these opportunities, communities will be
able to strike a balance between globalization and self-
sufficiency, aiding economic development for all.
L&T impacts communities across india through initiatives in
the areas of education, health, water & sanitation and skill-
building. From empowering students in rural areas through
digital literacy to building toilet blocks in schools. From
35
L&T has built over 200 check-dams in rural water-stressed
areas
School kits are distributed by L&T to children in tribal and
rural schools
ensuring water reaches far-flung fields to creating access
to sanitation facilities. From capability building among local
communities to creating a talent bank of employable young
men and women. Each initiative is instrumental in bridging
the gap between the underprivileged and the resources
available.
Below are the highlights of L&T’s CSr interventions focused
across four key thrust areas (including areas attended to by
L&T public Charitable Trust and administered by L&T’s CSr
Department).
Water & Sanitation:
• Implementation of Integrated Community Development
(iCD) programme aimed at making water for drinking,
sanitation and agriculture, available to communities
staying in water-stressed regions of maharashtra, Tamil
nadu and rajasthan.
• Creating awareness and access to sanitation through the
building of toilets and bathrooms with the objective of
making communities open-defecation-free
• Strengthening basic infrastructure and services in rural
india and creating livelihood options, once water-
sufficiency is achieved
• Capability-building of the people’s institutions like Village
Development Committees, Farmers’ Groups and Self-help
Groups to ensure participation in decision- making and
ownership
• Sustained community action for the operation and
maintenance of assets created and further development
of the potential of the natural resources in the watershed
area
• Tree plantation in and around L&T operations and at ICD
locations. more than 14 lakh trees were planted this year
and many green areas like public gardens developed and
maintained
• Number of beneficiaries: 1,31,988
Education
• Enhancing pre-primary and primary education to ensure
enrolment and prevent dropouts
• Implementing soil and moisture conservation
• Infrastructure development in schools for creating a
programmes, building water-harvesting structures,
check dams and field bunds, and implementing other
sustainable agricultural techniques
conducive learning environment
• STEM Education Programme for encouraging scientific
rigour among students and introducing new age skills to
36
L&T’s mobile medical vans take medical care to urban
slums as well as rural and tribal areas
A respiratory check-up at the TB clinic run by L&T in partnership with the
Municipal Corporation of Greater Mumbai at Koldongri
prepare students for contemporary careers focussed on
technology and innovation
• ‘Science on Wheels’ – an initiative that takes science to
the doorsteps of rural children sparking scientific temper
in young minds,
• Introduction of innovative teaching and learning
techniques to teach English and Science.
• E-learning through digitization of content, smart
classrooms and computer labs
science and math, organising various education sessions
(such as programs on safety, caring for the environment,
celebrating days of national importance with them,
organising extra-curricular programs and events for
development of various art forms) in schools that do
not have sufficient resources, mentoring children from
low-income communities to develop various aspects
of their personality and mentoring young adults for
confidence building and making them job ready.
• Conducting workshops on life skills and awareness on
• Providing innovative teaching aids and capacity-building
social issues
programmes for teachers in techno-pedagogy
• Urban and rural community learning centres to
provide after-school academic support to children from
disadvantaged communities and help them to cope up
with their curriculum and prevent them from dropping
out
• L&T’s employee volunteering programme (L&T-eering)
to augment the running of urban community learning
centres. The programs encompass a multitude of
activities and assistance such as aiding the visually
challenged (in recording audio books, helping them with
the studies and functioning as scribes in various exams),
designing low cost teaching aids to explain concepts in
• Conducting summer camps, sports activities and
conducting extracurricular activities for overall
development and to help children expand their horizons
• Number of beneficiaries: 3,63, 377
Health
• Providing health and welfare facilities for the
underprivileged across L&T’s locations in india
• Conducting malnutrition and anaemia mitigation camps
• Conducting eye check-ups, blood donation camps and
health awareness programmes
• Providing health services in remote locations through
mobile health vans
37
Scaffolding and formwork training at L&T’s Construction
Skills Training Institute (CSTI)
Training with bar-tying machine at one of L&T’s CSTIs
• Dedicated health centres at 10 locations across India
provide Family Welfare services, maternal and child
health care and reproductive health, specialty and
super-specialty consultations, low-risk day care surgeries
(capacity of 8 beds), services in diagnostic and clinical
camps, immunization and health education
• Services for psychological health, child guidance clinic,
physiotherapy and occupational therapy
• Introducing innovative and technology-based skill-
training in Solar pV Technician skills, oFC & CCTV
installation and maintenance
• Digitalising CSTIs with e-learning modules
• Training CSTI trainees in safety and soft skills
• Vocational training programmes for women: Tailoring,
beautician, home nursing and food processing courses
• Imparting skills and development of self-help groups at
• Outreach treatment services through satellite clinics
iCD locations
• TB Clinic services to treat Multi Drug Resistant
• Collaboration with state-run technical institutes (ITIs)
Tuberculosis and counselling the patients and their
families
• Treating and supporting HIV / AIDS patients through
anti-retroviral Therapy (arT) centre at mumbai
• Number of beneficiaries: 84,240
Principle 9: Engage with and provide
value to customers
• Artificial kidney dialysis centres
• Number of beneficiaries: 7,95,736
Skill Development
• Providing free training in various construction skills like
bar bending, formwork carpentry, masonry, scaffolding,
welding, electric wiring etc., through Construction Skills
Training institutes (CSTis) to rural and urban youth to
enhance their employability
The range of projects, products and services offered by L&T
has a far reaching impact on customers and considerable
attention is consequently devoted to the design,
development and execution of these offerings.
inputs on changing customer preferences and market
trends culled from interactive customer engagement
and study of markets are incorporated into products
and services through training, r&D, design, testing,
38
manufacturing and best-in-class construction
methodologies. The business has also leveraged new age
technology for productivity improvements that benefit
both Company and customer. These include artificial
intelligence, machine Learning, use of Geospatial
technologies (Lidar, radar, Sonar, Thermal, optical),
Virtual reality (including extensive usage in worker safety
applications and training), augmented reality, analytics
tools, Bots, Laser, radiography, extensive use of ioT
platforms and adoption of different components of the
industry 4.0 value chain. health and safety aspects are also
carefully incorporated into product lifecycles.
products carry requisite labelling, and maintenance
manuals include related specifications and codes that
render transparency and provide maintenance utility
to customers. products undergo testing in conformity
with national and international Standards such as indian
Standards, international organization of Standardization
(iSo), rohS (for relevant products) and international Electro
Technical Commission. Training of customer personnel on
product characteristics, usage and maintenance forms an
integral part of services offered by the Company. in case
of electrical products, the Company has well equipped
training centres in 6 different locations (pune, Lucknow,
Conoor, Vadodar, Delhi and Kolkata) where specialised
training on usage and maintenance of electrical products
is imparted to customers as well as people involved in the
electrical supply chain ecosystem.
L&T’s green product and services portfolio helps its clients
to reduce their energy, water and material footprint and
helps them to follow a low carbon economy path. The
Company regularly engages with customers through
customer meets, customer satisfaction surveys and market-
based research, including training and capability building
programmes for customers. Senior management actively
reviews customer feedback and suggests corrective and/or
preventive action as required.
a survey of 66 customers conducted by an external agency
in 2019-20 (most customers having been associated with
L&T for more than 5 years) reaffirms the high levels of our
customer engagement.
Level of satisfaction with L&T’s response to address
customer queries and grievances
11%
0%
47%
42%
Excellent
Good
Satisfactory
not satisfied
Customers’ experience with L&T
personnel interaction
0%
8%
24%
68%
Excellent
Good
Satisfactory
not satisfied
39
ANNEXURE: MAPPiNG TO THE SEBi FRAMEWORk
Question
Reference
Section
Description
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
5. Email id
6.
Financial Year reported
7. Sector(s) that the Company is engaged in (industrial
activitycode-wise)
8.
List three key products/services that the Company manufactures/
provides (as in balance sheet)
ar
ar
ar
ar
ar
ar
9. Total number of locations where business activity is undertaken by
ar
the Company
i. number of international Locations (provide details of major 5)
ii. number of national Locations
ar
ar
10. markets served by the Company – Local/State/national/international ar
Section B: Financial Details of the Company
1. paid up Capital (inr)
2. Total Turnover (inr)
3. Total profit after taxes (inr)
4. Total spending on Corporate Social responsibility (CSr) as
percentage of profit after tax (%)
ar
ar
ar
5.
List of activities in which expenditure in 4 above has been incurred: ar
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
principle-wise (as per nVGs) Br policy / policies
ar
ar
ar
ar
ar
40
22
22
22
22
22
22
22 and 23
23
23
23
23
23
23
23
23
23
23
23
23
24
24
24-25
Question
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.
Reference
Section
ar
Does the Company publish a Br or a Sustainability report? What is the
hyperlink for viewing this report? how frequently it is published?
ar
Section E: Principle-wise Performance
Principle 1: Ethics, Transparency and Accountability
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
Description
Page Number
25
25
26-27
how many stakeholder complaints have been received in the past
financial year and what percentage was satisfactorily resolved by the
management?
26-27, 105
The details related to
stakeholder complaints
are included in the
Director’s report
Section of this annual
report.
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.
ar
ar
ar
ar
ar
27
27
27
27
27
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.
41
Question
Principle 3: Employee Well Being
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 and 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 financial
year and pending, as on the end of the finacial year.
What percentage of your under-mentioned 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 identified 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
financial year and what percent was satisfactorily resolved by the
management?
Principle 6: Environment
Does the policy relate 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 efficiency, renewable energy, etc.? Y/n.
are the Emissions/Waste generated by the company within the
permissible limits given by CpCB/SpCB for the financial year being
reported?
number of show cause/ legal notices received from CpCB/SpCB which
are pending (i.e. not resolved to satisfaction) as on end of Financial Year.
42
Reference
Section
Description
Page Number
ar
28-30
ar
ar
ar
ar
ar
ar
ar
ar
ar
ar
ar
ar
ar
28-30
28-30
30-31
30-31
31-32
31-32
32-34
32-34
32-34
32-34
32-34
32-34
32-34
Question
Reference
Section
Description
Page Number
Principle 7: Responsible Public Advocasy
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 specified 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.
have you taken steps to ensure that this community development
initiative is successfully adopted by the community?
Principle 9: Customer Welfare
What percentage of customer complaints/consumer cases are pending as
on the end of financial year?
Does the company display product information on the product label, over
and above what is mandated as per local laws?
is there any case filed by any stakeholder against the company regarding
unfair trade practices, irresponsible advertising and or anti-competitive
behavior during the last five years and pending as of end of financial year
ar
ar
ar
ar
ar
ar
ar
ar
ar
34-35
35-38
35-38
35-38
35-38
35-38
38-39
38-39
38-39
43
10 YEAR HIGHLIGHTS ANNUAL REPORT 2019-20
STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS
Ind AS [11]
IGAAP [11]
v crore
Description
2019-20
2018-19
2017-18
2016-17
2015-16
2014-15
2013-14
2012-13
2011-12
2010-11
[10]
[8]
Statement of Profit and Loss
Gross revenue from operations [1]
82384
82287
74612
66301
63813
57558
57164
52196
53738
44296
PBDIT[1][2]
6838
7653
7701
6481
5829
6488
6667
5473
6283
5640
Profit after tax (excluding extraordinary &
exceptional items)
6069
6009
4861
4560
4454
4699
4905
4169
4413
3676
Profit after tax (including extraordinary &
exceptional items)
6679
7491
5387
5454
5000
5056
5493
4384
4457
3958
Balance Sheet
Net worth
Loan funds
52175
50048
49174
46013
25785
11990
10561
10558
Capital employed
77960
62038
59735
56571
42135
13924
56059
37085
33662
29291
25223
21846
12936
11459
8478
9896
7161
50021
45121
37769
35119
29007
Ratios and statistics
PBDIT as % of net revenue from
operations [1][3]
PAT as % of net revenue from
operations [1][4]
RONW % [5]
8.30
9.30
10.34
9.86
9.23
11.38
11.78
10.60
11.82
12.84
7.31
8.44
7.23
8.30
13.07
15.74
11.32
12.37
7.91
12.39
8.87
9.71
8.50
8.38
9.01
14.30
17.46
16.06
18.95
19.73
Gross Debt: Equity ratio
0.49:1
0.24:1
0.21:1
0.23:1
0.33:1
0.35:1
0.34:1
0.29:1
0.39:1
0.33:1
Basic earnings per equity share (R) [6]
47.59
53.43
38.46
39.00
35.81
36.31
39.57
35.55
32.41
29.04
Book value per equity share (R) [7]
371.65
356.79
350.90
328.79
301.57
265.85
241.97
211.39
182.90
159.31
Dividend per equity share (R) [7][9]
18.00
18.00
16.00
14.00
12.17
10.83
9.50
8.22
7.33
6.44
No. of equity shareholders
12,51,569 10,21,275
8,99,902
9,23,628
10,28,541
8,53,824
832,831
854,151
926,719
8,53,485
No. of employees
45,467
45,205
42,924
41,466
43,354
44,081
54,579
50,592
48,754
45,117
[1] From Continuing Operations in 2019-20 and 2018-19.
[2] Profit before depreciation, interest and tax (PBDIT) is excluding extraordinary & exceptional items wherever applicable and other income.
[3] PBDIT as % of net revenue from operations =[(PBDIT)/(gross revenue from operations less excise duty up to June 30, 2017)].
[4] Profit After Tax (PAT) as % of net revenue from operations =[(PAT including extraordinary & exceptional items)/(gross revenue from opertions less
excise duty up to June 30, 2017)].
[5] RONW [(PAT including extraordinary & exceptional items)/(average net worth excluding revaluation reserve)].
[6] Basic earnings per equity share has been calculated including extraordinary & exceptional items and adjusted for all the years for issue of bonus
shares.
[7] After considering adjustments for issue of bonus shares during the respective years.
[8] Figures for the year 2010-11 to 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary.
[9] Dividend for the year 2019-20 includes interim dividend of R 10.00 per share and final dividend of R 8.00 per share.
[10] Figures for 2019-20 and 2018-19 include the impact of the merger of L&T Shipbuilding Limited with the Company.
[11] Figures from 2015-16 to 2019-20 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable.
44
CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS
Ind AS
IGAAP
v crore
Description
2019-20
2018-19
2017-18
2016-17
2015-16
2014-15
2013-14
2012-13
2011-12
2010-11
Statement of Profit and Loss
Gross revenue from operations [1]
145452
135220
119862
110011
101975
92762
85889
75195
64960
52470
PBDIT[1] [2]
16329
15330
13641
11130
10463
11258
10730
9929
8884
7677
Profit attributable to Group
shareholders (excluding
extraordinary & exceptional items)
Profit attributable to Group
shareholders (including
extraordinary & exceptional items)
Balance Sheet
Net worth
9549
8713
7151
5920
4154
4470
4547
4911
4649
4238
9549
8905
7370
6041
4233
4765
4902
5206
4694
4456
66723
62375
54904
50217
44180
40909
37712
33860
29387
25051
Non-controlling interest
9521
6826
5201
3564
2893
4999
3179
2653
1753
1026
Loan funds
Capital employed
Ratios and statistics
PBDIT as % of net revenue from
operations [1] [3]
PAT as % of net revenue from
operations [1] [4]
141007
125555
107524
93954
88135
90571
80330
62672
47150
32798
217251
194756
167629
147735
135208
136479
121221
99185
78290
58875
11.23
11.34
11.40
10.18
10.35
12.24
12.60
13.33
13.81
14.75
RONW % [5]
14.80
15.35
14.12
12.80
6.12
6.16
6.16
5.53
4.19
9.91
5.18
5.76
6.99
7.30
8.56
12.13
13.71
16.47
17.26
19.38
Gross debt: Equity ratio
1.85:1
1.81:1
1.79:1
1.75:1
1.87:1
2.21:1
2.13:1
1.85:1
1.61:1
1.31:1
Basic earnings per equity share (R) [6]
68.04
63.51
52.62
43.20
30.32
34.22
35.31
37.69
34.14
32.69
Book value per equity share (R) [7]
475.27
444.67
391.78
358.83
316.20
293.29
271.10
244.40
213.09
182.65
Dividend per equity share (R) [7] [8]
18.00
18.00
16.00
14.00
12.17
10.83
9.50
8.22
7.33
6.44
Figures for 2015-16 to 2019-20 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable.
[1] From Continuing Operations in 2019-20 and 2018-19
[2] Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary & exceptional items wherever applicable and other income.
[3] PBDIT as % of net revenue from operations =[PBDIT/(gross revenue from operations less excise duty upto June 30, 2017)].
[4]
Profit after tax (PAT) as % of net revenue from operations = [PAT including extraordinary & exceptional items/gross revenue from operations less excise
duty upto June 30, 2017].
Basic earnings per equity share has been calculated including extraordinary & exceptional items and adjusted for all the years for issue of bonus shares.
[5] RONW = [(PAT including extraordinary & exceptional items)/(average net worth excluding revaluation reserve)].
[6]
[7] After considering adjustment for issue of bonus shares during respective years.
[8] Dividend for the year 2019-20 includes interim dividend of R 10.00 per share and final dividend of R 8.00 per share.
45
GRAPHS ANNUAL REPORT 2019-20
L&T CONSOLIDATED - ORDER INFLOW*
L&T CONSOLIDATED - SEGMENT-WISE ORDER INFLOW
2019-20
210000 –
190000 –
170000 –
150000 –
16%
147274
170817
45116
130000 –
34228
113046
125701
186356
9%
60094
126262
2017-18
–
2018-19
–
2019-20
–
Domestic
International
5265
3%
4850
3%
13822
8%
102678
55%
22135
12%
20964
11%
2233
1%
2361
1%
12048
6%
v crore
Infrastructure
Power
Heavy Engineering
Defence
Engineering
Hydrocarbon
IT & Technology
Services
Financial Services
Developmental
Projects
Others
L&T CONSOLIDATED - GROSS REVENUE FROM OPERATIONS*
L&T CONSOLIDATED - SEGMENT-WISE EXTERNAL REVENUE
2019-20
8%
135220
18%
43577
145452
48467
91643
96985
114653
38243
76410
13822
10%
22135
15%
17420
12%
5070
3%
4850
3%
73037
50%
2017-18
–
2018-19
–
2019-20
–
Domestic
International
L&T CONSOLIDATED - ORDER BOOK*
3970
3%
2853
2%
2294
2%
L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK
2019-20
v crore
Infrastructure
Power
Heavy Engineering
Defence
Engineering
Hydrocarbon
IT & Technology
Services
Financial Services
Developmental
Projects
Others
290780
4%
12%
61670
303857
75038
229110
228819
260079
60714
199365
9216
3%
4121
1%
15849
5%
6074
2%
44130
15%
224467
74%
v crore
Infrastructure
Power
Heavy Engineering
Defence
Engineering
Hydrocarbon
Others
e
r
o
r
c
v
110000 –
90000 –
70000 –
50000 –
30000 –
–
e
r
o
r
c
v
170000 –
150000 –
130000 –
110000 –
90000 –
70000 –
50000 –
30000 –
–
360000 –
310000 –
260000 –
210000 –
160000 –
110000 –
e
r
o
r
c
v
60000 –
–
As at 31-3-2018
–
As at 31-3-2019
–
As at 31-3-2020
–
Domestic
International
46
L&T CONSOLIDATED - PBDIT AS % OF NET REVENUE
FROM OPERATIONS*
L&T CONSOLIDATED - PAT AND RONW %
17000 –
15000 –
13000 –
12826
16329
15330
e
r
o
r
c
v
11000 –
9000 –
7000 –
5000 –
–
11.2
11.3
11.2
2017-18
2018-19
2019-20
–
–
– 14.0
– 13.5
– 13.0
– 12.5
– 12.0
– 11.5
– 11.0
– 10.5
– 10.0
– 9.5
– 9.0
–
PBDIT
PBDIT as % of net revenue from operations
10000 –
9000 –
8000 –
7000 –
6000 –
5000 –
e
g
a
t
n
e
c
r
e
P
e
r
o
r
c
v
7370
14.1
9549
8905
– 24.0
– 22.0
– 20.0
– 18.0
– 16.0
e
g
a
t
n
e
c
r
e
P
15.3
14.8
– 14.0
– 12.0
– 10.0
–
4000 –
–
2017-18
–
PAT
2018-19
2019-20
–
RONW
L&T CONSOLIDATED - SEGMENT-WISE EBIT
L&T CONSOLIDATED - SEGMENT-WISE NET ASSETS
6000 –
5000 –
4000 –
3000 –
2000 –
1000 –
e
r
o
r
c
v
9
8
3
5
7
0
2
5
2018-19
2019-20
9
7
2
8
2
30000 –
25000 –
0
4
9
3
2
31.03.2019
31.03.2020
3
9
6
3
4
8
0
3
3
5
0
3
9
7
6
2
6
4
7
1
8
7
1
1
6
6
5
7
8
4
6
7
5
2
7
4
0
3
1
6
3
2
20000 –
15000 –
e
r
o
r
c
v
10000 –
5000 –
9
6
9
6
7
7
4
1
3
7
8
3
6
0
9
2
3
0
5
2
4
1
0
3
2
6
8
2
0
8
8
2
8
2
1
2
5
4
7
1
2
9
1
1
8
9
3
4
2
1
3
6
1
2
8
3
6
9
1
1
7
0
7
1
6
4
3
1
9
6
8
1
1
5
3
1
7
4
8
8
5
0 –
– – – – – – – – – –
n
o
b
r
a
c
o
r
d
y
H
g
n
i
r
e
e
n
g
n
E
g
n
i
r
e
e
n
g
n
E
e
r
u
t
c
u
r
t
s
a
r
f
n
e
c
n
e
f
e
D
s
e
c
i
v
r
e
S
s
e
c
i
v
r
e
S
s
t
c
e
o
r
P
r
e
w
o
P
s
r
e
h
t
O
a
j
l
i
i
l
I
a
t
n
e
m
p
o
e
v
e
D
l
l
y
g
o
o
n
h
c
e
T
&
T
I
i
c
n
a
n
i
F
y
v
a
e
H
Total Segment wise EBIT 2018-19 : R 14883 crore and 2019-20 : R 16059 crore
0 –
– – – – – – – – – –
n
o
b
r
a
c
o
r
d
y
H
g
n
i
r
e
e
n
g
n
E
g
n
i
r
e
e
n
g
n
E
e
r
u
t
c
u
r
t
s
a
r
f
n
e
c
n
e
f
e
D
s
e
c
i
v
r
e
S
s
e
c
i
v
r
e
S
s
t
c
e
o
r
P
r
e
w
o
P
s
r
e
h
t
O
a
i
i
l
j
l
I
a
t
n
e
m
p
o
e
v
e
D
l
l
y
g
o
o
n
h
c
e
T
&
T
I
i
c
n
a
n
i
F
y
v
a
e
H
Segment wise Net Assets as at 31.03.2019 R 79080 crore and as at 31.03.2020 R 103456 crore
L&T CONSOLIDATED - EPS
L&T STANDALONE - EPS# & DPS
80.00 –
70.00 –
60.00 –
50.00 –
v
n
i
40.00 –
30.00 –
20.00 –
10.00 –
0.00 –
–
63.51
68.04
52.62
2017-18
–
2018-19
–
2019-20
–
80.00 –
70.00 –
60.00 –
50.00 –
v
n
i
40.00 –
35.21
53.43
47.59
30.00 –
20.00 –
10.00 –
0.00 –
–
16
18
18
2017-18
–
2018-19
–
2019-20
–
Earning per share
Earning per share
Dividend per share
*For comparability purposes, numbers for 2017-18 exclude Electrical & Automation (E&A) business
# For comparability purposes, EPS of 2017-18 includes operations of the Shipbuilding subsidiary which has been subsequently merged with L&T standalone entity
47
NOTICE ANNUAL REPORT 2019-20
LARSEN & TOUBRO LIMITED
Regd. Office : L&T House, Ballard Estate, Mumbai 400 001.
CIN : L99999MH1946PLC004768
Email: igrc@larsentoubro.com • Website: www.larsentoubro.com
Tel No.: 022-67525656 • Fax No.: 022-67525893
Notice
NOTICE IS HEREBY GIVEN THAT the Seventy Fifth Annual
General Meeting of LARSEN & TOUBRO LIMITED will
be held through VIDEO CONFERENCING OR OTHER
AUDIO VISUAL MEANS on Thursday, August 13, 2020
at 3.30 P.M. IST to transact the following business :-
1) To consider and adopt the audited financial
statements of the Company for the year ended
March 31, 2020 and the Reports of the Board of
Directors and Auditors thereon and the audited
consolidated financial statements of the Company
and the report of the auditors thereon for the year
ended March 31, 2020;
2) To declare final dividend on equity shares;
3) To appoint a Director in place of Mr. Subramanian
Sarma (DIN: 00554221), who retires by rotation and
is eligible for re-appointment;
4) To appoint a Director in place of Mrs. Sunita Sharma
(DIN: 02949529), 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, as a SPECIAL
RESOLUTION the following:
“RESOLVED THAT approval of the Company be
and is hereby accorded for the re-appointment and
continuation of Mr. A.M Naik (DIN: 00001514) as
a Non-Executive Director of the Company who has
attained the age of seventy-five years.”
7) To consider and, if thought fit, to pass as an
ORDINARY RESOLUTION the following:
“RESOLVED THAT Mr. Sudhindra Vasantrao
Desai (DIN: 07648203) who was appointed as an
Additional Director and holds office upto the date of
this Annual General Meeting of the Company, and
48
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 as an
ORDINARY RESOLUTION the following:
“RESOLVED THAT Mr. T. Madhava Das (DIN:
08586766) who was appointed as an Additional
Director and holds office upto the date of this
Annual General Meeting of the Company, and 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.”
9) To consider and, if thought fit, to pass, 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.
D.K Sen (DIN: 03554707) as the Whole-time Director
of the Company with effect from October 1, 2020
upto and including April 7, 2023.
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.”
10) To consider and, if thought fit, to pass, as an
ORDINARY RESOLUTION the following:
Director of the Company with effect from July 11,
2020 upto and including July 10, 2025.
“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 and subject
to such approvals as may be required, approval
be and is hereby granted to the appointment of
Mr. Subramanian Sarma (DIN: 00554221) as the
Whole-time Director of the Company with effect
from August 19, 2020 upto and including August 18,
2025.
RESOLVED FURTHER THAT Mr. Subramanian Sarma
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 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.
Sudhindra Vasantrao Desai (DIN: 07648203) as the
Whole-time Director of the Company with effect
from July 11, 2020 upto and including July 10, 2025.
RESOLVED FURTHER THAT Mr. Sudhindra Vasantrao
Desai 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 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. T.
Madhava Das (DIN: 08586766) as the Whole-time
RESOLVED FURTHER THAT Mr. T.Madhava Das
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.”
13) To consider and, if thought fit, to pass as a SPECIAL
RESOLUTION the following:
“RESOLVED THAT in supersession of the resolution
no. 14 passed by the Members at the 74th Annual
General Meeting of the Company held on August
1, 2019 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 of Capital
and Disclosure Requirements) Regulations, 2018
(‘SEBI Regulations’), Securities and Exchange
Board of India (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
49
NOTICE ANNUAL REPORT 2019-20
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 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 VI 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 4500 Crore (Rupees Four
Thousand Five Hundred Crore) or US $600 Mn (US
Dollars Six Hundred Million), if the value is 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 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/
50
or Central Depository Services (India) Limited for
admission of the Securities.
maintained by the Company for the Financial Year
2020-21.”
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.
By Order of the Board of Directors
For LARSEN & TOUBRO LIMITED,
SIVARAM NAIR A
COMPANY SECRETARY
M.NO – F3939
Mumbai, July 11, 2020
Notes:
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.”
[a]
14) To re-appoint Statutory Auditors and fix their
remuneration and for that purpose to pass, as an
ORDINARY RESOLUTION the following:
“RESOLVED THAT pursuant to Section 139 of the
Companies Act, 2013 read with the Companies
(Audit and Auditors) Rules, 2014 and other applicable
provisions, if any, M/s. Deloitte Haskins & Sells
LLP, Chartered Accountants, ICAI Registration no.
117366W-W100018 be and are hereby re-appointed
as the Statutory Auditors of the Company, for the
second and final term of 5 years, to hold office
from conclusion of 75th Annual General Meeting till
conclusion of 80th Annual General Meeting.
RESOLVED FURTHER THAT the Board of Directors,
or Audit Committee thereof, be and is hereby
authorized to decide and finalise the terms
and conditions of appointment, including the
remuneration of the Statutory Auditors.”
15) To consider and ratify the remuneration payable to
Cost Auditors and for that purpose to pass, 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 R 13 lakhs plus applicable taxes
and out of pocket expenses at actuals for travelling
and boarding/lodging for the financial year ending
March 31, 2021 to M/s R. Nanabhoy & Co. Cost
Accountants (Regn. No. 00010), who are appointed
as Cost Auditors to conduct the audit of cost records
In view of the COVID-19 pandemic and the need
for ensuring social distancing, the Government of
India, Ministry of Corporate Affairs (“MCA”) allowed
conducting Annual General Meeting through video
conferencing (VC) or other audio-visual means
(OAVM) without the physical presence of Members
at a common venue. Accordingly, MCA issued
Circular No. 14/2020 dated April 08, 2020, Circular
No.17/2020 dated April 13, 2020 and Circular No.
20/2020 dated May 05, 2020 (“MCA Circulars”),
prescribing the procedures and manner of conducting
the Annual General Meeting through VC/OAVM.
Securities and Exchange Board of India (“SEBI”)
also vide its Circular dated May 12, 2020 (“SEBI
Circular”), permitted holding of Annual General
Meetings through VC/OAVM. In compliance with the
applicable provisions of the Companies Act, 2013,
MCA Circulars and applicable provisions of the SEBI
Circular, the 75th Annual General Meeting (AGM) of
the Members will be held through VC/ OAVM. Hence,
Members can attend and participate in the AGM
through VC/OAVM only. The venue of the Meeting
shall be deemed to be the registered office of the
Company.
[b] Since this General Meeting is held through VC/OAVM
the physical attendance of members is dispensed
with and no proxies would be accepted by the
Company pursuant to the relevant MCA Circulars.
[c] No attendance slip/route map has been sent along
with this Notice of the Meeting as the meeting is
held through Audio Visual means
[d] Members who are shareholders as on Thursday,
August 6, 2020 can join the AGM 30 minutes before
the commencement of the AGM i.e at 3.00 P.M and
till the time of the conclusion of the Meeting by
following the procedure mentioned in this Notice.
51
NOTICE ANNUAL REPORT 2019-20
[e] The attendance through VC/OAVM is restricted
and hence members will be allowed on first come
first serve basis. However, attendance of Members
holding more than 2% of the shares of the
Company, Institutional Investors as on Thursday,
August 6, 2020 and Directors and Key Managerial
Personnel, the Chairpersons of the Audit Committee,
Nomination and Remuneration Committee, the
Stakeholders Relationship Committee and Auditors
will not be restricted on first come first serve basis.
[f] Members attending the Meeting through VC/OAVM
will be counted for the purposes of reckoning of
Quorum under Section 103 of the Companies Act,
2013.
[g] In line with the MCA Circulars and the SEBI
Circular, the Notice calling the AGM has been
uploaded on the website of the Company at
www.larsentoubro.com. The Notice can also
be accessed from the websites of the Stock
Exchanges i.e. BSE Limited and National Stock
Exchange of India Limited at www.bseindia.com
and www.nseindia.com respectively and is
also available on the website of KFintech at
https://evoting.karvy.com/
[h] The information required to be provided under the
SEBI (Listing Obligations and Disclosure Requirement
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 6 to 15 set out above are
annexed hereto.
[i] The Register of Members and Transfer Books of the
Company will be closed from Friday, August 7, 2020
to Thursday, August 13, 2020 (both days inclusive).
[j] Members holding shares in physical form are
requested to furnish bank details, email address,
change of address etc. to KFin Technologies Private
Limited (“KFintech”), 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 Thursday, August 6, 2020, 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.
[k] Considering the difficulties caused due to the
Covid-19 pandemic, MCA and SEBI have dispensed
with the requirement of printing and sending physical
copies of the Annual Report and the Notice of this
Meeting and the Annual Reports have been sent via
email to all those members who have registered their
email ids with the Company or the Registrar and
Transfer Agent or the Depositories or the Depository
Participants as on Friday, July 10, 2020.
Those Members who have not yet registered their
email address are requested to get their email
addresses registered by following the procedure given
below:
1. Those Members who have registered/not
registered their mail address and mobile nos.
including address and bank details may please
contact and validate/update their details with the
Depository Participant in case of shares held in
electronic form and with Registrar and Transfer
Agents KFin Technologies Private Ltd in case the
shares are held in physical form.
2. Members may also visit the
website of the Company
www.larsentoubro.com or the website of
KFintech at https://evoting.karvy.com/ for
downloading the Annual Report and Notice of
the AGM.
3. Alternatively, Members may send
an e-mail request to the email id
einward.ris@KFintech.com along with scanned
copy of the signed request letter providing the
email address, mobile number, self-attested PAN
copy and Client Master copy in case of electronic
folio and copy of share certificate in case of
physical folio.
[l] Members who have already registered their email
addresses are requested to get their email addresses
validated with their Depository Participants / the
Company’s Registrar and Share Transfer Agent, KFin
Technologies Private Limited to enable servicing of
notices / documents / Annual Reports electronically to
their email address.
52
[m] In terms of the MCA Circulars and in the view of
the Board of Directors, all matters included in this
Notice are unavoidable and hence are proposed for
seeking approval at this AGM. All documents referred
to in the accompanying Notice and the Explanatory
Statement have been uploaded on the website of
the Company at www.larsentoubro.com. All
shareholders will be able inspect all documents
referred to in the Notice electronically without
any fee from the date of circulation of this Notice
up to the date of AGM. Members seeking to
inspect such documents can send an email to
IGRC@larsentoubro.com.
The Register of Directors and Key Managerial
Personnel and their shareholding maintained under
Section 170 of the Companies Act, 2013, the
Register of Contracts or Arrangements in which the
directors are interested, maintained under Section
189 of the Act, and the relevant documents referred
to in the Notice will be available electronically for
inspection by the members during the AGM.
Pursuant to Section 124 of the Companies Act, 2013
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
84
85
86
87
88
89
90
91
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
26.08.2016
31.03.2016
02.10.2023
22.08.2017
31.03.2017
27.09.2024
23.08.2018
31.03.2018
28.09.2025
01.08.2019
31.03.2019
06.09.2026
18.03.2020
31.03.2020
24.04.2027
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.
Final Dividend if approved by the Members at this
Meeting will be directly credited to the bank accounts
of the shareholders as on the Book Closure Date i.e
Thursday, August 6, 2020 for shares held in demat
form and Thursday, August 13, 2020 for shares held
in physical form, as per the details available with the
Company within the prescribed timelines. In case
of shareholders who have not registered their bank
details with the Company, dividend warrants/demand
drafts will be sent to them in due course of time and
upon normalization of postal services.
[n]
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.
[o] Adhering to the various requirements set out
in the Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016, as amended, the Company has
during the financial year 2019-20 transferred to
the IEPF Authority all shares in respect of which
dividend has remained unpaid or unclaimed
for seven consecutive years or more as on the
due date of transfer i.e November 30, 2019.
Details of shares transferred to IEPF Authority
are available on the website of the Company
and the same can be accessed through the link:
http://investors.larsentoubro.com/resources.aspx.
The said details have also been uploaded on the
website of the IEPF Authority and the same can be
accessed through the link: www.iepf.gov.in.
[p] SEBI has decided that securities of listed companies
can be transferred only in dematerialized form with
effect from April 1, 2019. In view of the above and to
avail various benefits of dematerialisation, members
are advised to dematerialize shares held by them in
physical form.
[q] Pursuant to Finance Act 2020, dividend income will
be taxable in the hands of shareholders w.e.f. April
1, 2020 and the Company is required to deduct tax
at source from dividend paid to shareholders at the
prescribed rates. For the prescribed rates for various
categories, the shareholders are requested to refer
to the Finance Act, 2020 and amendments thereof.
The shareholders are requested to update their PAN
with the Company/KFintech (in case of shares held in
physical mode) and with the Depositories/ Depository
Participants (in case of shares held in demat mode).
53
NOTICE ANNUAL REPORT 2019-20
For Resident Shareholders, who have provided PAN,
taxes shall be deducted at source under Section 194
of the Income Tax Act, 1961 at 7.5% on the amount
of dividend. If no PAN is provided, then the tax shall
be deducted at source at 20% as per Section 206AA
of the Act. No tax shall be deducted on the dividend
payable to a resident individual if the total dividend
to be received by the resident shareholders during
Financial Year 2020-21 does not exceed R 5,000. In
cases where the shareholder provides Form 15G /
Form 15H and provided that all the required eligibility
conditions are met, no tax will be deducted at source.
Apart from above cases following categories of
shareholders are exempt from tax deduction at
source:
(a) Life Insurance Corporation of India [clause (a) to
2nd proviso to section 194]
(b) General Insurance Corporation of India/ The
New India Assurance Company Ltd / United India
Insurance Company Ltd / The Oriental Insurance
Company Limited / National Insurance Company
Ltd [clause (b) to 2nd proviso to section 194]
(c) any other insurer in respect of any shares owned
by it or in which it has full beneficial interest
[clause (c) to 2nd proviso to section 194]
The following payees are also not subject to TDS in
view of the provisions of sections 196, 197A of the
Act and CBDT notification:
(a) Government [section 196(i)]
their income, other than profits and gains of
business and profession.
For Foreign Portfolio Investor (FPI) category
Shareholders, taxes shall be deducted at source under
Section 196D of the Income Tax Act, 1961 at 20%
(plus applicable surcharge and cess) on the amount
of dividend payable.
For other Non-resident Shareholders, taxes are
required to be deducted in accordance with the
provisions of Section 195 of the Income tax Act,
1961, at the rates in force. As per the relevant
provisions of the Income tax Act, 1961, the tax shall
be deducted at the rate of 20% (plus applicable
surcharge and cess) on the amount of dividend
payable to them. However, as per Section 90(2)
of the Income tax Act, 1961, the non-resident
shareholder has the option to be governed by
the provisions of the Double Tax Avoidance
Agreement (DTAA) between India and the country
of tax residence of the shareholder, if they are
more beneficial to them. To avail benefit of rate
of deduction of tax at source under DTAA, such
non-resident shareholders will have to provide the
following:
1. Self-attested copy of the PAN allotted by the
Indian Income Tax authorities;
2. Tax residency certificate from the jurisdictional
tax authorities confirming residential status [for
the dividend declared in FY 2020-21] – TRC
3. Declaration by the non- resident in prescribed
(b) Reserve Bank of India [section 196(ii)]
form 10F
(c) a corporation established by or under a Central
Act which is, under any law for the time being
in force, exempt from income-tax on its income
[section 196(iii)]
(d) Mutual Fund [section 196(iv)]
(e) any person for, or on behalf of, the New Pension
System Trust referred to in section 10(44)
[subsection 1E to section 197A]
(f) Category I or a Category II Alternative
Investment Fund (registered with SEBI as per
section 115UB) as per Notification 51/2015 since
4. Self-declaration by the non-resident shareholder
as to:
•
Eligibility to claim tax treaty benefits
based on the tax residential status of the
shareholder, including having regard to the
Principal Purpose Test (if any), introduced in
the applicable tax treaty with India;
• No Permanent Establishment / fixed base in
India in accordance with the applicable tax
treaty;
54
•
Shareholder being the beneficial owner of
the dividend income to be received on the
equity shares.
iv. Then click on camera icon appearing against
AGM event of Larsen & Toubro Limited, to
attend the Meeting.
In order to enable us to determine the appropriate
tax rate at which tax has to be deducted at source
under the respective provisions of the Income-
tax Act, 1961, we request you to upload the
abovementioned details and documents in the format
provided by us and as applicable to you on the link
https://ris.KFintech.com/form15/ by 05.00 p.m.
IST on Thursday, August 6, 2020.
Please note that the Company is not obligated
to apply the beneficial DTAA rates at the time of
tax deduction/withholding on dividend amounts.
Application of beneficial DTAA Rate shall depend
upon the completeness and satisfactory review by
the Company, of the documents submitted by Non-
Resident shareholder.
[r]
Instruction for attending the meeting through
VC:
Convenience of different persons positioned in
different time zones has been kept in mind before
scheduling the time for this Meeting.
The Company has appointed M/s KFin Technologies
Private Limited (“KFintech”), to provide Video
Conferencing facility for the AGM and the attendant
enablers for conducting of the e-AGM. Member
will be provided with a facility to attend the e-AGM
through video conferencing platform provided
by KFintech. Members may access the same at
https://emeetings.KFintech.com by clicking “AGM
video conference”
Members are requested to follow the procedure
given below:
i.
Launch internet browser (chrome/
firefox/safari) by typing the URL:
https://emeetings.KFintech.com
ii. Enter the login credentials (i.e., User ID and
password for e-voting).
iii. After logging in, click on “Video Conference”
option
Please note that the members who do not have the
User ID and Password for e-Voting or have forgotten
their User ID and Password may retrieve the same by
following the remote e-Voting instructions mentioned
in the notice.
Members can participate in AGM through smart
phone/laptop. However, for better experience
and smooth participation it is advisable to join the
Meeting using Google Chrome, through Laptops
connected through broadband.
Further Members will be required to use Internet with
a good speed to avoid any disturbance during the
meeting.
Please note that Participants connecting from Mobile
Devices or Tablets or through Laptop via Mobile
Hotspot may experience Audio/Video loss due to
fluctuation in their respective network. It is therefore
recommended to use Stable Wi-Fi or LAN Connection
to mitigate any kind of aforesaid glitches.
Members seeking any information with regard to the
accounts or any matter to be placed at the AGM,
are requested to write to the Company on or before
Thursday, August 6, 2020 through email on IGRC@
larsentoubro.com. The same will be replied by the
Company suitably. Please note that, members’
queries/ questions will be responded to only, if the
shareholder continues to hold the shares as on the
cut-off date i.e Thursday, August 6, 2020.
Members intending to ask questions at the AGM,
may login at https://emeetings.KFintech.com and
click on “Speaker Registration” by mentioning the
demat account number/folio number, city, email id,
mobile number and submit. A reference number shall
be displayed on the screen which may be preserved
for recalling during the Q&A session in the e-AGM
meeting.
The “Speaker Registration” window shall be
activated on Saturday, August 8, 2020 at 9.00 A.M
and shall be closed on Monday, August 10, 2020
at 09.00 A.M. The Company reserves the right to
restrict the number of questions and number of
55
NOTICE ANNUAL REPORT 2019-20
speakers, depending upon availability of time as
appropriate for smooth conduct of the AGM.
Members who are not able to join this Meeting
over video conferencing will be able to view
the live webcast of proceedings of AGM by
logging on the e-voting website of KFintech at
https://emeetings.KFintech.com/ using their
remote e-voting credentials.
Members who need assistance before or
during the AGM, can contact KFintech on
emeetings@KFintech.com or call on toll free
numbers 1800-425-8998 / 1800-345-4001 . Kindly
quote your name, DP ID-Client ID / Folio no. and
E-voting Event Number in all your communications.
[s] 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, Standard 2 of the Secretarial Standards on
General Meetings and Reg. 44 of the SEBI (Listing
Obligations and Disclosure Requirement) Regulations,
2015, the Company is pleased to offer the facility of
voting through electronic means. The said facility of
casting the votes by the members using electronic
means (remote e-voting) will be provided by
KFintech.
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 Thursday, August 6, 2020 shall be entitled to
avail the facility of remote e-voting or e-voting on the
day of the Meeting. 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 KFintech.
The members who have cast their vote through
remote e-voting prior to the AGM may also attend
the AGM through video-conferencing but shall not
be entitled to cast their vote again.
The remote e-voting period commences on
Monday, August 10, 2020 at 9.00 A.M and ends on
Wednesday, August 12, 2020 at 05.00 P.M During
this period, members of the Company holding shares
either in physical or dematerialised form, as on the
cut-off date of Thursday, August 6, 2020 may cast
their vote by remote e-voting. The remote e-voting
module shall be disabled by KFintech for voting
thereafter.
Instructions for e-voting during the AGM:
The e-Voting window shall be activated upon
instructions of the Chairman during the AGM
proceedings. Members shall vote as per the
credentials displayed in the e-voting window.
Members would need to click on the “Instapoll” icon
and follow the instructions to vote on the resolutions.
Only those shareholders, who are present in the AGM
and have not casted their vote on the Resolutions
through remote e-Voting and are otherwise not
barred from doing so, shall be eligible to vote
through e-Voting system available during the e-AGM.
The Members, whose names appear in the Register
of Members / list of Beneficial Owners as on
Thursday, August 6, 2020, i.e. the commencement
of the 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 Thursday, August 6, 2020 may approach the
Company for issuance of the User ID and Password
for exercising their right to vote by electronic means.
Members who are already registered with KFintech
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 https://evoting.karvy.com
The Company has appointed Mr. S. N.
Ananthasubramanian, Practicing Company Secretary,
(Membership No. 4206, COP No. 1774) or failing him
Mrs. Aparna Gadgil, Practicing Company Secretary,
(Membership No. 14713, COP No. 8430), to act as
the Scrutinizer for conducting the voting and remote
e-voting process in a fair and transparent manner.
56
Members are requested to follow the instructions
below to cast their votes through e-voting:
A.
In case a Member receives an e-mail from
KFintech (for Members whose e-mail addresses
are registered with the Company/ Depository
Participants) the following needs to be done:
(i)
Launch internet browser by typing the URL:
https://evoting.karvy.com.
(ii) Enter the login credentials (i.e. User ID
and Password which are mentioned in the
email). Your Folio No./ DP ID-Client ID will
be your User ID. However, if you are already
registered with KFintech for e-voting, you
can use your existing User ID and password
for casting your vote.
(iii) After entering these details appropriately,
Click on “LOGIN”.
(iv) You will now reach password change Menu
wherein you are required to mandatorily
change your password. The new password
shall comprise of minimum 8 characters
with at least one upper case (A-Z), one
lower case (a-z), one numeric value (0-9)
and a special character (@,#,$, etc.). The
system will prompt you to change your
password and update your contact details
like mobile number, email ID, etc. on first
login. You may also enter a secret question
and answer of your choice to retrieve your
password in case you forget it. It is strongly
recommended that you do not share your
password with any other person and that
you take utmost care to keep your password
confidential.
(v) You need to login again with the new
credentials.
(vi) On successful login, the system will prompt
you to select the “EVENT” i.e., Larsen &
Toubro Limited.
(vii) On the voting page, enter the number of
shares (which represents the number of
votes) as on the Cut Off date under “FOR/
AGAINST” or alternatively, you may partially
enter any number in “FOR” and partially
in “AGAINST” but the total number in
“FOR/AGAINST” taken together should
not exceed your total shareholding as on
the cut-off date. You may also choose the
option ABSTAIN. If the Member does not
indicate either “FOR” or “AGAINST” it will
be treated as “ABSTAIN” and the shares
held will not be counted under either head.
(viii) Members holding multiple folios/demat
accounts shall choose the voting process
separately for each folios/demat accounts.
(ix) You may then cast your vote by selecting an
appropriate option and click on “Submit”.
(x) A confirmation box will be displayed.
Click “OK” to confirm else “CANCEL” to
modify. Once you confirm, you will not
be allowed to modify your vote. During
the voting period, Members can login any
number of times till they have voted on the
resolution(s).
(xi) 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@karvy.com.
(xii) In case of any queries, please visit Help
and Frequently Asked Questions (FAQs)
section available at evoting website
https://evoting.karvy.com.
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 has cast his vote by remote e-voting then
he will not be eligible to vote at the Meeting.
The details of the person who may be contacted
for any grievances connected with the facility for
57
NOTICE ANNUAL REPORT 2019-20
e-voting on the day of the AGM shall be the same as
mentioned in the instructions for remote-evoting.
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.
Facility to cast vote through e-voting will be made
available on the Video Conferencing screen and will
be activated once the same is announced by the
Chairman during the Meeting.
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
e-voting at https://evoting.karvy.com 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.
Chairman of the Company for a further period of 3 years
with effect from October 1, 2020 and upto September
30, 2023.
Mr. A.M. Naik is strongly identified with the growth
of the Company and its contribution to strategic
sectors of Defence, Nuclear Power, Space Research and
Infrastructure. Mr. Naik has been awarded four doctorates
and numerous awards from institutions and industry. He
has also served as the Chairman of IIM, Ahmedabad.
Mr. Naik in the capacity of Non-Executive Chairman, in
addition to sitting fees, will be entitled to remuneration/
benefits as per the following terms and conditions:
1. Commission: Fixed amount of upto R 5 crore p.a.
within the overall limits approved by the shareholders
of the Company for payment of remuneration to
NED’s.
2. Car & Driver, telephone & communication facilities
and club membership.
3. Maintain an office with staff at the Company’s
expense.
EXPLANATORY STATEMENT
4. Reimbursement of medical expenses in accordance
As required by Section 102 of the Companies Act, 2013,
the following Explanatory Statement sets out material
facts relating to the business under items 6 to 15 of the
accompanying Notice dated July 11, 2020.
Item No. 6:
Mr. A.M Naik has been associated with Larsen & Toubro
Limited for over five decades. During his tenure as
Executive Chairman he played a key role in the Company’s
rise to its pre-eminent position, and its presence overseas,
boosting employee morale and focusing on delivering
superior value to stakeholders. After his superannuation
as Executive Chairman, Mr. Naik has been guiding the
Executive Management ensuing smooth transition as
Non-Executive Chairman since October 1, 2017.
Mr. A.M Naik, currently aged 78 years, was appointed
as a Non-Executive Chairman of the Company with
effect from October 1, 2017, after his superannuation as
Executive Chairman of the Company. The shareholders
in their meeting held on August 26, 2018 had approved
appointment and continuation of Mr. Naik as Non-
Executive Chairman in accordance applicable regulations.
with the policy of the Company.
5. Perquisite value of Company accommodation.
Regulation 17(1A) of the SEBI(Listing Obligations and
Disclosure Requirements) Regulations, 2015, effective
April 1, 2019, requires companies to obtain approval
of shareholders by passing a special resolution for
appointment or continuation of any Non-Executive
Director who has attained the age of seventy-five years.
Mr. Naik is liable to retire by rotation in this AGM and
hence is proposed to be re-appointed. Accordingly,
approval of the shareholders of the Company is sought
for continuation of Mr. Naik as Non-Executive Chairman
by passing Special Resolution.
Disclosure, as required under Secretarial Standard 2 on
General Meetings, is provided as an Annexure to the
Notice.
The Board recommends approval of re-appointment of
Mr. Naik as Non-Executive Chairman of the Company,
liable to retire by rotation and continuation beyond 75
years of age.
The Board of Directors at its meeting held on June 5,
2020 re-appointed Mr. A.M Naik as Non-Executive
Except Mr. Naik being the appointee, none of the
Directors or the Key Managerial Personnel of the
58
Company and their relatives are concerned or interested
in the resolution set out at Item No. 6.
Item No. 7 and 11
On the recommendation of the Nomination &
Remuneration Committee, the Board of Directors
appointed Mr. Sudhindra Vasantrao Desai (DIN:
07648203) as an Additional Director with effect from July
11, 2020. In terms of Section 161(1) of the Companies
Act, 2013, Mr. Desai holds office as additional director
upto the date of this Annual General Meeting. The
Company has received a notice in writing from a
member under Section 160 of the Companies Act, 2013,
proposing his candidature for the office of Director of the
Company.
On the recommendation of the Nomination &
Remuneration Committee, the Board of Directors
appointed Mr. Sudhindra Vasantrao Desai (DIN:
07648203) as a Whole-time Director of the Company
with effect from July 11, 2020 upto and including July
10, 2025, subject to the approval of the members in the
Annual General Meeting.
Mr. S.V. Desai, a second rank holder in Civil Engineering
from Gulbarga University, Karnataka in 1984 and a Post-
Graduate [M Tech] from IIT Madras in 1986, started his
career with National Buildings Construction Corporation
Limited [NBCC] as Management trainee.
He was involved in Light Combat Aircraft [LCA], HAL and
then four years at Male’ Rep. of Maldives for an Hospital
project, funded by Govt. of India on deputation to MEA.
Then he was selected and rostered in Common Wealth
Secretariat, London (UK) and UN Centre for Human
Settlements (HABITAT), Nairobi, Kenya.
Mr. Desai began his career in L&T in 1997 as a
Construction Manager. During initial period of his
career, he developed expertise in Tendering & Contracts
management and then became the Head of Tender
& Contracts of B&F-IC for domestic and international
projects. He made remarkable contribution, as Head
of Procurement & Contracts, in our prestigious Delhi
International Airport Project, handling various national &
international stakeholders.
Subsequently in 2012, from B&F-IC, he was moved to
Heavy Civil Infrastructure IC and was responsible for
Metros & Defence businesses, and then took over as the
Head of Heavy Civil Infrastructure IC in October 2015.
In HCI, he has been handling many JVs, international
partners, Corporates, Government Departments and
a wide variety of jobs in the field of Elevated and
Underground Metros, Bridges, Tunnel, Hydro, Nuclear,
Ports & Harbours and Defence infrastructure.
Mr. Desai is known for his expertise in the areas of
Bid-estimation, negotiation and finalization of Mega
Projects. In Heavy Civil, he was instrumental in bagging
landmark infrastructure projects like Riyadh Metro, Qatar
Metro, mega Defence infrastructure project. He has been
inducted as a member of the Executive Committee of L&T
in 2020.
In his new role, over and above his current responsibilities
of Heavy Civil Infra IC, he will oversee the functioning of
Transportation Infra IC.
Part III, of Schedule V of the Companies Act, 2013 and
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, 2016 the shareholders had fixed the maximum
limits within which the Board was delegated authority to
decide the remuneration of the Whole-time Directors of
the Company. Pursuant to this, the Board has fixed the
remuneration payable to Mr. Sudhindra Vasantrao Desai
during his tenure as Whole-time Director.
The Company will enter into an Agreement with Mr.
Sudhindra Vasantrao appointing him as a Whole-time
Director for the period from July 11, 2020 to July 10,
2025. 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 : R 8,75,000/- (Rupees Eight Lac Seventy
Five Thousand Only) per month in the scale of
R 650000-R 75000-R 1025000-R 100000-R 1525000 with
the annual increment due on April 1 every year.
Commission : The commission will be paid as per the
parameters fixed by the Nomination and Remuneration
Committee and the Board of Directors within the overall
limits approved by the shareholders of the Company.
59
NOTICE ANNUAL REPORT 2019-20
Perquisites : 12 lakh per annum excluding free furnished
accommodation or House Rent Allowance in lieu thereof.
to the approval of the members in the Annual General
Meeting.
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 draft agreement to be entered into by the Company
with Mr. Sudhindra Vasantrao Desai, in respect of his
appointment as Whole-time Director, contains the
terms and conditions of his appointment including
remuneration.
The draft Agreement to be entered into with Mr.
Sudhindra Vasantrao Desai will be open for inspection in
the manner specified in the Notice up to the date of the
Annual General Meeting.
The Board recommends approval of the appointment
and remuneration of Mr. Sudhindra Vasantrao Desai, as
Whole-time Director of the Company.
Except Mr. Desai, being the appointee, none of the
Directors and Key Managerial Personnel of the Company
and their relatives are concerned or interested, in the
resolutions set out at Item No. 7 and 11
Item No. 8 and 12
On the recommendation of the Nomination &
Remuneration Committee, the Board of Directors
appointed Mr. T. Madhava Das (DIN: 08586766) as an
Additional Director with effect from July 11, 2020. In
terms of Section 161(1) of the Companies Act, 2013, Mr.
T. Madhava Das holds office as additional director upto
the date of this Annual General Meeting. The Company
has received a notice in writing from a member under
Section 160 of the Companies Act, 2013, proposing his
candidature for the office of Director of the Company.
On the recommendation of the Nomination &
Remuneration Committee, the Board of Directors
appointed Mr. T. Madhava Das (DIN: 08586766) as a
Whole-time Director of the Company with effect from
July 11, 2020 upto and including July 10, 2025, subject
Mr. T. Madhava Das a graduate in Electrical Engineering
from Regional Engineering College (now NIT), Calicut,
joined L&T in 1985 as a GET. He has also completed his
Post Graduation from Xavier Institute of Management,
Bhubaneswar.
During his career, he held various key positions in
Electrical business of ECC such as Regional Projects
Manager (Hyderabad Region), Sector Projects Manager
(UAE) and Chief - Business Initiatives & Contracts
(Transmission Lines).
He was instrumental in expanding tower manufacturing
capacity by setting up a new plant in Pithampur and in
modernizing other manufacturing units. Subsequently, he
headed Tranmission Line Business in domestic and later
moved to GCC as Head of International Cluster-I.
Mr. Madhava Das was elevated to the position of Head
- PT&D IC in 2014. Under his leadership, the domestic
Transmission Line EPC, Tower Manufacturing, Tower
Testing Services and the PT&D business in UAE, Saudi
Arabia, Oman and Kuwait has grown significantly, besides
moving to new geographies in ASEAN and Africa.
He has also successfully incubated Solar Business and has
steered it to grow to the current level, besides adding
microgrid and energy storage capabilities, making it one
of the largest Solar EPCs in the country.
He has been inducted as a member of the Executive
Committee of L&T in 2017. He is currently the
Co-Chairman of Confederation of Indian Industry (CII)’s
Transmission Line Committee.
In his new role, over and above his current responsibilities
of the Power Transmission & Distribution IC, he will
oversee the functioning of Water & Effluent Treatment
(WET) IC.
Part III, of Schedule V of the Companies Act, 2013 and
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, 2016 the shareholders had fixed the
60
maximum limits within which the Board was delegated
authority to decide the remuneration of the Whole-time
Directors of the Company. Pursuant to this, the Board has
fixed the remuneration payable to Mr. T. Madhava Das
during his tenure as Whole-time Director.
The Company will enter into an Agreement with Mr. T.
Madhava Das appointing him as a Whole-time Director
for the period from July 11, 2020 to July 10, 2025. 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 : R 8,75,000/- (Rupees Eight Lac Seventy
Five Thousand Only) per month in the scale of
R 650000-R 75000-R 1025000-R 100000-R 1525000 with
the annual increment due on April 1 every year.
Commission : The commission will be paid as per the
parameters fixed by the Nomination and 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 draft agreement to be entered into by the Company
with Mr. T. Madhava Das, in respect of his appointment as
Whole-time Director, contains the terms and conditions of
his appointment including remuneration.
The draft Agreement to be entered into with Mr. T.
Madhava Das will be open for inspection in the manner
specified in the Notice up to the date of the Annual
General Meeting.
The Board recommends approval of the appointment
and remuneration of Mr. T. Madhava Das, as Whole-time
Director of the Company.
Except Mr. T. Madhava Das, being the appointee, none
of the Directors and Key Managerial Personnel of the
Company and their relatives are concerned or interested,
in the resolutions set out at Item No. 8 and 12.
Item No. 9:
Mr. D.K Sen (DIN: 03554707) was appointed as the
Whole-time Director of the Company for a term of
five years from October 1, 2015 upto and including
September 30, 2020.
The Board of Directors, on the recommendation of the
Nomination & Remuneration Committee, approved the
re-appointment of Mr. D.K Sen (DIN: 03554707) as a
Whole-time Director of the Company with effect from
October 1, 2020 upto and including April 7, 2023, subject
to the approval of the members in the Annual General
Meeting.
Mr. Dip Kishore Sen is the Whole Time Director and
Senior Executive Vice President (Development Projects),
Larsen & Toubro Ltd. A Civil Engineering graduate from IIT
Kharagpur and a Post Graduate in Business Management
from XLRI, Jamshedpur, prior to joining Larsen & Toubro,
Mr. Sen worked for 12 years for reputed companies
like M/s. Tata Steel, Jamshedpur, M/s. Development
Consultants, Kolkata and was involved in a turnkey EPC
Transmission line project in Malaysia.
Mr. Sen started his tenure at L&T in 1989 as Sr. Manager
(Civil & Structural Design) in EDRC Kolkata and has
subsequently headed various portfolios like Head (Civil &
Structural Design) EDRC Kolkata, Project Manager - Safal
F&V Market Project, Bangalore, SPM (B&F) Kolkata
Region, Regional Manager – Mumbai, Project Director
Mumbai International Airport & Head - Transportation
Infrastructure. His uniqueness is in his versatility of
having worked across domains like Design & Engineering,
Business Development, Tendering and hardcore
construction.
Driven by a passion to succeed and possessing the
requisite talent, Mr. Sen steadily rose up the ranks and
during this period he led several marquee projects that
underscored L&T’s standing as ‘a builder of nations’. The
most notable amongst which was the highly complex,
mega project of the Mumbai International Airport. As
Project Director from 2007 to 2011, he oversaw the most
critical phase of project and was chiefly instrumental in
paving the way to delivering a world-class airport in time,
for which the organization takes great pride.
61
NOTICE ANNUAL REPORT 2019-20
Mr. Sen took over as Senior Vice President and Head
-Transportation Infrastructure in 2011 to spearhead the
organization’s efforts in the realms of roads, highways,
elevated corridors and railways. Under his leadership, the
business completed several high value projects in both
India and the Gulf.
Under his leadership, several major breakthroughs were
achieved in the Railways sector and he has successfully
steered the business to bag the prestigious projects like
Metro Express Project in Mauritius & Dhaka Metro Project
in Bangladesh.
He has played a very prominent role in establishing L&T in
the GCC Countries by securing several landmark projects,
notable among which are the Maffraq - Ghweifat Road
Project, the Abu Dhabi International Airport etc. Under
his leadership L&T bagged their first Railways job in the
Kingdom of Saudi Arabia, some urban infra development
projects in Qatar, Oman & UAE.
Part III, of Schedule V of the Companies Act, 2013 and
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, 2016 the shareholders had fixed the
maximum limits within which the Board was delegated
authority to decide the remuneration of the Whole-time
Directors 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 would enter into an Agreement with Mr.
D.K Sen re-appointing him as a Whole-time Director
for the period from October 1, 2020 to April 7, 2023.
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 : 12,25,000 (Rupees Twelve Lac 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 : The commission will be paid as per the
parameters fixed by the Nomination and 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 draft agreement to be entered into by the Company
with Mr. D.K Sen, in respect of his re-appointment
as Whole-time Director, would contain the terms and
conditions of his re-appointment including remuneration.
The draft Agreement to be entered into with Mr. D.K Sen
will be open for inspection in the manner specified in the
Notice up to the date of the Annual General Meeting.
The Board recommends approval of the re-appointment
and remuneration of Mr. D.K Sen, as Whole-time Director
of the Company.
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. 9.
Item No. 10
On the recommendation of the Nomination &
Remuneration Committee, the Board of Directors
appointed Mr. Subramanian Sarma (DIN: 00554221) as
a Whole-time Director of the Company with effect from
August 19, 2020 upto and including August 18, 2025,
subject to the approval of the members in the Annual
General Meeting.
Mr.Sarma is the Chief Executive Officer (CEO) and
Managing Director (MD) of L&T Hydrocarbon Engineering
Ltd, a wholly-owned subsidiary of Larsen & Toubro Ltd.
In this role, he leads the worldwide Hydrocarbon projects
portfolio of L&T.
A graduate in Chemical Engineering, Mr. Sarma
completed his Master’s from IIT Mumbai. A seasoned
62
professional, he has over 37 years of experience, with the
last 28 being in the Middle East.
During his career span, Mr. Sarma has handled the
complete Oil & Gas value chain including Executive
Management, Business Development, Project
Management and Process Engineering.
Mr. Sarma is the recipient of the CHEMTECH CEW,
Business Leader of the year 2017 for Engineering Services.
Immediately prior to joining L&T, Mr. Sarma served as
Managing Director of Petrofac - Onshore Engineering &
Construction, with complete responsibility for all of the
Company’s onshore projects worldwide.
He was appointed as a Non-Executive Director of the
Company and the Chief Executive Officer and Managing
Director of L&T Hydrocarbon Engineering Limited with
effect from August 19, 2015.
In his new role, over and above his current responsibilities
as CEO and Managing Director of L&T Hydrocarbon
Engineering Limited, Mr. Sarma will assume charge of
Power IC.
Part III, of Schedule V of the Companies Act, 2013 and
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, 2016 the shareholders had fixed the
maximum limits within which the Board was delegated
authority to decide the remuneration of the Whole-time
Directors of the Company. Pursuant to this, the Board
has fixed the remuneration payable to Mr. Subramanian
Sarma during his tenure as Whole-time Director.
Mr. Subramanian Sarma has not been a resident in
India for a continuous period of 12 months immediately
preceding his date of appointment, the Company will
seek approval of the Central Government as required
under Schedule V and other applicable provisions of the
Companies Act, 2013 and the ruled made thereunder.
The Company will enter into an Agreement with Mr.
Subramanian Sarma appointing him as a Whole-time
Director for the period from August 19, 2020 to August
18, 2025. 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 : R 14,25,000 (Rupees Fourteen Lakh Twenty Five
Thousand Only) per month in the scale of R 10,25,000 -
R 1,00,000 – R 19,25,000 with the annual increment due
on April 1 every year.
Commission : The commission will be paid as per the
parameters fixed by the Nomination and 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 draft agreement to be entered into by the
Company with Mr. Subramanian Sarma, in respect of
his appointment as Whole-time Director, contains the
terms and conditions of his appointment including
remuneration.
The draft Agreement to be entered into with Mr.
Subramanian Sarma will be open for inspection in the
manner specified in the Notice up to the date of the
Annual General Meeting.
The Board recommends approval of the appointment and
remuneration of Mr. Subramanian Sarma, as Whole-time
Director of the Company.
Except Mr. Sarma, 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. 10.
Item No. 13
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, debt raising would be another source of
63
NOTICE ANNUAL REPORT 2019-20
funds and hence it is thought prudent for the Company
to have enabling 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. 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 VI of the Securities and
Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018 (‘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 VI 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 depository receipts the price will be determined
on the basis of the then 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 BSE Limited /
National Stock Exchange of India Limited.
The Shareholders through a resolution passed at their
meeting held on August 1, 2019, had approved issue
of Securities for an aggregate sum up to US$ 600
Million (or its rupee equivalent) or INR 4500 Crore, if
higher. The Company has not raised any funds under
the said approval. 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 renewal of the
approval.
64
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. 13.
Item No. 14:
In accordance with the provisions of Section 139 of the
Companies Act, 2013 read with the Companies (“Audit
and Auditors Rules, 2014), M/s. Deloitte Haskins & Sells
LLP (“DHS”), were appointed as the Statutory Auditors
of the Company, at the Annual General Meeting held on
September 9, 2015, to hold office for a period of 5 years
from the conclusion of the 70th AGM till the conclusion
of the 75th AGM.
DHS would be completing their first term of five
years at this AGM. The Board of Directors (“Board”)
of the Company on the recommendation of the
Audit Committee (“Committee”) recommended the
re-appointment of DHS for a second and final term of five
years to hold office from the conclusion of the 75th AGM
till the conclusion of the 80th AGM in accordance with
the provisions of Section 139 of the Companies Act, 2013
and the Companies (Audit and Auditors) Rules, 2014.
Credentials of DHS:
Deloitte Haskins & Sells LLP, registered since 1983, is
one of the member firms of Deloitte Touche Tohmatsu
Limited, a UK private company limited by guarantee
(“DTTL”). Each DTTL member firm provides services in
particular geographic areas and is subject to the laws
and professional regulations of the particular country or
countries in which it operates.
Deloitte Haskins & Sells LLP tied up with CC Chokshi & Co
in 1983 which was one of the largest Indian Independent
audit and accounting firms. After that, it got merged
with Fraser & Ross, PC Hansotia & Co and later with SB
Billimoria (SBB) in 1999. In 2004, AF Ferguson & Co (one
of India’s oldest audit firm) merged into existing DHS
firms.
Deloitte is now a global network with circa 286,000
people with revenues over $43 billion. Deloitte India
has more than 10,000 professionals operating out of
13 cities – Ahmedabad, Bengaluru, Vadodara, Chennai,
Coimbatore, Goa, Gurgaon, Hyderabad, Jamshedpur,
Kochi, Kolkata, Mumbai and Pune providing professional
services in the areas of Audit, Risk Advisory, Tax,
Consulting, and Financial Advisory services to public
and private clients spanning multiple industries. It
draws its strength from its people, which include
2,500+ professionals in Audit, 2,350 + in Tax, 1,900+ in
Consulting, and 1000+ in Financial Advisory.
Rationale for re-appointment:
The Board and the Audit Committee considered various
parameters while approving the re-appointment of DHS
as Statutory Auditors of the Company including but not
limited to their capability to serve a diverse and complex
business landscape as that of the Company, existing
experience in the Company’s business verticals and
segments, market standing of the firm, clientele, technical
knowledge and found DHS suited to continue to handle
the scale, diversity and complexity associated with the
audit of the financial statements of the Company.
Terms and Conditions of re-appointment:
Term of Re-Appointment –
5 years from the conclusion of the 75th AGM till the
conclusion of the 80th AGM
Remuneration –
Fixed Remuneration for Statutory Audit of R 205 lakh for
FY 2020-21 plus applicable taxes, travelling and other
out of pocket expenses incurred by them in connection
with the statutory audit. The proposed fees is based
on the scope of work, knowledge, industry experience,
expertise, time and efforts required to be put by DHS
for FY 2020-21. The proposed fees are also in line with
the industry benchmarks. The fees for services in the
nature of limited review, statutory certifications and
other professional work will be in addition to the audit
fee as above and will be decided by the Management
in consultation with the Auditors and will be subject
to approval by the Board of Directors and/or the Audit
Committee.
Further, the remuneration for the remaining tenure
of DHS as Statutory Auditors for the FY 2021-22 to
FY 2024-25 will be decided by the Management in
consultation with the Auditors and will be subject to
the approval by the Board of Directors and/or the Audit
Committee
DHS has given their consent to act as Statutory Auditors
of the Company and have confirmed that the said
re-appointment if made will be in accordance with the
conditions prescribed under Section 139 and 141 of the
Companies Act, 2013.
65
NOTICE ANNUAL REPORT 2019-20
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. 14.
Item No. 15:
In accordance with the provisions of Section 148 of the
Companies Act, 2013 (“the Act”) and the Companies
(Audit and Auditors) 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 2020-21, at a
remuneration of R 13 lakhs plus applicable taxes 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. 15.
By Order of the Board of Directors
For LARSEN & TOUBRO LIMITED,
SIVARAM NAIR A
COMPANY SECRETARY
M.No – F3939
Mumbai, July 11, 2020
66
(ANNEXURE TO NOTICE DATED JULY 11, 2020)
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. Subramanian Sarma
Name of the
Director
Date of Birth
Date of
Appointment
on the Board
Qualifications Masters’ Degree in Chemical
Engineering from IIT Bombay
February 4, 1958
August 19, 2015
Ms. Sunita Sharma
Mr. A.M Naik
Mr. D.K Sen
March 9, 1959
April 1, 2015
June 9, 1942
November 23, 1989
March 19, 1956
October 1, 2015
Masters Degree in
Science
B.E (Mech.)
Expertise
Expertise in managing large
business portfolios in energy
sector.
Vast Experience in
Insurance and Housing
Finance
L&T Hydrocarbon Engineering
Limited
L&T Power Limited
National Stock Exchange
of India Limited
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
Risk Management
Committee
Larsen & Toubro Limited
Chairperson
Stakeholders
Relationship
Committee
Larsen & Toubro Limited
5 of 5
5 of 5
Number of
Meetings
attended
during the year
Shareholding
of Non-
Executive
Directors
Relationships
between
directors
inter-se
NA
Nil
100
Nil
624958
Nil
B.Tech (Hons.) in Civil
Engineering from IIT, Kharagpur.
1977 and
MBA (PGDBM) from XLRI,
Jamshedpur. 1986
Vast experience in Design
and Engineering, Business
Development, Tendering and
construction
1. L&T Infrastructure
Engineering Limited
Diverse and vast experience
in General Management,
Technology, Engineering &
Construction
1. Larsen & Toubro Infotech
Limited
2. L&T Technology Services
2. L&T Aviation Services Private
Limited
Limited
3. L&T Construction Equipment
3. L&T Power Development
Limited
Limited
4. L&T Welfare Company Limited
5. L&T Employees Welfare
4. Nabha Power Limited
5. Raykal Aluminum Company
Foundation Private Limited
Private Limited
6. Mindtree Limited
7. National Skill Development
Council
Member
Nomination & Remuneration
Committee
Larsen & Toubro Limited
Larsen & Toubro Infotech Limited
L&T Technology Services Limited
4 of 5
6. Larsen & Toubro Qatar LLC
7. Larsen & Toubro Oman LLC
8. Construction Skill
Development Council of
India
Member
Corporate Social
Responsibility Committee
Larsen & Toubro Limited
5 of 5
NA
Nil
67
NOTICE ANNUAL REPORT 2019-20
Name of the Director
Date of Birth
Date of Appointment on
the Board
Qualifications
Mr. Sudhindra Vasantrao Desai
July 5, 1960
July 11, 2020
Masters in Civil Engineering from IIT
Expertise
Vast Experience in Heavy Civil and Infrastructure Space
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
L&T Arunachal Hydropower Limited
L&T Himachal Hydropower Limited
L&T Uttaranchal Hydropower Limited
L&T Infrastructure Engineering Limited
International Seaports Dredging Private Limited
Member
Corporate Social Responsibility Committee
L&T Uttaranchal Hydropower Limited
NA
NA
Nil
Mr. T. Madhava das
January 25, 1963
July 11, 2020
B.E from NIT Calicut, Post Graduate in Management from
Xavier Institute, Bhubaneshwar
Expertise in managing large business portfolios in power
transmission and distribution segment
Indian Electricals and Electronics Manufacturers
Association
NA
NA
NA
Nil
68
INFORMATION AT A GLANCE:
Sr. no Particulars
Details
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Day, Date and Time of AGM
Thursday, August 13, 2020, 3.30 P.M
Mode
Video Conference (VC) and Other Audio Visual Means (OAVM)
Participation through VC/OAVM
Members can login from 03.00 P.M (IST) on the date of the AGM at
https://emeetings.kfintech.com
Helpline Number for VC/OAVM
participation
Submission of Questions/Queries
before AGM
Speaker Registration before AGM
Recorded Transcript
Dividend for FY 2020 recommended
by the Board
Dividend Book Closure Dates
1800-425-8998/1800-345-4001
Members seeking any information with regard to the accounts or
any matter to be placed at the AGM, are requested to write to the
Company on or before Thursday, August 6, 2020 through email
on IGRC@larsentoubro.com. The same will be replied by the
Company suitably. Please note that, members queries/ questions
will be responded to only, if the shareholder continues to hold the
shares as on the cut-off date i.e Thursday, August 6, 2020.
Visit https://emeetings.kfintech.com and click on “Speaker
Registration” during the period from Saturday, August 8, 2020
(9.00 A.M IST) to Monday August 10, 2020 (09.00 A.M IST)
Will be made available post AGM at www.larsentoubro.com
R 8 per equity share of the face value of R 2 each
Friday, August 7, 2020 to Thursday, August 13, 2020 (both days
inclusive)
Dividend Payment Date
Cut-off date for e-voting
17th August, 2020
Thursday, August 6, 2020
Remote e-voting start time and date Monday, August 10, 2020, 09.00 A.M
Remote e-voting end time and date
Wednesday, August 12, 2020, 05.00 P.M
Remote e-voting website of Kfintech
https://evoting.karvy.com
Name, address and contact details
of e-voting service provider and
registrar and transfer agent
KFin Technologies Private Limited (“Kfintech”),
Karvy Selenium, Tower B, Plot 31-32, Gachibowli,
Financial District, Nanakramguda, Hyderabad 500 032
Tel No: 1800-425-8998/1800-345-4001
Email: evoting@karvy.com
Email Registration and Contact
Updation Process
Demat Shareholders:
Contact respective Depository Participant
Physical Shareholders:
KFintech Website: https://ris.KFintech.com/email_registration/
69
1020.51
999.55
aMoUNT To BE CarrIEd To rESEr VE:
Board RepoRt ANNUAL RepoRt 2019-20
Board report
Dear Members,
the Directors have pleasure in presenting their 75th
Annual Report and Audited Financial Statements for the
year ended 31st March 2020.
FINaNCIaL rESULTS:
particulars
profit Before Depreciation,
exceptional items & tax
Less: Depreciation, amortization,
impairment and obsolescence
profit before exceptional items
and tax
Add: exceptional Items
profit before tax
Less: provision for tax
profit for the year from
2019-20
v crore
2018-19
v crore
7379.43
8576.66
6358.92
626.99
6985.91
961.15
7577.11
1642.35
9219.46
2271.13
continuing operations
profit before tax from
discontinued operations
Less: tax expense of discontinued
operations
6024.76
6948.33
865.38
812.40
210.93
269.34
Net profit after tax from
discontinued operations
Net profit after tax from
continuing operations and
discontinued operations
Add: Balance brought forward
from the previous year
Less: Business combination
impact
Less: Ind AS 115 transition
adjustment
Less: Ind AS 116 transition
adjustment
Less: Dividend paid for the
previous year (Including
dividend distribution tax)
Less: Interim dividend paid during
the year
Less: Loss on remeasurement of
the net defined benefits plans
/ equity instruments through
other Comprehensive Income
Balance available for disposal
(which the Directors
appropriate as follows)
Less: Debenture Redemption
Reserve
Balance to be carried forward
654.45
543.06
6679.21
7491.39
15046.99
14250.01
–
–
3291.90
704.04
3.97
–
2754.94
2596.78
1403.89
–
512.96
20.37
17050.44
15128.31
93.27
16957.17
81.32
15046.99
70
STaTE oF CoMPaNY aFFaIrS:
the total income for the financial year under review was
R 85,192 crore as against R 84,999 crore for the previous
financial year, registering an increase of 0.23%. the
profit before tax from continuing operations including
exceptional items was R 6,986 crore for the financial year
under review as against R 9,219 crore for the previous
financial year, registering a decrease of 24%. the profit
after tax from continuing operations including exceptional
items was R 6,025 crore for the financial year under
review as against R 6,948 crore for the previous financial
year, registering a decrease of 13%.
the Company has not transferred any amount to the
reserves during the current financial year.
dIVIdENd:
During the Financial Year ended March 31, 2020, the
Company paid an interim dividend of R 10/- (500%) per
equity share amounting to R 1,403.89 crore
the Directors recommend payment of dividend of R 8/-
(400%) per equity share of R 2/- each on the share capital
amounting to R 1,123.11 crore for FY 2020.
the total dividend for FY 2020, including the final
dividend, if approved by shareholders, would amount to
R 18/- (900%) per equity share.
the Dividend payment is based upon the parameters
mentioned in the Dividend Distribution policy approved
by the Board of Directors of the Company which is in line
with regulation 43A of the SeBI (Listing obligations &
Disclosure Requirements) Regulations, 2015 (‘SeBI LoDR
Regulations’). the policy is provided as Annexure ‘G’
forming a part of this Board Report and also uploaded on
the Company’s website at http://investors.larsentoubro.
com/Listing-Compliance.aspx.
CaPITaL & FINaNCE:
During the year under review, the Company allotted
7,83,249 equity shares of R 2/- each upon exercise
of stock options by the eligible employees under the
employee Stock option Schemes.
on exercise of the conversion option of US$200 million
0.675% convertible bonds due in 2019, the Company
has allotted 3,79,388 equity shares of R 2/- each against
conversion of 7,970 FCCBs of the face value of US$ 1000
each. Remaining 1,92,030 Bonds of the face value of
US$1000 each were redeemed/repaid.
the Company repaid long-term borrowings of USD
492.03 million (approx. R 3,500 crore) during the year
under review on scheduled due dates. on the other hand,
the Company raised USD 425 million of foreign currency
borrowings for meeting business requirements and certain
capital expenditure.
the Company has issued and allotted on private
placement basis, Unsecured, Rated, Listed, Redeemable
Non-convertible Debentures (NCDs) aggregating to
R 5900 crore during the financial year 2019-20. the funds
raised through issuance of NCDs had been utilised for
capital expenditures, long-term working capital, business
expenses, treasury investments and bonafide purposes in
the normal course of business. these NCDs are listed on
the Wholesale Debt Market Segment of National Stock
exchange of India Limited and BSe Limited.
Listing of CPs
the Company has issued Commercial papers amounting
to R 4,845 Crore during the FY 2019-20.
pursuant to the SeBI Circular dated october 2019, the
Company has listed the Commercial papers on BSe
Limited.
the Company has not defaulted on any of its dues to the
financial lenders.
the Company’s borrowings are rated by CRISIL and
ICRA. the details of the same are given on page 115 in
Annexure ‘B’ - Report on Corporate Governance forming
part of this Board Report and is also available on the
website of the Company.
dIVESTMENT oF ELECTrICaL & aUToMa TIoN
BUSINESS:
As disclosed in our previous Report, the Company had
on 1st May 2018 signed, subject to regulatory approvals,
definitive agreements with Schneider electric, a global
player in energy management and automation for
strategic divestment of its electrical and Automation
(e&A) business for an all-cash consideration of R 14,000
crore. As reported last time, Schneider electric had
received approval from Competition Commission of India
for the proposed combination, vide letter dated 18th April
2019. the process of divestment was progressing well.
However, due to the Covid-19 pandemic and subsequent
lock-down, the process has been delayed and the
Company expects the transaction to close after normalcy
is restored.
CaPITaL EXPENdITUrE:
As at 31st March 2020, the gross property, plant and
equipment, investment property and other intangible
assets including leased assets, stood at R 13,559.73 crore
and the net property, plant and equipment, investment
property and other intangible assets, including leased
assets, at R 8,637.58 crore. Capital expenditure during the
year amounted to R 1,370.51 crore.
dEPoSITS:
the Company has not accepted deposits from the public
falling within the ambit of Section 73 of the Companies
Act, 2013. the Company does not have any unclaimed
deposits as of date. All unclaimed deposits have been
transferred to Investor education & protection Fund.
pursuant to the Ministry of Corporate Affairs (MCA)
notification amending the Companies (Acceptance of
Deposits) Rules, 2014, the Company has filed with the
Registrar of Companies (RoC) the requisite returns for
outstanding receipt of money/loan by the Company,
which is not considered as deposits.
dEPoSITorY SYSTEM:
As the members are aware, the Company’s shares are
compulsorily tradable in electronic form. As on 31st
March 2020, 98.68% of the Company’s total paid
up capital representing 1,38,52,96,740 shares are in
dematerialized form.
SeBI LoDR Regulations mandate that the transfer, except
transmission and transposition, of securities are to be
carried out in dematerialized form only with effect from
1st April 2019. 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. Accordingly, any investor
desirous of transferring shares (which are held in
physical form) can transfer only after their shares are
dematerialized.
Further in adherence to SeBI’s circular to enhance the
due-diligence for dematerialization of the physical
shares, the Company has provided the static database
of the shareholders holding shares in physical form to
the depositories to augment the integrity of its existing
systems and enable the depositories to validate any
dematerialization request.
71
Board RepoRt ANNUAL RepoRt 2019-20
TraNSFEr To INVESTor EdUCa TIoN aNd
ProTECTIoN FUNd:
investments / divestments in subsidiary companies during
the year are as under:
the Company has been regularly sending communications
to members whose dividends are unclaimed, requesting
them to provide/update bank details with RtA/Company,
so that dividends paid by the Company are credited to the
investor’s account on time. efforts are also made by the
Company in co-ordination with the Registrar to locate the
shareholders who have not claimed their dues.
Despite these efforts, an amount of R 5,27,14,490 which
was due & payable and remained unclaimed and unpaid
for a period of seven years, was transferred to Investor
education & protection Fund (IepF) as provided in section
125 of the Companies Act, 2013 and the rules made
thereunder. Cumulatively, the amount transferred to the
said fund was R 29,61,28,286 as on 31st March 2020.
In accordance with the provisions of the Section 124(6)
of the Companies Act, 2013 and Rule 6(3)(a) of the
Investor education and protection Fund Authority
(Accounting, Audit, transfer and Refund) Rules, 2016
(‘IepF Rules’), the Company has transferred 2,47,300
equity shares of R 2 each (0.02% of total number of
shares) held by 2,709 shareholders (0.24% of total
shareholders) to IepF. the said shares correspond to the
dividend which had remained unclaimed for a period of
seven consecutive years from the financial year 2011-12.
Subsequent to the transfer, the concerned shareholders
can claim the said shares along with the dividend(s) by
making an application to IepF Authority in accordance
with the procedure available on www.iepf.gov.in and on
submission of such documents as prescribed under the
IepF Rules.
the Company sends specific advance communication to
the concerned shareholders at their address registered
with the Company and also publishes notice in
newspapers providing the details of the shares due for
transfer so as to enable them to take appropriate action.
All corporate benefits accruing on such shares viz. bonus
shares, etc. including dividend except right shares shall be
credited to IepF.
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. the details of
a) Shares acquired during the year:
Name of the Company
L&t Shipbuilding Limited
(Note 1)
Mindtree Limited (Note 2)
L&t Construction Machinery
Limited (Note 3)
L&t Construction equipment
Limited (Note 3)
L&t Construction equipment
Limited (Note 3)
Note:
Type of
Shares
equity
equity
equity
equity
No. of shares
1,33,20,000
10,05,27,734
19,91,32,091
4,71,600
preference
64,83,00,000
1. the Company had acquired the entire stake held
by tamil Nadu Industrial Development Corporation
(tIDCo) in L&t Shipbuilding Limited thereby making
it a wholly owned subsidiary of the Company.
Subsequently, pursuant to the National Company
Law tribunal (Mumbai & Chennai bench) approval
for the Scheme of Amalgamation, L&t Shipbuilding
Limited has merged with the Company (appointed
date 1st April 2019 and effective date 18th May
2020).
2. the Company acquired 3,27,60,229 equity shares
of Mindtree Limited, pursuant to the Share purchase
Agreement. Further, 164,42,134 equity shares of
Mindtree Limited have been acquired in the open
market and 5,13,25,371 equity shares have been
acquired through open offer.
3. pursuant to the approval of the Composite Scheme of
Amalgamation & Arrangement between L&t Realty
Limited (LtR), L&t Construction equipment Limited
(LtCeL) and L&t Construction Machinery Limited
(LtCML) by National Company Law tribunal, Mumbai
bench (appointed date 1st April 2018 and effective
date 17th May 2020), LtR has been amalgamated
into LtCeL and the manufacturing business of LtCeL
has been demerged into LtCML. As consideration
towards this amalgamation and demerger, the
Company has been allotted 19,91,32,091 equity
shares of R 10 each by L&t Construction Machinery
Limited and 4,71,600 equity shares of R 10 each and
64,83,00,000 12% non-convertible preference shares
of R 10 each by L&t Construction equipment Limited.
72
B)
Equity shares sold / transferred / reduced during
the year:
Name of the Company
L&t technology Services Limited (Note 1)
L&t Kobelco Machinery private Limited
(LtKM) (Note 2)
Number of
shares
40,63,632
2,55,00,000
pursuant to the amendment agreement entered by the
Company with Canadian pension plan Investment Board
(CCpIB), L&t Infrastructure Development projects Limited,
(L&t IDpL), a wholly owned subsidiary of the Company,
has allotted 30,84,62,468 equity shares to CCpIB India
private Holdings Inc. Accordingly, the Company presently
holds 51% in L&t IDpL.
Note:
1. the Company had sold shares of L&t technology
Services Limited in the open market and through
offer for Sale towards achieving the minimum public
shareholding norm. pursuant to this sale, the present
public shareholding in L&t technology Services
Limited is more than 25% and is in compliance of
SeBI requirements.
2. Sale of 51% stake of L&t in LtKM to the JV partner
is in line with L&t’s strategy to move away from the
non-core businesses.
C) Companies Struck off:
L&t Cassadian Limited has applied to the Ministry of
Corporate Affairs for strike off under the provisions of
Companies Act, 2013 and is awaiting approval for the
same.
d)
Performance and Financial Position of subsidiary
/ associate and joint venture companies:
A statement containing the salient features of the
financial statement of subsidiary / associate / joint
venture companies and their contribution to the overall
performance of the Company is provided on pages 594 to
607 of this Annual Report.
the Company has formulated a policy on identification
of material subsidiaries in line with Regulation 16(c)
of the SeBI LoDR Regulations and the same is placed
on the website at http://investors.larsentoubro.com/
Listing-Compliance.aspx. the Company does not have any
material subsidiaries.
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 as required under section 186 of the
Companies Act, 2013, Regulation 34(3) and Schedule V
of the SeBI LoDR Regulations in Note 58 forming part of
the financial statement.
ParTICULarS oF CoNTraCTS or arraNGEMENTS
WITH rELaTEd ParTIES:
the Audit Committee and the Board of Directors have
approved the Related party transactions policy, signifying
the individual threshold limits for each transaction and
the same has been uploaded on the Company’s website
http://investors.larsentoubro.com/Listing-Compliance.
aspx.
the Company has a process in place to periodically review
and monitor Related party transactions.
All the related party transactions were in the ordinary
course of business and at arm’s length. the Audit
Committee has approved the related party transactions
for the FY 2019-20 and estimated related party
transactions for FY 2020-21.
there were no materially significant related party
transactions that may have conflict with the interest of
the Company.
MaTErIaL CHaNGES aNd CoMMITMENTS
aFFECTING THE FINaNCIaL PoSITIoN oF THE
CoMPaNY, BETWEEN THE ENd oF THE FINaNCIaL
YEar aNd THE daTE oF THE rEPorT:
the Company had filed a petition for merger of
L&t Shipbuilding Limited with the Company. the
amalgamation was approved by National Company Law
tribunals at Mumbai & Chennai. L&t Shipbuilding Limited
has thus merged with the Company (appointed date 1st
April 2019 and effective date 18th May 2020).
there are no other material changes and commitments
affecting the financial position of the Company between
the end of the financial year and the date of this report.
CoMPaNY rESPoNSE To CoVId-19
During March 2020, the CoVID pandemic increased
rapidly forcing Governments of most countries to
enforce a lockdown of all activities. Heeding to the
73
Board RepoRt ANNUAL RepoRt 2019-20
various guidelines issued in India by the Central and
State Governments and abroad by various agencies on
the Covid-19 pandemic, all establishments, offices &
factories of the Company had shut down operations from
March 25, 2020. Your Company immediately took several
measures to ensure health and safety of its workers and
other employees and thereafter, steps were taken to
ensure business continuity of essential services including
Security and It lights-on operations. Special permissions
were also taken for ensuring that very critical operations
such as defence business, dewatering in Metro projects,
etc. continued with all the precautionary measures.
A Decision Response team was formed which consisted
of members from the executive Committee to assess the
situation and take appropriate decisions. Smaller teams/
task forces were set up at each location / site / factory /
manufacturing units etc to regularly monitor the situation.
Your Company employs more than 250,000 contract
labourers around various sites in India and abroad. Your
Company set up labour camps at their sites to house
these labourers including migrant labourers. During the
lockdown period, your Company ensured food, shelter
and medical facilities in these labour camps and timely
remittance of wages to workmen and payments to
subcontractors, directly to their bank accounts.
Your Company along with its subsidiary companies and
employees who donated two days salary, contributed
R 150 Crore to the pM-CAReS Fund, responding to the
call given by Hon’ble prime Minister of India. Additionally,
your Directors, executive Committee members, with
equivalent contribution from the Company, contributed
R 5.58 crore to the pM CAReS fund. Your Company
also provided a wide range of material assistance viz.,
donated medical equipment to various hospitals and
other institutions, distributed grocery kits and cooked
food to doctors, sanitation workers, stranded families
and migrant workers. Your Company has also extended
its technological expertise to partner with civic authorities
and the police to set up monitoring systems and manage
Command & Control Centers. Such centers are in
operation in over 20 cities including Mumbai, pune,
Nagpur, prayagraj, Ahmedabad, Visakhapatnam and
Hyderabad. As of date, your Company has re-purposed
sections of hospitals in Delhi, Dwarka, Bettiah,
puducherry, Kolkata and Gorakhpur to meet the needs of
CoVID patients.
For the quarter ended 31 March 2020, the impact due
to CoVID 19 on your Company’s revenues and net
profits was approximately R 1800 crore and R 400 crore
respectively. this was due to stoppage of work in almost
all the sites for the last part of March 2020 as well as the
disruption to the last mile work, like physical inspection,
customer clearance etc., that could not be completed due
to lockdown restrictions.
Your Company resumed partial service of operations
from April 14, 2020, after implementation of standard
protocols in line with the guidelines prescribed. As on
the date of this report, your Company has resumed
work in all offices/manufacturing units, barring some
establishments in Maharashtra where the employees
continue to Work from Home. 90% of the domestic
project sites of the Company are working with restricted
labour capacity. the Company is remobilizing the
workmen as a significant percentage of the migrant
workmen have gone back to their villages.
All international sites have also resumed work after some
interruptions. employees are working in a staggered
manner with mandatory rotation on a periodic basis and
in adherence to all the safety protocols.
In fact, all the plants and office establishments that have
started functioning have implemented safety and hygiene
protocols like wearing of face masks, social distancing
norms, workplace sanitation and employee awareness
programmes. the protocols are regularly reviewed and
updated based on revisions in guidelines received from
authorities concerned from time to time.
With the graded opening of sites and factories, the
Company is making every effort possible to make up for
the lost time, due to the pandemic, during the year. the
impact of the lockdown disruption is being assessed from
time to time. A lot depends on the success of the various
pandemic containment efforts being undertaken by the
State and Central Government and Health authorities.
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.
74
rISK MaNaGEMENT:
the Risk Management Committee was reconstituted
during the year and comprises of Mr. Adil Zainulbhai, Mr.
Sanjeev Aga and Mr. Subramanian Sarma, Directors of
the Company. Mr. Adil Zainulbhai 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. the risk assessment
includes review of strategic risks of the group at the
domestic and international level, including Sectoral
developments, risk related to market, financial,
geographical, political and reputational issues,
environment, Social and Governance (eSG) risks, cyber
security and risk minimization initiatives. the Committee
periodically reviews the risk 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 331 to 334 of this Annual Report.
CorPoraTE SoCIaL rESPoNSIBILITY:
the Corporate Social Responsibility Committee comprises
of Mr. M. M. Chitale, Mr. R. Shankar Raman and Mr. D. K.
Sen as the Members. Mr. Chitale is the Chairman of the
Committee.
the CSR policy framework is available on its website
http://investors.larsentoubro.com/Listing-Compliance.
aspx.
A brief note regarding the Company’s initiatives with
respect to CSR is given in Annexure ‘B’ - Report on
Corporate Governance forming part of this Board Report.
please refer to pages 105 to 107 of this Annual Report.
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:
Mr. Akhilesh Gupta ceased to be an Independent Director
of the Company w.e.f. 8th September 2019 on account
of completion of his term as Independent Director.
Mr. Arvind Gupta, Nominee Director representing equity
interest of the Administrator of the Specified Undertaking
of the Unit trust of India (SUUtI) on the Board of
the Company, has demitted the office as a Nominee
Director of the Company with effect from 26th March
2020 on account of withdrawal of his nomination by
SUUtI, pursuant to divestment of their stake held in the
Company.
Mr. thomas Mathew t. ceased to be an Independent
Director of the Company w.e.f. 2nd April 2020 on
account of completion of his term as Independent
Director.
Mr. Ajay Shankar ceased to be an Independent Director
of the Company w.e.f. 29th May 2020 on account of
completion of his term as Independent Director.
Mr. N. Hariharan, executive Vice-president & Company
Secretary superannuated from the services of the
Company with effect from 1st January, 2020.
the Board places on record its appreciation towards
valuable contribution made by them during their tenure
as Directors and Key Managerial personnel of the
Company.
pursuant to the recommendation of the Nomination and
Remuneration Committee, the Board at its Meeting held
on 23rd october 2019, approved the appointment of Mr.
Sivaram Nair A as the Company Secretary and Compliance
officer with effect from 2nd January 2020.
the Board has re-appointed Mr. D. K. Sen as a Whole-
time Director of the Company from 1st october 2020
to 7th April 2023, subject to the approval of the
shareholders.
the Board has re-appointed Mr. A M Naik as Non-
executive Chairman of the Company for a period of 3
years from 1st october 2020, subject to the approval of
the shareholders.
Mr. Subramanian Sarma, Ms. Sunita Sharma and Mr. A
M Naik, retire by rotation at the ensuing AGM and being
eligible, offer themselves for re-appointment.
the notice convening the AGM includes the proposal for
re-appointment of Directors.
the terms and conditions of appointment of the
Independent Directors are in compliance with the
provisions of the Companies Act, 2013 and are placed on
75
Board RepoRt ANNUAL RepoRt 2019-20
the website of the Company http://investors.larsentoubro.
com/Listing-Compliance.aspx.
the Committee has also formulated a separate policy on
Board Diversity.
the Company has also disclosed on its website
http://investors.larsentoubro.com/Listing-Compliance.aspx
details of the familiarization programs to educate the
Directors regarding their roles, rights and 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 Report.
Members are requested to refer to pages 92 and 93 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 LoDR Regulations. 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 98 to 100 of this Annual
Report.
CoMPaNY PoLICY oN dIrECTorS’ aPPoINTMENT
aNd rEMUNEraTIoN:
the Company has in place a Nomination and
Remuneration Committee in accordance with the
requirements of the Companies Act, 2013 read with the
rules made thereunder and Regulation 19 of the SeBI
LoDR Regulations. 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 100 to 104 of this Annual Report.
the Committee has formulated a policy on
Directors’ appointment and remuneration including
recommendation of remuneration of the key
managerial personnel and senior management
personnel, composition and the criteria for determining
qualifications, positive attributes and independence of
a Director. the Nomination and Remuneration policy
is provided as Annexure ‘H’ forming part of this Board
Report and is also disclosed on the Company’s website at
http://investors.larsentoubro.com/Listing-Compliance.aspx.
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 as laid down in section 149(6) of
the Companies Act, 2013 and Regulation 16(1)(b) of SeBI
LoDR Regulations. the same are also displayed on the
website of the Company http://investors.larsentoubro.
com/Listing-Compliance.aspx. the Independent Directors
have complied with the Code for Independent Directors
prescribed in Schedule IV to the Companies Act, 2013.
the Independent Directors of the Company have
registered / in the process of registering themselves with
the data bank maintained by Indian Institute of Corporate
Affairs (IICA). In terms of Section 150 of the Act read with
Rule 6(4) of the Companies (Appointment & Qualification
of Directors) Rules, 2014, the Independent Directors are
required to undertake online proficiency self-assessment
test conducted by the IICA within a period of one (1)
year from the date of inclusion of their names in the data
bank. the said online proficiency self-assessment test
will be undertaken by the Independent Directors of the
Company, as applicable, within the prescribed timelines.
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 Report.
dIrECTorS’ rESPoNSIBILITY STaTEMENT:
the Board of Directors of the Company confirms:
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 judgements
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
76
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 control 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
31st March 2020, 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, dIrECTorS aNd CHaIrMaN:
the Nomination & Remuneration Committee and the
Board have laid down the manner in which formal annual
evaluation of the performance of the Board, committees,
individual directors and the Chairman has to be made. All
Directors responded through a structured questionnaire
giving feedback about the performance of the Board, its
Committees, Individual directors and the Chairman.
For the year under review, the questionnaire was modified
suitably to include qualitative criteria, based on the
comments and suggestions received from Independent
Directors. As in the previous years, an external consultant
was engaged to receive the responses of the Directors
and consolidate/ analyze the responses. the same
external consultant’s It platform was used from initiation
till conclusion of the entire board evaluation process.
this ensured that the process was transparent and
independent of involvement of the Management or the
Company. this has enabled unbiased feedback.
the Board performance evaluation inputs, including areas
of improvement, for the Directors, Board processes and
related issues for enhanced Board effectiveness were
discussed in the meeting of the Independent Directors
held on 18th May, 2020 and in the subsequent meeting
of Nomination and Remuneration Committee and the
Board.
Most of the suggestions from the Board evaluation
exercise of FY 2019-20 have been suitably implemented
such as considering qualitative criteria for performance
evaluation exercise.
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 information in respect of employees of the Company
required pursuant to Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial
personnel) Rules, 2014, as amended from time to time,
is provided in Annexure ‘I’ 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 at the Registered
office of the Company. None of the employees listed
in the said Annexure is related to any Director of the
Company.
CoMPLIaNCE WITH SECrETarIaL STaNdardS oN
Board aNd GENEraL MEETINGS:
the Company has complied with Secretarial Standards
issued by the Institute of Company Secretaries of India on
Board Meetings and 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. the policy has been
widely disseminated. the Company has constituted
Internal Complaints Committees as per the above Act.
No complaint was received in the Company during the
F.Y. 2019-20.
77
Board RepoRt ANNUAL RepoRt 2019-20
In addition to the continuous online awareness programs,
more than 100 awareness workshops and training
programs were conducted during the year across the
Company to sensitize employees to uphold the dignity
of their colleagues at workplace specially with respect to
prevention of sexual harassment.
oTHEr dISCLoSUrES:
zz
eSop 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 Securities
and exchange Board of India (Share Based employee
Benefit) Regulations, 2014 (“SBeB Regulations”).
zz
zz
the disclosures relating to eSops required to be made
under the provisions of the Companies Act, 2013 and
the rules made thereunder and the SBeB Regulations
is provided on the website of the Company http://
investors.larsentoubro.com/Listing-Compliance.aspx.
the certificate obtained from the Statutory Auditors,
confirming compliance with the Companies Act,
2013 and the SBeB Regulations is also provided in
Annexure ‘B’ forming part of this Report.
Corporate Governance: pursuant to Regulation 34 of
the SeBI LoDR Regulations, a Report on Corporate
Governance and a certificate obtained from the
Statutory Auditors confirming compliance, are
provided in Annexure ‘B’ forming part of this Report.
Integrated Reporting: pursuant to SeBI Circular on
Integrated Reporting, the Company is complying
with the applicable requirements of the Integrated
Reporting Framework. the Sustainability Report has
been replaced by an Integrated Report which tracks
the sustainability performance of the organization
and its interconnectedness with the financial
performance, showcasing how the Company is
adding value to its stakeholders.
the Integrated Report encompasses areas such
as Corporate Governance, the IR & Sustainability
Structure, Sustainability Roadmap 2021, Risks &
opportunities, enhancement of Financial Capital,
Manufactured Capital, Intellectual Capital, Human
Capital, Natural Capital and Social & Relationship
Capital and alignment to sustainable development
goals. It also covers strategy, business model and
resource allocation.
the integrated Report for the year 2018-19 is
available on the Company’s website http://www.
larsentoubro.com/corporate/sustainability/integrated-
report/ and the report for the year 2019-20 shall be
published shortly.
zz
Statutory Compliance: the Company complies with
all applicable laws and regulations, pays applicable
taxes on time, takes care of all its stakeholders,
ensures statutory CSR spend and initiates sustainable
activities.
zz MSMe: the Ministry of Micro, Small and Medium
enterprises vide their Notification dated 2nd
November 2018 has instructed all the Companies
registered under the Companies Act, 2013, with a
turnover of more than Rupees Five Hundred crore to
get themselves onboarded on the trade Receivables
Discounting system platform (tReDS), set up by
the Reserve Bank of India. In compliance with this
requirement, the Company has registered itself on
tReDS through the service providers Receivables
exchange of India Limited (RXIL).
the Company complies with the requirement of
submitting a half yearly return to the Ministry of
Corporate Affairs within the prescribed timelines.
zz
IBC: there is no Corporate Insolvency Resolution
process initiated under the Insolvency and Bankruptcy
Code, 2016 (IBC).
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
the Companies Act, 2013. 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 policy also
establishes adequate mechanism to enable employees
report instances of leak of unpublished price sensitive
information. the Audit Committee of the Company
oversees the implementation of the Whistle-Blower policy.
78
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 person has been declined access
to the Audit Committee, wherever desired.
Also see page 108 forming part of Annexure ‘B’ of this
Board Report.
BUSINESS rESPoNSIBILITY rEPor TING:
As per Regulation 34 of the SeBI LoDR Regulations, a
separate section on Business Responsibility Reporting
forms a part of this Annual Report (refer pages 22 to 43).
dETaILS oF SIGNIFICaNT aNd MaTErIaL ordErS
PaSSEd BY THE rEGULaTorS or CoUr TS 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 LoDR Regulations and prepared in accordance
with the Indian Accounting Standards (Ind AS) notified
under the Companies (Indian Accounting Standards)
Rules, 2015 and amendments thereof issued by the
Ministry of Corporate Affairs in exercise of the powers
conferred by section 133 of the Companies Act, 2013.
aUdIT rEPorT:
the Auditors’ report to the shareholders does not contain
any qualification, observation or adverse comment.
SECrETarIaL aUdIT rEPor T:
the Secretarial Audit Report issued by M/s. S. N.
Ananthasubramanian & Co., Company Secretaries is
attached as Annexure ‘e’ forming part of this Board
Report.
aUdITorS:
In view of the mandatory rotation of auditors’
requirement and in accordance with the provisions of
Companies Act, 2013, M/s. Deloitte Haskins & Sells LLp
were 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.
Accordingly, in terms of Section 139 of the Companies
Act, 2013 read with the Companies (Audit and Auditors)
Rules, 2014, the present Statutory Auditors of the
Company, M/s Deloitte Haskins & Sells LLp would hold
office until the conclusion of the ensuing Annual General
Meeting. they have expressed their willingness to be
reappointed for a further term.
the Board of Directors of the Company, after considering
the recommendation of the Audit Committee,
recommends the re-appointment of M/s Deloitte Haskins
& Sells LLp for the 2nd and final term of five consecutive
years from the conclusion of this ensuing 75th Annual
General Meeting till the conclusion of 80th Annual
General Meeting of the Company.
M/s Deloitte Haskins & Sells LLp has submitted their
confirmation to the effect that they continue to satisfy
the criteria provided in Section 141 of the Companies
Act, 2013 and that their appointment is within the limits
prescribed under Section 141(3)(g) of the Act.
the Auditors have confirmed that they have subjected
themselves to the peer review process of Institute of
Chartered Accountants of India (ICAI) and hold valid
certificate issued by the peer Review Board of the ICAI.
the 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 Audit Committee reviews the independence and
objectivity of the Auditors and the effectiveness of the
Audit process.
the Auditors attend the Annual General Meeting of the
Company.
the Notice convening the AGM includes a resolution for
their re-appointment. the terms and conditions of their
appointment including remuneration are specified in
the explanatory statement which is a part of the notice
convening the AGM.
Also see pages 108 and 109 forming part of Annexure ‘B’
of this Board Report.
79
Board RepoRt ANNUAL RepoRt 2019-20
rEPorTING oF FraUd:
the Auditors of the Company have not reported any
instances of fraud committed against the Company by its
officers or employees as specified under Section 143(12)
of the Companies Act, 2013.
the provisions of Section 148(1) of the Companies Act,
2013 are applicable to the Company and accordingly the
Company has maintained cost accounts and records in
respect of the applicable products for the year ended 31st
March 2020.
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 5th June 2020, has
approved the appointment of M/s R. Nanabhoy & Co.,
Cost Accountants as the Cost Auditors for the Company
for the financial year ending 31st March 2021 at a
remuneration of R 13 lakhs.
A proposal for ratification of remuneration of the Cost
Auditor for the financial year 2020-21 is placed before
the shareholders.
the Report of the Cost Auditors for the financial year
ended 31st March 2020 is under finalization and shall
be filed with the Ministry of Corporate Affairs within the
prescribed period.
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 Chairman
(DIN: 00001514)
Date : 5th June 2020
place : Mumbai
80
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:
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Implementation of LeD lights in He-Hazira
campus and other project sites and Solar pipes in
SG fabrication area.
Installation of an off Grid Mini-Solar power plant
for meeting the energy requirement of site &
workmen habitats at Ranchi Smart City project.
Installed Local pre/ post Weld Heat treatment
(pWHt) using pID technology which ensures
uniform heating and reduction in energy
wastage.
Implemented the use of Metal Halide (400 Watt)
eot Crane under bay lights with LeD Lights.
Installed energy efficient burners for Furnaces
and pre heating.
Usage of electro Slag Strip Cladding (eSSC) Iot
station and usage of Submerged Arc Welding
(SAW) Iot station which reduces welding process
time per shell.
Installation of Ie-2 Class energy Motors (315 kW,
37 kW, 11 kW) for Flushing facility.
Retrofitting of VtL machine with 828 D energy
efficient system and retrofitting of edge Bevelling
machine with energy efficient drive mechanism.
Usage of pWHt & pBHt combined cycle in
Furnace for HMeL bends and double layer
loading in Furnace to reduce the number of
cycle.
Replacing existing aged in efficient pumps
(Water, Sewage & HVAC ) with energy efficient.
Development of energy efficient screw chiller
with BMS system for 120t AC plant.
Implemented enpI monitoring of etS precision
tool manufacturing energy consumption
and enpI reduction of CG moulding energy
consumption.
Implemented Smart CoMM energy Management
system at ASW & Digital Dashboard.
Replacement of conventional light fittings with
Solar lighting system in SSII, open yard-5 and
Grit blasting & painting areas at production/
Utility areas at eWL Kancheepuram factory and
Kansbahal works.
Replacement of conventional MH Lamps and
fluorescent tube lights by LeD lamps in working
areas at office and projects as well as for street
lights.
Installation of energy efficient water coolers and
submersible pumps
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.
Initiative has been taken for replacement of
Air-Cooled Chiller with Water Cooled Chiller.
Commissioned Air Compressor with Variable
Speed Drive which reduced the air pressure from
5.5 to 6.5 bar to 5.2 bar constant pressure.
Utilization of Solar Lights for lighting around
compound walls.
Development of panasonic make MIG Welding
Machines.
Development of ApFC relay automation for
maintaining power factor and without Joint
single point electrode - 8mm small electrode.
Implementation of timer in Vertical Brazing
machine for CM90516 production and
eliminating Corona process from pad printing.
Installation of Ducting in tool programming Cell
Department.
Replacement of 90t Centralized Chiller type Air
Conditioning with VRF type Air Conditioning.
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Replacement of Solar inverter with solar
generation.
Replacement of one chiller coil for improvement
in efficiency of the chiller.
Successfully completed Bureau Veritas
Surveillance audit of ISo50001 energy
Management System of all 3 ASW eSp MFG.
campus.
Reducing carbon footprint by replacing a portion
of cement with GGBS in the mix design at
Varsha Inner Harbour, Kochi Dry Dock, Bangalore
Metro Rail Limited, MtHL and MCRp.
effective usage of Flyash in the mix design thus
reducing the cement content at Ahmedabad
Metro Rail project and Kudankulam HtS
project has reduced the carbon footprint of the
structure.
Installation of small Lt power at temporary
locations like bridge and structures where the
work duration is shorter.
A dedicated energy monitoring cell is set up at
HQ to explore technological upgrades and for
better monitoring and control.
Installation of seven asphalt mix plants in
RReC are technology ready for recycled asphalt
production (RAp).
the transmission tower manufacturing facilities
re-use galvanizing plant rinse water for pickling
acid preparation.
Zinc Recovery machines have been installed to
recover zinc from zinc ash generated during
galvanizing process.
online monitoring of Gas, electricity and Water
consumption is practised.
By installing gantry cranes, usage of hydra has
been reduced thereby saving requirement of
High Speed Diesel.
Increased use of digital collaboration tools such
as Microsoft teams and Virtual Inspections have
led to reduced travel thereby leading to less
carbon footprint.
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Adoption of digital tools such as Integrated
Vehicle Management System have led to fuel
savings.
(ii) Steps taken by the Company for utilizing
alternate sources of energy:
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Shift towards usage of windmill power in the
place of State electricity Board at Kanchipuram
factory
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Dedicated motor for oil cooling to reduce energy
consumption
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Development of Ie3 Class Motor for otR presses
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Use of therminol Fluid in place of Steam heating
for 55” tube presses
Implemented 120w led luminaries instead of
250w HpMH lamp in Shop floor and energy
saved 3500 KWH / Annum.
Implemented VFD drive in Line 1 De dusting and
energy saved 66000KWH/Annum.
Rainwater harvesting implemented and the
water used for Fire hydrant sump. energy saved
8900KWH /Annum 1400KL water saved in
Sump.
time based oN /oFF compressor controller
implemented and energy saved 9000KWH /
Annum.
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Installing Solar panels on Rooftop.
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Solar panels installed at project sites.
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Alternate usage of M-sand instead of Natural
Sand at all project sites has produced a
considerable impact in conserving the natural
resource.
Implementation of usage of alternative solution
of curing compound for all the vertical structures
in the projects.
Usage of the power source from the electricity
grid in the metro projects for tunnel Boring
machine operations.
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Usage of pNG at DIAL project to power the Hot
Mix plant.
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(iii) Capital investment on energy conservation
equipments:
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Use of High-tension breakers maintenance
(effective monitoring of power consumption)
transformer oil servicing towards effective
functioning & reduce heat losses.
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Installation of Auto Cut off sensors at Vizag.
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Using the methodology of parallel work, both
the tanks were made ready for Hpt at the same
time. this methodology helped in re-usage of
50 tons of fresh water which would have been
drained out otherwise.
the measures taken have resulted in savings in cost of
production, power consumption and processing time at
all locations.
[B] TECHNoLoGY aBSorPTIoN:
(i) Efforts made towards technology absorption:
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Development of capabilities in High-end Finite
element Analysis including automation of Finite
element Model generation.
Development of capability for multi-physics
simulation in areas such as Fluid Structure
Interaction.
Advanced manufacturing simulation technology
for 3D analysis of multi-layer weld overlay
distortion prediction.
Design development for Multi-tubular Reactor
Systems and methodology for piping flexibility
analysis of complex Refinery systems.
Development of Chemical process technology
in the area of residue up-gradation (petroleum
Refining) and Coal/petcoke Gasification.
Developed a 3D Concrete printing which has the
potential to radically redefine the way concrete
buildings are constructed.
Developed Internal painting Robot for
construction application and also at Ap Housing
projects.
Developed Acid concentration meter with auto
pump operation in Derusting tank to reduce the
acid consumption and spent acid generation.
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Implemented Acid level indicator with visual
display in paintshop communication room to
monitor the HCL acid stock.
Implemented Advanced scada monitoring and
data lodging system in paint shop Dryer for
effective monitoring of paint shop.
Implemented Demand controller in eB panel
to maintain the allotted demand for power
consumption monitoring & control.
Implemented VFD Drive with multi speed
running of Blower in Line 1 De dusting and
energy conservation is achieved.
Implemented semi-automated Stp plant with
online monitoring (parameters like pH, Dissolved
oxygen, Running hours, Flow rate) with SMS.
Implemented the online monitoring system
for compressor Air consumption & energy
consumption.
Development of tandem Wagon traverser with
rack & pinion pusher drive, 10000 tpH C-Frame
stacker reclaimer and plant dedusting system
including development of manual damper for
process plant.
Development of pCR Column type Hydraulic
tire Curing press, Column type V orientation
Hydraulic tire Curing press, 1100 t Bladder
Curing press – BAto, otR / Ultra otR Gt Lube
spraying machine.
Implementation of cured tyre handling
Automation system, load control for 84” cracker
Mill through Digital load cell arrangement, otR
presses for tulip Mold and otR – Radial II Stage
tire building
Innovated new MCCBs, new variants of ACBs,
Contactors, Isolators and panel solutions for new
emerging market segments like Solar & Railways,
new state of art motor protection relays,
controllers for power Quality solution, Intelligent
products for Agriculture segments etc
Implemented additional pendent type Remote
for Robomaster Fixed bender manual operation
to increase the Human safety.
In Manual Cutting Machine implemented scale
with stand for measuring purpose to increase the
productivity.
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Implemented the colour tag FG Material to easily
identify and reduce the Loading time and reduce
the Customer complaint.
Implemented Colour tag Quarter wise for Raw
Material to Follow FIFo.
Implemented Integrated Life Support System –
for tejas Aircraft (oxygen Generation System)
Developed Chemical Warfare Agent Detection
System
Developed ICRS- Intelligent Collaborative Robotic
System, Robot Sentry, mini UGV & Ballbot, MARF
& Control software and Integration of complete
collaborative system.
Developed Wireless Smart Handheld Device,
secure communication (Voice and Data) between
users and Modular system with clear separation
between App, Security and Network.
Developed power Amplifier Module, product
development, product improvement, cost
reduction, manufacturing of the power Amplifier
Module and developed in house test jigs for
testing.
Development of Autonomous Underwater
Vehicle “Amogh” for oceanographic Surveys in
collaboration with foreign partner.
Development of Mine plough for t72 tanks in
collaboration with foreign partner.
Development of Indigenous Fire Control Radar in
collaboration with foreign technology partner.
Indigenization of subsystems for K9 Vajra
Artillery Gun.
zz Manufacturing of test panels for sonar domes
using Resin Film Infusion technology by
partnering with DRDo.
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Development of Acoustic payloads for
Autonomous Underwater Vehicles in partnership
with DRDo.
Developed three types of efficient hull forms
with low resistance suitable for various warships/
patrol vessels in collaboration with IIt Kharagpur.
Development of design of Avionics LRUs
with Standby engine Instrument and Standby
Instrumentation System for Helicopter platforms.
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Deployment Communication Lte based 4G
Network in a Box (NIB)-chassis including
electronics using in-house Base station.
Development of a separate internal Rapid
Deployment Communication System including
electronics and chassis for customer demos and
trials and includes qualification testing.
Development of Lt Vega (Unmanned Surface
Vessel) and Wireless Client Device.
Development of Ammunition Handling tube in
composite material for K9 Vajra Artillery Gun.
Designed and manufactured track mounted
mobile roll crusher (for Coal application).
Developed skid mounted crushing plant with
impactor to meet specific customer application.
Development of higher capacity surface miner
KSM404 and operational in coal application.
Developed Bulk Reception unit for feeding coal
after receiving from dumper.
Developed tertiary reversible impact
crusher (RI6363t) which is presently under
manufacturing.
experimental investigation on usage of shredded
waste plastics in construction of bituminous
layers in flexible pavements.
Development of high early strength concrete
without affecting target strength using special
sleeper grade cement.
Investigation on seismic performance of various
precast connections of buildings with shear
walls.
Fire resistance tests on load bearing RC wall
panels for various fire rating in association with
CBRI, Roorkee.
Developed sizing optimization Software (iBoSS-
intelligent Buildings optimum Structural Sizing)
for mid and high-rise buildings using genetic
algorithms.
proof of concept studies were undertaken with
IItM Chennai to explore the feasibility of 3D
printing technology.
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Development of new indigenous precast
connections for RC walls.
downhill conveyors and complete inhouse design
of pipe conveyors 5.5km and even more.
Feasibility study on the use of high-performance
concrete base (M100 grade) suitable for wind
turbine generators construction, in place of steel.
Development of pervious concrete for parking
bays and pavements
Laboratory Studies on the effect of coarse
aggregate grading of fresh & hardened concrete
properties.
Laboratory study on the determination of volume
of coarse aggregate content in the hardened
concrete by titration method.
Use of precast geo-polymer concrete for non-
structural components like manhole covers.
Indigenous development and import substitute
of co-efficient of thermal expansion test
equipment for the study of a material’s
expansion or contraction with temperature.
Development of in-house Dynamic Cone
penetration and Light cone penetration
apparatus for quick estimation of in-situ soil
strength characteristics.
Development of pods using light weight
concrete.
Developed Slab transport wagon in steel plant,
roll/coil/slab transfer car for hot strip mill project,
Wing tripper and wagon loader in for stockpile
generation / wagon loading, C-frame stacker
reclaimer with 58 m lg boom in port.
Developed machine performance and
health monitoring system through Iot and
implemented for Stacker reclaimer machine,
indurating machine for pellet plant, pelletizing
disc with modified drive arrangement.
Developed Spillage protection arrangement in
track Hopper & mechanism for auto opening
during plough feeder operation, drag type
plough feeder technology and composite weigh
hopper gate for Blast furnace.
Developed roller compact concrete conveying
system developed inhouse to convey RCC from
batching plant to feed to punatsangchhu hydel
project construction, complete inhouse design of
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Absorbed the technology of pipe Bursting
which is a trenchless method of pipe
installation that allows for minimal disruption
to existing infrastructure in Udaipur Integrated
Infrastructure project.
Development of an in-house L&t SBBR
technology which is a method for biological
treatment of domestic waste-water.
Developed SafeArmZ & VieweHS applications
which are structured platforms designed with an
intention to enhance eHS compliance at project
sites and institutionalize incident reporting.
Replaced the ordinary submersible pump in Stp
plant with new cutter pump
Development of SFF energy Meter, Meter with
2G & 4G Communication modules and Smart
prepaid Meter with 4G & NBIot Communication
modules
Developed one of the largest Smart Meter
project based on LpR technology in the country.
Introduced Feeder pillars, CSS (Compact Sub
Station) & Front RMU with FRtU for Utilities
segment
Introduced Sub-Main Distribution Board (SMDB)
and GIS for wind segment to cater for the
infrastructure sector like Metros, Airports,
Smart cities, high-end residential complexes for
international markets.
Introduced a pre-Fabricated electrical Substation
building, known as “e-House”, customized to
house all electrical equipment as per project
requirements
Developed domestic LV Switchboards with
“Closed Door operation” feature which were
offered to key customers in refinery and power
plant segments
Indigenously developed and released industrial
platform i-Visionmax®; and deployed at various
industry verticals.
Developed a centralized o&M Incident
Management which is a Web and Mobile App
based GIS application that helps in keeping track
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
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of project incidents, resolving the tickets and
maintaining the required SLA.
SWIFt (Supply and Work Integrated Finishing on
time)
Developed in-house by SWC Digital team,
a proactive project Monitoring tool (Start to
Finish) from managing approvals digitally
(Smart Signoff), to monitoring completion of
packages/file in a project, Identifying items
that are in critical status, draw Responsibility &
Accountability for the project stake holders and
to generate timely alerts by way of SMS / emails.
Developed Smart Meter-project Management
which collects data on the field, store data
in cloud, present real-time dashboards to all
stakeholders facilitating multiple touch points
access across mobile and desktop.
the RC wall thickness of 100mm was
successfully implemented at AptIDCo project
after the successful fire rating investigation at
CBRI Roorkee.
optimized precast connection systems are
implemented based on the outcome of the test
results.
iBoSS software has been successfully tested on
many real time projects.
Introduction of curing admixtures in pQC mix to
improve the concrete permeability, which in-turn
improves the quality and long-term performance
of concrete.
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Introduction of gauge conversion for side rollers
used in compactors and graders.
(ii) Benefits derived like product improvement,
cost reduction, product development or import
substitution:
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Integrated Life Support System acts like a
technology enabler to develop variants for other
platforms like Helicopter, Dornier Do 228 and to
Develop products for High Altitude survival kits.
Developed first-of-its-kind crowd management
system that proactively interprets crowd
dynamics and provides timely alerts.
Developed real time notifications of crowd
density at different locations which provided
efficient means.
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Innovated deep Learning based Alert Generation
for identifying crowd gatherings.
Implemented Crowd Management Analytics of
Line Count (counting number of people crossing
the line in either direction to determine entry
and exit) at the prominent entry exit routes.
zz Monitoring the real-time crowd density to notify
law enforcement officials when the pilgrims in a
square metre area exceeds above 3.6 threshold.
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Developed & deployed a Deep learning based
Social Distance monitoring solution to aid law
enforcement agencies to pin down areas.
Deployed Computer Vision enabled pothole
detection algorithm to notify city authorities on
areas with high intensity of potholes.
Deployed Machine learning based vehicle
movement restriction solution beyond 3 Kms.
through automated correlation on license plate
recognition data.
pilot deployment of state-of-the art patrol
Management solution for efficient and effective
patrolling operations for a large state police
force.
Usage of Chemical Warfare Agent Detection
System addresses Indian & international market
needs and also enables to develop variants
like Integrated Nuclear Sensor and Integrated
Network Chemical Agent Detector System for
different platforms.
Usage of ICRS has resulted in enabling the
Company to gain good expertise in Robotics
field and develop their own Robots not only
for Military applications but also for industrial
applications in smartcity as well.
Development of Amogh acts as import
substitution for applications of oceanographic
surveys up to depth of 1000 m
Development of efficient hull forms has enabled
the Company to select lower capacity propulsion
systems, which is a major cost element in the
ships.
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Avionics has the potential for Business in the
Helicopter programs, can also be targeted for
other platforms (Fixed Wing Aircrafts), civil and
military configurations
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RDCS enables the Company to address tCS,
MCCS, MINt and other upcoming projects
and will also be useful for Civilian applications
including Disaster relief & public safety
operations
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Integration of new communication technologies
such as 4G, NBIot and LoRa in the Smart Meters.
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of Gas Insulated Switchgear (GIS) for Wind
energy applications and Metro projects
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Adoption of face-recognition based attendance
system for workmen at Buxar project site helps
achieving contact-less, faster attendance and
also provides video footage
Development of virtual guard (Video analytics)
for weighbridge unmanned surveillance to
provide better control over weighbridge process.
Adoption of RpA bot for automating some
repetitive processes e.g. generating comparison
sheets for rate contract items, saving time of
buyers.
Implemented Iot for tracking critical p&Ms such
as concreting machinery, welding machines,
vehicles. this has helped improve asset
utilization.
Usage of smart glass for remote project review
and remote inspection at vendor’s saves travel
time and cost.
Implemented in-house scripted and video shoot
360o Virtual reality-based films in 5 languages
for unsafe scenarios for workmen. these
immersive videos implemented at all project sites
help workmen understand unsafe scenarios and
its consequences.
L&t has adopted its own private cloud
infrastructure services for some of its critical
systems and business continuity.
Increased self-reliance and savings in Foreign
exchange in process plant, refinery and power
plant equipment sector
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Reduction in production cycle time, cost and
rework due to implementation of advanced
manufacturing
Continuous improvement in on-site fabrication
capability and on-going improvement in existing
product & technology
Received grants from e&A business 81 patents
and 09 trademarks.
the use of lightweight structural concrete
utilizing by products of flyash leads to
improved fire and thermal resistance, improved
productivity with environment friendly.
Reduction in the optimum binder content of the
mix and improved the strength of the mix by
considerably.
Superpave mix design was found to reduce the
optimum binder content of Dense Bituminous
Macadam (DBM) and Bituminous Concrete (BC)
mixes by 0.5%.
precast connection seismic performance study
helps to optimize the connection cost with
improved safety.
Reduced thickness of RC walls for the desired
fire rating has saved huge quantity of concrete
with increased carpet area for mass housing
projects.
the cycle time required for making each precast
structural element is significantly brought down
by using the high early-age strength concrete
mix
pervious concrete is an economical alternative to
paver concrete blocks and sustainable product
Developed a new resurfacing technology
for bridge decks with light weight concrete,
geotextiles and asphalt concrete
Implemented optimized pavement overlay
solution by LtCRtC and optimization of
conventional concrete mixes for foundation
structures for various ptD project sites
the Casting Gantry is a new generation portable
mould system for casting precast, post-tensioned
I-Beams, designed for the Second Ishwar
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Gupta Setu project, for West Bengal Highway
Development Corporation Ltd.
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epoxy Coated pile Rebar Cage Machine Dia 1.2
m to 2.2 m is an in-house innovation done for
Mechanization of the pile rebar cage fabrication
process.
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economical and cost-effective piles in solar
projects which saves time.
(iii) Information regarding technology imported
during the last 3 years:
S.
No.
Technology
Imported
Year of
Import
Status of absorption
& reasons for non-
absorption, if any
Implementation
of UltraViolet (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.
Implementing MBR
technology for 11 MLD
Stp and 13 MLD Cetp
for BIDKIN Infrastructural
Development project.
Major advantage of MBR
technology includes the
production of high quality
effluent suited to be
discharged to the surface
water or to be utilized for
urban irrigation. Further, it
also offers small footprint,
easy retrofit and upgrade
of old wastewater
treatment plants.
Fully absorbed this
technology and are
implementing the same
with other projects like
318 MLD WWtp at
Coronation pillar, DJB –
Cluster Stps.
a)
UV disinfection
system
2017
b)
MBR (Membrane
Bioreactor)
technology
2017
c)
2017
Vortex Grit
Removal in
Sewage treatment
plant
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S.
No.
Technology
Imported
Year of
Import
Status of absorption
& reasons for non-
absorption, if any
2017
d)
Unistage tire
Building machine
passenger- 12-17
and electrical
platen Heating
System
e)
3D Virtual Reality
Model in Ctp-14
2017
2018
f)
Magnetic Field
Analysis for
Underground
220kV power
cables inside
power Duct
g)
Verse equipment
2019
h)
electrical Storage
System
2019
Indigenized Rubber
processing Machines by
designing, developing
specifications and
adapting to International
customers’ needs.
enhancing the
demonstration capabilities
for the civil components
viz., track, embankment,
bridges, drain, retaining
wall, etc.
electromagnetic Field
for Underground Cables
inside power Duct
with different level
depths for Amaravati
projects has been done
and analyzed which
henceforth concluded
with a satisfactory result,
Field Strength being
under the acceptable
electromagnetic pollution
limit set to protect health
of the public.
Non-destructive
measurement of stress-
free temperature of track.
the electrical Storage
System (eSS) are capable
of storing energy and
powering trains during
failure of traction Supply.
eSS system are also
capable of voltage
stabilization-smoothening
the voltage fluctuation
caused by normal traction
operations.
S.
No.
Technology
Imported
Year of
Import
Status of absorption
& reasons for non-
absorption, if any
(iv) Expenditure incurred on research &
development:
i)
DC traction
System Design
2019
optimization of both
inverter capacity as well
as battery capacity has
been achieved for eSS
system, which is leading
to economies in project
execution.
optimization of ratings of
rectifiers and transformers
using the overload
capacity has also been
developed, which is
leading to economy in
project execution.
Capital
Recurring (includes customer funded of
R 0.08 crore)
Total
total R&D expenditure as a percentage of
total turnover
v crore
2019-20
41.01
198.82
239.83
0.28%
[C] ForEIGN EXCHaNGE EarNINGS aNd oUTGo:
Foreign exchange earned
Foreign exchange saved / deemed exports
Total
Foreign exchange used
v crore
2019-20
10,133.03
54.96
10,187.99
24,947.51
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
annexure ‘B’ to the Board 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, Non-executive Directors and
Independent Directors.
(ii) Executive Management – by the executive Committee (eCom) comprising of the Chief executive officer and
Managing Director, 5 executive Directors, 1 Non-executive Director and a few senior leaders.
(iii) Strategy & operational Management – by the Independent Company Boards of each Independent Company
(IC) (not legal entities) 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 the 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 provides
strategic direction, reviews and approves management’s business objectives and plans.
b. The Group Chairman (GC):
the GC is the Chairman of the Board. His primary role is to provide leadership to the Board and guidance and
mentorship to the Ceo & MD and executive Directors for realizing the approved strategic plan and business
objectives. He presides over the Board and the Shareholders’ meetings.
90
c. Executive Committee (ECom):
the eCom provides a companywide operations review and plays a key role in strengthening linkages between
the ICs and the Company’s Board, as well as in rapidly realizing inter-IC synergies. In addition, the eCom
deliberates upon strategic issues that cut across ICs and Corporate. the agenda includes:
zz
Review of major order prospects (Standalone/ Group) / “Integrated offerings”
zz
Review of consolidated financials including working capital, cash flow, capital structure, etc.
zz
Review of Monthly / Quarterly / Yearly financial performance
zz
Review of Revenue, Capital & Manpower Budget and performance there against
zz
Review and discuss strategic issues which impact the entire organization, viz.,
i.
ii.
International business expansion
IC synergies
iii. HR Update/ talent Management / Service contract extensions for senior management personnel
iv. Digitalization & Analytics initiatives
zz
Approval of common policies
zz
Sharing of best practices, etc.
zz
Strategic plans and business portfolio reviews
d. The Chief Executive officer and Managing director (CEo & Md):
the Ceo & MD is fully accountable to the Board for the Company’s business development, operational
excellence, business results, leadership development and other related responsibilities.
e. Executive directors (Ed) / Senior Management Personnel:
the executive Directors, as members of the Board, along with the Senior Management personnel in the
executive 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.
f. 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, safety, etc., besides providing the Board with valuable inputs.
g.
Independent Company Board (IC Board):
As a part of Lakshya 2016, the Company decided to have Hybrid Holdco Structure. Accordingly, 10
Independent Companies (ICs) were created. During the process of evolving Lakshya 2021, the structure was
reviewed and it was decided to continue with the IC structure with modified mandate. Needless to mention
that the IC structure has enabled the Company to empower people and achieve substantial growth in their
businesses. Looking to the long-term objective of the company, a detailed exercise on perspective planning and
Strategic planning have been undertaken. It is expected to be completed during the current financial year.
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 31st March 2020, the Board comprised of the Group Chairman, the Chief executive officer & Managing
91
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Director, 5 executive Directors, 3 Non-executive Directors (2 representing financial institutions) and 10
Independent Directors, including one Independent Woman Director. the composition of the Board, as on 31st
March 2020, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SeBI
(Listing obligations & Disclosure Requirements) Regulations, 2015 (‘SeBI LoDR Regulations’).
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 whenever 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, 5 meetings were held on 10th May 2019, 23rd July 2019,
30th September 2019, 23rd october 2019 and 22nd January 2020.
the Independent Directors met on 18th May 2020 to discuss, interalia, 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
Chairman / Chief executive officer & Managing Director and circulates the same in advance to the Directors.
every Director is free to suggest inclusion of items on the agenda. the Board meets at least once every quarter,
inter alia, to review the quarterly results. the Company also provides Video Conference facility, if required,
for participation of the Directors at the Board/Committee Meetings. Additional Meetings are held, whenever
necessary. presentations are made on business operations to the Board by Independent Companies / 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 respective Chairman of the Board Committees apprise the
Board Members of the important issues and discussions in the Committee Meetings. Minutes of Committee
meetings are also circulated to the Board.
the Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are
circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors
are also incorporated in the Minutes, in consultation with the Chairman. the minutes are approved and entered
in the minutes book within 30 days of the Board meeting. thereafter, the minutes are signed and dated by the
Chairman of the Board at the next meeting.
the following is the composition of the Board of Directors as on 31st March 2020. the Directors strive to attend
all the Board / Committee meetings. 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. S. N. Subrahmanyan
Mr. R. Shankar Raman
Mr. Shailendra Roy
Mr. D. K. Sen
Mr. M. V. Satish
Mr. J. D. patil
Mr. M. M. Chitale
Mr. Subodh Bhargava
Mr. M. Damodaran
Mr. Vikram Singh Mehta
Mr. Adil Zainulbhai
GC
Ceo & MD
eD
eD
eD
eD
eD
ID
ID
ID
ID
ID
5
5
5
5
5
5
5
5
5
5
5
5
No. of Board
Meetings
attended
4
5
5
5
5
5
5
5
5
3
5
5
attendance at
last aGM
YeS
YeS
YeS
YeS
YeS
YeS
YeS
YeS
YeS
YeS
YeS
No
92
Name of director
Category
Meetings held
during the year
Mr. Akhilesh Gupta &
Mrs. Sunita Sharma (Note 1)
Mr. thomas Mathew t.$
Mr. Ajay Shankar #
Mr. Subramanian Sarma
Ms. Naina Lal Kidwai
Mr. Sanjeev Aga
Mr. Narayanan Kumar
Mr. Arvind Gupta (Note 2) @
Mr. Hemant Bhargava (Note 1)
Meetings held during the year are expressed as number of meetings eligible to attend
Note: 1. Representing equity interest of LIC
ID
NeD
ID
ID
NeD
ID
ID
ID
NeD
NeD
2
5
5
5
5
5
5
5
5
5
No. of Board
Meetings
attended
2
5
5
5
5
5
5
4
5
2
attendance at
last aGM
YeS
YeS
YeS
YeS
YeS
YeS
YeS
YeS
YeS
No
2. Representing equity interest of SUUtI
& - ceased to be a Director w.e.f 8th September, 2019
$ - ceased to be a Director w.e.f. 2nd April 2020
@ - resigned as a Director w.e.f 26th March 2020 pursuant to withdrawal of nomination by SUUtI
# ceased to be a Director w.e.f. 29th May 2020
GC – Group Chairman
eD – executive Director
ID – Independent Director
Ceo & MD – Chief executive officer & Managing Director
NeD – Non-executive Director
1. None of the above Directors are related inter-se.
2. None of the Directors hold the office of director in more than the permissible number of companies under the
Companies Act, 2013 or Regulation 17A of the SeBI LoDR Regulations.
As on 31st March 2020, the number of other Directorships & Memberships / Chairmanships of Committees of
the Board of Directors along with the names of the listed entities (whose equities securities are listed) wherein
the Director holds directorships are as follows:
Name of director
Mr. A. M. Naik
No. of other
company
directorships
5
No. of
Committee
Membership
0
No. of
Committee
Chairmanship
0
Mr. S. N.
Subrahmanyan
Mr. R. Shankar
Raman
5
9
1
6
0
0
Names of other Listed
entities where he
holds directorship
Larsen & toubro Infotech
Limited
L&t technology Services
Limited
Mindtree Limited
Larsen & toubro Infotech
Limited
L&t technology Services
Limited
Mindtree Limited
Larsen & toubro Infotech
Limited
Category of
directorship
Non-executive
Chairman
Non-executive
Chairman
Non-executive
Chairman
Non- executive
Vice- Chairman
Non- executive
Vice- Chairman
Non- executive
Vice-Chairman
Non-executive Director
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Name of director
No. of other
company
directorships
No. of
Committee
Membership
No. of
Committee
Chairmanship
Mr. Shailendra Roy
Mr. D. K. Sen
Mr. M. V. Satish
Mr. J. D. patil
Mr. M. M. Chitale
Mr. Subodh
Bhargava
Mr. M. Damodaran
Mr. Vikram Singh
Mehta
7
2
1
3
6
1
8
6
Mr. Adil Zainulbhai
7
Mrs. Sunita
Sharma
Mr. thomas
Mathew t.*
1
5
1
0
0
0
4
1
4
3
4
0
3
0
0
0
0
3
0
4
1
5
1
2
94
Names of other Listed
entities where he
holds directorship
L&t Finance Holdings
Limited
Mindtree Limited
Category of
directorship
Non-executive Director
Non- executive
Director
Nil
Nil
Nil
Mindtree Limited
essel propack Limited
Atul Limited
Larsen & toubro Infotech
Limited
Bhageria Industries
Limited
Batliboi Limited
Crisil Limited
Hero Motocorp Limited
tech Mahindra Limited
Biocon Limited
Interglobe Aviation
Limited
Colgate-palmolive (India)
Limited
Ht Media Limited
Apollo tyres Limited
Mahindra & Mahindra
Limited
Jubiliant Foodworks
Limited
Reliance Industries
Limited
Network18 Media &
Investment Limited
Cipla Limited
tV18 Broadcast Limited
Nil
Non- executive
Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Chairman-
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Chairman-
Independent Director
Independent Director
Chairman -
Independent Director
L&t Finance Holdings
Limited
ptC India Financial
Services Ltd
Independent Director
Independent Director
Name of director
Mr. Ajay Shankar #
Mr. Subramanian
Sarma
Ms. Naina Lal
Kidwai
Mr. Sanjeev Aga
Mr. Narayanan
Kumar
Mr. Hemant
Bhargava
No. of other
company
directorships
1
1
No. of
Committee
Membership
2
0
No. of
Committee
Chairmanship
0
0
Names of other Listed
entities where he
holds directorship
Nil
Nil
Category of
directorship
4
4
7
3
3
3
2
1
2
2
4
0
Cipla Limited
Independent Director
Max Financial Services
Limited
Larsen & toubro Infotech
Limited
UFo Moviez India
Limited
pidilite Industries Limited
Mahindra Holidays &
Resorts India Limited
L&t technology Services
Limited
Mphasis Limited
take Solutions Limited
entertainment Network
(India) Limited
Bharti Infratel Limited
the tata power
Company Limited
Voltas Limited
ItC Limited
Independent Director
Independent Director
Chairman and
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Chairman -
Independent Director
Independent Director
Independent Director
Nominee Director
Non-executive Director
Non- executive
Director
Notes: * - ceased to be a Director w.e.f. 2nd April 2020
# ceased to be a Director w.e.f. 29th May 2020
zz
zz
other Company Directorships includes directorships in all public limited companies whose equity shares are
listed. However, it excludes private limited companies, foreign companies and Section 8 companies.
the details of Committee Chairmanships / Memberships are disclosed as per Regulation 26 of the SeBI
LoDR Regulations.
c.
Information to the Board:
the Board of Directors has complete access to the information within the Company, which inter alia includes -
zz
Annual revenue budgets and capital expenditure plans
zz
Quarterly results and results of operations of ICs and business segments
zz
Financing plans of the Company
zz Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee,
Stakeholders Relationship Committee and Corporate Social Responsibility Committee
95
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
zz
zz
zz
Details of any joint venture, acquisitions of companies or collaboration agreement or sale of investments,
subsidiaries, assets Quarterly report on fatal or serious accidents or dangerous occurrences, any material
effluent or pollution problems, etc.
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
zz
Developments in respect of human resources/industrial relations
zz
zz
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
Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of
adverse exchange rate movement, if material.
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 regularly presented to the Board.
e. Board Skill Matrix:
the matrix setting out the skills / expertise/competence of the Board of Directors is given below:
Sr.
No
1
2
3
4
Experience / Expertise /
attribute
Comments
Leadership
Industry knowledge and
experience
Ability to envision the future and prescribe a strategic goal for the
Company, help the Company to identify possible road maps, inspire
and motivate the strategy, approach, processes and other such key
deliverables and mentor the leadership team to channelize its energy/
efforts in appropriate direction. Be a thought leader for the Company
and be a role model in good governance and ethical conduct of
business, while encouraging the organization to maximize shareholder
value. Should have had hands on experience of leading an entity at the
highest level of management practices.
Should possess domain knowledge in businesses in which the Company
participates viz. Infrastructure, power, Heavy engineering, Defence,
Hydrocarbon, Financial Services, Information technology and technology
Services. Must have the ability to leverage the developments in the
areas of engineering and technology and other areas as appropriate for
betterment of Company’s business.
experience and exposure in
policy shaping and industry
advocacy
Should possess ability to develop professional relationship with the
policy makers and Regulators for contributing to the shaping of
Government policies in the areas of Company’s businesses.
Governance including legal
compliance
Commitment, belief and experience in setting corporate governance
practices to support the Company’s robust legal compliance systems
and governance policies/practices.
96
Sr.
No
5
Experience / Expertise /
attribute
expertise/experience in
Finance & Accounts / Audit /
Risk Management areas
6
Global experience /
International exposure
Comments
Ability to understand financial policies, accounting statements and
disclosure practices and contribute to the financial/risk management
policies/ practices of the Company across its business lines and
geography of operations.
Ability to have access and understand business models of global
corporations, relate to the developments with respect to leading
global corporations and assist the Company to adapt to the local
environment, understand the geo political dynamics and its relations to
the Company’s strategies and business prospects and have a network of
contacts in global corporations and industry worldwide.
the above list of core skills/expertise/competencies identified by the Board of Directors as required in the
context of its business(es) and sector(s) for it to function effectively, are available with the Board.
the mapping of the Skill Matrix for the FY 2019-20 for all the Directors is as follows:
Sr.
No
1
2
3
4
5
6
7
8
9
Name of the 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. J.D patil
Mr. M.M Chitale
Mr. Subodh Bhargava
10 Mr. M. Damodaran
11 Mr. Vikram Singh Mehta
12 Mr. Adil Zainulbhai
13 Ms. Sunita Sharma
14 Mr. thomas Mathew t *
15 Mr. Ajay Shankar #
16 Mr. Subramanian Sarma
17 Ms. Naina Lal Kidwai
18 Mr. Sanjeev Aga
19 Mr. Narayanan Kumar
20 Mr. Hemant Bhargava
1
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
2
√
√
√
√
√
√
√
X
X
X
√
X
X
X
√
√
X
X
√
X
3
√
√
√
√
X
X
√
√
√
√
√
√
√
√
√
√
√
√
√
√
4
√
√
√
√
√
√
√
√
√
√
X
√
√
√
X
X
√
√
X
√
5
√
√
√
X
X
X
X
√
X
√
X
X
√
√
X
X
√
√
√
√
6
√
√
X
X
√
√
X
X
√
X
√
√
X
X
√
√
X
X
X
X
Notes: * - ceased to be a Director w.e.f. 2nd April 2020
# - ceased to be a Director w.e.f. 29th May 2020
Absence of any skill does not necessarily mean that the Director does not possess the skill.
97
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
F. Board CoMMITTEES
the Board currently has 5 Committees: 1) Audit
Committee, 2) Nomination and 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 in compliance
with the provisions of the Companies Act, 2013,
SeBI LoDR Regulations and are also reviewed 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
Chairperson. 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
the Company constituted the Audit Committee
in 1986, well before it was made mandatory by
law.
i) Terms of reference:
the role of the Audit Committee includes
the following:
zz
zz
zz
zz
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.
Approval of payment to statutory
auditors for any other services rendered
by the statutory auditors.
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.
zz
Reviewing, with the management, the
annual financial statements and the
audit report before submission to the
98
board for approval, with particular
reference to:
1. Matters required to be included
in the Director’s 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, if any.
zz
zz
zz
Reviewing, with the management,
performance of statutory and internal
auditors, and adequacy of the internal
control systems.
zz
zz
zz
zz
zz
zz
zz
zz
zz
zz
zz
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 and
frequency 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.
zz
zz
zz
Reviewing the utilization of loans and/
or advances from/investment in the
subsidiary companies exceeding rupees
100 crore or 10% of the asset size
of the subsidiary, whichever is lower
including existing loans / advances /
investments.
Valuation of undertakings or assets of
the company, wherever it is necessary.
evaluation of internal financial controls
and risk management systems.
zz 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, when necessary.
ii) Composition:
As on 31st March 2020, the Audit
Committee comprised of four Independent
Directors.
iii) Meetings:
During the year ended 31st March 2020, 8
meetings of the Audit Committee were held
on18th April 2019, 9th May 2019, 22nd
July 2019, 21st August 2019, 22nd october
2019, 27th November, 2019, 21st January
2020 and 28th February 2020.
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
No. of
Meetings
Attended
No. of
meetings
held
during
the year
Mr. M. M. Chitale
Chairman
Mr. M. Damodaran
Member
Mr. Sanjeev Aga
Member
Mr. Narayanan Kumar Member
8
8
8
8
8
5
7
8
Meetings held during the year are expressed as number of
meetings eligible to attend.
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
All the members of the Audit Committee are
financially literate and have accounting or
related financial management expertise.
the Chief executive officer & Managing
Director, Whole-time Director & Chief
Financial officer and Head - Corporate
Audit Services are permanent invitees to
the Meetings of the Audit Committee. the
Company Secretary is the Secretary to the
Committee.
iv) Internal audit:
the Company has an internal corporate
audit team consisting of Chartered
Accountants / Cost Accountants and
engineers. over a period , 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
9001:2015 certified. the Head of Corporate
Audit Services is responsible to the Audit
Committee. the staff of Corporate Audit
department is rotated periodically to have
a holistic view of the entire operations and
share the findings and good practices.
the Corporate Audit Services team
carries out theme-based audits (revenue
recognition, It controls, etc.), joint audits
with other Corporate departments for
specific functions, identifies risk-based
focus areas in project audits, benchmarks
the audit processes with large companies,
encourages its team members to obtain
globally renowned CISA, CIA and CFe
Certification, etc. the audit plan is finalized
based on the value of the contract in case of
construction projects and the geographical
spread of the Company. It is ensured that,
on an average, all operations get covered in
a span of two years. the Corporate Audit
Services team has its offices at Mumbai and
Chennai and all overseas audits are shared
between these two zones.
From time to time, the Company’s systems
of internal controls covering financial,
operational, compliance, It applications,
etc. are reviewed by external experts.
presentations are made to the Audit
Committee, on the findings of such reviews.
the Corporate Audit Services team of the
Company also covers the internal audit of all
ICs and Subsidiary Companies. An in-depth
audit is conducted by the team. the major
deviations are highlighted and discussed
with the concerned IC and / or subsidiary
company Boards and the report highlighting
the variations and the suggested corrective
actions are also placed before the Audit
Committee of the Company. Some
subsidiaries have engaged external firms for
conducting internal audit.
2) Nomination & remuneration Committee
(NrC)
the Nomination & Remuneration Committee
was constituted in 1999 even before it was
mandated by law.
i) Terms of reference:
zz
zz
zz
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;
zz
Devise a policy on Board diversity;
zz
zz
zz
zz
zz
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);
Administration of employee Stock
option Scheme (eSoS);
Recommend to the Board, all
remuneration, in whatever form,
payable to senior management.
100
ii) Composition:
As at 31st March 2020, the Committee
comprised of 3 Independent Directors and
the Group Chairman.
iii) Meetings:
During the year ended 31st March
2020, 4 meetings of the Nomination &
Remuneration Committee were held on
10th May 2019, 23rd July 2019, 23rd
october 2019 and 22nd January 2020.
the attendance of Members at the Meetings
was as follows:
Name
Status
Mr. Subodh Bhargava
Chairman
Mr. A. M. Naik
Member
Mr. Adil Zainulbhai
Member
Mr. Thomas Mathew
T. *
Member
No. of
Meetings
Attended
No. of
meetings
held
during
the year
4
4
4
4
4
4
4
4
Meetings held during the year are expressed as number of
meetings eligible to attend.
* ceased to be a member w.e.f. 2nd April 2020
iv) Board Membership Criteria:
While screening, selecting and
recommending to the Board new members,
the Committee ensures that the Board
is objective, there is absence of conflict
of interest, ensures availability of diverse
perspectives, business experience,
legal, financial & other expertise,
integrity, leadership and managerial
qualities, practical wisdom, ability to
read & understand financial statements,
commitment to ethical standards and values
of the Company and there are healthy
debates & sound decisions.
While evaluating the suitability of a Director
for re-appointment, besides the above
criteria, the NRC considers Board evaluation
results, attendance & participation 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 all the applicable provisions of the
SeBI LoDR Regulations. 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 the SeBI
LoDR Regulations.
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 LoDR Regulations.
the Board has taken on record the
declaration and confirmation submitted
by the Independent Directors and after
assessing the veracity of the same, the
Board is of the opinion that the Independent
Directors fulfill the conditions specified
in the SeBI LoDR Regulations and are
independent of the management.
these certificates have been placed on the
website of the Company http://investors.
larsentoubro.com/corporategovernance.aspx.
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
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
based on the overall performance of the
Company, 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
paid sitting fees of R 1,00,000/- per meeting
of the Board and R 50,000/- for Audit
Committee, Nomination and Remuneration
Committee and Risk Management
Committee meetings and R 35,000/- for
Stakeholders Relationship Committee
and Corporate Social Responsibility
Committee meetings during the year to
the Independent Directors / Non-executive
Directors. 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 Group Chairman provides leadership
to Board and guidance and mentorship to
the leadership team for implementing the
strategy plan and business objectives. the
commission to the 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 LoDR Regulations, the criteria
for payment to Independent Directors /
Non-executive Directors is made available on
the investor page of our corporate website
http://investors.larsentoubro.com/Listing-
Compliance.aspx.
Performance Evaluation Criteria for
Independent directors:
the performance evaluation questionnaire
covers qualitative/ subjective criteria’s with
respect to the structure, culture, Board
processes and selection, effectiveness
of the Board and Committees, strategic
decision making, functioning of the Board
and Committees, Committee composition,
information availability, remuneration
framework, familiarization program,
succession planning, adequate participation,
assessment of their independence, etc. It
also contains specific criteria for evaluating
the Chairman and individual Directors.
An external consultant was engaged to
receive the responses of the Directors and
consolidate/analyze the responses.
the Chairman of the Company discusses
the performance evaluation results with the
Chairman of the NRC and interacts with all
the Non-executive Directors & Independent
Directors on a one-to-one basis. the NRC
Chairman also interacts with the executive
Directors.
Members are also requested to refer to
page 77 of the Board Report.
vi) Training & Succession Planning:
the Company has institutionalized
Leadership Development through a Seven
Step leadership pipeline for development
of a robust stage-wise leadership by a
structured process of talent management.
the thrust is on facilitating the
transformation of managers into leaders,
leaders into ‘corporate entrepreneurs
(intrapreneurs)’ and to create a large pool
of leaders who can envision, inspire, and
successfully deploy global growth strategies
thus creating a result-oriented culture of
multiplying value.
each step of this Leadership pipeline
development process has been meticulously
customized to equip managers at various
levels, with the required knowledge, skill
& mind-set to transition seamlessly to
the next level of leadership and global
entrepreneurship. In this effort, the
Company has partnered with globally
renowned senior faculty and premier
institutes like Harvard Business School,
INSeAD, IIM Ahmedabad, and Stephen
102
M. Ross School of Business- University of
Michigan. the programs are designed to
provide inputs on vital areas of strategic
importance such as innovation-based
strategies, integrated business models
to take on global multinationals, cross-
cultural challenges, organic and inorganic
growth etc., and thus mark an important
milestone in the journey towards leadership
development in the global context.
to facilitate enhanced global acumen &
international exposure, which are critical
competencies for establishing a global
footprint, the Company continues to
nominate select senior leaders for Advanced
Management programs offered by globally
renowned business schools like INSeAD,
Wharton, Harvard, IMD, London Business
School, oxford and the likes. As a part
of Leadership development at the top
echelons of the organization, a structured
& systematic approach to mentoring has
been initiated to leverage on the leadership
experiences & networks of senior leaders
and to enable them to leave a legacy of
success mantras.
In order to continuously monitor the
progress of high potentials (HIGH potS)
who go through the Seven Step Leadership
Development process and to ensure that
they are given challenging roles and
responsibilities, a top talent Management
System is also put in place which is essential
to ensure progress of a strong leadership
pipeline.
to ensure that the Company has sufficient
pool of probable employees who can be
nominated for Leadership pipeline, efforts
are taken at the grass root level. there
exist several structured core developmental
programs, conducted by reputed institutions
like IIM-Bangalore, IIM-Calcutta, XLRI,
Symbiosis and NMIMS for deserving
employees to develop superior management
skills and capabilities. A host of strategic
and behavioral programs are conducted to
address specific training and developmental
needs of employees. A comprehensive
e-learning portal AtL (Any time Learning) is
available with multiple on-line programs and
courses for employees to enable learning ‘at
any time, at any place’ at locations remote
or otherwise. the portal provides access to
on-line data bases, references, management
videos, e-books and journals.
the NRC reviews on a periodic basis the
succession planning process being followed
by the Company especially at the level of
the Board and senior management.
vii) details of remuneration paid / payable
to directors for the year ended 31st
March 2020:
(a) Executive directors:
the details of remuneration paid /
payable to the executive Directors for
FY 2019-20 is as follows:
v crore
Total
Retirement
Benefits
Commission
Names
Salary
Perquisites Perquisites
related to
ESOP*
12.175
0.272
-
9.008
5.885
0.180
1.830
2.592
3.132
2.083
0.180
1.710
3.229
13.207
27.179
Mr. S. N.
Subrahmanyan
Mr. R. Shankar
Raman
Mr. Shailendra
N. Roy
4.469
Mr. D. K. Sen
5.779
Mr. M. V. Satish
Mr. J. D. Patil
5.086
*Represents perquisite value related to ESOPs exercised during
the year in respect of stock options granted over the past several
years by Larsen & Toubro Infotech Limited and L&T Technology
Services Limited.
0.180
0.225
0.180
1.350
1.350
1.140
0.912
1.181
1.043
2.027
3.023
2.723
1.373
3.374
6.637
-
-
-
zz
zz
zz
zz
Notice period for termination of
appointment of Chief executive
officer & Managing Director and
other Whole-time Directors is six
months on either side.
No severance pay is payable on
termination of appointment.
Details of options granted under
employee Stock option Schemes
are provided on the website of the
Company www.larsentoubro.com.
Apart from eSops of the Company,
Mr. S. N. Subrahmanyam has
also been vested 40,000 stock
options in Larsen & toubro Infotech
Limited and L&t technology
Services Limited each and he has
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
exercised the same. Similarly, Mr.
R. Shankar Raman has been vested
20,000 stock options in Larsen
& toubro Infotech Limited and
he has exercised the same. the
perquisite amount on exercise of
these options is considered as a
part of the remuneration/ of these
Directors.
zz
Considering the impact of Covid-
19 on the business, the executive
Directors have taken a voluntary
reduction of 50% on the entitled
commission.
(b) Non-Executive directors:
the details of remuneration paid /
payable to the Non-executive Directors
for the year 2019-20 is as follows:
Names
Commission
Others^
v crore
Total
Sitting
Fees for
Board
Meeting
0.040
Sitting
Fees for
Committee
Meeting
0.020
–
–
–
–
–
–
–
3.100
0.050
0.050
0.030
0.392
0.315
0.020
0.004
0.020
0.240
0.050
0.050
3.022
0.020
0.025
0.047
0.180
0.058
0.433
0.050
0.014
Mr. A. M. Naik
Mr. M. M. Chitale
Mr. Subodh Bhargava
Mr. M. Damodaran
Mr. Vikram Singh
Mehta
Mr. Adil Zainulbhai
Mr. Akhilesh Gupta *
Mrs. Sunita Sharma
Mr. Thomas Mathew
T. &
Mr. Ajay Shankar $
Mr. Subramanian
Sarma
Ms. Naina Lal Kidwai
Mr. Sanjeev Aga
Mr. Narayanan Kumar
Mr. Arvind Gupta @
Mr. Hemant Bhargava
Notes: ^ Others include pension of R 3 crore and perquisite
0.191 #
0.023 #
0.145 #
0.014
0.237
0.020
0.050
0.145
0.273
0.198
0.274
0.050
0.040
0.020
0.050
0.050
0.040
0.050
0.035
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6.182
0.489
0.503
0.235
0.294
0.385
0.078
0.255
0.344
0.337
–
0.195
0.322
0.278
0.195
0.043
value of medical R 0.022 crore
* ceased to be a Director w.e.f. 8th September 2019
@ resigned as a Director w.e.f. 26th March 2020 pursuant to
withdrawal of nomination by SUUTI
& ceased to be a Director w.e.f. 2nd April 2020
$ ceased to be a Director w.e.f. 29th May 2020
# Payable to respective Institutions they represent.
104
Details of shares and convertible
instruments held by the Non-executive
Directors as on 31st March 2020 are as
follows:
Names
No. of Shares held
Mr. A. M. Naik
Mr. M. M. Chitale
Mr. Subodh Bhargava
Mr. M. Damodaran
Mr. Vikram Singh Mehta
Mr. Adil Zainulbhai
Mr. Sanjeev Aga
Mr. Thomas Mathew T.
Mr. Subramanian Sarma
Mr. Narayanan Kumar
Mrs. Sunita Sharma *
Mr. Ajay Shankar
Ms. Naina Lal Kidwai
Mr. Hemant Bhargava *
Mr. Hemant Bhargava
4,24,958
2,443
1,125
225
1,327
150
4,500
150
94,650
1,500
100
150
150
100
90
* held jointly with the Institution they represent.
3) Stakeholders’ relationship Committee:
i) Terms of reference:
the terms of reference of the Stakeholders’
Relationship Committee are as follows:
zz
zz
zz
Resolving the grievances of the security
holders of the company including
complaints related to transfer/
transmission of shares, non-receipt of
annual report, non-receipt of declared
dividends, issue of new/duplicate
certificates, general meetings etc.
Review of measures taken for
effective exercise of voting rights by
shareholders.
Review of adherence to the service
standards adopted by the Company
in respect of various services being
rendered by the Registrar & Share
transfer Agent.
zz
Review of the various measures and
initiatives taken by the Company for
reducing the quantum of unclaimed
dividends and ensuring timely receipt
of dividend warrants/annual reports/
statutory notices by the shareholders of
the company.
ii) Composition:
As on 31st March 2020 the Stakeholders’
Relationship Committee comprised of 1
Non-executive Director, 1 Independent
Director and 1 executive Director.
iii) Meetings:
During the year ended 31st March 2020, 4
meetings of the Stakeholders’ Relationship
Committee were held on 10th May 2019,
28th June 2019, 23rd october 2019 and
22nd January 2020.
the attendance of Members at the Meetings
was as follows-
Name
Status
No. of
Meetings
Attended
No. of
meetings
held
during
the year
Mrs. Sunita Sharma
Chairperson
Mr. Ajay Shankar $
Mr. Shailendra Roy
Member
Member
4
4
4
4
4
4
Meetings held during the year are expressed as number of
meetings eligible to attend.
$ - ceased as a Member w.e.f. 29th May 2020
Mr. N. Hariharan, Company Secretary was
the Compliance officer till 1st January 2020.
Mr. Sivaram Nair A, Company Secretary is
the Compliance officer with effect from 2nd
January 2020.
iv) Number of requests / Complaints:
During the year, the Company has resolved
investor grievances expeditiously except for
the cases constrained by disputes or legal
impediments.
During the year, the Company / its
Registrar’s received the following complaints
from SeBI / Stock exchanges and queries
from shareholders, which were resolved
within the time frames laid down by SeBI.
Particulars
Opening
Balance
Received Resolved Pending*
Complaints:
SEBI / Stock
Exchange
Shareholder
Queries:
Dividend
Related
Transmission /
Transfer
16
97
112
1
500
12006
12495
11
164
2325
2489
0
4
Demat / Remat
132
1914
2042
* Investor complaints / queries shown outstanding as on
31st March 2020 have been subsequently resolved to
the complete satisfaction of the investors. The Company
repeatedly sends reminders to shareholders regarding
unclaimed shares and dividends. This results in an increase
in the number of queries received.
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 14 meetings during the
year and approved the transfer of shares
lodged with the Company. pursuant to SeBI
press releases dated 3rd December 2018
and 27th March, 2019, except in case of
transmission or transposition of securities,
requests for effecting transfer of securities
subsequent to 1st April 2019, have not
been processed by the Company unless the
securities were held in the dematerialized
form with a depository.
4) Corporate Social responsibility 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
105
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
(c) monitor the Corporate Social
Responsibility policy of the Company
from time to time.
ii) Composition:
As on 31st March 2020, the CSR Committee
comprised of 1 Independent Director and 2
executive Directors.
iii) Meetings:
During the year ended 31st March 2020, 3
meetings of the CSR Committee were held
on 9th August 2019, 11th December 2019
and 11th March 2020.
the attendance of Members at the Meetings
was as follows-
Name
Status
No. of
Meetings
Attended
No. of
meetings
held
during
the year
Mr. Vikram Singh Mehta
#
Chairman
Mr. M. M. Chitale *
Chairman
Mr. R. Shankar Raman
Member
Mr. D. K. Sen
Member
1
2
3
3
1
2
2
2
Meetings held during the year are expressed as number of
meetings eligible to attend.
# ceased to be a member w.e.f. 11th December 2019
* appointed as Chairman w.e.f. 11th December 2019
iv) CSr activities & Impact assessment:
the Company, through its CSR Committee,
is committed to improve the social
infrastructure of the country. the Company
is leveraging its countrywide presence to
reduce disparities through interventions in
Water and sanitation, Healthcare, education
and Skill building. Close interactions with
the local community members have enabled
the Company to identify and address
their most pressing needs and the social
interventions for community development
have been specifically aligned.
106
Under flagship program of “Integrated
Community Development” (ICD), the
Company has launched programs towards
holistic development in the following areas
based on need assessment:
zz Water & Sanitation: For the availability
of safe drinking water and proper
sanitation facilities
zz
zz
zz
education: to improve access to
education (increased enrollment
in pre-school, children attending
neighborhood schools) and improving
quality of learning (better school
infrastructure, better teaching-learning
process)
Health: Improvement in access
to quality health care (expanding
infrastructure of health centres,
increased number of people availing
quality health care)
Skill development: enhancing
employability of youth (enhancing
training capacity, improved
infrastructure of skill development
centres).
102 Village Development Committees
(VDCs) and Farmers Groups have been
formed across locations, with participation
from women. A quarterly review of the ICD
projects is done with the village panchayats
and local authorities.
Access to cleaner water, hygienic
surroundings, better health, education and
new skills, has altered the lives of around
0.77 million individuals through our CSR
programs in 2019-20.
All CSR projects have defined goals and
milestones which are tracked as per the
periodicity defined for the project. the
progress is compared with the baseline data
that is gathered before the commencement
of the project. this is carried out through
an onsite evaluation as well as the reports
generated from the project. the indirect
impacts that accrue are also factored and
documented in the monthly reporting
process. these are subsequently vetted /
measured during the external Social Audit or
Impact Assessment. the social audit report is
discussed during the Committee meetings.
the detailed disclosures of CSR spending
during the year has been given in Annexure
‘C’ forming part of this Board Report. please
refer to pages 126 to 131 of this Annual
Report.
5) risk Management Committee:
the Company has re-constituted the Risk
Management Committee on 22nd January 2020
and renamed it as ‘Board Risk Management
Committee (BRMC)’. the erstwhile Apex Risk
Management Committee continues to exist and
reviews the operational risks including client
quality, manpower availability, logistics and
other aspects which impact the Company and
the Group.
i) Terms of reference:
the terms of reference of the Board Risk
Management Committee are as follows:
zz
Review of the existing Risk
Management policy, framework and
processes, Risk Management Structure
and Risk Mitigation Systems. Broadly,
the key risks will cover strategic risks
of the group at the domestic and
international level, including Sectoral
developments, risk related to market,
financial, geographical, political and
reputational issues, environment, Social
and Governance (eSG) risks, etc.
zz
evaluate risks related to cyber security.
ii) Composition:
As on 31st March 2020, the Board Risk
Management Committee comprised of 2
Independent Directors and 1 Non-executive
Director.
iii) Meetings:
During the year ended
31st March 2020, 6 meetings of the
Apex Risk Management Committee were
held on 16th May 2019 (two meetings),
27th May 2019, 25th July 2019 and
25th october 2019 (two meetings).
the attendance of Members at the Meetings
was as follows-
Name
Status
Mr. S. N. Subrahmanyan Chairman
Mr. R. Shankar Raman
Member
Mr. Subramanian Sarma Member
No. of
meetings
held
during the
year
6
6
6
No. of
Meetings
Attended
6
5
4
Meetings held during the year are expressed as number of
meetings eligible to attend.
Note : The Board Risk Management Committee
comprising of Mr. Adil Zainulbhai, Sanjeev Aga and Mr.
Subramanian Sarma as Members was constituted on
January 22, 2020. Mr. Adil Zainulbhai is the Chairman of
the Committee. No meetings were held in FY 2020.
G. oTHEr INForMaTIoN
a) directors’ Familiarization Program:
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 wherever 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.
presentations are made regularly to the Board /
NRC / Audit Committee (AC) (minutes of AC,
NRC, SRC and CSR Committee are circulated
to the Board). 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.
the Directors get an opportunity to interact
with senior managers during the course of these
presentations.
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 (IC) / Business
Unit, to the Board.
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Some of the Independent Directors are members
of the IC Board. they share the learnings
from these meetings with the remaining Non-
executive Directors / Independent Directors
formally and informally. Such interactions also
happen when these Directors meet senior
management in IC meetings and informal
gatherings.
As part of the appointment letter issued to
Independent Directors, the Company has
stated that it will facilitate attending seminars/
programs/conferences designed to train directors
to enhance their role as an Independent Director.
this information is also available on the website
of the Company http://investors.larsentoubro.
com/Listing-Compliance.aspx.
b) risk Management Framework:
please refer to page 75 of the Board Report.
c) Vigil Mechanism / Whistle Blower Policy:
the Company has a Whistle Blower policy in
place since April 2004. the said policy was
modified in line with the requirements of the
Vigil Mechanism under the Companies Act,
2013. the Company has a Whistle Blower
Investigation Committee (WBIC) to manage
complaints from “Identified” Whistle Blowers.
In addition, WBIC considers “Anonymous”
complaints which in their judgement are serious
in nature and require investigation. the WBIC
has five members viz. Chief Financial officer,
Company Secretary, Head-Corporate HR, Chief
Internal Auditor and a senior executive. the
WBIC is responsible for end to end management
of the investigations from receipt of complaints
to bringing them to a logical conclusion, keeping
in mind the interest of the Company.
employees are encouraged to report any acts
of unacceptable behaviour inconsistent with
the Company’s Code of Conduct having an
adverse effect on the Company’s financials /
image and instances of sharing of unpublished
price sensitive information. An employee can
report any such conduct in oral or written form.
Whistle-blowers are assured by the management
of full protection from any kind of harassment,
retaliation, victimization or unfair treatment.
Complaints under the Whistle Blower policy are
received by the Corporate Audit Services of the
Company. the Chief Internal Auditor reviews
the same and convenes a meeting of the WBIC
for discussions. the WBIC, after screening
the complaint, decides on the further course
of action which will include requesting the
complainant to provide further details, internal
investigation by the Internal Audit department,
investigation by external agencies, wherever
necessary, opportunity to the defendant to
present his / her case, etc. Based on the findings
of the investigation, the WBIC decides the action
to be taken and recommends the same to the
executive Committee for implementation.
the WBIC meets formally and reviews the
complaints and their progress. In addition,
discussions also take place over video-
conferencing, telephone and emails amongst the
WBIC members.
the Audit Committee is periodically briefed
about the various cases received, the status of
the investigation, findings and action taken, if
any.
During the year, the Company has investigated
the complaints received under the Whistle
Blower policy and suitable action has been taken
against employees, wherever necessary.
Also refer to pages 78 and 79 of the Board Report.
d) Statutory auditors:
In the case of appointment of new auditors, a
Committee, comprising of the Chairman of the
Audit Committee, the CFo and the Company
Secretary, evaluates various audit firms based
on approved criteria as given herein below. the
Audit firms are required to make a presentation
to this Committee. the Committee considers
factors such as compliance with the legal
provisions, number / nature / size and variation
in client base, skill sets available in the firm both
at partner level and staff level, international
experience, systems and processes followed by
the firm, training and development by the firm
to its partners and staff, etc. during the process
of evaluation. Based on merit and the factors
mentioned above, the Committee finalizes the
firm to be appointed and recommends the same
108
to the Audit Committee. The Audit Committee
reviews the same before recommending to the
Board and shareholders for approval.
The above process was followed by the
Company while re-appointing M/s Deloitte
Haskins & Sells LLP (‘DHS’) as the Auditors of the
Company for second and final term of five years
in 2020.
Deloitte Haskins & Sells LLP, registered since
1983, is one of the member firms of Deloitte
Touche Tohmatsu Limited, a UK private company
limited by guarantee (“DTTL”). Each DTTL
member firm provides services in particular
geographic areas and is subject to the laws and
professional regulations of the particular country
or countries in which it operates.
Deloitte Haskins & Sells LLP tied up with CC
Chokshi & Co in 1983 which was one of the
largest Indian Independent audit and accounting
firms. After that, it merged with Fraser & Ross,
PC Hansotia & Co and later with SB Billimoria
(SBB) in 1999. In 2004, AF Ferguson & Co (one
of India’s oldest audit firm) merged into existing
DHS firms.
Deloitte is now a global network with circa
286,000 people with revenues over $43
billion. Deloitte India has more than 10,000
professionals operating out of 13 cities –
Ahmedabad, Bangalore, Vadodara, Chennai,
Coimbatore, Goa, Gurgaon, Hyderabad,
Jamshedpur, Kochi, Kolkata, Mumbai and Pune
providing professional services in the areas
of Audit, Risk Advisory, Tax, Consulting, and
Financial Advisory services to public and private
clients spanning multiple industries. It draws its
strength from its people, which include 2,500+
professionals in Audit, 2,350 + in Tax, 1,900+ in
Consulting, and 1000+ in Financial Advisory.
For the financial year 2019-20, the total fees
paid by the Company and its subsidiaries, on
a consolidated basis, to Deloitte Haskins &
Sells LLP, Statutory Auditor and all entities in
the network firm/network entity of which the
statutory auditors are a part thereof for all the
services provided by them is R 12.91 crore.
Also refer to page 79 of the Board Report.
e) Code of Conduct:
The Company has laid down a Code of
Conduct for all Board members and senior
management personnel. The Code of Conduct
is available on the website of the Company
www.larsentourbo.com. The declaration of the
Chief Executive Officer & Managing Director is
given below:
To the Shareholders of Larsen & Toubro Limited
Sub: Compliance with Code of Conduct
I hereby declare that all the Board Members and Senior
Management Personnel have affirmed compliance
with the Code of Conduct as adopted by the Board of
Directors and Senior Management Personnel.
S. N. Subrahmanyan
Chief Executive Officer & Managing Director
Date: 5th June, 2020
Place: Mumbai
f) General Body Meetings:
The last three Annual General Meetings of the
Company were held as under:
Date
Financial
Year
2018-2019 1st August,
2019
2017-2018 23rd August
2018
2016-2017 22nd August
2017
Venue
Time
Birla Matushri
Sabhagar
Birla Matushri
Sabhagar
St. Andrews
Auditorium
3.00 p.m.
3.00 p.m.
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 1st August
2019:
zz
zz
zz
To re-appoint Mr. M. M. Chitale as an
Independent Director of the Company for a
five year term upto March 31, 2024.
To re-appoint Mr. M. Damodaran as an
Independent Director of the Company for a
five year term upto March 31, 2024.
To re-appoint Mr. Vikram Singh Mehta as an
Independent Director of the Company for a
five year term upto March 31, 2024.
109
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
zz
zz
zz
to re-appoint Mr. Adil Zainulbhai as an
Independent Director of the Company for a
five year term upto May 28, 2024.
to amend the object clause of the
Memorandum of Association of the
Company
to approve raising of capital through QIp’s
by issue of shares / convertible debentures
/ securities upto an amount of USD 600
million or R 4,000 crore.
Annual General Meeting held on 23rd August
2018:
zz
zz
to appoint Mr. A.M. Naik as a Non-
executive Director of the Company with
effect from 1st october 2017 who has
attained the age of 75 years.
to approve the payment of remuneration
to Mr. A.M. Naik, being in excess of fifty
percent of the total annual remuneration
payable to all the Non-executive Directors.
zz
to approve raising of finances through issue
of debentures upto R 6000 crore.
Annual General Meeting held on 22nd August
2017:
zz
zz
to re-appoint Mr. Subodh Bhargava as an
Independent Director of the Company for a
five year term upto 29th March 2022.
to approve raising of capital through QIp’s
by issue of shares / convertible debentures
/ securities upto an amount of USD 600
million or R 4,000 crore.
zz
to approve raising of finances through issue
of debentures upto R 6000 crore.
Note : the resolution relating to raising of
finances have been taken at each of the above
AGMs since the validity of the resolution is one
year.
g) resolution(s) passed through Postal Ballot:
No postal ballot was conducted during the
financial year 2019-20. there is no immediate
proposal for passing any resolution through
postal ballot.
h) disclosures:
1. During the year, there were no transactions
of material nature with the Directors or the
Management or relatives or the subsidiaries
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 IND AS 24 and the same are given
in Note 47 forming part of the financial
statements.
3. the Company has followed all relevant
Accounting Standards notified by the
Companies (Indian Accounting Standards)
Rules, 2015 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 are provided to the Stock
exchanges and also available on our
website http://investors.larsentoubro.com/
Announcements.aspx.
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 policies for determining material
subsidiaries and related party transactions
are available on our website http://investors.
larsentoubro.com/Listing-Compliance.aspx.
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 331 to 334 of this Annual
Report.
8. As required under the provisions of SeBI
LoDR Regulations, a certificate confirming
that none of the Directors on the Board
have been debarred or disqualified by the
Board/Ministry of Corporate Affairs or any
such statutory authority obtained from M/s
S. N. Ananthasubramanian & Co., Company
Secretaries is a part of the Corporate
Governance report.
110
9. Details in relation to the Sexual Harassment
of Women at Workplace (prevention,
prohibition and Redressal) Act, 2013 form
a part of the Board Report. please refer to
pages 77 and 78 of this Annual Report.
i) Means of communication:
Annual Report
and Annual
General Meeting
Financial Results
and other
Communications
News Releases
Website
Filing with Stock
exchanges
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.
Advertisements relating to
IepF, e-Voting, AGM related
compliances, etc. are published
in the Financial express &
Loksatta.
official news releases are sent
to stock exchanges as well as
displayed on the Company’s
website: www.larsentoubro.com.
the Company’s corporate
website www.larsentoubro.
com provides comprehensive
information about its portfolio
of businesses. Section on
“Investors” serves to inform and
service the Shareholders allowing
them to access information at
their convenience. 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 would
also be made available on the
websites of the Stock exchanges.
Information to Stock exchanges
is now being also filed online on
NeApS for NSe, BSe online for
BSe and RNS for London Stock
exchange.
Annual Report is circulated to
all the members and all others
like auditors, equity analysts,
etc. In order to enable a larger
participation of shareholders for
the Annual General Meeting,
the Company has provided
Webcast facility of its last
three Annual General Meeting
in co-ordination with NSDL/
Kfintech. this year, due to
CoVID pandemic, the Company
will be conducting the Annual
General Meeting through Audio
Visual Means, as permitted by
Ministry of Corporate Affairs
and SeBI. the Annual Report
is sent to all members who
have registered their email
ids with the Company. the
Company suitably responds to
the queries, if any, raised by the
shareholders.
Investor complaints are
processed at SeBI in a centralized
web-based complaints redress
system. the salient features
of this system are centralised
database of all complaints,
online upload of Action taken
Reports (AtRs) by concerned
companies and online viewing
by investors of actions taken on
the complaints and their current
status.
this forms a part of the Annual
Report which is mailed to the
shareholders of the Company.
the schedule of analyst /
institutional investor meets and
presentations made to them on
a quarterly basis are informed
to the Stock exchanges and also
displayed on the website.
SeBI Complaints
Redress System
(SCoReS):
Management
Discussion &
Analysis
presentations
made to
Institutional
Investors and
Analysts
H. UNCLaIMEd SHarES
the Company does not have any unclaimed shares
lying with it from any public issue. However certain
shares resulting out of the bonus shares issued by
111
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
the Company are unclaimed by the shareholders. As
required under Regulation 39(4) of the SeBI LoDR
Regulations, 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.
In accordance with the provisions of the Section
124(6) and Rule 6(3)(a) of the Investor education
and protection Fund Authority (Accounting, Audit,
transfer and Refund) Rules, 2016 (‘IepF Rules’), the
Company has transferred equity shares on which
dividend has remained unclaimed for a period of
seven consecutive years from the financial year
2011-12. the details are given in the Board Report.
please refer to page 72 of this Annual Report.
All corporate benefits on such shares viz. bonus
shares, etc. shall be transferred in accordance
with the provisions of IepF Rules read with Section
124(6) of the Companies Act, 2013. the eligible
shareholders are requested to note the same and
make an application to IepF Authority in accordance
with the procedure available on www.iepf.gov.in and
submit such documents as prescribed under the IepF
Rules to claim these shares. Mr. Sivaram Nair A., has
been appointed as the Nodal officer of the Company.
I. GENEraL SHarEHoLdErS’ INForMa TIoN
a) annual General Meeting:
the Annual General Meeting of the Company
has been convened on thursday, 13th August
2020 through Video Conferencing (“VC”) /
other Audio Visual Means (“oAVM”) pursuant
to the MCA Circular dated May 5, 2020 at
3.30 p.m.
b) Financial calendar:
1.
2.
Annual Results of
2019-20
E-Mailing of Annual
Reports
3. First Quarter Results
5th June 2020
fourth week of July 2020
During the fourth week of
July 2020 *
4.
Annual General Meeting
Thursday, 13th August 2020
5. Payment of Dividend
17th August 2020
112
6.
Second Quarter results
7. Third Quarter results
During third week of October
2020 *
During third week of January
2021 *
* Tentative
c) Book Closure:
the dates of Book Closure are from 7th day
of August 2020 to 13th day of August 2020
(both days inclusive) to determine the members
entitled to the dividend for financial year
2019-2020.
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 admitted for trading on London Stock
exchange.
e) Listing Fees to Stock Exchanges:
the Company has paid the Listing Fees for the
year 2020-21 to BSe in May 2020. the Fees to
Luxembourg Stock exchange has been paid in
March, 2020. the Company is in the process of
payment of Listing fees to NSe. Fees to London
Stock exchange will be paid on receipt of the
bill.
f) Custodial Fees to depositories:
the Company has made payment of custodial
fees for the year 2020-21 to National Securities
Depository Limited (NSDL). the fees to Central
Depository Services (India) Limited (CDSL) shall
be paid on the receipt of their invoice.
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)
National Stock Exchange of India
Limited (NSE)
ISIN
Reuters RIC
Luxembourg Exchange Stock Code
London Exchange Stock Code
: Scrip Code - 500510
: Scrip Code - LT
INE018A01030
:
: LART.BO
: 005428157
: 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.
h) Stock market data for the year 2019-20:
Month
L&T BSE Price (v)
BSE SENSEX
2019
April
May
June
July
High
Low Month
Close
High
Low
Month
Close
1427.00
1337.30
1347.75 39487.45 39083.16 39031.55
1606.70
1284.90
1557.95 40124.96 39500.56 39714.20
1584.70
1495.00
1553.05 40312.07 40031.05 39394.64
1591.60
1361.20
1387.15 40032.41 39858.33 37481.12
August
1399.00
1274.10
1328.10 37807.55 37449.69 37332.79
September 1554.05
1289.10
1476.60 39441.12 38913.06 38667.33
October
1495.95
1382.00
1473.40 40392.22 40054.89 40129.05
November 1481.00
1315.05
1330.60 41163.79 40996.08 40793.81
December
1342.40
1255.60
1298.95 41809.96 41636.11 41253.74
2020
January
1376.35
1283.60
1369.10 42273.87 41850.29 40723.49
February
1383.85
1162.35
1183.00 41709.30 41338.31 38297.29
March
1211.50
661.05
806.85 39083.17 38386.68 29468.49
)
V
(
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 (v) BSE SENSEX
Apr
19
May
19
Jun
19
Jul
19
Oct
19
Sep
19
Nov
Aug
19
19
Daily Closing Price
Dec
19
Jan
20
Feb
20
Mar
20
45000
42500
40000
37500
35000
32500
X
E
S
N
E
S
E
S
B
30000
27500
25000
Month
L&T NSE Price (v)
NIFTY
High
2019
1426.95
April
1607.00
May
1585.00
June
1591.65
July
August
1399.40
September 1551.00
Low Month
Close
Low
High
Month
Close
1348.55 11856.15 11549.10 11748.15
1557.55 12041.15 11108.30 11922.80
1553.20 12103.05 11625.10 11788.85
1387.30 11981.75 10999.40 11118.00
1328.25 11181.45 10637.15 11023.25
1474.25 11694.85 10670.25 11474.45
1336.60
1285.30
1495.25
1360.50
1274.00
1289.10
Month
L&T NSE Price (v)
NIFTY
High
2019
October
1496.45
November 1481.05
1342.90
December
2020
January
February
March
1377.00
1383.70
1212.35
Low Month
Close
Low
High
Month
Close
1473.05 11945.00 11090.15 11877.45
1330.55 12158.80 11802.65 12056.05
1298.20 12293.90 11832.30 12168.45
1381.05
1314.15
1255.00
1283.35
1162.00
661.00
1369.30 12430.50 11929.60 11962.10
1187.55 12246.70 11175.05 11201.75
8281.10
808.50 11433.00
7511.10
)
V
(
E
S
N
-
T
&
L
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
Stock Performance
L&T NSE (v) NSE NIFTY
Apr
19
May
19
Jun
19
Jul
19
Oct
19
Sep
19
Nov
Aug
19
19
Daily Closing Price
Dec
19
Jan
20
Feb
20
Mar
20
13000
12400
11800
11200
10600
10000
9400
8800
8200
7600
7000
Y
T
F
I
N
E
S
N
i) registrar and Share Transfer agents (rTa):
KFin technologies private Limited.
(previously known as Karvy Fintech pvt. Ltd)
Unit: Larsen & toubro Limited
Karvy Selenium tower B, plot number 31 & 32
Financial District Gachibowli, Nanakramguda,
Hyderabad, telangana - 500 032.
j) Share Transfer System:
pursuant to SeBI press releases dated 3rd
December 2018 and 27th March, 2019, except
in case of transmission or transposition of
securities, requests for effecting transfer of
securities subsequent to 1st April 2019, shall
not be processed by the Company unless the
securities are held in the dematerialized form
with a depository. the share related information
is available online.
physical shares received for dematerialization are
processed and completed within a period of 21
days from the date of receipt.
As required under Regulation 40 of the
SeBI LoDR Regulations, a certificate on half
yearly basis confirming due compliance of
113
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
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 31st
March 2020:
No. of Shares
upto 500
501 - 1000
1001 - 2000
2001 - 3000
3001 - 4000
4001 - 5000
5001 - 10000
10001 and
above
TOTAL
Shareholders
Number
1151553
49109
27503
9223
3894
2600
4162
3525
%
92.01
3.92
2.20
0.74
0.31
0.21
0.33
0.28
Shareholding
Number
93052806
35956148
38286378
22478536
13468576
11685610
28911529
1160052439
%
6.63
2.56
2.73
1.60
0.96
0.83
2.06
82.63
1251569 100.00
1403892022
100.00
l) Categories of Shareholders is as under:
Category
31.03.2020
31.03.2019
No. of
Shares
%
No. of
Shares
%
Financial Institutions
25,73,31,891
18.33
30,15,15,029
21.49
Foreign Institutional
Investors
23,43,64,607
16.69
26,22,44,271
18.70
Shares underlying GDRs
1,72,96,884
1.23
2,28,26,592
1.63
Mutual Funds
26,60,38,659
18.95
22,89,29,940
16.32
Bodies Corporate
9,62,45,948
Directors & Relatives
15,62,000
6.86
0.11
9,01,82,021
15,76,870
6.43
0.11
L&T Employees Trust
18,55,24,682
13.22
17,21,28,421
12.27
General Public
34,55,27,351
24.61
32,33,26,241
23.05
TOTAL
140,38,92,022 100.00 140,27,29,385 100.00
Categories of Shareholders
as on March 31, 2020
General
Public
24.61%
L&T
Employees
Trust
13.22%
Directors &
Relatives
0.11%
Bodies
Corporate
6.86%
Mutual
Funds
18.95%
Financial
Institutions
18.33%
Foreign
Institutional
Investors
16.69%
Shares
underlying
GDRs
1.23%
114
m) dematerialization of shares & Liquidity:
the Company’s Shares are required to be
compulsorily traded in the Stock exchanges in
dematerialized form.
the number of shares held in dematerialized
and physical mode as on 31st March, 2020 is as
under:
No. of shares
Held in dematerialized form in NSDL
Held in dematerialized form in CDSL
Physical
Total
131,81,07,545
6,71,89,195
1,85,95,282
140,38,92,022
% of
total
capital
issued
93.89
4.79
1.32
100.00
Shares held in demat / Physical Form
as on March 31, 2020
CDSL
6,71,89,195
4.79%
Physical
1,85,95,282
1.32%
NSDL
131,81,07,545
93.89%
n)
outstanding Gdrs / adrs / Warrants or any
Convertible Instruments, conversion date
and likely impact on equity:
the outstanding GDRs are backed up by
underlying equity shares which are part of the
existing paid-up capital.
the details of Foreign Currency Convertible
Bonds is as follows:
(i)
(ii)
0.675% USD 200 million Foreign Currency Convertible
Bonds due 2020
Principal Value of the Bonds issued
Principal Value of Bonds converted to
GDRs during the year
Principal Value of the Bonds Repaid
during the year
Principal Value of Bonds outstanding
as at 31st March 2020
USD 200 million
USD 7.97
million
USD 192.03
million
Nil
(iii)
(iv)
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 and / or BSe Limited.
of offices in India and around the globe. See
pages 12 and 13 of this Annual Report.
p) Listing of Commercial Paper:
t) address for correspondence:
the Commercial papers issued by the Company
are listed on BSe Limited.
q)
debenture Trustees (for privately placed
debentures):
Larsen & toubro Limited,
L&t House, Ballard estate,
Mumbai 400 001.
tel. No. (022) 6752 5656,
Fax No. (022) 6752 5893
IDBI trusteeship Services Limited
Ground Floor, Asian Building
17, R. Kamani Marg
Ballard estate
Mumbai – 400 001
r) Credit rating:
the Company has obtained rating from CRISIL
Limited and ICRA Limited during the financial
year 2019-20. there has been no revision in
credit ratings during the financial year 2019-20.
Rating
Agency
Type of
Instrument
CRISIL
Limited
Non-Convertible
Debentures
Inflation-linked
Capital- Indexed
Non-Convertible
Debentures
Rating
‘CRISIL AAA/Stable’
‘CRISIL AAA/Stable’
Commercial Paper
‘CRISIL A1+’
ICRA
Limited
Non-Convertible
Debentures
Programme
‘[ICRA] AAA
(stable)’
Commercial Paper
‘[ICRA] A1+’
s) 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, Bengaluru,
Chennai, Coimbatore, Faridabad, Hazira (Surat),
Kattupalli (near Chennai), Kanchipuram,
Mumbai, Navi Mumbai, Mysuru, pithampur,
puducherry, Rajpura, Kansbahal (Rourkela),
talegaon, Vadodara and Visakhapatnam. L&t’s
international manufacturing footprint covers the
Gulf (oman, Saudi Arabia, UAe, Kuwait), South
east Asia (Malaysia and Indonesia) and the U.K.
the L&t Group also has an extensive network
Shareholder correspondence may be directed
to the Company’s Registrar and Share transfer
Agent, whose address is given below:
1. KFin technologies private Limited
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
email: einward.ris@kfintech.com
Website: www.kfintech.com
2. KFin technologies private Limited
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
u)
Investor Grievances:
the Company has designated an exclusive e-mail
id viz. IGRC@LARSeNtoUBRo.CoM to enable
investors to register their complaints, if any.
v) Securities dealing Code:
pursuant to the SeBI (prohibition of Insider
trading) Regulations, 2015 (‘SeBI pIt
Regulations’), the Company had suitably
modified its Securities Dealing Code (‘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 based on 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
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
during the closure of trading Window. to deal
in securities beyond specified limit, permission
of Compliance officer is also required. Directors
and designated employees who buy and sell
shares of the Company are prohibited from
executing contra-trades during the next six
months following the prior transactions.
the Company has a policy for acting against
employees who violate the SeBI pIt Regulations
/ Code. pursuant to the enactment of the SeBI
(prohibition of Insider trading) (Amendment)
Regulations, 2018, the Company has suitably
modified the provisions of the Code which are
effective from 1st April 2019.
Mr. N. Hariharan, Company Secretary was the
Compliance officer till 1st January 2020. Mr.
Sivaram Nair A, Company Secretary has been
designated as the Compliance officer from 2nd
January 2020.
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 http://investors.
larsentoubro.com/Listing-Compliance.aspx.
w) Stakeholder Engagement:
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 process. the Company engages
with its identified stakeholders on an ongoing
basis through business level engagements and
structured stakeholder engagement programs.
the Company maintains its focus on delivering
value to all its stakeholders, especially the
disadvantaged communities.
the Company has a dedicated Corporate Brand
Management & Communications department
which facilitates an on-going dialogue between
the Company and its stakeholders. the
communication channels include:
zz
For external stakeholders - Stakeholder
engagement sessions, client satisfaction
surveys, shareholder satisfaction assessment,
116
zz
dealer and stockists meet, analyst / investors
meet, periodic feedback mechanism, general
meeting for shareholders, factory visits for
shareholders, online service and dedicated
e-mail service for grievances, corporate
website and access to business media to
respond to queries, etc.
For internal stakeholders – employee
satisfaction surveys, employee engagement
surveys for improvement in employee
engagement processes, circulars and
messages from management, corporate
social initiatives, welfare initiatives for
employees and their families, online
news bulletins for conveying topical
developments, large bouquet of print and
online in-house magazines, helpdesk facility,
etc.
each of the businesses have their internal
mechanisms to address the grievances of its
stakeholders. In addition, at the corporate level,
there are committees which can be approached
if the stakeholders are not satisfied with the
functioning of such internal mechanisms. As
part of the vigil mechanism, the Whistle Blower
policy provides access for various stakeholders
to the Chairperson of the Audit Committee. the
Whistle Blower policy for Vendors & Channel
partners is displayed on the website of the
Company http://investors.larsentoubro.com/
CorporateGovernance.aspx.
x)
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 has 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 pIt
Regulations, etc.
the Company has created a batch of trainers
across businesses who in turn conduct training
/ awareness sessions within their business
regularly during the year.
Secretaries and shall submit the same to the
Stock exchanges within the prescribed timelines.
y)
ISo 9001:2015 Certification:
bb) Statutory Compliance System:
the Company’s Secretarial Department which
provides secretarial services and investor services
for the Company and its Subsidiaries and
Associate Companies is ISo 9001:2015 certified.
z) 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 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.
aa) Secretarial audit as per Companies act,
2013:
pursuant to the provisions of Section 204(1)
of the Companies Act, 2013, M/s. S. N.
Ananthasubramanian & Co., Company
Secretaries, conducts the secretarial audit of the
compliance of applicable statutory provisions and
the adherence of good corporate practices by
the Company.
pursuant to the SeBI circular no. CIR/CFD/
CMD1/27/2019 dated 8th February 2019,
the Company has obtained an annual
secretarial compliance report from M/s. S.
N. Ananthasubramanian & Co., Company
the Company complies with applicable laws,
rules and regulations impacting Company’s
business. these comprise of Central Acts /
Rules and those of state governments where
the Company generally carries on business.
the applicable laws are reviewed by the
Corporate Legal and Legal departments of each
Independent Company (IC) as well as an external
consultant on a periodic basis and updated
whenever required.
each IC / Business head certifies compliance of
all applicable laws by the IC on a quarterly basis.
Based on these confirmations, the Company
Secretary gives a compliance certificate to the
Board of Directors.
the Company has a process of verifying the
compliances through a random review of the
process / system / documentation of the location
of the IC / Corporate function / Group Company.
the review is placed before the Board of the
respective IC / group company. existing internal
controls are also reviewed. the audit process
includes planning the audit, discussion with
auditee before audit commencement to explain
the scope and purpose of the audit, verifying
the compliances based on the supporting
documentation, post audit meeting for
explaining the observations, etc.
cc) Group Governance Policy:
Vide its circular dated 10th May 2018, SeBI has
introduced the concept of Group Governance
Unit. the circular expects listed companies to
monitor their governance through a Governance
Committee and establishment of a strong and
effective group governance policy.
“Corporate Governance” in the Company
and its subsidiaries broadly includes strategic
supervision by the Board and its Committees,
compliance of Code of Conduct, Statutory
Compliance including compliance of Companies
Act / applicable SeBI Regulations, avoiding
conflict of interest, Risk Management, Internal
Controls and Audit.
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
the Company has four listed entities within the
group. each of these entities have their own
Board and Board Committees in compliance
with the Companies Act 2013 & SeBI LoDR
Regulations. the oversight of their subsidiaries
(137 subsidiaries) is as per Companies Act 2013
& SeBI LoDR Regulations. the Board Report and
its annexures of these listed companies contains
various disclosures dealing with subsidiary
companies.
Most of these listed entities has one executive
Director and one Independent Director of the
Company on its Board. Any financial assistance
to the above companies or purchase/sale by the
Company of their shares, is dealt with by the
Company’s Board.
these listed entities publish their independent
Auditors’ certificate on Corporate Governance,
secretarial audit report of practising Company
Secretary and Ceo/CFo’s certificate for internal
controls for financial reporting.
Responsibility of the Company’s corporate team
in the areas of statutory compliance (including
corporate laws), Risk Management, Internal
Controls and Internal Audit, covers all unlisted
subsidiaries. the four listed entities have their
own teams to carry out these functions.
the Company has a multi –tier governance
system, where major business divisions operate
as Independent Companies (ICs). these ICs
are not legal entities, however, have their own
Ceo’s, Functional Heads and Independent
Boards, including external independent members
from the respective business sectors, executive
Directors of the Company and Senior executives
from the IC’s. All IC’s have independent directors
of the Company as their Board Members.
the ICs have separate internal teams to
oversee their legal and compliance functions.
All Subsidiary Companies associated with the
respective ICs are reviewed by their respective IC
Boards.
the subsidiary companies also function
independently and have separate Boards which
consists of representatives of the Company
who are senior executives of the Company,
representatives of Joint Venture partners,
representative of the Company’s Board as well
as Independent Directors as required by law. As
per law, these companies, wherever required,
also have Audit Committee, Nomination &
Remuneration Committee and CSR Committee.
Major subsidiary companies have some executive
Directors and Independent Directors of the
Company on their Board. the Key Managerial
personnel of subsidiary companies like Chief
executives, Chief Financial officers and Company
Secretaries are mostly employees of the
Company or are nominated by the Company as
per the terms of the Joint Venture Agreement.
the subsidiary companies’ performance is also
reviewed by the Company’s Board periodically
(included in quarterly results presented to the
Company’s L&t Board). F&A heads of some
of the subsidiary companies are functionally
reporting to senior executives in the Company.
thus, the overall functioning of these Subsidiary
companies is monitored by the Group directly or
through their respective IC’s.
A voluntary Secretarial Audit is conducted for
all subsidiary companies, including foreign
companies and companies which are not
covered under the purview of Companies Act,
2013. thus, there is a complete audit of the
compliance of applicable statutory provisions and
adherence to good corporate practices.
the Company’s Code of Conduct (Code) is
required to be adhered by all unlisted group
companies covering employees, directors,
suppliers, contractors, etc. In addition to this, the
subsidiaries set up their own vigil mechanism, if
they meet the thresholds given in the Companies
Act. the Audit Committee/Board of these
companies monitor this mechanism. the Vigil
Mechanism Framework to report breach of
code is a structured process, which encourages
and facilitates all covered, to report without
fear, wrongdoings or any unethical or improper
practice which may adversely impact the image,
credibility and/or the financials of the company,
through an appropriate forum.
the Secretarial Department of the Company has
qualified Company Secretaries (CS) with vast
experience in the field of compliance and law.
It consists of fulltime professionals dedicated to
performing corporate secretarial and subsidiary
governance duties. Qualified CS in secretarial
118
department monitor the compliance related to
subsidiaries under Companies Act / Rules. the
Company’s Secretarial Department develops a
broad Governance policy for the Company and
its group of subsidiaries.
the Company’s Secretarial Department is
involved in all major corporate actions of
subsidiaries like Ipo’s, raising of capital,
restructuring, major financial assistance to
subsidiaries etc.
Appropriate disclosures related to subsidiaries
are made in financial statements / directors’
report of the Company as well as its subsidiaries
as per Companies Act 2013 / applicable
SeBI Regulations and applicable Accounting
Standards. All companies are subject to Statutory
Audit and applicable Secretarial Audit.
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Independent auditor’s Certificate on Corporate Governance
To THE MEMBErS oF
LarSEN & ToUBro LIMITEd
INdEPENdENT aUdITor’S CEr TIFICaTE oN CorPoraTE GoVErNaNCE
1. this certificate is issued in accordance with the terms of our engagement letter dated September 26, 2019.
2. We, Deloitte Haskins & Sells LLp, Chartered Accountants, the Statutory Auditors of Larsen & toubro Limited (the
“Company”), have examined the compliance of conditions of Corporate Governance by the Company, for the year
ended on March 31, 2020, as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C
and D of Schedule V of the SeBI (Listing obligations and Disclosure Requirements) Regulations, 2015, as amended
from time to time (the “Listing Regulations”).
MaNaGEMENTS’ rESPoNSIBILITY
3. the compliance of conditions of Corporate Governance is the responsibility of the Management. this responsibility
includes the design, implementation and maintenance of internal control and procedures to ensure the compliance
with the conditions of the Corporate Governance stipulated in Listing Regulations.
aUdITor’S rESPoNSIBILITY
4. our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for
ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
5. We have examined the books of account and other relevant records and documents maintained by the Company for
the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the
Company.
6. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note
on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the ”ICAI”),
the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for
the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special purposes issued by
the ICAI which requires that we comply with the ethical requirements of the Code of ethics issued by the ICAI.
7. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality
Control for Firms that perform Audits and Reviews of Historical Financial Information, and other Assurance and
Related Services engagements.
oPINIoN
8. Based on our examination of the relevant records and according to the information and explanations provided
to us and the representations provided by the Management, we certify that the Company has complied with the
conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2)
and para C and D of Schedule V of the Listing Regulations during the year ended March 31, 2020.
9. 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.
For dELoITTE HaSKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/ W-100018)
Sanjiv V. Pilgaonkar
partner
(Membership No. 039826)
UDIN: 20039826AAAADG5355
Mumbai, June 05, 2020
120
Independent auditor’s Certificate in respect of the implementation of
Employee Stock option Schemes of the Company
To THE MEMBErS oF
LarSEN & ToUBro LIMITEd
INdEPENdENT aUdITor’S CEr TIFICaTE IN rESPECT oF THE IMPLEMENTaTIoN oF EMPLoYEE SToCK oPTIoN
SCHEMES oF THE CoMPaNY.
1. this certificate is issued in accordance with the terms of our engagement letter dated September 26, 2019.
2. We, Deloitte Haskins & Sells LLp, Chartered Accountants (Firm Registration Number 117366W/W-100018), the
Statutory Auditors of Larsen & toubro Limited (“L&t”/ “Company”), pursuant to the requirement of clause 13 of
Securities and exchange Board of India (Share Based employee Benefits) Regulations, 2014, as amended by Circular
No. SeBI/LADNRo/GN/2015-16/021 dated September 18, 2015 and vide Notification no.SeBI/LAD/NGo/GN/2016-
17/037 dated March 6, 2017 (the “Regulations”) are required to certify for the year ended March 31, 2020, that
the employee Stock option Schemes, L&t Limited eSop Scheme -2003 and L&t Limited eSop Scheme -2006
(the “Schemes”) have been implemented in accordance with the Regulations and in accordance with the special
resolutions passed in the general meeting held on August 26, 1999 and August 25, 2006 (the “Resolutions”).
MaNaGEMENT’S rESPoNSIBILITY
3.
Implementation of the Schemes in accordance with the provisions of the Regulations and Resolutions and
compilation of the relevant information for financial reporting is the responsibility of the Management of the
Company. this includes the design, implementation and maintenance of internal control necessary to ensure
accurate compilation of information necessary of the purpose and maintenance of all accounting and other relevant
supporting records and documents and applying an appropriate basis of preparation of the relevant information for
financial reporting; and making estimates that are reasonable in the circumstances.
aUdITor’S rESPoNSIBILITY
4.
It is our responsibility to certify whether the Company has complied with the applicable provisions of the
Regulations and Resolutions during the year ended March 31, 2020, in implementing the Schemes on the basis of
information compiled or collated by Management and the accounting and other relevant supporting records and
documents provided to us for our examination.
5. We conducted our examination and obtained the explanations in accordance with the Guidance Note on Reports
or Certificates for Special purposes issued by the Institute of Chartered Accountants of India (“ICAI”) and the
Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 which include the concepts of
test checks and materiality. this Guidance Note requires that we comply with the ethical requirements of the Code
of ethics issued by the ICAI.
6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality
Control for Firms that perform Audits and Review Historical Financial Information, and other Assurance and Related
Services engagements.
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
CrITErIa aNd SCoPE
7. the criteria against which the information is evaluated are the following:
a)
the Schemes;
b)
the Regulations;
c)
the Resolutions; and
d) Written representation provided by the Management.
oPINIoN
8. Based on our examination of the accounting and other relevant supporting records and documents maintained
by the Company as aforesaid, and according to the information and explanations give to us, in our opinion, the
Company has complied with the applicable provisions of the Regulations and Resolutions in implementing the
Schemes during the year ended March 31, 2020.
rESTrICTIoN oN USE
9. this certificate is addressed to and provided to the Members of the Company solely for the purpose of compliance
with Clause 13 of the Regulations. this certificate should not be circulated, copied, used/referred to for any other
purpose, without our prior written consent. Accordingly, we do not accept or assume any liability or any duty of
care of for any other purpose or to any other party to whom it is shown or into whose hands it may come without
our prior consent in writing.
For dELoITTE HaSKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Sanjiv V. Pilgaonkar
partner
(Membership No. 039826)
UDIN: 20039826AAAADH7874
Mumbai, June 5, 2020
122
CErTIFICaTE oF NoN-dISQUaLIFICaTIoN oF dIrECTorS
[pursuant to Regulation 34(3) and Schedule V para C Clause (10) (i) of Securities and exchange Board of India
(Listing obligations and Disclosure Requirements) Regulations, 2015]
to,
The Members of
Larsen & Toubro Limited
L & t House,
Ballard estate,
Mumbai 400001.
We have examined the following documents:
i) Declaration of non-disqualification as required under Section 164 of Companies Act, 2013 (‘the Act’);
ii) Disclosure of concern or interests as required under Section 184 of the Act; (hereinafter referred to as ‘relevant
documents’)
as submitted by the Directors of Larsen & Toubro Limited (‘the Company’) bearing CIN: L99999MH1946PLC004768
and having its registered office at L & t House, Ballard estate, Mumbai 400001, to the Board of Directors of the
Company (‘the Board’) for the Financial Year 2019-20 and Financial Year 2020-21 and relevant registers, records,
forms and returns maintained by the Company and as made available to us for the purpose of issuing this Certificate in
accordance with Regulation 34(3) read with Schedule V para C Clause 10(i) of SeBI (LoDR) Regulations, 2015. We have
considered non-disqualification to include non-debarment by Regulatory/ Statutory Authorities.
It is the responsibility of Directors to submit relevant documents with complete and accurate information in accordance
with the provisions of the Act.
ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the
management of the Company. our responsibility is to express an opinion based on our verification.
Based on our examination as aforesaid and such other verifications carried out by us as deemed necessary and adequate
(including Directors Identification Number (DIN) status at the portal www.mca.gov.in), in our opinion and to the best of
our information and knowledge and according to the explanations provided by the Company, its officers and authorized
representatives, we hereby certify that during the Financial Year ended 31st March 2020, none of the Directors on
the Board of the Company, as listed hereunder have been debarred or disqualified from being appointed or continuing
as Directors of Companies by Securities and exchange Board of India/ Ministry of Corporate Affairs or any such statutory
authority.
Name of director
Sr.
No.
01 Mr. Anilkumar Manibhai Naik
02 Mr. Mukund Manohar Chitale
03 Mr. Subodh Kumar Bhargava
04 Mr. Sekharipuram Narayanan Subrahmanyan
05 Mr. Ramamurthi Shankar Raman
06 Mr. Shailendra Narain Roy
07 Mr. Meleveetil Damodaran
08 Mr. Vikram Singh Mehta
director
Identification
Number (dIN)
date of
appointment
date of Cessation
00001514
00101004
00035672
02255382
00019798
02144836
02106990
00041197
23-11-1989
06-07-2004
03-07-2007
01-07-2011
01-10-2011
09-03-2012
22-10-2012
22-10-2012
–
–
–
–
–
–
–
–
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aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Name of director
Sr.
No.
09 Mr. Adil Siraj Zainulbhai
10 Mr. Akhilesh Krishna Gupta
11 Mrs. Sunita Sharma
12 Mr. thomas Mathew t.
13 Mr. Ajay Shankar
14 Mr. Subramanian Sarma
15 Mr. Dip Kishore Sen
16 Mr. M. V. Satish
17 Mrs. Naina Lal Kidwai
18 Mr. Sanjeev Aga
19 Mr. N. Kumar
20 Mr. Jayant Damodar patil
21 Mr. Arvind Gupta
22 Mr. Hemant Bhargava
director
Identification
Number (dIN)
date of
appointment
date of Cessation
06646490
00359325
02949529
00130282
01800443
00554221
03554707
06393156
00017806
00022065
00007848
01252184
00090360
01922717
30-05-2014
09-09-2014
01-04-2015
03-04-2015
30-05-2015
19-08-2015
01-10-2015
29-01-2016
01-03-2016
25-05-2016
27-05-2016
01-07-2017
01-07-2017
28-05-2018
–
08/09/2019
–
02/04/2020
–
–
–
–
–
–
–
–
26/03/2020
–
this Certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness
with which the management has conducted the affairs of the Company.
this Certificate has been issued at the request of the Company to make disclosure in its Corporate Governance Report
for the Financial Year ended 31st March, 2020.
For S. N. aNaNTHaSUBraMaNIaN & Co.
Company Secretaries
ICSI Unique Code p1991MH040400
peer Review Cert. No. 606/2019
S. N. ananthasubramanian
partner
FCS : 4206
Cop No. : 1774
ICSI UDIN : F004206B000257591
thane, 19 May, 2020
124
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 and 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, 2020 and that to the best of our knowledge and belief, we state that;
(a)
(i) these statements do not contain any materially untrue statement or omit any material fact or contain
statements that may be misleading;
(ii) these statements present a true and fair view of the Company’s affairs and are in compliance with current
accounting standards, applicable laws and regulations.
(b) there are, to the best of our knowledge and belief, no transactions entered into by the Company during the period
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:
(i) that there were no significant changes in internal controls over financial reporting during the year; and
(ii)
that there were no significant changes in accounting policies made during the year except the change in
accounting policy on leases pursuant to Ind AS 116; and
(iii) that there were no instances of significant fraud of which we have become aware.
Yours sincerely,
r. Shankar raman
Whole-time Director & Chief
Financial officer
DIN: 00019798
S. N. Subrahmanyan
Chief executive officer &
Managing Director
DIN: 02255382
Date: June 5, 2020
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annexure ‘C’ to the Board report
CSr aCTIVITIES For 2019-20
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 CSR projects of the Company are focused on
communities that are disadvantaged, vulnerable and
marginalized. the Company strives to contribute
positively to improve their standard of living; through
our interventions in water & sanitation, heath,
education and skill development.
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.
zz Water & Sanitation – includes but not limited
to watershed development -access to water,
promoting rain water harvesting, soil and
moisture conservation, enhancing ground water
levels by facilitating setting up of community
based institutions such as village development
committees , Self-help groups, farmer groups
and community management of water resources
for improving conditions related to sanitation,
health, education and livelihoods of communities
through an integrated approach .
zz
education - includes but not limited to education
infrastructure support to educational Institutions,
educational programs & nurturing talent at
various levels. promoting learning enhancement
amongst children, both in schools and in
communities through interventions in pre-school
education, innovative teaching methodology and
training teachers in formal schools, providing
126
interesting “teaching learning material”, with
special focus on Science, technology engineering
and Maths (SteM) subjects.
this is achieved through support to Balwadi’s
and Anganwadis strengthening the in school
interventions, providing after school study
classes in the community and creating platforms
to spark the curiosity of children through science
fairs, visits and competitions.
Health - includes 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 - includes 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.
zz
zz
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 website of the Company.
please see the link http://investors.larsentoubro.com/
Listing-Compliance.aspx.
2. Composition of the CSr Committee.
the CSR Committee of the Board comprises of
1. Mr. M. M. Chitale
Chairman
2. Mr. R. Shankar Raman Member
3. Mr D. K. Sen
Member
Mr. Sivaram Nair A acts as the Secretary of the
Committee.
3.
average net profit of the Company for the last
three financial years.
6.
reasons for not spending the amount during the
financial year.
the average net profit of the Company for the last
three financial years is R 7,239.43 Cr.
4.
Prescribed CSr expenditure (two percent of the
amount as in item 3 above).
the Company is required to spend an amount of
R 144.79 Cr. as CSR expenditure during the financial
year 2019-20.
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 R 144.79
Cr during the financial year 2019-20. As against
this mandate, the Company spent R 145.29 Cr
towards various activities for the benefit of the
community. this exceeds the required spend
by R 0.50 Cr. the CSR spend for FY 2019-20 is
2.01% of net profit.
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
NA
7. CSr Committee responsibility Statement:
the CSR Committee hereby affirms that:
zz
zz
zz
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;
the Company has constituted a mechanism to
monitor and report on the progress of the CSR
programs;
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
M. M. Chitale
Chief executive officer &
Managing Director
DIN: 02255382
Chairman – CSR
Committee
DIN: 00101004
127
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
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
Education
Chandigarh, Gujarat (Vadodara,
Ahmedabad, Hazira, Ranoli),
Jharkhand (Jamshedpur), Karnataka
(Mysuru, Bengaluru), Maharashtra
(Mumbai, Ahmednagar, Nagpur), New
Delhi, Odisha (Rayagada, Kansbahal,
Bhubaneswar), Tamil Nadu (Chennai,
Coimbatore), West Bengal (Kolkata)
Amount
outlay
(budget)
project or
programe
wise
(R In Lakh)
924.248
Overhead
(R In
Lakh)
Direct
expenditure
on projects
or programs
(R In Lakh)
Cumulative
expenditure
upto to the
reporting
period
(R In Lakh)
Amount spent:
direct or through
implementing
agency
869.468
41.474
910.942 Implementing
agency
1
2
3
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 infrastructure support
for education (drinking water and
sanitation facilities, renovation
of classrooms, water proofing
of school buildings, providing
furniture and light fittings,
donation of computers, up
gradation of libraries, playground
development, distribution of solar
lamps)
128
Education
Karnataka (Bengaluru, Mysuru),
Maharashtra (Mumbai, Navi Mumbai,
Pune), New Delhi, Odisha (Rayagada),
Tamil Nadu (Chennai)
268.969
255.800
12.202
268.002 Implementing
agency
1,853.622
1,703.935
81.278
1,785.212 Direct
Education
Andhra Pradesh(Vizag, Mangalagiri,
Vijayawada, Nellore, Anantapur),
Bihar (Buxar, Bettiah, Patna,
Bihar Sharif, Madhubani, Supaul),
Gujarat (Vadodara, Hazira, Ranoli,
Ahmedabad, Dhandhusar, Mahesana),
Haryana (Faridabad, Mewat, Bhiwani),
Jharkhand (Ranchi, Hazaribagh),
Karnataka (Mysuru, Bengaluru,
Bellary, Bagalkot, Koppala, Haveri),
Kerala (Thiruvananthapuram),
Madhya Pradesh (Bhopal, Indore,
Khandwa, Alirajpur, Seoni, Tikamgarh,
Rajgarh, Satna, Chhatarpur, Dewas,
Sehore), Maharashtra (Aurangabad,
Ahmednagar, Dolvi, Nagpur, Latur,
Pue, Tanda, Talegaon ), Meghalaya
(Shilong), Odisha (Rayagada, Daripali,
Cuttack, Brhampura, Nuapada,
Jashipur, Mayurbanj, Kalahandi,
Kendrapada, Ganjam), Puducherry,
Punjab (Moga, Mohali), Rajasthan
(Jaipur, Jhunjhunu, Ganganagar,
Nagaur, Taranagar, Dungarpur,
Pali, Alwar, Karauli, Kushalgarh,
Udaipur),Sikkim (Penlong), Tamil Nadu
(Kancheepuram, Coimbatore, Chennai,
Kottaram), Telangana (Hyderabad,
Warangal), Uttar Pradesh (Tanda,
Varanasi, Gorakhpur, Bulandshahr),
Uttarakhand (Singoli), West Bengal
(Kolkata, North 24 Parganas,
Minakhan, Indpur, Taltangara,
Bankura),
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
4
5
6
7
8
9
10
Providing infrastructure support
for education (drinking water and
sanitation facilities, renovation
of classrooms, water proofing
of school buildings, providing
furniture and light fittings,
donation of computers, up
gradation of libraries, playground
development, distribution of solar
lamps)
Providing educational aids to
children- books, stationary, sports
equipment, uniforms, school bags,
shoes, woolen clothes, raincoats
etc.
Awareness programmes (health
and hygiene, road safety,
career guidance, personality
development)
Science Technology Enginering
& Maths
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 Camps (general, eye,
dental, vaccinations) and health
awareness
Amount
outlay
(budget)
project or
programe
wise
(R In Lakh)
236.964
Overhead
(R In
Lakh)
Direct
expenditure
on projects
or programs
(R In Lakh)
Cumulative
expenditure
upto to the
reporting
period
(R In Lakh)
Amount spent:
direct or through
implementing
agency
226.070
10.784
236.854
Implementing
agency
264.628
236.521
11.282
247.803 Direct
Education
Gujarat (Chonda), West Bengal
(Kolkata), Telangana (Hyderabad)
Education
Andhra Pradesh (Vizag), Assam
(Guwahati), Bihar (Madhepura, Patna),
Chandigarh, Gujarat (Vadodara,
Ahmedabad, Hazira, Ranoli), Haryana
(Faridabad), Karnataka (Bengaluru),
Kerala (Kochi), Maharashtra (Mahape,
Nagpur), New Delhi, Odisha
(Rayagada), Puducherry, Rajasthan
(Jaipur), Tamil Nadu (Coimbatore)
Education
Gujarat (Hazira, Ranoli)
14.751
14.068
0.671
14.739 Direct
Education
Gujarat (Vadodara, Hazira), Haryana
(Faridabad), Maharashtra (Mumbai),
Puducherry, Rajasthan (Jaipur), Tamil
Nadu (Chennai, Vayalur)
Health
Maharashtra (Mumbai, Thane,
Ahmednagar)
421.991
402.907
19.219
422.126
Implementing
agency
648.754
545.711
26.030
571.741 Direct
75.070
70.109
3.344
73.453 Direct
172.819
160.019
7.633
167.652
Implementing
agency
Health
Health
Andhra Pradesh (Vizag), Gujarat
(Hazira, Ranoli), Haryana (Faridabad),
Odisha (Rayagada), Telangana (Ranga
Reddy)
Andhra Pradesh (Vizag),
Bihar(Bettiah), Chandigarh,
Chhattisgarh (Raipur), Gujarat
(Ranoli, Hazira), Kerala (Kunnur),
Maharashtra (Mumbai, Nagpur),
Odisha (Bhubaneswar, Berhampur,
Keonjhar, Cuttack, Kendrapada,
Boudh, Naupada), Rajasthan (Jaipur,
Jodhpur), Tamil Nadu (Chennai), West
Bengal (Kolkata)
129
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
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
11
Blood donation camps
Health
Andhra Pradesh (Vizag), Chhattisgarh
(Raipur), Gujarat (Vadodara),
Karnataka (Bengaluru), Kerela
(Kochi), Madhya Pradesh (Bhopal),
Maharashtra (Pune), New Delhi,
Odisha (Bhuwaneshwar), Rajasthan
(Jaipur), Tamil Nadu (Chennai,
Coimbatore), Telangana (Hyderabad),
Uttar Pradesh (Lucknow), West Bangal
(Kolkata)
Amount
outlay
(budget)
project or
programe
wise
(R In Lakh)
11.176
Overhead
(R In
Lakh)
Direct
expenditure
on projects
or programs
(R In Lakh)
Cumulative
expenditure
upto to the
reporting
period
(R In Lakh)
Amount spent:
direct or through
implementing
agency
10.028
0.478
10.506
Implementing
agency
Health
Maharashtra (Nagpur), Gujarat
(Hazira), Tamil Nadu (Chennai)
117.159
83.906
4.002
87.908 Direct
Health
Tamil Nadu (Kancheepuram, Vellore)
1,101.500
1,052.757
50.217
1,102.973
Implementing
agency
12
13
14
"Infrastructure support to medical
centres
"
"Infrastructure support to medical
centres
"
Construction Skill Training
Institute - CSTI
Skill Building
15
Vocational and Computer training
for youth
Skill Building
16
Vocational Training
Skill Building
Gujarat (Ahmedabad), Karnataka
(Bengaluru), Maharashtra (Panvel),
Odisha (Cuttack), Tamil Nadu
(Kancheepuram), Telangana
(Hyderabad, Jadcherla), Uttar Pradesh
(Pilkhuwa), West Bengal (Kolkata)
New Delhi, Telangana (Hyderabad),
Gujarat (Hazira), Uttar Pradesh
(Lucknow)
Andhra Pradesh (Vizag), Madhya
Pradesh (Bhopal, Malwa), Tamil Nadu
(Kancheepuram, Pulicat), West Bengal
(Kolkata), Gujarat (Vadodara, Hazira),
Uttar Pradesh (Lucknow)
4,288.654
4,050.656
193.216
4,243.872 Direct
71.798
68.008
3.244
71.252 Direct
217.849
201.017
9.589
210.606 Direct
Vocational Training
Skill Building Maharashtra (Ahmednagar, Pune)
75.265
71.948
3.432
75.380 Implementing
agency
Women empowerment through
vocational training
Skill Building
Skill building for differently abled
(Neev)
Skill Building
Basic infrastructure support in
the community (Water, Health,
Sanitation, Solar lights, roads etc.)
Community
Development
Odisha (Rayagada), Gujarat
(Vadodara, Ahmedabad), Chandigarh,
Madhya Pradesh (Bhopal), Rajasthan
(Jaipur), West Bangal (kolkata)
Andhra Pradesh (Vizag), Kerala (Kochi,
Keezhmadu), Maharashtra (Pune,
Nagpur, Jalgaon), Rajasthan (Jaipur),
Telangana (Hyderabad), Tamil Nadu
(Chennai), West Bengal (Kolkata)
Andhra Pradesh (Vizag), Gujarat
(Hazira, Tapi), Karnataka
(Bengaluru), Madhya Pradesh
(Indore), Maharashtra (Ahmednagar,
Aurangabad, Bhiwandi, Pune,
Mumbai), Pondicherry, Tamil Nadu
(Chennai, Kancheepuram), Telangana
(Medigadda, Hyderabad), West Bengal
(Kolkata)
95.441
82.929
3.956
86.885 Direct
112.034
101.142
4.824
105.967 Implementing
agency
470.008
418.125
19.945
438.070 Direct
17
18
19
20
130
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
Integrated Community
Development Programme
Development of gardens and
maintenance of public spaces
Water &
Sanitation,
Health,
Education,
Skill Building
Environment
Tree plantation and environment
protection
Environment
Maharashtra (Pathardi, Devgaon,
Nagzari), Rajasthan (Bhim,
Kumbhalgarh, Sewantri), Tamil
Nadu (Chetipalayam, Gudyatham,
Pappampatti)
Gujarat (Vadodara), Maharashtra
(Mumbai, Nasik, Mahape,
Ahmednagar, Talegaon), New Delhi
Andhra Pradesh (Vizag), Gujarat
(Hazira), Karnataka (Ballari,
Bengaluru), Madhya Pradesh
(Bhopal, Indore), Odisha (Rayagada,
Jharsuguda, Mayurbhanj), Rajasthan
(Jaipur), Tamil Nadu (Chennai), Uttar
Pradesh (Ghaziabad)
21
22
23
24
Amount
outlay
(budget)
project or
programe
wise
(R In Lakh)
3,033.972
Overhead
(R In
Lakh)
Direct
expenditure
on projects
or programs
(R In Lakh)
Cumulative
expenditure
upto to the
reporting
period
(R In Lakh)
Amount spent:
direct or through
implementing
agency
2,754.373
132.051
2,886.424
Implementing
agency
164.477
153.552
7.324
160.876 Direct
123.978
117.336
5.597
122.933 Direct
Awareness programmes
- environment, energy
conservation,road safety
Environment
Gujarat (Hazira)
95.519
91.309
4.355
95.665
Implementing
agency
25
Employee Volunteering
Employee
volunteers
Andhra Pradesh (Vizag), Gujarat
(Hazira, Ranoli, Vadodara), Jharkhand
(Jamshedpur), Karnataka (Mysuru),
Maharashtra (Mumbai), New Delhi,
Tamil Nadu (Chennai, Coimbatore)
150.214
125.366
5.980
131.346 Direct
Total
15,010.858
13,867.061
662.126
14,529.188
131
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
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 2019-20, the percentage increase in remuneration of each director & Company
Secretary during the financial year 2019-20 and comparison of the remuneration of each of the Key
Managerial Personnel against the performance of the company:
Name of the director/
KMP
designation
A. M. Naik
Group Chairman
S. N. Subrahmanyan
R. Shankar Raman
Shailendra Roy
D. K. Sen
M. V. Satish
J. D. patil
Chief executive officer &
Managing Director
Whole-time Director & Chief
Financial officer
Whole-time Director & Senior
executive Vice president
(power)
Whole-time Director & Senior
executive Vice president
(Infrastructure)
Whole-time Director & Senior
executive Vice president
(Buildings, Minerals & Metals)
Whole-time Director &
Senior executive Vice
president (Defence & Smart
technologies)
M. M. Chitale
Independent Director
Subodh Bhargava
Independent Director
M. Damodaran
Independent Director
Vikram Singh Mehta
Independent Director
Adil Zainulbhai
Independent Director
Akhilesh Gupta @
Independent Director
Sunita Sharma^
Nominee of Life Insurance
Corporation of India
thomas Mathew t.
Independent Director
Ajay Shankar
Independent Director
Subramanian Sarma
Non- executive Director
v crore
2019-20
Total
remuneration
ratio of remuneration
of director to the
median remuneration $
Percentage
increase in
remuneration
6.182
27.179
13.207
6.636
4.468
5.778
5.086
0.489
0.503
0.235
0.294
0.385
0.078
0.255
0.344
0.337
–
72.07
316.85
-24.19%
-43.91%
153.97
-47.33%
77.37
-53.01%
52.09
-36.15%
67.37
-38.41%
59.29
-38.91%
5.70
5.86
2.74
3.43
4.49
0.40
2.97
4.01
3.93
–
-3.46%
-22.91%
-51.93%
-33.63%
-19.03%
*
675.08%
-19.96%
-11.66%
–
132
Name of the director/
KMP
designation
Naina Lal Kidwai
Independent Director
Sanjeev Aga
Independent Director
Narayanan Kumar
Independent Director
Mr. Arvind Gupta ^ #
Nominee of SUUtI
Mr. Hemant Bhargava ^
Nominee of Life Insurance
Corporation of India
N. Hariharan !
Company Secretary
Sivaram Nair A. %
Company Secretary
v crore
2019-20
Total
remuneration
ratio of remuneration
of director to the
median remuneration $
Percentage
increase in
remuneration
0.195
0.322
0.278
0.195
0.043
1.998
0.433
2.27
3.75
3.24
2.25
0.50
17.61
1.24
-25.43%
-14.18%
-29.89%
*
17.49%
*
*
$
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 2019-20.
^
part of the remuneration has been paid to the financial institution he/she represents
@ Ceased to be a Director w.e.f. 8th September 2019
*
Details not given as the Director / KMp was there for part of the year
#
Ceased to be a Director w.e.f. 26th March 2020
!
Ceased to be Company Secretary w.e.f. 1st January 2020
% Appointed as Company Secretary w.e.f. 2nd January 2020
B. Percentage increase in the median remuneration of all employees in the financial year 2019-20:
the median remuneration of employees of the Company during the financial year was R 8.57 lakh. In the financial
year, there was an increase of 5.70% in the median remuneration of employees.
C. Number of permanent employees on the rolls of Company as on 31st March 2020:
there were 45,268 permanent employees on the rolls of Company as on 31st March 2020.
d.
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
2019-20 was 4.70% whereas there is decline in the managerial remuneration by 42.21%. Reduction in Managerial
remuneration is mainly due to cost reduction measures voluntarily adopted by executive Directors in the current
pandemic scenario and reduced perquisite value.
E. affirmation that the remuneration is as per the remuneration policy of the company:
It is hereby affirmed that the remuneration paid is as per the Remuneration policy for Directors, Key Managerial
personnel and other employees.
133
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
annexure ‘E’ to the Board report
Form No. Mr-3
SECrETarIaL aUdIT rEPor T
For THE FINaNCIaL YEar ENdEd 31 st MarCH, 2020
[pursuant to section 204(1) of the Companies Act, 2013 and Rule 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 2020, 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,
2020 according to the provisions of:
i.
the Companies Act, 2013 (the Act) and the rules
made thereunder;
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,
2015;
c.
Securities and exchange Board of India (Issue
of Capital and Disclosure Requirements)
Regulations, 2018 - Not applicable as there
was no reportable event 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;
h. the Securities and exchange Board of India
(Buyback of Securities) Regulations, 2018 - Not
applicable as there was no reportable event
during the financial year under review;
i.
the Securities and exchange Board of
India (Listing obligations and Disclosure
Requirements), Regulations, 2015;
134
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;
(ii) Listing Agreements entered into by the Company
with National Stock exchange of India Limited and
BSe Limited.
During the period under review the Company has
complied with the provisions of the Act, Rules,
Regulations, Guidelines, Standards, etc.
We further report that:-
zz
zz
the Board of Directors of the Company is duly
constituted with proper balance of executive
Directors, Non-executive Directors including
Independent Directors and Women Directors. the
changes in the composition of the Board of Directors
which took place during the period under review
were carried out in compliance with the provisions of
the Act;
Adequate notice is given to all Directors of the
schedule of the Board and Committee Meetings and
Agenda & detailed notes on agenda were sent at
least seven days in advance except for the meetings
where consent of the Directors was obtained for
receiving notice and agenda and notes to agenda less
than seven days before the meeting;
zz
there exists a system for seeking and obtaining
further information and clarifications on the
agenda items before the meeting for meaningful
participation at the meeting;
zz
All decisions of Board and Committee meetings were
carried unanimously.
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.
We further report that during the audit period the
following events have occurred which had a major
bearing on the Company’s affairs in pursuance of the
above referred laws, rules, regulations, guidelines,
standards etc:
the Company has
zz
zz
completed acquisition and control of Mindtree
Limited (“Mindtree”), a listed Company by acquiring
61.08% of its paid-up share capital;
issued 59,000 Non- Convertible Debentures of R 10
Lac each aggregating to R 5900 Crore (Rupees Five
thousand Nine Hundred Crore only)
zz
the members at the Annual General Meeting held on
1st August 2019, passed Special Resolutions :
zz
zz
to amend the object Clause of the
Memorandum of Association of the Company
to specifically authorise manufacture and
supply of defence equipment as required by the
authorities.
to authorise the Board of Directors to raise funds
through issuance of securities in one or more
tranches upto amount not exceeding R 4000
Crore (Rupees Four thousand Crore only) or
US $600 Mn (US Dollars Six Hundred Million),
whichever is higher.
zz
obtained sanction from National Company Law
tribunal (NCLt) to the Scheme of Arrangement
for merger of L& t Shipbuilding Limited, a Wholly
owned Subsidiary with the Company and filed the
necessary forms with Ministry of Company Affairs on
18th May 2020 to give effect to the Scheme.
this Report is to be read with our letter of even date
which is annexed as Annexure A and forms an integral
part of this report.
For S. N. aNaNTHaSUBraMaNIaN & Co.
Company Secretaries
ICSI Unique Code: p1991MH040400
S. N. ananthasubramanian
partner
FCS: 4206 | Cop No.: 1774
ICSI UDIN: F004206B000257569
peer Review Cert. No.: 606/2019
Date : May 19, 2020
place : thane
135
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
annexure-‘a’
to,
the Members,
Larsen & toubro Limited
CIN L99999MH1946pLC004768
L& t House, Ballard estate,
Mumbai – 400 001.
our Secretarial Audit Report for the Financial Year ended 31st March, 2020, 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.
6. We have not verified the correctness and appropriateness of financial records and books of accounts of the
Company
For S. N. aNaNTHaSUBraMaNIaN & Co.
Company Secretaries
ICSI Unique Code: p1991MH040400
S. N. ananthasubramanian
partner
FCS: 4206 | Cop No.: 1774
ICSI UDIN: F004206B000257569
peer Review Cert. No.: 606/2019
Date : May 19, 2020
place : thane
136
annexure ‘F’ to the Board report
ForM No. MGT-9
EXTraCT oF aNNUaL rETUrN
as on the financial year ended on March 31, 2020
[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 dET aILS:
i) CIN
ii) Registration Date
iii) Name of the Company
iv) Category
L99999MH1946pLC004768
February 7, 1946
LARSeN & toUBRo LIMIteD
pUBLIC LIMIteD CoMpANY
v) Sub-Category of the Company
CoMpANY HAVING SHARe CApItAL
vi) Address of the Registered office and
contact details
vii) Whether listed company
L&t HoUSe, N. M. MARG, BALLARD eStAte, MUMBAI - 400 001
teL : 022-67525656 FAX: 022-67525893
LISteD
viii) Name, Address and Contact details of
Registrar andtransfer Agent, if any
KFin technologies private Limited
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
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
% to total turnover of
the company #
15.53%
29.37%
39.46%
# on the basis of gross turnover
III. ParTICULarS oF HoLdING, SUBSIdIar Y aNd aSSoCIaTE CoMPaNIES –
Sl. No Name of the
Address of the Company
CIN/GLN
Company
AHMEDABAD-MALIYA
TOLLWAY LIMITED
BHILAI POWER SUPPLY
COMPANY LIMITED
1
2
MOUNT POONAMALLE
ROAD, POST BOX NO. 979,
MANAPAKKAM,
CHENNAI - 600089
9TH FLOOR, AMBADEEP BUILDING,
14, KASTURBA GANDHI MARG,
CONNAUGHT PLACE,
NEW DELHI-110001
U45203TN2008PLC069211
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
51.00 Section 2(87)(ii)
U74899DL1995PLC070704
SUBSIDIARY
99.90 Section 2(87)(ii)
137
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Sl. No Name of the
Address of the Company
CIN/GLN
Company
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
CHENNAI VISION
DEVELOPERS PRIVATE
LIMITED
ESENCIA
TECHNOLOGIES INC
MOUNT POONAMALLE
ROAD, POST BOX NO 979,
MANAPAKKAM,
CHENNAI - 600089
2350 MISSION COLLEGE BLVD
SUITE 490, SANTA CLARA, CA
95054, USA
ESENCIA
TECHNOLOGIES INDIA
PRIVATE LIMITED
3RD FLOOR, 26TH, 5TH BLOCK,
5TH CROSS, KORAMANAGALA,
BANGALORE 560095
GRAPHENE
SEMICONDUCTORS
SERVICES PRIVATE
LIMITED
GRAPHENE
SOLUTIONS PTE LTD
GRAPHENE
SOLUTIONS SDN.BHD
GRAPHENE
SOLUTIONS TAIWAN
LTD.
HENIKWON
CORPORATION SDN.
BHD
#1154, 10TH B CROSS ,
YELAHANKA NEW TOWN ,
BANGALORE, KARNATAKA
-560064
30 CECIL STREET, #19-08,
PRUDENTIAL TOWER, SINGAPORE
C-2-20, SME1, SME
TECHNOPRENEUR CENTRE, 2270,
JALAN USAHAWAN 2, CYBER 6 ,
63000 CYBERJAYA, SELANGOR,
MALAYSIA
6F, NO. 378, CHANGCHUN ROAD,
ZHONGSHAN DISTRICT, TAIPEI
CITY 104, TAIWAN (R.O.C)
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 ARUNACHAL
HYDROPOWER
LIMITED
L&T AVIATION
SERVICES PRIVATE
LIMITED
L&T CAPITAL
COMPANY LIMITED
L&T CAPITAL
MARKETS 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
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
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
BRINDAVAN, PLOT NO. 177,
C.S.T. ROAD, KALINA,SANTACRUZ
(EAST),MUMBAI - 400 098,
MAHARASHTRA, INDIA.
138
U70101TN2008PTC068877
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
100.00 Section 2(87)(ii)
0479598-9
SUBSIDIARY
74.62 Section 2(87)(ii)
U74140KA2011PTC061480
SUBSIDIARY
74.62 Section 2(87)(ii)
U74900KA2013PTC068574
SUBSIDIARY
74.62 Section 2(87)(ii)
201524512K
1231163-D
SUBSIDIARY
74.62 Section 2(87)(ii)
SUBSIDIARY
74.62 Section 2(87)(ii)
50787314
SUBSIDIARY
74.62 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)
U40106TN2012GOI111122
SUBSIDIARY
51.00 Section 2(87)(ii)
U74140MH2008PTC177765
SUBSIDIARY
100.00 Section 2(87)(ii)
U40300MH2010PLC204778
SUBSIDIARY
100.00 Section 2(87)(ii)
U62100MH2009PTC196917
SUBSIDIARY
100.00 Section 2(87)(ii)
U67190MH2000PLC125653
SUBSIDIARY
100.00 Section 2(87)(ii)
U67190MH2013PLC240261
SUBSIDIARY
63.72 Section 2(87)(ii)
Sl. No Name of the
Address of the Company
CIN/GLN
2908
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
63.72 Section 2(87)(ii)
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Company
L&T CAPITAL
MARKETS(MIDDLE
EAST) LIMITED
L&T CASSIDIAN
LIMITED*
L&T CHENNAI TADA
TOLLWAY LIMITED
L&T CONSTRUCTION
EQUIPMENT LIMITED
L&T CONSTRUCTION
MACHINERY LIMITED
L&T DECCAN
TOLLWAYS LIMITED
L&T ELECTRICAL &
AUTOMATION FZE
501,502, LEVEL 5, LIBERTY
HOUSE, DUBAI INTERNATIONAL
FINANCIAL CENTRE, DUBAI -
506895 UAE
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
MOUNT POONAMALLE
ROAD, POST BOX NO. 979,
MANAPAKKAM,
CHENNAI - 600089
WAREHOUSE NO. FZS2ABO5
262158, JEBEL ALI FREE ZONE,
DUBAI, UNITED ARAB EMIRATES
L&T ELECTRICAL AND
AUTOMATION SAUDI
ARABIA COMPANY
LIMITED LLC
MH-4, PLOT NO. 17+19, IIND
INDUSTRIAL CITY, DAMMAM, P.O.
BOX 77186, AL KHOBAR 31952,
KINGDOM OF SAUDI ARABIA
L&T ELECTRICALS AND
AUTOMATION LIMITED
L&T FINANCE
HOLDINGS LIMITED
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
BRINDAVAN, PLOT NO. 177,
C.S.T. ROAD, KALINA,SANTACRUZ
(EAST),MUMBAI - 400 098,
MAHARASHTRA, INDIA.
L&T FINANCE LIMITED TECHNOPOLICE, 7TH FLOOR, A
WING, PLOT NO. 4, BLOCK-BP,
SECTOR- V, SALT LAKE,
KOLKATA -700091
L&T FINANCIAL
CONSULTANTS
LIMITED
L&T GLOBAL
HOLDINGS LIMITED
L&T HALOL-SHAMLAJI
TOLLWAY LIMITED
L&T HIMACHAL
HYDROPOWER
LIMITED
L&T HOUSING
FINANCE LIMITED
BRINDAVAN, PLOT NO. 177,
C.S.T. ROAD, KALINA,SANTACRUZ
(EAST),MUMBAI - 400 098,
MAHARASHTRA, INDIA.
UNIT 7, LEVEL 3, GATE
PRECINCT, BUILDING 2, DUBAI
INTERNATIONAL FINANCIAL
CENTRE, P.O BOX 63671,
DUBAI, UAE
MOUNT POONAMALLE
ROAD, POST BOX NO. 979,
MANAPAKKAM,
CHENNAI - 600089
RAMA COTTAGE, KANLOG,
SHIMLA-171001
BRINDAVAN, PLOT NO. 177,
C.S.T. ROAD, KALINA,SANTACRUZ
(EAST),MUMBAI - 400 098,
MAHARASHTRA, INDIA.
U29253MH2011PLC216258
SUBSIDIARY
100.00 Section 2(87)(ii)
U45309TN2008PLC066938
SUBSIDIARY
51.00 Section 2(87)(ii)
U29119MH1997PLC109700
SUBSIDIARY
100.00 Section 2(87)(ii)
U29248MH2018PLC318481
SUBSIDIARY
100.00 Section 2(87)(ii)
U45203TN2011PLC083661
SUBSIDIARY
52.89 Section 2(87)(ii)
107673
SUBSIDIARY
100.00 Section 2(87)(ii)
2050051589
SUBSIDIARY
100.00 Section 2(87)(ii)
U31501MH2007PLC176667
SUBSIDIARY
100.00 Section 2(87)(ii)
L67120MH2008PLC181833
SUBSIDIARY
63.72 Section 2(87)(ii)
U65910WB1993FLC060810
SUBSIDIARY
63.72 Section 2(87)(ii)
U65100MH2011PLC299024
SUBSIDIARY
63.72 Section 2(87)(ii)
CL2106
SUBSIDIARY
100.00 Section 2(87)(ii)
U45203TN2008PLC069210
SUBSIDIARY
24.98 Section 2(87)(ii)
U40102HP2010PLC031697
SUBSIDIARY
100.00 Section 2(87)(ii)
U45200MH1994PLC259630
SUBSIDIARY
63.72 Section 2(87)(ii)
139
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Sl. No Name of the
Address of the Company
CIN/GLN
Company
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
L&T HOWDEN PRIVATE
LIMITED
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
L&T HYDROCARBON
CASPIAN LLC
L&T HYDROCARBON
ENGINEERING
LIMITED
L&T HYDROCARBON
INTERNATIONAL FZE
L&T INFORMATION
TECHNOLOGY
SERVICES (SHANGHAI)
CO., LTD.
AGHA NEMATULLA STREET 224,
NARIMANOV DISTRICT BAKU CITY,
ALGERIA
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
WAREHOUSE NO. LV 38-B,
HAMRIYAH FREE ZONE, SHARJAH,
U.A.E
ROOM 1317, NO. 35, DINGBIAN
ROAD / LANE, JIADING DISTRICT,
SHANGHAI
L&T INFORMATION
TECHNOLOGY SPAIN
SOCIEDAD LIMITADA
PASEO DE LA CASTELLANA
81 STREET, FLOOR 11, 28046,
MADRID, SPAIN
L&T INFOTECH
FINANCIAL SERVICES
TECHNOLOGIES INC
2810, MATHESON BLVD EAST
SUITE 500, MISSISSAUGA, ONL4W
4X7 CANADA
L&T INFOTECH S. DE.
RL.C.V
L&T INFRA
CONTRACTORS
PRIVATE COMPANY
LIMITED
L&T INFRA DEBT
FUND LIMITED
BOSQUE DE CIRUELOS 180, SUITE
PP 101, COL.BOSQUES DE LAS
LOMAS, 11700 MEXICO CITY,
MEXICO
L&T HOUSE, BALLARD ESTATE, N
M MARG, MUMBAI 400001
PLOT NO. 177, CTS 6970,
6971,VIDYANAGARI MARG, C.S.T.
ROAD, KALINA,SANTACRUZ
(EAST), MUMBAI - 400098
L&T INFRA
INVESTMENT
PARTNERS ADVISORY
PRIVATE LIMITED
PLOT NO. 177, CTS 6970,
6971,VIDYANAGARI MARG, C.S.T.
ROAD, KALINA,SANTACRUZ
(EAST), MUMBAI - 400098
L&T INFRA
INVESTMENT
PARTNERS TRUSTEE
PRIVATE LIMITED
PLOT NO. 177, VIDYANAGARI
MARG, C.S.T. ROAD,
KALINA,SANTACRUZ (EAST),
MUMBAI - 400098
L&T INFRASTRUCTURE
DEVELOPMENT
PROJECTS LIMITED
L&T INFRASTRUCTURE
ENGINEERING
LIMITED
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
BRINDAVAN, PLOT NO. 177,
C.S.T. ROAD, KALINA,SANTACRUZ
(EAST),MUMBAI - 400 098,
MAHARASHTRA, INDIA.
L&T INTERSTATE
ROAD CORRIDOR
LIMITED
MOUNT POONAMALLE
ROAD, POST BOX NO. 979,
MANAPAKKAM,
CHENNAI - 600089
140
U31401MH2010PTC204403
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
50.10 Section 2(87)(ii)
1503665631
SUBSIDIARY
50.00 Section 2(87)(i)
U11200MH2009PLC191426
SUBSIDIARY
100.00 Section 2(87)(ii)
17744
SUBSIDIARY
100.00 Section 2(87)(ii)
310000400714060 (JIADING)
SUBSIDIARY
74.53 Section 2(87)(ii)
B87472072
SUBSIDIARY
74.53 Section 2(87)(ii)
770556-5
SUBSIDIARY
74.53 Section 2(87)(ii)
N-2017020633
SUBSIDIARY
74.53 Section 2(87)(ii)
U45400MH2017PTC292586
SUBSIDIARY
100.00 Section 2(87)(ii)
L67100MH2013PLC241104
SUBSIDIARY
63.72 Section 2(87)(ii)
U67190MH2011PTC218046
SUBSIDIARY
63.72 Section 2(87)(ii)
U65900MH2011PTC220896
SUBSIDIARY
63.72 Section 2(87)(ii)
U65993TN2001PLC046691
SUBSIDIARY
51.00 Section 2(87)(ii)
U74140TN1998PLC039864
SUBSIDIARY
100.00 Section 2(87)(ii)
U67190TN2006PLC059527
SUBSIDIARY
63.72 Section 2(87)(ii)
U45203TN2006PLC058735
SUBSIDIARY
51.00 Section 2(87)(ii)
Sl. No Name of the
Address of the Company
CIN/GLN
U65991MH1996PLC229572
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
63.72 Section 2(87)(ii)
Company
L&T INVESTMENT
MANAGEMENT
LIMITED
L&T MBDA MISSILE
SYSTEMS LIMITED
L&T METRO RAIL
(HYDERABAD)
LIMITED
BRINDAVAN, PLOT NO. 177,
C.S.T. ROAD, KALINA,SANTACRUZ
(EAST),MUMBAI - 400 098,
MAHARASHTRA, INDIA.
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
HYDERABAD METRO RAIL
ADMINISTRATIVE BUILDING,
UPPAL MAIN ROAD, NAGOLE,
HYDERABAD,
TELANGANA 500039.
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, P.O.
BOX 278, MUMBAI 400001
L&T OVERSEAS
PROJECTS NIGERIA
LIMITED
252E, MURI OKUNOLA STREET,
VICTORIA ISLAND, LAGOS,
NIGERIA
52
53
54
55
56
57
58
L&T POWER
DEVELOPMENT
LIMITED
59
L&T POWER LIMITED
60
61
62
63
64
65
66
67
68
L&T RAJKOT-VADINAR
TOLLWAY LIMITED
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 SPECIAL
STEELS AND HEAVY
FORGINGS PRIVATE
LIMITED
L&T Technology
Services (Canada)
Limited
L&T Technology
Services (Shanghai)
Co. Ltd
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
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
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
200 BURRARD STREET,
VANCOUVER BC, CANADA V6C
3L6
UNIT 3031, ROOM 302, BUILDING
1, SHENGIX RD, 399, SHANGHAI
PILOT FREE TRADE ZONE, CHINA
U29308MH2017PLC293402
SUBSIDIARY
51.00 Section 2(87)(i)
U45300TG2010PLC070121
SUBSIDIARY
100.00 Section 2(87)(ii)
1001910
SUBSIDIARY
70.00 Section 2(87)(ii)
U65993MH1996PLC211198
SUBSIDIARY
63.72 Section 2(87)(ii)
601723
SUBSIDIARY
100.00 Section 2(87)(ii)
U40101MH2007PLC174071
SUBSIDIARY
100.00 Section 2(87)(ii)
U40100MH2006PLC160413
SUBSIDIARY
99.99 Section 2(87)(ii)
U45203TN2008PLC069184
SUBSIDIARY
51.00 Section 2(87)(ii)
U45203TN2010PLC074501
SUBSIDIARY
51.01 Section 2(87)(ii)
U45206TN2013PLC093395
SUBSIDIARY
51.00 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)
U27109MH2009PTC193699
SUBSIDIARY
74.00 Section 2(87)(ii)
5020583
SUBSIDIARY
74.62 Section 2(87)(ii)
91310115MA1K4DK527
SUBSIDIARY
74.62 Section 2(87)(ii)
141
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Sl. No Name of the
Address of the Company
CIN/GLN
69
70
71
72
73
Company
L&T TECHNOLOGY
SERVICES LIMITED
L&T TECHNOLOGY
SERVICES LLC
L&T THALES
TECHNOLOGY
SERVICES PRIVATE
LIMITED
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
200, WEST ADAMS STREET,
CHICAGO, ILLINOIS-60606
RR V TOWER, 6TH FLOOR, 33A,
DEVELOPED PLOTS, SIDCO
INDUSTRIAL ESTATE, GUINDY,
CHENNAI-600032
L&T TRANSPORTATION
INFRASTRUCTURE
LIMITED
MOUNT POONAMALLE
ROAD, POST BOX NO 979,
MANAPAKKAM, CHENNAI
- 600089
L&T UTTARANCHAL
HYDROPOWER
LIMITED
VILLAGE BEDUBAGAR P.O
AUGUSTMUNI RUDRAPRAYAG
RUDRA PRAYAG UR 246421
74
L&T VALVES LIMITED
L&T VISION VENTURES
LIMITED
L&T-MHPS BOILERS
PRIVATE LIMITED
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
L72900MH2012PLC232169
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
74.62 Section 2(87)(ii)
0479598-9
SUBSIDIARY
74.62 Section 2(87)(ii)
U72200TN2006PTC059421
SUBSIDIARY
55.22 Section 2(87)(ii)
U45203TN1997PLC039102
SUBSIDIARY
63.86 Section 2(87)(ii)
U31401UR2006PLC032329
SUBSIDIARY
100.00 Section 2(87)(ii)
U74999MH1961PLC012188
SUBSIDIARY
100.00 Section 2(87)(ii)
U74210TN2006PLC061845
SUBSIDIARY
68.00 Section 2(87)(ii)
U29119MH2006PTC165102
SUBSIDIARY
51.00 Section 2(87)(ii)
L&T-MHPS TURBINE
GENERATORS PRIVATE
LIMITED
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
U31101MH2006PTC166541
SUBSIDIARY
51.00 Section 2(87)(ii)
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
SUITE 702, 7TH FLOOR, WISMA
HANGSAM, JALAN HANG LEKIR,
50000 KUALA LUMPUR, MALAYSIA
U74210MH1995PLC088099
SUBSIDIARY
50.0001 Section 2(87)(ii)
390357-T
SUBSIDIARY
30.00 Section 2(87)(i)
AL-TURKI BUILDING, KING KHALED
STREET, P.O. BOX 91, DAMMAM
2050055625
SUBSIDIARY
100.00 Section 2(87)(ii)
L&T-SARGENT &
LUNDY LIMITED
LARSEN & TOUBRO
(EAST ASIA) SDN. BHD
L&T HYDROCARBON
SAUDI COMPANY LLC
(formerly known as
LARSEN & TOUBRO
ATCO SAUDIA LLC)
LARSEN & TOUBRO
ELECTROMECH LLC
P.O. BOX 1999, RUWI, POSTAL
CODE 112, MUSCAT
1/04445/1
P.O. BOX 281, POSTAL CODE 325,
W LIWA, SULTANATE OF OMAN
1042928
SUBSIDIARY
70.00 Section 2(87)(ii)
SUBSIDIARY
70.00 Section 2(87)(ii)
LARSEN & TOUBRO
HEAVY ENGINEERING
LLC
LARSEN & TOUBRO
HYDROCARBON
INTERNATIONAL
LIMITED LLC @@
LARSEN & TOUBRO
INFOTECH CANADA
LIMITED
LARSEN & TOUBRO
INFOTECH GMBH
LARSEN & TOUBRO
INFOTECH LIMITED
P.O. BOX 6391, AL KHOBAR
34423, KINGDOM OF SAUDI
ARABIA
2051053464
SUBSIDIARY
100.00 Section 2(87)(ii)
2810, MATHESON BLVD EAST
SUITE 500, MISSISSAUGA, ONL4W
4X7 CANADA
1415026
MARCEL-BREUER-STR. 15, 80807
MUNICH, GERMANY
HRB15958
SUBSIDIARY
74.53 Section 2(87)(ii)
SUBSIDIARY
74.53 Section 2(87)(ii)
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
L72900MH1996PLC104693
SUBSIDIARY
74.53 Section 2(87)(ii)
LARSEN & TOUBRO
INFOTECH LLC
1220, N. MARKET ST., SUITE 806,
WILMINGTON, DE 19801, USA
270596763
SUBSIDIARY
74.53 Section 2(87)(ii)
75
76
77
78
79
80
81
82
83
84
85
86
87
142
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
Sl. No Name of the
Address of the Company
CIN/GLN
921 974 248
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
74.53 Section 2(87)(ii)
Company
LARSEN & TOUBRO
INFOTECH NORGE AS
LARSEN & TOUBRO
INTERNATIONAL FZE
LARSEN &
TOUBRO KUWAIT
CONSTRUCTION
GENERAL
CONTRACTING
COMPANY, WITH
LIMITED LIABILITY
LARSEN & TOUBRO
LLC
LARSEN & TOUBRO
OMAN LLC
LARSEN & TOUBRO
QATAR LLC
LARSEN & TOUBRO
SAUDI ARABIA LLC
LARSEN & TOUBRO
TANDD SA (PTY)
LIMITED
MARTIN LINGES VEI 25, 1364
FORNEBU, 0219 BAERUM,
NORWAY
OFFICE LOB 16 G 08, POST
BOX 41558, HAMRIYAH FREE
ZONE, SHARJAH, UNITED ARAB
EMIRATES
PLOT NO. 3, BUILDING NO.1,
SHARQ, KUWAIT
113, BARKSDALE PROFESSIONAL
CENTRE, NEWARK CITY, COUNTRY
OF NEW CASTLE, G56 ZIP
CODE-19711, U.S.A
0067
SUBSIDIARY
100.00 Section 2(87)(ii)
117668
SUBSIDIARY
49.00 Section 2(87)(i)
6 DEL.C 18-101
SUBSIDIARY
98.79 Section 2(87)(ii)
P.O. BOX 1127, RUWI, POSTAL
CODE 112, SULTANATE OF OMAN
1/40304/4
SUBSIDIARY
65.00 Section 2(87)(ii)
P.O. BOX 24399, SH. THAMOUR
BLDG., MEZZANINE FLOOR,
AL-HANDASA AREA, NEAR JAIDAH
FLYOVER, B RING ROAD, DOHA,
QATAR
P.O. BOX NO.20, RIYADH 11351,
KINGDOM OF SAUDI ARABIA
11351
2ND FLOOR, 4 PENCARROW
CRESCENT, LA LUCIA RIDGE
OFFICE ESTATE, SOUTH AFRICA
4019
27454
SUBSIDIARY
49.00 Section 2(87)(i)
1010154437
SUBSIDIARY
100.00 Section 2(87)(ii)
2010/018159/07
SUBSIDIARY
72.50 Section 2(87)(ii)
LARSEN AND TOUBRO
INFOTECH SOUTH
AFRICA (PTY) LIMITED
6TH FLOOR, 119 HERTZOG
BOULEVARD, FORESHORE,
CAPETOWN, SOUTH AFRICA 8001
LARSEN TOUBRO
ARABIA LLC
ALMADA TOWER, PRINCE TURKI
STREET, AL KHOBAR, SAUDI
ARABIA
LTH MILCOM PRIVATE
LIMITED
L & T HOUSE, BALLARD ESTATE,
MUMBAI 400001
LTIDPL INDVIT
SERVICES LIMITED
LTR SSM PRIVATE
LIMITED
5TH FLOOR, SKCL - TECH SQUARE,
LAZER ST, SOUTH PHASE, SIDCO
INDUSTRIAL ESTATE, GUINDY,
CHENNAI CHENNAI TN 600032
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
2011/007226/07
SUBSIDIARY
55.83 Section 2(87)(ii)
2051049523
SUBSIDIARY
75.00 Section 2(87)(ii)
U74999MH2015PTC267502
SUBSIDIARY
56.67 Section 2(87)(ii)
U45203TN1999PLC042518
SUBSIDIARY
51.00 Section 2(87)(ii)
U70109MH2018PTC314632
SUBSIDIARY
99.00 Section 2(87)(ii)
LYMBYC SOLUTIONS
INC
1452, HUGHES ROAD, SUITE #200,
GRAPEVINE, TEXAS - 76051, USA
0801748966
SUBSIDIARY
74.53 Section 2(87)(ii)
LYMBYC SOLUTIONS
PRIVATE LIMITED
MUDIT CEMENT
PRIVATE LIMITED
NABHA POWER
LIMITED
PLOT NO. 3726, DOOR NO. 41,
‘MA FOI HOUSE’, 6TH AVENUE, Q-
BLOCK, ANNA NAGAR, CHENNAI
TAMIL NADU 600040 IN
5TH FLOOR, DCM BUILDING,
16, BARAKHAMBA ROAD,
CONNAUGHT PLACE, NEW
DELHI - 110001
PO BOX NO-28, NEAR VILLAGE
NALASH, RAJPURA, PATIALA,
PUNJAB-140401
U74900TN2012PTC087141
SUBSIDIARY
74.53 Section 2(87)(ii)
U26942DL1990PTC041941
SUBSIDIARY
63.72 Section 2(87)(ii)
U40102PB2007PLC031039
SUBSIDIARY
100.00 Section 2(87)(ii)
143
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Sl. No Name of the
Address of the Company
CIN/GLN
GROSSER BURSTAH 45, 20457
HAMBURG, GERMANY
HRB 60455
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
74.53 Section 2(87)(ii)
Company
NEILSEN+PARTNER
UNTERNEHMENSBERATER
GMBH
NIELSEN&PARTNER
CO., LTD.
NIELSEN&PARTNER
PTY LTD
105
106
107
108
109
110
111
12A FLOOR, UNIT B1 AND B2,
SIAM PIWAT TOWER, 989 RAMA 1
ROAD, PATHUMWAN, BANGKOK,
THAILAND
ADDISONS, LEVEL 12 , 60
CARRINGTON STREET, SYDNEY,
NSW 2000, AUSTRALIA
0105561057293
SUBSIDIARY
74.53 Section 2(87)(ii)
ACN 624 699 627
SUBSIDIARY
74.53 Section 2(87)(ii)
NIELSEN+ PARTNER
S.A.
5, RUE DES PRIMEURS, L-2361,
STRASSEN LUXEMBOURG
NIELSEN+PARTNER
PTE LTD.
11 COLLYER QUAY #09-09 THE
ARCADE, SINGAPORE 049317
R.C.S Luxembourg B213716
SUBSIDIARY
74.53 Section 2(87)(ii)
RCB Reg. No. 201306219M
SUBSIDIARY
74.53 Section 2(87)(ii)
NIELSEN+PARTNER
UNTERNEHMENSBERATER
AG
PANIPAT ELEVATED
CORRIDOR LIMITED
112
PNG TOLLWAY
LIMITED
STAMPFENBACHSTRASSE 52,
CH-8006 ZüRICH, SWITZERLAND
UID: CHE-113.683.377
SUBSIDIARY
74.53 Section 2(87)(ii)
MOUNT POONAMALLE
ROAD, POST BOX NO 979,
MANAPAKKAM, CHENNAI
- 600089
MOUNT POONAMALLE
ROAD, POST BOX NO.979,
MANAPAKKAM,
CHENNAI - 600089
U45203TN2005PLC056999
SUBSIDIARY
51.00 Section 2(87)(ii)
U45203TN2009PLC070741
SUBSIDIARY
37.74 Section 2(87)(ii)
113
114
115
116
POWERUPCLOUD
TECHNOLOGIES
PRIVATE LIMITED
16, RAJIV NAGAR, 3RD STREET,
SAMUNDIPURAM, TIRUPUR TN
641603
PT TAMCO INDONESIA JALAN RAYA PASAR SERANG, NO.
15, KANDANG RODA, CIKARANG
BEKASI 17330, INDONESIA
PT. LARSEN & TOUBRO
HYDROCARBON
ENGINEERING
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,
KHORDHA-751014
U72200TZ2015PTC021473
SUBSIDIARY
74.53 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)
117
RULETRONICS LIMITED 43 FARNSWORTH COURT, WEST
7946822
SUBSIDIARY
74.53 Section 2(87)(ii)
118
119
120
121
RULETRONICS
SYSTEMS INC
RULETRONICS
SYSTEMS PRIVATE
LIMITED
SAHIBGANJ GANGES
BRIDGE-COMPANY
PRIVATE LIMITED *
SEASTAR LABS
PRIVATE LIMITED
122
SERVOWATCH
SYSTEMS LIMITED
PARKSIDE, LONDON SE10 0QG
271 US HIGHWAY 46, STE C104,
FAIRFIELD, NJ 07004, USA
24A-1611/2,46965,DWARAKA,
APARTMENTS 401, ALLASANI,
PEDDANNA STREET, ELURU,
ANDHRA PRADESH
L&T HOUSE BALLARD ESTATE
MUMBAI 400001
501, SARKAR-1, OPP.
GANDHIGRAM RAILWAY STATION,
ASHRAM ROAD
AHMEDABAD -380009
THE WOODROPE BUILDING,
WOODROLFE ROAD, TOLLESBURY,
MALDONESSEX CM9 8SE, UNITED
KINGDOM
0450075646
SUBSIDIARY
74.53 Section 2(87)(ii)
U72200AP2014PTC094911
SUBSIDIARY
74.53 Section 2(87)(ii)
U45309MH2016PTC283661
SUBSIDIARY
100.00 Section 2(87)(ii)
U72900GJ2015PTC083374
SUBSIDIARY
74.62 Section 2(87)(ii)
2159287
SUBSIDIARY
100.00 Section 2(87)(ii)
123
SYNCORDIS LIMITED
8 RUE PAUL BELMONDO 75012
PARIS, FRANCE
10045506
SUBSIDIARY
74.53 Section 2(87)(ii)
144
Holding/
Subsidiary/
Associate
SUBSIDIARY
% of Shares
held
Applicable Section
74.53 Section 2(87)(ii)
Sl. No Name of the
Address of the Company
CIN/GLN
Company
124
125
SYNCORDIS PSF S.A.
(formerly known as
SYNCORDIS SUPPORT
SERVICES S.A.)
SYNCORDIS S.A.
LUXEMBOURG
126
SYNCORDIS SARL
105, ROUTE D’ARLON, L-8009,
STRASSEN, LUXEMBOURG
B217963
105 ROUTE D’ARLON, L-8009
STRASSEN RCS LUXEMBOURG B
NUM’ERO 105331
8, RUE, PAUL BELMONDO, PARIS,
FRANCE - 75012
SYNCORDIS
SOFTWARE SERVICES
INDIA PRIVATE
LIMITED
BLOCK 4, 10TH FLOOR “A-WING”,
DLF IT PARK (SEZ CAMPUS),1/124
SHIVAJI GARDENS, MANAPAKKAM,
CHENNAI – 600 089
TAMCO ELECTRICAL
INDUSTRIES
AUSTRALIA PTY LTD
TAMCO SWITCHGEAR
(MALAYSIA) SDN BHD
130
THALEST LIMITED
131
VADODARA BHARUCH
TOLLWAYS LIMITED
132
MINDTREE LIMITED
MINDTREE SOFTWARE
(SHANGHAI) CO.
LIMITED
BLUEFIN SOLUTIONS
SDN. BHD
31, KITCHEN ROAD, DANDENONG,
VICTORIA 3175, AUSTRALIA
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
MOUNT POONAMALLE
ROAD, POST BOX NO 979,
MANAPAKKAM,
CHENNAI - 600089
GLOBAL VILLAGE, RVCE POST,
MYSORE ROAD, BENGALURU
- 560059
ROOM 2986, 29F, NO. 501,
MIDDLE YIN CHENG ROAD,
PUDONG DISTRICT, SHANGHAI,
CHINA.
1 SENTRAL , LEVEL 16 JALAN,
STESEN SENTRAL, KL SENTRAL,
50470, KUALA LUMPUR,
MALAYSIA
B105331
SUBSIDIARY
74.53 Section 2(87)(ii)
514135862
SUBSIDIARY
74.53 Section 2(87)(ii)
U72900TN2015FTC101675
SUBSIDIARY
74.53 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)
U45203TN2005PLC058417
SUBSIDIARY
51.00 Section 2(87)(ii)
L72200KA1999PLC025564
SUBSIDIARY
61.08 Section 2(87)(ii)
913101150609180327
SUBSIDIARY
61.08 Section 2(87)(ii)
829837 U
SUBSIDIARY
61.08 Section 2(87)(ii)
BLUEFIN SOLUTIONS
PTE LIMITED #
6, SHENTON WAY, #33-00 OUE
DOWNTOWN 2, SINGAPORE
201220020M
SUBSIDIARY
61.08 Section 2(87)(ii)
BLUEFIN SOLUTIONS
INC. #
200 S WACKER DRIVE FLOOR 31,
CHICAGO, IL 60606, USA.
4480544
SUBSIDIARY
61.08 Section 2(87)(ii)
GRAMEEN CAPITAL
INDIA LIMITED
402, 36 TURNER ROAD,BANDRA
WEST, MUMBAI - 400050
U65923MH2007PTC168721
ASSOCIATE
16.57 Section 2(6)
GUJARAT LEATHER
INDUSTRIES LIMITED
@@
INDIRAN
ENGINEERING
PROJECTS AND
SYSTEMS KISH (LLC)
INTERNATIONAL
SEAPORTS (HALDIA)
PRIVATE LIMITED
L& T-CHIYODA
LIMITED
NO 3001, GIDC INDUSTRIAL
ESTATE, ANKLESHWAR, GUJARAT
U18104GJ1978SGC003134
ASSOCIATE
50.00 Section 2(6)
POST BOX 1267, NEHA
APARTMENT, BAZAAR-E-DANOOS,
KISH ISLAND, IRAN
3744
ASSOCIATE
50.00 Section 2(6)
FLAT NO. 27, 5TH FLOOR,
KOHINOOR BUILDING, 105, PARK
STREET, KOLKATA 700016
L&T HOUSE, BALLARD ESTATE,
N M MARG, MUMBAI,
MAHARASHTRA - 400001
U45205WB1999PTC090733
ASSOCIATE
21.74 Section 2(6)
U28920MH1994PLC083035
ASSOCIATE
50.00 Section 2(6)
145
127
128
129
133
134
135
136
1
2
3
4
5
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Sl. No Name of the
Address of the Company
CIN/GLN
Company
L&T CAMP FACILITIES
LLC
P. O. BOX 44357, DUBAI, UNITED
ARAB EMIRATES
600640
Holding/
Subsidiary/
Associate
ASSOCIATE
% of Shares
held
Applicable Section
49.00 Section 2(6)
6
7
8
9
LARSEN & TOUBRO
QATAR & HBK
CONTRACTING LLC
MAGTORQ PRIVATE
LIMITED
MAGTORQ
ENGINEERING
SOLUTIONS PRIVATE
LIMITED
P. O. BOX 1362, DOHA, QATAR
28634
ASSOCIATE
50.00 Section 2(6)
NO. 58-C, SIPCOT INDUSTRIAL
COMPLEX, HOSUR, TAMIL NADU
635126
NO. 58-C, SIPCOT INDUSTRIAL
COMPLEX, HOSUR, TAMIL NADU
635126
U02520TZ1989PTC002458
ASSOCIATE
42.85 Section 2(6)
U02520TZ1989PTC002458
ASSOCIATE
39.28 Section 2(6)
* Under process of Strike off
@@ the Company is under Liquidation
# liquidated during the year.
IV. SHarE HoLdING P aTTErN:
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
% Change
during the
year
% of Total
Shares
A. Promoters
(1)
Indian
a)
b)
c)
d)
e)
f)
Individual/HUF
Central Govt
State Govt (s)
Bodies Corp.
Banks / FI
Any Other….
Sub-total (A) (1):-
(2) Foreign
a) NRIs -Individuals
b) Other –Individuals
c)
d)
e)
Bodies Corp.
Banks / FI
Any Other….
Sub-total (A) (2):-
Total shareholding of Promoter
(A) =(A)(1)+(A)(2)
B
Public Shareholding
(1)
Institutions
a) MutualFunds
Banks / FI
Central Govt
State Govt(s)
Venture Capital Funds
b)
c)
d)
e)
f)
i)
j)
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
228,916,062
7,652,527
3,590,744
0
0
13,878
45,887
0
0
0
228,929,940
16.32
266,024,781
7,698,414
3,590,744
0
0
0.55
0.26
0.00
0.00
1,309,016
5,292,298
0
0
13,878
45,787
0
0
0
266,038,659
1,354,803
5,292,298
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
18.95
0.10
0.38
0.00
0.00
18.33
0.05
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
2.63
-0.45
0.12
0.00
0.00
-2.66
-0.01
0.00
Insurance Companies
294,374,166
675
294,374,841
20.99
257,329,522
675
257,330,197
FIIs
Foreign Venture Capital
Funds
848,582
0
52,558
0
901,140
0
0.06
0.00
648,377
0
51,002
0
699,379
0
Sub-total (B)(1):-
535,382,081
112,998
535,495,079
38.18
530,603,994
111,342
530,715,336
37.80
-0.37
146
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
% Change
during the
year
% of Total
Shares
(2) Non-Institutions
a)
Bodies Corp.
i)
Indian
ii) Overseas
b)
Individuals
i)
ii)
Individual
shareholders
holding nominal
share capital upto
R 2 lakh
Individual
shareholders holding
nominal share
capital in excess of
R 2 lakh
Others (specify)
c)
73,662,439
406,668
74,069,107
39,713
3,260
42,973
5.28
0.00
100,461,693
361,203
100,822,896
48,005
3,260
51,265
7.18
0.00
249,613,337
20,377,228
269,990,565
19.25
261,628,429
17,656,402
279,284,831
19.89
1.90
0.00
0.65
31,436,696
5
31,436,701
2.24
13,671,581
5
13,671,586
0.97
-1.27
i)
ii)
iii)
Directors & Relatives
Foreign Nationals
Foreign Portfolio
Investors
iv) Non-Residents
v)
vi)
Employee Trust
Qualified Foreign
Investor
vii)
IEPF
viii)
Alternate Investment
Funds
1,576,520
547,173
261,343,131
12,841,446
172,128,421
0
1,292,037
1,115,268
350
21,705
1,576,870
568,878
0.11
0.04
1,562,000
547,173
0
21,705
1,562,000
568,878
0
261,343,131
18.63
233,665,228
0
233,665,228
477,413
13,318,859
0
0
0
0
172,128,421
0
1,292,037
1,115,268
0.95
12.27
0.00
0.09
0.08
14,341,881
185,524,682
0
1,530,131
2,060,287
436,865
14,778,746
0
0
0
0
185,524,682
0
1,530,131
2,060,287
ix)
Trust
17,520,404
4,500
17,524,904
1.25
22,354,772
4,500
22,359,272
Sub-total (B)(2):-
823,116,585
21,291,129
844,407,714
60.20
837,395,862
18,483,940
855,879,802
Total Public Shareholding
(B)=(B)(1)+ (B)(2)
C.
Shares held byCustodian
for GDRs & ADRs
1,358,498,666
21,404,127 1,379,902,793
98.37 1,367,999,856
18,595,282 1,386,595,138
22,826,592
0
22,826,592
1.63
17,296,884
0
17,296,884
0.11
0.04
16.64
1.05
13.22
0.00
0.11
0.15
1.59
60.96
98.77
1.23
Grand Total (A+B+C)
1,381,325,258
21,404,127 1,402,729,385
100.00 1,385,296,740
18,595,282 1,403,892,022
100.00
0.00
0.00
-1.99
0.10
0.94
0.00
0.02
0.07
0.34
0.77
0.40
-0.40
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
Total
NIL
NIL
NIL
NIL
147
Annexure to the Board report aNNUaL report 2019-20
(iii) Change in Promoters’ Shareholding (please specify, if there is no change)
Sl.
No.
1
2
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):
3
At the End of the year
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
NIL
NIL
NIL
NIL
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDrs
and ADrs):
Name of the Share Holder
Date
Sl.
No.
1
LIFE INSURANCE CORPORATION
OF INDIA
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
Shareholding at the
beginning of the Year
05/04/2019
12/04/2019
19/04/2019
26/04/2019
03/05/2019
10/05/2019
10/05/2019
17/05/2019
17/05/2019
24/05/2019
31/05/2019
07/06/2019
14/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
05/07/2019
12/07/2019
12/07/2019
19/07/2019
19/07/2019
Reason
Increase/
Decrease
in share
holding
-2835629 Transfer
-2587133 Transfer
-2583225 Transfer
-3570177 Transfer
-1456282 Transfer
2450 Transfer
-480983 Transfer
2000 Transfer
-2000 Transfer
-550516 Transfer
-1978618 Transfer
-1497501 Transfer
-2171316 Transfer
-1703892 Transfer
5320 Transfer
-1840767 Transfer
31280 Transfer
-2135980 Transfer
200400 Transfer
-1250131 Transfer
265715 Transfer
-2932877 Transfer
148
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
17.59
246676682
243841053
241253920
238670695
235100518
233644236
233646686
233165703
233167703
233165703
232615187
230636569
229139068
226967752
225263860
225269180
223428413
223459693
221323713
221524113
220273982
220539697
217606820
17.38
17.20
17.01
16.76
16.66
16.66
16.62
16.62
16.62
16.58
16.44
16.33
16.18
16.05
16.06
15.92
15.93
15.77
15.79
15.70
15.72
15.51
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
26/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
09/08/2019
16/08/2019
23/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
04/10/2019
11/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
22/11/2019
29/11/2019
29/11/2019
27/12/2019
07/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
06/03/2020
13/03/2020
Reason
Increase/
Decrease
in share
holding
422000 Transfer
-634166 Transfer
1850 Transfer
-1850 Transfer
22830 Transfer
-842667 Transfer
-1297822 Transfer
111925 Transfer
-2432900 Transfer
500 Transfer
-1908933 Transfer
1400 Transfer
-1099280 Transfer
2000 Transfer
-498942 Transfer
42050 Transfer
-872536 Transfer
-749400 Transfer
-33604 Transfer
-583276 Transfer
-1323061 Transfer
14965 Transfer
-706004 Transfer
-1242502 Transfer
560000 Transfer
-1144595 Transfer
-1119539 Transfer
-1950488 Transfer
610 Transfer
-610 Transfer
-299864 Transfer
654700 Transfer
469118 Transfer
399150 Transfer
-150 Transfer
1263852 Transfer
2600275 Transfer
1856570 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
15.54
15.49
15.49
15.49
15.49
15.43
15.34
15.35
15.18
15.18
15.04
15.04
14.96
14.96
14.93
14.93
14.87
14.81
14.81
14.77
14.68
14.68
14.63
14.53
14.57
14.49
14.41
14.27
14.27
14.27
14.25
14.30
14.33
14.36
14.36
14.45
14.63
14.77
218028820
217394654
217396504
217394654
217417484
216574817
215276995
215388920
212956020
212956520
211047587
211048987
209949707
209951707
209452765
209494815
208622279
207872879
207839275
207255999
205932938
205947903
205241899
203999397
204559397
203414802
202295263
200344775
200345385
200344775
200044911
200699611
201168729
201567879
201567729
202831581
205431856
207288426
149
Annexure to the Board report aNNUaL report 2019-20
Sl.
No.
2
3
Name of the Share Holder
Date
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
L&T EMPLOYEES TRUST
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
HDFC TRUSTEE CO LTD A/C
HDFC EQUITY FUND
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
13/03/2020
20/03/2020
20/03/2020
27/03/2020
At the end of the year
Shareholding at the
beginning of the Year
27/03/2020
31/03/2020
At the end of the year
Shareholding at the
beginning of the Year
05/04/2019
05/04/2019
12/04/2019
12/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
03/05/2019
10/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
12/07/2019
19/07/2019
Reason
Increase/
Decrease
in share
holding
-2150 Transfer
1614818 Transfer
-15500 Transfer
298262 Transfer
4396261
9000000
8541 Transfer
-11550 Transfer
102606 Transfer
-4872 Transfer
-3289 Transfer
26710 Transfer
-3968 Transfer
2439 Transfer
-1280 Transfer
5959 Transfer
26020 Transfer
28487 Transfer
-8881 Transfer
22036 Transfer
-50000 Transfer
2065 Transfer
-700000 Transfer
272403 Transfer
46008 Transfer
-875 Transfer
6792 Transfer
-5049 Transfer
206268 Transfer
5567 Transfer
496521 Transfer
150
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
14.77
14.88
14.88
14.90
14.90
12.27
207286276
208901094
208885594
209183856
209183856
172128421
176524682
185524682
185524682
55081556
55090097
55078547
55181153
55176281
55172992
55199702
55195734
55198173
55196893
55202852
55228872
55257359
55248478
55270514
55220514
55222579
54522579
54794982
54840990
54840115
54846907
54841858
55048126
55053693
55550214
12.57
13.22
13.22
3.93
3.93
3.93
3.93
3.93
3.93
3.94
3.93
3.94
3.93
3.94
3.94
3.94
3.94
3.94
3.94
3.94
3.89
3.91
3.91
3.91
3.91
3.91
3.92
3.92
3.96
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
26/07/2019
02/08/2019
09/08/2019
16/08/2019
23/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
04/10/2019
04/10/2019
11/10/2019
11/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
08/11/2019
15/11/2019
15/11/2019
22/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
03/01/2020
10/01/2020
17/01/2020
24/01/2020
Reason
Increase/
Decrease
in share
holding
6866 Transfer
109299 Transfer
13426 Transfer
5234 Transfer
1373337 Transfer
446674 Transfer
642840 Transfer
-92 Transfer
166526 Transfer
400233 Transfer
424240 Transfer
-1020 Transfer
1222 Transfer
1817 Transfer
-126 Transfer
408236 Transfer
-11859 Transfer
503339 Transfer
207476 Transfer
-50000 Transfer
22631 Transfer
3079 Transfer
504 Transfer
-14882 Transfer
30798 Transfer
94552 Transfer
67873 Transfer
-2971 Transfer
54483 Transfer
1483309 Transfer
-1666 Transfer
1023283 Transfer
-2506 Transfer
24430 Transfer
501949 Transfer
368017 Transfer
4698 Transfer
66583 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
3.96
3.97
3.97
3.97
4.07
4.10
4.14
4.14
4.16
4.18
4.21
4.21
4.21
4.21
4.21
4.24
4.24
4.28
4.29
4.29
4.29
4.29
4.29
4.29
4.29
4.30
4.30
4.30
4.31
4.41
4.41
4.49
4.49
4.49
4.52
4.55
4.55
4.55
55557080
55666379
55679805
55685039
57058376
57505050
58147890
58147798
58314324
58714557
59138797
59137777
59138999
59140816
59140690
59548926
59537067
60040406
60247882
60197882
60220513
60223592
60224096
60209214
60240012
60334564
60402437
60399466
60453949
61937258
61935592
62958875
62956369
62980799
63482748
63850765
63855463
63922046
151
Annexure to the Board report aNNUaL report 2019-20
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
4
ICICI PRUDENTIAL CAPITAL
PROTECTION ORIENTED FUND
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
31/01/2020
31/01/2020
07/02/2020
14/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
13/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
At the end of the year
Shareholding at the
beginning of the Year
05/04/2019
05/04/2019
12/04/2019
12/04/2019
19/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
03/05/2019
10/05/2019
10/05/2019
17/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
Reason
Increase/
Decrease
in share
holding
1567 Transfer
-289 Transfer
22649 Transfer
24576 Transfer
-377 Transfer
106113 Transfer
-50000 Transfer
170175 Transfer
-25000 Transfer
22279 Transfer
38116 Transfer
-7875 Transfer
423907 Transfer
-73500 Transfer
865885 Transfer
-137625 Transfer
240872 Transfer
-6000 Transfer
34903 Transfer
-324010 Transfer
391319 Transfer
-459530 Transfer
985 Transfer
-24520 Transfer
60313 Transfer
-195418 Transfer
2341 Transfer
-26119 Transfer
463006 Transfer
-16210 Transfer
569599 Transfer
-109323 Transfer
83719 Transfer
-99347 Transfer
112664 Transfer
152
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
4.55
4.55
4.56
4.56
4.56
4.56
4.56
4.57
4.57
4.57
4.58
4.58
4.61
4.60
4.66
4.65
4.67
4.67
4.67
2.30
2.31
2.28
2.31
2.28
2.28
2.28
2.28
2.27
2.27
2.27
2.30
2.30
2.34
2.33
2.34
2.33
2.34
63923613
63923324
63945973
63970549
63970172
64076285
64026285
64196460
64171460
64193739
64231855
64223980
64647887
64574387
65440272
65302647
65543519
65537519
65537519
32321704
32356607
32032597
32423916
31964386
31965371
31940851
32001164
31805746
31808087
31781968
32244974
32228764
32798363
32689040
32772759
32673412
32786076
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
31/05/2019
07/06/2019
07/06/2019
14/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
05/07/2019
12/07/2019
12/07/2019
19/07/2019
19/07/2019
26/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
16/08/2019
16/08/2019
23/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
30/09/2019
04/10/2019
04/10/2019
Reason
Increase/
Decrease
in share
holding
-556463 Transfer
48675 Transfer
-102204 Transfer
54621 Transfer
-23840 Transfer
2971 Transfer
-946541 Transfer
1159 Transfer
-747077 Transfer
4866 Transfer
-102815 Transfer
2185 Transfer
-157653 Transfer
307626 Transfer
-30750 Transfer
42675 Transfer
-318247 Transfer
8862 Transfer
-11546 Transfer
31082 Transfer
49736 Transfer
-636 Transfer
124246 Transfer
-243944 Transfer
44902 Transfer
-617512 Transfer
226352 Transfer
-306338 Transfer
247922 Transfer
-1008998 Transfer
74832 Transfer
-2946 Transfer
55667 Transfer
-748097 Transfer
14599 Transfer
-137556 Transfer
366728 Transfer
-1284495 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
2.30
2.30
2.29
2.30
2.30
2.30
2.23
2.23
2.18
2.18
2.17
2.17
2.16
2.18
2.18
2.18
2.16
2.16
2.16
2.16
2.16
2.16
2.17
2.15
2.16
2.11
2.13
2.11
2.12
2.05
2.06
2.06
2.06
2.01
2.01
2.00
2.03
1.93
32229613
32278288
32176084
32230705
32206865
32209836
31263295
31264454
30517377
30522243
30419428
30421613
30263960
30571586
30540836
30583511
30265264
30274126
30262580
30293662
30343398
30342762
30467008
30223064
30267966
29650454
29876806
29570468
29818390
28809392
28884224
28881278
28936945
28188848
28203447
28065891
28432619
27148124
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Annexure to the Board report aNNUaL report 2019-20
Name of the Share Holder
Date
Sl.
No.
11/10/2019
11/10/2019
18/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
15/11/2019
22/11/2019
22/11/2019
29/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
31/12/2019
03/01/2020
03/01/2020
10/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
31/01/2020
07/02/2020
07/02/2020
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
154
Reason
Increase/
Decrease
in share
holding
6750546 Transfer
-52037 Transfer
4021 Transfer
-1463445 Transfer
10126 Transfer
-1230093 Transfer
17779 Transfer
-680765 Transfer
20918 Transfer
-337836 Transfer
349 Transfer
-429228 Transfer
7088 Transfer
-424080 Transfer
891591 Transfer
-813667 Transfer
1063464 Transfer
-2074 Transfer
1852496 Transfer
-136524 Transfer
3887 Transfer
-98378 Transfer
109959 Transfer
-1482100 Transfer
1525 Transfer
-1683 Transfer
5676 Transfer
-3075 Transfer
104351 Transfer
-16069 Transfer
127798 Transfer
-7395 Transfer
14096 Transfer
-1831382 Transfer
212977 Transfer
-919116 Transfer
1015541 Transfer
-816621 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
2.42
2.41
2.41
2.31
2.31
2.22
2.22
2.17
2.17
2.15
2.15
2.12
2.12
2.09
2.15
2.10
2.17
2.17
2.30
2.29
2.29
2.29
2.30
2.19
2.19
2.19
2.19
2.19
2.20
2.20
2.20
2.20
2.21
2.07
2.09
2.02
2.10
2.04
33898670
33846633
33850654
32387209
32397335
31167242
31185021
30504256
30525174
30187338
30187687
29758459
29765547
29341467
30233058
29419391
30482855
30480781
32333277
32196753
32200640
32102262
32212221
30730121
30731646
30729963
30735639
30732564
30836915
30820846
30948644
30941249
30955345
29123963
29336940
28417824
29433365
28616744
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
5
SBI - ETF SENSEX
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
14/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
06/03/2020
13/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
At the end of the year
Shareholding at the
beginning of the Year
05/04/2019
12/04/2019
12/04/2019
19/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
10/05/2019
17/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
21/06/2019
Reason
Increase/
Decrease
in share
holding
72165 Transfer
-1854 Transfer
2003 Transfer
-195708 Transfer
2065812 Transfer
-100000 Transfer
992330 Transfer
-302142 Transfer
432195 Transfer
-951339 Transfer
209949 Transfer
-143703 Transfer
491180 Transfer
-1654761 Transfer
170955 Transfer
-298281 Transfer
326133 Transfer
1768 Transfer
-2907 Transfer
43335 Transfer
-13789 Transfer
95830 Transfer
-2 Transfer
153541 Transfer
135814 Transfer
249185 Transfer
-50000 Transfer
612005 Transfer
-2532 Transfer
266874 Transfer
-34400 Transfer
459686 Transfer
-52143 Transfer
87393 Transfer
98291 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
28688909
28687055
28689058
28493350
30559162
30459162
31451492
31149350
31581545
30630206
30840155
30696452
31187632
29532871
29703826
29405545
29405545
32277232
32603365
32605133
32602226
32645561
32631772
32727602
32727600
32881141
33016955
33266140
33216140
33828145
33825613
34092487
34058087
34517773
34465630
34553023
34651314
% of total
shares
of the
Company
2.04
2.04
2.04
2.03
2.18
2.17
2.24
2.22
2.25
2.18
2.20
2.19
2.22
2.10
2.12
2.09
2.09
2.30
2.32
2.32
2.32
2.33
2.33
2.33
2.33
2.34
2.35
2.37
2.37
2.41
2.41
2.43
2.43
2.46
2.46
2.46
2.47
155
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Name of the Share Holder
Date
Sl.
No.
28/06/2019
28/06/2019
05/07/2019
05/07/2019
12/07/2019
19/07/2019
26/07/2019
02/08/2019
09/08/2019
09/08/2019
16/08/2019
23/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
30/09/2019
04/10/2019
11/10/2019
11/10/2019
18/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
15/11/2019
22/11/2019
22/11/2019
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
156
Reason
Increase/
Decrease
in share
holding
43440 Transfer
-14224 Transfer
540859 Transfer
-331 Transfer
294203 Transfer
264616 Transfer
120799 Transfer
272751 Transfer
216344 Transfer
-8299 Transfer
115989 Transfer
98285 Transfer
-27400 Transfer
160650 Transfer
-18210 Transfer
65951 Transfer
-5 Transfer
72434 Transfer
-5504 Transfer
74590 Transfer
-16 Transfer
7 Transfer
-71525 Transfer
17365 Transfer
-7117 Transfer
59163 Transfer
33346 Transfer
-2 Transfer
196884 Transfer
130110 Transfer
429281 Transfer
-20000 Transfer
361505 Transfer
-2 Transfer
211095 Transfer
-12668 Transfer
169706 Transfer
-126 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
2.47
2.47
2.51
2.51
2.53
2.55
2.56
2.58
2.59
2.59
2.60
2.61
2.61
2.62
2.62
2.62
2.62
2.63
2.63
2.63
2.63
2.63
2.63
2.63
2.63
2.63
2.63
2.63
2.65
2.66
2.69
2.68
2.71
2.71
2.73
2.72
2.74
2.74
34694754
34680530
35221389
35221058
35515261
35779877
35900676
36173427
36389771
36381472
36497461
36595746
36568346
36728996
36710786
36776737
36776732
36849166
36843662
36918252
36918236
36918243
36846718
36864083
36856966
36916129
36949475
36949473
37146357
37276467
37705748
37685748
38047253
38047251
38258346
38245678
38415384
38415258
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
29/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
03/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
31/01/2020
07/02/2020
07/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
06/03/2020
13/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
31/03/2020
At the end of the year
Reason
Increase/
Decrease
in share
holding
272995 Transfer
-525000 Transfer
141996 Transfer
-10059 Transfer
69320 Transfer
-396248 Transfer
100757 Transfer
-2352 Transfer
6050 Transfer
-116636 Transfer
309727 Transfer
71223 Transfer
74443 Transfer
71054 Transfer
-3886 Transfer
82355 Transfer
-180000 Transfer
107583 Transfer
-6078 Transfer
120077 Transfer
-298892 Transfer
73961 Transfer
50890 Transfer
-3538 Transfer
479163 Transfer
1210937 Transfer
341121 Transfer
-17500 Transfer
11301237 Transfer
-6788247 Transfer
1601429 Transfer
512241 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
2.76
2.72
2.73
2.73
2.73
2.71
2.71
2.71
2.71
2.70
2.73
2.73
2.74
2.74
2.74
2.75
2.73
2.74
2.74
2.75
2.73
2.73
2.74
2.74
2.77
2.86
2.88
2.88
3.69
3.20
3.32
3.35
3.35
38688253
38163253
38305249
38295190
38364510
37968262
38069019
38066667
38072717
37956081
38265808
38337031
38411474
38482528
38478642
38560997
38380997
38488580
38482502
38602579
38303687
38377648
38428538
38425000
38904163
40115100
40456221
40438721
51739958
44951711
46553140
47065381
47065381
157
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Name of the Share Holder
Date
Sl.
No.
6
ICICI PRUDENTIAL LIFE
INSURANCE COMPANY LIMITED
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
Shareholding at the
beginning of the Year
05/04/2019
12/04/2019
19/04/2019
26/04/2019
03/05/2019
10/05/2019
17/05/2019
24/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
21/06/2019
28/06/2019
05/07/2019
12/07/2019
12/07/2019
19/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
16/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
13/09/2019
20/09/2019
27/09/2019
04/10/2019
11/10/2019
18/10/2019
25/10/2019
01/11/2019
08/11/2019
Reason
Increase/
Decrease
in share
holding
-86737 Transfer
9312 Transfer
-50468 Transfer
2175397 Transfer
319787 Transfer
284007 Transfer
-6709 Transfer
17656 Transfer
395398 Transfer
247629 Transfer
-65000 Transfer
3286 Transfer
1081 Transfer
29794 Transfer
446726 Transfer
265041 Transfer
-4822 Transfer
-19854 Transfer
253158 Transfer
1653 Transfer
-65000 Transfer
-316660 Transfer
-45000 Transfer
7824 Transfer
81280 Transfer
-65000 Transfer
-143205 Transfer
-32086 Transfer
-97093 Transfer
-471431 Transfer
439430 Transfer
253465 Transfer
-125684 Transfer
-57809 Transfer
-64807 Transfer
100000 Transfer
158
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
1.79
25077416
24990679
24999991
24949523
27124920
27444707
27728714
27722005
27739661
28135059
28382688
28317688
28320974
28322055
28351849
28798575
29063616
29058794
29038940
29292098
29293751
29228751
28912091
28867091
28874915
28956195
28891195
28747990
28715904
28618811
28147380
28586810
28840275
28714591
28656782
28591975
28691975
1.78
1.78
1.78
1.93
1.96
1.98
1.98
1.98
2.01
2.02
2.02
2.02
2.02
2.02
2.05
2.07
2.07
2.07
2.09
2.09
2.08
2.06
2.06
2.06
2.06
2.06
2.05
2.05
2.04
2.01
2.04
2.06
2.05
2.04
2.04
2.04
Name of the Share Holder
Date
Sl.
No.
08/11/2019
15/11/2019
22/11/2019
29/11/2019
06/12/2019
13/12/2019
20/12/2019
27/12/2019
31/12/2019
03/01/2020
10/01/2020
17/01/2020
24/01/2020
31/01/2020
07/02/2020
14/02/2020
21/02/2020
28/02/2020
06/03/2020
13/03/2020
20/03/2020
27/03/2020
31/03/2020
At the end of the year
Shareholding at the
beginning of the Year
05/04/2019
19/04/2019
03/05/2019
10/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
07/06/2019
14/06/2019
21/06/2019
05/07/2019
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
7
GOVERNMENT OF SINGAPORE - E
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
Reason
Increase/
Decrease
in share
holding
-224146 Transfer
-48052 Transfer
-822 Transfer
-58314 Transfer
-115027 Transfer
-300932 Transfer
466362 Transfer
-205038 Transfer
-40934 Transfer
60078 Transfer
-139636 Transfer
336107 Transfer
21516 Transfer
565067 Transfer
-581332 Transfer
-269 Transfer
-188746 Transfer
-365972 Transfer
1696 Transfer
-838974 Transfer
160775 Transfer
-126519 Transfer
-140283 Transfer
83363 Transfer
7518 Transfer
-32645 Transfer
-52463 Transfer
-6593 Transfer
8938 Transfer
-47419 Transfer
646440 Transfer
755068 Transfer
42727 Transfer
-12453 Transfer
24837 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
28467829
28419777
28418955
28360641
28245614
27944682
28411044
28206006
28165072
28225150
28085514
28421621
28443137
29008204
28426872
28426603
28237857
27871885
27873581
27034607
27195382
27068863
26928580
26928580
12426432
12509795
12517313
12484668
12432205
12425612
12434550
12387131
13033571
13788639
13831366
13818913
13843750
% of total
shares
of the
Company
2.03
2.02
2.02
2.02
2.01
1.99
2.02
2.01
2.01
2.01
2.00
2.02
2.03
2.07
2.03
2.03
2.01
1.99
1.99
1.93
1.94
1.93
1.92
1.92
0.89
0.89
0.89
0.89
0.89
0.89
0.89
0.88
0.93
0.98
0.99
0.98
0.99
159
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Name of the Share Holder
Date
Sl.
No.
12/07/2019
19/07/2019
19/07/2019
26/07/2019
02/08/2019
09/08/2019
16/08/2019
23/08/2019
30/08/2019
06/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
04/10/2019
11/10/2019
18/10/2019
25/10/2019
01/11/2019
08/11/2019
15/11/2019
22/11/2019
29/11/2019
06/12/2019
13/12/2019
13/12/2019
20/12/2019
31/12/2019
03/01/2020
10/01/2020
10/01/2020
17/01/2020
24/01/2020
31/01/2020
07/02/2020
07/02/2020
14/02/2020
21/02/2020
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
160
Reason
Increase/
Decrease
in share
holding
-26557 Transfer
136266 Transfer
-16711 Transfer
83849 Transfer
167341 Transfer
434049 Transfer
231943 Transfer
230069 Transfer
1454571 Transfer
430564 Transfer
84337 Transfer
14085 Transfer
-7271 Transfer
406826 Transfer
74064 Transfer
-14849 Transfer
19447 Transfer
-49966 Transfer
-9327 Transfer
8222 Transfer
228070 Transfer
196684 Transfer
-495118 Transfer
-325435 Transfer
23946 Transfer
-72958 Transfer
68560 Transfer
43107 Transfer
29454 Transfer
285344 Transfer
-44094 Transfer
-93479 Transfer
-9023 Transfer
1175362 Transfer
1158822 Transfer
-34789 Transfer
286418 Transfer
318876 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
0.98
0.99
0.99
1.00
1.01
1.04
1.06
1.07
1.18
1.21
1.22
1.22
1.22
1.24
1.25
1.25
1.25
1.25
1.25
1.25
1.26
1.28
1.24
1.22
1.22
1.21
1.22
1.22
1.22
1.25
1.24
1.24
1.23
1.32
1.40
1.40
1.42
1.44
13817193
13953459
13936748
14020597
14187938
14621987
14853930
15083999
16538570
16969134
17053471
17067556
17060285
17467111
17541175
17526326
17545773
17495807
17486480
17494702
17722772
17919456
17424338
17098903
17122849
17049891
17118451
17161558
17191012
17476356
17432262
17338783
17329760
18505122
19663944
19629155
19915573
20234449
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
1.47
1.50
1.63
1.78
1.74
1.76
1.76
1.76
1.74
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
8
GENERAL INSURANCE
CORPORATION OF INDIA
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
28/02/2020
06/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
31/03/2020
At the end of the year
Shareholding at the
beginning of the Year
24/05/2019
31/05/2019
07/06/2019
28/06/2019
19/07/2019
26/07/2019
09/08/2019
16/08/2019
23/08/2019
13/09/2019
20/09/2019
27/09/2019
08/11/2019
15/11/2019
22/11/2019
29/11/2019
06/12/2019
13/12/2019
17/01/2020
24/01/2020
07/02/2020
14/02/2020
21/02/2020
28/02/2020
13/03/2020
20/03/2020
27/03/2020
At the end of the year
Reason
Increase/
Decrease
in share
holding
436847 Transfer
452149 Transfer
1687884 Transfer
2184277 Transfer
-582975 Transfer
362947 Transfer
-47248 Transfer
-40000 Transfer
-60000 Transfer
-49000 Transfer
-51000 Transfer
35000 Transfer
65000 Transfer
10000 Transfer
40000 Transfer
50000 Transfer
5000 Transfer
5000 Transfer
20000 Transfer
25000 Transfer
75000 Transfer
40000 Transfer
60000 Transfer
50000 Transfer
250000 Transfer
10000 Transfer
80000 Transfer
65000 Transfer
45000 Transfer
50000 Transfer
40000 Transfer
20000 Transfer
21500 Transfer
1500 Transfer
20671296
21123445
22811329
24995606
24412631
24775578
24728330
24728330
24400000
24360000
24300000
24251000
24200000
24235000
24300000
24310000
24350000
24400000
24405000
24410000
24430000
24455000
24530000
24570000
24630000
24680000
24930000
24940000
25020000
25085000
25130000
25180000
25220000
25240000
25261500
25263000
25263000
1.74
1.73
1.73
1.72
1.73
1.73
1.73
1.74
1.74
1.74
1.74
1.74
1.74
1.75
1.75
1.75
1.76
1.78
1.78
1.78
1.79
1.79
1.79
1.80
1.80
1.80
1.80
1.80
161
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Name of the Share Holder
Date
Sl.
No.
9
RELIANCE CAPITAL TRUSTEE
CO LTD
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
Shareholding at the
beginning of the Year
05/04/2019
05/04/2019
12/04/2019
19/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
03/05/2019
10/05/2019
10/05/2019
17/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
05/07/2019
12/07/2019
12/07/2019
19/07/2019
26/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
09/08/2019
Reason
Increase/
Decrease
in share
holding
1494622 Transfer
-35160 Transfer
426300 Transfer
200219 Transfer
-1728 Transfer
626444 Transfer
-7004 Transfer
46 Transfer
-5813 Transfer
154428 Transfer
-374430 Transfer
212080 Transfer
-254 Transfer
137197 Transfer
-133915 Transfer
40710 Transfer
-746250 Transfer
10340 Transfer
-520435 Transfer
504189 Transfer
-180000 Transfer
28569 Transfer
-90140 Transfer
5008 Transfer
-182035 Transfer
167477 Transfer
-48161 Transfer
1080337 Transfer
-573730 Transfer
591049 Transfer
120065 Transfer
-83677 Transfer
132233 Transfer
-125125 Transfer
427103 Transfer
-611634 Transfer
162
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
1.41
19730114
21224736
21189576
21615876
21816095
21814367
22440811
22433807
22433853
22428040
22582468
22208038
22420118
22419864
22557061
22423146
22463856
21717606
21727946
21207511
21711700
21531700
21560269
21470129
21475137
21293102
21460579
21412418
22492755
21919025
22510074
22630139
22546462
22678695
22553570
22980673
22369039
1.51
1.51
1.54
1.56
1.56
1.60
1.60
1.60
1.60
1.61
1.58
1.60
1.60
1.61
1.60
1.60
1.55
1.55
1.51
1.55
1.53
1.54
1.53
1.53
1.52
1.53
1.53
1.60
1.56
1.60
1.61
1.61
1.62
1.61
1.64
1.59
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
16/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
04/10/2019
04/10/2019
11/10/2019
18/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
15/11/2019
22/11/2019
22/11/2019
29/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
Reason
Increase/
Decrease
in share
holding
186697 Transfer
377028 Transfer
227363 Transfer
-1370 Transfer
27750 Transfer
-13170 Transfer
2577 Transfer
-2625 Transfer
30983 Transfer
-20000 Transfer
85166 Transfer
-551335 Transfer
9495 Transfer
831674 Transfer
-230179 Transfer
-34659 Transfer
75920 Transfer
-948 Transfer
87484 Transfer
-305790 Transfer
25 Transfer
-61189 Transfer
352510 Transfer
-422087 Transfer
240507 Transfer
-314148 Transfer
42684 Transfer
-306878 Transfer
206 Transfer
-40270 Transfer
717462 Transfer
-97929 Transfer
5706 Transfer
-970617 Transfer
67550 Transfer
-977 Transfer
4464 Transfer
-71820 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
1.61
1.63
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.66
1.62
1.62
1.68
1.66
1.66
1.67
1.67
1.67
1.65
1.65
1.65
1.67
1.64
1.66
1.63
1.64
1.62
1.62
1.61
1.66
1.66
1.66
1.59
1.59
1.59
1.59
1.59
22555736
22932764
23160127
23158757
23186507
23173337
23175914
23173289
23204272
23184272
23269438
22718103
22727598
23559272
23329093
23294434
23370354
23369406
23456890
23151100
23151125
23089936
23442446
23020359
23260866
22946718
22989402
22682524
22682730
22642460
23359922
23261993
23267699
22297082
22364632
22363655
22368119
22296299
163
Annexure to the Board report aNNUaL report 2019-20
Name of the Share Holder
Date
Sl.
No.
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
31/12/2019
31/12/2019
03/01/2020
03/01/2020
10/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
31/01/2020
07/02/2020
07/02/2020
14/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
06/03/2020
13/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
At the end of the year
Reason
Increase/
Decrease
in share
holding
43396 Transfer
-20170 Transfer
616112 Transfer
-9063 Transfer
338304 Transfer
-3000 Transfer
3451 Transfer
-898 Transfer
204370 Transfer
-418256 Transfer
1994235 Transfer
-627 Transfer
414340 Transfer
-12 Transfer
59926 Transfer
-1120236 Transfer
177948 Transfer
-620000 Transfer
465934 Transfer
-1419275 Transfer
218039 Transfer
-512589 Transfer
78034 Transfer
-515617 Transfer
672643 Transfer
-546725 Transfer
971074 Transfer
-264102 Transfer
26337 Transfer
-10875 Transfer
164
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
1.59
1.59
1.63
1.63
1.66
1.66
1.66
1.66
1.67
1.64
1.78
1.78
1.81
1.81
1.82
1.74
1.75
1.71
1.74
1.64
1.65
1.62
1.62
1.59
1.63
1.60
1.66
1.65
1.65
1.65
1.65
22339695
22319525
22935637
22926574
23264878
23261878
23265329
23264431
23468801
23050545
25044780
25044153
25458493
25458481
25518407
24398171
24576119
23956119
24422053
23002778
23220817
22708228
22786262
22270645
22943288
22396563
23367637
23103535
23129872
23118997
23118997
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
1.08
Name of the Share Holder
Date
Sl.
No.
10 NPS TRUST- A/C KOTAK
PENSION FUND SCHEME
E - TIER
Shareholding at the
beginning of the Year
Reason
Increase/
Decrease
in share
holding
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
05/04/2019
12/04/2019
19/04/2019
26/04/2019
03/05/2019
10/05/2019
17/05/2019
24/05/2019
31/05/2019
07/06/2019
14/06/2019
21/06/2019
28/06/2019
05/07/2019
12/07/2019
19/07/2019
26/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
16/08/2019
16/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
13/09/2019
20/09/2019
27/09/2019
04/10/2019
11/10/2019
18/10/2019
25/10/2019
01/11/2019
47760 Transfer
61754 Transfer
9901 Transfer
9401 Transfer
4086 Transfer
8080 Transfer
239625 Transfer
113300 Transfer
41600 Transfer
66250 Transfer
3468 Transfer
53100 Transfer
25600 Transfer
60700 Transfer
70863 Transfer
170218 Transfer
183550 Transfer
-27369 Transfer
203367 Transfer
-11716 Transfer
70992 Transfer
67404 Transfer
-31700 Transfer
82493 Transfer
111172 Transfer
-80 Transfer
52846 Transfer
79850 Transfer
172699 Transfer
93570 Transfer
9000 Transfer
21250 Transfer
94400 Transfer
9950 Transfer
56500 Transfer
15111340
15159100
15220854
15230755
15240156
15244242
15252322
15491947
15605247
15646847
15713097
15716565
15769665
15795265
15855965
15926828
16097046
16280596
16253227
16456594
16444878
16515870
16583274
16551574
16634067
16745239
16745159
16798005
16877855
17050554
17144124
17153124
17174374
17268774
17278724
17335224
1.08
1.09
1.09
1.09
1.09
1.09
1.10
1.11
1.12
1.12
1.12
1.12
1.13
1.13
1.14
1.15
1.16
1.16
1.17
1.17
1.18
1.18
1.18
1.19
1.19
1.19
1.20
1.20
1.22
1.22
1.22
1.22
1.23
1.23
1.24
165
Annexure to the Board report aNNUaL report 2019-20
Name of the Share Holder
Date
Sl.
No.
08/11/2019
15/11/2019
22/11/2019
29/11/2019
06/12/2019
13/12/2019
20/12/2019
27/12/2019
31/12/2019
03/01/2020
10/01/2020
17/01/2020
24/01/2020
31/01/2020
07/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
13/03/2020
20/03/2020
27/03/2020
31/03/2020
At the end of the year
Shareholding at the
beginning of the Year
01/11/2019
20/12/2019
27/12/2019
03/01/2020
24/01/2020
14/02/2020
21/02/2020
28/02/2020
20/03/2020
27/03/2020
At the end of the year
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
11 NOMURA INDIA INVESTMENT
FUND MOTHER FUND
Date wise Increase / Decrease
in Shareholding during the year
specifying the reasons for increase
and decrease (e.g. allotment/
transfer/bonus/sweat etc.)
166
Reason
Increase/
Decrease
in share
holding
52900 Transfer
87850 Transfer
82928 Transfer
125367 Transfer
148159 Transfer
104756 Transfer
57085 Transfer
154600 Transfer
87750 Transfer
114359 Transfer
128524 Transfer
21829 Transfer
55621 Transfer
14516 Transfer
43316 Transfer
113925 Transfer
52230 Transfer
-8000 Transfer
428090 Transfer
-8000 Transfer
141533 Transfer
146709 Transfer
114200 Transfer
337515 Transfer
8821 Transfer
-200000 Transfer
-962889 Transfer
-150000 Transfer
-100000 Transfer
-250000 Transfer
-100000 Transfer
-502000 Transfer
-400000 Transfer
-200000 Transfer
-9812174 Transfer
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
Company
1.24
1.25
1.25
1.26
1.27
1.28
1.28
1.29
1.30
1.31
1.32
1.32
1.32
1.32
1.33
1.33
1.34
1.34
1.37
1.37
1.38
1.39
1.40
1.42
1.42
1.42
0.93
0.90
0.89
0.82
0.81
0.80
0.78
0.78
0.74
0.71
0.70
0.00
17388124
17475974
17558902
17684269
17832428
17937184
17994269
18148869
18236619
18350978
18479502
18501331
18556952
18571468
18614784
18728709
18780939
18772939
19201029
19193029
19334562
19481271
19595471
19932986
19941807
19941807
13077063
12477063
11514174
11364174
11264174
11014174
10914174
10412174
10012174
9812174
0
0
(v) Shareholding of directors and Key Managerial Personnel:
Shareholding at the
beginning of the year
No. of
shares
At the Beginning of the year
424,958
% of total
Shares
of the
Company
0.03
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
265,584
0.02
424,958
0.03
At the End of the year
At the beginning of the year
328,500
0.02
265,584
0.02
At the End of the year
At the beginning of the year
23/05/2019 (Sold)
24/05/2019 (Sold)
27/05/2019 (Sold)
90,125
-500
-1,000
-1,500
328,500
0.02
0.01
At the End of the year
At the beginning of the year
46,054
0.00
87,125
0.01
Sl.
No.
Name of Director / KMP
1
2
3
4
5
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):
D. K. SEN
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
46,054
0.00
167
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Shareholding at the
beginning of the year
No. of
shares
At the beginning of the year
14/06/2019 (Sold)
64,312
-15,000
% of total
Shares
of the
Company
0.00
Cumulative Shareholding
during the year
No. of
shares
% of total
Shares
of the
Company
Sl.
No.
6
Name of Director / KMP
M. V. SATISH
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):
7
J. D. PATIL
At the End of the year
As on the date of
appointment as director
174,100
0.01
49,312
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):
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):
8
9
10
At the End of the year
At the beginning of the year
2,443
0.00
174,100
0.01
At the End of the year
At the beginning of the year
1,125
0.00
2,443
0.00
At the End of the year
At the beginning of the year
225
0.00
1,125
0.00
At the End of the year
225
0.00
168
Shareholding at the
beginning of the year
No. of
shares
At the beginning of the year
1,327
% 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
150
0.00
1,327
0.00
-
At the End of the year
At the beginning of the year
08/09/2019 (ceased to be
Director)
7,680
0.00
Ceased as
Director
150
0.00
At the End of the year
At the beginning of the year
1,500
0.00
-
-
At the End of the year
At the beginning of the year
4,500
0.00
1,500
0.00
Sl.
No.
11
12
13
14
15
Name of Director / KMP
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):
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):
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):
NARAYANAN KUMAR
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):
SANJEEV AGA
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
4,500
0.00
169
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Sl.
No.
16
17
18
19
20
Name of Director / KMP
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):
THOMAS MATHEW T.
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):
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):
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):
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):
Shareholding at the
beginning of the year
No. of
shares
At the beginning of the year
150
22.04.2019 (Transfer back
to LIC)
-50
% 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
150
0.00
100
0.00
At the End of the year
At the beginning of the year
150
0.00
150
0.00
At the End of the year
At the beginning of the year
94,650
0.01
150
0.00
At the End of the year
At the beginning of the year
150
0.00
94,650
0.01
At the End of the year
150
0.00
170
Sl.
No.
21
22
23
24
Name of Director / KMP
ARVIND GUPTA jointly
with ADMINISTRATOR
OF THE 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):
HEMANT BHARGAVA
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):
HEMANT 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):
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):
Shareholding at the
beginning of the year
No. of
shares
At the beginning of the year
100
% of total
Shares
of the
Company
0.00
Cumulative Shareholding
during the year
No. of
shares
% of total
Shares
of the
Company
26/03/2020 (ceased to be a
Director)
Ceased as
Director
At the End of the year
At the beginning of the
year
100
0.00
-
At the End of the year
At the beginning of the year
90
0.00
100
0.00
At the End of the year
At the beginning of the year
01-Jan-20 (ceased to be
Company Secretary)
34,710
0.00
Ceased to
be Company
Secretary
90
0.00
At the End of the year
–
–
171
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
Shareholding at the
beginning of the year
% of total
Shares
of the
Company
0.00
No. of
shares
2,750
500
Cumulative Shareholding
during the year
No. of
shares
% of total
Shares
of the
Company
Appointed as Company
Secretary on 02/01/2020
24/03/2020 (Purchase)
Sl.
No.
Name of Director / KMP
24
SIVARAM NAIR A
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):
V.
INdEBTEdNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment as on 31st March 2020
At the End of the year
3,250
0.00
Secured Loans
excluding
deposits
Unsecured
Loans
deposits
v 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)
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)
ii)
principal Amount *
Interest due but not paid
iii)
Interest accrued but not due
1750.08
10239.61
–
–
–
–
1750.08
10239.61
2925.22
60120.67
(2508.20)
(47032.39)
1.76
–
288.55
–
418.78
13376.83
2168.86
23616.44
–
–
–
–
Total (i+ii+iii)
2168.86
23616.44
* principal amount mentioned includes interest accrued but not due.
^ Addition during the financial year includes interest accrued but not due.
–
–
–
–
–
–
–
–
–
–
–
–
–
11989.69
–
–
11989.69
63045.89
(49540.59)
290.31
–
13795.61
25785.30
–
–
25785.30
172
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
R SHANKAR RAMAN
Name of MD / WTD / Manager
D. K. SEN
SHAILENDRA ROY
M. V. SATISH
J. D. PATIL
V crore
Total
Amount
S. N.
SUBRAHMANYAN
2.592
1.830
1.710
1.350
1.350
1.140
9.972
12.447
3.409
0.180
0.180
0.225
0.180
16.621
–
–
–
9.008
–
3.132
–
–
–
5.885
–
2.083
27.179
13.207
–
–
–
3.374
–
1.373
6.637
–
–
–
2.027
–
0.912
4.469
–
–
–
3.023
–
1.181
5.779
–
–
–
2.723
–
1.043
5.086
–
–
–
26.040
–
9.724
62.357
744.79
B. rEMUNEraTIoN To oTHEr dIrECTorS
Sl.
No.
Particulars of
Remuneration
A M Naik M M Chitale
Subodh
Bhargava
M Damodaran Vikram Singh
Mehta
Adil
Zainulbhai
Name of Directors
Sunita Sharma
Thomas
Mathew T
Akhilesh
Gupta
Ajay Shankar Subrmanian
Sarma
Naina Lal
Kidwai
Sanjeev Aga Narayanan
Kumar
Arvind
Gupta
Hemant
Bhargava
V crore
Total
Amount
0.097
0.070
0.055
0.054
0.070
0.020
0.392
–
0.433
–
0.180
–
0.240
–
0.315
–
0.058
–
0.489
0.503
0.235
0.294
0.385
0.078
–
–
–
–
0.070
0.064
0.274
–
0.273
–
0.344
0.337
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.064
0.191*
–
–
–
–
–
–
–
–
0.489
–
0.503
–
0.235
–
0.294
–
0.385
–
0.078
0.255
0.255
–
0.344
–
0.337
–
–
–
–
–
–
–
–
–
–
–
–
–
0.060
3.100
3.022
6.182
6.182
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
@ Others include pension of R 3 crore and perquisite value of medical R 0.022 crore
* Paid to the institutions they represent
0.050
0.085
0.080
0.145
–
0.237
–
0.198
–
0.195
0.322
0.278
–
–
–
–
–
–
–
–
0.715
2.745
–
3.460
0.050
0.020
0.194
–
–
–
–
–
–
–
–
–
0.145*
–
–
0.195
–
0.322
–
0.278
0.195
0.195
0.023*
–
0.043
0.043
3.459
3.022
6.675
10.135
72.492
819.270
173
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
C. rEMUNEraTIoN To KEY MaNaGErIaL PErSoNNEL oTHEr THaN Md / MaNaGEr / WTd
Particulars of Remuneration
Key Managerial Personnel
CEO
Company
Secretary (N.
Hariharan) till
01.01.2020
Company
Secretary
(Sivaram
Nair) from
02.01.2020
V 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
(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
Not Applicable
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 dEF aULT
penalty
punishment
Compounding
174
1.868
0.308
0.050
0.001
–
–
–
–
–
0.088
–
–
0.080
0.036
1.998
0.433
Not Applicable
2.176
0.051
–
0.088
–
–
0.116
2.431
details of
Penalty/
Punishment/
Compounding
fees imposed
authority [rd/
NCLT/CoUrT]
appeal made,
if any (give
details)
NIL
NIL
NIL
annexure ‘G’ to the Board report
dIVIdENd dISTrIBUTIoN PoLICY
INTrodUCTIoN
As per Regulation 43A of the Securities and exchange
Board of India (Listing obligations and Disclosure
Requirements) Regulations, 2015, prescribed Listed
Companies are required to frame a Dividend Distribution
policy.
PUrPoSE
the purpose of this policy is to regulate the process of
dividend declaration and its pay-out by the Company
which would ensure a regular dividend income for the
shareholders and long term capital appreciation for all
stakeholders of the Company.
aUTHorITY
this policy has been adopted by the Board of Directors of
Larsen & toubro Limited (‘the Company’) at its Meeting
held on 22nd November, 2016. the policy shall also be
displayed in the annual reports and also on the website of
the Company.
ForMS oF dIVIdENdS
the Companies Act provides for two forms of Dividend:
•
Final Dividend
the final dividend is paid once for the financial
year after the annual accounts are prepared. the
Board of Directors of the Company has the power
to recommend the payment of final dividend to
the shareholders for their approval at the general
meeting of the Company. the declaration of final
dividend shall be included in the ordinary business
items that are required to be transacted at the
Annual General Meeting.
•
Interim Dividend
this form of dividend can be declared by the Board
of Directors one or more times in a financial year as
may be deemed fit by it. the Board of Directors shall
have the absolute power to declare interim dividend
during the financial year, in line with this policy. the
Board should consider declaring an interim dividend
after finalization of quarterly/ half yearly financial
results. this would be in order to supplement
the annual dividend or to reward shareholders in
exceptional circumstances.
QUaNTUM oF dIVIdENd aNd dISTrIBUTIoN
Dividend payout in a particular year shall be determined
after considering the operating and financial performance
of the Company and the cash requirement for financing
the Company’s future growth. In line with the past
practice, the payout ratio is expected to grow in
accordance with the profitable growth of the Company
under normal circumstances.
dECLaraTIoN oF dIVIdENd
Dividend shall be declared or paid only out of-
1) Current financial year’s profit:
a) after providing for depreciation in accordance
with law;
b) after transferring to reserves such amount as
may be prescribed or as may be otherwise
considered appropriate by the Board at its
discretion
2) the profits for any previous financial year(s) after
providing for depreciation in accordance with law
and remaining undistributed; or
3) out of 1) & 2) both.
the circumstances under which shareholders may not
expect dividend/or when the dividend could not be
declared by the Company shall include, but are not
limited to, the following:
a. Due to operation of any other law in force;
b. Due to losses incurred by the Company and the
Board considers it appropriate not to declare dividend
for any particular year;
c. Due to any restrictions and covenants contained in
any agreement as may be entered with the Lenders
and
d. Due to any default on part of the company.
FaCTorS aFFECTING dIVIdENd dECLara TIoN
the Dividend pay-out decision of any company, depends
upon certain external and internal factors-
External Factors:
•
Legal/ Statutory Provisions and Regulatory concern:
the Board should keep in mind the restrictions
imposed by Companies Act, any other applicable
laws with regard to declaration and distribution
175
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
of dividend. Further, any restrictions on payment
of dividends by virtue of any regulation as may be
applicable to the Company may also impact the
declaration of dividend.
•
State of Economy: The Board will endeavor to retain
larger part of profits to build up reserves to absorb
future shocks in case of uncertain or recessionary
economic conditions and in situation where the
policy decisions of the Government have a bearing
on or affect the business of the Company.
• Nature of Industry: The nature of industry in which
a company is operating, influences the dividend
decision. Like the industries with stable demand
throughout the year are in a position to have stable
earnings and thus declare stable dividends.
•
Taxation Policy: The tax policy of a country also
influences the dividend policy of a company. the
rate of tax directly influences the amount of profits
available to the company for declaring dividends.
• Capital Markets: In case of unfavorable market
conditions, Board may resort to a conservative
dividend pay-out in order to conserve cash outflows
and reduce the cost of raising funds through
alternate resources.
Internal Factors:
Apart from the various external factors, the Board shall
take into account various internal factors including the
financial parameters while declaring dividend, which inter
alia will include -
• Magnitude and Stability of Earnings: The extent of
stability and magnitude of company’s earnings will
directly influence the dividend declaration. thus, the
dividend is directly linked with the availability of the
earnings (including accumulated earnings) with the
company.
•
Liquidity Position: A company’s liquidity position also
determines the level of dividend. If a company does
not have sufficient cash resources to make dividend
payment, then it may reduce the amount of dividend
pay-out.
•
Future Requirements: If a company foresees some
profitable investment opportunities in near future
including but not limited to Brand/ Business
Acquisitions, expansion / Modernization of existing
businesses, Additional investments in subsidiaries/
associates of the Company, Fresh investments into
external businesses, then it may decide for lower
dividend payout and vice-versa.
•
Leverage profile and liabilities of the Company.
• Any other factor as deemed fit by the Board.
rETaINEd EarNINGS
the portion of profits not distributed among the
shareholders but retained and used in business are termed
as retained earnings. It is also referred to as ploughing
back of profit. the Company should ensure to strike
the right balance between the quantum of dividend
paid and amount of profits retained in the business for
various purposes. these earnings may be utilized for
internal financing of its various projects and for fixed as
well as working capital. thus the retained earnings shall
be utilized for carrying out the main objectives of the
company and maintaining adequate liquidity levels.
ParaMETErS THaT SHaLL BE adoPTEd WITH
rEGard To VarIoUS CLaSSES oF SHarE
the Company does not have different classes of shares
and follows the ‘one share, one vote’ principle.
rEVIEW & aMENdMENT
the policy shall be reviewed as and when required
to ensure that it meets the objectives of the relevant
legislation and remains effective. the executive
Management Committee has the right to change/amend
the policy as may be expedient taking into account the
law for the time being in force.
176
annexure ‘H’ to the Board report
NoMINaTIoN aNd rEMUNEraTIoN PoLICY
2. dEFINITIoNS:
the Board of Directors of Larsen & toubro Limited
(“the Company”) had constituted the “Nomination and
Remuneration Committee” which is in compliance with
the requirements of the Companies Act, 2013 (“Act”)
and SeBI (Listing obligations and Disclosure Requirements)
Regulations, 2015 (“LoDR”).
1. oBJECTIVE:
the Nomination and Remuneration Committee and
this policy shall be in compliance with Section 178 of
the Act read along with the applicable rules thereto
and Regulation 19 of LoDR. the Key objectives of the
Committee would be:
zz
zz
zz
zz
zz
to identify persons who are qualified to become
directors and who may be appointed in senior
management in accordance with the criteria laid
down, recommend to the Board their appointment
and removal and shall specify the manner for
effective evaluation of performance of Board, its
Committees and individual directors to be carried
out by the Board or the Nomination & Remuneration
Committee or by an Independent external Agency
and review its implementation and compliance;
to formulate the criteria for determining
qualifications, positive attributes and independence
of a director and recommend to the Board a policy,
relating to the remuneration for the directors, key
managerial personnel and other employees;
to ensure that level and composition of remuneration
is reasonable and sufficient to attract, retain and
motivate directors of the quality required to run the
company successfully;
Relationship of remuneration to performance is clear
and meets appropriate performance benchmarks;
Remuneration to directors, key managerial personnel
and senior management involves a balance between
fixed and incentive pay reflecting short and long-term
performance objectives appropriate to the working of
the company and its goals;
zz
Devising a policy on Board diversity;
2.1. act means the Companies Act, 2013 or Companies
Act, 1956 as may be applicable and Rules framed
thereunder, as amended from time to time.
2.2. Board means Board of Directors of the Company.
2.3. directors means Directors of the Company.
2.4. Executive directors means the Executive
Chairman if any, Chief Executive officer and
Managing director, deputy Managing director, if
any and Whole-time directors.
2.5. Key Managerial Personnel means
zz
Chief executive officer or the Managing Director
or the Manager;
zz Whole-time directors;
zz
Chief Financial officer;
zz
Company Secretary;
zz
Senior Management personnel designated as
such by the Board; and
zz
Such other officer as may be prescribed.
2.6. Senior Management Personnel means all
members of management one level below the
Executive directors including the Chief Financial
officer and Company Secretary. Presently,
persons in Sr. Vice President grade and F&a
heads of Independent Companies reporting to
Whole-time directors will be covered as Senior
Management Personnel.
3. roLE oF CoMMITTEE:
3.1. Matters to be dealt with, perused and
recommended to the Board by the Nomination
and remuneration Committee
the Committee shall:
zz
Formulate the criteria for determining
qualifications, positive attributes and
independence of a director.
zz
Identify persons who are qualified to become
Director and persons who may be appointed
177
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
in Key Managerial and Senior Management
positions in accordance with the criteria laid
down in this policy.
zz
Recommend to the Board, appointment
and removal of Director, KMp and Senior
Management personnel.
3.2. Policy for appointment and removal of director,
KMP and Senior Management
3.2.1. appointment criteria and qualifications
a) the Committee shall identify and ascertain the
integrity, qualification, expertise and experience
of the person for appointment as Director and
recommend to the Board his/her appointment.
Appointment and Remuneration of KMp or
Senior Management personnel is in accordance
with the HR policy of the Company. the
Company’s policy is committed to acquire,
develop and retain a pool of high calibre talent,
establish systems and practises for maintaining
transparency, fairness and equity and provides
for payment of competitive pay packages
matching industry standards.
b) A person should possess adequate qualification,
expertise and experience for the position he / she
is considered for appointment. the Committee
has discretion to decide whether qualification,
expertise and experience possessed by a person
is sufficient / satisfactory for the concerned
position.
c) the Company shall not appoint or continue the
employment of any person as Director who has
attained the retirement age fixed by the Board or
as approved by the Shareholders pursuant to the
requirement of the Act/LoDR.
3.2.2. Term / Tenure
a) Executive directors:
the Company shall appoint or re-appoint
any person as its executive Director for a
term not exceeding five years at a time. No
re-appointment shall be made earlier than one
year before the expiry of term.
b)
Independent director:
-
An Independent Director shall hold office for
a term up to five consecutive years on the
-
-
Board of the Company and will be eligible
for re-appointment on passing of a special
resolution by the Company and disclosure of
such appointment in the Board’s report. the
rationale for such re-appointment shall also
be provided in the Notice to Shareholders
proposing such re-appointment.
No Independent Director shall hold office for
more than two consecutive terms, but such
Independent Director shall be eligible for
appointment after expiry of three years of
ceasing to become an Independent Director.
provided that an Independent Director shall
not, during the said period of three years,
be appointed in or be associated with the
Company in any other capacity, either
directly or indirectly.
At the time of appointment of Independent
Director it should be ensured that number of
Boards on which such Independent Director
serves is restricted to seven listed companies
as an Independent Director and three listed
companies as an Independent Director in
case such person is serving as a Whole-time
Director of a listed company or such other
number as may be prescribed under the Act.
c) Maximum Number of directorships:
-
A person shall not be appointed as a
Director in case he is a Director in more
than eight listed companies after April 1,
2019 and seven listed companies after April
1, 2020. For the purpose of this clause
listed companies would mean only those
companies whose equity shares are listed.
3.2.3. Evaluation
the Committee shall by itself or through the Board or
an independent external agency carry out evaluation
of performance of the Board/Committee(s), Individual
Directors and Chairman at regular interval (yearly)
and review implementation and compliance.
the Company may disclose in the Annual Report:
a. observation of the Board evaluation for the year
under review
b. previous years observations and actions taken
178
c. proposed actions based on current year’s
observations
3.2.4. removal
Due to reasons for any disqualification mentioned
in the Act or under any other applicable Act, rules
and regulations thereunder, the Committee may
recommend, to the Board with reasons recorded
in writing, removal of a Director, KMp or Senior
Management personnel subject to the provisions and
compliance of the said Act, rules and regulations.
3.2.5. retirement
the Director, KMp and Senior Management personnel
shall retire as per the applicable provisions of
the Act or the prevailing policy of the Company,
as applicable. the Board/Committee will have
the discretion to retain the Director, KMp, Senior
Management personnel in the same position/
remuneration or otherwise even after attaining the
retirement age, for the benefit of the Company.
3.3. Policy relating to the remuneration of Executive
director, KMP and Senior Management
Personnel
3.3.1. General:
a) the remuneration / compensation / commission
etc. to the executive Directors will be determined
by the Committee and recommended to
the Board for approval. the remuneration /
compensation / commission etc. shall be subject
to the approval of the shareholders of the
Company and Central Government, wherever
required.
b) the remuneration and commission to be paid
to the executive Directors shall be in accordance
with the percentage / limits / conditions laid
down in the Articles of Association of the
Company and as per the provisions of the Act.
c)
Increments to the existing remuneration/
compensation structure may be recommended
by the Committee to the Board which should be
within the limits approved by the Shareholders in
the case of executive Directors.
d) Where any insurance is taken by the Company
on behalf of its executive Directors, Chief
executive officer, Chief Financial officer, the
Company Secretary and any other employees
for indemnifying them against any liability, the
premium paid on such insurance shall not be
treated as part of the remuneration payable to
any such personnel. provided that if such person
is proved to be guilty, the premium paid on
such insurance shall be treated as part of the
remuneration.
e) Remuneration of other KMp or Senior
Management personnel, in any form, shall be
as per the policy of the Company based on the
grade structure in the Company.
3.3.2. remuneration to Executive directors/ KMP and
Senior Management Personnel:
a) Fixed pay:
the executive Directors/ KMp and Senior
Management personnel shall be eligible for
a monthly remuneration as may be approved
by the Board on the recommendation of the
Committee or policy of the Company. In case
of remuneration to Directors, the breakup
of the pay scale and quantum of perquisites
including, employer’s contribution to p.F, pension
scheme, medical expenses, club fees etc. shall be
decided and approved by the Board/ the person
authorized by the Board on the recommendation
of the Committee and approved by the
shareholders and Central Government, wherever
required.
b) Minimum remuneration:
If, in any financial year, the Company has
no profits or its profits are inadequate, the
Company shall pay remuneration to its executive
Directors in accordance with the provisions of
Schedule V of the Act and if it is not able to
comply with such provisions, with the previous
approval of the Central Government.
c) Provisions for excess remuneration:
If any Chairman/Managing Director/Whole-time
Directors draws or receives, directly or indirectly
by way of remuneration any such sums in excess
of the limits prescribed under the Act or without
the prior sanction of the Central Government,
where required, he / she shall refund such
sums to the Company and until such sum is
179
aNNEXUrE to tHe BoARD RepoRt ANNUAL RepoRt 2019-20
refunded, hold it in trust for the Company. the
Company shall not waive recovery of such sum
refundable to it unless permitted by the Central
Government.
d) Stock options in Subsidiary Companies:
executive Directors may be granted stock options
in subsidiary companies as per their Schemes
and after taking necessary approvals. perquisites
may be added to the remuneration of concerned
directors and considered in the limits applicable
to the Company.
3.3.3. remuneration to Non- Executive / Independent
4. MEMBErSHIP
4.1 the Committee shall consist of a minimum 3 non-
executive directors, half of them being independent.
4.2 Minimum two (2) members or one-third of the
members whichever is greater including atleast one
Independent Director shall constitute a quorum for
the Committee meeting.
4.3 Membership of the Committee shall be disclosed in
the Annual Report.
4.4 term of the Committee shall be continued unless
terminated by the Board of Directors.
director:
5. CHaIrPErSoN
a) remuneration / Commission:
the remuneration / commission shall be fixed as
per the limits and conditions mentioned in the
Articles of Association of the Company and the
Act.
b) Sitting Fees:
the Non- executive / Independent Director
may receive remuneration by way of fees for
attending meetings of Board or Committee
thereof. provided that the amount of such fees
shall not exceed R one Lac per meeting of the
Board or Committee or such amount as may be
prescribed by the Central Government from time
to time.
c) Commission:
Commission may be paid within the monetary
limit approved by shareholders, subject to
the limit not exceeding 1% of the profits of
the Company computed as per the applicable
provisions of the Act. the Board of Directors will
fix the Commission payable to Directors on the
basis of number of Board/Committee meetings
attended during the year and Chairmanships of
Committees.
d) Stock options:
An Independent Director shall not be entitled
to any stock option of the Company. Non-
executive Directors are eligible for Stock options
in accordance with Schemes formulated by the
Company. Nominee Directors are not entitled to
stock options as per their respective nomination
letters received by the Company.
5.1 Chairperson of the Committee shall be an
Independent Director.
5.2 Chairperson of the Company may be appointed
as a member of the Committee but shall not be a
Chairman of the Committee.
5.3 In the absence of the Chairperson, the members of
the Committee present at the meeting shall choose
one amongst them to act as Chairperson.
5.4 Chairman of the Nomination and Remuneration
Committee meeting could be present at the Annual
General Meeting or may nominate some other
member to answer the shareholders’ queries.
6. FrEQUENCY oF MEETINGS
the meeting of the Committee shall be held atleast
once in a year and at such regular intervals as may be
required.
7. CoMMITTEE MEMBErS’ INTErESTS
7.1 A member of the Committee is not entitled to be
present/participate in discussion when his or her own
remuneration is discussed at a meeting or when his
or her performance is being evaluated.
7.2 the Committee may invite such executives, as it
considers appropriate, to be present at the meetings
of the Committee.
8. SECrETarY
the Company Secretary of the Company shall act as
Secretary of the Committee.
9. VoTING
Matters arising for determination at Committee meetings
shall be decided by a majority of votes of Members
180
present and voting and any such decision shall for all
purposes be deemed a decision of the Committee.
10. NoMINaTIoN dUTIES
the duties of the Committee in relation to nomination
matters include:
10.1 ensuring that on appointment to the Board,
Non-executive Directors receive a formal letter of
appointment in accordance with the Guidelines
provided under the Act;
10.2 Determining the appropriate size, diversity and
composition of the Board;
10.3 Setting a formal and transparent procedure for
selecting new Directors for appointment to the
Board;
10.4 Developing a succession plan for the Board and
11. rEMUNEraTIoN dUTIES
the duties of the Committee in relation to remuneration
matters include:
11.1 to consider and determine the Remuneration policy,
based on the performance and also bearing in mind
that the remuneration is reasonable and sufficient
to attract retain and motivate members of the Board
and such other factors as the Committee shall deem
appropriate and all elements of the remuneration of
the members of the Board.
11.2 to ensure the remuneration maintains a balance
between fixed and incentive pay reflecting short and
long term performance objectives appropriate to the
working of the Company.
11.3 to delegate any of its powers to one or more of its
members or the Secretary of the Committee.
Senior Management and regularly reviewing the plan;
11.4 to consider any other matters as may be requested by
10.5 evaluating the performance of the Board members
and Senior Management in the context of the
Company’s performance from business and
compliance perspective;
10.6 Making recommendations to the Board concerning
any matters relating to the continuation in office of
any Director at any time including the suspension or
termination of service of an executive Director as an
employee of the Company subject to the provision of
the law and their service contract.
10.7 Delegating any of its powers to one or more of its
members or the Secretary of the Committee;
10.8 Recommend any necessary changes to the Board; and
10.9 Considering any other matters, as may be requested
by the Board.
the Board.
11.5 professional indemnity and liability insurance for
Directors and senior management.
12. MINUTES oF NoMINaTIoN aNd rEMUNEraTIoN
CoMMITTEE MEETING
proceedings of all meetings must be minuted and signed
by the Chairman of the Committee at the subsequent
meeting. Minutes of the Committee meetings will be
tabled at the subsequent Board and Committee meeting.
13. rEVIEW & aMENdMENT:
the policy shall be reviewed as and when required
to ensure that it meets the objectives of the relevant
legislation and remains effective. the executive
Committee has the right to change/amend the policy as
may be expedient taking into account the law for the
time being in force.
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MANAGEMENT DISCUSSION AND ANALYSIS ANNUAL REPORT 2019-20
MANAGEMENT
DISCUSSION
AND
ANALYSIS
The Indian economy has been exhibiting lacklustre growth
in the face of global volatility amidst weak manufacturing,
muted domestic demand and volatility in oil prices.
Real GDP growth has slowed down from 6.1 per cent
in fiscal 2018-19 to 4.2 per cent in the backdrop of the
slowdown in private consumption, lower tax collections,
fund allocation challenges at the State and Central
Government levels, and a sharp slowdown in credit
growth. To overcome the slowdown, various reforms
were announced by the Government in FY 2019-20, viz.
reduction in corporate tax rates, a scheme to provide a
one-time partial credit guarantee to public sector banks
(PSBs) for purchase of pooled assets of financially sound
non-banking financial companies (NBFCs), recapitalization
of public sector banks, relaxation of external commercial
borrowing guidelines for affordable housing, setting up of
a Realty Fund for stalled housing projects, merger of 10
public sector banks into four entities and revised Priority
Sector Lending (PSL) norms for exports.
Private sector investments continued to be muted in the
areas of industrial capex and building infrastructure. Public
sector spending, however, remained firm and was robust in
the areas of core infrastructure, driven by the Government’s
commitment to boost investment across multiple
infrastructure sectors. The Government also announced
the National Infrastructure Pipeline (NIP) of projects worth
R 100+ lakh crore up to FY25, with a focus on energy,
roads, railways, urban infrastructure and irrigation projects
to provide a much-needed productivity boost to the
Indian economy and fulfil India’s aspiration to become a
USD 5 trillion economy by 2025. The NIP, coupled with
other ’pro-business’ policy initiatives, is expected to lead to
a rebound in domestic demand in the medium and long
term.
Global Economy
The global economy had its share of upheavals in the
year 2019-20. Amid prolonged trade disputes and wide-
ranging policy uncertainties, growth suffered broad-based
deterioration. Global trade has declined and there has
been a marked slowing-down in manufacturing activities,
even though the service-sector activity has held up to some
extent.
The escalation of tension between the US and China is
expected to further dampen global growth. The fall in
crude oil prices, occasioned by changes in the demand-
supply position and geopolitical events across OPEC+
countries, has also had an impact on commodity prices,
which have been largely depressed globally. The pandemic
has led to a sharp contraction in the demand for oil and
commodities, and recovery is likely to happen only after
global economies tide over the COvID-19 crisis. Fragilities
in the financial sector in a number of economies continue
to remain a concern, though this has been partly addressed
through increased liquidity, which has been boosted by
a series of stimulus measures undertaken by all large
economies.
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COVID-19 Outbreak
The pandemic and the nationwide lockdown that it
triggered has dealt both demand and supply shocks to the
economy, with wide ramifications on revenue collections
and economic growth. It is likely to take quite some time
for the consequent stress in the economy to be relieved and
for growth to revive.
The crisis has prompted the Government to announce a
series of monetary and fiscal relief packages designed to
inject liquidity into the system and provide relief to stressed
sectors. While these stimulus measures will provide relief to
the affected people and some industries, the slowdown in
economic activity is expected to significantly lower India’s
GDP growth in FY 2020-21.
Global supply chains have also been threatened by the
pandemic. Governments around the world have been
quick to respond to the crisis by implementing meaningful
stimulus measures through a combination of fiscal and
monetary easing, increased health spending and direct
support to cover losses in incomes and revenues. Sustained
efforts from Governments, focused on these measures
could soften the economic impact of the Coronavirus.
Against this backdrop, the Company has undertaken a
series of measures to mitigate the crisis, which includes
securing the safety and livelihood of its staff and sub-
contracted labour working at project sites, curtailing and
reducing overheads at all operating levels, enhancing
liquidity on its Balance Sheet through increased market
borrowings and controlling working capital requirements
through a mix of judicious cashflow planning and measured
project execution.
Digital @ L&T
At L&T, digital technologies have made a significant
impact in data-driven decision making. Plant & Machinery
remote monitoring cells are a case in point; powered by
Industrial IoT and Artificial intelligence, these cells enable
remote monitoring, provide advanced analysis and insights,
and facilitate decision making for plant and machinery
operations. For instance, in one such remote monitoring
cell, a plant & machinery head is analysing equipment
productivity vs. internal hiring charges to take decisions on
hiring of concrete batching plants. An engineer zooms into
the dashboard of a tower crane operating thousands of
kilometres away to analyse and understand utilization and
lifting patterns. Factory heads are able to centrally monitor
and benchmark OEE of manufacturing plants located across
the country.
Today, more than 50 digital solutions have been deployed
across the organization – spanning bidding, engineering,
procurement, construction, manufacturing, supply chain,
safety, quality, customer experience and finance. These
digital solutions are designed and developed leveraging
Artificial Intelligence (Machine learning, Computer
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MANAGEMENT DISCUSSION AND ANALYSIS ANNUAL REPORT 2019-20
vision, Natural Language Processing, Natural Language
Understanding, Conversational AI), Industrial IoT, Cloud
computing, virtual reality, Augmented reality, and
Geospatial technologies. All these solutions are deployed
at scale enabling significant improvement on operational
efficiency, accelerating project completion, enhancing
workplace safety and improving quality.
Digital for construction & project businesses
Asset Insight, L&T’s connected equipment platform,
acquires a variety of operational, performance and health
data from construction equipment, analyses this data by
leveraging advanced analytics, AI and machine learning,
and provides necessary insights to project and operations
personnel. Today, more than 11,000 equipment across
various project sites are connected to the Asset Insight,
streaming real-time equipment data. Insights derived from
the Asset Insight platform have enabled L&T to increase
equipment productivity, enhance capacity utilization,
right-size assets, improve fuel efficiency, reduce capital
expenditure and much more.
WISA – Worker Induction and Skills Application is an
end-to-end digital solution for smooth on-boarding of blue-
collar workers into construction sites. This solution spans
mobilization, screening of records, KYC, health screening,
skill grading, attendance management, performance
records and observations, appreciations, violations, and
training management. Today more than 300,000 workers
are on-boarded in WISA. This solution extensively leverages
mobile technologies, statistical analysis, and artificial
intelligence to provide insights that have enabled faster
mobilization of workers, reduction in on-boarding lead
time and better understanding of the demographics and
performance of our workforce.
Integrated safety platform provides holistic visibility,
analysis and insights to improve workplace safety across all
construction sites. More than 10,000 forms are submitted
digitally every day giving visibility into prestart checklists,
work permits, near misses, incidents, safety observations,
inspections, audit findings, safe and unsafe conditions.
This data is analysed to arrive at an integrated safety
performance score-card. Natural language processing
helps in analysing the free text entered in the forms to
categorize the safety incidents and provide targeted safety
training. Computer vision helps detect safe and unsafe
conditions and acts based on the photographs captured
during the form submissions and using the CCTv footage.
More than 50 virtual Reality (vR) based safety modules
have been created, covering different scenarios such as
working at height, excavation, tower construction and
so on. These vR modules are pre-installed in portable vR
devices and distributed across various construction sites.
Safety awareness sessions for workers using these vR
modules create a vivid immersive experience about safe
work practices.
At the place, by the person, at the time of work: This
is the guiding principle of Procube, a progress-monitoring
solution. This mobile-enabled solution helps capture
project progress information in near-real-time. This data
is further analysed using statistical analysis and machine-
learning techniques to provide insights to different project
management stakeholders with role-based visualization.
These insights enable project managers and operations
personnel to take informed decisions for removing
constraints and adding resources that enable timely
completion of projects.
Geospatial solutions use a range of sensors (Lidar, Radar,
Sonar, Thermal, Optical) mounted on multiple platforms
(Terrestrial, Mobile, Aerial) for capturing geographical
information. A variety of analyses – such as temporal
analysis, flood flow analysis, cut-fill analysis and quantity
estimations – are performed on this data to provide
location-based intelligence and insights. This is further
integrated with data from other digital solutions to provide
map-based integrated dashboards and visualizations to
different stakeholders. These solutions enable multi-fold
improvements in accuracy and time taken to acquire and
analyze geographical information. This results in better
design and estimation as well as faster start of procurement
and execution.
These digital solutions provide high-velocity data with
a significant volume and huge variety. Alchemy, an
advanced analytics and artificial intelligence initiative, helps
in understanding, analysing and deriving insights from this
data. For instance, statistical analysis is used extensively
on weighbridge data to detect weighment anomalies and
provide real-time alerts. Natural language processing helps
in automatically comprehending large complex contract
documents and flag risky clauses. Machine learning
techniques are used for analysing equipment condition
and predicting failure to improve equipment availability.
Conversational AI is used to provide seamless interaction
between humans and systems through FAQ bots,
information bots, transaction bots, and knowledge bots.
Digital for manufacturing businesses
Embracing Industry 4.0: The Internet of Things for
manufacturing has been applied to connect machines,
cranes, welding machines and other equipment across
various manufacturing plants for remote monitoring and
maintenance. Installing multiple sensors and intelligent
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gateways on the machines and equipment enables the
business to obtain real-time operational, production and
condition-based data without human intervention. Some
of these data points are location, movement, arcing
time, switch on and switch off time, idling time, work
done, number of hours worked, pressure, temperature
and welding consumables consumption and many other
variables, depending on the type of equipment.
Laser & Radiography: These technologies have helped
reduce the job set-up times from days to hours, automate
non-destructive quality testing methods and integrate
manufacturing processes for real-time information visibility.
Mobile Applications: All digital applications are made
mobile first to ensure real-time, anytime and anywhere
information visibility across the enterprise.
Smart Glass: These wearables allow our customers to
undertake remote inspection of their work-in-process
orders in a collaborative manner. This has helped the
Company to save the time and energy spent on third party
or customer inspections, thereby facilitating faster time-to-
market of products and faster delivery of customer orders.
RFID / Near-field communications (NFC) / Beacons:
These technologies have been widely used for real-time
monitoring of workers entering hazardous areas,
monitoring and tracking of materials across the supply
chain, monitoring of materials at open-storage locations
and tracking of moving assets across project sites.
Virtual Reality and Augmented Reality are used to
create captivating experiences such as augmented technical
training of products, enabling the sales team to gain a
higher order conversion ratio and an immersive 360-degree
view of products. This technology has also been applied to
increase the work safety at project sites. The application
of this technology in scenarios such as working at heights,
material handling, working in confined spaces, heavy
vehicle management, high temperature welding and
working in marine environments has helped create a vivid
immersive experience and imprint the rules of safety firmly
on the minds of the workers.
Artificial Intelligence is used across the value chain
in applications such as cognitive comprehension of bid
documents, price prediction, image analytics to automate
quality testing, contractual risk analysis and auto-validation
of in-bound material quality.
Implementation, Change Management &
Benefit Realization
Over the last four years, digital solutions have been rolled
out pervasively across the business with speed and scale
at every project site and every manufacturing plant.
Employees on the field actively use these digital solutions.
This has been made possible by continuous engagement,
training, active change management and governance.
L&T is a diversified organization with a variety of
businesses. Its Digital Council is a confluence of digital
leaders from all L&T businesses under the aegis of the Chief
Digital Officer of L&T. The Council provides a platform to
discuss ideas, understand challenges, adopt best practices,
leverage technologies and solutions implemented across
different businesses. It provides the necessary direction,
governance and oversight for driving digital initiatives
within L&T.
With digital solutions deployed at scale, cyber security
assumes paramount importance. All the digital solutions
are designed and developed with in-built security principles
under the guidance of the Company’s Chief Information
Security Officer. All the solutions are subjected to
frequent security reviews, testing and monitoring. Regular
governance meetings involving the CISO team and the
Digital Council enable key digital stakeholders to take
stock of the current status, understand the cyber risks, and
adopt relevant mitigations and counter-measures towards
enhancing cyber security.
SPEED, a structured programme for benefit realization
from digital solutions, has been in operation for the past
2 years. This programme has different tracks for driving
adoption of digital solutions, programme management and
governance, KPIs and benchmarking, and driving actions
based on insights derived from digital solutions. The SPEED
programme has helped create significant business impact
from digital solutions.
Outlook
Digital transformation can be broadly categorized into
four areas; transforming operations, building connected
products and services, transforming customer experience,
and creating new business models enabled by digital. So far
in L&T, the digital solutions were focussed on transforming
operations. The Company is now in the process of
developing digital solutions in the areas of connected
products and services and customer experience.
Digital solutions have assumed greater importance in the
current environment. The progress made in digitalisation
will put the group in an advantageous position to leverage
technology to devise newer ways of working safely and
efficiently under ever-changing circumstances.
Further, with in-house success, the digital solutions are
ready to be marketed, creating a new business portfolio for
the organisation.
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MANAGEMENT DISCUSSION AND ANALYSIS ANNUAL REPORT 2019-20
Information Technology
The business environment today is rapidly evolving with
the emergence of new technologies, and a high-stakes
global game of digital disruption is currently under way.
It is fuelled by the latest wave of technology: advances in
Artificial Intelligence, data analytics, robotics, the Internet
of Things, and new software-enabled industrial platforms
that incorporate all these technologies and more. Every
enterprise leader recognizes that, as a result, the prevailing
business models and the way of working in his or her
industry could drastically and fundamentally change. Add
to this, the interconnections between corporate networks
and other networks to conduct business online. The
technology innovations being rapidly adopted online have
created access across people, information, systems and
assets worldwide. We are today, in the true sense of the
word, a network-delivered society.
At L&T, we are constantly enabling business with such
innovative technologies to enable collaboration between
individuals, and between people and machines. This
reduces friction and deepens insights to facilitate
quick decision making. It is not enough to just bring in
technology; its adoption is far more important. A special
IT group is formed to handhold the users. Technology
always has a flip side – and that is cybersecurity. A special
taskforce has been formed under Chief Information
Security Officer (CISO) to keep a tab on all such
developments, guide the organization and create a cyber-
safe environment to conduct business.
The proof of virtual presence through IT was put to test
when, due to the sudden disruption caused by COvID-19,
the staff had to shift to Work From Home (WFH) mode
for the first time. The IT systems built over the period
ensured a smooth transition. In addition, the Company’s IT
infrastructure was upgraded / modified on a war-footing
to enable WFH for almost all the employees and also
enable them to connect across locations without worrying
about productivity dips. Adequate training was provided
to employees to enable them to handle such situations.
Additional cybersecurity controls and 24x7 monitoring
mechanisms were implemented. This enabled the Company
to execute business as usual in unusual times.
Human Resources
Manpower - the key resource in business and more so in
project and services businesses - is the pillar of business
growth. A strong organisation supported by an evolving
leadership continues to play a key role in the success of
a business. L&T can confidently affirm having a robust
leadership pipeline to support current and future business
requirements. The Company’s signature leadership
development practices continue to be designed and
deployed so that leaders are identified, developed and
groomed to take up larger responsibilities, faster. The
Development Centres, pivotal to the Company’s core
philosophy of grooming internal talent, ensure that the
right leadership talent is identified through a rigorous
process. To reflect the changing business context and the
required leadership capabilities, the Development Centres
have been revamped across different levels. Additionally,
they have been digitised and training can be imparted
virtually. The outcomes of Development Centres are used
for talent management, succession planning, training and
leadership development.
The Development Centre’s efforts are augmented by
the Seven-Step Leadership Programme, developed
in-house. The programme provides access to world-class
management gurus from the most reputed institutions
from across the globe and curates learning experiences
which are not only transformational for the participants
but result in breakthrough outcomes for the organization.
The Action Learning Projects that participants undertake
not only help them to assimilate and apply the learnings
but also to work on live business improvement projects
under the guidance of high-calibre business leaders. The
mentoring programme, in which senior executives including
the Group Chairman, CEO & MD and other Directors and
Business Heads mentor emerging leaders, serves as the
ultimate leadership experience that few organizations can
provide. These initiatives have ensured a steady talent pool
of leaders.
The Company has been developing project management
capabilities which are key for the success of its core
businesses through its Project Leadership Programme.
This will augment the project execution capability building
efforts spearheaded by the in-house Institute of Project
Management.
L&T’s Leadership Development Academy at Lonavala,
its captive Technical Training Institutes along with the
Corporate Learning and Development Centre, continue to
provide a world-class learning eco-system with high quality
and business-relevant capability-building programmes that
augment the skills and abilities of the human resources of
the Company.
To sustain a culture of safety, which is of paramount
importance for the Company, the Corporate Learning &
Development team offers specialized programmes to train
employees and integrate safety in every aspect of work. To
develop internal training capabilities in EHS, the Company
has partnered with the National Examination Board in
Occupational Safety & Health (NEBOSH) and The Institution
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of Occupational Safety & Health (IOSH) to become an
accredited course provider for its employees.
L&T’s Corporate Technology & Engineering Academy
(CTEA), with centres at Madh and Mysuru, plays a
critical role in bridging the skill gap of young engineers,
making them job-ready and focussing on developing their
technical competence by providing hands-on training in
contemporary technologies.
L&T has been at the forefront of digital learning. Its
state-of-the-art Artificial Intelligence and Machine
Learning-driven learning experience platform ATLNext won
the prestigious People Matters - Learning & Development
Award 2019 in the ‘Best in L&D Technology and Analytics’
category.
The digitalisation of HR processes received further impetus
during 2019-20. The digital roadmap put in place an
integrated cloud-based platform to anchor all talent
processes. This platform harbours a contemporary and
transparent interface for the employees and includes HR
processes as diverse as employee life cycle operations,
performance management, leadership development,
efficient query management and robust data for HR
Analytics. In addition, digital platforms are being planned
for talent acquisition and learning management; these
digital platforms will be seamlessly integrated with
existing platforms so as to provide a superior employee
experience and to be leveraged for organization-level talent
interventions, reviews and data-driven decision making.
These investments in digitalisation of HR processes ensured
minimal disruption to work during the COvID-19 crisis,
ensuring that employees are productive and engaged while
working remotely during the lockdown.
L&T continued to be recognised externally for its Human
Resources practices. Forbes magazine again named L&T
amongst the global best employers. The 2019 Randstad
Most Attractive Employer Brand Research ranked L&T #6.
Business Standard named L&T ‘The Company of The Year’.
Apart from these accolades, L&T received other rankings,
such as the Business World ranking of #12 in the Most
Respected Companies list, Business Today, People Strong
ranking at #13 in the Best Companies to Work for 2020,
Universum ranking at #7 as Most Attractive Employers in
India amongst engineering students – affirming its stature
as a strong employer brand. The signature Technology
Leadership Programme for the Defence business received
the SHRM HR Excellence Award 2019 – recognition as a
best practice in developing leaders for tomorrow.
COVID-19 Response
The HR response to COvID-19 was timely, caring and
effective, ensuring the safety of over 250000 personnel
operating across 200+ sites and offices in India and
overseas.
As soon as the first signs of the pandemic emerged, a
robust structure and comprehensive process was put in
place to collate information and take quick decisions.
Under the aegis of the Executive Committee, a Direct
Response Team comprising senior executives was set
up. This was followed by local leadership teams being
set up for the respective businesses, regions, projects,
clusters, manufacturing sites and offices. The HR Council,
comprising HR Heads of the businesses, swung into action
to integrate the efforts at the enterprise and local levels.
A system of daily monitoring and reporting of COvID-19
suspected and positive cases was put in place.
Periodic health advisories and SOPs were issued on what
steps should be taken towards the safety of employees,
contractual personnel and their families, apart from the
security of business assets. These ensured timely, clear
and consistent communication. Government orders were
suitably communicated to ensure strict compliance. In the
wake of the lockdown, adequate measures were taken
with speed and agility – including setting up a medical
helpline, a counselling helpline and the necessary IT
infrastructure to facilitate ‘Work From Home’.
Work From Home guidelines were issued, and detailed
plans and infrastructure was put in place to ensure that
employees not only complied with the Government
guidelines to stay safe but also remain engaged and
productive while working from home. Additional e-learning
and virtual training infrastructure was immediately set up
to facilitate capability-building. A host of webinars curated
in-house, by academic institutions and training partners
were offered to employees on a wide range of themes
relevant to business as well as mental well-being. Taskforces
were set up to take up projects for process improvements
and various other initiatives.
The CEO & MD and the Business Heads have undertaken
a massive communication exercise through different
media to reach out to all employees and apprise them
of the current situation, what actions were to be taken
and how the future was likely to unfold. This served as
a very effective platform for top-down and bottom-up
communication.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
INFRASTRUCTURE
BUSINESS
Sector Performance in FY 2019-2020
The Infrastructure sector is a key driver for the
Indian economy, and contributes to India’s overall
development. The sector, accordingly, receives focused
attention and resource allocation from both Central and
State Governments.
FY 2019-20 was a challenging year both for the Indian
economy, which performed below its true potential,
as well as the construction sector, which recorded a
six-year low growth of 1.3%.
Cement production saw a marginal decrease of 0.8%
in FY 2019-20 as compared to 13.3% increase in FY
2018-19. India’s crude steel production was down
by 1.5 percent and finished steel production was flat
at 109.2 MT in FY 2019-20 against 110.9 MT in FY
2018-19.
Despite the challenges, the Government’s thrust areas
continued to provide a business opportunity basket
for the Company, which was in the pole position to
capitalize on the business prospects that came to
fruition during the year. The continuing weakness in
the Realty sector was countered with a Government
focused boost to the affordable mass housing and
health segments. With the Government’s focus on
improving air-connectivity, opportunities in the airport
segment continue to arise at periodic intervals.
Al Wakrah Bypass Road Project, Qatar
The construction of highways slowed to 28 km a day
during FY 2019-20, from 29.7 km a day achieved in FY
2018-19. The Ministry of Road Transport & Highways is
hopeful of increasing it to 32 km a day in FY 2020-21.
Competition in this sector has increased with a higher
frequency of smaller-sized bids attracting interest
from smaller players. This sector is also beset with
challenging payment terms in Government tenders
coupled with slow progress in land acquisition.
With a discernable thrust on renewable energy, the
award of some contracts in this area has been gaining
momentum, which has offset the tapering of prospects
on centrally sponsored intensive electrification projects
under the ‘Saubhagya’ initiatives. As on March 31,
2020, over 26 million households have been provided
with electricity connections under the Scheme.
As the implementation of Mass Rapid Transit System
(MRTS) at various metros progressed well, the
Government’s focus has turned to Tier II cities, and
opportunities are being sighted there.
The Government’s emphasis on augmenting local water
resources launched under the Jal Jeevan Mission is also
giving rise to good prospects.
Under the National Infrastructure Pipeline (NIP), roads,
urban and housing, railways, power (renewable and
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Hyderabad International Airport, Telangana
conventional) and irrigation comprise ~80% of the total
plan. This investment and initiative from the Government
will create a good opportunity for the infrastructure sector
in the coming years.
Public sector spending on the Infrastructure sector, as a
whole, continues to witness focused attention through a
combination of Central, State Government and PSU capex.
The combined Budgetary Capex spends (including PSU
Capex) amount to over R 16 lakh crore for FY 2020-21,
which translates to over 7% of expected nominal GDP.
The COvID-19 crisis is likely to adversely affect revenue
collections and GDP growth in FY 2020-21, which in turn
could lead to contraction of spends on Infrastructure. The
Central and State Governments are attempting to mitigate
the impact of lower tax collections through significantly
higher market borrowings than originally budgeted for the
year FY 2020-21, and the increase could be in the region of
R 9 lakh crore. Multi-lateral funding of projects, which has
increased in recent years, is providing additional resources
for building infrastructure within the country.
On the international front, amid geo-political upheavals,
the Middle East countries have been investing in
non-oil capex as well, which has offered some business
opportunities to the Company, especially in Saudi Arabia
and the UAE. Geographical diversification has been yielding
results in the last few years, and the segment saw some
big-value successes in countries other than the Middle East
region.
The Infrastructure business, which faces normal execution
challenges in terms of ‘Right of Way’ and delayed client
clearances, encountered some unprecedented issues
in FY 2019-20. Change in some State Governments,
led to reassessment of awarded contracts, while some
environmental-related work stoppages adversely affected
work progress in some projects. The impact of these
challenges was accentuated with the onset of the
pandemic in the last fortnight of the financial year, which
slowed down the economy, with the lockdown being
implemented by various Governments. The pandemic has
affected execution in the last quarter of the year, which
otherwise is the busiest quarter for the segment in terms
of progress and collections. This has had an impact on
both revenues and profits, since the sites had to be shut
temporarily.
With the changing environment, the project sites are also
required to adapt to a new set of norms for continuation
of work, which will hamper progress for some time. The
impact of the pandemic is expected to continue into the
next financial year, and may taper off as normalcy gradually
returns.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Motera Cricket Stadium, Gujarat
Ford Global Technology & Business Centre
BUILDINGS AND FACTORIES
Overview:
L&T’s Buildings & Factories (B&F) business is
the leader in Engineering, Procurement and
Construction (EPC) of airports, hospitals, stadiums,
retail spaces, educational institutions, IT parks, office
buildings, datacentres, residential buildings, high-
rise structures, mass housing complexes, cement
plants, industrial warehouses, and other factory
structures in India and overseas. The business is
well-known for its capabilities in constructing
engineering marvels and landmark structures.
The business comprises six business units (BUs) –
Airports, Health, Public Spaces, IT & Office Space
(ITOS), Residential Buildings and Factories.
Airports: B&F offers design-and-build solutions
for passenger terminal buildings and allied service
buildings, and cargo terminal buildings, with
integrated airport system solutions like baggage-
handling systems, passenger-flow monitoring
system, passenger boarding bridges, visual docking
guidance systems and other facilities.
Health: This business unit handles hospitals,
medical and nursing colleges. Healthcare
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infrastructure is delivered with end-to-end
healthcare facilities, including medical equipment,
right from concept to commissioning.
Public Spaces: Design and execution of special
structures like tall statues, metro stations,
convention centres, secretariat buildings, hotels,
malls, integrated development and educational
institutions are handled by this business unit.
IT & Office Spaces: This business unit focuses on
providing turnkey solutions for IT and office spaces.
Leveraging the strong mechanical, electrical and
plumbing (MEP) competencies of B&F, it also offers
concept-to-commissioning services for building Data
Centres.
Residential Buildings: This business unit is a prime
EPC solutions provider of elite, affordable and mass
housing projects.
Factories: This business unit is a one-stop solution
for the EPC requirements of factories like cement
plants, automobile plants, glass manufacturing and
food processing plants.
In line with L&T’s Perspective Plan 2026, the
business is venturing into a new segment – B&F
Fast – to explore and create value from advanced
construction technologies such as Prefabricated
Academic Block for West Bengal Medical College
Asian Paints Factory, Mysuru
Prefinished volumetric Construction, Offsite
Manufacturing, Structural Steel Construction and
3D printing.
the health care segment, in which B&F has a proven
expertise of handling design, turnkey execution including
the supply and commissioning of medical equipment.
A state-of-the-art design facility, competency cells,
advanced formwork systems, highly mechanized
project execution, digitalized project control and
a talented pool of employees helps sustain the
leadership position of the business, retain key
customers and secure major orders. An efficient
supply chain and extraordinary project management
expertise, acquired over decades, adds to the
competitive edge.
Business Environment
The Indian economy started the year FY20 on a high note
with higher GDP growth projections of up to 8% year
on year. Government of India’s intention to drive more
investments into developing infrastructure and thereby
improving the growth, was evident in the Union Budget
2020. The tax sops for sovereign wealth funds investing in
infrastructure sector, proposal of an Investment Clearance
Cell, viability gap funding for projects in healthcare and
logistics were some of the initiatives proposed. The
allocation of funds towards the National Infrastructure
Pipeline, announced earlier by the Finance Minister, has also
offered promise to the Infrastructure industry, specifically
The data localization policy has also paved the way for
more Datacenters in India, a segment in which B&F has
concept to commissioning capabilities.
The real estate industry was the focal point of the Indian
economy in FY 2019-20, but not for the ideal reasons.
The Government of India had announced substantial relief
packages to support the real estate industry by improving
liquidity and enabling developers to come out of stuck
realty projects. However, sizeable orders emerged from the
affordable and mass housing industry and major developers
from elite housing business were making a move to capture
the market in this segment.
Assembly elections and the political instability that followed
had created problems viz. delayed tender results and lack of
clarity in governmental policies and decisions in this fiscal.
Additionally, the spread of the COvID-19 pandemic
towards the end of the financial year and the consequential
lockdown has posed severe concerns for the economy.
Construction activities across the country have been
impacted due to the lockdown.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Godrej The Trees, Mumbai
Government Medical College Hospital, Madhepura
Major Orders secured
• CIDCO Housing Project at Navi Mumbai
• One of the largest greenfield airports in India at Navi
Mumbai
• The largest cricket stadium in the world at Motera,
Gujarat was substantially completed and was the venue
for the meeting between the Prime Minister of India and
the President of the US
• AIIMS Gorakhpur’s OPD block was completed and
• Mandarin Oriental Hotel, Muscat in Oman
handed over
Key projects completed
Key projects commissioned during the year include:
• Government Hospital & Medical College, Madhepura,
Bihar
• Ford Global Technology & Business Centre, Chennai
• ITC Royal Bengal, Kolkata
• Police Bhawan – Signature Building, Lucknow
• Prestige Song of the South, Bengaluru
• Asian Paints Factory, visakhapatnam
The business has also achieved important milestones in the
execution of major landmark projects, as given below:
• The pitch-laying process was completed at the Al Rayyan
- FIFA Stadium, Qatar in under 12 hours
Awards
The business has received numerous accolades from
renowned international and national agencies for its
superior standards in EHS and quality.
• Bengaluru International Airport Project bagged three
coveted awards from the Confederation of Indian
Industries – Southern Region
• Multiple International agencies – such as Project
Management Associates (PMA), American Concrete
Institute (ACI) and Engineering News Record – have
showered praises on the construction of the iconic Statue
of Unity project in Gujarat
• The Prestige Lakeside Habitat secured the ACCE(I)
Billimoria Award for ‘Excellence in Construction of
High-rise Buildings’
• South Asia’s largest skybridge weighing a massive 2000
MT was erected in 8 hours at ITC Colombo by the
in-house team
• WIPRO Kodathi was conferred the ICI (BC) Birla Super
Endowment Award for the Outstanding Concrete
Structure of Karnataka 2019 in the Building Category
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ICC Towers, Mumbai
IKEA Navi Mumbai
• Police Bhawan, Lucknow was conferred an award by
ICI Ultratech – Lucknow Centre, for the Outstanding
Concrete Structure of 2019 in the Institutional Building
Category
The Digital Stores initiative has digitized the processes of
indent generation, approval, material issue and indent
creation in an ERP system. The data generated through this
application has helped in better inventory management.
Significant Initiatives
The business has been the frontrunner in developing
digital applications customized to serve its project sites
in streamlining various activities and statutory processes.
Apart from the consistent success in employing advanced
Building Information Modelling (BIM) in construction,
the business was able to leverage the latest technologies
like Geospatial Information System, Image Recognition,
Artificial Intelligence and Robotic Process Automation
through various applications developed in-house.
Geospatial technology using LiDAR (Light Detection
and Ranging) was utilized to map existing structures
and create 3D models. The Workforce Induction and
Screening Application (WISA) is extensively used to digitize
the workmen induction process and build a database
of over 2 lakh workmen including their skill details and
images captured using face recognition technology.
Robotic Process automation helps in replacing human
effort in mundane activities like indent creation and other
accounting functions.
Using 3D-printing technology, the team successfully printed
a 2.8 m-high residential building at Kancheepuram, the
first full-scale 3D-printed building in India. The mix design
developed by the team enabled the use of crusher sand
in 3D printing of concrete for the first time in the world.
Further research is in progress.
Environment, Health and Safety
The business has rolled out its EHS Professional
Development Programme (EHSPDP) and comprehensive Risk
Management training for front-line engineers to ensure
better EHS practices.
In an effort to develop a positive safety culture based on
the principles of BBS (Behaviour Based Safety), SIM (Safety
Improvements made by Me) has been introduced. To date,
more than 4000 interventions (SIM cards) were made at all
levels of employees at the project sites.
As a testimony of superior EHS standards, the business was
certified for ISO 45001:2018 Occupational Health & Safety
on June 13, 2019 by M/s DNvGL.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
ITC One - Colombo, Sri Lanka
ITC Royal Bengal, Kolkata
Significant statistics for the year include:
• 93% of projects achieved Zero Accidents status
• 65 projects achieved more than 3 million safe man-hours
• 20 projects achieved more than 10 million safe
man-hours
The business was conferred several prestigious awards
during the year, including:
• British Safety Council’s Sword of Honour, for the fourth
consecutive year, with ten of its projects securing the
award
• The Royal Society for the Prevention of Accidents (UK)’
Gold Awards for Occupational Health & Safety for eleven
projects
• 18 National Safety Council awards in various categories
The business has also taken up several initiatives to
safeguard employees and workmen within the country and
abroad at the onset of the pandemic. The various project
sites across India are housing workmen in labour camps
equipped with all essential facilities, medical care and
competent supervision. COvID-19 Emergency Response
Teams (ERT) constituted at the cluster-level pan-India are
tasked with reaching out to staff, especially those at project
sites, to check on their well-being.
The business has also banned the use of single use plastic
in all forms across all offices, sites and establishments.
Human Resources
With people as the prime assets, the business ensures that
it nurtures talent through new initiatives and value-adding
training programmes. The business has introduced a Testing
& Commissioning Management Development Programme
to develop a specialist group of individuals to deliver Testing
& Commissioning of Airports, Data Centres and Smart
Buildings. To further develop a specialist group of ‘Finishes
professionals’, a customized programme covering Masonry
& Plaster, Dry Finishes, Wet Finishes, Interiors and Façades
was launched in December 2019.
Risks and Concerns
The housing and real estate business is increasingly
witnessing the political risks of Government decisions being
reversed and projects halted due to changes in regime in
the States. A robust political risk index is conceived and
being developed to effectively identify and mitigate the
same at the bidding stage.
In the case of a few projects, specifically Government
projects, hand-over of encumbrance-free sites on time,
remains a key issue that halts the project’s momentum.
In jobs executed on a design-and-build contract
basis, frequent changes in design by the client and
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Prestige Song of South, Bengaluru
TANCEM Cement Plant, Tamil Nadu
client-appointed consultants are a huge concern. Though
in-house Engineering, Design & Research Centre (EDRC) is
proactive and is improving continuously by documenting
and implementing the learning from previous experiences
in new jobs, unexpected changes suggested by clients
hinder timely completion of jobs. Such changes are
thoroughly documented and communicated to clients by
the Contracts Administration team to pursue claims.
The strategy of the business to develop a specialized
vertical – B&F Fast – to modularize, standardize and focus
on ‘prefab plus assembly’ building solutions for different
types of buildings is a step towards mitigating the growing
risk of the non-availability of skilled manpower in the
industry. The solution will also cater to the increasing need
of customers for quicker construction.
Presently, the world economy is facing a downturn
triggered by the COvID-19 pandemic, which has spread to
almost all the countries across the globe. The Infrastructure
industry is among one of the badly affected industries due
to the contagion-led lockdown and eventual new norms
of working. It has also impacted the supply chain and the
availability of the workforce.
The business is working on identifying different scenarios
and preparing contingency plans for each scenario. All
necessary measures are being taken to ensure the collection
of payments due and to have a hard look at fixed costs and
optimize overheads during the lockdown period.
Outlook
Currently the economy is opening up with restrictions on
construction activities completely lifted.
The lockdown has led to a reduction in consumption
demand in the country, leaving government spending
in social sectors as the key driver of economic growth.
The opportunities for the business in the upcoming year
will be majorly from Healthcare industry, as increased
government spending is expected in this segment. Also,
there is a negative sentiment about China and many
countries currently are looking to move out of China which
was their manufacturing base. This is expected to trigger
opportunities for the factories segment in B&F as most
companies are likely to set up their manufacturing
establishments in India. However, the commercial
and residential real estate business in the country will
witness a prolonged impact of the pandemic. The
investments into the development of Airport construction
may slow down and are expected to rebound only during
the latter part of FY 21.
The major challenge for the construction industry will
be supply chain disruptions including limited availability
of labourers as the migrant workers constituted a very
large share of the workforce. The business has already
initiated the implementation of long-term solutions to face
such challenges like reducing the dependency on human
resources by leveraging advanced construction technology.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
A section of the 13km Phase 1 of Mauritius Metro
Also, the business is considering implementation of
techniques like Zero Based Budgeting for cutting down
unnecessary expenses and optimizing resource utilization.
On the international front, B&F will employ a cautious
approach in the Middle East and also while exploring
opportunities to enter new geographies like Bangladesh
and Africa.
The business is confident of its ability to tide over the
challenges arising from subdued demand and executional
challenges through its customer- centric approach,
construction expertise and technology leadership in the
industry.
TRANSPORTATION
INFRASTRUCTURE
Overview:
L&T’s Transportation Infrastructure business (TI)
is one of the oldest, largest and most reputed
EPC contractors in India in the Road, Railway and
Airport sectors and has two Strategic Business
Groups (SBGs), namely, Roads, Runways & Elevated
Corridors (RREC) and Railways Business Group
(RBG).
196
The RREC’s major business unit, the Roads
& Runways BU (R&R), provides EPC Design
& Build Construction services for all types
of roads (asphalt and concrete) including all
associated structures, cross drainage, toll booths,
wayside amenities, etc., to NHAI, MoRTH, State
Governments and certain private clients. In
the Airport sector, the R&R BU undertakes EPC
construction of complete airside infrastructure,
namely, runways, taxiways, aprons, airfield ground
lighting, fuel hydrant systems, etc., both greenfield
and brownfield. The R&R BU is also a pioneer in
providing complete civil infrastructure for greenfield
city infrastructure projects, e.g. Smart Cities. The
Elevated Corridor Segment (EC) is engaged in EPC
construction of all types of urban flyover projects for
City Traffic Decongestion, and the Dedicated Freight
Corridor Corporation of India (DFCC) - civil works
projects in both the Eastern and Western Dedicated
Freight Corridors.
The Railways SBG (RBG) consists of the Mainline
Business Unit (MLBU) and the Metro Business Unit
(MTBU). The MLBU provides EPC construction
services for all Mainline Railway Projects, Western
& Eastern Dedicated Freight Corridors including
Track Laying, Overhead Electrification, Dedicated
Railway Linking for Port & Mining facilities, etc.
Area Development Works, Bidkin, Maharashtra
Runway for Bengaluru International Airport
The MTBU executes EPC projects for all Signalling
& Telecommunication Systems Works, Mass Rapid
System Projects for metro projects in India, Riyadh
Metro, Dhaka Metro and end-to-end Integrated
Transit System complete with Civil and Systems
Works (Mauritius Light Rail Transit – LRT).
On the international front, the business recently
completed several large and complex road
projects in the UAE, Oman and Qatar. The RBG is
currently executing major projects in Mauritius and
Bangladesh.
The business leverages its vast experience in project
management, engineering design and construction
management to achieve international standards
of safety, quality and operational efficiency. It has
engineering design centres in Mumbai, Faridabad
and Chennai. In addition, it has a Competency
Development Centre at Kancheepuram for the RBG
and a Workmen Training Centre at Ahmedabad
for the RREC. In FY 2019-20, the transportation
infrastructure business has executed approximately
1 million sq. mtr. of airside construction, 1347 lane
km of roads, 389 km of track linking and 981 km of
Railway Electrification (OHE).
Business Environment
a) Roads, Runways & Elevated Corridors
Over the last 5 years, the budgetary support for road
construction has seen a steady increase. However, the
award of contracts has shrunk significantly in FY 2019-20
owing to land- acquisition issues. The delay in the financial
closure of Hybrid Annuity Model (HAM) projects has
impacted the Government’s ambition to infuse private
investment into the sector. Any shift towards a higher
proportion of EPC projects will impact NHAI’s awarding
capability due to higher funding requirement for civil
works related to EPC projects. Due to difficult contractual
terms, the working capital requirement for road projects
is becoming very high. The delays in settling contractual
issues like extension of time, arbitration award, etc., are
compounding problems. In FY 2019-20, approximately
5,100 km of road were awarded and 9,855 km of road
were constructed. Construction of highways at 28 km/day
in 2019-20, has been steady from FY 2017-18 onwards,
with an increased focus on delivery of projects. The
market continues to have many small EPC contractors,
consequently intensifying the competition.
In the year 2019-20, a few major airports have been
initiated, such as the Delhi International Airport and Navi
Mumbai International Airport, providing opportunities for
the business.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Rewa-Katni-Jabalpur Road
City Infrastructure Development has seen a lull in orders in
FY 2019-20, with no significant awards. The Delhi–Mumbai
industrial corridor is at an advanced stage, with multiple
projects substantially completed in Dholera and Bidkin
industrial township.
The Government announced a National Infrastructure
Pipeline with a total outlay of R 100+ lakh crore for
FY20-FY25. Out of this, 19% of the capital expenditure
is earmarked for Roads, which is expected to give a
considerable boost to the sector.
b) Railways:
The Indian Railways (IR) has significantly improved its
EPC tendering model. The new EPC tender document
(Single Stage 2 packet) has been finalized, with industry
suggestions suitably incorporated. However, the IR needs
successful and faster implementation of EPC tendering. No
major project was awarded in FY 2019-20.
High Speed Rail, the tendering for which was expected
to gather momentum, has been deferred, with the major
bids being extended multiple times. Steady projects in
metro rails in various States are expected to help increase
business. The Public-Private Partnership (PPP) component
has been made mandatory for availing Central assistance
for new metro projects.
Major Orders
• Navi Mumbai International Airport - design, engineering,
procurement and construction of Passenger Terminal
Building, runway, taxiways and aprons, landside roads,
utility infrastructure and drainage
• Delhi International Airport Limited – Fuel Hydrant System
• Three Systems packages on EPC basis for the Eastern
Dedicated Freight Corridor
• EPC Overhead Electrification job from CORE
• Track works for two packages of Mumbai Metro Line 3
Projects Completed
The business has completed the following projects:
• Rewa–Katni–Jabalpur–Lakhnadon Road Project – 4
Packages, 288 km, 4-lane, Madhya Pradesh
• Bijapur–Humnabad Road Project, 220 km, 2-lane,
Karnataka
• Raipur–Bilaspur Road Project, 42 km, 4-lane,
Chhattisgarh
• Hospet–Chitradurga Road Project, 108 km, 4-lane,
Karnataka
• North–South Parallel Runway commissioned for
Bangalore International Airport, Phases 1 & 2
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RTA 1028 Road Network, Dubai
• Kanakura–Madar section (OHE – 294 TKM) and the
Alwar–Bandikui section (OHE – 68 TKM)
under the Design Acceleration Initiative of the RREC
business
• Khaliapali–Loisinga (11.15 TKM) track section of the
• Aurangabad–Karodi Road project milestone II achieved 6
Sambalpur–Tilagarh Doubling Project
months ahead of time
• GMRCL – Meg Track Project – Priority Stretch (13 TKM)
• Hyderabad Metro OHE and Track Package (25 TKM)
• Track-linking for the Rewari–Iqbalgarh section of CTP
1&2 (1400 TKM)
• Commercial Trial runs are in progress in the Rewari–
Madar section
• Mauritius Light Rail Transit system (Phase I, 25 TKM)
• Roads and Transport Authority (RTA) 1028 (Extension of
Tripoli Street)
• RTA 1048 Improvement of Expo 2020 Roads Network
contract No R 1048/1 & 5
During the year some other notable achievements were:
• DFCC – (Civil track package) CTP3R project had the
highest single-day production of 1.16 L cu.m/Day
Earthwork in filling and record of executing 20.30 lakhs
cu.m in May 2019
• Mumbai–Nagpur Expressway Project, Mumbai–vadodara
Road Project - 80% design completed in 6 months’ time
Significant Initiatives
The major fixed cost for the RREC business includes hiring
charges for asset operation & maintenance, fuel, etc.
Special initiatives of P&M as a profit centre with a focus
on productivity-driven decision-making have resulted in
cost-reduction on all these fronts.
The business continues to leverage the benefits of the
extensive use of Linear Project Management tools, such as
TILOS, to effectively visualize and plan mega linear projects
across domains. Driven by a dedicated ‘Track Planning Cell’,
this strategic initiative facilitates centralized planning of not
only civil and track projects but also mega OHE (Overhead
Electrification) projects.
An Internal Project Management Consultant (IPMC)
team was formed to conduct a quality audit of ongoing
projects. The team will ensure that construction complies
with design specifications, specified materials are used
during construction, codal specifications meet with
the requirements, as well as review the status of non-
conformance reports and aid closure.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
E&AM System Works, Dhaka Metro
Bata Nagar Flyover, Kolkata, West Bengal
Engineering Project Monitoring & Control Cell was
formed under the project controls team and tasked with
development of a design and drawing tracker to monitor
the delivery with respect to agreed time lines, optimization
of quantities with respect to initial design, coordination and
monitoring of the actual quantity reported by the design
department progressively and development of a model
for indices for quantities of projects of a similar nature to
support ongoing projects and the tendering department.
The thrust on mechanization in the railway business for
faster execution has been a remarkable success, involving
simultaneous stringing of Contact and Catenary, which
reduces operational costs and execution time. Having been
well-established in DFCC, such mechanization is also being
used in other EPC projects, such as the Konkan Railway in
the Western Ghats – a project requiring OHE installations
amidst highly restrictive ‘block sections’ involving
significant material handling and extraordinary erection
methodologies.
Digitalisation
Connected assets and geospatial solutions are two
high-impact solutions for the business. Digital data now
backs the majority of equipment mobilization and hiring
decisions, as well as fuel distribution. On the geospatial
front, drone-based photogrammetry or LiDAR-based
surveys are conducted wherever possible for every new
project.
Work has commenced on an Artificial Intelligence (AI)
based Contracts Administration Platform to introduce
smarter ways to manage contracts.
Environment, Health and Safety
Transportation Infrastructure projects are typically spread
across hundreds of kilometres, with a multitude of discrete
safety risks that are both location and task specific. RtR
(Reverse the Risk) and PREP are digital applications which
have been developed to identify the risk level. Continuous
monitoring of the risk level using digital applications
and implementation of effective control measures helps
mitigate risk.
Well-planned implementation of traffic diversions as per
IRC SP55 to prevent work zone incidents is undertaken. To
monitor live road activities and prevent traffic accidents, the
business has introduced the ‘verify and Ensure Controlling
Traffic’ (vECT) initiative.
Across all the projects, digitally enabled training modules
– such as virtual reality safety modules and augmented
reality EHS Golden Rule modules – have been developed to
increase the EHS awareness in the workforce. A ‘Zero Fatal
Award’ has been introduced for projects having zero fatality
for the entire duration of the project cycle.
A structured Environment Management System (EMS)
has been implemented. Every project has a specific
200
Ghoshpukur-Salsalabari Road, West Bengal
Overhead Electrification for Delhi Metro Phase 3
Environment Plan which conforms to ISO 14001 2015,
individual contractual needs and the business’ Integrated
Management System (IMS) manual. Micro-level preparation
takes place at each project to define a set of processes,
followed by Impact Aspect Assessment. The defined control
measures are implemented during job execution, and that
facilitates the reduction of the negative environmental
impact and the mitigation of all potential environmental
aspects. Detailed Environment Impact Assessments (EIA)
are conducted in the pre-execution construction planning
stage. various control measures are identified and
implemented. Along with dedicated methodology / SOP
and engineering control, many new initiatives are taken.
During FY 2019-20, the business won 19 international
awards (five Gold Awards, two Silver Awards from the
Royal Society for the Prevention of Accidents, a Sword
of Honour and a BSC OHS Audit Five Star Rating from
the British Safety Council, one distinction, 4 merit and 5
pass certificate from British Safety Council). Other than
international, the business has received seven prestigious
safety awards by the National Safety Council, a prestigious
award by the Institution of Engineers India and two awards
by India HSE Summit.
Human Resources
The focus of the business has been on developing a culture
of recognition, innovation and process improvement.
The business conceptualized the DELTA Awards - Digital
Breakthrough, Energy Optimization, Large scale reuse of
Scrap/ Waste, Time reduction (Reduction in Cycle Time),
Advances (Innovation). To strengthen its safety culture
using positive motivation, the LIFE (Loss & Injury Free
Environment) Award was conceptualized.
Risks and Concerns
Land acquisition is a critical factor. very often, there
are delays in handing over encumbrance-free land and
Right of Way, impacting progress of work and idling of
resources. Commercial terms in the business are getting
tougher, resulting in working capital pressures. The sector
is also exposed to delays in various approvals, leading to
a domino effect. Extreme environmental events (such as
unprecedented rainfall), National Green Tribunal bans and
construction bans due to pollution pose an adverse risk to
the business.
Outlook
a) RREC business
Over the next 5 years, the Government has planned to
expand the National Highway network by ~60,000 km,
with about 20,000 km in major economic corridors,
strategic areas and major tourist destinations.
The Department of Civil Aviation envisages 100 new
airports will be built in the country over the next 10 to
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Signaling & Telecommunication for WDFC
Trial run at Western Dedicated Freight Corridor
15 years. It is also working on the cargo policy, which
will provide a boost to the nation’s logistics capacity.
The Government has envisaged an investment of
more than R 1.43 lakh crore for airports under the
National Infrastructure plan over a period of 5 years.
The Government’s focus on developing a strong express
highway network, along with changes in contractual terms,
is expected.
b) Railway business
The Indian Railways is planning its highest outlay of R 1.61
lakh crore for FY 2020-21, an increase of over ~3% on last
year’s outlay of R 1.58 lakh crore.
The conventional projects of the Indian Railways continue
to get a big thrust, backed by strong institutional funding
like LIC, IRFC, etc. The Indian Railways is planning to tackle
Mainline Capacity constraints through a New Line of
~5,000 km, Capacity Augmentation (Doubling & Tripling)
of ~12,000 km and Gauge Conversion of ~2,500 km in
the next five years. About 10,000 km of electrification is
also expected to be awarded under the banner of ‘Mission
Electrification’ over the next four years.
Tendering for three New Dedicated Freight Corridors is to
be initiated in the next 2-3 years.
India is well on its way to creating a world-class MRT
system as an integral part of community infrastructure
development across all metros and major cities, including
Tier 1 and Tier 2 cities in the country. System works in
MRTS provide good business opportunities; nevertheless
such opportunities are increasingly becoming multiple
smaller packages, especially in Tier 2 cities, and hence may
not be attractive enough for the business to participate in.
The Indian Railways has floated tenders for a Detailed
Project Report (DPR) on each new Dedicated Freight
Corridor. The Government has not yet secured funding for
these projects. Certain packages are being contemplated
on the PPP mode. Packages worth ~ R 68,000 crore are
expected to be finalized in the next five years.
On the international front, the focus is on the neighbouring
geographies and in geographies where the business already
exists. The funding needs to be through secured sources,
such as the Indian Government or from any bi-lateral /
multilateral agencies like JICA.
There is a major thrust on electrification of the entire
railway network by 2024. New projects including port
connectivity dedicated rail links, etc., are planned to be
implemented through SPvs owned by State-Centre Jvs.
c) International
Since all the major infra projects related to EXPO 2020 in
Dubai and FIFA 2022 in Qatar are already awarded and are
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Cable Stayed Bridge across Durgam Cheruvu Lake, Telangana
at an advanced stage and oil prices have dropped, no more
major prospects are visible in the near horizon in the Middle
East. Africa posted very few opportunities during 2019-20
and stiff competition persisted from Chinese contractors.
The key hubs for investment in 2020 are expected to be
Morocco, Egypt, Ghana, Cote D’Ivoire, Namibia, Botswana,
Rwanda, Ethiopia and Kenya.
In general, with the disruptions due to the COvID-19
lockdown, funding for new projects is likely to get affected.
The lockdown may trigger shortage of raw material and
workmen, disruption in the supply chain, a significant
increase in costs related to operating at site, coupled
with reduced productivity due to controlled working
environment, need for hygiene infrastructure and various
safety measures requirements. There may be a decline in
project awarding by various other authorities owing to
rising debts, limited capital and reduced private investment.
HEAVY CIVIL INFRASTRUCTURE
Overview:
L&T’ s Heavy Civil Infrastructure business is a
market leader in Engineering, Procurement,
and Construction (EPC) projects in core civil
infrastructure segments that are crucial to the
economy, viz. Metros, Nuclear, Special Bridges,
Hydel and Tunnels, Ports and Harbours and
Defence.
As an industry leader in augmenting capabilities
for urban mass rail transit systems, the business is
involved in the construction of metro rail systems
in almost all the major Indian cities. It provides
extensive end-to-end engineering and construction
services for both elevated and underground metro
systems. During the year, the construction of the
Hyderabad Metro was completed.
In the Nuclear segment, the business provides
EPC solutions in civil, mechanical, electrical and
instrumentation, including seismic qualification
and modular construction technology. Its expertise
extends to both pressurized heavy water reactor
(PHWR) and light water reactor (LWR) technologies.
The Special Bridges segment has extensive
experience in executing a wide range of bridges,
such as cable-stayed, precast, pre-stressed concrete,
steel and concrete composite construction using
ingenious cutting-edge construction techniques,
viz. incremental launching, segmental construction,
balance cantilever construction and span-by-span
construction.
The Hydel and Tunnel segment offers EPC solutions
for complete Hydroelectric Power Projects,
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Singoli Bhatwari Hydro Power Project, Uttarakhand
Multi-modal terminal at Sahibganj, Jharkhand
large-diameter Transport / Water Tunnels and
complex Irrigation projects. The business also
provides expertise for road and railway tunnelling
projects, which cater to nation-building.
The Ports & Harbours vertical has extensive
experience in greenfield ports, shipyard structures
and seawater intake systems in all coastal states
of India. It provides EPC solutions for breakwaters,
berths, jetties and wharfs, dry docks and shore
protection structures. It has unique expertise in
providing design and construction solutions for
state-of-the-art Shiplift structures.
Backed by the expertise and experience gained from
managing mega projects, L&T has established a
position of pre-eminence in shoring up the country’s
defences. L&T offers single-point EPC solutions
in the form of infrastructure facilities for defence
bases, underground facilities and surveillance.
The business has a strong presence in India, the
Middle East, Bhutan, and Bangladesh. The ability
to provide ‘tailor-made’ design-&-build and EPC
solutions to suit the specific requirements of
customers for complex infrastructure projects
has made the business a market leader in India.
Dedicated design and technical centres, competency
cells, specialized training centres, digital project
management, and a talented pool of employees
help the business sustain a leading role, attract
key clients, penetrate new geographies and secure
major orders.
L&T Geostructure is a unique entity which focuses
on foundation and ground improvement related
projects. It has a strong and professional foundation
specialist team with the knowledge of design,
equipment and methods to execute and supervise
sophisticated foundation works. It has expertise
in deep piling and diaphragm walls, multi-cellular
intake wells for river-linking, marine terminals with
berths and jetties and deep cut-off walls.
Business Environment
Infrastructure is a major sector that propels the overall
development of the Indian economy. The Government
maintains India’s upward growth trajectory and continues
to target gradual and sustained growth. Infrastructure was
one of the country’s budget priorities this year.
With major metropolitan areas on the metro map,
both the Central and the State Governments have
now turned their attention towards Tier-II cities such as
Kanpur, Agra, Surat, Patna, Meerut, Ahmedabad, Nagpur,
etc. due to their increasing population density. The
business has been awarded two packages of the 82-km
Delhi-Ghaziabad-Meerut Regional Rapid Transit System
(RRTS) line in Uttar Pradesh.
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Kakrapar Atomic Power Plant, Gujarat
The Ministry of Defence has identified an urgent need to
upgrade the country’s defence infrastructure, and major
projects are currently in the planning stage.
policy changes to promote the Hydropower sector based
recommendations of the Standing Committee on Energy
(2019).
Bridge construction in India is witnessing significant interest
from international funding agencies like JICA, the World
Bank, ADB, etc.
India’s ports and trade-related infrastructure accelerate
growth in the manufacturing industry and assist the
‘Make in India’ initiative. India has 12 major ports and
approximately 200 non-major ports administered by
Central and State Governments respectively. With a view
to promoting the expansion of port infrastructure and
facilitating trade and commerce, the Ministry of Shipping’s
proposal to replace the Major Port Trusts Act, 1963 by
the Major Port Authorities Bill, 2020, was approved. The
Major Port Authorities Bill, 2020 will empower the major
ports to perform with greater efficiency on account of full
autonomy in decision-making and by modernizing the
institutional framework of the major ports. The business
has secured the Dabhol Breakwater Project (offshore
structures) located at Ratnagiri.
FY 2019-20 saw a steady increase in projects tendered
out by the Government in the Hydel, Tunnel and Irrigation
segments, as the Government introduced a few structural
India’s total nuclear power generation capacity is 6,780
MWe, which comprises 2 percent of the country’s overall
power generation. The Energy policy of the country calls
for 25 percent of electricity to be generated from nuclear
power by 2050. The business is expecting the Government
to move forward with a proposal for 10 pressurized heavy-
water reactor (PHWR) fleet. Major tenders in the Nuclear
industry were delayed and were pushed to FY 2020-21
due to lack of clarity about The Civil Liability for Nuclear
Damage Act, 2010 amongst civil contractors.
However, the momentum of project awards suffered due
to delays in bid evaluations, board approvals, etc., towards
the end of the FY, and was further aggravated due to
the impact of COvID-19 in March 2020. These delays
have affected the much-anticipated order inflow for the
business.
Major Achievements
Orders Won
• Rishikesh – Karnaprayag Rail Link Project (Package# 2),
Uttarakhand
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Mumbai Coastal Road Package 1
• Dabhol Breakwater Project (offshore structures) located
near Ratnagiri, Maharashtra
‘Outstanding Concrete Structure of Telangana-2019’ for
the Medigadda Barrage Project.
• Delhi-Meerut Regional Rapid Transit System (RRTS) – two
packages, Delhi and Uttar Pradesh
• Strategic Defence Facility project
Projects Completed
• Medigadda Barrage, Kaleshwaram Irrigation Project,
Telangana
• Singoli Bhatwari HEP, Uttarakhand
• Hyderabad Metro Rail Project (HMRP) Raidurgam Stretch,
Telangana
• Doha Metro Gold Line, Qatar
• Durgam Cheruvu cable-stayed bridge, Telangana
• Kakrapar Atomic Power Plant (KAPP MPCW), Gujarat
Other Key Achievements
• The business won a slew of awards during the financial
year from august bodies, including the Indian Chapter
of ACI Excellence in Concrete Construction Awards in
the ’Infrastructure’ category for the Kakrapar Atomic
Power Project 3 & 4, and the Indian Concrete Institute for
• A 16 m-high wall was cast in a single pour at the
Kudankulam Nuclear Power Plant Project, setting a
benchmark in the industry.
• The first-of-its-kind superstructure erection was
undertaken using heavy cranes across the congested
Delhi-Mumbai live railway line in a block period of 4
hours at DFCC 15C project.
• The first span for Mumbai Trans Harbour Link (MTHL
Package 1) was erected in January 2020.
Significant Initiatives
With high potential business opportunities anticipated
in tunnelling projects, an in-house Tunnelling Excellence
Academy (TEA), the first-of-its-kind in India, was built at
Kancheepuram, Chennai, India. It has been set up with
international expertise to build strong technical capability
in the design and execution of complex tunnelling projects
conforming to world-class standards, with high quality
and safety compliance. The academy has in-house subject-
matter experts who are capable of training the staff on
various technical aspects to upskill them in alignment with
the needs of the business. The objective of this institute is
to create a pool of certified tunnelling professionals for the
business in order to meet international industry standards
in safety, quality and productivity.
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One of the underground tunnels for Mumbai Metro
Riyadh Metro Line 3, Kingdom of Saudi Arabia
Digitalisation
Digitalisation has become an integral part of business
processes. It has opened up new-age capabilities to
measure, analyse and improve business performance. The
business digitally monitors all productivity factors – Men,
Material and Machinery – in real-time. For effective project
delivery, the business is committed to digitalisation and
innovation through the use of digital platforms such as
vR for workmen training in EHS (Environment Health and
Safety), BIM (building information modelling), Drones and
3D laser scanners.
Environment, Health and Safety
Committed to the mission of ‘Zero Harm’, the business
clocked 330 million safe man-hours in the year, and 76
thousand man-hours were invested in EHS awareness and
training. Key EHS training initiatives were implemented,
including P&M operations, tunnelling, incident
investigation, marine construction, scaffolding, sustainable
skills, auditing, EHS leadership, behaviour-based safety and
certifications in NEBOSH IGC and IOSH Managing safety.
The business has successfully fulfilled the corporate EHS
strategic plan 2019-20 with key EHS deliverables that have
been implemented across all its operations.
Digital applications have been launched to regulate safe
working conditions, such as inspections, work permits,
P&M inspections before use, and monthly reporting status.
various projects across the business have received safety
awards:
1. Six projects received International Safety Awards
and one project received a Gold medal (for the 9th
consecutive time) from The Royal Society for the
Prevention of Accidents (RoSPA) – UK, for the year
2019.
2. International Safety Awards were conferred for various
projects from the British Safety Council – UK for the
year 2019.
3. various projects received awards and appreciation
certificates from the National Safety Council –
India (NSCI) under the Construction Award Scheme
2019.
Human Resources
The prime focus is on talent development and talent
engagement. Policies and programmes for employee
growth and development, employee appreciation and
employee satisfaction are put in place to pave the way for
future leaders. Programmes – such as those conducted at
the Trainees Engagement & Development Centre (TEDC),
an initiative of HR’s Talent Development cell – focus on the
engagement and development potential of the recruits.
Other training programmes deliver customized training,
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
The Mumbai Trans Harbour Link
partnering with subject-matter experts to enhance relevant
skillsets.
In collaboration with IIM-Trichy and Great Lakes Institute
of Management, long-term capability-development
programmes have been initiated in order to develop future
leaders. Different methodologies, mentoring and coaching
forums and L&T-specific case studies have been created to
make the Competency Development model more relevant
to the business context.
Risks and Concerns
Each construction project is unique and comes with its
own set of challenges and opportunities. Major risks for
the business are delay in obtaining Right of Way (RoW),
work front, third-party liability, epidemic risks, schedules,
approvals/clearances, design approvals, and change in
design.
We have a strong risk management system and process
in place. The risks identified in the pre-bid and post-bid
stages are continuously monitored through regular reviews
throughout the project cycle for mitigation/resolution.
Outlook
A National Infrastructure Pipeline (NIP) has been prepared
for capital investment worth R 100+ lakh crore in
infrastructure through FY25, pledging about R 65 lakh crore
for ports, urban development, irrigation, railways and roads
and power.
Out of the total NIP, R 34 lakh crore (30%) worth of
projects are at the conceptualization stage, and R 22 lakh
crore (20%) worth of projects are under development.
Several big-ticket and first-of-its-kind projects are proposed
by the Government – such as High-speed Rail, Dedicated
Freight Corridors, Urban Transport / MRTS projects – which
are expected to provide an impetus to the business in the
coming years. Strategic investments in the North East and
the J&K region in Hydel projects are expected to enter the
implementation phase in the next 2-3 years.
The Government has also identified an urgent need to
upgrade the country’s defence infrastructure. Plans for the
upgrade of Naval and Air force bases as well as the creation
of underground infrastructure for strategic assets by the
Government are in progress.
However, the COvID-19 situation may lead to a shift in
priorities and a slowdown in decision-making by customers
for the award of projects. Elevated investments in
infrastructure will be the key to ensuring that India recovers
from the COvID-19 crisis at the earliest. The Government
has already identified infrastructure as one of the 5 pillars
to make India a self-reliant economy, and various stimulus
208
220 kV Transmission Line, Uttarakhand
5 million households electrified
packages proposed by the Government to revive the
economy will be a big boost for the infrastructure sector.
POWER TRANSMISSION &
DISTRIBUTION
Overview:
L&T’s Power Transmission and Distribution (PT&D)
business vertical is a leading EPC player in the field
of power transmission & distribution and solar
energy. It offers integrated solutions and end-to-
end services – ranging from design, manufacture,
supply, installation and commissioning of
transmission lines, substations, underground cable
networks, distribution networks, power quality
improvement projects, infrastructure electrification
and fibre optic backbone infrastructure, to solar
Pv plants including floating solar, battery energy
storage systems and mini / micro grid projects.
Besides being a dominant player in the Indian
subcontinent, the business enjoys a significant share
and a strong reputation in the Middle East, Africa
and ASEAN markets.
The business comprises several business segments:
The Substation business unit provides turnkey
solutions for Extra High voltage (EHv) air insulated /
gas insulated substations, Flexible AC Transmission
Systems (FACTS) and substation automation
and digital substation solutions for utilities and
power plants, EHv cable systems and complete
electrical and instrumentation solutions for various
infrastructure projects, such as metros and airports.
The Power Distribution business unit provides
a range of EPC services related to urban/ rural
electrification, including last-mile connectivity,
augmenting, reforming and strengthening of high
voltage and low voltage distribution networks,
distribution automation solutions and power quality
improvement works.
The Transmission Line business offers turnkey EPC
solutions for overhead lines for power evacuation
and transmission, bolstered by its state-of-the-
art tower manufacturing units at Puducherry,
Pithampur and Kancheepuram, which have supplied
over seventeen lakh tonnes of tower components
over the years. The Testing and Research station
at Kancheepuram is accredited by NABL (National
Accreditation Board for Testing and Calibration
Laboratories), and is one of the largest in Asia, apart
from being amongst the most renowned testing
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
250 MWp Solar PV Plant, Madhya Pradesh
centres in the world. The clientele of this testing
facility includes utilities from 30 different countries.
The Optic Fibre Cabling (OFC) segment provides
turnkey solutions for deploying a gigabit-scale
optical fibre backbone for both government
agencies and private telecommunication companies
by establishing a state-of-the-art network
infrastructure, typically involving a vast geographic
spread. The business also provides operation &
maintenance support to ensure the health of
the Optic Fibre Cable by maintaining Mean Time
Between Failure (MTBF) and Mean Time To Repair
(MTTR) figures as per the agreed Service Level
Agreements (SLAs).
The Renewables business provides single-point
EPC turnkey solutions for solar Photo voltaic (Pv)
related projects, including energy storage solutions
and microgrids. Its experience ranges from flat to
highly undulating as well as to landfill topologies,
with specialized technologies, including designing
and executing contour-following solar Pv power
plants. The solar business has in-house capabilities
to produce different module-mounting structure
types – such as Fixed Tilt, Seasonal Tilt and HSAT –
offering the customer a range of solutions. As grid
stability and power conditioning requirements gain
significance in the wake of large-scale renewable
210
integration, standalone and Pv integrated storage
solutions are being offered, ranging from rooftop
systems to floating solar systems.
The International units of the business in the Middle
East, Africa and the ASEAN region offer complete
solutions in the field of power transmission
and distribution up to 500 kv. These include
substations, power transmission lines, EHv cabling,
distribution networks, solar plants and Electrical,
Instrumentation and Controls (EI&C) works for
infrastructure projects such as airports, oil & gas
industries, etc.
The Middle East business unit that caters to the
UAE, Saudi Arabia, Qatar, Oman, Kuwait and
Bahrain, has garnered a coveted place in the GCC
region. With a presence spanning over 25 years and
numerous milestones, it enjoys an enviable track
record in the region.
The once-fledgling Africa business unit has
established itself as a force to reckon with, in 10
countries across the North, East and South of
the continent. With a sizeable market share in
the addressable segment, and projects from all
the business lines within the PT&D spectrum, the
business unit is now poised to make inroads into the
western parts of Africa.
400 kV Grid Station at Misfah, Oman
400/220/66 kV Substation at Wangtoo, Himachal Pradesh
In the ASEAN region, a proven track record of
successful project execution in Malaysia and
Thailand has helped the business foray into
Myanmar and the Philippines.
Larsen & Toubro Saudi Arabia LLC (LTSA) is a
wholly owned subsidiary providing engineering,
construction and contracting services in the sphere
of Transmission & Distribution in the Kingdom of
Saudi Arabia.
Business Environment
On the power distribution front in India, the achievement
of electrical connectivity to all villages and the near closure
of centrally sponsored schemes such as Saubhagya and
R-APDRP redirected the focus to strengthening of urban
distribution networks and intensification of electrification
in select States. As the State DISCOMS depended mainly
on multilateral funding, finalization delays were witnessed.
However, the business was able to maintain its market
share and garner significant orders from Karnataka, Tamil
Nadu and Uttar Pradesh.
In the transmission system space, investments were driven
by the packages finalized based on tariff-based competitive
bidding and through the State utilities that could secure
multilateral funding. With the continuing general lack
of investment in the conventional power generation and
industry segments, centrally-driven transmission schemes
were not aplenty. States such as West Bengal and Tamil
Nadu finalized packages for strengthening their intra-state
transmission line networks and associated substations.
The neighbouring countries of Nepal and Bangladesh too
offered potential across the T&D spectrum, viz. substations,
transmission lines and distribution.
Despite the fact that the solar industry faced a lower
capacity addition in FY 2019-20 as compared to the
previous year, in the face of political changes in some
States and the dependence on China for modules, the
solar business portfolio surpassed a cumulative capacity of
2.3 GW. Measures such as the removal of the ceiling on
tariff, acceptance of corporate guarantees in lieu of bank
guarantees, etc., boosted the confidence of the developers.
Central PSU tenders with a domestic content requirement
gave a fillip to prospects.
In the Middle East, though the macro-economic scenario
was mixed in FY 2019-20, the business garnered a major
portion of the opportunities that arose. The continued
trend of non-oil based economic diversification has opened
up infrastructure project development in these countries.
In Africa, certain countries in need of facilitation in terms
of funding and expertise to build transmission lines and
substations at EHv levels resorted to the MOU route with
reliable partners.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
400/220/132/33 kV Substation, Mawana, Botswana
With the on-schedule completion of projects in Malaysia
and Thailand and the strengthening of its presence in the
Philippines and Myanmar, the business has demonstrated
its capabilities and has won recognition in the ASEAN
market.
Major Achievements
Orders Won
• Modernizing the power distribution network in
Bengaluru Metropolitan Area Zone, Gurugram Smart City
and Chennai. The package for Chennai also includes fully
automated, unmanned 33 kv Gas Insulated Substations
at select locations
• Underground cabling packages and supply and
installation of Medium voltage capacitor banks with
related accessories in Uttar Pradesh
• Construction of 765 kv and 400 kv Transmission lines for
integration and evacuation of power from wind energy in
Kutch, using high capacity Transmission systems
• Design, supply and construction of a 400 kv Substation
at Ottapidaram, Tamil Nadu and the associated 400
kv Double Circuit Ottapidaram – Udangudi – Kamudhi
Transmission Line on a total turnkey basis
• Establishing a 220 kv Gas Insulated Substation including
laying of associated 220 kv and 66 kv cable networks in
Karnataka
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• Substation and Transmission Line packages associated
with Meerut and Simbhavali Project under tariff-based
competitive bidding
• Power Transmission Infrastructure for 800 MW Rupsha
power plant, Bangladesh; 220 kv Substations in
Nepal and a distribution package for establishing an
underground cable network in Kathmandu
• Developing a 230 MW Grid Connected Solar Photovoltaic
plant, which is one of the largest such orders under the
CPSU Scheme Phase II (Tranche II)
• Another 150 MW Solar Photovoltaic Plant in Tamil Nadu
and Uttar Pradesh including a large floater solar power
project at a reservoir of Auraiya Gas Power Plant
• Providing off-grid DC solar photovoltaic water pumping
systems with standalone lighting systems for farmers,
with provisions for mobile charging and transfer of
automated meter reading and water discharge reading
data in Maharashtra
• Orders across the Middle East for establishing 380 kv
and 230 kv Transmission Line corridors in the Kingdom
of Saudi Arabia, upgrading substations and related
power facilities in Kuwait and UAE, constructing 400 kv
Overhead Lines in Qatar and setting up a 400 kv Grid
Station in Oman
132/33 kV Grid Station at Ghala Heights, Oman
• Engineering, Procurement and Construction of the 400
kv Overhead Transmission Line between the towns of
Chimuara and Alto Molocue in Zambezia Province in
Mozambique, Africa. In Ethiopia and Uganda, orders
have been received for establishing distribution networks
involving medium / low voltage distribution lines and
last-mile consumer connections
• 500 kv Substation order in the Philippines
Projects completed and commissioned
• Three STATCOM projects in Hyderabad, Udumalpet and
Trichy
• Commissioned one of the highest-altitude 400 kv GIS at
Wangtoo, Himachal Pradesh, at an altitude of 1727 m
above MSL, overcoming cold weather conditions
• More than 1900 CKM-long transmission corridors were
completed in 2019-20
• Communication backbone networks involving aerial /
underground optic fibre cable links of more than 11000
km have been established
• The first biggest utility-scale solar-cum-MWh-scale energy
storage project in India was substantially completed.
Also, the first MW scale floating solar project in India (4
MWp) was rendered ready for commissioning
• Across the Middle East, 26 substations were
commissioned, including major 400 kv substations
in Qatar and Oman. More than 200 km of overhead
transmission lines and 325 km of underground cable
networks capable of high capacity energy transfer were
built
• Building upon the successful commissioning of EHv
substation projects in Africa, the business has now
completed a 220 kv Transmission Line in Egypt and a 500
kv HvDC Transmission Line in Kenya
• In Malaysia, a 500 kv Transmission Line from Yong to
Peng to Segamat has been successfully commissioned on
schedule
Awards and Recognitions
The business won laurels for its technological and execution
prowess.
• For its innovativeness amongst the emerging
technologies, the Energy Management System for
BESS used in hybrid and microgrid systems won several
awards, including World Innovation Congress 2020
Awards, ET Now Solar Leadership Award 2020 and the
ISGF Innovation Award 2020
• The smart portable mobile solution L&T Mobisol won
the World Innovation Congress 2020 and ET Now Solar
Leadership Awards 2020
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Floating Solar Project, Tirupati, Andhra Pradesh
• The Bihar rural electrification project was adjudged as the
best use of solar for societal benefits, and the Andaman
Energy Storage project was hailed as the energy storage
project of the year by ET NOW
• The automatic module dry cleaning system won the
award for the best smart technology of the year from
India Smart Grid Foundation (ISGF)
• The 132 kv Ghala Heights Substation earned L&T
Oman the Dossier Award for the Best Contractor for
Infrastructure Projects
• The power transmission & distribution projects in KSA
and UAE bagged five Middle East Economic Digest
(MEED) awards in different categories
• The Union Territory of Puducherry conferred the
Swachhata hi Sewa award for a water management
related CSR project of the Puducherry factory
Significant Initiatives
The containerized integration facility for battery
energy storage systems set up at Kancheepuram was
commissioned successfully and started despatch. The
ready-for -commissioning cell that was created to quicken
the handing-over of completed transmission line stretches
has started to have a beneficial impact on customer
delight. Improvised modularization initiatives such as kitting
of tower components and remote electrification items
continue.
In the vast expanses of Africa, mechanized bush-clearing
activities and the adoption of advanced techniques,
such as the Aerial LiDAR survey, have led to timely
project completion with desired productivity levels. With
mechanized trenching and in-house GIS surveys with
360° cameras, increased productivity was witnessed
in the domestic optic fibre cabling projects too. The
TL9000 certification meant for the supply chain of
telecommunications industry has been obtained.
The MoMRA (Ministry of Municipal and Rural Affairs)
certification for L&T Saudi Arabia has opened up
opportunities with Royal Commission tenders.
Digitalisation
Taking a step towards the next level of digitalisation, a
specific Opex initiative has been launched to orchestrate
the data captured by digital means and to articulate
the organizational wisdom in a replicable manner. This
initiative is expected to enhance the predictive abilities
and make the plans robust, so as to better manage risks
and achieve the desired speed and scale. The Industry
4.0 journey has gained momentum in the manufacturing
facilities, resulting in a marked improvement in the overall
214
400/132 kV Grid Station at Qabel, Oman
500/220 kV S4 Ras Ghareb Gas Insulated Substation, Egypt
equipment efficiency (OEE). At the core of such initiatives is
the centralized facilitator set-up named PRAPTI – Planning,
Reviewing and Assisting Projects to Improve – that equips
the site team with the requisite tools and analytics to
improve productivity.
Digital initiatives such as 3D/4D BIM, deployment of drones
and mobility devices for project progress monitoring,
connected plant and machinery, geospatial technology-
based surveying, integrated material management, quality
/ EHS incident reporting, etc., have yielded tangible
benefits. Novel solutions have been deployed, and a fibre
track application that facilitates patrol management for
Operation & Maintenance of cross-country cables laid is just
one such example.
Also, to measure the depth profile of trenches in real time
accurately, a sophisticated digital method has been used.
Environment, Health and Safety
EHS practices implemented by the business are aligned with
a corporate EHS policy that is strictly followed, along with
clear policies laid out at the business level. The EHS policy is
supported by standard operating procedures (SOPs) at the
business-unit level, and the aim of ‘Zero Harm’ is cascaded
down to the project level through various digital and
technical initiatives.
The start-and-stop OTP (One Time Password) based process
with a 3-level approval mechanism for shut-down works
is an example of an improvised fail-safe EHS practice
meant for the geographically distributed electrification
work involving workmen of different skill levels. virtual
reality-based training modules, gamified mobile training
modules, etc., are utilized to inculcate a safety culture. A
nimble communication platform named Prakasha vani was
launched for dial-out conferencing with large teams of
field staff. WISA (Workmen Induction & Skills Application)
Card implementation is used for workmen screening and
allocation of tasks according to skill levels and proficiency.
In the Middle East, the Occupational Health and Safety
System was migrated from OHSAS 18001:2007 to ISO
45001:2018.
The business bagged 21 British Safety Council (BSC)
Awards, 8 awards from NSCI under various categories and
15 RoSPA Awards. Also, ASSE awards and appreciation
certificates from several domestic and overseas customers
such as PGCIL, Aramco, SEC and OETC have been received.
Human Resources
The business has been constantly engaged in developing
employees for greater roles and responsibilities, ensuring
that there is a talent pipeline of managers prepared to take
up challenging roles.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
500 kV Bang Saphan-2 to Surat Thani Transmission Line
A blend of robust processes like the Performance
Management System, the Individual Development Plans,
Job rotation Plan, cross-learning and cross-training
opportunities help to develop young managers. They are
assigned new situations and challenges which expand their
skill sets and encourage them to think on their feet. Many
of the new projects sites in Africa have been staffed by
young managers and engineers transferred from India in
accordance with the employee development plan.
A wide array of digital platforms has been implemented to
connect and engage with employees as well as encourage
them to undertake new learning opportunities. A year-long
Employee Engagement Calendar has been launched, with
specific focus on a range of activities built around the core
values of the organisation. The initiatives to recruit and
induct young engineers of diverse nationalities continue.
Risks and Concerns
Towards the end of the financial year, the outbreak of the
COvID-19 pandemic and the resultant lockdown caused
uncertainties in timely delivery of a few supply items
planned. Adequate contractual safeguards have been put
in place and extensive scenario planning exercises have
been carried out.
management, workmen management, etc., as it provides
an opportunity for new methods of working and revised
cost estimates.
The business has implemented a bespoke digital platform
for Enterprise Risk Management that supports the pre-bid
and execution risk reviews with robust stage gates.
Outlook
The proposed amendment to the Electricity Act envisages
stricter enforcement of obligations that are to be fulfilled
by State utilities, thereby improving their financial health.
It may also open up new models of participation in the
distribution sector.
The Union Budget 2020-21 hinted on a centrally
sponsored scheme, focussed on smart metering, feeder
segregation and AT&C loss reduction. Early formulation and
implementation, along with project packaging and models
of participation, are crucial.
Though the investment levels delineated in the National
Infrastructure Pipeline are not markedly higher than
historical trends, the report contains a KPI-based framework
with specific targets on AT&C loss reduction, etc., by 2023.
Recovery is expected to be prolonged and necessitates
a multi-pronged approach towards prudent financial
In urban areas and cyclone-prone zones, HT and LT
overhead lines are being replaced with underground
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765 kV Gas Insulated Substation, Varanasi, Uttar Pradesh
132/33 kV Underground Cable at Ghala Heights, Oman
cables. New 11 kv feeders are created for load bifurcation.
Such projects improve the overall reliability of the power
distribution network and, in particular, help in avoiding
unscheduled power cuts during rains and gusty winds.
The transmission lines and substations related to the
second phase of Green Energy Corridors for evacuation of
renewable energy are expected to get finalized. These are
under various stages of bidding through the Tariff-based
Competitive Bidding mode. In addition, intra-state system
strengthening-related opportunities are expected to come
up in select States. Also, certain mass transit projects which
involve receiving substations and power supply networks
are envisaged in key cities.
Grid integration of intermittent renewable energy and
the emerging prospects of distributed generation require
investments in power quality devices such as STATCOM,
thyristor-controlled reactor (TCR) and SvC to ensure voltage
stability, reactive power compensation and reduction of
harmonics.
System Strengthening and Generation Linked Schemes,
especially those funded by Indian Lines of Credit and
multilateral aids, offer potential in Bangladesh and Nepal.
Despite the slow pace of solar EPC tenders from private
developers being incommensurate with ambitious targets,
there are ample opportunities, especially from PSUs.
Preference for Hybrid renewable projects and floating solar
projects are also on the rise. There is a perceivable shift
towards solar-cum-storage projects. The expanding support
to the International Solar Alliance is a positive factor in
attracting investments into the renewable energy sector in
India.
The Indian market for Optical Fibre Cable has been
projected to grow at a CAGR of 17 percent through 2023.
Growth in the market is majorly expected to be backed by
the rising investments in OFC network infrastructure by the
Indian Government to increase internet penetration across
the country, in line with the Government’s initiatives such
as Smart Cities vision and Digital India. Also, the success
of 5G technology will ultimately depend on the strength of
Optical Fibre Cable connectivity.
In the Middle East, the business is cautiously optimistic
in its outlook as oil prices are hovering in the lower
ranges; commodity prices are volatile, and the geopolitical
stalemates continue. The investment in infrastructure
will depend on the fiscal surplus and financial buffers
available with the countries. However, the diversification
of the economy to non-oil sectors will continue to provide
opportunities in terms of upgradation to higher voltage
levels, integration of renewable energy sources to the
existing power grid and interconnections of transmission
networks.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
12 Million cu.m storage reservoir for Vizag Steel Plant, Andhra Pradesh
The business continues to concentrate on key African
economies that have a clear road map to build transmission
and distribution networks to meet increasing demand.
Ambitious plans – such as the Kenya vision 2030, Growth
and Transformation Plan II of Ethiopia and the National
Development Plan of Botswana – point to significant
opportunities to scale up faster. Grid strengthening,
regional interconnection and rural electrification
opportunities are being pursued in select countries.
Renewable generation is another area that holds potential.
Consolidating the breakthroughs achieved in countries
forayed into, exploring renewable energy opportunities and
the opening-up of select West African countries will hold
the key to success in the coming year.
The rising power demand in ASEAN countries continues
to pave the way for significant investments in grid
interconnections, grid development and strengthening.
The entry into the Philippines, Myanmar and Cambodia is
expected to provide a fillip in the region. Plans are afoot for
an expanded presence in Malaysia and Thailand.
Given the visibility of prospects in traditional strongholds
and the thriving expansion in renewables and new
geographies, the growth momentum of the PT&D business
is intact, backed by a strong order book and ably supported
by cost leadership, technology leverage, delivery excellence
and employee engagement initiatives.
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WATER & EFFLUENT TREATMENT
Overview:
The Water & Effluent Treatment business undertakes
the construction of water infrastructure for the
efficient usage, conservation and treatment of
water. The business has proven to be a lead player
in the domestic market and has also had successes
in international markets. The business comprises the
following verticals:
• Water supply & distribution business, which
caters to the supply of potable water.
• Wastewater business, which provides
infrastructure by building sewer networks and
sewage treatment plants to collect and treat
municipal wastewater for safe disposal of the
treated effluent.
• Large Water business, which irrigates lakhs
of hectares of land in order to enhance the
livelihood of millions, pumps and lifts water
from rivers to delivery chambers and distributes
it using automated outlet management systems.
The business also constructs combined effluent
treatment plants for industries and desalination
plants.
375 MLD Sewage Treatment Plant, Jebel Ali, UAE
• Smart Water Infrastructure business, which
develops utility infrastructure in the cities as well
as the shortlisted brownfield cities under the
Smart City Mission.
• The International arm, which focuses on
building water infrastructure, viz. sewage
treatment plants, water treatment plants and
water transmission and distribution projects. The
business has a presence in the UAE, Qatar, Oman,
Tanzania and Sri Lanka.
Business Environment
Aiming to provide piped water supply to all households, the
Government has announced the Jal Jeevan Mission. The
scheme places emphasis on augmenting local water sources
and recharging existing sources, and will promote water
harvesting and de-salination. The ‘Har Ghar Jal’ scheme to
provide a functional tap connection to all households by
2024 is part of the Jal Jeevan Mission.
The business accounts for an average of more than 35%
share of the domestic market. Over the years, it has
emerged as a strong contender in the water segment,
meeting the requirements of the public at large. Each
business unit is independent, and faces stiff competition
in the market including international competition from
Chinese and European players.
FY 2019-20 has been volatile, with the General Elections
and the change in Governments of key states. This has
resulted in some delays in new prospects fructifying, and
the execution of projects being stalled or reviewed by a few
states. The COvID-19 pandemic also continues to have a
profound impact on the Indian construction industry.
Major Achievements
The business continued its momentum in securing repeat
orders from existing customers as well as attracting new
customers. These orders were secured across the various
business portfolios.
Major Orders Secured
In India
• Parwati Mega Lift Irrigation Schemes Phase III & Iv,
Madhya Pradesh
• 100 MLD Sea Water Reverse Osmosis Desalination
(SWRO) Plant in Dahej district
• 477 MLD Water Treatment Plant at Chandrawal
• Area Based Development for Rajkot, Gujarat
• Gunjawani Lift Irrigation Scheme
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
137 MLD Water Treatment Plant, Nashik, Maharashtra
Secondary clarifiers under construction for 318 MLD Waste Water
Treatment Plant, Coronation Pillar, New Delhi
• Bhubaneshwar Sewerage Scheme
• Rural Water Supply Scheme to Keonjhar District in Odisha
Company’ and ‘Best Rural Drinking Water Solutions
Provider’
• 30 MLD Combined Effluent Treatment Plant (CETP) at
Ahmedabad, Gujarat
• Water Supply Schemes to 4 blocks in Medinipur, West
Bengal
• Water Management projects in Hubballi-Dharwad,
Belagavi and Kalaburgi districts of Karnataka
• ‘Overall Infrastructure Development’ award from Dun &
Bradstreet
• Water Optimization Awards ‘Technology Excellence in
Design & Engineering’ and ‘Best Water Management in
Ash Handling’ from Mission Energy Foundation
• The prestigious Golden Peacock Award for HR Excellence
for 2019
International
• Al Dhakhliya Water Transmission System, Phase-II project
in the Sultanate of Oman
The business is proud of commissioning its largest 375 MLD
Sewage Treatment Plant in Jebel Ali, UAE and successfully
undertaking its operation and maintenance.
• Kundasale Haragama Water Supply Project, Sri Lanka
• Supply of Recycled Water along Abu Dhabi Al Ain Road –
Package B, UAE
Awards
During the year, the business won a slew of prestigious
awards:
• 7 awards from Zee Business as part of the National
CSR Leadership Congress including ‘Best Water
The desalination project bagged by the L&T-Tecton Jv this
year uses the Split Partial Method for the Reverse Osmosis
(RO) process, the first of its kind to be implemented in
India. This is an in-house design innovation and will reap
benefits during the progress of the project.
Significant Initiatives
The business keeps continuously honing its operations and
process knowhow capabilities by implementing strategic
initiatives for the effective working of its project sites.
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Pump house for Chhaigaonmakhan Lift Irrigation Scheme,
Madhya Pradesh
Lift Canal System for Upper Indravati Irrigation Project, Odisha
With significant focus on digitalisation, the business has
developed many web and mobile applications such as:
• Extensive utilization of BIM for project monitoring and
progress review
• Project monitoring tool ePragati, from which data is
captured for visualization of project progress using 3D
GIS platform for pipeline and civil structures
• Creation of value engineering centres and process
improvement techniques to aid in innovation and design
optimization
• The customized pipe fabrication (P-Fab) application
to track the status of pipes – from manufacturing to
installation
• The Material Schedule Tracker (MST) to ensure timely
supply of items by effective monitoring and tracking
• The WISA application for elaborate and faster
on-boarding, monitoring and screening of the workforce
• Using artificial intelligence in contracts for classifying,
extracting and assessing the risk in the tender’s clauses
The continuous emphasis on strengthening the in-house
design team has resulted in shortening the design duration
by leveraging technological solutions, such as:
• Use of LiDAR surveys to capture accurate, speedy and
voluminous data
• Automated design-to-drawing preparation of ESRs using
in-house developed tools
Apart from digitalisation, the business has also developed
strong process teams and tie-ups with educational
institutions like IIT Madras, Anna University and BITS,
Goa for research in the field of wastewater and sludge
management.
Environment, Health and Safety
The business:
• Achieved 112 million safe man-hours and clocked 5.9
lakh man-hours for training the workmen and staff
• Developed training videos for MS pipe manufacturing
process (conventional and spiral), pipe-handling
methodology, safe erection of transmission towers, micro
tunnelling safety and pipe-bursting methodology
• Developed Project Risk Index Map for real-time hazards
and risk-monitoring of sites
• Developed a comprehensive Safety Mobile application,
viewEHS, capturing safe execution cards (SEC),
observation and audit reviews
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Moradabad Sewerage Treatment Plant, Uttar Pradesh
Pump house for Nandawadagi Lift Irrigation Scheme, Karnataka
• Planted more than 14 lakh tree saplings, with 7 lakh+
saplings in a single day on World Environment Day 2019,
and donated 4300 units of blood
• Received several awards from RoSPA (Royal Society
of Prevention of Accidents), British Safety Council,
Confederation of Indian Industry and National Safety
Council
Human Resources
Continuous learning, improvement and excellence are
the focus of the business, which has 5700+ staff across
India and abroad. various programmes are conducted
to appreciate employees, such as RAvE (Recognition
Awards for value Engineering Excellence) which aims to
recognize individuals and teams in L&T’s Engineering,
Design & Research Centre (EDRC) for their outstanding
contribution to fulfilling business objectives; and PRAISE,
which recognized 124 staff members for the innovations or
improvements implemented by them at work.
To engage employees beyond work, various events were
organized to commemorate World Water Day, World
Environment Day as well as various national and regional
festivals. The business also organized sporting events across
all projects, which helped employees de-stress and develop
a sense of togetherness and camaraderie.
Succession planning is the key to ensuring the seamless
continuity of a business. A leadership programme,
ASCEND, was initiated to build leadership capabilities
in women managers. EMEX (Engineering Management
Excellence Programme) was organized to build the project
engineering management capabilities of the EDRC’s
managers.
Risks and Concerns
Operational risks include delays in land acquisition, ROW/
ROU issues and volatile steel prices. With the majority of
the business’ clients being state government authorities,
there isn’t much risk related to projects getting shelved
or concerns pertaining to creditworthiness. However, the
year evidenced the cashflow rationalisation in the case of
change in state governments.
The assessment of risks associated with the projects is
carried out frequently to track and review the project cost,
cash flows, margins as well as physical progress, and thus
determine the overall health of the portfolio. Also, state-
wise exposure is dynamically monitored to track any early
signals of cashflow constraints.
The business proactively ensures that it has a healthy
mixture of projects funded by various credit-worthy
clients and bodies like the Central Government, State
Governments, Municipal Corporations, Urban Local Bodies,
222
Command & Control Centre, Prayagraj
Multilateral Funding Agencies, etc. Wherever feasible,
the payment terms with supplier and vendor partners are
aligned to customer terms to avoid cash gaps.
Foreign currency exposure in the case of international
projects, is minimised by ensuring a natural hedge at the
bid stage. Further, hedging policies are also in place for
exposures, if any.
Outlook
The business is anticipating an increase of multilateral
funded projects in the next year from the domestic market.
The Jal Jeevan Mission is envisioned to provide piped
water supply to every rural household under the ‘Har
Ghar Jal Yojana’ scheme by 2024, which will bring greater
coherence to policy objectives and the decision-making
process.
However, the business foresees challenges in terms of
payment slowdown, mobilization of the workforce and loss
of the productive months of the year due to the ongoing
pandemic.
A revision of the National Water Policy 2012 with key
changes in the water governance structure and regulatory
framework is anticipated in FY 2020-21, with more
emphasis on water management and river interlinking. This
is expected to give impetus to the business.
The Union budget proposed an allocation of R 11,500 crore
during the year 2020-21 towards the Jal Jeevan Mission.
The Jal Shakti Ministry has been formed by merging the
Ministry of Drinking Water and Sanitation (MDWS) and
the Ministry of Water Resources and Ganga Rejuvenation
(MoWR).
SMART WORLD &
COMMUNICATION
Overview:
L&T’s Smart World & Communication (SWC) vertical
was created in 2016 to address the emerging need
for a safe, smart and digital India. As a Master
Systems Integrator, SWC operates and retains
market leadership in the following segments:
• Smart Cities & Smart Infrastructure: Smart Cities,
e-gov, Smart Energy, Smart Education, etc.
• Safe Cities: Public Safety, Critical Infra Security,
Intelligent Traffic Management, etc.
• Communication & Telecom Infrastructure:
Wired & Wireless i.e. IP/MPLS backbones, Dense
Wavelength Division Multiplexing, Global System
for Mobile Wi-Fi, Satellite, Microwave, Emergency
Communications like APCO, Tetra, Early Warning
Dissemination, 5G, etc.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Data Center, Hyderabad
Tourist Information Kiosk, Jaipur
The business has gained experience across 26+
cities and 44 agencies in the country. It has built
a technology and project management team with
over 800 personnel, to cater to the needs of both
projects and Operations & Maintenance. The
business is currently in the process of rolling out
various initiatives to transform itself as a ‘thought
partner’ to its clients; a value-adding Master System
Integrator (MSI) with futuristic solutions, strategic
partnerships, as well as Integration & Analytics and
domain-specific centres of excellence.
Business Environment
A growing number of cities is adopting elements of smart
city infrastructure, such as intelligent traffic management
and surveillance systems, smart electric grids and lighting,
fibre optic cabling and transport and logistics systems. Out
of the 100 Smart Cities planned in the Smart Cities Mission,
an integrated command and control centre along with
various Smart City solutions is operational in 47 cities, with
17 more cities being in the process of implementation.
To provide 100% population coverage for telecom and
high-quality broadband services for the socio-economic
empowerment of every citizen and end-to-end online
delivery of government services, the Government will
continue its investment in the Bharat Net Programme.
During the COvID-19 pandemic lockdown, the authorities
leveraged Smart City or Safe City Command and Control
Centres set up by the business, with cutting-edge
technologies like AI, IoT, etc. The business has rolled out
smart technology solutions to combat COvID-19 in 20
major cities across India. These technologies are helping
the administration in cities such as Mumbai, Pune, Nagpur,
Prayagraj, Raipur, Ahmedabad, visakhapatnam and
Hyderabad in fighting the pandemic through Command
Centres or City Operations Centres.
Major Achievements
The business received several major orders, as follows:
a. The business won a large order to establish the first-of-
its-kind, state-of-the-art Unified Network Management
System to Manage, Support and Operate a countrywide
Armed Forces Network under the Network for
Spectrum (NFS)
b. Jhansi Smart City involving deployment of an Integrated
Command and Control Centre, Intelligent Traffic
Management System, City Surveillance, City Wi-Fi,
technology-enabled Solid Waste Management, GIS,
Citizen Portal and e-Office Applications
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City Operation Centre, Nagpur
c. SUMITRA Project, which is a pilot project for
Surveillance using Multilayer Intelligent Tracking,
Response and Analysis system on a turnkey basis
d. Army IP MPLS - an order to create an IP MPLS Network
Backbone for the Armed Forces
e. Hyderabad ITMS Expansion an order for expansion
of the Intelligent Traffic Management System for
Rachakonda and Cyberabad
Other Achievements
The Early Warning Dissemination System (EWDS) for Odisha
was effectively utilized in disaster management by the
Government during Cyclone Fani enabling the Government
of Odisha to save millions of lives through dissemination
of warnings through text messages (26 million messages),
Sirens and Radio communication.
The business successfully rolled out 1 million+ Smart
Meters, with Meter Data Management System and Head
End System hosted on the cloud, in the states of Uttar
Pradesh and Haryana as part of the ongoing project to
deploy 5 million Smart Meters.
The business commissioned the E-shiksha (Hi-Tech Lab)
project for the state of Tamil Nadu, involving the largest
roll-out of ICT for more than 6000 schools in Tamil Nadu.
The largest City Surveillance and Intelligent Traffic
Management System for Hyderabad was declared Go-Live.
The Early Warning Dissemination System (EWDS) for
Andhra Pradesh was successfully commissioned and covers
10 coastal districts.
Raipur Smart City was successfully commissioned and
declared Go-Live.
Awards and Recognition
In the year under review, the business won over 10
prestigious awards, including: -
• ‘Best Smart City Award’ at the Dun & Bradstreet Infra
Awards 2019, for Nagpur Smart City
• ‘Best Safe & Secure Initiative’ Award at the 5th BW
Digital India Awards, for Prayagraj Smart City
• Unique Artificial Intelligence-based Solutions at the Data
Science Excellence Awards, CYPHER, for Prayagraj Smart
City
Significant Initiatives
The business has taken the following initiatives in the areas
of tendering, technology, supply chain management and
operational efficiency improvement:
• In order to solve problems utilising the huge amount
of data being collected in 25+ Smart and Safe cities,
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Early Warning Dissemination System, Odisha
Smart Pole, Vizag
the business has set up an Analytics & Integration
CoE using Big Data, IoT and Artificial Intelligence
technologies. The business has also undertaken
the development of a world-class Integrated platform,
which allows the creation of one Operating System
to solve business problems as against point solutions.
This value-based approach helps in retaining clients.
Under this initiative, a pilot use case of in-house
AI-based crowd management solutions was successfully
deployed in Telangana State to manage ‘Samakka
Saralamma Jatara’, Asia’s largest tribal fair
• VR Training Module: A virtual reality training module
for site staff/workmen
• QMS Tool: QMS Manual and Risk / Opportunity /
Objective Tracking
Environment, Health and Safety
• The business completed 4.93 million safe manhours
during this financial year
• The business planted 35,974 saplings and donated 403
units of blood
• The business is continuously working with global
• The business won 4 RoSPA Gold Awards from The
partners, reputed academic institutions and start-up
ecosystems to co-develop customised solutions,
blending the partner’s technology and its domain
expertise. This approach will position the business as
‘value-adding MSI’ and help transform it into a ‘thought
partner’ to clients
• The business launched a multitude of digital solutions to
support the business functionalities, viz.
• SWIFT: ‘Supply and Work Integrated Finishing on
Time’ to enable procurement
• Centralized O&M: A GIS-based tool to track O&M
activities and incident management
Royal Society for the Prevention of Accidents, UK, for
Lucknow Metro Rail Project, Raipur Smart City, MEGA
Telecommunication Project and Prayagraj Smart City
• The business launched its second digital application,
vIEW EHS, this year and received copyrights over the
application
• After successful completion of transition audits by
DNv-GL, the business has been recommended for ISO
45001:2018 certification
Human Resources
The team comprises multi-domain technical talent with
specialists in the areas of communication, IoT, server
and storage, Cloud in Smart Cities, Safe Cities and
226
Surveillance cameras installed at Prayagraj
Communication technology areas. The focus over the
last year has been on building capabilities in cutting-
edge technologies like AI, IoT, Computer vision, Cyber
Security, Blockchain technologies for Smart Cities. Project
Management, and Domain Expertise, blended with
technology expertise – all of which have differentiated the
business, enabling it to retain its position as market leader
for the last few years.
Technical certifications are a focus area, with over 150
employees obtaining certification in courses from CISCO,
Microsoft, Huawei, Juniper and Cloud.
Technology-enabled learning has been extensively
deployed, using eLearning and webinars as well as
microlearning using the ATL Next and RapL platforms. The
business recognizes high performers through its Quarterly
PRAISE awards programme.
Risks and Concerns
Though the projects secured are funded through Union and
State budgetary allocations, payment terms continue to
pose working capital challenges. Projects with certain State
authorities need close monitoring due to delay in handing
over of sites, delay in certifications due to involvement
of multiple agencies and the challenges faced in timely
budgetary allocations.
Operational risks – such as timely mobilisation, procedural
delays in ROW and sign-offs are mitigated through digital
interventions at every stage of project implementation
– from planning to monitoring operations – helping the
management to take appropriate action to pre-empt and
overcome challenges.
The business is well supported by a centralised support
team in the maintenance of SLA requirements.
The business also faces unstructured competition through
aggressive bidding of new entrants in certain segments.
However, with its experienced team and previous
experience in executing complex technological projects,
L&T has an advantage in the market.
Outlook
The Infrastructure vision 2025 includes the goal of ‘Digital
Services: Access for all’, amongst others. The current
pandemic has opened new opportunities to leverage digital
services owing to the necessity of social distancing, which is
going to be the new normal.
Under the Bharat Net Programme, investment in digital
connectivity backbone will be more prominent.
The Government has also announced the possible launch of
Smart Cities Mission 2.0 soon, covering 4000+ cities/towns.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
Chhabra Coal Handling Plant, Rajasthan
Under the Smart Meter National Programme, the
Government aims to replace 250 million conventional
meters with Smart Meters in the next 5 years. With the
Government’s focus on reducing commercial losses and
providing a choice of suppliers to consumers through Smart
Meters, this programme is likely to be implemented at an
accelerated mode with a target of completion of 3 years.
frontiers in computing, communications and cyber security,
with widespread applications including smart cities.
The business has the unique advantage of in-house domain
expertise, enabling it to provide end-to-end offerings to
its customers. This enables it to play the role of a Master
System Integrator for the Smart Cities of the future.
The Ministry of Home Affairs continues its focus on Safe
Cities and the modernization of the Police force. It is
expected to launch multiple City Surveillance projects and
augment the scope of the existing Safe City projects.
With the continued need for perimeter security for all
critical installations – including defence establishments, air/
army bases, armament factories, nuclear power plants, etc.
– investments are expected to flow into projects designed
to meet these security needs.
Another focus area in the National Infrastructure Pipeline
is the creation of technology-driven learning. This focus
on creating ICT infrastructure for primary and secondary
schools through ‘Samagra Shiksha Abhiyan’ is expected to
create many new opportunities in e-Education.
The Union Budget 2020-21 also announced the National
Mission on Quantum Technologies & Applications with
an outlay of R 8,000 crore over the next 5 years to focus
on a quantum computing domain and its impact on new
METALLURGICAL AND
MATERIAL HANDLING
Overview:
L&T’s Metallurgical and Material Handling (MMH)
business offers complete EPC solutions for the metal
(ferrous and non-ferrous) sectors across the globe.
The business undertakes end-to-end engineering,
procurement, manufacture, supply, construction,
erection and commissioning, covering the complete
spectrum from mineral processing to finished metal
products with state of the art Process Plants.
The business also offers comprehensive product
solutions such as Mineral Crushing Equipment
and Plants, Surface Miners, Premium Sand Plants,
Material Handling Equipment (Stackers, Reclaimers,
Wagon Tipplers, Ship Unloaders, Multipurpose
228
Finishing Mill for Rourkela Steel Plant
Cranes and other Mining Equipment), as well as
Steel Plant Machinery catering to core industrial
sectors, including Cement, Mining, Power,
Construction, Steel, Fertilizers and Chemical Plants.
The complete range of product solutions is backed
by 5 decades of experience and knowledge,
in-house design resources and state-of-the-art
manufacturing capabilities. The manufacturing
centres of its product lines are in Kansbahal,
Odisha and Kancheepuram, Tamil Nadu with
facilities for fabrication, machining and assembly
of custom-made equipment and critical structures.
The business commands a leadership position in the
sectors it serves.
Business Environment
The metal sector, as a whole and specifically the base metal
sector, witnessed a subdued price level globally on account
of less-than-anticipated growth in demand.
The demand for Manufactured Sand witnessed a rise with
the increasing restrictions / bans on river-sand mining. The
replacement of river sand with quality manufactured sand
continues to gain momentum, improving prospects for the
business.
The successful completion of the steel industry
consolidation and allocation of iron ore mines in Q4 FY20
has brought all the majors on par as vertically integrated
producers. Despite the liquidity crunch during the
consolidation cycle and new expansions not immediately on
the anvil, the refurbishment and de-bottlenecking of newly
acquired assets to synergise with their existing products will
be something very much on the cards.
The business faces reduced competition in EPC contracts
and technology-oriented projects due to the scarcity of
players matching qualification requirements.
In the wake of the COvID-19 pandemic, the global demand
has plummeted and business cycles have been disrupted,
resulting in a major production cut by the industry. The
industry is expected to take time to attain full capacity
again.
Major Achievements
The continued focus on the Middle East and North Africa
(MENA) has yielded good results in FY 2019-20, with
the award of major orders from the Ma’aden-Gold Plant
Project in Saudi Arabia and the Etihad Rail – Freight-
handling package in UAE. Despite the limited opportunities
available during the current year in India, the business
has managed to stay ahead of its competitors in terms of
order booking.
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MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2019-20
7C Stacker-cum-Reclaimer installed at Khargone
Marquee projects commissioned / at an advanced stage of
completion in the year 2019-20 are:
collaboration with Kemco of Japan was strengthened
to enable the addition of many new products for the
construction industry.
• Hot Strip Mill at Rourkela Steel Plant
• Basic Oxygen Furnace plant at Bokaro Steel Plant
– Commissioned
• Tandem Tippler at JSW Paradip – Commissioned
(hydraulically driven largest tippler in India)
• CHP & AHP at Tanda, Khargone
• CHP Lingaraj, Chhabra (Phase 1)
• 10 Large-capacity state-of-the-art sand plants
commissioned for various customers
• 3 Newly-developed Track-Mounted Mobile Roll Crushers
commissioned for coal-crushing applications
• 5 Surface Miners commissioned in Coal India subsidiaries
• 1100 MT Sky bridge in Colombo, fabricated in a factory
at EWL works Kancheepuram.
Significant Initiatives
The business has strategic alliances with leading global
technologists to offer comprehensive EPC solutions across
the various sectors of mineral beneficiation, steel processing
units and mega-sized by-product plants. The technical
Digitalisation
There is an increased thrust on digitalisation of processes /
activities to enhance operational efficiency through faster
decision-making with ready availability of data. The large
international projects are being executed through Building
Information Modelling (BIM) connected philosophy where
in-house 3D engineering capability is being extended to
4D for scheduling with Work Breakdown Structure (WBS).
Comprehensive solutions for EPC Planning and Monitoring,
as well as Communication and Document Management
solutions are implemented for projects under execution.
Many of the sites have digitalised the workmen induction
and tracking processes, while the initiative on connected
equipment began giving results in terms of increased
utilization.
The business has further strengthened real-time monitoring
systems for Stockyard Machines, Sand Plant and Surface
Miners through IOT and linked customized dashboards for
optimum utility of the system for customers.
Environment, Health and Safety
Leadership and management commitment are
demonstrated at all locations and levels, by continual
230
improvement in the EHS processes and their
implementation. various digital tools, including virtual
Reality (vR) based training modules for ‘Safe Rigging
Practices’, have been deployed at all project sites.
Concerted efforts are made to involve and engage every
employee, including workmen, in the safety cultural
transformation, with a training coverage of 0.52 million
manhours. Similarly, IB4U (Inspection Before Use) has been
launched to track the inspection details of various materials
and equipment including P&M, tools and tackle, PPE, etc.
All operations have been certified for ISO 45001:
Occupational Health & Safety.
various national and international awards and accolades
have been received for projects and factories in recognition
of EHS excellence from the Ministry of Labour and
Employment, RoSPA, ICC and customers.
Human Resources
Focussed interventions for employee learning and growth
were implemented through various virtual platforms like
RAPL and webinars after mapping the needs across various
levels and functions. To reinforce the latest developments
in technology and automation in processes, the business
has developed a pool of internal trainers. They share
knowledge and enhance implementation of these initiatives
at all locations for the development of our personnel and to
improve productivity. To increase employee satisfaction, the
business uses open communication channels like Connect
HR, Townhalls, 2-way feedback and an internal newsletter -
Sampark, while continuing with appreciation schemes, such
as Hi5, NMR and PRAISE.
For building future leaders, a focused way of talent
building across positions and levels, employees are provided
with challenging opportunities across various functions,
including job rotation with active handholding and
mentoring by senior leaders. Leaders have been identified
for senior key positions as part of the succession planning
process.
Risks and Concerns
The impact of the pandemic on the global and national
economy and the time the situation takes to return to
normalcy will determine the confidence of industry,
especially the private sector, towards fresh capital
expenditure.
COvID-19 will impact business operations, with
restrictions on the mobilization of the workforce to MENA
and disruptions in the supply chain, which may have
adverse effects on the projects under execution. However,
strategies to overcome these difficulties are being put in
place to minimize impact, and customers are taken into
confidence.
Outlook
While sentiments looked positive for FY 2020-21, the
COvID-19 pandemic has put the industry across the globe
on the back foot. Global investments may be impacted in
developing nations.
While the base and light metal prices continued to be
subdued, the demand for these metals in the medium-to-
long term looks robust enough to meet the growing needs
of domestic consumption.
While oil prices are recovering after hitting new lows
due to weak demand, impact on earnings of the GCC
countries may slow down the capex plans of governments.
Even though there is a slump in prices of base metals
due to weak demand, GCC nations (e.g. KSA) with their
own mines are expected to move ahead with capex
plans to compensate for the loss of revenues from the oil
sector.
With expected growth pick-up in the coal and cement
sectors, core products like Crushing Plants, Surface Miners
and Material Handling equipment are expected to grow at
a good pace, especially in the second half of FY 2020-21.
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MANAGEMENT DISCUSSION AND ANALYSIS POWER BUSINESS ANNUAL REPORT 2019-20
POWER
BUSINESS
Overview:
L&T has established itself as one of the leading
EPC players in the Power Plant business in India
and is known to deliver complete turnkey business
solutions from concept to commissioning for the
thermal power industry.
The business has built on its core competencies and
capabilities and has emerged as a major player in
new technologies such as Flue Gas Desulphurization
(FGD) in the thermal power plant industry. It now
has a sizeable presence in the FGD business.
The business has developed its own capabilities
for executing large and complex power projects,
which include in-house engineering, state-of-the-art
manufacturing facilities, competent manpower and
decades of experience earned in executing large
and complex projects within and outside India. The
business has a proven track record of delivering
complete power plant solutions with scale and
sophistication to meet India’s growing energy needs.
L&T’s integrated power equipment manufacturing
facility at Hazira, Gujarat, is one of the most
advanced in the world. The facility manufactures
ultra-supercritical / supercritical boilers, turbines and
generators, pulverisers, axial fans and air preheaters,
components of FGD and electrostatic precipitators.
400 MW Combined Cycle Power Plant, Bibiyana-III, Bangladesh
The business has project management offices at
vadodara and Faridabad.
The business is now gearing up to make its mark to
provide EPC solutions for Turbine Island of nuclear
power plants and has taken the necessary steps to
participate in tenders for upcoming nuclear power
projects.
The business has the following Jvs within its fold:
L&T-MHPS Boilers Private Limited, a joint
venture with Mitsubishi Hitachi Power Systems
Limited (MHPS) Japan, for the engineering, design,
manufacture, erection and commissioning of
ultra-supercritical / supercritical boilers in India up to
a single unit of 1000 MW.
L&T-MHPS Turbine Generators Private Limited,
a joint venture with Mitsubishi Hitachi Power
Systems Limited (MHPS), Japan and Mitsubishi
Electric Corp. (MELCO), for manufacture of Steam
Turbine Generator (STG) equipment of capacity
ranging from 500 MW to 1,000 MW. It is engaged
in engineering, design, manufacture, erection and
commissioning of ultra-supercritical / supercritical
turbines and generators in India.
L&T Howden Private Limited, a joint venture
with Howden Holdings B.v. L&T Howden, is in the
business of regenerative air-preheaters and variable
232
2x660 MW Khargone Thermal Power Plant, Madhya Pradesh, India
pitch axial fans (equipment, after-market spares and
services) for power plants.
L&T Sargent & Lundy, a joint venture with Sargent
& Lundy LLC, USA, which is engaged in the business
of providing design, engineering and project
management services for the power sector.
Business Environment
In the wake of the Government’s increasing emphasis on
renewable energy, the thermal power sector is growing
at a slow pace. However, compared to the previous year,
this year witnessed improved ordering in coal-based power
projects with the advent of major hydel players like SJvN
Limited and THDC India Limited in the coal sector.
Major Achievements
Some of the major achievements by the business during the
year include:
• Achieved Commercial Operation of India’s First Ultra
Supercritical power project for Central Utility in Madhya
Pradesh. Also achieved completion of Performance
Guarantee Test of 1st unit and completion of Trial
Operation of 2nd unit of this project
• Forayed into Turbines for Nuclear sector in collaboration
with MHPS, Japan and participated in NPCIL’s ambitious
tender for 6x700 MW Turbine Island package for
Gorakhpur and Kaiga projects, which are expected to be
ordered in financial year 2020-21
L&T’s FGD segment continued its order-winning streak
with a total of 13.4 GW out of 65 GW of orders from the
Central, State and Private sector companies chasing the
deadline of installing FGDs to meet revised emission norms
by 2022.
• Received Certification for completion of Phased
Manufacturing Program (PMP) for Supercritical Steam
Generators and Steam Turbine Generators as required
under CEA’s regulation for setting-up of Indigenous
manufacturing facilities
Going forward, the power sector will continue to face
challenges like availability of funds, lowering plant
load factor, financial stress, load balancing, coal and
water availability issues, payment assurances, etc. Further,
muted demand from the private sector and excess
manufacturing capacity of suppliers continues to put
pressure on prices.
Significant Initiatives
As a part of continuous improvement in operating
efficiency, the workshop at Hazira (near Surat) for
manufacturing of ESP Collecting Electrodes was upgraded
to undertake manufacturing of casings made of exotic
material (nickel-based high alloy) for absorbers required in
FGDs.
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MANAGEMENT DISCUSSION AND ANALYSIS POWER BUSINESS ANNUAL REPORT 2019-20
2x660 MW Chhabra Thermal Power Plant, Rajasthan, India
The business has embarked upon several initiatives to
reduce cost in areas like procurement, manufacturing,
logistics, value engineering, overheads, etc., and has
utilized the services of leading consultants/subject
matter experts. The business has been able to improve
its competitiveness due to these initiatives and intends
to continue its cost-saving journey in the coming years.
The business also enhanced its focus on initiatives to
achieve quality and EHS excellence and expand its global
footprint.
Digitalisation
The business is working on various digital technologies
at its project sites and offices. Its key initiatives include
deployment of the Internet of Things (IoT) in various plants
and on machinery at sites to benchmark and improve
its machine utilization, health of machines and their
duty cycles; use of Artificial Intelligence (AI) & Machine
Learning (ML) for video analytics like weighbridge and store
surveillance; Robotic Process Automation (RPA) to automate
repetitive processes to improve people productivity; virtual
Reality (vR) using immersive videos for imparting safety
training more effectively and Augmented Reality (AR) for
initiatives like smart-glass for remote project monitoring
to reduce travel time and cost. Efforts are also being made
to leverage the available data to get insights such as price
discovery for SCM and sentiment analysis for HR using
various analytics methodologies.
Environment, Health and Safety
Safety is one of the core elements of the business. Besides
ensuring implementation of robust engineering solutions
to enhance safety, various initiatives are being undertaken
to sensitize the workforce. The theme-based safety skit is
one such innovative platform. Online hazard and near-miss
reporting and compliance is an example of embracing
digitalisation in safety processes. The business’ commitment
towards safety is reaffirmed by various means, including
monthly theme-based safety campaigns, audits and
inspections.
Risks and Concerns
With the increased emphasis on renewable energy, the
business may face some headwinds on the opportunities
available. However, the business anticipates that coal will
continue to be a dominant source of power generation in
India and that may continue to offer market opportunities.
Excess manufacturing capacity, however, will continue
to drive the prices downwards and would reflect in the
financials of EPC players. The onslaught of the pandemic
has set in some uncertainty on project execution timelines,
for which the business has initiated the required steps
considering force majeure conditions.
234
Supercritical boiler internals being manufactured at Hazira, Gujarat
Supercritical turbine being manufactured at Hazira, Gujarat
Outlook
The projection of 292 GW thermal power capacity by FY25
in the National Infrastructure Pipeline (NIP) report published
by the Department of Economic Affairs (Ministry of Finance)
and retirals of old, inefficient and polluting power plants
indicate that thermal power is still going to be the mainstay
in the country’s power generation mix. Considering the
huge number of old and inefficient power plants which
are nearing retirement, the business is confident of growth
in capacity addition in the thermal power sector to match
projected rise in demand for power. Coal-fired stations will
continue to be in demand as it would ensure stable power
and provide peaking power requirements and ensure a
balanced grid.
It is estimated that the total installed capacity of power
plants in which FGDs are to be installed is around 167 GW,
involving 440 FGD units. Of this, 65 GW of orders have
already been placed, while additional 100 GW of orders are
expected to gain momentum in time to come.
The Government has an ambitious plan to increase the
nuclear power production to 23 GW by 2031 from the
current level of 7GW. The business sees large value
opportunities in this segment and has tied up with world-
class OEMs.
Gas-based plants are expected to be slowly revived in India.
Since the revival of the domestic gas sector is going to take
some time, the business continues to focus on markets
outside India for gas-based power plants. The target
countries are Bangladesh, Sri Lanka, Myanmar and GCC
countries. The business has taken steps to strengthen its
presence in the Middle East to capitalise on the available
opportunities in this sector.
The L&T-MHPS Boiler Jv and L&T-MHPS Turbine Generator
Jv are looking forward to leveraging upcoming spares
and service opportunities in the domestic market and
will continue to explore business opportunities in the
international market for export orders.
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MANAGEMENT DISCUSSION AND ANALYSIS HEAVY ENGINEERING BUSINESS ANNUAL REPORT 2019-20
HEAVY
ENGINEERING
BUSINESS
Overview:
L&T Heavy Engineering (HE) is amongst the top 3
global fabricators to supply engineered-to-order
critical equipment, piping and systems for core
sector industries – Refinery, Petrochemical, Oil &
Gas, Gasification, Fertilizer, Thermal & Nuclear
Power including critical revamp and up-gradation
projects.
The business is organized into Business Units
(BUs) based on the industries served. The Refinery,
Cracker, Oil & Gas and Gasification BU (RCOG)
focuses on hydro-processing reactors, high-pressure
heat exchangers, gasifiers, pressure vessels, waste
heat boiler packages, process plant internals and
such critical equipment for process plants. The
Fertilizer and Petrochemical BU (FP) focuses on
products like ammonia converters, urea reactors,
urea strippers, methanol converters and critical
reactors for the fertilizer and petrochemical sector.
The Nuclear BU supplies highly critical equipment
like steam generators, reactor components (end
shield assembly, end fittings) and pressurizers for
the nuclear power sector. The Modification, Revamp
& Upgrade (MRU) unit offers complete solutions
for Process Plants through dedicated engineering,
procurement, project management and construction
services. The Piping Center (LTPC) fabricates
critical piping spools for power and other process
industries.
236
Coke Drums for Marathon Petroleum Corporation, USA
The business has a Jv with Nuclear Power
Corporation of India (NPCIL) i.e., L&T Special Steels
and Heavy Forgings Private Limited (LTSSHF), to
cater to the demand for critical forgings required for
the Indian Nuclear Power programme and for other
critical sectors like Defence, Hydrocarbon and Oil
& Gas. The Jv has set up a fully-integrated forging
facility (from steel scrap to finished forgings of alloy
steels, carbon steel & stainless steels) with capacity
to produce a single-piece ingot up to 200 MT and
forgings up to 120 MT in the first phase. These have
applications in critical equipment in Nuclear power
plants, Defence, the Hydrocarbon industry and the
Power sector. Other applications include separator
blocks for the Oil & Gas segment and other heavy
forgings for engineering applications.
The business has achieved international recognition
through an impeccable track record of executing
large, complex projects and constantly creating
international benchmarks. Capabilities include state-
of-the-art fully integrated, globally benchmarked
manufacturing facilities, an experienced talent
pool and impressive global references for the
supply of high-end reactors and high-pressure heat
exchangers. The sustainability and safety standards
at its manufacturing facilities located in Mumbai,
Hazira and vadodara are at par with international
standards.
Cryostat Base Section for ITER, France
Business Environment
The business faced fierce competition from European,
Korean and domestic fabricators, while Korean, Chinese
and European companies continued to get preference due
to ECA (Export Credit Agency) financing requirements.
Excess global capacities and limited demand put pressure
on pricing and deliveries.
Amidst stiff competition, the business continued to bag
significant orders from global and domestic clients for
hydrocracker reactors, ethylene oxide reactors, coke drums,
HP heat exchanger and heavy columns, mainly for projects
in Middle East, South East Asia, North America and Mexico.
In the domestic market, the business bagged orders for
high pressure & exotic material heat exchangers for HPCL’s
RUF Project and an ethylene oxide reactor for IOCL’s Paradip
Project.
The domestic Nuclear sector continued to remain sluggish
due to delay in fleet procurement orders.
Major Achievements
In the domestic market, the business has secured the order
for the first Coal Gasifier using Air Product Technology
solutions for the Talcher Gasification Project. During the
year, the country’s heaviest hydrocracker reactor weighing
1858 MT was dispatched to HPCL’s vizag Refinery.
On the international front, the business dispatched 16
critical Chrome-Moly-vanadium reactors for ADNOC-
Takreer refinery, Abu Dhabi – all delivered before time.
The MRU business vertical executed a benchmark project
– revamp of an FCCU reactor for the ORPIC Refinery in
Oman.
On the Nuclear front, the base section and upper cylinder
of the Cryostat, a key component of the world’s largest
fusion reactor, was delivered to ITER at Cadarache, France.
Cycle time for NPCIL’s 700 MWe Steam Generator, currently
under manufacturing, was reduced from contractual
48 months to a record 30 months, setting an industrial
benchmark.
In the Defence sector, LTSSHF has been qualified as the only
indigenous producer of large and heavy forgings and thick
plates for the prestigious Submarine Programme.
Significant Initiatives
L&T Heavy Engineering embarked on a journey to be the
best manufacturer of critical fabricated equipment in the
world, determined to ‘Transform for Future NOW!’ to
improve competitiveness and deal with the challenging
market scenario. In 2019-20, the business focused on
cultural transformation, specifically streamlining initiatives
across the units and aligning with the Mission Statement.
The Root Cause Analysis (RCA) system was strengthened to
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MANAGEMENT DISCUSSION AND ANALYSIS HEAVY ENGINEERING BUSINESS ANNUAL REPORT 2019-20
India’s heaviest Hydrocracking Reactor (1858 MT) for HPCL Visakh Refinery
expand beyond quality and safety to cover project cost and
other overruns.
emphasize upon Transparency, Trust, Action-orientation
and Teamwork.
Environment, Health and Safety
The business conducted awareness sessions through the
celebration of National Safety Day, Road Safety Week and
World Environment Day at the workplace as well as in
Surat City. During the year, 48 batches of safety training
programmes were conducted at the Safety Innovation
School, Hazira for neighbouring industries. As a part
of the safe workplace initiative, oxygen sensors were
installed at confined locations and various initiatives were
undertaken for treatment of emissions, effluents, industrial
gases/wastes. The business has adopted ISO 45001:2018
standard from the earlier OHSAS 18001. The business won
the ‘Platinum category Energy & Environment Global Safety
Award 2020’ at the 10th World Petro Coal Congress 2020.
Human Resources
The business continued to improve its Performance
Management System from SMART (Specific, Measurable,
Attainable, Relevant and Time-based) goal-setting to
meaningful performance dialogue and subsequent fair
performance evaluation. Special programmes were
designed with help from internal and external faculty
for staff and workmen. These programmes focus on
driving the culture of Safety, Quality and Productivity and
Employee Engagement was a thrust area for FY20 with
the introduction of the ‘Josh Brigade’ – teams of Employee
Engagement Champions who drive initiatives at the
department level. The Mentorship initiative was extended
to promising young managers. Critical role-holders were
identified, and succession planning is in progress for a
sustainable leadership pipeline.
Risks and Concerns
The business faces the risk of reduced investments in the
refinery sector due to falling crude prices. To mitigate the
same, it has expanded its MRU offering, which continues
to grow due to focus on upgrades, modernization and
revamps of existing plants.
Shrinking markets and increasing competition, on both
the International and domestic fronts, continues to be
a challenge. To sharpen the competitive advantage of
engineering strength, the business has identified the role
of CTO (Chief Technology Officer) as being exclusively
responsible to build and develop engineering and
technological capabilities and knowledge management
within the Company.
Capabilities have been developed for niche equipment
for specialty chemicals and petrochemicals like Purified
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Forging of Nuclear Component at L&T Special Steels and Heavy Forgings
Terephthalic Acid (PTA) and Acrylic acid. The business is also
expanding into new geographies like North Africa, Egypt,
Mexico and MRU offerings for the Middle East and Asia
Pacific region. To mitigate the risk of doing business in new
geographies, the business avails of export credit insurance
to secure credit risk.
The business faces foreign competition in domestic
projects. To have a level playing field, it is proactively
suggesting policy changes to the ministries through
industry associates. Anomalies in implementation of Make-
in-India and GST by Public Sector Units (PSUs) procurement
are being addressed.
On the supply chain front, competitive sourcing remains a
focus area. With increasing price pressure, the business has
identified and developed new vendors in China, Eastern
Europe and India. The direct impact of COvID-19 on orders
under execution is covered under the force majeure clause
of the contract on account of expected delay.
Outlook
The global pandemic of COvID-19, combined with global
recession and a tough business environment, may lead
to reduced demand for heavy engineering equipment in
the short term. However, with a global recovery expected
towards the end of FY 2020-21, we expect the crude
prices to improve, which may lead to revival of the capital
expenditure cycle.
Nuclear customers are increasingly adopting strategies
like reverse auction and qualifying new suppliers. This is
resulting in a huge supply-demand gap with less demand
and excess global capacity, and thus causing increased
pressure on price and margin.
For the ongoing domestic bids, we expect slow progress in
project finalization on account of the COvID-19 pandemic.
In the domestic market, we expect new projects in the
sectors of Coal to Chemicals, Petrochemical and the
Specialty Chemicals industry, and increased demand for
MRU services. Nuclear fleet procurement opportunities (700
MWe PHWR projects) are expected to be tendered in FY
2021.
For the LTSSHF business, the domestic sectors in the
fields of nuclear and defence are expected to grow in the
coming years. The Government has cleared the proposal
of investment in 10 domestic nuclear power plant
(700 MWe each) through bulk ordering. This has opened
up opportunities for the Jv with the placement of orders
for supply of Steam Generator forgings for 6 units, End
Shield Plates for 4 units and forgings for Pressurizer and
Bleed Cooler for 4 units.
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MANAGEMENT DISCUSSION AND ANALYSIS DEFENCE BUSINESS ANNUAL REPORT 2019-20
DEFENCE
BUSINESS
Overview:
L&T has been active in the Defence and strategic
sector since the mid-80s, well ahead of the opening
up of the sector for private industry participation,
by associating with the Defence Research &
Development Organisation (DRDO) and Naval
indigenisation programmes. Having built a portfolio
of technologies, products, systems, platforms and
solutions, today L&T Defence provides design-to-
delivery solutions across chosen defence segments
with a focus on indigenous design, development
and production of Naval (Submarines and Warships)
and Land Platforms (Armoured Systems, Howitzers),
Weapon Systems, Engineering Systems, Missile &
Space Launch vehicle subsystems, Sensors, Radar
Systems and Avionics. These are complemented by
R&D and Design & Engineering Centres for targeted
Platforms, Systems & Solutions development.
The operations span across two R&D centres, three
Design & Engineering Centres and Production
centres at multiple locations spread across India
to serve the Defence & Aerospace sectors. These
include the following facilities:
• Submarine hull-building facility and an Armoured
Systems manufacturing, integration & testing
facility at L&T’s Hazira Complex (near Surat)
• Modern shipyard at Kattupalli (near Chennai)
240
L&T-made K9 Vajra-T at Republic Day Parade in New Delhi
• Aerospace manufacturing shops for rocket motors
for India’s Space Launch vehicles at Powai and
Coimbatore
• Precision Manufacturing & Systems Complex
for Aerospace & Missiles manufacturing at
Coimbatore
• Advanced Composites facilities at vadodara and
Coimbatore
• Strategic Systems Complex for Weapon &
Engineering Systems and Sensors at Talegaon
near Pune
• Strategic Electronics Centre at Bengaluru
Besides these dedicated facilities, L&T also operates
a facility at visakhapatnam under the Government
Owned Contractor Operated (GOCO) model for
a Strategic Programme. These Work Centres are
complemented by R&D Centres at Powai (Mumbai)
and Bengaluru, and Design and Engineering Centres
for Warship, Submarine and Weapon & Engineering
Equipment at Powai and Chennai.
The Defence Business is structured into two business
groups:
1. Defence & Aerospace
2. Defence Shipbuilding
Offshore Patrol Vessel for Indian Coast Guard
L&T has provided systems for most of India’s space missions - including those to the
moon and Mars
1. Defence & Aerospace
Over the years, the Defence and Aerospace (D&A)
business has built a bouquet of a wide range of
indigenous products, systems, solutions, platforms
and technologies through in-house efforts as well as
by teaming up with the DRDO, and participation in
the Indian Navy’s indigenisation programme for the
development of a range of Engineering Systems and
Weapon Systems and the realisation of Systems within
the country. To date, the D&A strategic business group
has indigenously developed more than 250 defence
products, and more than 50 of them have been
industrialised and delivered in serial production mode.
The business model uniquely differentiates with focus
on in-house technology and product development,
innovation at the core of offerings, mature and equated
partnerships with global majors, all of which enable it to
maintain market leadership position in an environment
where the Government is aggressively pursuing the
indigenisation agenda for the long run, and where most
indigenous players are dependent on the Transfer of
Technology (ToT) model to pursue defence production.
The D&A SBG also has a Joint venture (Jv) with MBDA,
a global leader in missiles and missile systems. The Jv is
well positioned to indigenously offer advanced missile
systems to the Indian Armed Forces.
2. Defence Shipbuilding
L&T’s Shipbuilding business offers end-to-end
solutions for design, construction and through-life
support of defence ships. L&T operates two defence
shipyards – one at Hazira Manufacturing Complex,
and another greenfield mega defence shipyard at
Kattupalli, near Chennai. Located across a sprawling
900-acre complex, the Kattupalli Shipyard is India’s
largest yard. The design and construction of the yard
ensures adaptation of global best practices like modular
construction, construction under covered shops, use
of a shiplift with dry and wet berths, etc., to enable
simultaneous construction of different classes of vessels
until near-completion on land and then launching them
through the shiplift. A large number of Industry 4.0
practices have been instituted, enhancing the efficiency
of construction.
A dedicated Warship Design Centre at Chennai
is equipped with the latest integrated 3D design,
analysis and Product Lifecycle Management tools, and
interfaced with project management and ERP systems,
in line with global best practices.
The Kattupalli Shipyard has been largely engaged in
new build and refits / repairs of defence ships of the
Indian Navy and Indian Coast Guard. Since 2010, the
Shipbuilding business of L&T has designed, constructed
and delivered 57 Defence vessels, which include a
Floating Dock (Navy), Interceptor Boats and Offshore
Patrol vessels (for the Coast Guard) in record time. The
unique capability of the business to achieve on-time
or ahead of contractual delivery performance in all the
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MANAGEMENT DISCUSSION AND ANALYSIS DEFENCE BUSINESS ANNUAL REPORT 2019-20
Pinaka Multi Barrel Rocket Launcher
Indigenous ASW Rocket Launcher
contracts for Defence vessels is a benchmark in itself
in the Indian Shipbuilding Industry. The shipyard has a
track record of delivering first-of-class vessels on / ahead
of schedule with design and construction maturity and
in-built quality.
L&T purchased the 3% stake held by the Tamil Nadu
Industrial Development Corporation Ltd (TIDCO) in L&T
Shipbuilding Ltd (LTSB) in April 2019, making it a wholly
owned subsidiary. In July 2019, the L&T Board approved
the Scheme of Amalgamation of LTSB with L&T wef
1st April, 2019 as record date. The NCLT permissions
have since been obtained and LTSB has now been
merged with parent Larsen & Toubro Limited.
Business Environment
The macro picture has been a mixed bag over the recent
years. On the one hand, the Government of India (GoI)
is taking substantive steps to promote defence exports,
boost the acquisition pipeline by preferential categorization
in favour of indigenous procurement of Defence systems
and accelerating the process of AoNs and RFPs, while,
on the other hand, budget constraints have seen orders
slip by. There has been a gradual increase in the Defence
Modernisation budget. However, the inclusion of the GST
(since July 2017) and Customs Duties (since April 2016) as
additional outflows from funds allocated to the Ministry of
Defence (MoD) had, in effect, cut the capital allocations to
Defence in real terms. The consequent decrease in funds
available for Defence Modernisation is visible from the drop
in the volume of orders placed on Indian companies in
preference to imports to address urgent gaps in capability.
A few steps have been taken during the FY 2019-20
to defray the Customs duties and IGST on the MoD’s
imports (Government-to-Government deals) and specific
programmes ordered on system integrators (DPSUs),
necessitating import inputs not produced in India and, in
the process, freeing some capital for indigenous acquisition
from within the budget allocation.
As per the Rajya Sabha Q&A data, the MoD has cleared
AoNs totalling more than R 409,000 crore worth of
programmes for Indian industries to participate in over the
last five years.
The intent of the Government to achieve a higher degree of
indigenisation and self-reliance is visible in the latest policy
measures, such as Strategic Partnerships. The Defence
procurement policy and procedures continue to evolve
with earnest and positive impetus towards ‘Make in India’
and industry friendliness, as can be seen from the draft
DPP-2020. While the GoI has taken steps to ensure ease
of doing business, concern regarding a level playing field
for the private sector continues in the form of retention
of provisions to nominate large Defence programmes to
state-owned companies.
242
Modular Bridging Systems
Floating Dock for Indian Navy
Major Achievements
During the year, the business has had multiple successes
and proud moments, uniquely reaffirming L&T’s positioning
as a ‘Nation Builder’. These include:
• L&T has been shortlisted as one of the two final
contenders as Strategic Partners for P75 (I) submarine
programme, and await issuance of the RFP
• Successfully delivered multiple Weapon Launch Systems
(Land & Naval), Engineering Systems and Missile Systems
to the Indian Armed forces
• The Work-Centres have set new benchmarks in terms of
deliveries (OPvs, K9 vajra-T, PINAKA, Satcom systems to
name few), safety and digitalisation
• Delivered 44 K9 vajra-T Self-propelled Howitzers ahead
of schedule during the year, having reached a peak of 10
deliveries a month, with the team at ASC Hazira ramping
up operations
• The R&D and Design & Engineering teams have
developed a range of new technologies, products and
solutions with a focus on emerging technologies such
as Unmanned Systems, AR/vR, Image Processing and
Predictive Maintenance that were on display at Defexpo
2020, emphasizing uniqueness of offerings, innovation
and presence across the value chain
• The Kattupalli Shipyard attained the globally unique
distinction of complete sea acceptance trials of OPv5 on
its maiden sea sortie and cut the build time to below 20
months from the keel-laying
• Delivered 2 Offshore Patrol vessels and 5 Interceptor
Boats to the Indian Coast Guard, all ahead of contracted
schedule
• L&T Shipbuilding achieved a breakthrough by initiating
execution of a large export order for 12 High Speed
Guard Boats from South East Asia and achieved a
significant milestone in public-private-partnership by
securing workshare from a DPSU Yard for construction of
three Defence vessels
Significant Initiatives
In addition to the focus on Defence Manufacturing to
serve the Indian Armed Forces, Direct Exports of our
matured weapon systems offerings, either solo or by
partnering with DPSU / OFB for weapons, and entering
into PPP relationships for and workshare with DPSUs are
being pursued as two additional engines for growth.
L&T has been working closely with DPSUs over the years
and this relationship is being leveraged to target specific
programmes and explore new opportunities in both
domestic and international markets.
The teams embarked on consolidation of work centres and
merged its Rabale operations into its Strategic Systems
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MANAGEMENT DISCUSSION AND ANALYSIS DEFENCE BUSINESS ANNUAL REPORT 2019-20
Chemical Agent Detector
Fire Control Radar - designed and developed by L&T
Complex (SSC) Talegaon. R&D has been the backbone of
the Defence business since its inception and the business
will continue investing in R&D to develop new-age
technologies and products such as Unmanned Systems
(all four segments), Robotics, Additive Manufacturing and
Artificial Intelligence.
The L&T-MBDA Jv achieved an important landmark, with
readiness to operationalize the new inert integration facility
at Coimbatore.
L&T has been building a strong position in digital design
since the mid-90s, and has attained proficiency in elements
of Industry 4.0 in its multiple R&D, Design & Engineering
Centres and Production work centres that extend to the
building of platforms such as warships and submarines.
The in-house Warship Design Centre employs highly skilled
designers to build platforms in 3D / virtual Domains and
extensively use vR/AR tools for walk-through analysis
for highly engineered designs which suit the modern
production facilities on the shop-floor.
L&T’s lead in submarine construction and outfitting and
system integration with indigenously developed home-
grown technologies draws from its early initiative in the
digital domain nearly two decades ago. L&T has been
gradually adopting an Industry 4.0 environment using
model digital data, tracking and scanning tools and data
analytics for planning, quality control and sequencing.
The Armoured Systems Complex (factory) built recently
at L&T’s Hazira Complex is a modern ‘Industry 4.0-ready’
set-up. It has created a sizeable opportunity for shop-floor
engineers and technicians to acquire skill in automation,
robotization and multi-disciplinary system integration in
order to attain >90% automated welding of armoured
vehicle hulls and turrets using a series of robots, as well
as to build complex components under the same roof
using 3D printing wire-deposition processes for volume
deposition.
Environment, Health and Safety
The safety track record across work centres, customer
locations, and Business Partners’ premises has been
exemplary. L&T Shipbuilding’s Kattupalli Yard has won
the prestigious ‘Sword of Honour’ from the British Safety
Council during FY20, making it the first shipyard in
India and the fourth globally to achieve such a feat. The
business has also implemented digital workmen safety
systems such as RFID-based tracking especially in confined
spaces, like submarines and warships, as well as tagging
of assets for online tracking. The business continues to
focus on the triple bottom line and green initiatives. It has
achieved significant y-o-y reduction in water and energy
consumption, in line with L&T’s sustainability focus.
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Human Resources
HR initiatives have been aligned to the overall business
strategy by focussing on identifying and grooming high-
potential talent, critical for having a competitive advantage,
through various management and leadership programmes.
L&T Defence has implemented a Technology Leadership
Programme to maintain a market leadership position and
continue to focus on development of niche technologies.
Attention to leadership and talent development continues
as a business imperative. Further, with renewed emphasis,
the business has embarked upon employee engagement
initiatives to retain and grow talent and continue to be an
employer of choice.
Risks and Concerns
While the cyclical nature of the business affects the entire
Defence sector, for L&T, which has developed a bouquet
of products across the segment through in-house efforts,
the risk is primarily that of delays and deferment of orders,
given the vagaries of Capital budget allocation. It can be
seen from parliamentary standing committee reports that
the defence modernisation budget allocation was not
sufficient even to cover the committed liabilities over the
last two years, leading to acquisition programmes getting
deferred, cancelled or even reduced in quantities after
issuance of RFPs. The lack of funds for new acquisitions
has resulted in very low order placement of about R 77,000
crore on Indian industries over the past three years, with
large portions being nominated to DPSUs. The rest of the
orders are placed on foreign suppliers to address urgent
capability gaps.
Outlook
The impact of social spending as a consequence of the
COvID-19 pandemic may further affect the already-
inadequate Capex budget available for Armed Forces
Modernisation and Indian Space Programmes. Also, the
decision-making window in FY 2020-21 is expected to
shrink due to the pandemic, leading to the spill-over of a
few significant contracts from Defence as well as Space
sectors into the next FY. The current slowdown in the
economy of the country is expected to marginally affect the
release of funds against the Navy’s Capital budget, while
the Revenue budget is likely to be significantly impacted, in
turn impacting ship refits in the short term.
In order to offset the risk of order inflow, the business is
pursuing a portion of business from major orders with
DPSUs and is exploring increased export opportunities in
the short term. To compensate for the effect of productivity
loss due to the pandemic, various measures have been
initiated for cost reduction in project procurement and
revenue expenses, accelerated cash conversion cycle,
targeted digitalisation, and reduced outsourcing to gainfully
use idling manhours.
The outlook for Defence business remains cautious in
the short run but positive in medium- long-term, as
indigenous production picks up in a big way with the
Government making concerted efforts to implement some
of its major policy initiatives, such as Strategic Partnership
and Indigenously Designed and Manufactured category
programmes. By 2027, the Indian Navy intends to operate
175 warships and submarines. Such an aggressive fleet
expansion plan, combined with the ‘Make in India’ initiative
of the Government, provides wider opportunities to Indian
shipyards for construction of warships and submarines for
defence forces. Further, L&T’s decades-long partnership
with the DRDO in indigenous design and development
programmes, including Strategic Programmes, augurs well,
with unprecedented opportunities in the pipeline.
In the short run, Shipbuilding sees some significant
opportunities, given the number of shipbuilding RFPs
issued by the MoD during the last FY. Weapons Systems
& Engineering Systems programmes have served to offer
a strong foundation to consolidate and build upon. The
Indian Space Research Organization (ISRO) has initiated
action to involve private sector firms in launch vehicle
integration, which is likely to create sizeable opportunities
in the aerospace segment in the coming years.
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MANAGEMENT DISCUSSION AND ANALYSIS ELECTRICAL & AUTOMATION BUSINESS ANNUAL REPORT 2019-20
ELECTRICAL &
AUTOMATION
BUSINESS
Overview:
L&T’s Electrical & Automation (E&A) business, is a
leading supplier of electrical equipment in India. It is
engaged in manufacturing low and medium voltage
electrical switchgear products (both standard &
customized) and energy meters, and executes
projects in the control & automation space.
In the low voltage (Lv) segment, E&A has two
categories of products – standard switchgear
products and customised switchboards / electrical
panels – and commands the highest market share
in India. These products are widely accepted in
international markets, particularly in South East
Asia, the GCC and select African geographies.
E&A’s electrical Agri products have occupied the
agricultural market for more than 40 years. Its
innovative control-gear products as well as new
generation solar energy-supported products give
a technological push to the Indian agricultural
ecosystem.
L&T’s Lv products are manufactured at three
locations in India. Customised Lv switchboards are
manufactured at two locations in India and one
location each in the Kingdom of Saudi Arabia (KSA)
and Indonesia.
The medium voltage (Mv) range of switchgear
products is manufactured in India and Malaysia.
E&A’s group Company ‘Tamco Switchgear’ enjoys a
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City Command & Control Centre, Vadodara Municipal Corporation
market-leading share in Malaysia and has a strong
foothold in the MENA region, the SEA region, and
select geographies in Europe and Australia.
E&A has the distinction of being the single largest
manufacturer of single-phase energy meters with a
leading market position in India. The business has
significant capacity to manufacture three-phase /
tri-vector meters, and is a pioneer in developing
new products. It is one of the first to deploy smart
prepaid meters in the country on a large scale.
E&A’s System Integration business possesses project
management experience of more than 25 years. The
business is supported by an in-house manufacturing
facility for control panels, combined with its own
copyrighted software solution- i-visionmax®. The
business provides a one-stop engineered solution
coupled with project management skills. The
domestic business serves the Indian market and
neighbouring countries like Bangladesh, Nepal and
Indonesia, while its international arm addresses the
GCC market.
Clients of the business span a wide range of sectors
including Metro Rail, Airports, Renewable Energy/
Solar, Defence, Hospitals, Educational Institutions,
Data Centres, Realty, Auto, Food & Beverages,
Chemical, Pharma, Textile, Sugar, Automobile and
Steel.
E&A’s range of switchgear
The business’ Lv standard switchgear and
agricultural products are marketed through
a network of over 650 stockists. Automation
products, such as drives and PLCs, are sold through
around 75 Integrated solution providers. In addition,
the retail market is serviced through a network of
165 Retail Distributors and around 350 Distribution
Select Partners. Customers of E&A include both
private and publicly-owned undertakings and select
corporates.
E&A is a full-suite business with strong in-house
design and development teams. It has five DSIR-
approved R&D facilities and two NABL-accredited
testing laboratories for testing products across
diverse testing parameters. The design and
development team collaborates with international
laboratories, testing centres and academic
institutions. The business is supported by state-of-
the-art tooling facilities which produce a range of
high precision tools to service the in-house business
needs as well as external customers.
To promote good electrical practices in the
industry, the business conducts a wide range of
training programmes for technicians, customers,
engineers, professionals and even students through
its Switchgear Training Centres at Pune, Lucknow,
Coonoor, Delhi, Kolkata and vadodara.
The business has an international presence through
the following entities within the group:
TAMCO Switchgear is an established manufacturer
of low and medium voltage switchgear. Together
with its direct subsidiary in Indonesia, Tamco’s
international market spans MENA regions, select
geographies in Europe, ASEAN countries and
Australia.
L&T Electrical & Automation FZE (LTEAFZE), located
at Jebel Ali Free Zone (Dubai, UAE) provides turnkey
engineering, assembly, integration of electrical,
instrumentation and telecommunication solutions.
It taps into a customer base in the Middle East and
Africa. It has a state-of-the-art integration facility in
Jebel Ali Free Zone.
L&T Electrical & Automation Saudi Arabia Company
Limited, located at Dammam in the Kingdom of
Saudi Arabia, offers the Gulf market a spectrum
of products and services comprising Air Insulated
Switchgear (AIS), Gas Insulated Switchgear (GIS),
Ring Main Units, Lv Switchgear, Motor Control
Centre (MCC) - Fixed / Drawout, Pre-Fabricated /
Packaged Sub-stations. Offerings include variable
Frequency Drive panels and automation systems,
Security Systems and allied equipment such as
Transformers, Busducts, DC/UPS, Power Quality
Management Systems, as well as erection, testing,
commissioning and retrofitting services and
maintenance contracts.
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MANAGEMENT DISCUSSION AND ANALYSIS ELECTRICAL & AUTOMATION BUSINESS ANNUAL REPORT 2019-20
Smart Meters
Henikwon Corporation is a leading Malaysia-based
Lv and Mv busduct systems’ manufacturer, with
offerings for the building and infra segments.
The UK-based Servowatch Systems Limited,
offers technology in the control & automation
space for marine applications as well as other
emerging segments. Servowatch is recognized as a
world-leading system integrator for modern naval
platforms, Super Yacht installations and commercial
marine operators. The unique software design
allows integration of third-party software into a
common operator platform environment.
Kana Controls, Kuwait, is a local company that
helps L&T penetrate the Kuwait market and
enhance its domain expertise in design, engineering,
supply and commissioning, as well as render
after-sales support of Integrated Automation and
Telecommunication Systems based on various global
OEM products and technologies.
Business Environment
The various Government reforms initiated – such as focus
on improving 41 different areas, primarily the Energy,
Infrastructure and Irrigation sectors in India and making
India a USD 5.0 trillion economy by 2024-25 – led the
business to begin FY 2019-20 with a healthy order backlog.
As the General Elections in India were held at the
beginning of the financial year, it was expected that
248
economic performance would remain benign in view of the
model code of conduct and slowing down of the decision-
making process by the Government in the first quarter of
FY 2019-20. The pro-incumbency mandate received by
the Government reassured the sustenance of the ‘reform’
agenda.
NITI Aayog’s focus on the North Eastern region by
proposing to set up industrial estates/parks in such
areas set up a platform for growth for the standard
product’s division of the business during FY 2019-20. The
Government’s continued emphasis on improving rural
infrastructure translated into opportunities for the business.
various announcements made in the Finance Budget
by the Government of India paved the way for creating
new infrastructure, public transport systems and airports.
The support for renewable energy provided significant
opportunities for E&A’s standard switchgear products and
switchboards divisions which are functional in the Lv and
Mv space.
Other notable initiatives like UDAY, Smart Cities, Smart
Grid, Pradhan Mantri Krishi Sinchayee Yojana, Pradhan
Mantri Kisan Samman Nidhi Yojana and Digital villages
continued to remain highlights in FY 2019-20. The
Metering division of the business found major opportunities
owing to these initiatives and was able to successfully
roll out one of the largest Smart Meter projects in India
based on the linear polarisation resistance technology.
Continued emphasis on smart cities has helped the
Control panels at MRPL
Control & Automation division of the business to provide
technologically superior solutions to the domestic market.
for asset management has been developed to monitor Lv
switchgear and other electrical system equipment
The business also has a significant presence in Malaysia
and South East Asian countries through TAMCO. With the
drop in growth rates in Malaysia, business opportunities for
TAMCO were scaled down.
Supported by market demand, enhancement in public-
private partnership projects and Government reforms, the
business performed on expected lines until January 2020
by achieving profitable growth. However the COvID-19
pandemic began to impact business from February 2020
onwards.
Awards
• The business’s New Product Development function
bagged the Deming Prize, the highest award in Quality.
L&T is the first switchgear manufacturing company
outside Japan to receive this prestigious award
• E&A’s Metering & Protection Systems business unit won
the coveted IMC Ramkrishna Bajaj National Quality
Award (RBNQA) Performance Excellence Trophy 2019
Significant Initiatives
• The switchboard business initiated the manufacture of
its ‘Compact Substation’ switchboard at Ahmednagar to
enhance manufacturing excellence. A web-based portal
• The business received grants for as many as 81 patents, 9
trademarks and 9 design applications in India
Product Launches
• New MCCBs, new variants of ACBs, contactors, isolators
and panel solutions for emerging market segments
such as Solar and Railways, new state-of-the-art motor
protection relays, controllers for Power Quality Solutions,
intelligent products for the Agricultural segment, etc.
were launched
• The Electrical Systems & Equipment business introduced
feeder pillars, compact sub-stations and front RMU with
FRTU for the Utilities segment. For the international
market, sub-main distribution boards (SMDBs) and GIS
for the wind segment were introduced to cater to the
Infrastructure sector, including Metros, Airports, Smart
Cities and high-end residential complexes. The business
also introduced a pre-fabricated electrical substation
building, known as ‘E-House’, customized to house all
electrical equipment as per project requirements
• The Mv portfolio was enhanced by an improved range of
GIS for Wind Energy applications and Metro projects
• ‘SMART’ Ring Main Units were in high demand in
Smart Cities. The domestic Lv Switchboards with the
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MANAGEMENT DISCUSSION AND ANALYSIS ELECTRICAL & AUTOMATION BUSINESS ANNUAL REPORT 2019-20
Air Insulated Switchgear
closed-door operation feature were offered to key
customers in the refinery and power plant segments
The business also developed a retail management system
for the Retail and Agricultural business of its ESP division.
• The Metering division worked on the integration of new
communication technologies such as 4G, NBIoT and LoRa
in the Smart Meter segment
• The business successfully rolled out one of India’s largest
Smart Meter projects based on the Linear Polarisation
Resistance (LPR) technology
Digitalisation
Key digital initiatives which comprised both new as well
as scope enhancement in projects under implementation
included:
1. Asset Lifecycle Management, using Radio Frequency
Identification (RFID)
2. Robotic Process Automation (RPA) & AI
3. Augmented reality (AR)
4. virtual Reality (vR) - virtual factory visit and Safety
Training
5. Sales Force Dot Com (SFDC): The business recently
implemented SFDC as a single platform for structured
planning, database management and analytics to
improve decision-making for its Electrical Standard
Product (ESP) sales, business development, product
management and service functions.
Environment, Health and Safety
Energy conservation remained a major focus area in FY20
across all manufacturing locations. various initiatives
undertaken have saved total energy of 962580 kWh.
Notable initiatives include use of LED lights, optimum
temperature setting for ACs, installation of solar panels to
reduce conventional energy consumption and the use of
the energy-saving option on CNC machines.
The Bureau veritas Surveillance audit of the
ISO50001 Energy Management. System of the ESP
manufacturing campus at Ahmednagar was successfully
completed.
There have been no accidents reported at the
Mahape, Coimbatore and Mysore facilities in the
last 2 years. The business conducted a Human Safety
Audit at manufacturing locations through M/s TCE
in August 2019. One of the outcomes of this audit
was the conducting of Safety Leadership Training
of line managers and supervisors who are directly
responsible for safety at the workplace. This has
resulted in safety awareness among employees, and
manufacturing facilities have started reporting ‘near miss’
incidents.
250
Human Resources
The business has rolled out several digital initiatives to
manage the indirect workforce, leading to enhanced
productivity and process efficiency. There has been
consistent encouragement to adopt on-line learning
through Anytime Learning (ATL) and ATL Next across the
organization. various leadership development programmes
linked to competency requirements at different career
stages help build a robust internal pipeline of leadership
to take charge of the current and future requirements of
the organization. Despite the overhang of divestment,
the business has been able to successfully recruit the
right talent to meet its manpower requirements. Focus
on employee health and wellness, succession and career
planning and need-based developmental opportunities
have helped retain top talent.
The HR practices of the business are well-aligned to the
business strategy, and the outreach for development
encompasses not just employees but also channel partners
and customers, through a variety of training interventions.
Risks and Concerns
The key concern for the business is keeping pace with
fast-evolving technologies to stay relevant to the market.
For this, investments in Research and Development are
essential.
By aligning its business strategy and product portfolio,
the business strives to make a winning proposition amidst
changing business environments and Government policies.
With the progress in the process of divesting the business
to Schneider Electric, an impact was felt due to customers’
apprehensions about continuity of service quality. Also,
with the pandemic, market sentiments have been affected
overall, and the new norms mandated may impact
operations.
Outlook
With the outbreak of the COvID-19 pandemic, economies
are expected to contract in the near term, leading to
reduced capex by the private sector. The Middle East
economies continue to reel under the oil-price meltdown,
impacting opportunities in that region. With limited
opportunities, the competition is expected to intensify.
However, the Government’s emphasis on ‘vocal for Local’
and the push in the rural economy in view of the large
migration of workforce from cities to rural areas may work
in favour of the business. With the Government’s focus on
the large-scale roll-out of Smart Prepaid Meters in order
to improve the fiscal health of the DISCOMs, the Metering
division stands to gain majorly due to its in-house design
and customization capabilities and its large manufacturing
capacity. Better prospects are visible in Malaysia for large
Mv orders through TAMCO.
The growing trade-tensions between the US and China
and the world’s changing perception towards China may
result in the shifting of manufacturing bases for some of
industries to India, Indonesia, etc. The business is likely to
benefit from this.
The divestment process of the business to Schneider Electric
is on course. The approval of the Competition Commission
of India, subject to fulfilment of certain conditions, has
been received and the business has been classified as a
discontinued operation from June 2019.
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MANAGEMENT DISCUSSION AND ANALYSIS HYDROCARBON BUSINESS ANNUAL REPORT 2019-20
HYDROCARBON
BUSINESS
Overview:
L&T Hydrocarbon Engineering Limited (LTHE),
a wholly-owned subsidiary of L&T, provides
integrated ‘design-to-build’ turnkey solutions for
the hydrocarbon industry globally. The business
executes projects for oil and gas extraction and
processing, petroleum refining, chemicals and
petrochemicals, fertilizers, cross-country pipelines
and terminals. In-house capabilities range from
front-end design through detailed engineering,
procurement, fabrication, project management,
construction and installation up to commissioning
services.
LTHE has a fully integrated capability chain,
including in-house engineering and R&D centres,
world-class modular fabrication facilities, as well
as onshore construction and offshore installation
capabilities. Major facilities in India include
Engineering & Project Management Centres
at Mumbai, vadodara, and Chennai, as well
as Fabrication Yards at Hazira (near Surat) and
Kattupalli (near Chennai). The business has an
overseas presence in the Middle East, i.e. in the UAE
(Sharjah), Saudi Arabia (Al-Khobar), Kuwait and
Oman (Muscat), as well as in Algeria. The business
also has a major Modular Fabrication and Heavy
Engineering Facility at Sohar in Oman.
Bassein Development 3 Well Platform & Pipeline Project for ONGC
LTHE caters to clients across the hydrocarbon value-
chain through five key business verticals:
Offshore
Lumpsum turnkey EPCIC solutions are offered to
the global offshore oil & gas industry encompassing
wellhead platforms, process platforms and modules,
subsea pipelines, brownfield developments, offshore
drilling rigs (upgrade and new-builds), FPSO modules,
deep-water subsea manifold & structures, living quarters,
transportation & installation services, offshore wind-farm
projects and decommissioning projects.
As a full-fledged EPCI player, it also has in-house
offshore installation capability comprising a self-propelled
heavy-lift-cum-pipe-lay vessel – LTS 3000 – held in a joint
venture, and a wholly-owned pipe-lay barge – LTB 300.
Onshore
The business vertical provides EPCC solutions for a
wide range of onshore hydrocarbon projects covering
upstream oil & gas processing, refining, petrochemicals,
fertilizers (ammonia & urea complexes), cryogenic storage
tanks and LNG regasification terminals and cross-country
pipelines. The business has a track record of concurrent
execution of multiple mega projects successfully, with
diverse technology process licensors. The vertical is
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The heaviest fully integrated gas platform in Saudi Aramco’s history installed by float-over method at the Hasbah field in Saudi Arabia
complemented by the Design Engineering capabilities of
L&T-Chiyoda for onshore engineering and L&T Gulf for
pipeline engineering.
Construction Services
This business 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.
Its major capabilities include heavy-lift competency,
application of advanced welding technologies, high levels
of automation, management of manpower and material
in large volumes at construction sites and Quality / HSE
systems conforming to international practices. 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.
Modular Fabrication Services
The vertical specialises in fabrication and supply of
modules and static equipment for offshore oil & gas fields,
refineries, petrochemical plants and fertilizer complexes. It
has world-class modular fabrication facilities strategically
located at Hazira (India’s west coast), Kattupalli (India’s east
coast) and Sohar (Oman), with a combined annual capacity
in excess of 200,000 MT (depending on the product mix).
The business is also equipped to supply foundations and
other modules for offshore wind-farm projects and modular
e-houses. The all-weather waterfront facilities provide easy
access to clients across the globe and have load-out jetties
suitable for the dispatch of large and heavy modules via
ocean-going vessels and barges.
A new Integrated Manufacturing Facility has been recently
opened at Jubail in Saudi Arabia to cater to the local
market.
Advanced Value Engineering & Technology
Services (AdVENT)
AdvENT (the erstwhile ‘Engineering Services’ vertical) offers
customer-centric solutions for the Hydrocarbon sector and
emerging industries, while addressing the specific needs of
the changing energy sector. Leveraging its domain expertise
in high-end engineering and the experience gained from
the execution of large-scale, technologically complex
EPC projects, AdvENT delivers comprehensive solutions
encompassing Design & Engineering, Project Management,
Strategic Project Delivery, Modularization, Smart Asset
Management and Green Energy to global clients.
Business Environment
During FY 2019-20, two key drivers impacting a structural
shift were the increase in oil supply by OPEC and the
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MANAGEMENT DISCUSSION AND ANALYSIS HYDROCARBON BUSINESS ANNUAL REPORT 2019-20
Three Gas Production Deck Modules (PDMs) for Saudi Aramco, ready for dispatch from LTHE’s Modular Fabrication Facility at Hazira, India
collapse in oil demand by the shuttering of the global
economy due to the coronavirus pandemic. The price of oil
fell 30% due to oversupply in the first week in March, even
before the impact of COvID-19 was factored in.
The domestic market also witnessed deferment of projects
by a few quarters due to overcapacity in the domestic
refining sector. The domestic segment also witnessed stiff
competition from new entrants.
In the Middle East, the other major focus region for LTHE
- the business was impacted by the oil prices coming under
pressure due to over-supply and the price war between
Saudi Arabia and Russia. Saudi Arabia - where LTHE has
a decent market share of the Offshore business, given its
position of being the select contractor under the Long Term
Agreement (LTA) - saw new contractors being pre-qualified.
This impacted LTHE’s share in the contracts being awarded
under LTA. Concerted localization efforts in the Kingdom of
Saudi Arabia are in progress to position LTHE as a compliant
contractor to achieve IKTvA (In-Kingdom Total value Add).
In other geographies, such as the UAE and Qatar, the
business is addressing the increasing ICv (In-country value)
requirements.
With a focus on ‘Execution Par Excellence’, LTHE achieved
robust financial performance, as compared to its global
peers.
Major Achievements
Major orders won during the year:
• EPCIC contract for the development of the Heera Panna
Block of the Western Offshore basin involving wellhead
platforms, subsea rigid pipelines, riser installation and
modification work at existing platforms
• EPCIC contract for the development of the Mumbai
High South field of the Western Offshore basin involving
a Water Injection Platform Bridge connected to the
existing WIS platform, Living Quarters, modification
and interconnection of all the utilities with the existing
platforms
• Marjan Incremental Development Project by Saudi
Aramco, a mega project in consortium with EMAS AMC
PTE Ltd. (a Subsea 7 Company) involving tie-in platforms,
tie platform module, production deck modules, 217 km
of subsea pipelines and 145 km of subsea cables
• EPCI contract from Saudi Aramco, involving 28 offshore
jackets in Saudi Arabia’s Zuluf, Marjan, Safaniya and
Ribyan offshore fields in consortium with EMAS AMC PTE
Ltd.
• EPCC contract for setting up a 3.55 MMTPA Residue
Upgradation Facility (RUF) for visakh Refinery
Modernisation Project (vRMP) at HPCL’s vizag Refinery to
convert the heaviest oils into high-quality Euro 6 diesel
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Cracker Furnace Package under execution for HMEL, Bathinda,
India
INDMAX FCC Unit including LPG Treatment Facility for IOCL, Bongaigaon, India
• EPCC contract for setting up a new 9 MMTPA
• The Construction business achieved the Commissioning
Atmospheric & vacuum Distillation Unit (AvU) and allied
facilities for Barauni Refinery Capacity Expansion Project
of Indian Oil Corporation
• Process and Piperack Modules (28,000 MT) for a
Refinery Project in South East Asia from EPC Contractors
Consortium, as a repeat order
• Supply of critical modules for Air Separation Process
Modules for a leading International Technology Company
for their projects in USA and Algeria, as a repeat order
• Three Instrumentation Houses for an international client
for a project in Algeria
Projects Completed
• During the year, the Offshore vertical achieved partial
mechanical completion for Hasbah II project of Saudi
Aramco and completed ONGC’s Bassein Development
3 Well Platform & Pipeline Project and Neelam
Re-development & B173AC Project
• The Onshore vertical achieved mechanical completion
of the IndMax FCC Unit for IOCL Bongaigaon
and completed the major milestone of Ready for
Commissioning – Multiphase Pump for Haliba Field
Development project of Al Dhafra Petroleum Operations
Company Ltd., UAE.
of Phase-2 of the Coal Bed Methane Development
Project at Shahdol in Madhya Pradesh for Reliance
Industries, Commissioning of Syngas Phase 2 Project
at Kochi for Air Products involving expansion of gas
separation facility based on cold-box technology and
laying & commissioning of pipeline for Barmer–Pali and
Palanpur–Pali projects
Significant Initiatives
The mission of ‘Execution Par Excellence’ is reflected in
LTHE’s continued emphasis on sharper bidding to enhance
its market share and execute projects within time and cost
to protect bid margins. The business continued its journey
with its Operational Excellence initiative, which has yielded
results by way of enhanced cost-competitiveness in its bids
and further improvement in its bottom-line for projects
under execution.
The business is resorting to newer manufacturing
techniques such as the Assembly Line Concept and Serial
Production technique for fabricating multiple jackets
concurrently. Additionally, cutting-edge technologies in
the pipe-welding process through automation and process
upgradation are implemented at its fabrication facilities
and construction sites for increased productivity and better
quality. Additionally, Construction Competency Centres
and Skill Development Centres have been augmented.
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MANAGEMENT DISCUSSION AND ANALYSIS HYDROCARBON BUSINESS ANNUAL REPORT 2019-20
Normal Paraffin & Derivative Complex for Farabi Petrochemical Company, Yanbu, KSA
LTHE has proactively embarked on an organisation-wide
Digital Transformation Programme for integrating Business
Processes, Enterprise Software and robust In-house IT
applications to enhance execution efficiency. This will result
in shorter project cycles, project progress visualisation
through Digital Walls, assured delivery schedules, cost-
competitiveness and enhanced risk mitigation; thereby
providing business differentiators for delivering projects.
Additionally, connected-construction machinery and
connected-workmen are being tracked through IoT to
improve productivity.
To create a strong foundation for business intelligence,
analytics and knowledge management, LTHE has
implemented an Enterprise-wide Project Lifecycle
Management programme (EPSILON). This provides a
collaborative space for all project stakeholders to interact
around a 3D-model-based integrated workspace wherein
project teams can plan together, conduct what-if analysis,
share and view project updates and manage changes.
In order to create new opportunities with a sustained
revenue stream, the AdvENT vertical is pursuing several
initiatives such as Smart Asset Management, Operation &
Maintenance (O&M) services and development of Green
Energy projects. The AdvENT business is actively engaged
with various R&D Centres and startups to harness emerging
technologies and create differentiated solutions for its
customers.
Environment, Health and Safety
The business remains committed to achieving HSE
excellence at the workplace and beyond by continuously
striving to improve, protect and develop the health,
safety, and environmental assets of its employees and
stakeholders. LTHE strongly believes that every incident is
preventable, and is committed, through its ‘Zero Incident
Credo’, to providing a safe and healthy workplace. During
the year, the business clocked over 102 million safe man
hours at a stretch across a dozen successful projects in both
the domestic as well as international markets, including the
three modular fabrication yards.
The business drives HSE excellence across the EPC value
chain, from engineering to commissioning of projects,
applied to all stakeholders by reinforcing a safe working
culture through various initiatives. HSE Assurance Audits
were initiated and carried out for all the verticals to ensure
the effective implementation of the HSE management
system across the business. Besides introducing new HSE
Training and HSE Design Policies, it redefined a set of
‘Golden Safety Rules’ to strengthen and transform the
safety culture.
Considering HSE performance an important factor for
business, many new HSE leading and lagging parameters
were added in the monthly online reporting system.
Further, various HSE Digitalisation Initiatives were
undertaken, such as vR (virtual Reality) based HSE Training,
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Coal Bed Methane Project (Phase II) for Reliance Industries at Shahdol, India
Electronic Permit to Work (e-PTW), Online Incident
Reporting & Investigation, Behaviour-based Safety and
Digital Health Monitoring.
• EHSS excellence award for achieving 25 million safe
man-hours from Farabi Petrochemical for N-Paraffin and
Derivative complex
During the year, the business bagged 22 national and 10
international level awards for best HSE performance. These
include:
• Certificate of appreciation for achieving 8 million safe
man-hours and for Best HSE performance from IOCL for
the Indmax FCC project
• The British Safety Council’s International Safety Award for
demonstrating a strong commitment to good Health &
Safety Management
• Middle East Energy Award 2019 under the category
of ‘HSE Innovation of the Year’ for Workmen Safety
Observation Programme
• Indian Chamber of Commerce’s National Occupational
Safety & Health Award 2019
• Confederation of Indian Industry’s Safety Best Practices
Award in recognition of the various HSE initiatives
• The Royal Society for the Prevention of Accident Gold
Award for Health & Safety performance during the year
2019
The business also received HSE recognition from several
clients, a few of which are listed below:
• Certificate of appreciation for achieving 32 million safe
man-hours from Saudi Aramco for HASBAH Offshore Gas
Facilities Increment II
• Certificate of appreciation for achieving 5 million safe
man-hours from EIL for the HPCL CDU vDU project
As a responsible corporate citizen, LTHE is determined
to continue operating in an environmentally sustainable
manner by fostering the HSE culture in all its activities.
Human Resources
The business focuses on recruiting and retaining a unique
and diverse set of talented and passionate individuals.
The organization utilizes various state-of-the-art training
infrastructure and resources like the L&T Leadership
Development Academy (LDA), the Institute of Project
Management (IPM) and technical training centres to
develop the employees’ Project Management skills,
Functional and Leadership competencies, as well as nurture
and groom talent.
In order to inculcate a culture of driving continuous career
advancement of internal talent, the business has initiated
a ‘DREAM’ Career Planning architecture for sustainable
growth of employees, and is strengthening its position in
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MANAGEMENT DISCUSSION AND ANALYSIS HYDROCARBON BUSINESS ANNUAL REPORT 2019-20
A 3D model of 10,000 TPA Hydrazine Hydrate Plant for Gujarat Alkalies and Chemicals Limited (GACL)
Social Media through professional networking sites. The
design and deployment of the GENIE: Engagement survey
with the subsequent business-specific and managerial-level
interventions undertaken and communicated through
the multiple forums of ‘IGNITE’, such as ‘town halls’,
webcasts and video conferencing, bears testimony
to LTHE’s commitment in creating a highly engaged
workforce. A culture of appreciation is inculcated by
various reward and recognition interventions. The ‘I-TOO’
recognition framework, initiatives like ICONS, Long Service
Awards, Talent Champions, Team Building Workshops,
non-monetary recognition events, etc. are periodically
undertaken to enhance employee motivation.
Innovation is recognized based on merit. LTHE appreciates
the convergence of divergent thought processes and ideas.
The business stands united in its mantra of ‘Together We
Succeed’ by practising ‘Execution Par Excellence’.
Risks and Concerns
The fortunes of the business are heavily linked to the global
oil prices and green environment pressures. Further, with
nearly 50% of the business originating from international
markets, geo-political situations have a major impact
on new orders and the execution momentum. With
some key competitors rendered with surplus capacity,
cost competition is becoming challenging, and is further
accentuated by the increasing requirement for localisation
in some of the regions where the business has a presence.
The business addresses the risks by continuous evaluation
of its portfolio, examining the emerging scenario, exploring
newer regions and addressing cost-competitiveness on an
on-going basis, while undertaking operational excellence.
Besides, the business may also face risks such as difficult
contract terms set by clients, tight schedules, counterparty
risks, currency and commodity exposures, vendor defaults,
delay in material delivery, QHSE, productivity, etc. These
risks are mitigated through specific actions, such as
operational excellence initiatives, alliances, compliance with
stringent QHSE standards, timely forex and commodity
price hedging, strong contract and claims management
and identification of key personnel and talent at the pre-bid
stage.
The risk management policy and guidelines have facilitated
the creation of a consistent set of standard tools and
templates incorporating global best practices and
procedures. Proactive risk management enables building
the ability to anticipate challenges, as well as mitigate and
identify opportunities which may help achieve strategic
objectives. The business promotes a culture of transparency
in flagging problems as early warning signals for the
Management’s timely attention.
Outlook
The downward oil price spiral started with the warring
between OPEC and Russia and was further fuelled by the
onset of the global pandemic, due to which the oil demand
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Lowering of new strategic gas export pipeline (Size: 30” / 40” x 146 km) from North Kuwait to Mina Al-Ahmadi for Kuwait Oil Company
depleted to a record low. To stabilise the plummeting oil
prices, OPEC and Russia have reached an agreement to
cut oil production. Further, the U.S. also cut its 2020 oil
production forecast by more than 1 million barrels a day
due to the plummeting demand and collapsing crude
prices. Oil prices are expected to predominantly remain
under stress during 2020. volatility and uncertainty
in oil prices is expected to delay project awards in the
hydrocarbon segment. Further, most of the Middle Eastern
GCC economies plan to diversify into several other sectors
other than hydrocarbon.
With international oil companies evincing interest in the
market, investments in West and North Africa may fructify
in case crude oil prices show upward movement.
On the domestic front, the Ministry of Petroleum and
Natural Gas is working in collaboration with various
Central Government Ministries, State Governments, and
stakeholders to make efforts to achieve reduction in
import dependency for oil in the long run through use of
alternative fuels like ethanol and biodiesel through the
Ethanol Blending in Petrol (EBP) Programme and Biodiesel
blending in diesel. The Government has formulated a
National Biofuel Policy 2018 to boost the availability
of biofuels in country. It has launched a Sustainable
Alternative Towards Affordable Transportation (SATAT)
initiative for producing Bio CNG by setting up 5000
Bio-CNG plants in next five years.
The Union Budget has proposed a capital outlay of
R 98,522 crore for oil and gas companies for FY 2020-21,
comprising R 52,019 crore for the Exploration and
Production segment, R 41,654 crore for the Refining &
Market segment R 4,754 crore for the Petrochemical sector.
Major domestic pipeline projects which were deferred in FY
2019-20 are expected to pick up during FY 2020-21.
The Company will expand its bid pipeline and explore new
clients and new markets in the adjacency of its existing
capabilities.
With the onslaught of the pandemic, numerous challenges
are also expected in project execution. The aim of the
business will be to remain cash-positive and adopt the
PIO approach, viz. Protect the business, be Innovative in
approach for solving unanticipated problems and look for
Opportunities in the marketplace that could give strategic
advantages in the medium and long term.
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
IT &
TECHNOLOGY
SERVICES
L&T INFOTECH
Overview:
L&T Infotech (LTI) is a global technology consulting
and digital solutions company helping more than
420 clients succeed in a converging world. With
operations in 32 countries, the business goes that
extra mile for its clients and accelerates their digital
transformation with its Mosaic platform – enabling
their mobile, social, analytics, IoT and cloud
journeys. Founded in 1997 as a subsidiary of
Larsen & Toubro Limited, its unique heritage gives
it an unrivalled real-world expertise to solve the
most complex challenges of enterprises across all
industries. Each day, the team of more than 30,000
LTItes enables clients to improve the effectiveness
of their business and technology operations and
deliver value to their customers, employees and
shareholders.
The business has a strong presence in each of the
following verticals:
• Banking and Financial Services
• Insurance
• Manufacturing
• Energy and Utilities
260
LTI’s Delivery Center in Warsaw, Poland
• Consumer packaged goods (CPG), Retail and
Pharma
• Hi-Tech, Media and Entertainment
To further augment its digital capabilities, LTI
announced two acquisitions in FY 2019-20. In
July 2019, it acquired Lymbyc, a specialist in AI,
machine learning and advanced analytics. The
Lymbyc acquisition adds to LTI’s Mosaic platform
offering. In October 2019, it acquired Powerup,
a born-in-cloud company, with cloud consulting
capabilities across all three leading cloud platforms
– AWS, Microsoft Azure and Google cloud. In
addition to cloud-consulting capabilities, Powerup
also adds 2 AI products to LTI’s powerful suite of
offerings.
Business Environment
The global Information Technology-Business Process
Management (IT-BPM) market, excluding hardware and
Engineering, Research & Development (ER&D), grew
5.6% over the last year and stood at USD 1.5 trillion in
2019. Indian IT-BPM industry revenues including hardware
and ER&D spend stood at USD 191 billion in FY20. The
industry added ~USD 14 billion in incremental revenues
last year, representing year-on-year growth of ~ 7.7%
in USD terms. IT-BPM export revenues for the industry
for FY 2019-20 are expected to reach USD 147 billion, a
growth of 8.1% over the past year.
LTI Headquarters, Powai, Mumbai
The share of digital in industry revenues has jumped from
~20% last year to a range of 26%-28%. Nine digital
technology areas will emerge as the fastest-growing and
highest-impacting, with the combined potential to deliver
one-third of the USD 100 trillion. The nine areas include
three foundational technologies – Big Data and Analytics,
Cloud Computing, and Cybersecurity – and six advanced
technologies – Artificial Intelligence, Internet of Things, 3D
Printing, Robotics, Blockchain, and Immersive Media.
The strong digital foundation that Indian technology has
built over the last decade underpinned the remarkable
agility and resilience in responding to the COvID-19 crisis;
ensuring business continuity for all global clients while
prioritizing the safety of its professionals.
The vertical specific key trends observed are as follows:
a) Banking and Financial Services: With the Banking
industry being a fast adopter of advanced data analytics
and AI-based strategies, as customer data segmentation
and enhanced decision support become key priorities,
this sector saw an increase in spend on digital
technologies. COvID-19 has the potential to change the
way people bank, forever marking a clear shift towards
digital and cloud. It is expected that most routine
operations would move to the cloud as cloud-native
technologies can enhance customer experience while
reducing costs at the same time.
b) Insurance: Cost optimization and legacy systems’
modernization are the key drivers of growth, and
many insurers are shifting from the product-centric
to a customer-centric business model, so insurance
companies are open to form partnerships with
‘InsurTechs’ which will help them cut costs and improve
business process efficiencies, as well as provide a better
customer experience.
c) Manufacturing: This sector includes Industrial
Manufacturing, Automotive & Aerospace. The
automotive industry has been facing an unprecedented
technology and business model transformation, driven
mainly by Connected, Autonomous, Shared and Electric
mobility (CASE). These trends will continue to drive
the industry evolution going forward. The industrial
manufacturing sector is witnessing the importance
of the Digital Twin in maintaining operations within
the manufacturing ecosystem, and the emerging and
expanding role of collaborative robots, remote work
and the ‘virtual shift’ in the manufacturing sectors.
d) Energy and Utilities: Cloud migration has helped
companies leverage solutions for automated adaptive
planning and scheduling of production, logistics
and service processes, which in turn will enhance
operational efficiency by reducing human interventions.
e) CPG, Retail and Pharma: Competition from
Direct-to-consumer companies is changing business
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
Mosaic Experience Centre
models for CPG players. Companies are investing in
customer-centric digital technologies, such as virtual
Shelves, Digital Kiosks, Self-Checkout, Digital Reality,
etc. As pharma companies generate a huge amount of
health data, linking them to new technologies to build
digital platforms is the way forward to transform their
businesses. Emerging technologies, such as mHealth,
Robotic Surgeries and 3D Printing, are paving their way
in the Life Sciences industry.
f) Hi-Tech, Media and Entertainment: Direct-to-
Consumer is a strong theme emerging from the
necessity to understand customer preferences
and behaviour. In the Media and Entertainment
sector, content creation and prediction, along with
personalization, are the keys to providing a seamless
user experience. In Hi-Tech, 5G technology is slated to
drive the market for the next several years and open
opportunities in Over-the-top (OTT) and E-commerce.
FY 2019-20 marks the fourth consecutive year of
industry-leading double-digit growth from LTI in
constant currency terms.
Major Achievements
In FY 2019-20, LTI further strengthened its partnership and
alliances ecosystem. LTI received the AWS SAP Competency
partner certification, positioning it on an exclusive list of
AWS global partners. Elevation of LTI to ‘Gold’ partnership
with Pega and ‘Premier’ partnership with MuleSoft
reaffirms the resolve of the business to remain relevant to
clients.
During the year, LTI’s long-term rating has been upgraded
by CRISIL to AAA/Stable from AA+/Positive. The National
Stock Exchange of India Ltd. (NSE) has included LTI in its
Nifty Next 50 Index.
Large Deal Wins
a) A US based insurance company, a new logo has
selected LTI for a multi-year, multi-million-dollar
managed services deal for its IT infrastructure and IT
security operations
b) A US based utility company, a new logo has selected LTI
for multi-year, multi-million-dollar deal to provide Cloud
and Infrastructure Managed services
c) Won a multi-year, multi-million-dollar managed services
engagement with a European financial institution, a
new logo
d) A leading power generation company chose LTI as
its partner for a greenfield and organization-wide
implementation of SAP S/4 HANA
e) A multi-year, multi-million-dollar deal for transforming
the global application operations of a global auto
ancillary manufacturer
262
LTI’s state-of-the-art Delivery Center in Johannesburg, South Africa
f) An apex government body selected LTI to create
a conceptual framework on Data Management,
integrating and harmonizing the available data sets in
various key sectors through a single-window system for
better governance
g) A multi-year, multi-million-dollar deal for complete
digital transformation, enhancing productivity and
quality of service of a key government ministry by
implementing new microservices-based applications and
building a data and analytics platform
d) LTI featured as a Major Contender in Everest Group
Talent Readiness for Next-generation IT Services PEAK
Matrix™ Assessment 2020
e) LTI positioned as a Major Contender and Star Performer
in Everest Group Application and Digital Services in
Banking – Services PEAK Matrix™ Assessment 2020
f) Won the SAP Pinnacle Award for Industry Innovation
Partner of the Year 2020
g) LTI is now a constituent of the FTSE4Good Index Series
h) A large energy retail company selected LTI for an
following the June 2019 index review
end-to-end managed services deal for its IT applications
and infrastructure operations
Awards and Recognition
a) LTI ranked as a Leader in AI-based Automation
Capability in Software Testing Services: AI and Digital
Next-Gen Testing NelsonHall NEAT report 2019
b) LTI’s Digital Transformative Agribusiness case study
recognized in ISG’s Global Digital Excellence: 25
Winning Partnerships Book
c) LTI ranked as HFS Top 10 IoT Service Providers 2019
h) LTI has been felicitated with the ZEE Business National
CSR Leadership Award 2019 for Innovation in CSR
practices
Significant Initiatives
The advent of newer and efficient technologies is driving
extraordinary changes across different industry verticals
all over the world. During these tumultuous shifts, there
are early signs of winners who would outgrow their
competitors and establish themselves as Breakaway
Enterprises. The common thread across these companies
is they are fast adopters of technology and are reshaping
their organisation at a pace and agility that has not been
witnessed in the past.
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
LTI Welcome Center in Powai
At LTI, we believe enterprises need to master four essential
plays to be a breakaway leader:
• Operate to transform – leveraging automation in
everyday operations and solving for the unstated needs
• Data driven Organization – harnessing the power of
analytics
• Experience Transformation for their customers and
employees
• Digitize the Core by leveraging real-world know-how of
the client’s industry domain
LTI’s go-to-market strategy that is believed to help
enterprises to be breakaway leaders continues to be the
same as last year. It is continuously working towards
‘strengthening to solve’ along these four plays by
investing in people and sharpening capabilities. LTI’s
programmatic capability building focuses on hiring and
re-skilling employees in digital technologies, developing
vertical-centric platforms, augmenting key partnerships and
acquiring unique capabilities.
xFH – LTI Design for Thriving in the WFH
Future
For the foreseeable future, WFH is the new global norm.
As with any competitive landscape, some organizations
will find ways to adapt and thrive under a fully distributed
model, while others will, unfortunately, flounder.
264
That’s what the xFH model is all about: helping
organizations make sense of their own WFH model,
understand the layers that comprise it, then drive
meaningful and impactful interventions at each of those
layers – and across all layers – to ensure optimal business
outcomes.
At LTI, the WFH is broken down into five layers, each
with a specific set of interventions, tools, governance and
outcomes – these layers traverse foundational needs to
include both team and individual requirements.
LTI has demonstrated agility and nimbleness to adapt to
the challenges posed by COvID-19. This, combined with its
strategy to help customers become Breakaway Enterprises,
is enabling LTI stand out in the marketplace.
Human Resources
LTI crossed the 30,000-employee mark in FY 2019-20. The
LTI culture is one of inclusivity and transparency. A gender-
inclusive workforce is a natural result of this outlook, which
is deeply woven into its ways of working. As of March 31,
2020, 31% of its workforce comprises women. LTI’s unique
recruitment programme ‘Revive with LTI’ provides return-
to-work opportunities to experienced women professionals,
who are currently on sabbatical, under which they receive
on-the-job training, mentorship from senior leaders and the
opportunity to work on trending technologies in LTI.
In the area of talent management and digital skilling, the
business has launched an AI-based solution that will help
LTI‘s Delivery Center at Pune
LTI’s Delivery Center in Bengaluru, India
contextualize and speed up hiring, skilling – specifically
focused on digital – and deployment. It provides accurate
ways of matching the right talent with the relevant job at
speeds that significantly cut down on sourcing and hiring
times. Besides providing a business-context based skill
map-gap analysis, it also ensures an improved employee as
well as candidate experience.
A key goal for the business in FY 2019-20 has been to
focus on continuous reduction in attrition. Towards this,
LTI launched the ‘iLead’ series to help first-time managers
develop their leadership skills and help in talent retention.
To tap the vast talent pool in colleges, LTI flagged off
the ‘Brand Icon’ initiative – a strategic programme
designed to engage with selected colleges, not just for
branding but from a 360-degree-development perspective
between academia and corporates. Student development
programmes like webinars and workshops were conducted
by the LTI industry experts.
The global sales leadership incubation programme – ‘iRise’
– has won recognition at the ‘2019 Stevie Awards for Great
Employers’. Currently in its 3rd batch, iRise is a 12-month
onboarding programme aimed at building the global sales
leaders of tomorrow. In its recent report “Talent Readiness
for Next-generation IT Services PEAK Matrix™ Assessment
2020: Closing the Demand-Supply Gap”, the Everest
Group has ranked LTI as the leading service provider for
talent readiness for next-generation data services skills. This
ranking is on account of LTI’s focused talent development
efforts across the entire data value chain of data storage
and management, data gathering, and data analytics.
In response to the COvID-19 outbreak, LTI has swiftly
enabled the work-from-home option for almost all of
its employees, ensuring the safety and well-being of its
employees, while maintaining continuity of operations.
A global helpline and email address have been set up to
answer questions about COvID-19. Regular updates and
information to employees through emails, Intranet and
other communication channels have been ensured. An
internal portal has been set up which acts as a one-stop
destination for accurate information and guidelines about
COvID-19.
For India-based employees, LTI SafeRadius - a GDPR-
compliant return-to-work app-based solution was launched
to track and monitor an employee’s health and safety, and
for issuing regional alerts from the HR and Admin teams.
Risks and Concerns
Client relationships are at the core of the business. LTI
enjoys a history of high client retention and continues
to derive a significant proportion of revenue from repeat
business built on the successful execution of prior
engagements. Also, efforts are on to expand the client
base and geographies, as well as increase the value-add of
deliverables.
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
Mindtree West Campus, Bengaluru
The major risks faced by the business include failure to
align the services portfolio with newer and in-demand
technologies, leading to lower operating revenue. A
technology architecture group has been created to ensure
continuous skill alignment with market needs. Evolving
geo- political and economic conditions may affect the
client’s business and LTI’s delivery, which is mitigated by
regular monitoring. Changes in immigration policies of
countries where LTI has significant business may affect its
ability to position consultants at client locations.
With a majority of the revenue being foreign currency
denominated, the business carries translation and
transaction foreign exchange risks. However, expenses in
respective currencies provide a natural hedge.
Employees are the real assets for the IT industry. In order
to compete effectively, the ability of the business to attract
and retain qualified employees is critical. Attrition of
experienced and talented employees impacts organizational
knowledge and relationships. LTI has launched programmes
for employee engagement and has a framework in place to
reward high-potential employees.
Outlook
The risks emanating from the global pandemic continue
to evolve. With sustained investments in capabilities and
clients concurring with a xFH approach in response to
COvID-19, the business is confident of a robust, resilient
and sustainable business model.
266
MINDTREE
Overview:
During the year, subsequent to acquisition of
control, Mindtree was consolidated as a subsidiary
in the L&T Group, from the second quarter of the
financial year.
Mindtree is a global technology consulting and
services company, helping Global 2000 corporations
marry scale with agility to achieve a competitive
advantage. ‘Born digital’ in 1999, more than 340
enterprise clients rely on the entity’s deep domain
knowledge to break down silos, make sense
of digital complexity and bring new initiatives
to market faster. Mindtree enables IT to move
at the speed of business, leveraging emerging
technologies and the efficiencies of continuous
delivery to spur business innovation.
Mindtree offers an extensive range of technology-
driven customized solutions. Mindtree’s digital
strategy is pivoted on multiple solutions, IPs, and
frameworks cutting across several service offerings,
covering areas such as real-time recommendations,
social media intelligence, workforce productivity,
customer analytics, and sales enablement. The
entity’s expertise in digital solutions span across
Immersive Aurora Experience Center
Adobe, Salesforce, and Sitecore. It services clients
in diverse industries such as Retail, CPG and
Manufacturing, Travel & Hospitality, Banking,
Financial Services & Insurance, High-Technology and
Media.
Mindtree is a Digital Next company with the
main emphasis on the digital transformation of
its clients to make them a better suited for future
disruptions. Mindtree has grown as a trusted service
provider for its clients and has repeatedly proven its
technological expertise and domain capabilities.
Digital Next Intelligent Enterprise for
Future Possibilities
Mindtree plays the foremost role in its clients’
digital transformation and customer experience
development. Mindtree’s clients’ businesses are
highly influenced by their customer experience and
the ease of use of all provided services. Emerging
technologies are defining businesses even more
than before. Therefore, companies have to be more
aggressive in their uptake of new offerings, before
they disrupt their business models.
Mindtree develops innovative solutions and
platforms around such unique customer and
cross-sector requirements.
Automation
At Mindtree, automation strategy is platform
and technology agonistic. Niche technologies like
Machine Learning and RPA are used to automate
repeatable and reusable tasks. At present, 764 BOTs
are employed along with Mindtree Minds to provide
top-notch client deliverables.
Application Managed Services
Mindtree has developed unique end-to-end
workflow-driven Application Managed Services that
take complete lifecycle ownership of client enterprise
applications. Through the AMS practice, Mindtree
has grown to become a strategic partner for clients’
business growth. The wide range of services provided
to clients through this practice includes:
• Transition and planning management – Performing
system audit and creating a tailored plan for IT
transformation completely aligned to business
objectives and relevant KPIs
• DevOps – Automation of all possible IT services and
transforming existing business into an agile and
lean IT system
• Test Automation capabilities – For complete
software test automation of client application with
reduced time to production
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
Kalinga Campus, Bhubaneswar
• End-to-end Managed Services – Providing
omnichannel support and business aligned KPIs
• SAP: Mindtree is the world’s only integrated service
provider with expertise on the SAP HANA platform
• Application Modernization – To identify and
eliminate redundancies in client systems, thereby
enhancing customer experience through increased
speed of operation, new features and add-ons
Expert Thinking
Mindtree helps its clients re-imagine their business,
providing unique solutions and digital transformation
by leveraging next-generation and emerging
technologies, including Blockchain, Machine Learning
and Artificial Intelligence, Internet of Things and
Cloud. Services ranging from ideation to customized
solution building and implementation are carried out
across the entire digital value chain.
Alliance and Partnerships
• Microsoft: Gold Cloud Partner, through which
access to all Microsoft resources is available,
delivering the best possible solutions to its
customers
• Salesforce partner ecosystem: A Platinum
partner, specialising in Salesforce implementation
strategies to drive digital growth through client
engagement
• Amazon Web Services: Advanced Consulting
Partner in the Amazon Partner Network (APN) for
AWS
• Adobe: Business Partner within the Adobe Solution
Partner Programme, which brings together a full
suite of customer experience transformation services
and Adobe Experience Cloud solutions to accelerate
the digital transformation journey
Business Environment
The IT BPM sector in India grew at the rate of 6.1%
year-on-year. The IT and ITES industry grew from USD 170
billion in FY19 to USD 181 billion in FY20. India’s IT industry
contributed around 7.7% of the country’s GDP. India has
become the largest digital capabilities hub in the world
with about 75% of the global digital talent being present
here.
The COvID-19 pandemic has had an unprecedented impact
at different levels viz. health and safety risks for Mindtree
Minds, impact on clients which may lead to reduction in
customer discretionary IT spends, delivery disruptions as
well as increase in financial, compliance and operational
risks. Mindtree set up a War Room consisting of senior
leaders from different functions to co-ordinate response to
COvID-19.
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Digital Pumpkin, London
Digital Pumpkin, Bengaluru
Significant Initiatives
Customer satisfaction is one of the key performance
indicators in Mindtree. Customer feedback is regularly
gathered through quarterly Project Feedback Survey (PFS)
and annual Customer Experience Survey (CES) which helps
in monitoring account health and interest.
Awards
The entity has been recognized on multiple fronts for
its capabilities in a wide range of offerings including
Digital, Cloud, Automation and other next generation
developments. A few highlights include:
• Mindtree has been placed on ‘The Best of The Global
Outsourcing 100®’ list by the International Association
of Outsourcing Professionals (IAOP)
• Zinnov positions Mindtree in the Leadership Zone in
Overall Digital Services and across Six Categories in the
Zinnov Zones for Digital Services 2019 Report
• Mindtree named Overall Winner of the 2019 ISG Star of
Excellence Awards™ for Core Technology Services
• Mindtree won at the 2019 Paragon Awards™ in the
Excellence Category for Outstanding Service Delivery for
a Global Airline
• Mindtree recognized as an Innovator in Avasant’s
Intelligent Automation Services Radarview™ Report
2019 - 2020
• Received several awards from The ISG Provider Lens™
Report viz. Leader for providing Professional Services for
Salesforce Sales and Service Cloud in USA, Leader for
Private/Hybrid Cloud – Data Center Services & Solutions,
Rising Star in Service Operation and Delivery (US), Global
Leader for Next-gen ADM services
• Conferred South Asian Federation of Accountants
(SAFA) best-presented accounts award for its strong
ethics, excellence in financial reporting and corporate
governance
• Best Compliance Framework award by UBS Forums
Environment, Health and Safety
The entity is determined to reduce its carbon footprint
through initiatives to conserve energy and water. It
continuously strives to improve energy efficiency, increase
the use of renewable energy, enhance water sustainability
and reduce waste to landfills.
The entity has installed a turbo core chiller, resulting in
an average annualized reduction of power consumption.
Installation of LED fixtures across locations, UPS
optimization, AC retrofit activity, shift rationalization
through Routematic Application, a common bus system
and so on led to reduced carbon emissions. In order to
reduce freshwater consumption and to make its Pune
facility a zero-discharge facility, its sewage treatment
plant was upgraded to a newer technology. At Bengaluru,
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
Digital Pumpkin, New Jersey
various water conservation programmes, such as
installation of advanced aerators and reuse of RO reject
water, resulted in saving of fresh water.
Gladius IoT, a full-fledged building IoT solution which
integrates all aspects of building management systems
with the IT systems, is operational at Mindtree Kalinga
and Bengaluru West campus. The system monitors energy
consumption in the building, across the floors and prevents
avoidable energy losses.
The entity is committed to providing a safe and healthy
workplace to employees. The aim is to make it a zero-
incident campus. Post COvID-19, the entity is closely
following WHO guidelines for health and safety. It has set
up a 24-hour medical hotline for all employees to report
any COvID-19 concerns, including diagnoses. Top priority
has been given to safeguarding the health and safety of
employees, while also ensuring the continuity of customer
deliverables.
Human Resources
Mindtree creates a work environment where Mindtree
Minds feel recognized for their efforts and contribution,
thus creating an organization nurturing high performance,
innovation and execution excellence. Through its focus
on diversity and inclusion, women-centric leadership
programmes cover more lady minds throughout the
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organization. The onboarding programme for new
Mindtree Minds and Mindtree Kalinga – The Global
Learning Center was designed to create Engineers of
Tomorrow. The homegrown, cloud-based learning
platform – Yorbit – has over 2400 courses that cover 900+
skills. More than 87,000 courses have been completed on
Yorbit in the current FY. The entity also has an Enterprise
Leadership Programme for leaders identified from a
combination of Talent Review and Leadership nominations
to ensure a diverse group across functions (sales, delivery,
enabling functions) and geographies. SpotOn – Mindtree’s
Rewards and Recognition tool – has been built to
strengthen the ways by which Mindtree Minds can
recognize each other, and provides People Manager and
Peer Awards that focus on instantaneous recognition.
Risks and Concerns
As a global enterprise, Mindtree is exposed to a range of
external as well as internal risks that have a significant
impact on its performance. In order to efficiently manage
these, a strong risk management architecture has been
built. The entity identifies, assesses, manages and reports
on the principal risks that could affect its ability to
implement strategies and deliver commitments. Its robust
enterprise risk management programme propels a culture
of informed and responsible risk handling to achieve the
desired growth.
Network Operations Center, Bengaluru
LTTS prototype of the Battery Management System used in Electric Vehicles
The business faces the risk of revenue concentration with
top clients. Changes in immigration policies of countries
like the US, which is tightening its visa norms, where
Mindtree has significant business, may affect its ability to
position consultants at client locations. It could face margin
pressures due to competitive pricing, tactical movements
by competitors to gain market share, or escalating
costs. With a majority of the revenue being foreign
currency denominated, the business carries translation
and transaction foreign exchange risks. A formal Board-
approved hedging strategy is reviewed periodically.
Cyber Risk has emerged as a top risk across industries as
organizations are moving to newer areas of engagement
such as social, mobile computing and cloud computing.
The entity has leveraged leading industry standards to
develop cyber security frameworks. In the knowledge
industry, attracting and retaining people with the right
skills is imperative for long-term success. Employee-friendly
policies, learning plans and career growth options have
ensured that attrition remains at tolerable limits.
Outlook
The COvID-19 outbreak has been creating an
unprecedented level of uncertainty with major economies
virtually coming to a halt. The business is well equipped to
handle the global crisis based on the business continuity
plan that has been successfully implemented to ensure
the health and safety of employees while fully supporting
clients worldwide. Looking ahead in 2020-21, the business
anticipates a drop in demand, curtailment of discretionary
spends and cost-optimization pressure within clients’
business. At the same time, the business also expects
demand from clients for digital and transformational
services as they invest into data, cloud-enabled solutions,
customer-centric and end user experience businesses.
Focus would be on signing multi-year annuity deals,
rationalizing tail-accounts and going deeper into the limited
set of strategic clients. The business will continue co-selling
with long-standing strategic partners.
The business will continue to drive operational efficiencies
for margin-expansion and continue the profitable growth
journey.
L&T TECHNOLOGY SERVICES
Overview:
L&T Technology Services Limited (LTTS) is a
leading global pure-play Engineering Research &
Development (ER&D) services company. It offers
design and development solutions throughout the
product development chain and provides services
and solutions in the areas of mechanical and
manufacturing engineering, embedded systems,
engineering analytics and plant engineering. LTTS’
customer base includes 69 Fortune 500 companies
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
Headquartered at Knowledge City, Vadodara, L&T Technology Services helps clients gain the competitive edge by building smart products, enabling smart
manufacturing and offering smart services.
and 53 of the world’s top ER&D companies across
industrial products, transportation, telecom &
hi-tech, medical devices and plant engineering. The
business also provides digital engineering advisory
services to some of the world’s leading enterprises.
The key differentiators for LTTS’ business are its
customer-centric industry innovations, domain
expertise, and multi-vertical presence spanning
major industry segments.
Transportation: LTTS offers the complete gamut
of engineering services and solutions for its global
customers in the transportation industry, including
OEMs and Tier 1 suppliers in the Automotive, Trucks
& Off-Highway vehicles and Aerospace sectors.
In the automotive sector, LTTS helps its customers
through best-in-class platforms and solutions in
areas such as Advanced Driver Assistance System
(ADAS), Autonomous Drive (AD) and Electrical
vehicles (Ev). In the Aerospace sector, LTTS’
offerings encompass a wide spectrum, including
aero engine, aero structure & systems, avionics, air
traffic management and new-age disruptive digital
transformation solutions, which cater to all phases
of the Aircraft Lifecycle – design, manufacturing,
and aftermarket services. LTTS has over a decade
of domain expertise in the Trucks and Off-highway
segment, and offers services across industries like
Construction & Mining, Cranes & Material Handlers,
Commercial vehicles, Agricultural & Gardening
Equipment, Powersports and Polymer.
Industrial Products: LTTS helps its OEM customers
across building automation, home and office
products, energy, process control and machinery
backed by its deep domain expertise across
software, electronics, connectivity, mechanical
engineering, industrial networking protocols, User
Interface/User Experience (UI/UX), test frameworks
and enterprise control solutions.
Telecom & Hi-tech: LTTS’ Telecom and Hi-tech
vertical provides engineering services and
solutions that cater to five key sectors: Telecom,
Consumer Electronics, Semiconductor, ISv, and
Media & Entertainment. For the Telecom sector,
the services provided include product variant
design & development, maintenance, testing,
support, optimization, system integration and
professional services (pre-deployment, deployment
& post-deployment). For the Semiconductors
industry, LTTS provides turnkey design services, IC
design services, hardware system design, platform
software, modem services, verification & validation,
multimedia, connectivity, storage, mechanical
engineering, and customer engineering support.
For the Consumer Electronics segment, it provides
services in the areas of product conceptualization,
design & development, platform software, testing
& certification, manufacturing support, product
maintenance, and product launch support. For the
Media & Entertainment industry, it provides services
in product engineering, product conceptualization,
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The IoT Innovation Hub in Bengaluru is where IoT solutions come to life - from connected workers to smart fuel dispensers
design & development, testing & certification,
manufacturing support, product maintenance, and
value engineering. And in ISv, LTTS undertakes
application engineering, vLSI, cloud engineering,
product uplift, platform development & migration,
product support, testing and certification.
Plant Engineering: As an engineering,
procurement, and construction management
(EPCM) specialist, LTTS supports every phase of a
plant’s lifecycle, from concept to commissioning.
The business enables its customers to address
all their engineering requirements to streamline
their processes, resolve downtime issues, and
adhere to statutory, human safety, machine safety,
regulatory compliance as well as local and global
standards. LTTS provides end-to-end solutions in
the areas of plant design, process engineering,
project management, construction management,
MOC (management of change), and handover
of operations to its customers in the Chemical,
Consumer Packaged Goods (CPG), and Oil & Gas
sectors.
Medical Devices: LTTS helps medical device OEMs
address various industry challenges, including
acceleration of the product development cycle,
reduction of time-to-market, value engineering,
and product launches in various geographies
in compliance with the regional regulatory
requirements. It focuses on delivering solutions
in in-vitro diagnostics, patient mobility services,
musculoskeletal services, surgical services,
cardiovascular, home healthcare and general
medical. LTTS also provides pre-compliance
testing and validation support, including product/
compliance remediation, complaint management,
and regulatory documentation support.
Business Environment
According to NASSCOM, India’s ER&D services sector
(comprising embedded systems, ER&D and product
engineering services) is the fastest growing sector within
the Indian technology space – estimated to grow at 11
percent Y-o-Y to reach USD 32.7 billion in FY20. NASSCOM
reports that, over the last 5-6 years, India’s ER&D services
sector has been a story of consistent double-digit growth,
even as the overall IT industry has grown in single digits.
The global ER&D spend remained strong at USD 1.5
trillion in the calendar year 2019 (growth of 5.3%
Y-o-Y), driven by increasingly software-led engineering
and digital technologies (like IoT and analytics). Digital
Engineering is going to be the focus area for enterprises
with growing requirements for a better user experience and
personalization, greater adoption of platforms and cloud,
and consolidation to build full-stack capabilities.
Zinnov reiterates this fact by observing that the global
ER&D spend is resilient and has witnessed growth despite
the slowdown and geo-political factors. Zinnov also
forecasts that enterprises will continue to invest in Digital
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
LTTS’ Motor Dyne system conducts troubleshooting of power electronics
LTTS’ Hardware & Test Equipment covers sectors like avionics,
communication, and security systems
Engineering initiatives to stay relevant. The global spend of
Digital Engineering is expected to grow at a CAGR of 19
percent, from USD 403 billion in 2019 to reach USD 1153
billion by 2025.
LTTS’ service portfolios have well-defined offerings in the
ER&D sector. Through its services and solutions in the
areas of Core Engineering, Digital Engineering and Digital
Advisory Practice combined with its Innovation Engine, the
entity is well- positioned to provide customers with business
value propositions throughout their value chain needs
across domains and industries. This is further corroborated
through its positioning as an established technology
leader by industry experts such as Zinnov, ISG, ARC, IDC,
NelsonHall, and Frost & Sullivan.
Major Achievements
LTTS had a healthy inflow of projects across all its verticals.
Several multi-million-dollar deals were won across the
globe.
Order Wins
Transportation
• Airbus India selected LTTS to manage their Avionics
Software Development, v&v (validation & verification)
and Data Analytics
• A European components supplier for autonomous
vehicles has selected LTTS as its engineering partner for
key programmes in Advanced Driving Assistance Systems
(ADAS) and Automated Driving (AD) domains
• A leading Swedish Automotive OEM has awarded LTTS
a multi-year programme to set up a SCRUM team to
develop and manage the software components in Brakes,
Steering, Suspension and Climate Control Domains
• A leading auto parts maker has awarded LTTS a multi-
year programme for design and development of their
Engine Control Unit (ECU) for enhanced fuel efficiency
for a new range of powertrains for their vehicles
• A global automotive manufacturer has chosen LTTS
for the development of their AUTOSAR platform and
integration of 5G telematics modules
• LTTS was selected as strategic partner by a European
automotive manufacturer for its electric Powertrain
(ePowertrain) practice
Industrial Products
• For an industrial automation company, LTTS won an
order to develop IoT firmware for next-generation motor
drives and controllers
• LTTS is setting up a development and design centre
in India for a European manufacturer to provide
engineering projects across Embedded, Mechanical and
Connectivity domains
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Engineers develop and test microscopy software in LTTS’ Microscopy
Lab
LTTS’ automation frameworks for 5G rollout will enable clients to get first mover
advantage
• A global manufacturer of Drinking Water Management
solutions has chosen LTTS to be their sole engineering
services partner to support various advanced digital
programmes including NPD and sensorization
• A major industrial automation company has awarded
LTTS a multi-year contract to develop an electrical power
module using end-to-end engineering protocols
Telecom and Hi-Tech
• LTTS won a contract from a global technology
conglomerate for vLSI engineering services spanning its
product suite of AR and vR enabled solutions
• One of the world’s leading technology firms has awarded
LTTS a multi-year deal involving an engineering analytics
program for next-generation wireless laptops and
processors
• The world’s leading datacentre solutions provider has
awarded LTTS a programme to validate their family
of high-speed platforms and to set up a Centre of
Excellence (CoE)
• LTTS will deploy its intelligent buildings framework
i-BEMS to help a multinational technology company
optimize energy conservation, implement analytics and
enhance UX
• A European media and communications conglomerate
awarded LTTS a contract to develop next-generation
Hybrid Boxes that support 4K resolution
• LTTS has been awarded a programme by a global media
firm to design and develop a next-generation chipset for
broad-band and video security
Medical Devices
• For a leading medical device manufacturer, LTTS is
executing a complete Design History File (DHF) and
European Union (EU) Medical Device Regulation &
Remediation project in the Newborn Care and Neurology
markets
• LTTS has secured the next phase of development of a
digital health programme for one of the top life sciences
companies in the US
• A global medical devices OEM awarded LTTS a contract
to develop a new IoT platform to remotely monitor their
life sciences products installed globally
• For a global healthcare company, LTTS was chosen to
be their engineering partner to set up a CoE that will
provide support investigating and analysing reporting of
complaints for regulatory filing in the US and Europe
• LTTS secured an order from a medical equipment
manufacturer for the design and development of a new
bedside patient-monitoring device
Plant Engineering
• A leading German chemical company has awarded LTTS a
programme to offer end-to-end services for a brownfield
plant expansion
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
5G Test Solutions are vital in the deployment and success of evolving 5G networks
LTTS’ Transport Instrument Cluster takes signals from various
sensors and conveys them to the driver
• LTTS won a large deal to implement over 600
engineering applications for a leading US-based EPC
company
• One of the largest beverage companies in the world
has selected LTTS for an Engineering, Procurement and
Construction Management Programme (EPCM) to replace
the age-old wastewater treatment system at one of its
key manufacturing plants
• LTTS was awarded a project to set up an Engineering
value Centre (EvC) by a multinational brewery company
for execution of site-based projects
Customer Recognition
• LTTS launched the ‘Smartest Office Campus in the World’
in Israel for a leading technology conglomerate, which
runs on its proprietary smart building platform i-BEMS
• Agappe Diagnostics, a diagnostics reagents and
equipment manufacturer, launched the first indigenously
developed blood cell counter in partnership with LTTS.
The blood cell counter provides accurate diagnostics for
critical ailments such as dengue fever, rat fever, allergic
conditions, leukaemia, typhoid, and anaemia
• LTTS was conferred with the ‘Performance Excellence
Award’ by a leading global OEM for exceeding
performance standards including quality, cost and service
Awards and Recognition
• The Confederation of Indian Industry (CII) conferred
LTTS with the CII Industrial Innovation Award, 2019
and recognized it as one of the most innovative Indian
companies in the Services category in the ‘Large
Enterprises’ segment
• LTTS was awarded recognition for ‘High Growth in
Women Employment’ and ‘Highest Exporter-IT (Mysuru
Region)’ by the Software Technology Parks of India (STPI)
• LTTS was rated as an ‘Expansive and Established Leader’
across 10 verticals by Zinnov
• LTTS was recognized as a ‘Leader’ in Product Engineering
and Manufacturing Services in the Automotive &
Aerospace sectors by ISG
• NelsonHall rated LTTS as an overall leader in Digital
Manufacturing Services
• LTTS was rated as ‘Leader’ in Worldwide Business and
Industrial IoT Engineering and Managed Services 2020 by
IDC
• Everest Group recognized L&T Technology Services as
‘Leader’ in Automotive Engineering Services
Significant Initiatives
LTTS believes in incremental efforts to enhance its
technology and service footprint across the industry
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LTTS’ Creative Think Studio showcases design aspects of the product to create delightful customer experiences
sectors that it caters to globally, and has launched various
initiatives that enable it to realize its vision and demonstrate
its commitment towards excellence.
is constantly undertaking various initiatives in the areas of
water and energy conservation as well as efforts to reduce
the carbon footprint.
• LTTS inaugurated an Aerospace and Defence Engineering
Design Centre in Rockford, Illinois, to cater to the new-
age digital requirements of the aerospace and defence
markets
• LTTS developed the world’s first cost-effective Robotic
Endo-training Kit in association with GITA and
Department of Science and Technology (DST). This kit
is a futuristic surgical training robot that gives a high-
definition observation of the patient’s anatomy and the
instruments. The research and development for the kit
has been a joint effort between India and the Republic of
Korea
• LTTS’ new framework unveiled a line-up of Digital
Manufacturing Solutions that can unlock value-based
digital transformation and help global manufacturers
scale-up their digital initiatives
Environment, Health and Safety
LTTS has aligned its sustainability goals with that of
its parent, L&T, with the objective of contributing to
the creation of a sustainable world by minimizing
environmental impact, maximizing social outreach and
offering sustainable solutions. As part of this roadmap, LTTS
From water-cooled chillers, occupancy sensors, LED
lighting, and elevator operation optimization to pressmatic
taps, wastewater treatment and usage of technology to
reduce travel and logistics, LTTS ensures optimal measures
to safeguard the environment. LTTS also follows and
implements all the industry standards, protocols, and
best practices to ensure the workplace health, safety, and
well-being of its workforce of over 16,000+ employees.
Human Resources
LTTS’ HR policies have strongly focussed on creating a
culture of excellence and achievement. Abiding by the
People, Process, and Portals parameters, the entity is
striving towards making employees at all levels an integral
part of the decision-making system. LTTS launched multiple
new employee support and welfare initiatives this year.
A few of these are:
Global Engineering Academy (GEA): The GEA provides an
invaluable opportunity for LTTS employees to reskill and
reboot their domain knowledge. There are 15 technology
tracks that employees can select from to advance their
digital skillsets and be eligible for new opportunities across
technology domains.
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MANAGEMENT DISCUSSION AND ANALYSIS IT & TECHNOLOGY SERVICES ANNUAL REPORT 2019-20
At LTTS’ Imaging Lab, engineers develop various Innovative AI-based imaging
solutions
The Tear Down Lab is where engineers disassemble products for
detailed analysis
DIGICIANDOS: This programme helps employees gain
proficiency in the latest technologies. With over 400
attendees, 3 sessions have successfully trained participants
on AI and Mobility. An additional USP, byte-sized learning
modules that can be accessed through handheld devices
will be launched soon, enabling employees to learn
on-the-go.
Risks and Concerns
The economic slowdown in key geographies or cyclical
downturns in key segments could materially affect
revenue growth and profitability. The inability to innovate
and develop new services and solutions to keep up with
customer expectations and evolving technologies could
result in lower growth traction. Changing immigration
laws and policies can impact the entity’s ability to provide
services to customers. Exchange rate fluctuations could
materially impact the results of operations.
Outlook
According to NASSCOM, the Indian ER&D landscape has
been growing at a healthy rate of 11 percent y-o-y. As
an ER&D leader in the industry, this bodes well for LTTS.
The entity’s strategic approach is to assess the changing
business needs of customers and build innovation
infrastructure to meet those needs, thereby enabling
customers to gain a market share and the technology edge.
Current circumstances have presented a unique opportunity
for providing unwavering support to the customers at a
difficult time. LTTS has identified areas where it can support
customers to see through the current challenges as well as
help them come out stronger. It has launched services for
the manufacturing industry to address the shift in demand
with its Manufacturing Line Expansion/Re-Design/Transfer
services, achieve business continuity with its AGILE Sourcing
and Supply Chain services and plan healthcare for their
machines with the Remote Asset Care services.
Furthermore, based on conversations with the customers
and industry experts, to address the RoI disparity in the
implementation of the digital initiatives, the business has
carved out a Digital Advisory Practice (DAP). The practice
goes beyond selling solutions and services and helps
companies to architect and execute their digital roadmap
with LTTS as a consulting partner.
The industry outlook points to a steady demand for ER&D-
led innovation in the form of cutting-edge technology
solutions that will help transform customer experiences.
LTTS aspires to be the transformation agent that customers
can bank upon to realize their vision and aspirations.
278
FINANCIAL
SERVICES
BUSINESS
Overview:
L&T Finance Holdings (LTFH) is the holding company
for the financial services businesses of the Larsen &
Toubro Group. It is one of India’s most valued and
diversified NBFCs, having a strong presence across
the Lending & Investment management businesses.
LTFH is a financial solutions provider catering to the
diverse needs of its customers across various sectors,
including:
• Rural Finance, comprising Farm Equipment
Finance, Two-Wheeler Finance, Micro Loans and
Consumer Loans
• Housing Finance, comprising Home Loans, Loan
against Property and Real Estate Finance
• Infrastructure Finance
• Mutual Funds
The Wealth management business is being divested
to IIFL wealth, the approval for which was received
in April ’20. With the aim of creating a single,
unified lending entity with a wider and stronger
capital and asset base, the process of amalgamating
three lending entities – L&T Finance Ltd., L&T
Infrastructure Finance Company Ltd. and L&T
Housing Finance Ltd. – has been initiated.
Micro Loans
Business Environment
The Indian economy in FY 2019-20 began on a
downward trajectory, and continued to slow down
further, weighed by structural stresses, such as sluggish
private investment, a significant decline in savings rate
and the highest unemployment rate ever recorded.
A broad-based breakdown in consumption further
accentuated the slowdown.
On the sectoral front, a bountiful monsoon supported
the growth in agriculture and allied activities. The healthy
water reservoirs augured well for rabi crops. Industrial
growth, however, slowed down on the back of sluggish
manufacturing activity. Growth in the services sector too
was moderate due to subdued activity in the trade, hotel,
transport and communication sectors.
India’s fiscal deficit stood at 4.6% of GDP in 2019-20 as
per the official report of the Department of Expenditure,
Government of India. The financial markets remained
jittery in FY20 due to the domestic economic slowdown,
concerns on fiscal slippage and geo-political tensions.
Weaknesses in overall economic activity also put pressure
on the business growth of lenders, including NBFCs.
Government revenues have taken a significant hit due to
the COvID-19 impact and the lockdown. On the other
hand, expenditures have risen due to the various costs
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MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL SERVICES BUSINESS ANNUAL REPORT 2019-20
Farm Equipment Finance
arising from the many virus containment efforts and the
enforcement of the lockdown.
• Enhancing market share in high-quality fixed-income
assets
However, AAA rated, large-sized NBFCs were relatively
better placed with liquidity, comprising liquid assets,
undrawn lines from banks, and, in some cases, funding
lines from group companies.
Overall, FY 2019-20 was a very challenging year, with
funding markets seeing multiple periods of disruption
and risk aversion from Mutual Funds and Banks especially
towards NBFCs. However, in these difficult times, LTFH has
been able to time the markets and has successfully raised
highest annual long-term incremental borrowing (across
various instruments) since FY 2016.
The business is comfortably placed with respect to both
liquidity and interest rate risks, due to its robust Asset
Liability Management (ALM) and strong risk management
framework.
The average assets under Management for the Mutual
Fund business had marginal Y-o-Y increase in FY20, the key
focus areas being:
• Continued focus on retailisation of assets with diversified
mix of distributors and customers
• Increase in market share through new customers
Significant Initiatives
During FY 2019-20, the business continued to focus on
sustainability of performance with steady margins, stable
asset quality, focused growth and building a strong liability
franchise. The specific focus for the year was on the
following areas:
a) Diversification of sources of funds leading
to stronger liability franchise
The business has a well-diversified borrowing mix in the
form of Bank borrowings (including PSL), NCDs (retail and
wholesale), Preference shares and ECBs. It has strengthened
its liability profile with higher proportion of long-term
borrowings through diversified sources of funding during
the year.
b) Business realignment with focus on the
‘Right to Win’
Some of the key business changes undertaken include:
• The business launched a pilot run of consumer loans
in Q3 FY2019-20 and has disbursed the product to
~12,000 active customers with an excellent track record
of repayment with the aid of data analytic tools
280
Infrastructure Finance
• In the Infrastructure Finance segment, the business is
also evaluating diversification into new sectors including
funding to City Gas Distribution (CGD) companies, ports
and airports. In line with the strategy of investing in
products with a ‘Right to Win’, the Structured Finance
Group (SFG) and Debt Capital Markets (DCM) were
classified as defocused business during the year and have
been run down significantly over the last year (50% YoY
reduction)
c) Maintained market share by leveraging on
business strengths
LTFH increased its market share in the Farm and Two-
wheeler sectors, while maintaining business strengths
across the businesses, through investing in footprint
expansion, team quality enhancement, technology
infrastructure and data analytics framework.
Major Achievements
LTFH, through rigorous execution of digital proposition and
domain expertise, has been able to capture a 9.3% market
share in the Two-Wheeler Finance segment in FY 2019-20.
A new scheme, ‘Sabse Khaas Loan’ was introduced to
target the unfinanced sector with no hypothecation and
a lower rate of interest as compared with credit cards.
LTFH focussed on touch-free collections, which accounted
for 32% of the total collection in FY20. LTFH has been
able to maintain its market share of 14% in Farm Loans
and strengthen its position as the #2 player in the Farm
Equipment Finance industry. The rich customer base in
Tractor Financing services, built over the years, is further
strengthened by extending the refinancing facility to its
prime customers with a good credit and payment history.
LTFH has strengthened its Right to Win in business by
moving to a desired OEM and Asset mix and by de-risking
over-dependencies. Disbursement from preferred OEMs
now contributes 73% of the total disbursements in FY
2019-20.
LTFH disbursed R 9,884 crore of micro loans in FY 2019-20,
benefiting over 28 lakh women in rural and semi-urban
areas who depend on dairy, grocery shops and similar allied
activities for earning their daily livelihood.
LTFH introduced the ‘Mid Term Renewal Product’ (MTRP)
scheme which aims to provide pre-approved early repeat
loans for existing customers with an excellent repayment
history, resulting in repeat business contributing 40% of
the total business.
Despite the challenging environment witnessed in the
housing market, direct sourcing initiatives have helped
scale up home loans from 69% in FY 2018-19 to 72% in
FY 2019-20.
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MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL SERVICES BUSINESS ANNUAL REPORT 2019-20
Housing Finance
Mutual Funds
With the strategy to optimise its sectoral mix, the business
scouted for disbursement opportunities in newer infra-
related sectors and, during the year, has funded 2 projects
of City Gas distribution (CGD) which are being executed by
the AG&P group.
Asset origination with a clear perspective of ‘Churn’, the
business achieved a key milestone of R 25,000 crore of
cumulative sell-down since FY’17. Further, while there was
a reduction in overall sell-down volumes during the year
due to the liquidity challenges being faced by NBFCs and
the consolidation of PSU banks, it managed to sell down
R 780 crore of Hybrid Annuity Model (HAM) road projects
to public sector banks.
FY 2019-20 was a year which also saw more rating
downgrades than upgrades. In such a difficult operating
environment, LTFH was successful in being assigned a AAA
rating by CRISIL for the first time (October 2019). With
this, all 4 rating agencies (viz., CRISIL, India Ratings, CARE
and ICRA) have reaffirmed / rated LTFH as ‘AAA’ during FY
2019-20.
Environment, Health and Safety
LTFH recognises that the physical risks of climate change
are very high, and thereby ensures that its operations and
investments have a positive environmental impact in line
with its Sustainability Policy. The policy has environmental
objectives including:
• Products and services that contribute to the sustainable
development of the Indian economy while ensuring
application of environmentally friendly practices
• To reduce the adverse impact of climate change, and
promote energy efficiency and environmentally friendly
operations
The business is working towards lowering Greenhouse Gas
(GHG) emissions through its operations. It believes that
its operational efficiency can be enhanced by measuring,
managing and mitigating GHG emissions. The business
is also in the process of phasing out ozone-depleting
substances (ODS) by reducing their usage and has installed
inverters in place of DGs to reduce carbon emissions.
Investments in technology are a part of LTFH’s commitment
towards sustainability. The digital transformation efforts
– e-communications and mobile apps across its business
segments – have led to an impressive reduction in paper
usage and, in turn, emission reduction. 100% E-waste is
re-cycled through registered recyclers in accordance with
the E-Waste Management and Handling Rules.
282
Real Estate Finance
Two-Wheeler Finance
Human Resources
The business believes that its people are its most important
asset, and works with a clear plan for capitalizing and
building upon their capabilities.
LTFH competes on the strength of its people; employees
who are united by the core values of pride, integrity,
discipline and ambition, and thrive in the climate of
the ‘Right People for the Right Culture’. A culture of
entrepreneurship and empowerment has been built, with
‘Results, Not Reasons’ being at its core. Believing that
knowledge is the differentiator, the business has modelled
itself as a learning organisation by focusing on ‘Stretch,
Learn and Grow’.
The business talent strategy, aligned with its goals,
is performance oriented. The business believes that
building individual capabilities with focus and direction
and leveraging them in a structured manner through job
rotation builds up organisational capability. It encourages
employees who have demonstrated the right capability,
the right attitude and the desire to ‘Step Up’. As part
of its strategy to groom talent who are future-ready,
cross-functional movements are encouraged and they are
up-skilled through ‘Education, Exposure and Experience’.
LTFH is an equal-opportunity employer, where meritocracy
is the norm, and helps build a forward-looking organisation
that can deal with the ever-changing business landscape.
Risks and Concerns
At this juncture, there are several uncertainties that cloud
India’s growth outlook and macroeconomic stability
during FY 2020-21. The critical GDP contributors for India,
comprising private consumption, investment and external
trade, may get significantly impacted on the plausible
scenario of a prolonged lockdown to contain the COvID-19
outbreak. The pandemic may have credit risk and liquidity
implications for the NBFC sector. Despite steep monetary
easing by the RBI, the cost of borrowing for NBFCs has
witnessed an increase owing to fiscal slippage expectations
and elevated risk premia for NBFCs. Furthermore,
asymmetry in loan moratorium relief announced during the
lockdown period (concessions from the asset side but not
from the liability side) is likely to create liquidity stresses and
ALM challenges for NBFCs.
The business of NBFCs is expected to experience a
pressure on the NIMs owing to surplus liquidity in the
banking system, coupled with a significant drop in new
disbursements and fee income. Lower collections due to
restrictive measures to counter the COvID-19 outbreak and
the adverse impact on the earnings of the borrowers are
likely to put additional pressures on asset quality and credit
costs, which could be more pronounced in certain relatively
more vulnerable segments, such as micro loans, loans
against property (LAP), affordable housing and real estate
segments.
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MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL SERVICES BUSINESS ANNUAL REPORT 2019-20
With the onset of the pandemic in March 2020, the RBI
has undertaken a series of radical policy measures to infuse
liquidity into the banking system via Targeted Long Term
Repo Operation (TLTRO), reduction in policy rate, widening
the Liquidity Adjustment Facility (LAF) corridor, availability
of funding for NBFC/HFC sector (TLTRO 2.0), etc. This
has helped restore a degree of normalcy in short-term
market rates. However, there has not been much effect on
medium-long term rates which, at best, saw a marginal
decline.
In April, following the Government’s decision to hike
its gross market borrowings for FY21 in the light of the
economic package to mitigate the impact of the economic
slowdown, there has been a rise in G-Sec yields reflecting
market nervousness on account of anticipated higher fiscal
deficit. Credit spreads have remained wide on account of
heightened risk aversion from market participants, who see
repayment stress affecting in particular, the NBFC sector,
due to which interest rates for FY 2020-21 are anticipated
to be elevated. This is despite the fact that the inflation rate
is expected to remain benign due to the demand crunch
both in the rural as well as the urban sectors and also due
to likely low crude oil prices in the world market.
The business is confident of managing the hazards of
adverse business conditions with the help of in-depth
business knowledge, strong managerial capabilities, an
agile execution engine, deep market penetration, risk
mitigation through various market and credit checks, robust
early warning systems and the extensive use of analytics.
Outlook
The global macroeconomic outlook is overcast with the
adverse impact of the COvID-19 pandemic which has
caused dislocations in global supply chains, among others.
Several multilateral agencies have projected a recession
for the global economy in 2020, with the International
Monetary Fund (IMF) warning of the worst global recession
in almost a century. Major nations, including India, have
responded by expansionary monetary and fiscal policies
to ensure liquidity and credit flow to their economies.
Nevertheless, the pace of the containment of the pandemic
will determine the depth of the recession while the policy
responses announced in the meanwhile will support the
pace of recovery in 2021.
Rating agencies and economic think-tanks have lowered
India’s growth projections for the year FY 2020-21 to
a lowly positive growth print on the back of factory
shutdowns, supply chain disruptions, travel restrictions,
reduced discretionary spending and a recessionary outlook
for the global economy. Many believe this decline as a
cyclical event and that India’s structural story is intact.
However, a prolonged economic slowdown could adversely
affect all credit intermediaries and financial markets. The
asset quality of banks and NBFCs could further deteriorate
amid the broad-based economic slowdown.
The outlook on inflation remains subdued during FY 2020-
21 due to adequate buffer stocks in cereals, a good rabi
harvest, record decline in global crude prices, low pricing
power of firms and expectations of a normal monsoon in
FY 2020-21.
LTFH expects that disbursements in retail will start gradually
as the economy opens up, and in Infrastructure and Real
Estate will be largely limited to tranche disbursements,
while fresh disbursements are subject to higher risk
controls.
LTFH remains resilient by continuing to focus on the
strengths built over the past few years, viz. a strong ALM
and enhanced liquidity on the back of well-established
liability franchise, a strong balance sheet demonstrated
through reduction in GS3 and comfortable capital
adequacy.
284
DEVELOPMENT
PROJECTS
BUSINESS
The Development Projects business segment
comprises:
a) Infrastructure projects executed through its
joint venture company, L&T Infrastructure
Development Projects Limited and its
subsidiaries and associates (the L&T IDPL
Group)
b) The Hyderabad Metro Rail project, executed
through its subsidiary, L&T Metro Rail
Hyderabad Limited
c)
Power development projects executed
through its subsidiary L&T Power
Development Limited and its subsidiaries (the
L&T PDL Group)
The operations of the Development Projects
business segment primarily involve the
development, operation and maintenance
of basic infrastructure projects in the Public-
Private Partnership (PPP) format, toll collection
including annuity-based road projects, power
development, power transmission and providing
related advisory services.
Vadodara-Bharuch Tollway Limited
L&T INFRASTRUTURE
DEVELOPMENT PROJECTS
LIMITED (L&T IDPL)
Overview:
L&T Infrastructure Development Projects Limited
(L&T IDPL) is a pioneer of the Public-Private
Partnership (PPP) model of development in India,
which involves the development of infrastructure
projects by private-sector players in partnership
with the Central and State Governments. Since
its inception in 2001, the entity has completed
landmark infrastructure projects across key sectors
like roads, bridges, transmission lines, ports,
airports, water supply, renewable energy and
urban infrastructure. It is one of India’s largest
road developers, as measured by lane kilometres
under concession agreements signed with Union
and State Government authorities. Currently,
L&T IDPL has 10 operational road assets and the
Kudgi Transmission Project in its portfolio. It also
manages 5 operational road assets transferred to
Indinfravit Trust, an InvIT that the entity sponsored
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MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2019-20
Interstate Road Corridor Limited
and launched in May 2018 as the first privately
placed InvIT in India, with 77% holding from an
international pension fund and insurance investors.
Two decades of extensive experience of working
with governments, multi-lateral agencies,
international and domestic financial institutions
and corporate entities has helped the business
to develop proven competencies in viability
Assessment, Financial Closure, Project Management,
Operations & Maintenance and Portfolio
Management of Infrastructure Assets across various
sectors.
The Canada Pension Plan Investment Board (CPPIB)
made substantial financial investments in L&T IDPL
in two investment tranches, in December 2014 and
December 2015 respectively. This is the first direct
private investment by the largest Canadian pension
fund into an Indian Infrastructure Development
company. During the year, on conversion of
Compulsorily Convertible Preference Shares, the
CPPIB became a 49% equity holder and L&T’s stake
in L&T Infrastructure Development Projects Ltd (L&T
IDPL) has been diluted to 51%.
286
Business Environment
Transportation sector
Considering that the private sector has moved away from
Build Operate Transfer and the response to Hybrid Annuity
Model projects has also been dwindling, NHAI has focussed
on the Toll Operate Transfer (TOT) model. During the year,
the entity associated itself with the National Infrastructure
& Investment Fund (NIIF) and the CPPIB for their consortium
bid for TOT Bundle 3.
In order to drive the Digital India vision of Electronic
Toll Collection (ETC), the Ministry of Road Transport &
Highways (MoRTH), with effect from December 2019,
made the Fastag mandatory for all commercial and private
vehicles plying on NHAI roads. The entity successfully led
the Fastag implementation on some of the busiest stretches
in the country. ETC collections, as a proportion of total toll
collections, went up from 27% in March 2019 to 72%
in March 2020. This has increased user convenience and
reduced cash-handling issues.
Transmission Lines
During the year, the entity resumed bidding activities
and participated in five bids under the TBCB (Tariff-Based
Competitive Bid) framework.
The Ministry of Power, GoI, Central Electricity Authority
(CEA) and Solar Energy Corporation of India have
Kudgi Transmission Limited
collectively decided to construct a Green Energy Corridor
across the country to make India grid-ready for upcoming
power generation through renewable energy sources.
CEA has approved 24 projects worth R 32,000 crore for
bidding under TBCB. However, the timelines for bidding are
uncertain due to COvID-19.
Major Achievements
MoRTH has instituted the ‘National Highways Excellence
Awards’ to recognize the country’s best-performing road
assets and toll plazas, both concessionaire-managed and
NHAI-managed. For the year 2019-20, Krishnagiri Thoppur
Tollways Ltd (KTTL) managed by IDPL won the Silver award,
while several others owned/managed by IDPL figured in
various categories as Champions. These road assets are
highlighted in the annual calendar and dossier of MoRTH,
which are widely distributed across the country.
In a road subsidiary for a project terminated in 2015,
there was a favourable arbitration award for termination
payments. Another road subsidiary received a favourable
arbitration award for a construction claim.
The entity actively supported Indian Highways Management
Company Limited (IHMCL), the agency responsible to carry
out Electronic Tolling, at various policy level discussions,
SOPs and operational experiences to enhance the
applicability and efficacy of Fastag across the nation. In
the Transmission Service Agreement of the project, the key
aspect is its availability. In FY 2019-20, Kudgi Transmission
Line (KTL) achieved an availability of 99.99% and thereby
earned incentives. The maintenance cost of KTL was also
reduced substantially as compared to the previous year.
Significant Initiatives
During FY 2019-20, remarkable advancements were made
towards digitalisation. Ahead of Fastag being called in
mandatorily, the business proactively envisaged the strong
need to push IT infrastructure to facilitate an enhanced user
experience and efficient operations. This resulted in the
development of the completely automated and centrally
monitored Fastag control system. This system enables the
automatic generation of all related transactional reports
and expeditious notification of class discrepancy evidence
to the acquiring bank, arresting revenue leakages.
The various other Digital Initiatives across the functions
include:
• End-to-End Integrated new age SAP S4 Hana
replacing existing ERP
During the year, the project for implementing SAP S4
Hana 1909 along with various other bolt-on products/
applications, such as SAP Ariba, vendor Portal, Business
on Maps, Mobile Application for route operations and
O&M teams, etc., were initiated. All these applications,
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MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2019-20
Sambalpur Rourkela Tollway Limited
once implemented, will be integrated with SAP, and will
enhance the speed of reporting and response.
This initiative also includes the implementation of 17+
SAP modules, some of which are first of their kind in
India to be implemented in an integrated way. Go-Live is
planned by August 2020.
• Human Resources
In the current financial year, the entire spectrum of HR
operations has moved to a sophisticated application
called EmployWise, which covers the entire employee
life cycle from ‘Hire to Retire’. It is on the cloud (SAAS -
Software as a service).
• Security-related Implementation
Numerous measures have been taken to tighten security,
and various tools and components have been introduced
and implemented. Network segregation has been done
at all toll plazas as well. People were enabled to work
from home in a secure way via secured vPN, end-point
security, etc.
• Kudgi Transmission Ltd (KTL) has gone completely digital
in its Operations and Maintenance
Environment, Health and Safety
The business is committed to providing a safe and healthy
workplace for their employees and stakeholders and to
conserving the environment. EHS is one of the essential
pillars of a good and robust corporate governance
structure.
To facilitate the implementation of the EHS policy,
various Standard Operating Procedures (SOPs) have
been formulated defining individual responsibilities and
procedures relating to Environmental, Health and Safety
matters.
A system called Route Operations Management System
(ROMS) has been implemented, which enables immediate
reporting of any incident to the project head and functional
head concerned in the form of a Preliminary Accident
Information Report (PAIR) and Final Accident Information
Report (FAIR).
Kudgi Transmission Line (KTL) has successfully achieved a
full safe year for all its manpower.
With the onset of the COvID-19 pandemic, the entity
enhanced its preparedness early on. A range of preventive
measures were undertaken in line with the guidelines under
Government advisories/regulations. The entity has also
been an early mover in rolling-out a detailed Operations
SOPs for not only dealing with the contagion but also
ensuring business continuity, including establishing a
concrete Disaster Recovery Plan.
288
Sambalpur Rourkela Tollway Limited
Human Resources
The business has well-laid practices in terms of recruitment
of talent and retention. Employees are kept engaged by
providing access to learning opportunities, Development
Centres, challenging business assignments, and individual
need-based specific development interventions. The
Development Centre is a systematic and objective method
to measure competence to provide insights into the
strengths and development areas of individuals.
The business has in place a Rewards & Recognition (R&R)
programme to drive performance and boost the morale
of the employees spanning across the categories. ‘An
engaged workforce will be a very productive workforce’ is
the principle based on which the R&R programme has been
devised.
With the aim of building future leaders, the business
has devised a 9-month long learning programme, called
‘Capability Capitalization’, for a select few potential future
leaders. This journey aims to mould an employee into a
well-rounded leader. The sessions comprise psychometric
tools to enhance self-awareness, awareness of the
ecosystem, etc. Tools are administered to further enhance
the Emotional Intelligence quotient. Change orientation,
mastering the change curve, team behaviour using tools
such as Belbin and Business Simulations are also covered.
Getting these potential future leaders to understand the
importance of communication for influence, business
thinking and developing managerial acumen are integral
parts of this learning journey.
Risks and Concerns
Traffic & Tariff are key factors in the Toll business. In the
aftermath of COvID-19, the nature of recovery across
various sectors, such as automobiles, mining, construction,
exports, etc., will play a pivotal role in determining the
traffic growth characteristics across the portfolio. Further,
in some of the projects, the annual toll tariff revisions
are based on the wholesale price index (WPI). Lower
WPI coupled with lower traffic could lead to lower toll
collections. The impact of the pandemic on toll collections
is being addressed by the business by resorting to
provisions under the Concession Agreements under force
majeure.
The mandatory implementation of Fastag has led to
various challenges, such as plaza-level cyber security,
data management and timely discrepancy reporting to
acquiring banks. However, the entity proactively recognised
the associated risks and reinforced the IT infrastructure
requirements and SOPs. This resulted in the seamless shift
towards Fastag implementation across the SPvs. Currently,
the entity hosts a completely digitalised and centrally
monitored in-house data management and monitoring
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MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2019-20
Hyderabad Metro Rail - Hitec City line
framework for Fastag transactions, which is thoroughly
secured.
Outlook
The Government of India intends to provide a strong thrust
to the Infrastructure sector via the National Infrastructure
Pipeline (NIP). Out of the total project capital expenditure
of NIP, 19% ~ R 20 lakh crore would be spent on the
Transportation sector.
Prior to COvID-19, toll revenue was expected to increase
to the tune of 6%. However, in the near term, the toll
revenues are expected to contract as compared to the
previous year due to lower traffic growth and lower WPI.
COvID-19 has presented an unprecedented challenge,
resulting in a nationwide lockdown and hence a sharp
decline in traffic across the country. This event has been
categorised as a force majeure event under the concession
agreement, the cashflow for the year will be stressed, and
hence cash conservation will be the key.
The MoRTH has issued a memorandum providing relief
to contractors / developers of the road sector under the
‘Atmanirbhar Bharat’ Scheme and directing NHAI to
provide force majeure relief to concessionaires impacted
by COvID-19. A separate committee is being set up
under the chairmanship of Director General (RD) &
Special Secretary to suggest further steps in this regard.
290
The Ministry of Finance (Department of Expenditure),
Government of India has also issued a circular to provide
extension of concession period between 3 to 6 months.
Expeditious approval in the Change of Scope in contracts,
extension of Concession Period, and provision of Revenue
Shortfall Loans are some of the immediate relief measures
mentioned in the memorandum published by MoRTH. In
addition, certain SPvs of the entity have availed of the debt
repayment moratorium announced by the RBI to take care
of immediate cashflow requirements.
The business has initiated necessary action and believes
that the impact will be substantially mitigated.
L&T METRO RAIL (HYDERABAD)
LIMITED (L&TMRHL)
Overview:
L&T Metro Rail (Hyderabad) Limited (L&TMRHL) is
a Special Purpose vehicle (SPv) incorporated on
24th August, 2010 to undertake the business to
construct, operate and maintain the Metro Rail
System including the Transit Oriented Development
(TOD), in Hyderabad under the Public Private
Partnership model on Design, Build, Finance,
Operate and Transfer (DBFOT) basis. L&TMRHL
Hyderabad Metro Rail on the Viaduct
entered into a Concession Agreement with the
erstwhile Government of Andhra Pradesh on 4th
September, 2010.
The Concession Agreement includes construction of
71.16 km of elevated metro rail corridor and rights
for real estate development of 18.5 million sq. ft.,
with strategically located land parcels interspersed
in prime city locations adjoining metro stations
and metro corridors. The concession period of
the project is 35 years, from the appointed date
of 5th July, 2012 including the initial construction
period of 5 years. This is extendable for a further
period of 25 years, subject to fulfilment of certain
conditions by the SPv as set out in the Concession
Agreement.
As per the Concession Agreement (CA), the
scheduled Commercial Operation date (COD) for
the project was 5th July, 2017. However, due to
delays in providing required RoW and confirming
alignment changes by the Government, extension
of the COD to 30th June, 2020 was approved.
L&TMRHL completed execution of the project
well ahead of the extended time granted.
L&TMRHL completed commissioning of the entire
stretch progressively, with the last stage getting
commissioned in February 2020. The entire project
is now operational.
During the year, the construction of 1.28 million sq.
ft. of Transit Oriented Development (TOD) consisting
of 4 malls and an office block has been completed
and has commenced commercial operations.
Construction work of 0.5 million sq. ft. of office
space at Raidurg site is currently under way. The
entity is chalking out plans for phased development
of the balance TOD.
Business Environment
The Hyderabad Metro Rail is the world’s largest metro
project in public-private partnership mode. It brings
together ‘best in class’ resources and technology in every
aspect of the project – stations, rolling stock, track work,
depots, AFC, power supply, traction and SCADA system,
signalling and train control systems and telecom systems.
Metros are an environment-friendly, safe and punctual
mode of transport. They ease commuting in densely
populated cities and towns. Given the population density of
Hyderabad, L&TMRHL has been working on various value-
added initiatives to minimize the commuters’ pain points,
such as last-mile connectivity, digital ticketing, mobile apps,
etc., which ensure higher ridership of the metro system.
Establishing successful last-mile connectivity is a challenge,
and discussions with the Government are in progress to
intensify steps to this end.
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MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2019-20
Hyderabad Metro Rail Uppal Depot and Nagole Station
However, with the onset of the COvID-19 pandemic, the
environment has been impacted in the short term. The
entity is looking at various innovative business models to
overcome this challenge.
Significant Initiatives
• Robust and affordable last mile connectivity initiatives to
enhance the ridership
• Launched corporate shuttle services from metro stations
to corporate offices
• All metro stations have a bike-rental facility
• Exploring non-fare revenue generating options, viz.
royalty amount from QR ticketing partners, consultancy
services for other metros, cross-selling of products to
commuters
• Tied up with ticketing partners like Goibibo, MakeMyTrip,
Phonepe, Paytm, etc. and launched Mobile Ticketing (QR
Code generation) solution for the convenience of metro
commuters
• Provision of skywalks from the Metro stations to the
adjoining TOD malls to enhance convenience and
business potential
Digitalisation
Easing the pressure of reconciling huge, heterogeneous
data on fare collection, L&TMRHL has automated Fare
292
Revenue Reconciliation between Automatic Fare Collection
System Reports vs Payment Channel Reports vs Bank
Reports. To make the metro travel easy and trouble-free,
it is coming up with the EMv-based Open Loop Ticketing
(Euro Master visa (EMv) card) solution for metro
commuters.
L&TMRHL has started using Business Intelligence IT
tools like Alteryx and Tableau for both business and
passenger data analysis/interpretation, which will improve
Management decisions.
L&TMRHL has put in place a process for automation of
refunds to customers by developing an auto verification
process of the refund data using software tools. This
software tool verifies items of refund reported by the
Automatic Fare Collection System (AFC) with the smart card
history data base. The tool helps minimising the process
time and facilitates timely refunds to customers.
Awards and Recognition
Prestigious awards received by L&TMRHL during FY
2019-20 include:
1. DCD National Awards 2019 – Hybrid IT Project of the
Year Award
2. Institute of Economic Studies – Enhancing the Image of
Metro Rails in India - Globally
Sharp bend of the Viaduct
3. DCD Global Awards 2019 – Hybrid IT Project of the
Year Award
4. CSO 100 Awards 2019 – the Information Security
Project has added significant benefit to the
organization, its employees, associates and vendors
Environment, Health and Safety
A mass transit system helps move large numbers of
commuters away from private vehicles, helping reduce
the carbon footprint of the city. It helps reduce the air
pollution, since it operates on electricity and hence there
is no emission of greenhouse gases. It also helps reduce
sound pollution due to the efficiency of the coaches and
the advanced engineering that has been used for building
the track, viaduct as well as metro coaches. Further, the
smart-card option reduces paper consumption.
The Automatic Train Protection (ATP) System implemented
continuously monitors safe train operations. Automatic
Train Supervision (ATS) pre-empts unscheduled interruptions
of train services. Station equipment such as Computer-
based Interlocking (CBI), wayside ATP, etc., are vital
signalling equipment and ensure safe and uninterrupted
train operations. Passenger Emergency Stop Plungers are
provided on each platform and in the Station Control Room
(SCR) to stop a train immediately in case of an emergency.
Risks and Concerns
With the Metro fully commissioned, the risks related to
construction phase are averted, except for the financial risks
of close out of pending claims. While the operational risks
now kick in viz. safety of passengers and assets, bus mode
of transport being preferred, considering the connectivity
and a drop in commuters in the feeder industry, especially
IT.
The business has a robust risk mitigation process and
several initiatives have been taken to avert / minimise the
impact of various risks, including:
• The appointment of Keolis, a reputed O&M operator
from France, with experience of providing safety
solutions
• Discussions with local bus transport authorities,
impressing upon them the need to work complementarily
• Thrust on developing additional revenue sources
However, the COvID-19 pandemic in the end of the
financial year is expected to have an impact on the
commuters, additional costs and real estate monetisation.
The business is working on ways to facilitate contactless
travel, increase focus on sanitisation of the metro system,
etc.
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MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2019-20
Rajpura project at the cusp of completion in December 2013
Outlook
With the entity getting into first full year of operation of
the metro, things had started looking up, aided by the
planned partial monetisation of the real estate. However,
the pandemic has brought in the challenges of:
• Commuters preference for avoidance of mass transit
• ITES commuters’ preference to continue to Work from
Home
• Drop in advertisement income due to curtailment of
expenses by various corporates
• Drop in oil prices, making alternative modes of transport
more attractive
• TOD revenues impacted by overall business sluggishness
• Major investments in realty sector may be on hold in the
short to medium term
All efforts are being taken to make Hyderabad Metro the
safest and cleanest transportation mode keeping in mind
the current pandemic situation. This gives L&TMRHL the
opportunity to shift the new customer segment to Metro
rail from other transportation modes like bus, auto, etc.
Also, contactless travel system integrated with other
transport modes focus on making travel safe.
294
Strategy alignment through innovative business models to
retain the competitive advantage in TOD and station retail
developments is a focus area.
L&T POWER DEVELOPMENT
GROUP
Overview:
L&T Power Development Limited, a wholly-owned
subsidiary of L&T, is engaged in developing,
operating and maintaining power generation
assets. The portfolio comprises projects in thermal
and hydel power generation projects aggregating
to 1499 MW. In the hydel sector, L&T Uttaranchal
Hydropower Limited is executing a hydel power
project of capacity 99 MW in the state of
Uttarakhand, which is at an advanced stage of
construction and is expected to be commissioned
in FY 2020-21. The hydel projects in L&T Himachal
Hydropower and L&T Arunachal Hydropower
have been shelved. In the thermal sector, Nabha
Power Limited owns and operates a 2 X 700 MW
supercritical thermal power plant at Rajpura, Punjab.
Rajpura 2x700 MW Supercritical Technology based Thermal Power Plant
Nabha Power Limited (NPL)
Business Profile
NPL is operating a 2 X 700 MW supercritical thermal
power plant at Rajpura, Punjab. 100% of the power
generated from this plant is tied-up to Punjab State Power
Corporation Limited (PSPCL) for a period of twenty-five
years upto 2039 under a Power Purchase Agreement
(PPA). The plant is the first indigenously manufactured
supercritical power plant, built using technology sourced
from Mitsubishi, Japan.
The plant sources its fuel from South Eastern Coalfields
Ltd. (SECL), a subsidiary of Coal India Limited, under a
20-year Fuel Supply Agreement (FSA). NPL has also secured
approvals to arrange coal from alternative sources to make
up for any shortage in supply of coal under the FSA. The
Bhakra-Nangal distributary is the perennial source of water
for the plant under an allocation by the State Government.
The plant is operated by an in-house team of experienced
operations and maintenance professionals.
The power plant has been running successfully for over
six years with an availability of over 85 % during FY20.
NPL has been the most reliable source of power for the
state of Punjab and has supported its requirements with
uninterrupted supply during the peak season also.
NPL is the lowest cost thermal power producer within
Punjab, with benchmark-setting operational efficiency.
Business Environment
India’s Installed Capacity rose to 3,70,106 MW in FY 2019-
20, a marginal increase of 1.41% over the previous year,
of which the Installed Capacity of thermal power plants
is 55%. Dependence on the thermal generation is clearly
reflective, as it fulfils 71% of the total power requirement
in the country.
The Average Power Demand in Punjab was 6486 MW in FY
2019-20 and NPL contributed to 14% of the demand. The
Average Power Purchase rate was R 3.60 per KWh in FY20
vs R 3.48 per KWh in FY19.
Third Party Sampling and testing through CIMFR (Central
Institute of Mining and Fuel Research) has been operating
quite well to mitigate the grade variation issues in linkage
coal.
Unit 1 was under a planned shutdown since Feb. 1,
2020 for 77 days for the first major capital overhaul in
which 1004 personnel were involved. The task involved
rectification and replacement of various equipment under
turbine, boiler, electrostatic precipitator.
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MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2019-20
Aerial view of cooling towers, Rajpura Thermal Power Plant
During the year, in order to comply with the emission
compliance norms the construction work of Flue Gas
Desulphurisation has been awarded to L&T Power, who
emerged as a successful bidder in the competitive bidding
process.
During the COvID-19 lockdown, NPL, being classified
as delivering an essential service, maintained business
continuity, while ensuring the health and safety of all
its employees and contract staff. various steps were
undertaken, including social distancing and following best
safety practices with robust Standard Operating Procedure
(SOP).
Major Achievements
• Best Operational Performance: - Annual Plant Load Factor
(PLF): 71%, (All India Thermal Average: 56%)
• Received a Favourable Order from Supreme Court on the
washing charges petition and received partial payment
from PSPCL
• During the year, NPL was awarded the following awards:
• National Energy Leader Award, CII
• Excellent Energy Efficient Unit Award, CII
• Winner - Water Management and Ash Handling,
Mission Energy Foundation
• Finalist, Global Platts Energy Excellence Award S&P
USA
• Gold Award, Grow Care India CSR Award 2019
• Best Operating Thermal Power Generator, IPPAI Third
Consecutive Year
• National Best Employer Brands 2019
Significant Initiatives
• Reduction in costs through alternate sourcing, reverse
engineering
• Digital Initiatives
• Partial Favourable Order received from PSERC in imported
• Implementation of Energy Management System
coal matter, clearing partial dues
• Ensured Fuel Adequacy, as no lapsing despite flooding
of mines in Korba Coalfields of South Eastern Coalfields
Limited (SECL) and approval for imported coal
• Management Dashboard upgradation
296
Environment, Health and Safety
NPL is committed to generating reliable and environment-
friendly power under safe working conditions. A policy
on Quality, Environment, Health and Safety has been put
in place. Emphasis is laid on continual improvement of
processes and practices to achieve improved environmental,
health and safety performance. Training on HSE for
employees and stakeholders is undertaken on a regular
basis to foster a culture of health and safety.
Human Resources
NPL has a team of 296 personnel including professionals
experienced in the field of operations and maintenance
of power plants and other support staff. NPL focusses
on leadership development and communication skills.
Emphasis is laid on participation in various training and
development programmes organized internally and
externally.
Risks and Concerns
As a private developer, NPL faces the following major risks:
• Delay in plant scheduling – increase in yard loss
• Delay in receipt of payment from DISCOM for monthly
bills
• Dispute for force majeure with DISCOM
• Coal quality from different mines
• Flue Gas Desulphurisation environmental compliances
The risk management policy of NPL provides for a
robust risk management framework which involves
risk identification, assessment & evaluation, strategy &
mitigation, and monitoring and review mechanisms. NPL
has implemented multiple measures in each of the risk
areas to ensure a proactive approach and timely mitigation.
Outlook
Due to the lockdown to contain spread of COvID-19,
power demand by industrial units and farmers in Punjab
has dropped substantially since March 2020. PSPCL may
prefer to optimize its power purchase costs by purchasing
power from the cheaper sources as the power exchange
prices have dropped substantially.
NPL is likely to remain the lowest cost thermal power
producer amongst the Independent Power Producers (IPPs)
in the state with an expected plant load factor of 73% in
FY21.
On the fuel side, coal supply continues to be challenging.
The GoI and GoP are pushing for reduction in coal imports
to reduce the cost of power. Non-approval of imported coal
may have adverse implications. Higher usage of RoM coal
may lead to higher maintenance and auxiliary consumption
and lower boiler efficiency.
NPL is geared to address the challenging times and
has been taking proactive steps like deferring capex/
modifications/non-routine purchases, negotiating better
credit from suppliers of coal, etc.
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MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
OTHERS
‘Others’ business comprises:
a. Realty Business
b. L&T valves Limited
Rejuve 360 - Mulund, Mumbai
Artist’s Impression
real estate development in Powai, spanning
over 90 acres. Phase I has been completed
and is now occupied by over 780 residents.
Development of further phases of the project is
in full swing.
c. Construction Equipment & others
2. Crescent Bay (Mumbai)
REALTY BUSINESS
Overview:
L&T Realty is positioned amongst the top real
estate developers in India, with a total portfolio
of over 70 Mn sq. ft. across segments like
residential, commercial and retail in key metro
cities, viz. Mumbai, Bengaluru and Chennai. L&T
Realty is focused on delivering higher value to its
customers through efficient designs, cutting-edge
technologies and superior project management
skills. The business model involves development of
large land banks in metro cities, partnership with
co-developers and sale/lease of commercial spaces.
Residential Segment
1. Emerald Isle (Mumbai)
This flagship residential project, the finest gated
community at a premium location, is part of a prime
Situated at the most desirable location – Parel,
with the Arabian Sea as the backdrop – Crescent
Bay is a residential complex with the perfect
setting for an extraordinary life. Crescent Bay
raises urban living to top-notch quality, with a
sky deck and associated amenities on level 21. It
is currently occupied by 1000+ residents and the
last tower is being built.
3. Raintree Boulevard (Bengaluru)
Conceptualized on the live-work-play idea,
Raintree Boulevard is a 65-acre mixed-use
project located in the premium, high-growth
micro-market of Bengaluru. The project offers
premium flats with elegant and majestic layouts,
along with the leisure of fine-living and best-in-
class amenities. The project also includes fully
furnished studio units, which were launched in
March 2020.
298
Seawoods Residences, Navi Mumbai
4. Seawoods Residences (Navi Mumbai)
Part of India’s first Transit-Oriented Development,
Seawoods Residences is part of a large development
spread across over 40 acres. The project offers
unmatched connectivity and is surrounded by breath-
taking views. Launched in June 2019, the project
received an excellent response and was sold out within
a month.
5. Rejuve 360 (Mumbai)
This residential complex is designed around wellness,
and is focused on the rejuvenation of mind, body
and soul. Conveniently located in the bustling
neighbourhood of Mulund West, Mumbai, it is planned
to stand 57 storeys tall. Phase I was launched recently
and gained traction quickly.
Commercial Segment
1. L&T Business Towers (Mumbai)
L&T Business Towers offers commercial office space that
taps into the excesses of nature, gives an uninterrupted
view of Powai lake, and has cutting-edge technological
features. It is a part of a mixed-use development,
designed on the live-work-play concept.
Artist’s Impression
2. Seawoods Grand Central (Navi Mumbai)
India’s first Transit-Oriented Development (TOD) is
spread across 40 acres and offers 2.6 Mn sq. ft of
Grade A development with a unique combination of
commercial and retail business spaces coupled with the
captive local train station. It offers spacious, well-
planned and completely customizable office spaces.
3. L&T Business Park (Mumbai)
Designed to provide superior workspaces, L&T Business
Park is one of the most coveted corporate addresses
in Powai, Mumbai. It offers about 1 Mn. sq. ft. of
high-quality, Grade A office spaces, which are occupied
by marquee MNC clients.
4. Technology Park, Bengaluru
Located in the premium and rapidly growing micro
market, the project has the potential for development
of commercial office spaces of 3.3 Mn. Sq. ft., which is
being taken up in phases. With unmatched connectivity
and well-designed spaces, it is set to become the most
favoured address for many technology companies.
Business Environment
Over the last few years, though reforms and changes
like demonetization, RERA, GST, IBC, and the ban on
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MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
Emerald Isle Phase II, Powai, Mumbai
subvention schemes have caused disruption; these
measures also have helped the sector by bringing about
much-needed transparency, accountability and fiscal
discipline. The resultant stress on over-stretched balance
sheets has witnessed a higher rate of collaborations. The
ensuing consolidation has further strengthened the position
of L&T Realty in the market.
In FY 2019-20, the residential segment witnessed an
increase of 21% in new launches in key metro cities, with
affordable housing contributing significantly to this supply.
Residential sales also gained momentum, recording a y-o-y
rise of 5%. Nearly 52 Mn. sq. ft. of Grade A office space
was completed, of which 46 Mn. sq. ft. was absorbed in
the top 7 cities in the year 2019. The office space market
grew at a robust 40% y-o-y with net absorption across the
top seven cities – creating a new record. This growth in
demand was led mainly by the expansion of IT/ITeS (42% of
overall leasing) and co-working operators (14% of overall
leasing) in cities with robust fundamentals and planned
infrastructure improvements. However, retail sector leasing
was hit as consumer spending went down, resulting in
35% reduction in retail leasing activity in the top 7 cities.
The maiden Real Estate Investment Trust (REIT), which
aimed to attract private investments and relieve the burden
on formal banking institutions, was listed in 2019. This has
set the stage for other real estate developers to consider
Artist’s Impression
the REIT as a vehicle to raise funds. The Government
of India (GoI), on its part, has introduced various fiscal
measures and policy reforms like the special window for
funding of stalled affordable and middle-income projects,
the Insolvency & Bankruptcy Code (Amendment) Bill 2019,
digitization of land records and reduction in corporate tax
rates. Indian real estate attracted USD 6.2 Bn of private
equity investments in the year.
The last quarter of FY 2019-20 threw up a unique
challenge in the form of the COvID-19 pandemic, first
threatening the health and safety of individuals and then in
the form of uncertainties in business continuity. While the
situation continues to remain fluid, the long-term impact of
this can perhaps only be assessed in the time to come.
Major Achievements
• Successful launch of two new premium residential
projects in Mumbai. Project Seawoods Residences was
sold out within a month of the launch and project Rejuve
360, Mulund, gained robust traction in the toughest
micro market of Mumbai
• Phase I of project Raintree Boulevard was completed on
time and hand-over started
• Blackstone Group made investments in Seawoods Grand
Central project
300
L&T Seawoods Grand Central, Navi Mumbai
Awards and Recognition
L&T Realty has been conferred many national and
international awards for the brand as well as individual
projects during the year. A few of them are listed below:
• Business Excellence in Real Estate – CNN News 18 Real
Estate Award
• Best Corporate Social Responsibility Practices and
Institution Building – World HRD Congress
• Most Customer Centric Company & Best Use of voice of
Customer – Customer FEST Leadership Award
• Smart Real Estate Project of the Year, Luxury Project of
the Year, Best Residential Luxury Project of the Year – ET
Now – Real Estate Awards 2020
• Iconic Excellence in Residential Development - 4th Times
Realty Icons 2019 Awards
• Commercial Project of the year (L&T Business Towers) -
Abu Dhabi Real Estate Leadership Awards
• Received Sword of Honour from British Safety Council,UK
Significant Initiatives
Digitalisation
L&T Realty is working on multiple digital initiatives covering
all aspects of the business. A state-of-the-art smart office
complex is being built in Powai aiming at the manifold
Artist’s Impression
improvement of employee safety, health and efficiency.
The I-BEMS IOT solution, an employee mobile app and – to
improve quality further – a mobile-based inspection app
called ‘SQAD’ have been implemented. The BIM solution
has been adopted for an advanced design process, and
soon 4D BIM initiatives will be started to track progress
visually. To provide a better customer experience at each
touchpoint, the Salesforce ecosystem for digital marketing,
sales and CRM has been implemented, complemented by
deploying augmented reality solutions and digital flipbooks.
Innovation
Besides excellence in design and development, L&T
Realty strives for innovation in every project. Emerald Isle
(Phase 2) features the first residential building in Mumbai
constructed with pre-finished bathroom PoDs (Prefabricated
on Demand), leading to reduction in finishing time and
delivery of an enhanced quality product.
Human Resources
L&T Realty makes every effort to generate a never-ending
desire to collaborate, learn and build a talent pool to stay
relevant to customers’ needs at all times. The business is
focused on creating a young vibrant organization; currently
the average age in the organization is 37 years. With
emphasis on gender diversity, L&T Realty has one of the
highest number of women employees in the Indian real
estate sector.
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MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
L&T Tech Park, Hebbal, Bengaluru
Artist’s Impression
Focusing on the employees’ physical and mental well-being,
a one-of-its-kind programme ‘Couch to 5K / 10K’ was
initiated this year, in which employees were professionally
trained and motivated towards their own well-being
through specially organized city marathons. The business
has been providing avenues for capability building and
continuous learning and this year clocked 1,920 man-days
of dedicated personnel training.
Risks and Concerns
As the after-effects of COvID-19 evolve, the real estate
sector is expected to be considerably impacted. Markets
have shown a negative sentiment towards real estate
sector. Further, the lockdown and stalling of construction
activity will lead to delayed construction schedules, which
will be further impacted by the unavailability of labour.
On the demand side, the lockdown has affected customer
walk-ins; and buying decisions have been deferred due to
the uncertainty regarding the return of normalcy. For the
next few quarters, office space demand is also expected
to remain subdued as the expansion plans and capital
expenditures of major corporates has been put on hold.
Outlook
Before COvID-19, the Indian real estate sector was slowly
coming out of the difficult phase. The residential segment
was in distress and the commercial segment was doing
well. Post the advent of the pandemic, the distress spread
across the industry chain. The commercial segment has
been largely dependent on US companies for a large
part of the annual offtake. As the impact of COvID-19 is
maximum in the US, companies may defer their expansion
or office consolidation plans. The segment is expected to
contract 20 – 30% in the short term before it starts to gain
traction again.
Near-term troubles are certain for the sector. However, with
Government support, the medium-to-long-term outlook is
positive. Other asset classes becoming riskier in the current
situation, smart investors, especially HNIs, are expected to
take advantage of the investment opportunities. Big real
estate funds are facing their own challenges; however,
many believe in the long-term story of the country and are
expected to continue with their investments to capture
attractive valuations.
The softening of interest rates would encourage buyers
who are re-looking at investment options, as hard assets
will be more lucrative than stock markets. NRIs may want
to own a house back in India, considering the uncertain
economic environment in their host countries.
Developers will focus on conserving cash and optimizing
resources. New launches will be paused for next few
quarters and, as a measure to pool in liquidity, the focus
would be on selling the inventory in hand. The marketing
approach to reach customers is already undergoing a
change, with enhanced digital outreach to sell directly.
302
100 inch Triple-offset Butterfly Valve
In the changed business scenario, the industry is looking
at a big wave of consolidation. L&T Realty is set to take
advantage of the situation and is confident of its growth
and expansion, given its strong business framework and
the brand connect with its customers.
L&T VALVES LIMITED
Overview:
L&T valves (LTvL) is a leading manufacturer of
industrial valves with a global manufacturing
presence. The business leverages six decades of
manufacturing excellence to serve key sectors of the
economy – such as oil and gas, defence, nuclear &
aerospace, power, petrochemicals, chemicals, water
and pharmaceuticals – in India and overseas. L&T
valves manufactures a wide range of products, such
as Gate, Globe, Check, Ball, Butterfly, Plug and
Control valves, as well as automation solutions. The
business also runs a global after-market business
to support its installed base with service and spares
needs.
The business has three state-of-the-art facilities in
Tamil Nadu and Gujarat in India, and has established
two new facilities in the USA and Saudi Arabia
respectively. LTvL’s products enhance safety,
reliability and performance in industries across the
world.
Business Environment
Market indicators such as prices of crude oil and natural
gas, environmental norms for fugitive emissions as well as
economic parameters of GDP growth, pace of urbanization
and capital investment in projects remain the key drivers
of demand for LTvL. The business environment in most of
these parameters remained stable through the first three
quarters in FY 2019-20. The investment climate across
sectors was lukewarm with an increased thrust on cost
reduction and faster implementation. LTvL has maintained
its portfolio spread in terms of domestic v/s international
business. In FY 2019-20, approximately 40% of its order
inflows were secured from overseas markets.
With structural challenges ailing the power sector, there
were no significant capacity additions in the thermal
power space. However, the new fugitive emission norms
introduced by the GoI opened up some opportunities in the
form of Flue Gas Desulfurization (FGD) projects.
Major Achievements
Major Orders Received
The business focussed on diligent build-up of its order
book during FY 2019-20 with a focus on improvement in
margins and on-time delivery performance. Some of the
order highlights include:
• Critical valves for naval applications from the MoD
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MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
Double Block & Bleed Plug Valve
Forged Steel High Pressure Gate & Globe Valves
• LNG Canada project from JGC and Fluor Jv
• Health & Safety award from National Safety Council,
• Duqm Refinery project from UTE-TR
• Supply of Remotely Operated Shut-off valves to IOCL
• BAPCO Modernization Programme for Technip, TR and
Samsung Jv
Moreover, LTvL progressed well on its journey to improve
the product mix by increasing the share of pre-configured
and after-market orders by 10% during the year.
Major product achievements:
Manufacture and supply of complex engineering products
viz:
• 76” Class 150 Triple Offset Butterfly valve
• 6” Class 150 Titanium Trunnion Mounted Ball valve
• Top Entry Cryo Triple Offset Butterfly valve (16” & 20”)
Awards
• Green Channel status awarded by DGQA, Ministry of
Defence, GoI. L&T valves Limited is the first private
enterprise to secure this status
• EEPC award for export performance
Tamil Nadu chapter
Significant Initiatives
LTvL continued its emphasis on strategic initiatives in three
key areas of business viz.: Front-end Sales; Operations and
Supply chain. Some of the key initiatives under each of
these areas is listed below:
Front-end Sales
• Improvement in customer experience and engagement
through the customer connect programme
• Branding agreement with leading valve manufacturers
• Securing key customer approvals
• Frame agreements with key EPC companies and
distribution tie-ups in US and Europe
Operations
• Operational excellence initiatives for faster conversion
cycles
• Sales and operations planning, to accelerate shipments
• Operationalising manufacturing facilities in USA and KSA
including quality and ISO certifications
• Expanding contract manufacturing capacity
• Use of Augmented Reality tools to give real-time plant
tours and conduct product inspections
304
R&D Facility – Flow Co-efficient Test
Jamnagar Plant
Supply chain
• Capacity enhancement for raw material inputs to provide
• Management of pattern allocation to foundries
• Automated supplier evaluation and allocation
supply chain sustainability
• Geographical diversification of supply chain with focus
on cost and quality
• Consolidation of its input sources in India
Cost reduction
• Fixed and variable cost reduction initiatives across the
business spectrum
• Design optimization
• Cost reduction strategies in sourcing and logistics
The business’s focus to pursue opportunities in the global
distribution space gained momentum during the year
mainly in the Americas and Europe. It also entered into
branding agreements with some global majors during the
year.
Digitalisation
Digitalisation initiatives at LTvL largely were focussed on
process automation through ERP and material management
during the year. Key initiatives included:
• AR-based real-time plant tour and product inspections
• Fully automated product costing system
Environment, Health and Safety
Environment, Health and Safety are at the core of
LTvL’s operations and the business remains committed
to achieving EHS excellence in its workplaces. various
initiatives in the area of health, safety and environment
helped the business achieve a ‘zero man-days lost’ record
during the year.
• Emissions maintained well below statutory requirement
• Maintaining water consumption at the same level despite
increase in production by 40%
• Single use, throw-away plastic items restricted across
manufacturing locations
• Daylight harvesting through solar dome installation on
building tops
• Tree-plantation drive undertaken at Coimbatore campus
• Reduction in diesel consumption through reduced DG set
operation
• Bar coding of key input components such as castings and
• Common air-line testing to reduce energy consumption
forgings
by 1.2L units using vFD compressor
• Automated full kit availability and management module
• Increase in usage of LED light panels and LED flood lamps
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MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
Digital Solutions for valves
Human Resources
The business has built a committed and experienced team
of professionals over the decades. Special emphasis is laid
on training and development of the workforce. In addition
to competency building programmes, focus is also laid on
soft skills and leadership development. various engagement
initiatives are undertaken to motivate employees and
maintain a harmonious workplace.
During the year, the business launched a focussed initiative,
committed to drive change management and talent
development under the flagship programme DISHA. At
the heart of this programme is the improvement of the
effectiveness of LTvL’s workforce in the marketplace.
Developmental initiatives, including training, mentoring
and coaching programmes, were organized for upskilling
high-potential employees. Cross-functional collaboration
workshops were identified as another key focus area and a
programme series was launched during the year to achieve
the team goals.
Risks and Concerns
The industrial valves market is a highly fragmented space.
With an increased focus by customers on faster deliveries
and lower costs, the market environment is highly
competitive. However, given the geographical spread of the
demand base, the business has a high market share gain
potential through its geographical, channel and product
expansion strategies.
The post-COvID-19 market scenario remains fraught with
uncertainty. Further, the business has major linkage to
the fortunes of the oil & gas segment, which is currently
facing major turmoil. Some of the major risks identified
are weakening demand, supply chain disruption, liquidity
crunch, delays in project awards, availability of labour
workforce and working capital management.
LTvL has a robust risk management framework in place and
has taken several initiatives to mitigate the risks, viz.
• Market share gain strategies through geographical,
product and channel expansions
• Building alternative revenue streams through brand
labelling
• Consolidating Aftermarket business presence
• Refining its product mix with focus on standard products
• Global manufacturing presence
• Global supply chain
• Enhanced Contract Manufacturing capacity
• Improving cost competitiveness through cost reduction
measures
• Operational excellence initiatives to improve delivery
performance
306
L&T 9020sx Wheel Loader
Komatsu PC210-10M0 Hydraulic Excavator
Outlook
The business is closely monitoring key demand indicators
such as crude oil prices, capacity additions, liquidity,
project capex spending and GDP trends in the relevant
geographies. It does expect a slowdown in the market in
the coming year if the lockdown across the world continues
for a longer than expected duration thereby affecting its
demand indicators and prospects. The dip in oil prices
normally affects the valve industries by one-year time
lag. Capital spending is expected to stay tepid for a few
quarters in the new financial year. Liquidity may also pose a
challenge due to the COvID-19 pandemic for the first two
quarters of next year.
The initiatives on geographical expansion of markets and
operations, product mix, focus on aftermarket business,
brand labelling, etc., provide immense opportunities and
will act as mitigation measures. The business is taking
adequate steps to maintain liquidity and preserve cash.
Once the situation normalises, the entity is geared to
expand its market share gain strategies and to develop an
alternative supply chain to enhance its cost and delivery
efficiency. With a strong order book, it continues to
position itself as a brand that maintains high customer
focus and high standards of quality and design. It also
expects the COvID-19 pandemic to provide opportunities
for its maintenance, repair and operations segment. With
the oil prices expected to redeem in Q4 of FY 21, and the
fragmented nature of the global valve market together
with the strategies deployed by LTvL, the outlook remains
positive.
CONSTRUCTION EQUIPMENT &
OTHERS
Overview:
The Construction Equipment & Others (CE&O)
business manufactures, distributes and provides
after-sales support for construction and mining
equipment for diverse industries and applications.
The business also manufactures and markets Tyre
Curing Presses and Tyre Building Machines and
provides solutions for the tyre manufacturing
industry globally.
The CE&O business consists of two broad business
segments, namely, Construction & Mining
Machinery (CMM) and Rubber Processing Machinery
(RPM). CMM further comprises Construction &
Mining Machinery business unit (CMB) and L&T
Construction Equipment Limited (LTCEL), a wholly
owned subsidiary of L&T. Under a scheme of
arrangement the business under LTCEL has been
transferred on going concern basis to a new entity
L&T Construction Machinery Limited (LTCML) on
receipt of approval from NCLT. In April 2019, L&T
fully exited its investment in L&T Kobelco Machinery
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MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
L&T 990HF Tandem Compactor
L&T Surface Miner - KM404
Private Limited (LTKMPL) with Kobe buying the 51%
stake held by L&T, while L&T continued to represent
LTKMPL for marketing its products.
The Product Development Centre (PDC), based
at Coimbatore, renders engineering and product
development support for all the businesses.
The CMB division focuses on distribution and
after-sales service for hydraulic excavators and
dump trucks manufactured by Komatsu India Private
Limited (KIPL) and other mining and construction
equipment manufactured by Komatsu worldwide. It
also handles the distribution and providing of after-
sales support for a range of construction equipment
including wheel loaders, compactors and hydraulic
excavators manufactured by LTCML and Mining
Tipper Trucks manufactured by Scania India. CMB’s
offerings include products such as surface miners,
sand plants, crushing solutions and apron feeders,
manufactured by L&T at Kansbahal Works.
LTCML, located in Doddaballapura near Bengaluru,
manufactures vibratory compactors, wheel loaders,
hydraulic excavators, asphalt paver finishers,
pneumatic tyred rollers, skid steer loaders,
hydraulic power packs, cylinders, pumps and other
components.
LTRPM, located in Kancheepuram near Chennai,
manufactures and markets rubber processing
machinery, i.e. mechanical and hydraulic tyre curing
presses, tyre building machines, conveyor systems
and tyre automation systems for the global tyre
industry, including India.
Business Environment
Construction & Mining Machinery Business
(CMM)
The construction and mining sectors are the key demand
drivers of the CMM business.
During the year, highway construction activity decreased
as compared to the previous year as the overall contract
awarding activity fell. Further prolonged slowdown in real
estate projects continue to weigh on the business.
The Union budget FY 2020-21 proposes to invest about
R 82,000 crore on road construction and R 70,000 crore on
Railways. With the above budget proposals, construction
activity is expected to pick up pace during the coming year.
In the mining sector, coal production registered a growth
of ~3.8% over the previous year. The Indian Government
has approved an ordinance that opens up the coal sector
by allowing commercial coal mining as well as removing
end-use restrictions. The move is likely to increase the coal
mining activity in the coming years. Iron ore production too
registered a growth of ~6.7% over the previous year.
308
Scania G440 Heavy Tipper
Komatsu PC1250 Hydraulic Excavator loading Komatsu HD785 Dump
Truck in opencast project
The installed capacity in the cement sector has increased
from 480 MT to 499 MT in FY 2019-20, with an increase in
overall production from 334 MT to 344 MT in FY 2019-20.
The above positives are likely to boost the demand for
mining equipment.
However, the NBFC crisis’ continuing to impact liquidity in
the economy, coupled with stiff competition from domestic
and Chinese mining equipment manufacturers, has
impacted growth.
Rubber Processing Machinery Business (RPM)
The demand for the machinery manufactured by the LTRPM
unit is dependent on tyre demand and is indirectly linked to
the automobile industry.
FY 2019-20 was not a good year for automotive market
globally. Currently, the automobile industry is at crossroads
due to an increased preference for shared mobility.
Coupled with a fall in demand is the technology shift
towards greener electric cars. The protracted slowdown
has taken a toll on the automotive industry, with 2-4%
de-growth in automobile sales across the world.
The automobile industry witnessed one of its sharpest
declines in domestic sales due to subdued demand and
consumer sentiments, besides lower production in view of
the transition to BS vI emission norms, affecting wholesale
despatches. Due to the severe challenges, the industry
witnessed a decline in production of 14.73% compared
to FY 2018-19. Despite the current situation, the Indian
automobile sector still has enormous potential and is
anticipating demand growth.
The global tyre market reached a volume of 3.2 billion
units in 2019-20, growing at a CAGR of around 4%
during 2014-2019. However, the sales growth tapered
in 2019, with growth seen in select geographies only.
In line with automobile sales, the OEM tyre market has
come down approximately by 2-4%. The replacement
tyre demand continues to be mostly flat and stable due
to higher passenger vehicles on road. Along with this, the
growing infrastructure activities in both the developed and
developing countries, combined with agricultural activities
is giving a boost to tyre sales in select segments.
The Indian tyre market has reached a consumption volume
of 185 million units in 2019-20. The market is currently
being driven by the increasing use of radial tyres, especially
for buses and trucks. There has been the constant threat of
cheaper imports from China, etc. Tyre industry investments
have been slow due to uncertain demand growth. There
has been a marked slowdown in industry investment
starting almost from Q2’ FY20. Tyre majors across the globe
are concentrating on realising the money out of their earlier
investments and are choosing to either cancel or defer their
orders.
309
MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
OTR Mechanical Tyre Curing Press
PCR Floor Mounted Hydraulic Tyre Curing Press
Significant Initiatives
Construction & Mining Machinery Business
(CMM)
CMB introduced a number of business expansion activities
during FY 2019-20. It introduced new equipment models
of construction and mining equipment such as Komatsu
PC 210-10M0 excavator and SCANIA G440 Mining Tipper
truck with better machine capabilities and attachments for
piling equipment from MOvAX, which helped in partially
mitigating the depressed market. With the availability
of spares being brought closer to customer sites, the
availability guarantee of the machines has been maintained
at the present levels of ~90% to achieve customer
confidence, thereby increasing sales of spares for the
business.
With a continued focus on capturing the hiring segment,
CMB promoted lease financing programmes with low
investment and low EMI. In order to retain customers
and overcome the competition, CMB has been educating
customers on evaluating the equipment on the basis of
lower life-cycle costs, quick serviceability, etc.
Rubber Processing Machinery Business (RPM)
LTRPM has successfully launched various new products in
the market:
• Floor-mounted passenger car Hydraulic Tyre Curing press
in India and Germany
• Compact v-orientation passenger car Hydraulic Curing
press
• Zeus single stage two-wheeler Tyre Building Machine
(TBM) to Thailand
• OTR Tyre Building Machine successfully commissioned in
USA
• Custom-built products like Batch-off Units and Lube-
spray machine
LTRPM developed an ‘In-house Panel shop’ to assemble
the control panels required in its products. This special
focus gives significant cost benefits and an opportunity to
supply the panels to other customers as well. The formation
of a ‘Technology Centre’ is helping it to adapt advanced
technologies for the tyre industry and add futuristic
products to its portfolio.
To ensure faster servicing of equipment, CMB increased the
dealer workshop network from 3 locations in FY 2017-18
to 9 in FY 2019-20.
LTRPM also strengthened its portfolio of Tyre Handling
Automation Solutions and increased its focus on product
310
OTR tyre Building Machine
support and services. Apart from these, the unit continues
to focus on process initiatives including design process
modernisation, long-term vendor contracts, product
reliability enhancements, digitalisation, automated
submerged arc welding, etc.
It is working on service offerings to the tyre industry like
maintenance contracts and value-added programming
services. The unit is also working on upgradation kits to
help its customers to improve the productivity of existing
machines with minimal investment.
LTRPM won the Prestigious Gold plus Award for Business
Excellence from CII. It has also won a Gold Award in the
Indian Green Manufacturing challenge and in 5S won a
Platinum Award and a Sustenance award from ABK- AOTS
Dosokai.
Digitalisation
Digitalisation in CMB has been one of the focus areas in the
past year. During the year, a new initiative, ‘EQUIPCARE’,
was implemented to serve the customers’ post-sales service
requirements. An App - ‘Customer Connect’ - is being
developed to help customers access complete service
information pertaining to their machines on their mobile
phones. Migration to SAP S4 HANA was completed during
the year, helping the users to process data faster.
On the digital front, the LTRPM business has established
a system for the Total Productivity Management (TPM)
track, monitoring adaptive feed and collision monitoring
in the manufacturing process. The unit also has initiated
digitalisation of customer connectivity through the
proposed E-CRM portal.
Environment, Health and Safety
Safety Officers are appointed at all the units and report to
management personnel. They are responsible for ensuring
that the safety practices are strictly adhered to. Safety
audits are conducted regularly to ensure that the safety
practices are in place and are being followed.
The manufacturing unit of RPM is certified in OHSAS under
Integrated Management Systems. LTCML has been certified
for its Integrated Management System (Environmental
Management systems as per ISO 14001:2004 and
OHSAS 18001:2007 for Occupational Health and Safety
Management systems).
Human Resources
The business has progressively built a team of committed
professionals across its manufacturing plants and
corporate offices. Emphasis on training and development
of the workforce has been the focus area. Additionally,
competency building programmes for leadership
311
MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2019-20
development and various engagement initiatives have
been undertaken to sustain the employees’ motivation and
maintain a harmonious workplace.
for FY 2020-21. The motor graders segment is expected
to increase by ~10%. CMB also expects the spares and
auxiliaries’ business to grow by ~4%.
The Industrial Relations scenario has remained cordial in
the manufacturing units of the business. There were no
cases of violations during the year under the whistle-blower
policy and the policy on ‘Protection of Women’s Rights at
Workplace’.
Risks and Concerns
Increased market competition and macro-economic
volatility are continuing concerns for the business.
Due to the lockdown because of COvID-19 and its
economic impact, it is anticipated that the customers may
request for deferment of orders or extension of credit.
In the CMB business, immediate availability of contract
workmen at the customer sites post lifting of the lockdown
will pose a challenge.
Outlook
CMB plans to strengthen its position in the premium
segment and increase its focus on large contractors,
large irrigation projects and coal OB (over burden)
removal contractors. With a targeted spend plan of over
R 100 lakh crore by the government in the next 5 years in
infrastructure, there is a large scope for CMB to achieve
higher business volumes.
Government initiatives in infrastructure development
in roads, railways, irrigation, ports, urban & rural infra,
affordable housing, etc., are expected to drive demand
in the cement and metal sectors, which in turn will boost
demand for excavators, dump trucks, dozers and other
road construction and mining equipment. With ~60% of
demand for mining equipment coming from coal PSUs,
CMB is planning to target selective tenders along with
Komatsu.
The dozer segment is expected to grow by ~18%. Demand
for Komatsu excavators is expected to increase by ~10%
In the parts and services segment, CMB plans to introduce
newer and more innovative, user-friendly spares. It is also
in discussion with the dealers to develop component
repair service for construction equipment. However, as an
aftermath of COvID-19, major capex or investments are
likely to be deferred by the customers, thus impacting the
order inflow.
Post COvID-19, people may continue to observe social
distancing norms even after the crisis has subsided and that
will change the way people commute. Daily commuters
may prefer avoiding public transport and shared mobility
might take a short-term hit. As a result, the demand for
entry-level cars and two-wheelers might increase. But
this again depends on economic/ market sentiments and
consumer purchasing power. With the shutdown of all
non-essential services, the demand for commercial vehicles
is expected to further plummet. Tyre demand is likely
to remain low and tyre companies may not make any
immediate major fresh investments. However, companies
which have already committed the money may wish to
expedite their activity.
Further to the COvID-19 outbreak, it is anticipated that
there will be limitations to global travel, at least in the
immediate future. Also, some tyre companies may prefer
to source locally. While this augurs well for LTRPM in the
domestic market, it may be a disadvantage in European
projects with stiff competition from suppliers in Europe.
LTRPM plans to be selective in its order intake by executing
orders which require a shorter production time to minimise
the inventory holding. It will also focus on spare parts and
retrofit kits which will increase productivity to the customer
at minimal cost. Further, joint development of machines
with the client, along with service opportunities, are being
explored.
312
Financial Review 2019-20
I. L&T CONSOLIDATED
A. PERFORMANCE REVIEW
The Indian economy faced a challenging year in FY
2019-20. Post the general elections, the Indian economy
witnessed sluggish investment momentum on the back
of weak consumer sentiment, lower tax collections
and fiscal slippages. The stress in the financial system
due to non-performing loans led to risk aversion and
low credit growth. The demand destruction in vital
sectors such as real estate, automobiles, etc., led to the
slowing economic growth and absence of broad-based
private investment in industrial capex and infrastructure
development. The onset of the global pandemic at the
very end of the financial year led to the lockdown of the
country’s social and economic activity, adding further
impetus to the economic slowdown.
To counter these challenges, the Government along with
the RBI initiated several measures both monetary and
fiscal at various times during the year, viz. reduction in
corporate tax rates, capital infusion into Public Sector
banks, relaxation of External Commercial Borrowing
guidelines for affordable housing, Realty Fund for stalled
housing projects and periodic lowering of interest rates
in line with an overall moderated inflation trajectory.
The Government’s firm commitment to substantially
boost investment in infrastructure development, rural
electrification, airports, railroads, water supply &
irrigation, social sector, education and health is expected
to provide opportunities to the Company’s various
business segments; although in the near term, the
Company would be required to deal with the economic
fallout of the Covid-19 pandemic. Further, with the
Government’s focus on structural reforms and the launch
of the National Infrastructure Pipeline (NIP) of R 100+ lakh
crore, the Company expects the measures to improve
India’s long-term growth potential.
The global economy witnessed significant volatility
in 2019-20. The continued slump in manufacturing
coupled with challenges relating to growth, inflation
and employment, weakened the global GDP. Driven by
protectionist policies in developed economies, trade wars
intensified in various pockets across the world. The year
2019-20 also witnessed delayed Brexit, an oil price war
between Saudi Arabia and Russia, rising geo-political
tensions in the Middle East and the onslaught of the
global pandemic, leading to major lockdown measures
across countries. All these effectively created recessionary
conditions in the world economy towards the end of the
fiscal year.
Against the backdrop of such an environment, the
Group recorded satisfactory growth in order inflows
and revenues during FY 2019-20, though the impact of
the pandemic will inevitably be felt in the FY 2020-21.
Slowdown of infrastructure projects in multiple states
due to change in State Governments, macroeconomic
concerns and the systemic liquidity challenges slowed
down the growth plans of the Company for FY 2019-20.
The diversified portfolio of the Company coupled with the
acquisition and the quick integration of Mindtree Limited,
has however helped register reasonable growth at the
Group level.
Post the acquisition of Mindtree Limited during the
year, the entity has been consolidated as a subsidiary
from the second quarter of FY 2019-20. The acquisition
will help consolidate the Company’s position in the
IT-enabled services sector. In compliance with regulatory
requirements, the Company further diluted its stake in
L&T Technology Services (LTTS) to achieve 25% minimum
public shareholding during the year.
Shareholding in L&T Infrastructure Development Projects
Ltd (L&T IDPL) was also diluted to 51% on the partner
Canadian Pension Plan Investment Board obtaining
statutory approvals for conversion of Compulsorily
Convertible Preference Shares (CCPS) into a 49% equity
stake in L&T IDPL under a negotiated agreement. L&T
Shipbuilding Limited which was a 100% subsidiary
company has now been merged with L&T standalone
entity as an adjusting event after obtaining NCLT approval
to the scheme of amalgamation. Also, during the year
FY 2019-20 the Company exited its shareholding in L&T
Kobelco Machinery Private Limited by selling its stake to
its JV partner Kobe Steel Ltd.
The Company is on course to complete divestment of
its Electrical & Automation (EA) business to Schneider
Electric. The approval of Competition Commission of
India subject to fulfilment of certain conditions has
been received and the business has been classified as
‘discontinued operation’ from June 2019, pursuant to
which the previous year figures have been regrouped
wherever necessary. Progress is being made on fulfilling
the conditions precedent to the divestment.
L&T Metro Rail (Hyderabad) Limited, a subsidiary
company, successfully operationalized and commissioned
the last stretch of the metro rail during FY 2019-20,
thereby completing the full network of close to 70 km
in the city of Hyderabad. Another subsidiary company,
viz. Nabha Power Limited, which houses two units of
a thermal power plant at Rajpura in Punjab, received
a favourable Supreme Court judgement on its income
related disputes with Punjab State Power Corporation
Ltd. Also, in compliance with environment norms, this
subsidiary has placed an order for construction of Flue
Gas Desulphurisation system and work on this is in
progress.
313
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
As at March 31, 2020, L&T Group comprises 117
subsidiaries, 6 associates, 25 joint venture companies
and 35 joint operations. Most of the group companies
are strategic extensions of the project and product
businesses of L&T, while the Hydrocarbon business is
housed in a separate set of group companies to provide
the desired focus and independent functioning. The
majority of the subsidiaries support L&T’s core businesses
and enable access to new geographies, products and
business segments. Certain distinct service businesses
such as Information Technology, Technology Services,
and Financial Services are housed in separate listed
subsidiaries. The development projects business resides in
separate subsidiaries and joint venture companies.
The Company continued on its journey of shareholder
value creation by focusing on cost efficiencies,
leveraging technology for productivity gains, efficient
fund management and targeting select international
opportunities beyond the Middle East. The Company’s
strong Balance Sheet, coupled with sound policies and
procedures and committed work force is helping it tide
over the current volatile economic environment and will
enable business to thrive and grow, once the environment
improves.
Order Inflow and Order Book
R crore
250000 –
200000 –
Order Inflow
9.1%
170817
150000 –
26%
45116
L&T Group achieved order inflows of R 186356 crore
during the year 2019-20, registering a growth of 9.1%
over the previous year, growth largely being driven
by international business. The year witnessed some
noteworthy order wins in thermal power, affordable
mass housing, a substation & transmission line project in
Africa, gold beneficiation order in Saudi Arabia, residue
upgradation in refinery modernisation and an order for
offshore oil facilities in Saudi Arabia. Despite deferral of
various prospects, Infrastructure contributed 55% of the
total order inflow, while the share of Power increased
from 2% in previous year to 6% in the current year on
receipt of a large value thermal order and increased
ordering by thermal power plants for emission control
equipment to meet environmental norms.
R crore
400000 –
320000 –
240000 –
160000 –
80000 –
0 –
–
Order Book
4.5%
290780
21%
61670
303857
75038
25%
79%
229110
228819
75%
As at 31-03-2019
–
As at 31-03-2020
–
Domestic
International
186356
60094
32%
Order Book Composition
100000 –
50000 –
0 –
–
74%
125701
126262
68%
2018-19
–
2019-20
–
Domestic
International
Order Inflow Composition
R crore
4850
3%, (3%)
5265
3%, (3%)
13822
8%, (8%)
22135
12%, (8%)
20964
11%, (16%)
2361
1%, (2%)
2233
1%, (2%)
102678
55%, (56%)
12048
6%, (2%)
Infrastructure
Power
Defence Engineering
Heavy Engineering
Hydrocarbon
IT & Technology
Services
Financial Services
Development projects
Others
Total Order Inflow: R 186356 crore during the year 2019-20
[Figures in brackets relate to previous year]
R crore
6074
2%, (2%)
44130
15%, (14%)
4121
1%, (2%)
9216
3%, (4%)
15849
5%, (2%)
Infrastructure
Power
Defence Engineering
Heavy Engineering
Hydrocarbon
Others
224467
74%, (76%)
Total Order Book: R 303857 crore as at March 31, 2020
[Figures in brackets relate to previous year]
The Group crossed the R 3 lakh crore mark as at
March 31, 2020 with the Order Book standing at
R 303857 crore. Infrastructure segment constitutes the
highest proportion of the consolidated Order Book at
74% share, though reduced from 76% as at March 2019,
with increase in the share of the Power segment from 2%
to 5% on higher order inflows during the year.
314
The Order Book growth at 4.5% was constrained on
deletion of some non-moving orders from the portfolio,
mainly impacted by review decisions in the post-Covid
scenario and change of Government in Andhra Pradesh
during the Financial Year. The Order Book comprises of
27% from various State Governments, including local
authorities. With major orders received from Public
Sector Undertakings during the year FY 2019-20, the
composition of the Order Book from that customer
segment increased from 35% to 44%.
International Order Book Composition
2%
(3%)
2%
(1%)
10%
(12%)
0%
(1%)
24%
(23%)
5%
(7%)
7%
(10%)
8%
(7%)
Saudi
Qatar
UAE
Oman
Kuwait
Bangladesh
Africa
Far East
America
Europe
ROW
28%
(17%)
7%
(11%)
7%
(8%)
Total International Order Book: R 75038 crore as at March 31, 2020
[Figures in brackets relate to previous year]
FY 2019-20 order inflow growth being driven by
international business, the share of the international
Order Book grew from 21% to 25%, with Saudi
Arabia and Africa contributing the majority of the
growth – resulting in their increased share in the overall
international Order Book to 28% and 24% respectively.
review of awarded tenders by some state governments
leading to stoppage of work in the Infrastructure segment
for a prolonged period of time during the year. With the
consolidation of Mindtree Limited acquired in early July
2019, the composition of international revenue at the
Group level increased to 33% in year FY 2019-20.
Segment-wise Gross Revenue*
R crore
4850
3%, (4%)
5309
4%, (4%)
13822
9%, (9%)
22335
15%, (11%)
17445
12%, (11%)
73777
50%, (53%)
3205
2%, (2%)
3979
3%, (3%)
2318
2%, (3%)
Infrastructure
Power
Defence Engineering
Heavy Engineering
Hydrocarbon
IT & Technology
Services
Financial Services
Development projects
Others
* includes inter segment revenue R 1590 crore for FY 20 and R 1700 crore for FY 19
[Figures in brackets relate to previous year]
Despite the challenges faced in the Infrastructure segment
and sharp deceleration of business activity in the last few
weeks of the year due to Covid-19, satisfactory growth
in the Segment Revenue for the year was achieved with
pick up of execution momentum mainly in Hydrocarbon
and Heavy Engineering segments. The composition of
IT&TS segment in the overall portfolio registered a growth
of 400 bps achieved with consolidation of Mindtree on
acquisition of control from Q2 FY 2019-20 onwards.
Consolidated Revenue from Operations
Operating Expenses and PBDIT
Gross Revenue from Operations
R crore
200000 –
150000 –
100000 –
7.6%
135220
32%
43577
145452
48467
33%
50000 –
68%
91643
96985
67%
0 –
–
2018-19
–
2019-20
–
Domestic
International
Operating Expenses and PBDIT
2019-20
[% to revenue]
11.2%
(11.3%)
5.9%
(5.0%)
15.9%
(12.9%)
Mfg., Construction &
Operating Expenses
Staff Expenses
Sales, Administration &
Other Expenses
Operating Profit (PBDIT)
66.9%
(70.7%)
L&T Group recorded revenue of R 145452 crore during the
year, registering a growth of 7.6%. The growth however,
was below expected levels with execution impediments
of Covid-19 in the last few weeks of the year, coupled
with delayed clearances, right of way constraints and the
[Figures in brackets relate to previous year]
Manufacturing, Construction and Operating (MCO)
expenses for FY 2019-20 at R 97363 crore increased
by 1.8% over the previous year. These expenses mainly
315
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
comprise cost of construction material, raw materials and
components, subcontracting expenses and interest costs
in Financial Services business. This represent 66.9% of
revenue, a decrease by 380 bps, mainly on account of
increased share of IT&TS segment as well as cost control
initiatives at the Group level.
Staff expenses for the year 2019-20 at R 23114 crore
increased by 32.3% over the previous year mainly on
consolidation of Mindtree - adjusted for the same,
the increase is 10.5% on a like-to-like basis. Adjusted
for IT&TS segment (where manpower augmentation
for revenue growth has led to an increase in the
total headcount), the staff cost as a percentage to
revenue increased by 30 bps, representing normal
escalation. The Group has sharpened its focus on
productivity improvement, digitalization and manpower
rationalization.
Sales and administration expenses increased by 27.3%
y-o-y to R 8647 crore - when adjusted for Mindtree
consolidation, the increase stands at 17.7% on a like-to-
like basis. The increase is mainly in Financial Services due
to higher credit cost and provisions in conformity with RBI
guidelines (issued consequent on moratorium relief given
to borrowers in the Covid-19 scenario). Other increases
that contributed to the rise include Expected Credit Loss
provisions for financial and contract assets, donations to
PM Cares fund and provision for write down of Yes Bank
AT1 bonds under regulatory mandate.
The Group operating profit at R 16329 crore for the year
2019-20 registered growth of 6.5% y-o-y. The EBITDA
margins for the year was lower by 10 basis points at
11.2%. Cost overruns encountered in some projects
coupled with slow progress in some jobs mainly in
Infrastructure segment impacted the operating margin.
The drop was partially offset by a favourable job mix,
coupled with execution efficiencies in Defence and
Hydrocarbon segments, and the reversal of provision on a
favourable arbitration award in the Power business.
Depreciation and Amortization charge
Depreciation and amortization charge for the year
2019-20 increased by 28% to R 2462 crore, compared
to R 1923 crore in previous year. The increase was largely
due to consolidation of Mindtree, full operationalization
of the Hyderabad Metro Rail concession and amortization
of Right of Use asset on adoption of the newly introduced
Ind AS 116 accounting standard in 2019-20.
Profit Before Interest and Tax
Segment-wise composition of PBIT for FY 2019-20 is
represented below:
Segment-wise PBIT Composition
R crore
387
2%, (2%)
969
6%, (5%)
2679
17%, (21%)
3693
23%, (21%)
5207
32%, (36%)
236
1%, (1%)
576
4%, (3%)
1746
11%, (8%)
566
4%, (3%)
Infrastructure
Power
Defence Engineering
Heavy Engineering
Hydrocarbon
IT & Technology
Services
Financial Services
Development projects
Others
[Figures in brackets relate to previous year]
Other Income
Aided by profit on sale of liquid investments, interest
earnings and dividend income from treasury investment,
Other income at R 2361 crore, increased by 28.6% over
R 1837 crore in the previous year.
Finance cost
The interest expenses for the year 2019-20 at
R 2797 crore was higher by 55.2% over R 1803 crore for
the previous year. The increase was mainly attributable
to the higher interest cost in L&T Hyderabad Metro Rail
upon commencement of full operations, interest on
lease liability on application of Ind AS 116 and higher
level of borrowings in the standalone entity to fund
the higher level of working capital caused by the tight
liquidity conditions. Average borrowing cost for the year
FY 2019-20 increased to 8.1% from 7.9% in the previous
year.
Exceptional Items
There are no exceptional items during the year under
review. Previous year exceptional item of R 192 crore
(post-tax) represents write back of certain customer dues
upon realization based on favourable NCLAT order.
Tax Expense
Income Tax charge for FY 2019-20 (excluding tax charge
on discontinued operations) decreased to R 3263 crore
compared to R 4067 crore in FY 2018-19 on adoption
of tax ordinance resulting in lower effective tax rate,
partially offset by write-down of opening DTA for the
rate differential and write-off of opening MAT credit, due
316
to its unavailability under the new tax regime. Creation
of DTA in 2019-20 for set-off of capital losses has also
contributed to the lower tax charge.
Consolidated Profit after Tax and EPS
Consolidated Profit after Tax (PAT) at R 9549 crore for
the year 2019-20 rose by 7.2% over the previous year at
R 8905 crore.
Consolidated Basic Earnings per Share (EPS) from
continuing operations and discontinued operations for
the year 2019-20 at R 68.04 registered growth over
previous year at R 63.51.
Return on Consolidated Net Worth
The Net Worth, as on March 31, 2020, at R 66723 crore,
reflects net increase of R 4348 crore, as compared to the
position as on March 31, 2019. Return on Net Worth
(RONW) for the year 2019-20 was lower at 14.8%,
compared to 15.3% in the previous year. RONW for the
current year has been adversely affected by Covid impact
and provisions in financial services business.
Liquidity & Gearing
Cash flow from operations (excluding change in loans
and advances towards financing activities) decreased to
R 6687 crore as compared to R 9100 crore in the previous
year due to delay in customer collections, impacted by
fund constraints with Government and Public Sector
clients. Borrowings increased by R 13874 crore to sustain
higher level of operations and increased working capital
requirements in a liquidity-constrained environment.
During the year, borrowing was supplemented by
additional funds generated from divestment of stake in
subsidiary companies, profit on sale of investment and
treasury income.
Funds were used mainly for purchase of stake in Mindtree
Limited. Further, the Group incurred capital expenditure
of R 3299 crore (including capex for full operationalisation
of Hyderabad Metro Rail concession). Funds were also
utilized for payment of final dividend for FY 2018-19
R 2526 crore, towards interim dividend of R 1404 crore for
FY 2019-20 and DDT R 621 crore. The cash outflow also
included net interest expense of R 2903 crore during the
year FY 2019-20.
Consequently, there was a net increase of R 4809 crore in
the cash balances as at March 31, 2020 as compared to
the beginning of the year.
Consolidated Fund Flow Statement
Particulars
Operating activities
Borrowings/(Repayment) of Borrowings
Treasury and dividend income
Sale/(Purchase) of other investments
ESOP Proceeds (net)
Sources of Funds
Capital expenditure (net)
Net investment/(divestment)
Dividend paid
Interest paid
Increase/(Decrease) in cash balance
Payment (to)/from minority interest (net)
Utilisation of Funds
v crore
2019-20 2018-19
9100
4319
983
(8252)
11
6161
3499
255
2647
2983
(338)
(2885)
6161
6687
13874
952
3983
18
25424
3299
9802
4551
2903
4809
60
25424
The total borrowings as at March 31, 2020 stood at
R 141007 crore as compared to R 125555 crore as at
March 31, 2019. The major increase is in the standalone
entity to support the increasing business volumes,
increase in borrowings of Financial Services and higher
debt availed to complete operationalization of the
Hyderabad Metro Rail concession. The gross debt:equity
ratio increased to 1.85:1 as at March 31, 2020 from
1.81:1 as at March 31, 2019. The net debt:equity ratio
stood at 1.53:1, as at March 31, 2020 from 1.52:1 as at
March 31, 2019.
Details of significant changes in key financial ratios
along with explanation:
In compliance with the requirement of listing regulations,
the key financial ratios of the Group were examined and
the ratios with significant changes i.e. change of 25% or
more as compared to the immediately previous financial
year have been provided hereunder along with the
explanation for the changes:
Sr.
No.
(i)
2018-19 2019-20
Particulars
-31.5%
8.93
6.12
Interest Coverage ratio*
(Interest cost excludes
Financial Services and
Finance Lease Activity)
Net Working Capital % of
Sales** (Excluding Financial
Services & Corporate)
(ii)
18.1% 23.7% 30.9%
* The significant change in the Interest Coverage Ratio for
FY 2019-20 has been due to implementation of Ind AS 116
resulting in accounting for interest on lease liability, as well
as full commissioning of L&T Hyderabad Metro Rail leading
to cessation of capitalization of interest on borrowing done
hitherto.
** The significant changes in Net Working Capital % of sales is due
to delay in customer collections, impacted by fund constraints
with Government and Public Sector clients as well as support
extended to vendors and sub-contractors in a tight liquidity
environment.
317
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
B. SEGMENT-WISE PERFORMANCE (GROUP)
1.
Infrastructure Segment
countries. International order wins were predominantly in
Power Transmission & Distribution and Metallurgical and
Material Handling business.
R crore
140000 –
120000 –
100000 –
80000 –
60000 –
40000 –
20000 –
0 –
–
Order Inflow
7.2%
95743
14846
16%
84%
80897
102678
29509
29%
73169
71%
2018-19
–
2019-20
–
Domestic
International
The Infrastructure segment won orders worth
R 102678 crore, higher by 7.2% over the previous year,
mainly from Public Sector Undertakings. Large value
orders were bagged by Building & Factories, Power
Transmission & Distribution, Water Effluent Treatment
and Metallurgical and Material Handling businesses.
Investment by the Maharashtra State Government in the
affordable housing segment and by private sector players
in the airport and health segments boosted the order
inflow momentum of the Buildings & Factories business
vertical. Heavy Civil Infrastructure registered growth
with receipt of orders in Hydel and Tunnel business, the
Power Transmission & Distribution business recorded
growth on receipt of key international orders, while the
Metallurgical and Material Handling business registered
significant growth with the receipt of a large value Gold
beneficiation plant order and railway freight facility
package in the MENA region.
The order inflow momentum was maintained in the Smart
World & Communication business with the receipt of an
order for an army network management system from
the Indian Army and in the Water Effluent & Treatment
business with order wins in the water supply and
distribution segment.
De-growth was registered in the Transportation
Infrastructure business due to deferral of some large value
award decisions.
The share of international order inflow for the
Infrastructure segment increased to 29%, from 16% in
previous year. The Middle East region contributed 65% of
the international order inflow. Lower contribution from
South East Asian countries was compensated by a higher
proportion of orders from African countries, reflecting
the result of past efforts to expand presence in those
318
Gross Revenue from Operations
0.8%
73204
19109
8.5%
74%
54095
R crore
100000 –
80000 –
60000 –
26%
40000 –
20000 –
0 –
–
73777
17898
24%
8.1%
55879
76%
2018-19
–
2019-20
–
Domestic
International
OPM %
Infrastructure segment clocked gross revenue of
R 73777 crore for the year 2019-20 registering a nominal
growth of around 1% over the previous year. Revenue
was impacted due to lack of progress in jobs in Andhra
Pradesh with the stand taken by new state government
to reassess new awards, execution challenges in some
projects viz. obtaining approvals, securing Right of
Way, rationalisation of fund allocation in certain states,
and stay on execution due to litigations concerning
environmental clearances. The sharp deceleration in
execution in the last few weeks of the year on account of
the pandemic and consequent regulatory clampdown on
business activities also impacted revenue growth for the
year as a whole.
Revenue from international operations constituted 24%
of the total revenues of the segment during the year
as compared to 26% in the previous year with some
large value orders in the opening Order Book nearing
completion, especially in Heavy Civil Infrastructure.
Infrastructure Segment earned operating profit of
R 5912 crore. There was a decline in margins from 8.5%
to 8.1% due to cost and time overruns in certain projects
in Transportation Infrastructure and Buildings & Factories
business. The decline was also due to the margin impact
caused by Covid-19 led slowdown / lockdown in March
2020 and lower margin earned during the year in Heavy
Civil Infrastructure business partially offset by realization
of claims in Transportation Infrastructure and Water &
Effluent Treatment business.
The Funds employed by the segment at R 28279 crore as
at March 31, 2020 registered a sharp increase of 18.1%
vis-à-vis March 31, 2019, mainly due to stalled projects
and fund allocation issues in certain State Government
contracts. The funds employed were also impacted by the
mandated stoppage of business activity / lockdown in the
last 2 weeks of the financial year, a period that is usually
characterized by a high level of customer collections.
2. Power Segment
R crore
15000 –
12000 –
9000 –
6000 –
3000 –
0 –
–
Order Inflow
>100%
12048
264
2%
11784
98%
16%
84%
2919
475
2444
2018-19
–
2019-20
–
Domestic
International
The Power segment order inflow registered a substantial
growth by bagging orders worth R 12048 crore as
compared to R 2919 crore in the previous year. The
segment received a large domestic order for an ultra-
supercritical thermal power project, an order for a
comprehensive Boiler Island package by L&T–MHPS Boiler
JV, consolidated for L&T share, and several Flue Gas
Desulphurisation projects following the mandate from
Ministry of Environment, Forest and Climate Change
to install emission control equipment in a timebound
manner.
Gross Revenue from Operations
R crore
6000 –
5000 –
4000 –
3000 –
2000 –
1000 –
0 –
–
(41.8%)
3983
1384
2599
4.5%
35%
65%
12.0%
2318
386
1932
17%
83%
2018-19
Domestic
–
2019-20
–
International
OPM %
Despite the surge in order inflow, the Power segment’s
revenue declined y-o-y by 41.8% to R 2318 crore, since
the new orders are yet to pick up execution momentum,
as well as tapering of execution in coal-based projects
nearing completion. Composition of revenue from
international projects decreased to 17% of total revenue
for the segment, from 35% in previous year due to
diminishing revenue contribution from a Bangladesh
gas-fired power project nearing completion in 2019-20.
Segment operating profit has improved from R 177 crore
in previous year to R 275 crore in FY 2019-20, with the
margin improving to 12% mainly due to reversal of
provision on receipt of favourable arbitration award.
The Funds employed by the segment stood at
R 1745 crore as at March 31, 2020 registering a growth
of 46.3% over the previous year due to delay in collection
of retention amount in jobs nearing completion and
higher carrying value of Investment in Joint Ventures
under Power Group, consolidated through equity method
under Ind AS.
3. Heavy Engineering Segment
R crore
6000 –
5000 –
4000 –
3000 –
2000 –
1000 –
0 –
–
Order Inflow
(41.7%)
4049
67%
2728
33%
1321
2361
1343
57%
1018
43%
2018-19
–
2019-20
–
Domestic
International
The Heavy Engineering segment recorded an order inflow
of R 2361 crore for the year ending March 31, 2020,
lower by 41.7% as compared to the previous year
due to deferment of orders, coupled with the loss of
international orders on aggressive pricing from global
fabricators in a low-demand-cum-surplus-capacity
scenario. Share of orders from international business
decreased from 67% in the previous year to 57% in
FY 2019-20, largely attributable to reduced prospects of
Marine Pollution Control equipment.
Gross Revenue from Operations
27.5%
R crore
4000 –
3500 –
3000 –
2500 –
2000 –
1500 –
1000 –
500 –
0 –
–
2514
24.5%
1184
47%
53%
1330
3205
1428
45%
21.5%
1777
55%
2018-19
Domestic
–
2019-20
–
International
OPM %
319
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
The segment’s gross revenue of R 3205 crore registered a
growth of 27.5% compared to the previous year on the
back of good progress in executing the Opening Order
Book of the refinery, oil and gas equipment business.
Revenue from international operations constituted 45%
of the total revenue for the segment.
The segment recorded an increase in the operating
profit for the year at R 612 crore. The margin, however
registered a decline from 24.5% to 21.5% due to
prudential provisions made in an international project,
partially offset by cost saving initiatives and a favourable
claim settlement.
Funds employed by the segment as on March 31, 2020
at R 2906 crore, registered an increase of 16.1% over the
previous year on higher working capital due to pending
milestone completion in some refinery projects.
4. Defence Engineering Segment
R crore
5000 –
4000 –
3000 –
2000 –
1000 –
0 –
–
Order Inflow
(25.9%)
3016
506
17%
83%
2510
2233
460
21%
1773
79%
2018-19
–
2019-20
–
Domestic
International
The Defence Engineering segment recorded an
order inflow of R 2233 crore for the year ending
March 31, 2020, lower by 25.9% over the previous year
with deferment of orders from the Ministry of Defence.
The share of international orders for FY 2019-20 was
higher at 21% as compared to the previous year.
Gross Revenue from Operations
R crore
6000 –
5000 –
4000 –
3000 –
2000 –
1000 –
0 –
–
3.4%
9%
91%
3849
333
3516
16.2%
3979
342
18.2%
9%
3637
91%
2018-19
2019-20
–
–
Domestic
International
OPM %
The segment’s gross revenue of R 3979 crore improved
by 3.4% compared to the previous year. Growth was
mainly contributed by the brisk execution of a tracked
artillery gun order and partially offset by decline in
the Shipbuilding business. Revenue from international
operations was steady at 9% of the total revenue for the
segment.
The operating margin improved from 16.2% in the
previous year to 18.2% in FY 2019-20 due to cost
savings across multiple projects in the Defence &
Aerospace business and a favourable claim settlement in
Shipbuilding business.
Funds employed by the segment as on March 31, 2020
at R 3014 crore increased by 5.3% y-o-y, due to delay in
collections from a fund constrained MoD.
5. Hydrocarbon Segment
Order Inflow
(24.8%)
27871
45%
12492
R crore
40000 –
32000 –
24000 –
16000 –
8000 –
55%
15379
20964
7641
36%
13323
64%
0 –
–
2018-19
–
2019-20
–
Domestic
International
The Hydrocarbon segment achieved order inflows of
R 20964 crore, registering a decline of 24.8% due to
deferment of orders mainly in the Onshore vertical.
The share of international orders decreased to 36%
in FY 2019-20 from 45% in the previous year, which
included one mega order received in Algeria. The
Order Book, at R 44,130 crore, however, still provides
multi-year revenue visibility even in the current uncertain
environment of low oil prices.
Gross Revenue from Operations
R crore
25000 –
20000 –
15000 –
10000 –
5000 –
0 –
–
15.0%
17445
7552
10.9%
9893
43%
57%
15176
7971
8.8%
7205
53%
47%
2018-19
Domestic
–
2019-20
–
International
OPM %
320
Segment revenue at R 17445 crore for the year grew by
15% y-o-y, enabled by peaking of execution activities
in key projects. The share of International revenue in
FY 2019-20 was lower at 43% of the total revenue of the
segment as compared to 53% in the previous year, with
closing stage progress of some large value international
orders in the opening Order Book.
The segment’s operating profit for the year improved to
R 1898 crore, with the margin increasing by 210 basis
points from 8.8% to 10.9%, reflecting operational /
execution efficiencies and claim settlements in a few
projects.
Funds employed by the segment as on March 31, 2020
at R 2880 crore increased by 35.3% as compared
to March 31, 2019, mainly due to the increase in
current outstanding from customers in a tight liquidity
environment.
6.
IT & Technology Services (IT & TS) Segment
The Company acquired a controlling stake of 60.59%
in Mindtree Limited as of 2nd July, 2019. Subsequent
to the acquisition of control, the financials have been
consolidated from the second quarter of FY 2019-20
and reported under the IT & TS segment. The resultant
figures for the current periods are not comparable with
the previous periods to that extent. An additional 0.49%
stake was acquired in March 2020, taking the total
shareholding as on March 31, 2020 to 61.08%.
Gross Revenue and OPM%
53.5%
R crore
28000 –
24000 –
20000 –
16000 –
12000 –
8000 –
4000 –
0 –
–
14553
23.2%
22335
20.9%
2018-19
–
2019-20
–
Revenue
OPM %
The IT & TS segment comprises publicly listed companies
L&T Infotech Limited and its group of companies, L&T
Technology Services Limited and its group of companies,
and Mindtree Limited and its subsidiaries. The segment
recorded a gross revenue of R 22335 crore for the year
ended March 31, 2020, registering a growth of 53.5%
over the previous year, including R 5915 crore on account
of the Mindtree acquisition in FY 2019-20. Excluding
Mindtree, the growth would have been 13% on a like-to-
like basis. International revenue constitutes a steady 91%
of the total revenue of the segment. Like other businesses
within the Group, the IT&TS Segment was also initially
affected by the transition challenges of work-from-home /
lockdown situation that prevailed towards the end of the
year. The businesses have, however, quickly ramped up
the work-from-home business model on various projects
under execution during the lockdown period in line with
approvals obtained from customers. The end-customer
geographical segments in the US and Europe continue
to witness stress due the pandemic that has severely
impacted these geographies.
The Segment’s Operating Profit was at R 4635 crore for
the year 2019-20 as compared to R 3336 crore in the
previous year including a contribution of R 951 crore from
Mindtree. The Operating Margin declined by 230 basis
points, mainly on account of an increase in manpower
cost, coupled with a drop in utilization and donations to
the PM Cares fund set up for Covid-19 relief purposes.
The Funds employed by the segment as on
March 31, 2020 at R 19638 crore increased by 178%
compared to March 31, 2019 mainly due to investment in
goodwill and intangible assets of customer contracts on
acquisition of Mindtree Limited.
During the year, the Company divested 4.26% stake in
L&T Technology Services, towards meeting the regulatory
requirement of minimum public shareholding of 25%
within three years from listing of its shares. L&T’ s
shareholding in LTI and LTTS as on March 31, 2020 is
74.53% and 74.62% respectively.
7. Financial Services (FS) Segment
The Financial Services segment comprises Rural,
Infrastructure and Housing Finance and Asset
Management. The segment’s revenue grew by 9.4% y-o-y
at R 13822 crore for the year FY 2019-20 aided by growth
in the loan assets of ‘focused’ business lines.
R crore
20000 –
15000 –
10000 –
5000 –
0 –
–
Gross Revenue
9.4%
12638
13822
2018-19
–
2019-20
–
321
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
Disbursal of fresh Loans and Advances in Infrastructure,
Real Estate, Micro Loans and Farm portfolio amounted to
R 37160 crore during the year ended March 31, 2020 – a
decline of 36% y-o-y in a year characterized by multiple
macroeconomic concerns that beset the financial
services sector at periodic intervals. The Loan Book
stood at R 98384 crore as at March 31, 2020, marginally
lower than the previous year. The Net Interest Margins
(including fee income) at 7.2% improved over 6.8% in
the previous year on the back of continued efforts to
improve asset quality and profitability of operations, aided
by the focus on increasing share of retail component in
the Loan Book.
This Segment was also adversely affected by the Covid-19
pandemic by way of abrupt stoppage of disbursements
at the year-end, extension of moratorium to customers
through RBI directives and introduction of additional
statutory provisioning requirements on account of such
moratorium.
Loan Book and NIM %
8. Developmental Projects (DP) Segment
The Developmental Projects Segment comprises
concessions acquired through a competitive bidding
process for the development of Power projects, Roads,
Bridges, Hyderabad Metro Rail and a Power Transmission
Line project. The total portfolio of the Developmental
Projects Group consists of 2 power projects (1 thermal
and 1 hydel), 10 roads and bridges projects, 1
transmission line project and 1 metro rail project. The
metro rail project has been executed under L&T Metro
Rail (Hyderabad) Limited (L&T MRHL) which is a 100%
subsidiary of L&T. Power projects are developed in
SPVs held by L&T Power Development Limited, a 100%
subsidiary, and other projects are developed through SPVs
held by L&T Infrastructure Development Projects Limited,
a Joint Venture in which the Company owns 51%. All
the projects which were under construction have been
commissioned by March 31, 2020, except 1 hydel power
plant, which is expected to be commissioned in early part
of FY 2020-21 on lifting of the lockdown.
R crore
100000 –
99000 –
98000 –
97000 –
96000 –
95000 –
–
99121
6.8
98384
7.2
2018-19
–
2019-20
–
Loan Book
NIM%
R crore
8000 –
7000 –
6000 –
5000 –
4000 –
3000 –
2000 –
1000 –
0 –
–
Gross Revenue and EBITDA
(4.3%)
5068
522
4850
539
2018-19
–
Gross Revenue
2019-20
EBITDA
–
The Gross Non-Performing Assets (GNPA) ratio
improved to 5.4% as at March 31, 2020 from 5.9%
as at March 31, 2019. Net NPA ratio has also reduced
to 2.3% as at March 31, 2020 against 2.4% as on
March 31, 2019.
Average Assets Under Management (AAUM) in the
Investment Management business has remained steady
at R 71056 crore during the year ended March 31, 2020
despite volatile markets and stress in the debt market
funds.
The Financial services business is in the process of
divesting its Wealth Management business to IIFL
Wealth, and is awaiting regulatory approvals as of
March 31, 2020.
The segment recorded a revenue of R 4850 crore for
the year ended March 31, 2020, lower by 4.3% over
the previous year, which included gains from divestment
of a container port business. The drop in revenue was
also contributed to by a lower Plant Load Factor (PLF) in
Nabha Power Ltd. on account of planned shutdown for
plant overhaul in Q4 FY 2019-20.
The segment clocked an operating profit of R 539 crore
for the year 2019-20, largely in line with the R 522 crore
earned in FY 2018-19, mainly on account of higher
contribution from Nabha Power and Hyderabad
Metro, partially offset by a non-recurring divestment
gain from sale of a Container Port business in the
previous year.
322
9. Others Segment
R crore
8000 –
7000 –
6000 –
5000 –
4000 –
3000 –
2000 –
1000 –
0 –
–
Gross Revenue and OPM%
(10.5%)
5935
28.6%
2941
2994
5309
3095
20.9%
2214
2018-19
–
2019-20
–
Industrial Machinery, Products & Others
Realty
OPM%
The Others segment covers Realty, Construction and
Mining Machinery, Rubber Processing Machinery and
Valves businesses. Revenue for the segment registered a
decline of 10.5% from R 5935 crore in 2018-19 to R 5309
crore in 2019-20. The decline was mainly in the Realty
business, which in the previous year included a large
value sale of commercial property and higher hand over
of residential properties. Construction Equipment and
other allied businesses have recorded a decline with lower
demand for wheel loaders and excavators. The Valves
business, registered growth with focus on its distribution
business and higher order intake in the previous year. The
Operating Margin declined over the previous year, which
included a lumpy gain on sale of commercial property in
the Realty business.
II. L&T STANDALONE
PERFORMANCE REVIEW
L&T’s standalone financials reflects the performance
of Infrastructure segment, Power, Heavy Engineering,
Defence Engineering, and Others. The Others segment
comprises of a part of Hydrocarbon business, Realty,
Construction & Mining Machinery and Rubber Processing
Machinery.
L&T Shipbuilding which was earlier a subsidiary has been
merged with the Company with effect from April 1, 2019
pursuant to an NCLT Order. Accordingly, the previous
year’s financials are restated for comparison purpose.
L&T standalone continues to be the major contributor to
revenue and profits of the Group’s performance.
Order Inflow and Order Book
R crore
150000 –
125000 –
100000 –
75000 –
50000 –
25000 –
0 –
–
Order Inflow
6.7%
107627
17597
16%
114825
27887
24%
84%
90030
86938
76%
2018-19
–
2019-20
–
Domestic
International
The order inflow during FY 2019-20 grew by 6.7% at
R 114825 crore as compared to R 107627 crore in the
previous year. The Infrastructure segment contributed
86% of the total order inflow during the year on receipt
of orders from the airport sector, affordable housing
sector, and a few international orders. The Power business
registered growth with the receipt of orders for an
ultra-supercritical thermal power project and several Flue
Gas Desulphurisation projects.
The international order inflow increased to 24% of the
total order inflow for FY 2019-20 as compared to 16% in
the previous year.
Order Book
1.8%
245628
16%
39165
250151
49875
20%
84%
206463
200276
80%
R crore
320000 –
240000 –
160000 –
80000 –
0 –
–
As at 31-03-2019
As at 31-03-2020
–
–
Domestic
International
323
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
Order Book Composition
Operating Expenses and PBDIT
4149
2%
5323
2%
R crore
8938
4%
13033
5%
Infrastructure
Power
Defence Engineering
Heavy Engineering
Others
218708
87%
Operating Expenses and PBDIT
2019-20
[% to revenue]
8.3%
(9.3%)
3.3%
(2.5%)
7.2%
(7.0%)
Mfg., Construction &
Operating Expenses
Staff Expenses
Sales, Administration &
Other Expenses
Operating Profit (PBDIT)
81.2%
(81.2%)
Total Order Book: R 250151 crore as at March 31, 2020
[Figures in brackets relate to previous year]
The Order Book as at March 31, 2020 stood at
R 250151 crore, 87% of which is contributed by
Infrastructure segment. International orders constituted
20% of the current Order Book. The Order Book growth
was restricted to 1.8% on deletion of some non-moving
projects, especially in the Infrastructure segment.
Revenue from Operations
Gross Revenue from Operations
R crore
120000 –
0.1%
82287
80000 –
23%
18787
40000 –
77%
63500
82384
18122
22%
64262
78%
0 –
–
2018-19
2019-20
–
–
Domestic
International
L&T achieved a revenue of R 82384 crore during
FY 2019-20 reflecting a flat growth over the previous
year, with several execution impediments and delayed
payment challenges from customers in various
Infrastructure projects.
The growth was further impacted due to a decline in
the Power segment’s revenue, since new orders are yet
to gain execution momentum, whilst existing coal-fired
power plant projects are nearing completion. The Realty
business revenues also declined, since the previous
year’s revenue included the sale of a major commercial
property and higher hand-over of residential flats. The
Defence Engineering segment registered growth, on
better progress achieved on execution of the artillery gun
project.
Manufacturing, Construction and Operating (MCO)
expenses, comprising cost of construction material, raw
materials, components and subcontracting expenses,
amounted to R 66882 crore, which is 81.2% of revenue,
similar to the previous year.
Staff expenses for the year at R 5956 crore increased
by 3.9% y-o-y mainly due to increase in manpower
count. Staff Cost as a percentage of revenue increased
marginally from 7% to 7.2%.
Sales and administration expenses for the year at
R 2707 crore increased by 32.2% y-o-y, mainly due to
higher Expected Credit Loss provisions on financial and
contract assets, impairment of investment and Donation
towards PM Cares Fund in Q4 FY 2019-20.
Profit before depreciation, interest and tax excluding
other income (PBDIT) was R 6838 crore for the year,
lower by 10.6% over the previous year. The 100 bps
drop in PBDIT at 8.3% of sales is mainly due to higher
ECL provisions and cost overruns in some projects in the
Infrastructure segment.
Depreciation and Amortization charge
Depreciation and amortization charge for the year
2019-20 marginally increased by 2.1% and was at
R 1021 crore, as compared to R 1000 crore in the previous
year, with additional depreciation of R 75 crore accounted
on implementation of new accounting standard on Leases
(Ind AS 116).
Other Income
Other income mainly comprises income from the
Company’s treasury operations, dividend and income
earning from Group companies. Other income for the
year 2019-20 at R 2808 crore, increased as compared to
R 2711 crore for the previous year mainly due to higher
earnings on larger treasury investments and dividend from
subsidiaries.
Finance cost
The interest expenses for the year FY 2019-20 at
R 2267 crore were higher by 26.8% vis-à-vis R 1788 crore
324
for the previous year. The increase is mainly attributable
to an increase of R 13,795 crore in borrowings as
at March 31, 2020 compared to borrowings as at
March 31, 2019, as well as a higher quantum of interest-
bearing customer advances. The average borrowing cost
for the year 2019-20 was at 7.4% p.a., lower from the
7.6% p.a. in the previous year.
Exceptional Items
Exceptional Items of R 610 crore (net of tax) for the year
2019-20 represents gain on dilution of stake in L&T
Technology Services, while the previous year included
gains on dilution of stake in L&T Infotech and L&T
Technology Services, as well as recovery of a receivable
amount under Insolvency & Bankruptcy Code, partly
offset by impairment of some investments in JVs.
Profit after Tax and EPS
R crore
9000 –
7500 –
6000 –
4500 –
3000 –
1500 –
0 –
–
Profit After Tax
7491
6679
2018-19
–
2019-20
–
Profit after Tax (PAT), including exceptional items, for the
year 2019-20 at R 6679 crore, registered a decline of 11%
as compared to R 7491 crore in the previous year mainly
due to lower operating margin, higher interest expenses
and lower exceptional income.
The Company has opted for the lower tax rate under the
tax ordinance introduced during the year under review.
This has resulted in saving in current tax. The said saving
is partially offset by write down of opening Deferred
Tax Asset for revised rate and surrender of Minimum
Alternate Tax credit not being available under the new tax
ordinance.
The Basic Earnings per Share (EPS) from continuing
operations & discontinued operations for the year
2019-20 at R 47.59 has declined compared to R 53.43 in
the previous year.
Other Comprehensive Income (OCI)
Other Comprehensive income during the year reflected
a loss of R 519 crore, vis-à-vis loss of R 118 crore in the
previous year, mainly due to impact of fair valuation of
investments in Mindtree prior to acquiring controlling
stake.
Return on Net Worth
The Net Worth of the Company as on March 31, 2020
at R 52175 crore increased by R 2127 crore as compared
to March 31, 2019, reflecting mainly profit for the year,
reduced by the payment of interim dividend of R 10 per
paid up equity share in March ‘20.
Return on Net worth (RONW) including Exceptional Items
for the year 2019-20 at 13.1% is lower as compared to
15.7% in the previous year. The decline is largely due
to higher exceptional income in 2018-19, which mainly
included gains on dilution of stakes in LTI & LTTS.
Liquidity & Gearing
Borrowings increased during FY 2019-20 by R 13452
crore to sustain a higher level of operations, increase in
the working capital and for the acquisition of Mindtree
Limited. During the year, additional funds were generated
from liquidation of other investments, dividend income
R 1384 crore and Treasury income R 518 crore.
Besides the Mindtree acquisition and operations, the
funds were deployed for capex of R 1309 crore, payment
of dividend R 4159 crore comprising of final dividend of
R 2526 crore for FY 2018-19, Dividend Distribution Tax
of R 229 crore and interim dividend of R 1404 crore for
FY 2019-20 and net interest expense of R 1893 crore
during the year. There was a net increase of R 464 crore in
the cash balances as at March 31, 2020 as compared to
the beginning of the year.
Fund flow statement
Particulars
Borrowings (net of repayment)
Sale/(Purchase) of Other investments
Treasury and dividend income
ESOP Proceeds (net of buyback expenses)
Sources of Funds
Operating activities
Capital expenditure (net)
Net investment/(divestment)
Dividend paid
Interest paid
Increase/(decrease) in cash balance
Utilisation of Funds
v crore
2019-20
13452
3463
1902
18
18835
121
1309
10889
4159
1893
464
18835
2018-19
(493)
(2612)
1937
11
(1157)
(2557)
792
(3053)
2597
1528
(464)
(1157)
Total borrowings as at March 31, 2020 stood at
R 25785 crore as compared to R 11990 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
increased to 0.49:1 as at March 31, 2020 from 0.24:1
as at March 31, 2019. The net debt:equity ratio has
increased to 0.31:1 as at March 31, 2020 from 0.08:1
as at March 31, 2019 – the increase has primarily been
driven by increased working capital requirements and the
acquisition of Mindtree Limited.
325
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
III. STRATEGY, BUSINESS MODEL AND RESOURCE ALLOCATION
Strategy Formulation
Business strategy formulation seeks to set long-term goals and strategies that help the Company in exploiting its
strengths, identifying and realizing new opportunities and building new capabilities. This is enabled through three plans
with time horizons ranging from long-term (7-10 years) to medium-term (5 years) to short-term (annual). Each plan
dovetails into the next.
Last year, the Company had embarked on the development of a ‘Perspective Plan’, with a long-term view of 7-10 years.
The process started with the identification of emerging megatrends and potential disruptions in current businesses. This
was followed by a call for ideas for new businesses as well as adjacencies and growth areas, conducted through group-
wide exercises, large-scale interactive processes, brainstorming sessions and interactions with experts. Ideas were filtered
based on certain criteria. Some ideas went through a stage-gated assessment and a few were selected for pursuing
further. The exercise culminated in a future outlook for the Group along with seeding of potential new businesses in
Digital Platforms such as the B2B marketplace, skilling platform, etc. The insights garnered from the Perspective Plan
exercise, tweaked for the changed circumstances of the pandemic, would be used for creating the next 5-year strategic
plan.
The strategic plan, which runs for a period of 5 years, is developed through a collaborative and consultative process
across the organization. Formulating the plan involves a lookback analysis of performance against the previous plan,
scanning market opportunities, outlook on investment and identification of critical areas to be addressed. The outcomes
of the exercise are priorities for growth, key initiatives at business unit and corporate level, talent and leadership pipeline
plan, financial resources plan, and broad financial targets for each business. The ensuing year (2020-21) is the terminal
year of the current 5-year strategic plan, ‘Lakshya 21’. The Company would be undertaking the development of next
5-year strategic plan ‘Lakshya 26’, which would lay down the strategic guideposts for the Company from FY 22 to
FY 26. Changes in various industry segments as well as new areas of business, after considering the impact of the recent
Covid-19 pandemic, would get factored into ‘Lakshya 26’. The Strategic Plan usually gets to be reviewed after, say, three
years for mid-course correction, if any.
While the 5-year business outlook and broad financial goals are embedded as an overarching strategic plan, the annual
operating plan is formulated before the commencement of every financial year. This helps provide flexibility in tailoring
annual operating and financial budgets to changing circumstances while keeping the 5-year strategic plan in view.
Strategy Formulation Schematic:
Perspective Plan
5 Year Strategic Plan
Annual Plan
Strategy Formulation Schematic:
Objective
• Long Term Business Vision
• Assessing Global Megatrends
• Assessment Of Emerging
Technologies & New Growth
Opportunities
• Identifying relevant growth
Initiatives
• Mid-Long term Business
Outlook
• Assessment of Global and
Domestic Macro Environment
• 5 Year Business Plan
• Key Strategic Initiatives
• Annual Business Plan
• Financial KPIs: Order Wins,
Revenues, Profits, Working
Capital and ROE Targets
• Operational KPI: Productivity
Targets
Timelines
7-10 years
5 year
1 year
• Business Portfolio
• Geographical Business Strategy
• Investment In Emerging
Businesses
• Organization Structure
• Leadership Pipeline
• Long Term Capex Outlay
• Detailed Growth Plan
• Assessment of Investment
Environment and Competition
• Medium Term Opportunities
• Talent Management and
Leadership Development
• Strategic Partnerships
• Portfolio Assessment
• Annual Budgets
• Order Prospect Pipeline
• Bid Management Policies
• Key Account Management
• Order Book Execution Plan
• Capex And Liquidity Plan
• Resource Allocation
Scope
326
Business Model
Value creation by the Group is enabled through leveraging its four business models:
•
EPC: The company focuses on its proven core competencies of conceptualizing, executing and commissioning large,
complex infrastructure projects in the areas of Roads and Bridges, Power Transmission & Distribution, Thermal /
Hydel / Solar / Nuclear Power Plants, Water and Irrigation Infrastructure, Residential, Commercial, Institutional and
Factory Buildings, Airports, Metro and Conventional Railways, Onshore and Offshore Hydrocarbon facilities and
Metallurgical projects.
• Manufacturing: Manufacturing is mainly concentrated around Defence and Shipbuilding, heavy custom-built
equipment catering to process industries, Electrical Products and Systems (made-to-stock and made-to-order),
Material Handling Equipment and Industrial Products & Machinery. The company has extensive manufacturing
facilities at Hazira, Vadodara, Ahmednagar, Talegaon, Chennai, Coimbatore, Kattupalli in India and Oman, UAE,
Saudi Arabia, Malaysia in international geographies.
•
Services: The services businesses cater to sectors of Information Technology (through LTI and Mindtree), Technology
Services (through LTTS), Smart World & Communication, Real Estate and Financial Services (through LTFHL).
• Development: The Company has also undertaken development projects such as the Hyderabad Metro, road
operations and tolling (through IDPL), Nabha Power and Uttaranchal Hydel Power, among others.
Business Segment Schematic:
Business Portfolio Schematic
The Group is present in various business segments, which are shown below:
Infrastructure
Energy
Power Transmission & Distribution
Transportation Infrastructure
• Buildings & Factories
•
• Heavy Civil
•
• Water & Effluent Treatment
• Metallurgical & Material Handling
• Hyderabad Metro
•
IDPL (Road Tolling & Operations)
• Hydrocarbon Engineering
•
•
Power
Power Development (Nabha Power,
Others)
Engineering,
Procurement &
Construction
Manufacturing and Defence
Services
• Defence and Shipbuilding
• Heavy Engineering
• Machinery & Industrial Products
• Others (Construction & Mining
Equipment, Valves etc.)
• Realty
•
•
•
•
Information Technology
Technology Services
Financial Services
Smart World & Communication
327
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
Portfolio Strategy
The portfolio strategy aims to de-risk the revenue while improving profitability in the pursuit of growth. This strategy
focuses on:
• Complementing the mature businesses with growth-stage businesses, with a focus on asset-light, capex-light and
high-margin businesses. The Group is also trying to reduce exposure to asset-heavy businesses. Businesses requiring
periodic capital infusion such as Financial Services will be reassessed from time to time in the context of emerging
strategic significance.
• Well-balanced and geographically diversified businesses across domestic and international markets. Over 35% of
the business comes from international markets (primarily the Americas, Middle East & Africa and Europe). To further
de-risk the geographical concentration and pursue new growth opportunities, the focus on few more high-potential
countries in Africa and ASEAN region will be enhanced.
•
•
Balancing the cyclical nature of the EPC business through a portfolio of manufacturing and services businesses. The
‘Services’ businesses contribute over 25% of the Group’s revenues. With the aim of better profitability and a stable
revenue profile, the Group intends to step up the proportion of services business while factoring the growth in the
traditional EPC and manufacturing businesses. The acquisition of Mindtree Limited was a step in this direction.
Supplementing the standalone offerings with partnerships: For the EPC and manufacturing businesses, the
Company has partnered with several large global process and technology licensors, and for the IT and Technology
Services businesses, the group has extensive partnerships with established global software product and technology
companies. These engagements enable the group to offer a bouquet of value-added services to customers in
different businesses.
Businesses and offerings are closely linked to global megatrends and the Company continues to build on these to
address future challenges.
328
Our Business Offerings Backed by Megatrends
High rise buildings for better utilization of land
space (B&F)
Underground multi-level car parks (Geo)
Urbanization
Redesigned utility networks (PT&D, WET)
Increasing population
density in cities leading to
various challenges e.g.
congestion, call for better
solutions with improved
service levels
Safe and Smart cities (SWC)
Renewables – Solar, Energy
Storage (PT&D, HC)
Green buildings (B&F)
Water Recycling and
Reuse solutions (WET)
Use of waste materials e.g. Fly Ash,
furnace slag, c&d waste in construction
Energy efficient manufacturing units
Mass Rapid Transit Systems (TI, HC)
Water neutral campuses
World class airports (B&F, TI)
Sustainability
Climate change and
resource scarcity; need for
solutions to balance global
needs with environment
Mobility
EV and Autonomous systems (LTTS)
Expressways & elevated corridors (TI)
Water Treatment and sewage
systems (WET)
Safe, fast, cheap and
environment friendly
solutions for people and
goods
Affordable & Mass Housing
(B&F)
Electricity distribution systems
and microgrids (PT&D)
Financial services (LTFS)
Big Data, AI / ML in BFSI, Retail and
Media (LTI, LTTS, MT)
Demographic
Challenge
Universal coverage for basic
amenities, keeping up with
growing demands for global
population
Digitalization
Automation, IoT in Manufacturing, HiTech, Industrial
Products, Medical devices (LTTS, L&T-NxT)
Cloud, Cybersecurity (LTI, MT)
Mobile, Drones, AR/VR/MR (LTI, LTTS, MT)
Technology and services offerings
to aid new age businesses across
various domains
Platforms (B2B marketplace, skilling)
329
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
Strategic Thrust and Direction
The focus of the Group’s strategy is to create economic value for its shareholders, investors and clients while generating
social and environmental value for its employees and other societal stakeholders. This is enabled by:
•
Ensuring efficient conversion of the Order Book into healthy margins through execution, operational excellence and
digitalization initiatives
• Driving growth of the services businesses which have a higher RoE profile
• Maintaining an optimum mix between domestic and international business
• Managing financial resources for the growth of the businesses and strong financial health to facilitate access to
capital markets, as and when required
Incubating new businesses to tap future growth opportunities
Engaging with start-ups to access innovations to enhance capabilities and develop new offerings
•
•
• Unlocking capital from non-core businesses and assets earning sub-par returns
•
•
•
Leveraging digital solutions and analytics across various parts of its businesses, spanning areas such as remote asset
management, material tracking, employee productivity enhancement, safety and procurement, among others
Focus on businesses contributing to environment sustainability such as solar, energy storage, water reuse and
recycling
Thrust on opportunities linked to achieving the Sustainable Development Goals, like access to clean water for
everyone, reduction in consumption of virgin material in construction, energy efficiency solutions, etc.
The Group retains its thrust on improving ROE.
Resource Allocation:
The Company has a well laid-out plan of resource allocation to meet its strategic goals which includes:
• Maintaining adequate liquidity on the Balance Sheet to exploit growth opportunities and fund emerging and high
growth businesses
•
Prudent allocation of resources (Capex and Working Capital) to fund growth in different businesses. Financial
resources are monitored and directed at a central level with mandates for control at a local level
• Attracting and retaining a robust and thriving talent pool through employee engagement programmes, monetary
and non-monetary incentives, leadership development initiatives, offering professional development opportunities
and fostering a conducive organisation climate. The Company has evolved a series of structured HR policies to
enable this resource allocation
•
•
Long-term lasting engagements with labour sub-contractors to ensure a steady augmentation of resources at project
sites
Long-term engagement with vendors of services, materials and equipment to provide adequate resources for
business growth in various business verticals
• Maintaining strong financial health to facilitate raising of resources from Capital Markets as and when required
•
Ensuring judicious allocation of manpower and monetary resources to company-wide sustainability and growth
initiatives such as CSR, Digitalisation and operational excellence programs
330
IV. RISk MANAGEMENT
The Company has an institutionalised Enterprise Risk Management framework, which is continuously reviewed and
benchmarked with industry best practices. The Audit Committee and the Risk Management Committee are two Board
committees that oversee the adequacy and effectiveness of the risk management framework and processes. Each
business vertical has in place policies, structures and procedures to cater to the unique nature of its business aligned
within the overall Enterprise Risk Management framework.
During the year, an Enterprise Risk Management (ERM) system for digitalizing the risk management processes for
business operations was developed and implemented. This system enables monitoring risks across projects in various
geographies of operation, provides aggregate risk-weighted portfolio views of businesses and shares learnings across the
organization, etc. An integrated Knowledge Centre portal has also been developed and provides access to information
on risks emerging from economic factors, geo-political happenings, financial markets, etc. It also provides a platform for
assessment of counter-party risks and feeds useful updates to enable informed, fact-based decision-making.
The Company’s emphasis on continuous learning has led to the creation of several programmes for improving the
risk awareness across the organization. These include workshops, knowledge sessions, embedded risk management
modules in project management / leadership development programmes and training content deployed on online learning
platforms.
Once again in FY 2019-20 the Company has won CNBC TV18’s prestigious ‘Firm of the Year Trophy - 2019’ for best Risk
Management practices for Frameworks and Systems in two categories – Conglomerate and Technology.
The top enterprise-wide risks for the Company and their mitigation measures are summarized below:
Risk Description
Mitigation
Pandemic
Covid-19, declared a pandemic by the World Health
Organization in March 2020, posed a risk to health and
safety. It also has had various implications on businesses in
terms of slowdown of new orders, delays in execution of
existing orders and supply disruptions.
Geopolitical Risks
Over the last few years, risk on account of sanctions, trade
barriers, protectionist policies and geopolitical conflicts
have increased.
A task force comprising members from leadership and
Risk Management was formed to assess and develop
suitable mitigation strategies to address the impact of the
pandemic. The Company is following all the lockdown
restrictions imposed by the Government of India.
Construction sites were closed and Work From Home for
employees was enabled with appropriate data security
controls. Standard Operating Procedures including safety
precautions and social distancing norms were prepared in
order to resume operations once the lockdown restrictions
are progressively lifted. To mitigate the risk of supply
disruptions, alternative procurement strategies have
been considered. The Company is also exploring various
contractual remedies to deal with the situation. The above
steps taken along with other measures, will help the
organization to be resilient and help weather any major
shocks.
Appropriate mitigation strategies are in place for
addressing geographical concentration, strategic sourcing
options, regular monitoring of international sanctions
and realignment with international partners based on the
geopolitical situation.
331
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
Risk Description
Mitigation
Slowdown in economy
There has been a slowdown in various sectors like
infrastructure, hydrocarbon, power, defence, metals &
minerals, realty, etc., on account of several factors, such as
budgetary allocation, funding issues, decline in oil prices,
slow pace of decision-making, lack of investment demand,
green initiatives and delays in environmental clearances.
Due to Covid-19 there will be further stress on the
resources available with central and state governments.
Terms of Trade
Over the years, terms of trade have become more
restrictive and stringent both in terms of aggressive
timelines as well as contract clauses such as payment
terms, etc.
Competition
Due to the overall slowdown and limited opportunities,
there has been aggressive bidding from various foreign
and domestic players in the past few years.
Reputation and Brand
The Company has a presence across sectors in various
geographies, and the size and scale of projects being
prospected / executed is of increasing magnitude and
high visibility, hence maintaining its reputation / brand is
paramount.
Cyber Security
As IT systems get increasingly interconnected and with
implementation of various digitalisation initiatives, cyber
security has become a key concern for Governments and
businesses.
332
Being a diversified conglomerate has helped mitigate the
risk of such a slowdown in some specific sectors, which is
compensated by growth in certain other sectors like water,
airport construction, renewable energy, metro network,
health infrastructure etc. The Company will continue to
seek opportunities and take appropriate measures to
offset the impact of the slowdown and the pandemic. The
Company is also analysing various sectors to identify areas
of growth and reallocate resources accordingly.
Various mitigation strategies are undertaken by the
Company, such as negotiating with the customer for
equitable terms with better value offerings. The Company
also enters into back-to-back arrangements with vendors
and sub-contractors.
The Company’s competitive strength is derived from its
engineering expertise, excellence in executing projects,
particularly the large and complex ones, reputation
for quality, usage of technology, project management
expertise and strong resource base, including the Balance
Sheet strength. The Company has also taken various
initiatives, such as digitalisation and cost-optimisation via
value engineering, and this has helped to win new orders.
The Company addresses the potential risk of erosion of
reputation and brand value through a strong corporate
governance framework and delivering projects on time
and in conformity with contracted quality of deliverables.
It has a Compliance Policy in place, mandating
adherence to a Code of Conduct and Internal Controls,
complemented by regular knowledge-sharing of best
practices across the organisation and mechanisms to track
various social media platforms.
The Company’s Corporate Brand Management &
Communications department also protects and bolsters
the brand in Indian and international markets through a
wide range of online and offline media.
The Company has taken several steps to mitigate the
cyber risks. These include roll-out of an enterprise-wide
cyber security framework that provides for technology
solutions to enforce detective and preventive controls and
employee education to create awareness of cyber risks.
Risk Description
Mitigation
Execution Challenges
The Company faces execution challenges like
unanticipated geological conditions, availability of work
front, land acquisition and Right-of-Way (ROW), delay
in approvals and clearances from Government agencies,
working in difficult/harsh weather conditions, manpower
issues, etc.
Counter Party Risks
The Company partners with different contractors (joint
venture / consortium projects) across businesses based
on technical requirements / local market conditions. The
partner’s performance and financial strength is crucial for
project success.
Working capital challenges
Project delays and adverse contractual payment terms lead
to increased working capital requirements.
Claims Management
The EPC business has an inherent risk of timely and
acceptable settlement of claims due to dependency on
various stakeholders for approval and clearances.
The Company closely tracks the key risks for each project
to ensure timely mitigation with proper escalation and
resolution mechanism as required.
Learnings from past projects are incorporated in the
inter-se agreements with the partners and clauses on
liability of each partner is carefully drafted after legal
due diligence. On a periodic basis the Company carries
out a financial assessment of its key counter parties and
appropriate measures are adopted based on the outcome
of the analysis.
Guidelines have been issued to monitor and manage
working capital, both at the project level as well as
the business level. The Company also deploys specific
cashflow management strategies at both client and
vendor level, to mitigate working capital challenges on a
case-to-case basis.
The Company maintains a strong documentation and
follow-up protocol with various stakeholders for any
claim management and to ensure timely and equitable
settlement of such claims. Documentation in relation to
Covid-19 / force majeure is being reviewed on a project-
to-project basis and is being suitably taken up with all
stakeholders.
FINANCIAL RISkS
Inflation in India remained benign in the first half of
FY 2019-20 but picked up sharply in the second half
mainly due to the rise in food prices driven by supply
concerns. Further economic growth remained a challenge
amidst follow-on concerns on domestic credit growth,
corporate deleveraging cycle and lack of pick-up in
private consumption. The US Dollar remained strong
in FY 2019-20, primarily on the back of strong growth
divergence between the US and rest of the world
including emerging market countries. Slowdown in
manufacturing gripped countries from Europe to China
and various emerging markets in the first half of the
year 19-20. During the second half of the year, risks
pertaining to Trade War and Brexit temporarily abated.
Liquidity infusion by Central banks and Corporate Tax
cuts provided thrust to various asset classes. The Indian
currency depreciated accordingly but less so due to
better fundamentals compared to other emerging market
economies.
The last quarter of FY 2019-20 witnessed elevated
financial market volatility, primarily due to the emergence
of the Covid-19 pandemic, thereby halting economic
activity across the globe. Lockdown and closure of
customer offices, non-completion of certification
inspections and the Company’s inability to generate
invoicing resulted in significant amount of collections not
being realized within the financial year. This has led to
a sharp increase in working capital levels in the current
year, which, for the last 3 years had been on a targeted
improvement path. The Company believes that this is a
temporary setback and hopes to pull back working capital
levels in the next year or two.
333
MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2019-20
Capital structure, liquidity and interest rate risks
The Company maintains a conservative capital structure.
Low gearing levels equip the Company to balance
business stresses on one hand and raise growth capital on
the other. This policy provided the Company the required
flexibility for fundraising at short notice to deal with the
sudden worsening of the working capital due to the
lockdown and also build up a liquidity buffer as the year
FY 2019-20 ended.
The Company has been investing capital into subsidiaries
as scheduled and also to optimise overall Group interest
costs. The Company also completed the acquisition of
shares of Mindtree Limited from a few of the existing
shareholders of Mindtree and the Open Offer, which
evidenced an overwhelming subscription resulting in
acquisition of over 60% stake in Mindtree Limited.
Despite the lower liquidity environment in FY 2019-20
on the back of risk aversion (post defaults by some large
AAA-rated entities in the NBFC sector) by both retail and
institutional investors, slower consumer demand and the
sluggishness around investments in the private sector as
well as disruption caused due to the Covid-19 outbreak,
the Company managed to meet its fund requirements and
also managed to add to the cash and cash equivalents of
the Company from R 7588 crore at the end of December
31, 2019 to R 9998 crore at March 31, 2020.
The Company plans to maintain adequate liquidity on
the Balance Sheet to deal with the ongoing Covid-19
crisis and downturn in economic conditions. With the
implementation of the Large Exposure Framework
guidelines of RBI from April 1, 2019, the banking limits
sanctioned by domestic banks to any of the Group
companies will need to fit within 25% of Tier 1 capital of
banks versus 40% of Tier 1 and Tier 2 capital prevalent
till now. This is likely to constrain the availability of bank
limits (both fund-based and non-fund-based) and also
impact the pricing of the same for the Group unless
some regulatory relaxation is granted and may have some
adverse impact on the growth plans of the Group.
The Company judiciously deploys its surplus funds
in short-term investments in line with the Corporate
Treasury policy. It constantly monitors the liquidity levels,
economic and capital market conditions and maintains
access to the lowest cost means of sourcing liquidity
through banking lines, trade finance and capital markets.
Given the extra liquidity buffer planned to be kept on the
balance sheet due to the Covid-19 situation, both the
debt and investments on the balance sheet are likely to
remain elevated in FY 2020-21. 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 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 risks
and residual commodity price risks are managed by
treasury products.
The disclosure of commodity exposures as required under
clause 9(n) of Part C of Schedule V of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 in the format specified vide SEBI Circular dated
15th November, 2018 is given separately on page 335 of
this Annual Report.
Financial risk management is governed by the Risk
Management framework and policy approved by the
Audit Committee and authorised by the Board. Financial
risks in each business portfolio are measured and
managed by Corporate Treasury.
Despite currency weakness and elevated financial
market volatility, the Company’s robust financial risk
management processes ensured that financial costs
remain under control.
V. INTERNAL CONTROLS
The Company maintains a robust framework of internal
controls sized appropriately with the nature of business,
size of operations, geographical spread and changing risk
complexity, which are impacted by varying internal and
external factors. This framework forms the building blocks
of a strong corporate culture of good governance.
The Company has aligned its internal financial controls
with the requirements of Companies Act, 2013 and the
globally accepted framework issued by the Committee
of Sponsoring Organizations (COSO) of the Treadway
Commission that operates at both entity and process
levels. The internal controls systems and activities at L&T
cover the operational controls in the business processes
besides the requirement of Internal Controls over
Financial Reporting (ICoFR).
The internal controls are designed to provide reasonable
assurance on recording of transactions and providing
334
reliable financial and operational information. The
Company has well documented policies, procedures
and authorization guidelines commensurate with the
level of responsibility, besides standard operating
procedures specific to respective businesses. This ensures
the propriety of transactions and authorisations at an
appropriate level of management.
The Corporate Policy on internal controls sets the tone at
the top and serves as the foundation for sound internal
controls. The internal control teams at corporate and
business levels assist the executive management, who are
responsible for establishing, operating and upgrading the
internal controls system. The Corporate team reviews and
assesses the processes, formulates the policies, guidance
notes and advisories. It also shares best practices across
the organisation.
The effectiveness of internal controls is tested by
Statutory Auditors as well as by the Corporate Audit
Services team. The Corporate Audit Services department
develops an audit plan for the Company, which covers
core business operations, corporate departments as
well as support functions. The Audit Committee of the
Board reviews the annual internal audit plan. Significant
audit observations from the independent internal audits
conducted by Corporate Audit Services are presented
quarterly to the Audit Committee along with the status
of the management actions and the progress of the
implementation of recommended remedial measures.
The Corporate Governance is strengthened by a
‘Code of Conduct’ applicable to the employees and
implementation of a separate ‘Code of Conduct’ for
Business Partners, which reinforces ethical behaviour
by aligning them to the unique corporate culture and
values of the Company. The whistle-blower mechanism
forms another integral component of the internal control
system, which is overseen by the Audit Committee. It is
available to both employees and business partners, to
enable them to raise genuine concerns about any actual
or suspected ethical / legal violations or misconduct or
fraud, with adequate safeguards against victimisation,
fear of punishment or unfair treatment. The Company
also has an institutionalised mechanism of dealing with
complaints of sexual harassment through a formal
committee constituted in line with the Company’s Policy
on ‘Protection of Women’s Rights at Workplace’ under
relevant statutory guidelines. This policy has been widely
disseminated across the Company and all complaints are
addressed in a time bound manner.
Disclosure of commodity exposures as required under clause 9(n) of Part C of Schedule V of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015
Sr
No
1
2
3
4
5
6
7
8
9
10
11
12
Commodity Name
Silver (Buy)
Copper (Buy)
Copper (Sell)
Steel (Buy)
Aluminium (Buy)
Aluminium (Sell)
Iron Ore (Buy)
Coking Coal (Buy)
Zinc (Buy)
Lead (Buy)
Cement (Buy)
Nickel (Buy)
Exposure in
INR towards
the particular
commodity
(R crore)
Exposure in
Quantity terms
towards the
particular
commodity (Tn)
% of such exposure hedged through
commodity derivatives
Domestic market
International market
Total
OTC Exchange
OTC Exchange
353
873
(502)
11735
546
(141)
44
55
90
63
2941
66
60
18,788
(12,221)
3,128,865
40,353
(12,629)
108,129
44,524
5,388
4,149
5,911,690
660
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
76.90
68.26
–
86.07
34.52
42.13
42.13
100.00
100.00
–
37.88
–
–
–
–
–
–
–
–
–
–
–
–
–
76.90
68.26
–
86.07
34.52
42.13
42.13
100.00
100.00
–
37.88
335
At L&T, we are increasingly embracing digital technologies to energize processes and systems, deliver transformational
solutions, create a safer environment for our workforce and a better world for the communities we impact.
We turn technology buzzwords into benefits, delivering speed and scale through innovation – propelling the Company,
its clients and the country to the next level.
Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001. CIN: L99999MH1946PLC004768
www.Larsentoubro.com
0
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DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Indiabulls Finance Centre, Tower 3
27th – 32nd Floor,
Senapati Bapat Marg
Elphinstone Road (West)
Mumbai 400013.
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF LARSEN & TOUBRO LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Larsen & Toubro Limited (the “Company”), which comprise
the Balance Sheet as at 31 March 2020, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement
of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and
other explanatory information, which includes 31 joint operations accounted on proportionate basis and an amalgamated entity.
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of
report of the other auditor on separate financial statements of the joint operation referred to in the Other Matters section below, the
aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so
required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read
with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”), and other accounting principles generally
accepted in India, of the state of affairs of the Company as at 31 March 2020, and its profit ,total comprehensive income, its cash flows
and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section
143(10) of the Act (“SA”s). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit
of the Standalone Financial Statements section of our report.
We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India (“ICAI”) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the
provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics. 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 the Other Matters section below, is sufficient and appropriate to provide a basis
for our audit opinion on the standalone financial statements.
Emphasis of Matters
We draw attention to Note 1(i)(iii) of the standalone financial statement in which the Company describes the uncertainties arising from
the COVID 19 pandemic. Our report is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone
financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matters described below to be the key audit matters to be communicated in our report.
Revenue recognition – accounting for construction contracts
Key audit matter
description
As described in Note No. 1(ii)(e) of the standalone financial statements, the Company recognises revenue
from contracts with customers when it satisfies its performance obligations.
Accounting for construction contracts is considered as a Key Audit Matter as there are significant accounting
judgements in estimating revenue to be recognised on contracts with customers, including estimation of
costs to complete and determining the timing of revenue recognition.
337
INDEPENDENT AUDITORS’ REPORT ANNUAL REPORT 2019-20
Revenue recognition – accounting for construction contracts
Principal Audit
Procedures
The Company recognises revenue and profit/loss based on stage of completion based on the proportion
of contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at
completion. The recognition of revenue is thus dependent on estimates in relation to total estimated costs of
each contract.
Cost contingencies are included in these estimates to take in to account specific uncertain risks, or disputed
claims against the Company, arising within each contract.
These contingencies are reviewed by the Management on a regular basis throughout the contract life and
adjusted where appropriate.
The revenue on contracts may also include variable consideration (variations and claims). Variable
consideration is recognised when the probability of reversal of such revenue is low.
Further, Refer to Note No. 41 for the disclosures made in the Standalone Financial Statements as per IND AS
115 ‘Revenue from Contracts with Customers’.
The procedures performed included the following:
•
•
•
•
•
obtained an understanding of the process followed by the Company in determination of the estimates
and contract revenue;
performed walkthrough procedures over the process of identification of performance obligation;
tested the design and implementation of internal control over the quantification of the estimates used
as well as the operating effectiveness of such control;
tested segregation of duties while recording the contracts in the Company’s information system and
recognising revenue from such contracts;
tested the General IT Controls over the relevant information technology systems’ access and change
management controls relating to contracts and related information used in recording and disclosing
revenue in accordance with Ind AS 115 – Revenue from Contracts with Customers;
•
tested sample of contracts for:
-
-
-
-
appropriate identification of performance obligations;
change orders and the impact on the estimated costs to complete;
evaluation of reasonability of estimates of costs to complete ; and
tested the appropriateness of the timing of recognizing the revenue from the contracts;
•
•
tested the appropriateness of the variable considerations recognized based on the low probability of
reversal of such revenue; and
tested appropriateness of the disclosures in the financial statements in respect of such construction
contracts to ensure compliance with Ind AS 115.
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
Key audit matter
description
The Company, in its contract with customers, promises to transfer distinct services to its customers,
which may be rendered in the form of engineering, procurement, and construction (EPC) services through
design-build contracts, and other forms of construction contracts. The recognition of revenue is based
on contractual terms, which could be based on agreed unit price or lump-sum revenue arrangements. At
each reporting date, revenue is accrued for costs incurred against work performed that may not have been
invoiced.
Identifying whether the Company’s performance has resulted in a service that would be billable and
collectable where the works carried out have not been acknowledged by customers as of the reporting date,
or in the case of certain defence contracts, where the evidence of work carried out and cost incurred are
covered by confidentiality arrangements, involves a significant amount of judgment.
Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against
invoices raised which have remained unsettled for a significantly long period after the end of the contractual
credit period also involves a significant amount of judgment. Refer to Note No. 1(ii)(e) and 1(ii)(m) of the
standalone financial statements.
338
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
Principal Audit
Procedures
The procedures performed included the following:
•
•
•
•
•
•
•
•
•
obtained an understanding of the Company’s processes in collating the evidence supporting execution
of work for each disaggregated type of revenue;
obtained an understanding of the Company’s processes in assessing the recoverability of amounts
overdue and process over estimating the expected credit loss allowance;
tested the design and operating effectiveness of the key controls over the completeness and accuracy of
the key inputs and assumptions into the provisioning model;
evaluated controls over authorisation and calculation of provisioning model;
for defence contracts which are covered under statutory confidentiality arrangements, for sample of
contracts, the auditors have compared the revenue recognised with amounts collected from customers
to ensure that the gap between revenue recognised and collections is below the materiality threshold;
evaluated the delivery and collection history of customers against whose contracts un-invoiced revenue
is recognised;
verified for the sample selected, receipts post balance sheet date upto the approval of the financial
statements by the Board of Directors of the Parent Company;
performed an overall assessment of the expected credit loss provision to determine if they were
reasonable considering the Company’s portfolio, risk profile, credit risk management practices and the
macroeconomic environment; and
tested the appropriateness of the disclosures in the financial statements to ensure compliance with Ind
AS 115.
Assessment of the carrying value of unquoted equity instrument and debt instrument in loss making joint ventures.
Key audit matter
description
As described in Note No. 1(ii)(j) for Impairment of assets in the standalone financial statements, as at the end
of each financial year, the Company reviews the carrying amounts of its investments joint venture company
to determine whether there is any indication that those assets have suffered an impairment loss.
Further, refer to Note 1(ii)(m)(B) under Financial instruments in the Standalone Financial Statements for the
Company’s policy for impairment assessment of Debt Instruments.
The impairment review of unquoted equity instrument and debt with a carrying value of R 1342 crore,
is considered to be a risk area due to the size of the balance as well as the judgmental nature of key
assumptions, which may be subject to management override.
The carrying value of such unquoted equity instrument and debt is at risk of recoverability. The net worth of
the underlying entity has significantly eroded and the orders in hand are below the break-even production
levels of these facilities. The estimated recoverable amount is subjective due to the inherent uncertainty
involved in forecasting and discounting future cash flows.
How the scope of our
audit responded to the
key audit matter
Besides obtaining an understanding of Management’s processes and controls with regard to testing of
impairment of the unquoted equity and debt instruments in such financially stressed joint venture.
The procedures performed included the following:
•
•
•
•
•
•
•
•
Tested the data used by the Management in their impairment review including the key assumptions and
the management controls over completeness and accuracy of the data.
Engaged internal fair valuation experts to challenge management’s underlying assumptions and
appropriateness of the valuation model used.
Compared the Company’s assumptions with comparable benchmarks in relation to key inputs such as
long-term growth rates and discount rates to relevant market information.
Assessed the appropriateness of the forecast cash flows within the budgeted period based on their
understanding of the business, sector experience and impact due to COVID-19, if any.
Considered historical forecasting accuracy, by comparing previously forecasted cash flows to actual
results achieved.
Performed a sensitivity analysis in relation to key assumptions.
Obtained specific representations detailing basis in which projections were prepared.
Tested the appropriateness of the disclosures in the financial statements
339
INDEPENDENT AUDITORS’ REPORT ANNUAL REPORT 2019-20
Physical verification of inventory
Key audit matter
description
Principal Audit
Procedures
The Company’s management conducts physical verification of inventories during the year at reasonable
intervals, however, on account of the COVID-19 related lockdown restrictions, management was able
to perform year end physical verification of inventories, only at certain locations. Management has
carried out other procedures to validate the existence of its inventory as at the year-end, such as carrying
out consumption analysis, and performing roll-back procedures from the subsequent year end physical
verification date to determine the quantities of the inventory at the balance sheet date.
Refer Note No. 1(ii)(n) of the standalone financial statements.
The procedures performed included the following:
•
•
•
•
Understood the process and tested the management’s internal controls to establish the existence of
inventory in relation to the process of periodic physical verification carried out by the management, the
scope and coverage of the periodic verification programme, the results of such verification including
analysis of discrepancies, if any;
At selected locations subsequent to year-end, where the management appointed third party
independent chartered accountants to perform physical verification, sent instructions to the third party
chartered accountants to carry out the physical verification and provided samples to be verified by
them. We have received the report of the physical verification carried out by the third party independent
chartered accountants. Obtained the roll back procedures performed by the management from the
subsequent year-end physical verification date to arrive at the quantities as at the balance sheet date.
Traced the samples physically verified by the third party independent chartered accountants roll back
workings provided by the management.
Inspected, for samples selected, supporting documentation relating to purchases and consumption, and
such other third party evidences where applicable.
Tested the analytical reviews performed by the Company such as consumption analysis.
Information Other than the Financial Statements and Auditor’s Report Thereon
The respective Board of Directors of the Company and its Joint Operation Companies are responsible for the preparation of other
information. The other information comprise the information included in the Management Discussion and Analysis, Board’s Report
including Annexures to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does
not include the standalone financial statements and our auditor’s report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained
during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS
and other accounting principles generally accepted in India.
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 standalone financial statement that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
340
In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and
whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express
an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit
of the financial statements of such entities included in the standalone financial statements of which we are the independent
auditors. For the other entities included in the standalone financial statements, which have been audited by the other auditors,
such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We
remain solely responsible for our audit opinion.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced.
We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of
our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
341
INDEPENDENT AUDITORS’ REPORT ANNUAL REPORT 2019-20
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
•
As described in note 1(i)(ab) of the standalone financial statements, the figures for the current and previous financial years have
been recast to include the financial information of the erstwhile L&T Shipbuilding Limited which has been amalgamated with
the Company with effect from 1st April, 2019. The financial statement of the erstwhile L&T Shipbuilding Limited was audited by
another firm of Chartered Accountants 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 the erstwhile L&T Shipbuilding Limited, is based solely on the reports of such other
auditor.
• We did not audit the financial information of 28 joint operations and erstwhile L&T Shipbuilding Limited included in the
standalone financial statements, whose financial information reflect total assets of R 6,161.16 crore as at 31st March, 2020, total
revenues of R 4,462.36 crore, total net loss after tax (net) of R 385.33 crore, total comprehensive loss (net) of R 384.02 crore and
net cash outflows (net) of R 114.57 crore for the year ended 31st March, 2020, respectively, as considered in the standalone
financial statements. The financial information of these joint operations and erstwhile L&T Shipbuilding Limited have been
audited, by the other auditors 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 joint operations and erstwhile L&T Shipbuilding Limited, is based solely on the reports of
such other auditors and the procedures performed by us as stated under Auditor’s Responsibilities section above.
Our report on the standalone financial statements 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.
•
The Statement also includes the financial information of 2 joint operations which have not been audited by their auditors, whose
financial information reflect total assets of R 0.03 crore as at 31st March, 2020 and total revenues of R 2.08 crore, total net loss
after tax of R 0.63 crore, total comprehensive loss of R 0.63 crore and net cash outflows (net) of R 0.20 crore for the year ended
31st March, 2020, respectively, as considered in the Statement. The financial information of these joint operations has been
unaudited and has been furnished to us by the Management and our opinion on the Statement, in so far as it relates to the
amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information
which is certified by Management. In our opinion and according to the information and explanation given to us by the
Management, the financial information of these joint operations are not material to the Company.
Our report on the Statement is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our audit we report 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.
b)
c)
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 and the reports of the other auditors.
The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and
Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d)
In our opinion, the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2020 taken on record by the Board of
Directors, none of the directors are disqualified as on 31st March, 2020 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.
342
g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of
the Act, as amended,
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the
Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended 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 standalone 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;
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’s Registration No. 117366W/W-100018)
SANjIv v. PILgAONKAR
(Partner)
(Membership No. 39826)
(UDIN: 20039826AAAADI1893)
Place: Mumbai
Date: 5th June, 2020
343
INDEPENDENT AUDITORS’ REPORT ANNUAL REPORT 2019-20
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1(f) under “Report on Other Legal and Regulatory Requirements” section 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 and Toubro Limited (the “Company”) as of March
31, 2020 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date
which includes internal financial controls over financial reporting of one of the Company’s 31 joint operations which is a company
incorporated in India.
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 respective 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company and its
joint operations company incorporated in India, 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 auditor’s 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 auditor of the joint operations
which is a company incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, 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.
344
Opinion
In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the
reports of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other
Matters paragraph below, 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, 2020, based on
the criteria for internal financial control over financial reporting established by the respective 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 one joint operation which is a company incorporated in India, is based on the
corresponding reports of the other auditor of such company incorporated in India.
Our opinion is not modified in respect of this matter.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
SANjIv v. PILgAONKAR
(Partner)
(Membership No. 39826)
(UDIN: 20039826AAAADI1893)
Place: Mumbai
Date: 5th June, 2020
345
INDEPENDENT AUDITORS’ REPORT ANNUAL REPORT 2019-20
ANNEXURE “B” TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of Larsen
& Toubro Limited of even date)
(i)
In respect of the Company’s property, plant and equipment:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property,
plant and equipment.
(b) The Company has a program of physical verification of its property, plant and equipment to cover all the items of property,
plant and equipment 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 property, plant and equipment. Pursuant to the program, certain property, plant
and equipment 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 , Management has represented that the title deeds, comprising all
the immovable properties of land and buildings are held in the name of the Company as at the balance sheet date, except the
following:
Type of asset
Total no. of
cases
Leasehold/
Freehold
gross block as at
March 31, 2020
Net block as at
March 31, 2020
Remark
Land
Building
3
2
Freehold
Freehold
1.14
0.29
1.14
0.15
Conveyance deed pending
to be executed as the matter
is sub judice.
In respect of immovable properties of land and buildings that have been taken on lease and disclosed as property, plant and
equipment in the financial statements, the lease agreements are in the name of the Company, where the Company is the
lessee in the agreement.
On account of the lockdown imposed post the outbreak of the COVID 19 pandemic, we were not able to physically verify the
title deeds.
v crore
(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 between the physical stock and the books of accounts.
(iii) According to the information and explanations given to us, during the year, the Company has not entered into any contracts or
arrangements covered under section 189 of the Companies Act, 2013 (the “Act”) and hence reporting under paragraph 3 (iii) of
the Order is not applicable to the Company.
(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 Act, to the extent applicable, in respect of grant of loans, making investments and providing
guarantees and securities during the year, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits during the year and does
not have any unclaimed deposits as at March 31, 2020 and hence, the provisions of the clause 3 (v) of the Order 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 Act. We have broadly
reviewed the cost records maintained during the year by the Company pursuant to the Companies (Cost Records and Audit) Rules,
2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the
opinion that, prima facie, the prescribed cost records have been made and maintained by the company. 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 during the year, in depositing undisputed statutory dues, including Provident
Fund, Employees’ State Insurance, Income-tax, Goods and Service Tax, Customs Duty, cess and other material statutory dues
applicable to it to the appropriate authorities.
346
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Goods and
Service Tax, Customs Duty, cess and other material statutory dues in arrears as at March 31, 2020 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, Goods and Service Tax and Value Added Tax
which have not been deposited as on March 31, 2020 on account of disputes are given below:-
Name of
Statute
Nature of Dues
Forum
where
Dispute is
Pending
Period to which
Amount Relates
Amount
Involved
(v crore)
Amount
Unpaid
(v crore)
The Central
Excise
Act,1944,
Service Tax
under Finance
Act, 1994 and
Customs Act,
1962
Classification dispute and other
matters
Supreme
Court
2000-01 to 2006-07
12.12
3.13
Dispute regarding questions of law,
classification dispute and other
matters
Disallowance of CENVAT credit,
short payment of service tax,
MRP Valuation disputes, dispute
regarding classification of services,
disallowances of excise duty
exemption, Non Maintenance of
Separate Books of Accounts, Export
rebate disallowance, and other
matters.
Disallowance of CENVAT credit,
short payment of service tax ,
pending forms, service tax rate
dispute, valuation dispute and other
matters
High Court
1987-88, 1993 to
1994, 1998 to 2013
258.12
224.47
CESTAT
1989-90, 1991-92,
1993-94 to 1996-97,
1999-2018
832.98
753.12
Commissioner
(Appeal)
1996-97, 1999-00 to
2017-18
2,880.01
2,798.53
Differential Custom Duty
DGFT
2016-17, 2019-20
1.05
0.79
The Central
Sales Tax Act,
Entry tax, Local
Sales Tax Act,
Works Contract
Tax Act and
Goods &
Services Tax Act
Taxability of sub-contractor
turnover, rate of tax for declared
goods, disallowance of labour
turnover and non- submission of
forms
Supreme
Court
2006-07, 2009-10 to
2012-13
492.64
492.58
Dispute regarding questions of law,
classification dispute, local VAT and
Works contract disputes.
High Court
1986-87, 1993-94,
1997-98, 1999-00 to
2000-01, 2003-04 to
2009-10, 2012-13
7.92
6.48
Sales Tax/VAT
Tribunal
1994-95 to 2017-18
56.64
48.03
Non submission of Forms,
classification disputes, inter-state
sale turnover, Rate of tax of
declared goods, Labour & service
charges disallowed, Disallowance
of exemptions claimed for imports
& Sales in transit, Sale mismatch
& levy of tax on import of goods
through Way bill, Road permit issue
and other matters
347
INDEPENDENT AUDITORS’ REPORT ANNUAL REPORT 2019-20
Name of
Statute
Nature of Dues
The Central
Sales Tax Act,
Entry tax, Local
Sales Tax Act,
Works Contract
Tax Act and
Goods &
Services Tax Act
Dispute regarding questions of
law, classification dispute, sales
in transit, high sea sales, non-
submission of C forms & E1 forms,
disallowance of ITC, valuation of
goods and other matters
Forum
where
Dispute is
Pending
Commissioner
(Appeal)
Period to which
Amount Relates
Amount
Involved
(v crore)
Amount
Unpaid
(v crore)
1999-00 to 2015-16
70.65
44.66
Additional
Commissioner
2007-08
0.06
0.06
2010-11 to 2017-18
1.82
1.82
2006-07 to 2014-15
134.38
125.65
1996-97, 2000-01 to
2015-16
81.57
78.45
1996-97 to 2017-18
409.11
377.21
2008-09, 2009-10
0.07
0.07
2012-13 to 2015-16
0.56
0.56
Additional
Commissioner
(Appeal)
Joint
Commissioner
Joint
Commissioner
(Appeal)
Assistant/
Deputy
Commissioner
Deputy
Commissioner
(Appeals)
Special
Objection
Hearing
Authority
State Revenue
Board
2011-12
0.01
0.01
2001-02 to 2016-17
2.62
2.6
Assessing /
Commercial
Tax Officer
Goods and
Service Tax Act
Disallowance of credits claimed in
Tran-1
Assistant Joint
Commissioner
2017-18
16.25
14.86
Income Tax Act,
1961
Demand arising out of Regular
Assessment/Reassessment
ITAT
2004-05 & 2009-10 to
2012-13
1,038.46
256.76
Demand arising out of Regular
Assessment/Reassessment
CIT(A)
2014-15 to 2016-17
1,246.58
1,233.87
(viii) In our opinion and according to the information and explanations given to us, during the year, the Company has not defaulted in
the repayment of loans or borrowings to financial institutions and banks and dues to debenture holders. The Company has not
borrowed any funds from the government during the year.
(ix)
In our opinion and according to the information and explanations given to us, during the year, the Company has not raised any
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 material fraud by the Company
and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
348
(xi)
In our opinion and according to the information and explanations given to us, during the year, 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 Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence
reporting under paragraph 3 (xii) of the Order is not applicable to the Company.
(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177
and 188 of the Act, where applicable, for all transactions with related parties undertaken during the year and the details of such
related party transactions have been disclosed in the financial statements 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 paragraph 3 (xiv) of the Order 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 Act is not
applicable to the Company.
(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’s Registration No. 117366W/W-100018)
SANjIv v. PILgAONKAR
(Partner)
(Membership No. 39826)
(UDIN: 20039826AAAADI1893)
Place: Mumbai
Date: 5th June, 2020
349
BALANCE SHEET ANNUAL REPORT 2019-20
Balance Sheet as at March 31, 2020
ASSETS:
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment property
Intangible assets
Intangible assets under development
Right-of-use assets
Financial assets
Investments
Loans
Other financial assets
Deferred tax assets (net)
Other non-current assets
Current assets
Inventories
Financials assets
Investments
Trade receivables
Cash and cash equivalents
Other bank balances
Loans
Other financial assets
Other current assets
Group(s) of assets classified as held for sale
TOTAL ASSETS
Note
2
2
3
4
4
54(c)
5
6
7
44(e)
8
9
10
11
12
13
14
15
16
39
As at 31-3-2020
v crore
v crore
As at 31-3-2019
v crore
v crore
6853.43
796.55
490.40
83.72
0.66
412.82
31786.76
1428.20
4068.94
2769.90
7982.02
567.31
381.26
228.72
171.69
–
20054.06
841.86
3373.64
3349.24
18197.30
1279.76
577.00
4706.85
28212.55
2733.45
4886.52
1305.94
1955.40
40423.23
49661.61
2780.37
141556.59
43800.71
43867.50
41.72
124659.73
27975.28
3507.00
304.48
6059.15
27912.96
3262.83
675.56
515.14
1997.59
350
Balance Sheet as at March 31, 2020 (contd.)
EQUITY AND LIABILITIES:
Equity
Equity share capital
Other equity
Total equity
Liabilities
Non-current liabilities
Financial liabilities
Borrowings
Lease liability
Other financial liabilities
Provisions
Other non-current liabilities
Current liabilities
Financial liabilities
Borrowings
Current maturities of long term borrowings
Lease liability
Trade payables:
Due to micro enterprises and small enterprises
Due to others
Other financial liabilities
Other current liabilities
Provisions
Current tax liabilities(net)
Liabilities associated with the group(s) of assets classified as held for sale
TOTAL EQUITY AND LIABILITIES
Note
As at 31-3-2020
v crore
v crore
As at 31-3-2019
v crore
v crore
17
18
19
20
21
22
23
24
25
26
27
28
39
280.78
51894.57
280.55
49767.87
52175.35
50048.42
7185.71
24.18
179.62
15044.11
3555.48
132.27
379.88
36249.51
1709.09
3772.07
–
81.69
7389.51
611.23
0.22
3853.76
497.62
0.58
4086.16
4131.46
-
201.96
36023.07
1931.73
57070.34
20758.05
1555.39
628.92
1367.58
141556.59
46374.38
22080.45
1483.61
320.91
–
124659.73
CONTINgENT LIABILITIES
COMMITMENTS (capital and others )
NOTES FORMINg PART OF THE FINANCIAL STATEMENTS
29
30
1 to 63
In terms of our report attached
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Firm’s Registration No.117366W/W-100018
by the hand of
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai, June 5, 2020
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
351
STATEMENT OF PROFIT AND LOSS ANNUAL REPORT 2019-20
Statement of Profit and Loss for the year ended March 31, 2020
2019-20
2018-19
Note
v crore
v crore
v crore
v crore
Continuing operations
INCOME:
Revenue from operations
Other income
Total Income
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, stock-in-trade
and work-in-progress
Other manufacturing, construction and operating expenses
Employee benefits expense
Sales, administration and other expenses
Finance costs
Depreciation, amortisation, impairment and obsolescence
Total Expenses
Profit before exceptional items and tax
Exceptional items
Profit before tax
Tax expenses
Current tax
Deferred tax
Net profit after tax from continuing operations
Discontinued operations
Profit before tax from discontinued operations
Tax expense of discontinued operations
Net profit after tax from discontinued operations
Net profit after tax from continuing operations & discontinued
operations
Other Comprehensive income
A
Items that will not be reclassified to Profit or Loss:
Equity instruments through Other Comprehensive Income
Gain/(loss) on remeasurement of the defined benefits plan
Income tax (expenses)/income on remeasurments of the
defined benefits plan
B
Items that will be reclassified to Profit and Loss
Debt instruments through Other Comprehensive Income
Income tax (expenses)/income on debt instruments
through Other Comprehensive Income
Carried forward - Other comprehensive Income
31
32
33
34
35
36
59
44(a)
39(a)(i)
44(a)
82383.65
2807.87
85191.52
82287.42
2711.19
84998.61
5486.99
28632.03
855.63
1520.47
22488.74
(64.01)
7962.36
5712.54
29482.65
906.49
2312.83
21647.74
(1126.17)
7917.78
66882.21
5955.98
2707.34
2266.56
1020.51
78832.60
6358.92
626.99
6985.91
1525.60
(564.45)
2409.73
(138.60)
961.15
6024.76
865.38
210.93
654.45
6679.21
(382.17)
66853.86
5732.60
2047.87
1787.62
999.55
77421.50
7577.11
1642.35
9219.46
2271.13
6948.33
812.40
269.34
543.06
7491.39
(174.60)
43.81
157.07
(34.28)
(31.31)
10.94
(130.79)
(20.37)
(78.85)
16.68
122.79
(390.17)
(62.17)
(82.54)
352
Statement of Profit and Loss for the year ended March 31, 2020 (contd.)
2019-20
2018-19
Note
v crore
v crore
(390.17)
Brought forward - Other comprehensive Income
Exchange differences in translating the financial
statements of foreign operations
Income tax (expenses)/income on exchange differences in
translating the financial statements of foreign
operations
Effective portion of gains/(losses) on hedging instruments
in a cash flow hedge
Income tax (expenses)/income on effective portion of
gains/(losses) on hedging instruments in a cash flow
hedge
Cost of hedging reserve
Income tax (expenses)/income on cost of hedging reserve
Other Comprehensive Income for the year [net of tax]
Total Comprehensive Income for the year
Earnings per share (EPS) of R 2 each from continuing operations:
Basic earnings per equity share (R)
Diluted earnings per equity share (R)
Earnings per share (EPS) of R 2 each from discontinued operations:
Basic earnings per equity share (R)
Diluted earnings per equity share (R)
Earnings per share (EPS) of R 2 each from continuing operations &
discontinued operations:
Basic earnings per equity share (R)
Diluted earnings per equity share (R)
Face value per equity share (R)
49
49
49
49
49
49
NOTES FORMINg PART OF THE FINANCIAL STATEMENTS
1 to 63
(14.28)
4.45
(147.87)
47.60
(25.76)
7.11
(9.83)
(100.27)
(18.65)
(518.92)
6160.29
42.93
42.87
4.66
4.66
47.59
47.53
2.00
v crore
9.31
v crore
(82.54)
(3.25)
(88.13)
30.59
25.38
(8.87)
6.06
(57.54)
16.51
(117.51)
7373.88
49.56
49.47
3.87
3.87
53.43
53.34
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
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai, June 5, 2020
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
353
STATEMENT OF CHANGES IN EqUITY ANNUAL REPORT 2019-20
Statement of changes in Equity for the year ended March 31, 2020
A. Equity share capital
Particulars
Issued, subscribed and fully paid up equity share outstanding at the beginning of the year
Add: Shares issued on exercise of employee stock options during the year
Add: Shares issued on conversion of foreign currency convertible bonds during the year
2019-20
2018-19
Number of
shares
1,40,27,29,385
7,83,249
3,79,388
v crore
Number of
shares
280.55 1,40,13,69,456
13,59,929
–
0.16
0.07
v crore
280.27
0.28
–
Issued, subscribed and fully paid up equity shares outstanding at the end of the year
1,40,38,92,022
280.78 1,40,27,29,385
280.55
B. Other equity
Particulars
Share
application
money
pending
allotment
Equity
component
of foreign
currency
convertible
bonds
Reserves and surplus
Items of Other Comprehensive income
Capital
reserve
Capital
reserve on
business
combination
Securities
premium
Employee
share
options
(net)
Debenture
redemption
reserve
General
reserve
Retained
earnings
Foreign
currency
translation
reserve
Hedging
reserve
Balance as at 31-3-2018
Business combination [Note 38]
Change in accounting policy [Ind AS 115]
3.56
–
–
153.20
–
–
10.52
–
–
(6.36)
(19.41)
–
8363.02
–
–
108.59
–
–
458.94
–
–
25395.78
–
–
14250.01
(3291.90)
(704.04)
(0.37)
–
–
102.16
(3.34)
–
Equity
instrument
through
Other
Comprehen-
sive Income
Debt
instruments
through
Other
Comprehen-
sive Income
54.93
–
–
Restated balance as at 1-4-2018
3.56
153.20
10.52
(25.77)
8363.02
108.59
458.94
25395.78
10254.07
(0.37)
98.82
54.93
–
44875.29
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
108.97
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7491.39
(20.37)
–
6.06
–
(41.03)
–
(62.17)
7471.02
6.06
(41.03)
(62.17)
(12.13)
10.45
–
–
(18.68)
–
–
–
112.13
–
–
–
(81.32)
–
(2243.18)
(353.60)
–
–
–
–
–
–
–
–
–
(0.38)
–
–
–
–
–
–
–
–
–
–
153.20
10.52
(25.77)
8471.99
106.91
440.26
25507.91
15046.99
5.69
57.41
(7.24)
– 49767.87
(v crore)
Total Other
equity
48893.98
(3314.65)
(704.04)
–
–
–
–
–
–
–
–
–
–
–
7491.39
(117.51)
7373.88
105.41
(0.38)
–
10.45
(2243.18)
(353.60)
Profit for the period (a)
Other Comprehensive Income (b)
Total Comprehensive Income for the
year (a+b)
Issue of equity shares
Transfer to non- financial assets/liability
Transfer from/to general reserve/retained
earnings during the year
Employee share options (net)
Dividend paid for previous year
Dividend distribution tax paid for previous year
Balance as at 31-3-2019
–
–
–
(3.56)
–
–
–
–
–
–
354
Statement of changes in Equity for the year ended March 31, 2020 (contd.)
Particulars
Share
application
money
pending
allotment
Equity
component
of foreign
currency
convertible
bonds
Balance as at 31-3-2019
Change in accounting policy [Ind AS 116]
[Note 54(a)]
Restated balance as at 1-4-2019
Profit for the year (c)
Other Comprehensive Income (d)
Total Comprehensive Income for the
year (c+d)
Issue of equity shares
Settlement of foreign currency convertible
bonds
Transfer to non- financial assets/liability
Transfer from/to general reserve/retained
earnings during the year
Employee share options (net)
Dividend paid for previous year
Interim equity dividend
Dividend distribution tax paid for previous
year
Balance as at 31-3-2020
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(153.20)
–
–
–
–
–
–
–
Reserves and surplus
Items of Other Comprehensive income
(v crore)
Capital
reserve
Capital
reserve on
business
combination
Securities
premium
Employee
share
options
(net)
Debenture
redemption
reserve
General
reserve
Retained
earnings
Foreign
currency
translation
reserve
Hedging
reserve
153.20
10.52
(25.77)
8471.99
106.91
440.26
25507.91
15046.99
5.69
57.41
Debt
instruments
through
Other
Comprehen-
sive Income
(7.24)
Equity
instrument
through
Other
Comprehen-
sive Income
–
Total Other
equity
49767.87
–
–
–
–
–
–
–
(3.97)
–
–
–
153.20
10.52
(25.77)
8471.99
106.91
440.26
25507.91
15043.02
5.69
57.41
(7.24)
–
–
(3.97)
49763.90
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
127.61
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
153.20
–
–
–
–
(8.39)
1.40
–
–
93.27
–
–
–
8.39
–
–
–
(475.44)
–
(2525.72)
(1403.89)
–
–
–
(229.22)
6679.21
(130.79)
–
(9.83)
–
(118.92)
–
122.79
–
(382.17)
6679.21
(518.92)
6548.42
(9.83)
(118.92)
122.79
(382.17)
6160.29
–
–
–
–
–
–
–
–
–
–
0.20
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
127.61
–
0.20
382.17
–
–
–
–
1.40
(2525.72)
(1403.89)
–
(229.22)
10.52
(25.77)
8599.60
99.92
533.53
25669.50
16957.17
(4.14)
(61.31)
115.55
–
51894.57
In terms of our report attached
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Firm’s Registration No.117366W/W-100018
by the hand of
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai, June 5, 2020
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
355
STATEMENT OF CASH FLOWS ANNUAL REPORT 2019-20
Statement of Cash Flows for the year ended March 31, 2020
A. Cash flow from operating activities:
Profit before tax from (excluding exceptional items) from:
Continuing operations
Discontinued operations
Profit before tax including discontinued operations (excluding exceptional items)
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
Expenditure on share buy back
Expenditure on demerger
Interest expense
Interest income
(Profit)/loss on sale of fixed assets (net)
(Profit)/loss on sale of investments (net) (including fair valuation)
Impairment of current investment
(Gain)/loss on derivatives at fair value through Profit or Loss
Employee stock option-discount forming part of employee benefits expense
Non-cash items related to discontinued operations
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:
Expenditure on acquisition of fixed assets
Sale of fixed assets (including advance received)
Investment in subsidiaries, associates and joint venture companies
Divestment of stake in subsidiaries, associates and joint venture companies
Purchase of non-current investments
Sale of non-current investments
(Purchase)/sale of current investments (net)
Change in other bank balance and cash not available for immediate use
Deposits/Loans (given) - subsidiaries, associates, joint venture companies and third parties
Deposits/Loans repaid - subsidiaries, associates, joint venture companies and third parties
Interest received
Dividend received from subsidiaries and joint venture companies
Dividend received from other investments
Settlement of derivative contracts related to current investments
Net cash (used in)/from investing activities
356
2019-20
v crore
6358.92
865.38
7224.30
(1387.29)
1020.51
(39.14)
(46.52)
–
–
2266.56
(561.48)
30.92
(503.71)
100.00
–
47.40
45.85
8197.40
(6572.53)
(183.14)
173.27
1615.00
(1736.30)
(121.30)
(1370.51)
61.50
(10231.82)
734.53
–
24.46
(788.79)
4226.96
(8901.99)
7510.01
516.20
1383.95
1.76
–
(6833.74)
2018-19
v crore
7577.11
812.40
8389.51
(1512.12)
999.55
(78.95)
3.64
17.38
71.49
1787.62
(474.85)
(594.25)
(230.58)
–
22.60
74.70
145.46
8621.20
(8979.11)
(296.63)
5898.28
5243.74
(2687.32)
2556.42
(1576.79)
785.22
(469.84)
3835.36
(17.49)
3.82
1146.46
(3722.45)
(12740.83)
12427.56
427.47
1330.60
178.70
(22.60)
1585.19
Statement of Cash Flows for the year ended March 31, 2020 (contd.)
C. Cash flow from financing activities:
Proceeds from fresh issue of share capital (including share application money)[net]
Proceeds from non-current borrowings [Note 43]
Repayment of non-current borrowings [Note 43]
(Repayments)/Proceeds from other borrowings (net) [Note 43]
Settlement of derivative contracts related to borrowings
Interest paid on Lease Liability
Principal repayment on Lease Liability [Note 43]
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 for discontinued operations (asset held for sale)
Cash and cash equivalents at end of the year
2019-20
v crore
17.56
6617.46
(4209.10)
10804.33
308.29
(12.65)
(67.95)
(3929.61)
(229.22)
(1880.49)
7418.62
463.58
2723.77
(0.07)
3187.28
2018-19
v crore
11.31
789.41
(974.33)
(616.54)
308.95
–
–
(2243.18)
(353.60)
(1527.61)
(4605.59)
(463.98)
3187.75
–
2723.77
Notes:
1. Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 “Statement of Cash Flows” as specified
in the Companies (Indian Accounting Standards) Rules, 2015.
2. Purchase of fixed assets represents additions to property, plant and equipment, investment property and other intangible assets
adjusted for movement of (a) capital work in progress for property, plant and equipment and investment property and (b) intangible
assets under development during the year.
3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following:
(a) Cash and cash equivalents disclosed under current assets [Note 12]
(b) Other bank balances disclosed under current assets [Note 13]
(c) Cash and bank balance disclosed under non-current assets [Note 7]
Total Cash and cash equivalents as per Balance Sheet
Add: Unrealised exchange (gain)/loss on cash and cash equivalents (reflected in Statement of
Profit and loss)
Add: Unrealised exchange (gain)/loss on cash and cash equivalents (reflected in Other
Comprehensive Income)
Less: Other bank balances disclosed under current assets [Note 13]
Less: Cash and bank balance disclosed under non-current assets [Note 7]
Total Cash and cash equivalents as per Statement of Cash Flows
4. Previous year’s figures have been regrouped/reclassified wherever applicable.
2019-20
v crore
3262.83
675.56
273.76
4212.15
(38.88)
(36.67)
675.56
273.76
3187.28
2018-19
v crore
2733.45
4886.52
289.76
7909.73
7.64
(17.32)
4886.52
289.76
2723.77
In terms of our report attached
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Firm’s Registration No.117366W/W-100018
by the hand of
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai, June 5, 2020
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
357
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements
NOTE [1](i)
Company overview
Larsen & Toubro is a major technology, engineering, construction, manufacturing and financial services conglomerate, with global
operations. L&T addresses critical needs in key sectors - Hydrocarbon, Infrastructure, Power, Process Industries and Defence - for
customers in over 30 countries around the world.
L&T is engaged in core, high impact sectors of the economy and its integrated capabilities span the entire spectrum of ‘design to
deliver’. With 8 decades of a strong, customer focused approach and a continuous quest for world-class quality, L&T has unmatched
expertise across Technology, Engineering, Construction, Infrastructure Projects and Manufacturing, and maintain a leadership in
all its major lines of business. Every aspect of L&T’s businesses is characterised by professionalism and high standards of corporate
governance. Sustainability is embedded into Company’s long-term strategy for growth.
The Company’s manufacturing footprint extends across eight countries in addition to India. L&T has several international offices and a
supply chain that extends around the globe.
NOTE [1](ii)
Significant Accounting Policies
(a) Statement of compliance
The Company’s financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and
the Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and
amendments thereof issued by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies
Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also
applied except where compliance with other statutory promulgations require a different treatment. These financial statements have
been approved for issue by the Board of Directors at its meeting held on June 5, 2020.
(b) Basis of accounting
The Company maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities
that are measured at fair value in accordance with Ind AS.
Fair value measurements are categorised as below, based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety:
(i)
(ii)
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at
measurement date;
Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either
directly or indirectly; and
(iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities.
Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair
value hierarchy unless the circumstances change warranting such transfer.
(c) Presentation of financial statements
The Balance Sheet, Statement of Profit and Loss and Statement of Changes in Equity are prepared and presented in the format
prescribed in the Schedule III to the Companies Act, 2013 (“the Act”). The Statement of Cash Flows has been prepared and
presented as per the requirements of Ind AS 7 “Statement of Cash Flows”. 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 the financial statements along with the other notes required to be disclosed under the notified Accounting
Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended.
Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal
places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimals
places.
358
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(d) 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.
(e) Revenue recognition
The Company recognises revenue from contracts with customers when it satisfies a performance obligation by transferring
promised good or service to a customer. The revenue is recognised to the extent of transaction price allocated to the performance
obligation satisfied. Performance obligation is satisfied over time when the transfer of control of asset (good or service) to a
customer is done over time and in other cases, performance obligation is satisfied at a point in time. For performance obligation
satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance
obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost
attributable to the performance obligation.
Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring good
or service to a customer excluding amounts collected on behalf of a third party. Variable consideration is estimated using the
expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are
as per business practice and there is no financing component involved in the transaction price.
Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in Statement of
Profit and Loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and
costs incurred to fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured
in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.
Significant judgments are used in:
1. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue
recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is
measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance
obligation.
2. Determining the expected losses, which are recognised in the period in which such losses become probable based on the
expected total contract cost as at the reporting date.
(i)
Revenue from operations
Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other
claims, which are not ascertainable/acknowledged by customers are not taken into account.
A . Revenue from sale of goods including contracts for supply/commissioning of complex plant and equipment is recognised
as follows:
Revenue from sale of manufactured and traded goods is recognised when the control of the same is transferred to the
customer and it is probable that the Company will collect the consideration to which it is entitled for the exchanged
goods.
Performance obligations in respect of contracts for sale of manufactured and traded goods is considered as satisfied at
a point in time when the control of the same is transferred to the customer and where there is an alternative use of the
asset or the Company does not have either explicit or implicit right of payment for performance completed till date.
In case where there is no alternative use of the asset and the Company has either explicit or implicit right of payment
considering legal precedents, performance obligation is considered as satisfied over a period of time and revenue is
recognised over time.
359
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
B.
Revenue from construction/project related activity is recognised as follows:
1. Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference
to the extent performance obligations have been satisfied. The amount of transaction price allocated to the
performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as
agreed with the customer.
2.
Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied
and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which
represents the 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.
Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in the Statement of
Profit and Loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration
that the Company expects to receive towards remaining performance obligations (after deducting the costs that relate
directly to fulfill such remaining performance obligations). In addition, the Company recognises impairment loss (termed
as provision for expected credit loss on contract assets in the financial statements) on account of credit risk in respect of
a contract asset using expected credit loss model on similar basis as applicable to trade receivables.
For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised
losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as “Due
from customers”. For contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus
recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed
as “Due to customers”. Amounts received before the related work is performed are disclosed in the Balance Sheet as
contract liability and termed as “Advances from customer”. The amounts billed on customer for work performed and
are unconditionally due for payment i.e only passage of time is required before payment falls due, are disclosed in
the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of
performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due
for payment.
C. Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains
control of the property transferred and a reasonable expectation of collection of the sale consideration from the
customer exists. The costs incurred on property development activities are carried as “Inventories” till such time the
aforesaid conditions are fulfilled.
D. Revenue from rendering of services is recognised over time as and when the customer receives the benefit of the
Company’s performance and the Company has an enforceable right to payment for services transferred.
Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.
E.
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 the same basis as stated in (B) supra.
F.
Commission income is recognised as and when the terms of the contract are fulfilled.
G. Other operational revenue represents income earned from the activities incidental to the business and is recognised
when the performance obligation is satisfied and right to receive the income is established as per the terms of the
contract.
(ii) Other income
A.
Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the
effective interest rate including interest on investments classified as fair value through Profit or Loss or fair value through
Other Comprehensive Income. Interest receivable on customer dues is recognised as income in the Statement of Profit
and Loss on accrual basis provided there is no uncertainty towards its realisation.
B. Dividend income is accounted in the period in which the right to receive the same is established.
360
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
C . Government grants, which are revenue in nature and are towards compensation for the qualifying costs, incurred by
the Company, are recognised as other income in the Statement of Profit and Loss in the period in which such costs are
incurred. Government grant receivable in the form of duty credit scrips is recognised as other income in the Statement of
Profit and Loss in the period in which the application is made to the government authorities and to the extent there is no
uncertainty towards its receipt.
D. Other items of income are accounted as and when the right to receive such income arises and it is probable that the
economic benefits will flow to the Company and the amount of income can be measured reliably.
(f) Exceptional items
An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the
performance of the Company is treated as an exceptional item and disclosed as such in the financial statements.
(g) Property, plant and equipment (PPE)
PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated
depreciation and cumulative impairment, if any. All directly attributable costs related to the acquisition of PPE and borrowing costs
in case of qualifying assets are capitalised in accordance with the Company’s accounting policy.
Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general
overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition
are allocated and capitalised as a part of the cost of the PPE.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably.
PPE 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).
Depreciation is recognised using straight-line method so as to write off the cost of the assets (other than freehold land and
properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013,
or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined.
Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic
benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the
effect of any change in the estimates of useful life/residual value is accounted on prospective basis.
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.
Depreciation on additions to/deductions from, owned assets is calculated pro rata to the period of use.
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.
Freehold land is not depreciated.
PPE is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss
arising on derecognition is recognised in the Statement of Profit and Loss in the same period.
(h)
Investment property
Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment
property and are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in
accordance with the Company’s accounting policy.
361
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
Depreciation is recognised using straight-line method so as to write off the cost of the investment property less their residual
values over their useful lives specified in Schedule II to the Companies Act, 2013 or in the case of assets where the useful life was
determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end
to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful
life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/
residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and
no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of property is recognised in
the Statement of Profit and Loss in the same period.
(i)
Intangible assets
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow
to the Company and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty
credits availed, if any, less accumulated amortisation and cumulative impairment. 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.
Research and development expenditure on new products:
(i)
Expenditure on research is expensed under respective heads of account in the period in which it is incurred.
(ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
A.
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
B.
the Company has intention to complete the intangible asset and use or sell it;
C.
the Company has ability to use or sell the intangible asset;
D.
E.
F.
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
the Company has ability to reliably measure the expenditure attributable to the intangible asset during its development.
Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “intangible assets under
development”.
Intangible assets are amortised on straight-line basis over the estimated useful life. The method of amortisation and useful life are
reviewed at the end of each financial year with the effect of any changes in the estimate being accounted for on a prospective
basis.
Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the
asset’s revised carrying amount over its remaining useful life.
(j)
Impairment of assets
As at the end of each accounting year, the Company reviews the carrying amounts of its PPE, investment property, intangible
assets and investments in subsidiary, associate and joint venture companies to determine whether there is any indication that those
assets have suffered an impairment loss. If such indication exists, PPE, investment property, intangible assets and investments are
tested for impairment so as to determine the impairment loss, if any. Intangible assets with indefinite life are tested for impairment
each year.
362
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is
determined:
(i)
in the case of an individual asset, at the higher of the net selling price and the value in use; and
(ii)
in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the
higher of the cash generating unit’s net selling price and the value in use.
The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an
asset, which may vary based on the future performance of the Company and from its disposal at the end of its useful life. For this
purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the Company suitably adjusted
for risks specified to the estimated cash flows of the asset.
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is
recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash
generating unit) is reduced to its recoverable amount.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the
revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.
(k) Employee Benefits
(i)
Short-term employee benefits:
Employee benefits such as salaries, wages, short-term compensated absences, cost of bonus, ex-gratia and performance-
linked rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits
and are expensed in the period in which the employee renders the related service.
(ii) Post-employment benefits:
A. 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.
B. Defined benefit plans: The employees’ gratuity fund schemes and employee provident fund schemes managed by board
of trustees established by the Company, the post-retirement medical care plan and the Company pension plan represent
defined benefit plans. The present value of the obligation under 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 using a discount rate based on the
market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the
defined benefit obligations at the Balance Sheet date.
Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in
net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is
recognised in Other Comprehensive Income and is reflected in Retained earnings and the same is not eligible to be
reclassified to Profit or Loss.
Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised
in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost
is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit
plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan
amendment or curtailment and when the Company recognises related restructuring costs or termination benefits.
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.
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
(iii) Long-term employee benefits:
The obligation recognised in respect of long-term benefits such as compensated absences, long service award etc. is
measured at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar
manner as in the case of defined benefit plans vide (ii)(B) supra.
Long-term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements,
re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit
expenses. Interest cost implicit in long-term employee benefit cost is recognised in the Statement of Profit and Loss under
finance cost.
(iv) Termination benefits:
Termination benefits such as compensation under employee separation schemes are recognised as expense when the
Company’s offer of the termination benefit is accepted or when the Company recognises the related restructuring costs
whichever is earlier.
(l) Leases
Leases are accounted as per Ind AS 116 which has become mandatory from April 1, 2019.
Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is accounted at the lease
commencement date.
Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives
received.
The lease liability is initially measured at the present value of the lease payments, discounted using the Company’s incremental
borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or
a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-
of-use asset, or is recorded in the Statement of Profit and Loss if the carrying amount of the right-of-use asset has been reduced to
zero.
The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and
cumulative impairment, if any. The right-of-use asset is depreciated using the straight-line method from the commencement date
to the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased
by interest on lease liability and reduced by lease payments made.
Lease payments associated with following leases are recognised as expense on straight-line basis:
(i)
Low value leases; and
(ii)
Leases which are short-term.
Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset. Initially asset held under finance lease is
recognised in balance sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income
is recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on Company’s net investment in
the lease. A lease which is not classified as a finance lease is an operating lease.
The Company recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The
Company presents underlying assets subject to operating lease in its balance sheet under the respective class of asset.
(Also refer to policy on depreciation, supra)
(m) Financial instruments
Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the
related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at
364
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
transaction values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from as the case may be, the fair value of such financial assets or liabilities, on
initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in Profit or Loss.
In case of funding to subsidiary companies in the form of interest free or concession loans and preference shares, the excess of the
actual amount of the funding over initially measured fair value is accounted as an equity investment.
A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally
enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle
the liability simultaneously.
(i)
Financial assets:
A. All recognised financial assets are subsequently measured in their entirety either at amortised cost or at fair value
depending on the classification of the financial assets as follows:
1.
2.
Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Debt
instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in Profit or
Loss.
Investments in debt instruments that meet the following conditions are subsequently measured at amortised cost
(unless the same designated as fair value through profit or loss):
•
•
The asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows; and
The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
3.
Investment in debt instruments that meet the following conditions are subsequently measured at fair value through
Other Comprehensive Income [FVTOCI] (unless the same are designated as fair value through profit or loss)
•
•
The asset is held within a business model whose objective is achieved both by collecting contractual cash flows
and selling financial assets; and
The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
4.
5.
6.
Investment in equity instruments issued by subsidiary, associate and joint venture companies are measured at cost
less impairment.
Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are
convertible into equity shares or are redeemable out of the proceeds of equity instruments issued for the purpose
of redemption of such investments. Investment in preference shares not meeting the aforesaid conditions are
classified as debt instruments at FVTPL.
Investments in equity instruments issued by other than subsidiaries are classified as at FVTPL, unless the related
instruments are not held for trading and the Company irrevocably elects on initial recognition to present
subsequent changes in fair value in Other Comprehensive Income.
7.
Trade receivables, security deposits, cash and cash equivalents, employee and other advances – at amortised cost
B.
For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and
exchange difference, if any, (on debt instrument) are recognised in Profit or Loss and changes in fair value (other than
on account of above income or expense) are recognised in Other Comprehensive Income and accumulated in Other
equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in Other equity
is reclassified to Profit or Loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to
Profit or Loss on disposal of investments.
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
C. A financial asset is primarily derecognised when:
1.
2.
the right to receive cash flows from the asset has expired, or
the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a pass-through arrangement; and (a)
the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of
derecognition and the consideration received is recognised in Profit or Loss.
D.
Impairment of financial assets: The Company recognises impairment loss on trade receivables using expected credit loss
model, which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted
under Ind AS 109. Impairment loss on investments is recognised when the carrying amount exceeds its recoverable
amount. For all other financial assets, expected credit losses are measured at an amount equal to 12-month expected
credit losses or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased
significantly since initial recognition.
(ii)
Financial liabilities:
A.
Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL
are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of
impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher.
All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate
(EIR) method.
B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled.
(iii) The Company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign
currency risk, certain non-derivatives, as either fair value hedges, cash flow hedges or hedges of net investments in foreign
operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges.
A.
Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are
recognised in Profit or Loss immediately, together with any changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it
no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising
from the hedged risk is amortised to Profit or Loss from that date.
B. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is recognised in Other Comprehensive Income and accumulated in
equity as “Hedging reserve”. The gain or loss relating to the ineffective portion is recognised immediately in Profit or
Loss. Amounts previously recognised in Other Comprehensive Income and accumulated in equity relating to the effective
portion, are reclassified to Profit or Loss in the periods when the hedged item affects Profit or Loss, in the same head
as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the
hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from
the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion.
In case of time period related hedges, the premium element and the spot element of a forward contract is separated
and only the change in the value of the spot element of the forward contract is designated as the hedging instrument.
Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is
excluded from the designation of that financial instrument as the hedging instrument in case of time period related
hedges. The changes in the fair value of the premium element of the forward contract or the foreign currency basis
spread of the financial instrument is accumulated in a separate component of equity as “Cost of hedging reserve”. The
changes in the fair value of such premium element or foreign currency basis spread are reclassified to Profit or Loss as a
reclassification adjustment on a straight-line basis over the period of the forward contract or the financial instrument.
366
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it
no longer qualifies for hedge accounting. Any gain or loss recognised in Other Comprehensive Income and accumulated
in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in Profit
or Loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised
immediately in Profit or Loss.
(iv) Compound financial instruments issued by the Company which can be converted into fixed number of equity shares at the
option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the
liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability
that does not have an equity conversion option. The equity component is initially recognised at the difference between
the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly
attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying
amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured
at amortised cost using the effective interest method. The equity component of a compound financial instrument is not
remeasured subsequently.
(n)
Inventories
Inventories are valued after providing for obsolescence, as under:
(i)
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.
(ii) 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.
(iii) 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 costs of purchases, costs of conversion and other costs incurred in bringing the inventories to
their present location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.
(iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically
identifiable cost or net realisable value.
Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused
inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value
because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original
amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value.
(o) 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 subject to more than insignificant risk of
change in value, are not included as part of Cash and cash equivalents.
(p) Securities premium
(i)
Securities premium includes:
A.
The difference between the face value of the equity shares and the consideration received in respect of shares issued.
B.
The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock
Options Scheme.
(ii) The issue expenses of securities which qualify as equity instruments are written off against Securities premium.
(q) Borrowing costs
Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired
on lease and exchange differences arising on foreign currency borrowings to the extent they are regarded as an adjustment to
367
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and
are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element
of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument.
Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the
acquisition, construction or production of a qualifying asset are capitalised/inventoried 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 in the Statement of Profit and Loss in the period in
which they are incurred.
(r) Share-based payment arrangements
The stock options granted to employees pursuant to the Company’s Stock Options Schemes, are measured at the fair value of the
options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over
the vesting period on a straight-line basis. The amount recognised as expense in 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 within equity.
The fair value of the stock options granted to employees of the Company by the Company’s subsidiaries is accounted as employee
compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated
as dividend declared by them. The share based payment equivalent to the fair value as on the date of grant of employee stock
options granted to key managerial personnel is disclosed as a related party transaction in the year of grant.
(s) Foreign currencies
(i)
The functional currency and presentation currency of the Company is Indian Rupee.
(ii) Transactions in currencies other than the Company’s functional currency are recorded on initial recognition using the
exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the
closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.
Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet
date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for:
A.
exchange differences on foreign currency borrowings relating to assets under construction for future productive use,
which are included in the cost of those assets when they are regarded as an adjustment to finance costs on those
foreign currency borrowings; and
B.
exchange differences on transactions entered into in order to hedge certain foreign currency risks.
(iii) Exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt
of advance consideration is used for initial recognition of related asset, liability, expense or income.
(iv) Financial statements of foreign operations whose functional currency is different than Indian Rupee are translated into Indian
Rupee as follows:
A.
assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet;
B.
income and expenses for each income statement are translated at average exchange rates; and
C.
all resulting exchange differences are recognised in Other Comprehensive Income and accumulated in equity as “Foreign
currency translation reserve” for subsequent reclassification to Profit or Loss on disposal of such foreign operations.
(t) Accounting and reporting of information for Operating Segments
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating
decision making body in the Company to make decisions for performance assessment and resource allocation.
The reporting of segment information is the same as provided to the management for the purpose of the performance assessment
and resource allocation to the segments.
368
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
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
inter segment revenue.
ii)
Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result.
iii) Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment
revenue estimated at the beginning of the reported period.
iv)
v)
Income which relates to the Company as a whole and not allocable to segments is included in “unallocable corporate income/
(expenditure)(net)”.
Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the
Company.
vi) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in
“unallocable corporate income/(expenditure)(net).
vii) Segment results have not been adjusted for the exceptional item attributable to the corresponding segment. The said
exceptional item has been included in “unallocable corporate income/(expenditure)(net)”. The corresponding segment assets
have been carried under the respective segments without adjusting the exceptional item.
viii) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which
are either determined to yield a desired margin or agreed on a negotiated basis.
ix) 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.
x)
Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is
accounted as employee compensation cost [Note 1(r) supra] and is allocated to the segment.
(u) 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 temporary differences between the carrying amounts of assets and liabilities in the Company’s
financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates as
per laws enacted or substantively enacted as at the Balance Sheet date.
Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated
with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits
will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be recovered.
Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head “capital gains”/other temporary
differences are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing
other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which
the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities.
Transaction or event which is recognised outside Profit or Loss, either in Other Comprehensive Income or in Equity, is recorded
along with the tax as applicable.
369
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
The Company uses estimates and judgements based on the relevant rulings in the areas of allowances and disallowances which are
exercised while determining the provision for income tax.
(v)
Interests in joint operations
The Company as a joint operator recognises in relation to its interest in a joint operation, its share in the assets/liabilities held/
incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of
output by the joint operation. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the
joint arrangement.
Interests in joint operations are included in the segments to which they relate.
(w) Provisions, contingent liabilities and contingent assets
Provisions are recognised only when:
(i)
the Company has a present obligation (legal or constructive) as a result of a past event;
(ii)
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
(iii) a reliable estimate can be made of the amount of the obligation.
Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money
is material, the carrying amount of the provision is the present value of those cash flows. 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:
(i)
a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle
the obligation; and
(ii) a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an
inflow of economic benefits is probable.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received
under such contract, the present obligation under the contract is recognised and measured as a provision.
(x) Commitments
Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:
(i)
estimated amount of contracts remaining to be executed on capital account and not provided for;
(ii) uncalled liability on shares and other investments partly paid;
(iii)
funding related commitment to subsidiary, associate and joint venture companies; and
(iv) 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.
(y) Discontinued operations and non-current assets held for sale
Discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a
major line of business.
Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally
through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present
370
Notes forming part of the Financial Statements (contd.)
NOTE [1](ii)
Significant Accounting Policies (contd.)
condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly
probable and is expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less
costs to sell.
(z) Statement of Cash Flows
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of:
(i)
changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;
(ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and
(iii) all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available
for general use as at the date of Balance Sheet.
(aa) Key sources of estimation
The preparation of financial statements in conformity with Ind AS 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. The estimates and
underlying assumptions made by management have been explained under respective policies and are reviewed on an ongoing
basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for
expected credit loss, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision
for rectification costs, fair value measurement, etc. Difference, if any, between the actual results and estimates is recognised in the
period in which the results are known.
(ab) Business Combination
Common control business combination where the Company is transferee is accounted using the pooling of interest method. Assets
and liabilities of the combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity
of reserves of the transferor company is preserved by reflecting them in the same form in the Company’s financial statements in
which they appeared in the financial statement of the transferor company. The excess between the amount of consideration paid
over the share capital of the transferor company is recognised as a negative amount and the same is disclosed as capital reserve on
business combination.
The financial information in the financial statements in respect of prior periods is restated from the beginning of the preceding
period in the financial statements if the business combination date is prior to that date. However, if business combination date is
after that date, the financial information in the financial statements is restated from the date of business combination.
NOTE [1](iii)
The Company has assessed the impact of COVID-19 on its financial statements based on the internal and external information upto the
date of approval of these financial statements and expects to recover the carrying amounts of its investments, intangible assets, trade
receivable, project work-in-progress and inventories. The Company will continue to monitor the future economic conditions and update
its assessment.
371
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [2]
Property, Plant and Equipment & Capital work-in-progress
Class of assets
As at
1-4-2019
Additions
Cost/Valuation
Trf to/from
Investment
property
T/f to ROU
asset
Assets
held for
sale
Foreign
currency
fluctuation
Deductions
As at
31-03-2020
Up to
31-3-2019
For the
period[1]
Assets held
for sale
Depreciation
Trf to
Investment
property
T/f to ROU
asset
Foreign
currency
fluctuation
v crore
Impairment
Book value
Deductions
Up to
31-03-2020
Up to
31-3-2019
Up to
31-03-2020
As at
31-03-2020
As at
31-3-2019
Land
Freehold
Leasehold
Sub total -Land
Buildings
Plant &
equipment
Owned
Leased out
Sub total- Plant
& equipment
Computers
Office equipment
Furniture &
fixtures
Vehicles
Other assets
Ships
Dredged Channel
Breakwater
Structures
Aircraft
Sub total - Other
assets
Total
703.70
344.82
1048.53
2719.92
38.94
–
38.94
224.44
(3.64)
(10.81)
(14.45)
(279.57)
–
(282.10)
(282.10)
–
1.18
–
1.18
152.01
–
–
–
5.78
–
–
–
6.95
–
737.82
15.68
51.92
789.74
15.68
2511.60 441.67
–
0.71
0.71
86.47
–
(0.94)
(0.94)
(44.22)
–
(12.54)
(12.54)
–
–
–
–
0.12
–
–
–
5.71
–
0.00
0.00
5.12
–
2.92
2.92
484.39
–
–
–
87.25
–
–
–
89.30
703.70
737.82
49.00
329.14
786.82 1032.84
1937.91 2190.99
6161.01
2.11
6163.12
398.71
–
398.71
(620.67)
–
(620.67)
408.94
193.97
78.42
27.22
(44.13)
(12.43)
163.17
236.93
9.77
32.36
(31.32)
(7.17)
36.73
418.11
585.81
195.22
1235.87
46.94
–
1.11
–
48.05
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20.14
–
20.14
183.67
–
183.67
5775.52 2809.73
1.44
5777.63 2811.17
2.11
609.90 (323.45)
–
610.11 (323.45)
0.20
0.34
0.73
0.70
1.32
–
–
–
–
–
19.34
1.34
2.73
15.84
424.23 259.26
208.15 123.91
67.95
30.19
(22.96)
(6.53)
139.59
247.60
90.12
99.09
16.46
32.11
(14.25)
(2.48)
–
–
–
–
–
83.67
18.93
418.11 156.27
53.41
586.93
195.22
16.41
1283.92 245.01
7.39
(0.71)
43.85
10.48
61.01
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
14.35
–
14.35
123.93 2986.60
1.64
123.93 2988.24
–
15.01
–
15.01
15.05
–
15.05
2773.87 3336.28
0.67
2774.34 3336.95
0.47
0.27
0.65
0.58
1.01
–
–
–
–
–
17.92
1.31
286.61
146.90
2.50
10.78
90.41
118.94
–
–
–
–
–
26.31
155.56
97.25
26.89
306.02
–
0.01
0.24
–
–
–
–
–
–
–
0.01
0.24
–
137.63
61.24
149.68
70.05
48.94
128.66
72.81
137.84
–
–
–
–
–
57.36
262.54
17.81
261.84
489.67
168.33
977.90
532.41
178.81
990.86
12170.45
857.92 (1009.74)
(282.10)
153.19
29.00
229.88
11382.47 4085.92
905.02 (414.82)
(12.54)
0.12
22.56
161.57 4424.44 102.51
104.60
6853.43 7982.02
11031.55 1391.33
Previous year
Add : Capital work-in-progress
[1] R 1.38 crore pertains to Foreign currency fluctuation
–
–
(6.03)
26.25 284.71 12170.45 3181.98 1052.50
–
–
(1.19)
15.79 165.55 4085.92 102.51
102.51
796.55
567.31
7649.98 8549.34
a) Cost of freehold land includes R 1.14 crore (previous year: R 1.27 crore) for which conveyance is yet to be completed.
b) Cost of buildings includes ownership accommodations:
(i) A.
in various co-operative societies, shop-owners’ associations and non-trading corporations : R 68.26 crore, including 2615
shares of R 50 each, 75 shares of R 100 each. (previous year: in various co-operative societies, shop-owners’ associations
and non-trading corporations : R 65.75 crore, including 2615 shares of R 50 each, 80 shares of R 100 each).
B.
C.
in various apartments : R 9.42 crore. (previous year: R 9.42 crore).
in various co-operative societies : R 0.36 crore (previous year: R 0.36 crore) for which share certificates are yet to be
issued.
D.
in proposed co-operative societies R 30.59 crore. (previous year: R 30.59 crore).
372
Notes forming part of the Financial Statements (contd.)
NOTE [2] (contd.)
(ii) ownership accommodations of R 0.29 crore in respect of which the deed of conveyance is yet to be executed. (previous year:
R 3.53 crore).
(iii) ownership accommodations of R 11.75 crore representing undivided share in properties at various locations. (previous year:
R 11.75 crore).
c) Additions during the year and capital work-in-progress include R 23.10 crore (previous year: R 26.72 crore) being borrowing cost
capitalised in accordance with Accounting Standard (Ind AS) 23 “Borrowing Costs”. Asset class wise break-up of borrowing costs
capitalised during the year is as follows:
Class of assets
2019-2020
2018-2019
v crore
Buildings
Plant and Equipment
Total
23.09
0.01
23.10
25.99
0.73
26.72
d)
The average capitalisation rate for borrowing cost is 6.24 % (previous year: 7.68 %).
e)
In addition to depreciation, obsolescence amounting to R 4.30 crore (previous year: R 6.35 crore) have been recognised in Profit
and Loss during the year.
f) Owned assets given on operating lease have been presented separately under respective class of assets as “Leased out” pursuant
to Ind AS 116 “Leases”.
g) Cost as at April 1, 2019 of individual assets has been reclassified wherever necessary.
h) Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its joint venture company and the
lease deed is under execution.
i)
Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the
consumption pattern of the assets and the past performance of similar assets.
a.
Estimated useful life of the following assets is in line with useful life prescribed in schedule II of the Companies Act, 2013:
Sr. No
Asset Class
Minimum useful life (in years)
Maximum useful life (in years)
1.
2.
3.
4.
5.
6.
7.
Buildings
Plant & Equipment
Computer
Office Equipment
Furniture & Fixture
Vehicles
Ships
3
8
3
4
10
8
14
60
15
6
5
10
10
14
b.
Estimated useful life of following assets is different than useful life as prescribed in schedule II of the Companies Act, 2013.
Sr. No Category of Assets
Sub-category of Assets
1.
2.
Aircrafts
Vehicles
–
Motor Cars
Useful life as per
Schedule II (in years)
Useful life
adopted (in years)
20
8
18
7
373
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [2] (contd.)
A Assets used in Heavy Engineering Business:
Category of Assets
Sub-category of Assets
Useful life
as per Schedule II
(in years)
Useful life adopted
(in years)
Sr.
No
1.
Plant & Equipment
General
Boring/Rolling/Drilling/Milling machines
Modular Furnace
Other Furnaces
Horizontal Autoclaves
Load bearing structures
Flushing Facility
Cranes
2.
Roads
Carpeted Roads-other than RCC
B
Assets used in Shipbuilding Business:
10-30
5-15
5-30
10-30
50
3
10-30
5-15
15
5
Sr.
No
Category of Assets
Sub-category of Assets
Useful life
as per Schedule II
(in years)
Useful life adopted
(in years)
1. Marine structures
2.
Plant & equipment
Ship lift structures, Control system, Chiller
units, Condition monitoring system, Ship
position system, Ship transfer system, other
ship lift related structures
Land berth and piled platforms
Rail Mounted quay Cranes, Rubber Tyre
Gantry Cranes having capacity of 40 Tons
or more
Tower cranes and EOT cranes
Rails
Air-Conditioner & refrigeration equipment
3.
Buildings
Diesel generator
Production shops
Container yards
Internal roads
4.
Vehicles
Motor Cars
30*
30*
30*
15
15
15
15
15
30
30
5
8
*Represents licence period as per agreement executed with the Tamil Nadu Maritime Board.
50
20
40
20
25
20
12
12
50
20
15
7
374
Notes forming part of the Financial Statements (contd.)
NOTE [2] (contd.)
C Assets used in Defence Business:
Sr.
No
1.
2.
3.
4.
Category of Assets
Sub-category of Assets
Buildings
Buildings
Factory Buildings
Non-Factory Buildings
Plant and Equipment General
Plant & Equipment
Photographic equipment
Laboratory Equipment
Electrical Installation
Air conditioning and refrigeration
equipment
5.
6.
7.
Computer
Office Equipment
Furniture and Fixture
D Assets used in Electrical & Automation business:
Useful life as per
Schedule II (in years)
Useful life adopted
(in years)
30
3 – 60
8 – 15
15
10
10
12
3 – 6
4 – 5
10
2 - 60
5 - 50
1 – 50
8
1
1 – 21
1 – 12
1 – 8
1 – 15
1 – 20
Sr.
No
1.
Category of Assets
Sub-category of Assets
Plant & Equipment General
Specialised machine tools, dies,
jigs, fixtures, gauges for electrical
business
Useful life as per
Schedule II (in years)
Useful life adopted
(in years)
15
5
E Assets used in Construction business:
Sr.
No
1.
2.
3.
4.
5.
Category of Assets
Sub-category of Assets
Office Equipment
Assets deployed at project site
Air conditioning and
refrigeration equipment
Assets deployed at project site
Canteen Equipment
Assets deployed at project site
Laboratory Equipment
Assets deployed at project site
Photographic equipment
Assets deployed at project site
Useful life as per
Schedule II (in years)
Useful life adopted
(in years)
5
15
15
10
15
3
3
3
3
3
In addition to above, any assets purchased for project site with acquisition value less than R 50,000 for above 5
categories of Asset, full cost is depreciated in the same financial year.
j)
Carrying value of Property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2020
amounts to R 1718.30 crore (as at March 31, 2019: R 1973.52 crore)
375
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [3]
Investment Property
Class of assets
Land
Buildings
Total
As at
1-4-2019
52.77
357.20
409.97
Additions
–
0.33
0.33
Cost
Transferred
from PPE/to
Inventories
1.18
151.96
153.15
Deductions
As at
31-3-2020
As at
31-3-2019
Additions
Depreciation
Transferred
from PPE/to
Inventories
v crore
Book Value
Deductions
Upto
31-3-2020
As at
31-3-2020
As at
31-3-2019
–
53.95
7.77
7.77
501.72
555.68
–
48.79
48.79
–
16.63
16.63
–
0.08
0.08
–
0.22
0.22
–
53.95
52.77
65.27
65.27
436.45
490.40
308.41
361.18
Previous year
523.16
7.62
(8.93)
111.88
409.97
48.18
15.49
(1.34)
13.54
48.79
Add : Capital work-in-progress
–
20.08
490.40
381.26
(a) Additions during the year and capital work-in-progress include R 0.33 crore (previous year: R 1.38 crore) being borrowing cost
capitalised in accordance with Accounting Standard (Ind AS) 23 “Borrowing Costs”. Asset class wise break-up of borrowing costs
capitalised during the year is as follows:
Buildings
Class of assets
R crore
2019-2020
2018-2019
0.33
1.38
(b) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the
consumption pattern of the assets and the past performance of similar assets:
Class of assets
Buildings
Minimum useful life
(in years)
Maximum useful life
(in years)
3
60
(c) Disclosure pursuant to Ind AS 40 “Investment Property”
(i) Amount recognised in the Statement of Profit and Loss for Investment property:
Sr.
No.
1
2
3
Particulars
v crore
2019-20
2018-19
Rental income derived from Investment property
137.81
179.92
Direct operating expenses arising from Investment property that generated rental income
79.14
66.74
Direct operating expenses arising from Investment property that did not generate rental
income
0.63
0.67
(ii)
Fair value of Investment property : R 2644.31 crore as at March 31, 2020 (R 2932.97 crore as at March 31, 2019)
(iii) The fair values of investment properties have been determined with the help of internal architectural department and
independent valuer on a case to case basis. Fair value of properties that are evaluated by independent valuer amounts to
R 1802.82 crore (R 2932.97 crore as at March 31, 2019). Valuation is based on government rates, market research, market
trend and comparable values as considered appropriate.
376
Notes forming part of the Financial Statements (contd.)
NOTE [4]
Intangible assets & Intangible assets under development
Class of assets
As at
1-4-2019
Additions
Assets held
for sale
Deductions
As at
31-03-2020
Up to
31-3-2019
For the
period
Assets held
for sale
Deductions
Up to
31-3-2020
As at
31-3-2020
As at
31-3-2019
Cost
Amortisation
Book value
Specialised softwares
226.69
12.02
(31.48)
Technical knowhow
106.55
8.34
(14.20)
New product design and
development
229.38
54.08
(277.20)
Total
562.62
74.44
(322.88)
–
–
–
–
207.22
182.07
13.56
(25.18)
100.69
43.02
24.43
(13.72)
6.26
108.81
7.64
(110.18)
314.17
333.90
45.63
(149.08)
–
–
–
–
170.45
36.77
44.62
53.74
46.95
63.52
6.26
0.00
120.58
230.45
83.72
228.72
Previous year
463.99
98.63
–
– 562.62
270.57
63.33
–
– 333.90
v crore
Add: Intangible assets under development
(a) Additions during the year
Class of assets
Specialised softwares
Technical knowhow
New product design and development
Total
FY 2019-20
FY 2018-19
Internal
development
–
8.34
54.08
62.42
Acquired
- external
12.02
–
–
12.02
Total
12.02
8.34
54.08
74.44
Internal
development
–
–
67.99
67.99
Acquired
- external
23.16
7.48
–
30.64
0.66
171.69
84.38
400.41
v crore
Total
23.16
7.48
67.99
98.63
(b) Note : Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the
consumption pattern of the assets and the past performance of similar assets:
Sr. No.
1.
2.
3.
Class of assets
Specialised softwares
Technical knowhow
New product design and development
Minimum useful life
(in years)
1
1
1
Maximum useful life
(in years)
10
10
6
377
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [5]
Non-current Assets: Financial Assets - Investments
Particulars
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
(A) Investment in equity instruments
(a) Subsidiary companies
(b) Associate companies
(c) Joint venture companies
(d) Other companies
(B) Other investments in Subsidiary Company
Details of Non-current Assets: Financial Assets - Investments
Particulars
(A) Investments in fully paid equity instruments
(a) Subsidiary companies:
(i)
Investments in fully paid equity instruments:
L&T Valves Limited
Bhilai Power Supply Company Limited
Hi-Tech Rock Products & Aggregates Limited
Kesun Iron & Steel Company Private Limited
L&T Aviation Services Private Limited
L&T Capital Company Limited
L&T Cassidian Limited [Net of provision R 0.05 crore (previous year:
R 0.05 crore)]
L&T Finance Holdings Limited (quoted)
L&T Metro Rail (Hyderabad) Limited
L&T Power Development Limited
L&T Power Limited
L&T Construction Equipment Limited [1]
L&T Seawoods Limited
Mindtree Limited
L&T Electricals and Automation Limited
L&T Hydrocarbon Engineering Limited
L&T Technology Services Limited (quoted)
Larsen & Toubro Infotech Limited (quoted)
Larsen & Toubro Hydrocarbon International Limited LLC [Net of provision R 0.68
crore (previous year:R 0.68 crore)]
Larsen & Toubro LLC
L&T Construction Machinery Limited [1]
Larsen & Toubro (Saudi Arabia) LLC
L&T Infrastructure Engineering Limited
L&T Global Holdings Limited
26339.03
4.42
1539.91
73.42
16537.52
4.42
1539.51
97.35
27956.78
18.50
27975.28
18178.80
18.50
18197.30
Number of units
As at
31-3-2020
Face value
per unit
v
As at
31-3-2020
v crore
As at
31-3-2019
v crore
100
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
2
1
SAR 1000
USD 1
10
SAR 1000
10
USD 100
18,00,000
49,950
50,000
9,500
4,56,00,000
50,000
50,000
1,27,75,20,203
2,43,89,99,999
3,11,27,00,000
51,157
16,71,60,700
1,65,45,50,000
10,05,27,734
74,38,796
1,00,00,50,000
7,79,86,899
12,97,84,034
450
50,000
19,91,42,091
625
36,00,000
80,000
161.23
0.05
0.05
0.01
45.60
0.05
–
3468.17
2439.00
3112.70
0.05
107.72
1654.55
9567.93
40.36
1000.05
805.25
108.05
–
161.23
0.05
0.05
0.01
45.60
0.05
–
3468.17
2427.18
3112.70
0.05
107.72
1654.55
–
40.36
1000.05
805.49
108.05
–
0.23
22.27
1.05
21.85
53.16
22609.38
0.23
22.27
1.05
21.85
53.16
13029.87
378
Notes forming part of the Financial Statements (contd.)
NOTE [5]
Details of Non-current Assets: Financial Assets - Investments (contd.)
Particulars
(ii) Preference share considered equity as per terms:
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, March 30, 2022.
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, May 12, 2022
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, July 14, 2022
L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable
preference shares, September 3, 2022
L&T Hydrocarbon Engineering Ltd -10% Non-cumulative, optionally convertible
redeemable at par preference shares, February 6, 2029
L&T Hydrocarbon Engineering Ltd -12% Non-cumulative, optionally convertible,
redeemable at par preference shares, October 19, 2030
L&T Hydrocarbon Engineering Ltd -12% Non-cumulative,optionally convertible,
redeemable at par preference shares, March 30, 2031
Number of units
As at
31-3-2020
Face value
per unit
v
As at
31-3-2020
v crore
As at
31-3-2019
v crore
2
2
2
2
10
10
10
82,60,00,000
826.00
826.00
4,80,00,000
48.00
48.00
4,22,50,000
42.25
42.25
4,20,00,000
42.00
42.00
50,00,00,000
500.00
500.00
13,00,00,000
130.00
130.00
13,00,00,000
130.00
130.00
L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally
2
1,36,24,50,000
1362.45
1140.45
convertible redeemable preference shares, July 17, 2029.
L&T Construction Equipment Limited - 12% Non-cumulative and optionally
10
64,83,00,000
648.30
648.30
convertible, redeemable at par preference shares, May 26, 2025. [1]
(iii) Other equity investments:
L&T Aviation Services Private Limited
Total - (a) = (i)+(ii)+(iii)
(b) Associate companies:
Gujarat Leather Industries Limited [Net of provision R 0.56 crore (previous year:
R 0.56 crore)]
Magtorq Private Limited
(c) Joint venture companies:
(i)
Investments in fully paid equity instruments:
Ahmedabad-Maliya Tollway Limited [R 1000 (previous year: R 1000)]
L&T Chennai-TADA Tollway Limited [R 1000 (previous year: R 1000)]
L&T Halol-Shamlaji Tollway Limited [R 1000 (previous year: R 1000)]
L&T Howden Private Limited
L&T Infrastructure Development Projects Limited [Net of provision R 1723 crore
(previous year: R 950 crore)]
L&T Kobelco Machinery Private Limited
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Rajkot-Vadinar Tollway Limited [R 1000 (previous year: R 1000)]
L&T Samakhiali Gandhidham Tollway Limited
Carried forward
3729.00
3507.00
0.65
0.65
26339.03
0.65
0.65
16537.52
–
4.42
4.42
–
–
–
15.03
1021.48
–
119.39
362.41
–
0.01
1518.32
–
4.42
4.42
–
–
–
15.03
973.48
25.50
119.39
362.41
–
0.01
1495.82
10
100
7,35,000
9,000
10
10
10
10
10
10
10
10
10
10
100
100
100
1,50,30,000
32,10,59,096
–
11,93,91,000
36,24,06,000
100
13,000
379
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [5]
Details of Non-current Assets: Financial Assets - Investments (contd.)
Particulars
(i)
Investments in fully paid equity instruments: (contd.)
Brought forward
L&T Special Steels and Heavy Forgings Private Limited [Net of provision
R 419.28 crore (previous year: R 419.28 crore)]
L&T Transportation Infrastructure Limited
L&T-Sargent & Lundy Limited
PNG Tollway Limited
Raykal Aluminum Company Private Limited
L&T MBDA Missile Systems Limited
(ii) Other equity investments:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
(iii) Preference shares-(equity portion):
Number of units
As at
31-3-2020
Face value
per unit
v
10
41,92,84,000
10
10
10
10
10
1,08,64,000
27,82,736
100
37,750
5,10,000
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative,
10
15,54,00,000
non-convertible redeemable at par preference shares, December 8, 2024 [Net
of provision R 78.33 crore (previous year: R 78.33)]
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative,
10
17,76,00,000
non-convertible redeemable at par preference shares, December 8, 2025 [Net
of provision R 97.91 crore (previous year: R 97.91)]
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative,
10
14,20,80,000
non-convertible redeemable at par preference shares, December 8, 2026 [Net
of provision R 84.41 crore (previous year: R 84.41)]
Total - (c) = (i)+(ii)+(iii)
(d) Other companies:
International Seaport Dredging Limited [Net of provision R 15.90 crore (previous
10000
15,899
year: R 15.90 crore)]
BBT Elevated Road Private Limited
Utmal Multi purpose Service Co-operative Society Limited (B Class) (non-trade
investments) [R 30,000 (previous year: R 30,000)]
Tidel Park Limited [note 53(f)]
VP Global Fibre and Yarns Private Limited [R 22,900 (previous year: R 20,600)]
New Vision Wind Power Private Limited
The New India Assurance Company Limited
ICICI Securities Limited
Total - (d)
Total - (A) =(a)+(b)+(c)+(d)
10
100
10
100
10
10
5
1,00,000
300
40,00,000
229
2,700
4,45,803
–
As at
31-3-2020
v crore
As at
31-3-2019
v crore
1518.32
–
1495.82
–
10.86
0.82
–
0.04
0.51
1530.55
2.24
7.13
9.36
–
–
–
10.86
0.82
22.42
0.04
0.51
1530.47
2.24
6.80
9.04
–
–
–
–
1539.91
–
1539.51
–
0.10
–
–
0.10
–
68.30
–
–
5.01
–
73.42
27956.78
65.58
–
–
11.92
19.73
97.35
18178.80
380
Notes forming part of the Financial Statements (contd.)
NOTE [5]
Details of Non-current Assets: Financial Assets - Investments (contd.)
Particulars
Number of units
As at
31-3-2020
Face value
per unit
v
As at
31-3-2020
v crore
As at
31-3-2019
v crore
(B) Investment in preference shares of Joint Venture companies:
(Fair value debt portion):
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible
redeemable at par preference shares, December 8, 2024 [Net of provision
R 77.77 crore (previous year: R 77.77)]
10
15,54,00,000
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible
10
17,76,00,000
redeemable at par preference shares, December 8, 2025 [Net of provision
R 79.12 crore (previous year: R 79.12)]
L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible
10
14,20,80,000
redeemable at par preference shares, December 8, 2026 [Net of provision
R 56.28 crore (previous year: R 56.28)]
Total - (B)
(C) Other investments:
Subsidiary companies: In limited liability partnership:
L&T Geo structure LLP
Total - (B)
Total Non Current Investment =(A)+(B)
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 amount of Impairment in value of investments
–
–
–
–
–
–
–
–
18.50
18.50
27975.28
18.50
18.50
18197.30
As at
31-3-2020
v crore
As at
31-3-2019
v crore
13954.41
42534.94
4413.37
53882.38
14020.87
2633.29
13783.93
2633.29
[1] The composite scheme of amalgamation and arrangement between L&T Realty Limited and L&T Construction Equipment Limited and
L&T Construction Machinery Limited has been approved by National Company Law Tribunal on April 23,2020 with appointed date as
April 1, 2018. Pursuant to the scheme:
a.
b.
c.
Pursuant to amalgamation of L&T Realty Limited with L&T Constructure Equipment Limited, L&T Construction Equipment Limited
issued 4,71,60,700 equity shares of R 10 each and 64,83,00,000 , 12% non-cumulative redeemable preference shares of R 10
each to Larsen & Toubro Limited as a consideration towards transfer of all assets and liabilities by L&T Realty Limited. The cost
of acquisition of shares issued is deemed to be the cost at which Larsen & Toubro Limited acquired shares of L&T Realty Limited.
Accordingly, the value of investment in L&T Construction Equipment Limited has been increased by R 47.16 crore towards equity
shares and R 648.30 crore towards preference shares w.e.f. April 1, 2018 and correspondingly investment in equity and preference
shares of L&T Realty Limited stands cancelled.
Subject to the approval of the Registrar of Companies, L&T Construction Equipment Limited is proposed to be renamed as L&T
Realty Developers Limited and L&T Construction Machinery Limited is proposed to be renamed as L&T Construction Equipment
Limited.
Pursuant to demerger of Manufacturing business of L&T Construction Equipment Limited, L&T Construction Machinery Limited
issued 19,91,32,091 equity shares of R 10 each to Larsen & Toubro Limited as a consideration towards transfer of certain assets
and liabilities by L&T Construction Equipment Limited. The cost of acquisition of these shares issued is derived based on book value
of assets transferred to the total value of assets of L&T Construction Equipment Limited as at appointed date. Accordingly, the
value of investment in L&T Construction Machinery Limited has been increased by R 22.26 crore and reduced in L&T Construction
Equipment Limited w.e.f. April 1, 2018.
381
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [6]
Non-current Assets: Financial Assets - Loans
Particulars
Unsecured security deposits, considered good:
Less: Allowance for expected credit loss
Unsecured loan and advances to related parties:
Subsidiary companies, considered good [Note 57 & 58 (A)]
Joint venture companies, considered good [Note 57 & 58 (A)]
Less: Allowance for expected credit loss
Other loans, considered good:
Secured
Unsecured
NOTE [7]
Non-current Assets: Financial Assets - Others
Particulars
Cash and bank balances not available for immediate use [Note 7(a)]
Forward contract receivables
Premium receivable on financial guarantee contracts
Other receivables
Fixed deposits with banks (maturity more than 12 months)
As at 31-3-2020
As at 31-3-2019
v crore
152.45
36.54
1578.79
263.00
–
0.71
v crore
v crore
v crore
115.91
2074.59
106.32
28.30
1463.59
263.00
78.02
–
1315.79
1200.59
0.08
1.07
0.71
3507.00
1.15
1279.76
As at 31-3-2020
As at 31-3-2019
v crore
273.76
19.87
10.53
–
0.32
304.48
v crore
289.76
102.43
10.54
174.27
–
577.00
382
Notes forming part of the Financial Statements (contd.)
7(a) Particulars of cash and bank balances not available for immediate use
Sr.
No.
1
2
3
Particulars
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, acquisition etc.
Total
Less: Amount reflected under current assets [Note 13]
Amount reflected under other financial assets - non-current [Note 7]
v crore
As at
31-3-2020
As at
31-3-2019
26.02
25.25
26.49
25.97
575.28
627.79
354.03
273.76
4372.34
4423.56
4133.80
289.76
NOTE [8]
Other non-current assets
Particulars
Capital advances:
Secured
Unsecured
Advance recoverable other than in cash
Current tax receivable (net)
NOTE [9]
Current Assets: Inventories
Particulars
Raw materials [includes goods-in-transit R 1.12 crore
(previous year: R 14.83 crore)]
Components [includes goods-in-transit R 10.58 crore
(previous year: R 19.29 crore)]
Construction materials [includes goods-in-transit R 17.11 crore
(previous year: R 114.39 crore)]
Manufacturing work-in-progress
Finished goods
Stock-in-trade [includes goods-in-transit R 37.10 crore
(previous year: R 38.79 crore)]
Stores and spares [includes goods-in-transit R 1.14 crore
(previous year: R 2.22 crore)]
Loose tools
Property development related work-in-progress
As at 31-3-2020
As at 31-3-2019
v crore
0.15
237.94
1758.01
2072.84
4068.94
v crore
1.84
19.29
1636.04
1716.47
3373.64
As at 31-3-2020
As at 31-3-2019
v crore
377.44
82.04
48.34
367.48
18.12
308.36
133.60
2.96
1431.56
2769.90
v crore
332.93
296.27
144.09
489.87
230.41
386.27
130.74
3.69
1334.97
3349.24
Note: During the year R 73.98 crore (previous year: R 1.09 crore) was recognised as expense towards write-down of inventories.
383
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [10]
Current Assets: Financial Assets - Investments
Particulars
(A) Government and trust securities
(B) Debentures and bonds
(i) Subsidiary companies
(ii) Joint venture companies
(iii) Other debentures & bonds
(C) Mutual funds
As at 31-3-2020
As at 31-3-2019
v crore
v crore
757.82
v crore
v crore
924.53
331.40
836.53
2132.58
273.07
741.94
1123.75
3300.51
2000.82
6059.15
2138.76
1643.56
4706.85
Details of current investments in Subsidiary companies and joint venture companies
Particulars
Number of units
As at
31-3-2020
Face value
per unit
v
As at
31-3-2020
v crore
As at
31-3-2019
v crore
Debentures and Bonds (quoted):
(i) Subsidiary companies:
9.10% L&T Finance Ltd. NCD April 13, 2022
7.65% L&T Finance Ltd. NCD November 13, 2020
9.50% L&T Metro Rail (Hyderabad) Limited SR-F NCD November 26, 2030
9.55% L&T Metro Rail (Hyderabad) Limited SR-F NCD September 28, 2030
Total- (i)
(ii) Joint Venture companies:
9.14% Kudgi Transmission Limited SR-K NCD April 25, 2028
9.14% Kudgi Transmission Limited SR-L NCD April 25, 2029
9.14% Kudgi Transmission Limited SR-M NCD April 25, 2030
9.14% Kudgi Transmission Limited SR-N NCD April 25, 2031
9.14% Kudgi Transmission Limited SR-O NCD April 25, 2032
9.50% Kudgi Transmission Limited SR-P NCD April 25, 2033
9.50% Kudgi Transmission Limited SR-Q NCD April 25, 2034
9.50% Kudgi Transmission Limited SR-R NCD April 25, 2035
9.50% Kudgi Transmission Limited SR-S NCD April 25, 2036
9.50% Kudgi Transmission Limited SR-T NCD April 25, 2037
9.50% Kudgi Transmission Limited SR-U NCD April 25, 2038
9.50% Kudgi Transmission Limited SR-V NCD April 25, 2039
9.50% Kudgi Transmission Limited SR-W NCD April 25, 2040
8.60% LTIDPL NCD December 26, 2026
Total- (ii)
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 (Accounted based on NAV)
384
1000
2500000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
1000000
2,00,000
80
1,500
1,000
230
240
270
280
290
310
330
360
390
410
350
960
250
2,500
20.83
20.81
172.96
116.81
331.40
27.20
28.52
32.01
33.35
34.50
37.85
40.37
43.90
47.83
50.56
43.36
119.34
31.15
266.60
836.53
–
162.61
110.47
273.07
25.84
26.96
30.19
31.00
31.94
35.03
–
40.64
44.08
46.39
39.64
108.82
28.36
253.06
741.94
As at
31-3-2020
v crore
As at
31-3-2019
v crore
4058.33
4058.33
3063.29
3063.29
2000.82
1643.56
Notes forming part of the Financial Statements (contd.)
NOTE [11]
Current Assets: Financial Assets - Trade receivables
Particulars
Unsecured, considered good
Less: Allowance for expected credit loss
Credit Impaired
Less: Allowance for expected credit loss
NOTE [12]
Current Assets: Financial Assets - Cash and cash equivalents
Particulars
Balance with banks
Cheques and drafts on hand
Cash on hand
Fixed deposits with banks (maturity less than 3 months)
NOTE [13]
Current Assets: Financial Assets - Other bank balances
Particulars
Fixed deposits with banks
Earmarked balances with banks-unclaimed dividend
Earmarked balances with banks-Section 4(2)(1)(D)RERA[1]
Margin money deposits with banks
Cash and bank balances not available for immediate use
[1] Real Estate (Regulation and Development) Act, 2016
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
29056.56
1313.12
1234.68
1065.16
29438.93
1411.43
27743.44
28027.50
1044.24
859.19
169.52
27912.96
185.05
28212.55
As at 31-3-2020
As at 31-3-2019
v crore
2130.13
66.04
4.16
1062.50
3262.83
v crore
1862.20
174.42
2.06
694.77
2733.45
As at 31-3-2020
As at 31-3-2019
v crore
185.35
114.27
0.15
21.76
354.03
675.56
v crore
647.64
84.64
–
20.44
4133.80
4886.52
385
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [14]
Current Assets: Financials Assets - Loans
Particulars
Unsecured security deposits, considered good
Less: Allowance for expected credit loss
Unsecured security deposits, credit impaired
Less: Allowance for expected credit loss
Unsecured loan and advances to related parties:
Subsidiary companies, considered good [Note 57 & 58 (A)]
Joint venture companies, considered good [Note 57&58(A)]
Other secured loans, considered good
NOTE [15]
Current Assets: Financial Assets - Others
Particulars
Advances to related parties:
Subsidiary companies
Associate companies
Joint venture companies
Advances recoverable in cash
Premium receivable on financial guarantee contracts
Forward contract receivable
Embedded derivative receivable
Doubtful advances:
Deferred credit sale of ships
Other loans and advances
Less: Allowance for doubtful loans and advances
386
As at 31-3-2020
As at 31-3-2019
v crore
312.81
0.97
–
–
v crore
v crore
v crore
329.22
0.45
311.84
328.77
5.07
5.07
–
176.67
26.56
0.07
515.14
–
914.75
62.27
0.15
1305.94
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
691.36
671.69
12.51
567.57
54.46
642.18
0.93
48.25
27.11
219.51
246.62
246.62
694.33
730.44
8.07
509.97
12.59
635.44
4.94
53.95
27.11
88.76
115.87
115.87
–
1997.59
–
1955.40
Notes forming part of the Financial Statements (contd.)
NOTE [16]
Other current assets
Contract Assets [Refer Note 41(d)]
Particulars
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
Due from customers (construction and project related activity)
Retention money including unbilled revenue
31750.52
13238.42
28311.36
11953.54
Advance recoverable other than in cash
Government grants receivable
Doubtful other loans and advances
Less: Provision for doubtful advances
7.00
7.00
44988.94
4601.02
71.65
–
49661.61
7.00
7.00
40264.90
3513.52
89.08
–
43867.50
NOTE [17]
Equity share capital
(a) Share capital authorised, issued, subscribed and paid up:
Particulars
Authorised:
Equity shares of R 2 each
Issued, subscribed and fully paid up:
Equity shares of R 2 each
As at 31-3-2020
As at 31-3-2019
Number of
shares
v crore
Number of
shares
v crore
1,62,50,00,000
325.00
1,62,50,00,000
325.00
1,40,38,92,022
280.78
1,40,27,29,385
280.55
(b) Reconciliation of the number of equity shares and share capital:
Particulars
Issued, subscribed and fully paid up equity share outstanding at the beginning of
the year
Add: Shares issued on exercise of employee stock options during the year
Add: Shares issued on conversion of foreign currency convertible bonds during
2019-20
2018-19
Number of
shares
v crore
Number of
shares
v crore
1,40,27,29,385
7,83,249
280.55 1,40,13,69,456
13,59,929
0.16
280.27
0.28
the year
3,79,388
0.07
–
–
Issued, subscribed and fully paid up equity shares outstanding at the end of the
year
1,40,38,92,022
280.78 1,40,27,29,385
280.55
(c) Terms/rights attached to equity shares:
The Company has only one class of share capital, i.e., equity shares having face value of R 2 per share. Each holder of equity share
is entitled to one vote per share.
387
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [17]
Equity share capital (contd.)
(d) Shareholder holding more than 5% of equity shares:
Name of the shareholders
As at 31-3-2020
As at 31-3-2019
Number of
shares
Shareholding
%
Number of
shares
Shareholding
%
Life Insurance Corporation of India
20,91,83,856
14.90
24,66,76,682
L&T Employees Trust
18,55,24,682
13.22
17,21,28,421
17.59
12.27
(e) Shares reserved for issue under options outstanding on un-issued share capital:
Particulars
As at 31-3-2020
As at 31-3-2019
Number of
equity shares
to be issued
as fully paid
R crore (at
face value)
Number of
equity shares
to be issued as
fully paid
R crore (at
face value)
Employee stock options granted and outstanding [3]
25,21,389[5]
0.50[1]
28,85,240[5]
0.58[1]
0.675% 5 years & 1 day US$ denominated foreign currency convertible
bonds (FCCB) [4]
–
–
95,20,455[5]
1.90[2]
[1]
[2]
The equity shares will be issued at a premium of R 63.06 crore (previous year: R 71.99 crore)
The equity shares will be issued at a premium of R Nil (previous year: R 1214.50 crore) on the exercise of options by the bond
holders
[3] Note 17(h)(i) for terms of employee stock option schemes
[4] Note 19(b) for terms of foreign currency convertible bonds
[5]
The number of options have been adjusted consequent to bonus issue wherever applicable
(f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended
March 31, 2020 are 46,67,64,755 (previous period of five years ended March 31, 2019: 46,67,64,755 shares).
(g) 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, 2020 – Nil (previous period of five years ended March 31, 2019: Nil).
(h) Stock option schemes
i.
Terms:
A.
The grant of options to the employees under the stock option schemes is on the basis of their performance and other
eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject
to the discretion of the management and fulfillment of certain conditions.
B. 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.
388
Notes forming part of the Financial Statements (contd.)
NOTE [17]
Equity share capital (contd.)
ii.
The details of the grants under the aforesaid schemes under various series are summarised below:
Sr.
No.
Series reference
1
2
3
4
5
6
7
8
9
Grant price - (R)
Grant dates
Vesting commences on
Options granted and outstanding at
the beginning of the year
Options lapsed
Options granted
Options exercised
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)
2000
2002(A)
2002(B)
2003(A)
2003(B)
2006(A)
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2.00
2.00
2.00
2.00
2.00
2.00
7.80
7.80
7.80
7.80
267.10
267.10
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
1-7-2007 onwards
23-5-2004 onwards
23-5-2004 onwards
1-7-2008 onwards
–
–
–
–
–
–
–
19,800
19,800
–
–
–
–
–
–
–
–
–
–
–
–
48,375
48,375
–
–
–
–
–
–
–
–
–
–
–
–
89,325
89,325
–
–
–
–
–
–
–
–
–
–
–
–
70,767
1,73,309
4,87,892 27,11,931 35,49,464
70,767
13,837
1,05,342
2,64,380
3,51,935
–
–
38,700
25,200
6,58,915
6,39,890
52,237
2,34,441
7,31,012 11,25,488
– 1,45,935
1,73,309 23,75,454 27,11,931
–
–
49,762
10,750
6,51,653
9,76,795
96,173 1,62,559 17,23,801 17,35,136
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
4.63
4.95
4.61
4.15
iii. The number and weighted average exercise price of stock options are as follows:
Particulars
2019-20
2018-19
No. of stock
options
Weighted
average
exercise
price (R)
No. of stock
options
(A) Options granted and outstanding at the beginning of the year
28,85,240
251.52
42,65,623
(B) Options granted
(C) Options allotted
(D) Options lapsed
6,97,615
7,83,249
2,78,217
252.72
6,65,090
249.81
13,59,929
254.20
6,85,544
(E) Options granted and outstanding at the end of the year
25,21,389
252.09
28,85,240
(F) Options exercisable at the end of the year out of (E) supra
7,01,415
248.70
9,87,545
Weighted
average
exercise
price (R)
223.35
257.28
222.40
139.58
251.52
264.28
iv. Weighted average share price at the date of exercise for stock options exercised during the year is R 1065.30 (previous year:
R 1272.80) per share.
v. A.
In respect of stock options granted pursuant to the Company’s stock options schemes, the fair value of the options is
treated as discount and accounted as employee compensation over the vesting period.
B.
Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2019-20 is R 49.44 crore
(previous year: R 72.47 crore) net of recoveries of R 0.46 crore (previous year: R 1.63 crore) from its group companies
towards the stock options granted to deputed employees, pursuant to the employee stock option schemes. The entire
amount pertains to equity-settled employee share-based payment plans.
389
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [17]
Equity share capital (contd.)
vi. During the year, the Company has recovered R 5.54 crore (previous year: R 17.15 crore) from its subsidiary companies towards
the stock options granted to their employees, pursuant to the employee stock option schemes.
vii. Weighted average fair values of options granted during the year is R 804.63 (previous year: R 986.95) per option.
viii. 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
(A) Weighted average risk-free interest rate
(B) Weighted average expected life of options
(C) Weighted average expected volatility
2019-20
6.23 %
4.12 years
25.40%
2018-19
7.44%
4.09 years
25.73%
(D) Weighted average expected dividends over the life of the option
R 74.07 per option
R 65.41 per option
(E) Weighted average share price
(F) Weighted average exercise price
(G) Method used to determine expected volatility
R 1056.34 per option
R 1225.00 per option
R 252.72 per option
R 257.28 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.
ix. The balance in share options (net) account as at March 31, 2020 is R 99.92 crore (previous year: R 106.91 crore), including
R 47.54 crore (previous year: R 52.29 crore) for which the options have been vested to employees as at March 31, 2020.
(i) Capital Management:
The Company continues its policy of 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. The gross debt equity ratio is 0.49.1 as at March 31, 2020 (as at March
31, 2019 0.24:1).
During the year ended March 31, 2020, the Company paid the final dividend of R 18 per equity share for the year ended March
31, 2019 amounting to R 2525.72 crore and dividend distribution tax of R 229.22 crore.
During the year ended March 31, 2020, the Company paid the Interim dividend of R 10 per equity share for the year ended March
31, 2020 amounting to R 1403.89 crore.
On June 5, 2020, the Board of Directors has recommended the final dividend of R 8 per equity share for the year ended March 31,
2020 subject to approval from shareholders. On approval, the total dividend payment based on number of shares outstanding as
at March 31, 2020 is expected to be R 1123.11 crore.
390
Notes forming part of the Financial Statements (contd.)
NOTE [18]
Other equity
Particulars
Equity component of foreign currency convertible bonds [5]
Capital reserve[1]
Capital reserve on business combination[2]
Securities premium
Employee share options (net)
Employee share options outstanding
Deferred employee compensation expense
Debenture redemption reserve[3]
General reserve[4]
Retained earnings
Foreign currency translation reserve
Hedging reserve
Cash flow hedging reserve
Cost of hedging reserve
Debt instruments through Other Comprehensive Income
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
–
10.52
(25.77)
8599.60
166.80
(66.88)
177.63
(70.72)
99.92
533.53
25669.50
16957.17
(4.14)
(46.83)
(14.48)
53.24
4.17
(61.31)
115.55
51894.57
v crore
153.20
10.52
(25.77)
8471.99
106.91
440.26
25507.91
15046.99
5.69
57.41
(7.24)
49767.87
[1]
[2]
Capital Reserve : It represents the gains of capital nature which mainly include the excess of value of net assets acquired over
consideration paid by the Company for business amalgamation transactions in earlier years.
Capital reserve on business combination: It arises on transfer of business between entities under common control. It represents
the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other
assets and the amount of share capital of the transferor [refer to note 1(ab)].
[3] Debenture redemption reserve (DRR) : The Ministry of Corporate Affairs vide notification dated August 16, 2019, amended
the Companies (Share capital and Debenture) Rules, 2014 by which the Company is no longer required to create DRR towards the
debentures issued. Earlier to this amendment, the Company was required to maintain a DRR of 25% of the value of debentures
issued, either by a public issue or on a private placement basis and the amounts credited to the DRR was not to be utilised by the
Company except to redeem debentures. The above amount represents the DRR created out of profits of the Company prior to the
said notification.
[4] general Reserve : The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act,1956
where in certain percentage of profits was required to be transferred to General Reserve before declaring dividends. As per
Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve
available to the Company.
[5]
Equity component of foreign currency convertible bonds : Pursuant to Ind AS 32, Foreign Currency Convertible Bonds (FCCB)
issued by the Company are split into equity and liability component and presented under other equity and financial liabilities
respectively.
391
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [19]
Non-current liabilities: Financial Liabilities - Borrowings
Particulars
Secured Unsecured
Total
Secured Unsecured
Total
v crore
v crore
v crore
v crore
v crore
v crore
As at 31-3-2020
As at 31-3-2019
Redeemable non-convertible fixed rate debentures
[Note 19(a)(i) & (ii)]
1380.78
5034.13
6414.91
1380.20
2180.66
3560.86
Redeemable non-convertible inflation linked debentures
[Note 19(a)(iii)]
Term loan from banks [Note 19(c)]
Finance lease
–
–
–
124.11
646.69
–
124.11
646.69
–
–
–
–
120.48
90.67
0.06
120.48
90.67
0.06
1380.78
5804.93
7185.71
1380.20
2391.87
3772.07
19(a) (i)
Secured redeemable non-convertible fixed rate debentures (privately placed):
Terms of repayment for debentures outstanding as at
31-03-2020
Redeemable at face value at the end of 15 years from the
date of allotment or on exercise of call option.
The Company has call option to redeem debentures at the
end of 10th year from the date of allotment.
Redeemable at face value at the end of 14 years from the
date of allotment or on exercise of call option.
The Company has call option to redeem debentures at the
end of 10th year from the date of allotment.
Redeemable at face value at the end of 13 years from the
date of allotment or on exercise of call option.
The Company has call option to redeem debentures at the
end of 10th year from the date of allotment.
Redeemable at face value at the end of 12 years from the
date of allotment or on exercise of call option.
The Company has call option to redeem debentures at the
end of 10th year from the date of allotment.
Redeemable at face value at the end of 11 years from the
date of allotment or on exercise of call option.
The Company has call option to redeem debentures at the
end of 10th year from the date of allotment.
Sr.
No.
Face value per
debenture (R)
Date of
allotment
10,00,000
October 25,
2012
As at
31-3-2020
R crore
As at
31-3-2019
R crore
Interest for
the year
2019-20
301.77
301.66 9.10% p.a.
payable
annually
10,00,000
October 25,
2012
269.67
269.56 9.10% p.a.
payable
annually
10,00,000
October 25,
2012
269.72
269.61 9.10% p.a.
payable
annually
10,00,000
October 25,
2012
269.78
269.66 9.10% p.a.
payable
annually
10,00,000
October 25,
2012
269.85
269.71 9.10% p.a.
payable
annually
Total
1380.78
1380.20
1
2
3
4
5
392
Notes forming part of the Financial Statements (contd.)
NOTE [19] (contd.)
Security
13,310 fully paid redeemable non-convertible debentures having face value of R 10,00,000 /- each issued on private placement basis are
secured by :
i)
First pari-passu charge over the assets of the Company with an asset cover of 1.25 times; and
ii) Charge on the designated account under the Debenture Trust Deed.
19 (a) (ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed):
Sr.
No.
Face value per
debenture (R)
Date of
allotment
As at
31-3-2020
R crore
As at
31-3-2019
R crore
Interest for the
year 2019-20
Terms of repayment for debentures
outstanding as on 31-3-2020
1
2
3
4
5
6
7
8
9
Total
Less:
1000000
April 10,2012
273.69
273.56
1000000
May 26,2011
322.81
322.71
1000000
May 11,2010
324.35
324.32
1000000
April 13,2010
216.96
216.95
9.75% p.a.
payable annually
Redeemable at face value at the
end of 10th year from the date of
allotment.
8.95% p.a.
payable annually
Redeemable at face value at the
end of 10th year from the date of
allotment.
9.15% p.a.
payable annually
Redeemable at face value at the
end of 10th year from the date of
allotment.
8.80% p.a.
payable annually
Redeemable at face value at the
end of 10th year from the date of
allotment.
1000000
September
24, 2015
1043.66
1043.12
8.40% p.a.
payable annually
1000000
April 18,
2019
1611.87
1000000
May 22, 2019
2136.82
1000000
January 24,
2020
1011.36
1000000
August 19,
2019
1458.36
–
–
–
–
7.87% p.a.
payable annually
8.02% p.a.
payable annually
6.72% p.a.
payable annually
6.77% p.a.
payable annually
Redeemable at face value at the
end of 5th year from the date of
allotment.
Redeemable at face value at the
end of 3rd year from the date of
allotment.
Redeemable at face value at the
end of 3rd year from the date of
allotment.
Redeemable at face value at the
end of 3rd year from the date of
allotment.
Redeemable at face value at the
end of 1st year from the date of
allotment.
8400.28
2180.66
3366.15
– Current maturity of long-term borrowings [Note 24]
5034.13
2180.66 Borrowings – non-current [Note 19]
393
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [19] (contd.)
19 (a) (iii) Unsecured redeemable non-convertible inflation linked debentures:
Face value per
debenture (R)
Date of
allotment
As at
31-3-2020
R crore
As at
31-3-2019
R crore
Interest for the year
2019-20
Terms of repayment for debentures
outstanding as on 31-3-2020
1000000
May 23,2013
124.11 [1]
120.48[1] 1.65% p.a. payable
on Inflation Adjusted
Principal as on the
date of coupon
payment
Redeemable at the end of 10th year
from the date of allotment. Redemption
value calculated as [{Average Ref WPI
(on Maturity Date) / Average Ref WPI (on
Issue Date)} x Face Value] with Floor Rate
as 3 % and Cap Rate as 12%. WPI here
refers to Wholesale Price Index
[1]
The principal amount has been calculated as [{Average Ref WPI as at reporting period/Average Ref WPI (as at 23/5/2013)}
x Face Value]
19(b) Foreign Currency Convertible Bonds:
0.675% USD denominated 5 years & 1 day Foreign Currency Convertible Bonds (FCCB) carried at R NIL as at March 31, 2020 (as at
March 2019: R 1363.39 crore, represent 200,000 bonds of USD 1000 each).
19(c) Details of term Loans (Unsecured):
Sr.
No.
As at
31-3-2020
R crore
As at
31-3-2019
R crore
Rate of Interest for the year
2019-20
Terms of repayment of term loan outstanding as at 31-3-2020
1
2
3
4
5
6
7
Total
Less:
–
–
–
1382.59
691.28
694.20
–
–
–
–
–
–
556.02
31.79
58.88
189.33
836.02
189.33
646.69
–
USD LIBOR + Spread
Repayable on February 28, 2025
31.79
58.88
8.40% p.a. payable monthly
Repayable on May 7, 2023
9.00% p.a. payable monthly
Repayable on October 19, 2023
–
USD LIBOR + Spread
Repayable on July 20, 2020
2858.74
2768.07 Current maturity of long-term borrowings [Note 24]
90.67 Borrowings non–current [Note 19]
Loans guaranteed by directors - R Nil (previous year: R Nil)
394
Notes forming part of the Financial Statements (contd.)
NOTE [19] (contd.)
19(d) Annual disclosure as Large Corporate pursuant to SEBI Circular dated November 26, 2018.
Annexure A
Sr. No. Particulars
Name of the company
CIN
Details
Larsen & Toubro Limited
L99999MH1946PLC004768
1
2
3
4
5
1
2
3
4
5
Outstanding borrowing of company as on March 31, 2020, as applicable
(in R Cr) (Audited)
R 25785.30 crore
Highest Credit Rating During the previous financial year along with name of
the Credit Rating Agency
CRISIL & ICRA AAA (Stable)
Name of Stock Exchange in which the fine shall be paid, in case of shortfall
in the required borrowing under the framework
National Stock Exchange of India Limited
Annexure B
Sr. No.
Particulars
Incremental borrowing done in financial year 2019-20 (a)
Mandatory borrowing to be done through issuance of debt securities (b) = (25% of a)
Actual borrowings done through debt securities in financial year 2019-20 (c)
Shortfall in the mandatory borrowing through debt securities, if any (d) = (b) - (c)
{If the calculated value is zero or negative, the shortfall considered is “Nil”}
Amount R crore
5,900[1]
1475
5900
NIL
Reasons for short fall, if any, in mandatory borrowings through debt securities
Not applicable
[1] Incremental borrowing represents actual long-term borrowing raised by the Company during financial year 2019-20
NOTE [20]
Non current liabilities: Other financial liabilities
Particulars
Forward contract payables
Embedded derivative payables
Financial guarantee contracts
Due to others
NOTE [21]
Non-current liabilities: Provisions
Particulars
Employee pension scheme
Post-retirement medical benefits plan
As at 31-3-2020
As at 31-3-2019
v crore
133.44
–
10.98
35.20
179.62
v crore
6.76
26.63
11.19
37.11
81.69
As at 31-3-2020
As at 31-3-2019
v crore
339.63
271.60
611.23
v crore
308.36
189.26
497.62
395
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [22]
Other non-current liabilities
Particulars
Other Payables (Deferred income on day fair valuation of financial instrument)
NOTE [23]
Current liabilities: Financial Liabilities - Borrowings
As at 31-3-2020
As at 31-3-2019
v crore
0.22
v crore
0.58
Particulars
Secured Unsecured
Total
Secured Unsecured
Total
As at 31-3-2020
As at 31-3-2019
Loans repayable on demand from banks
Short term loan and advances from banks
Commercial Paper
Loans from related parties:
Subsidiary companies
Joint venture companies
v crore
746.37
41.71
–
v crore
v crore
7697.54
4702.36
746.37
7739.25
4702.36
v crore
364.76
5.12
–
v crore
v crore
–
3683.55
–
364.76
3688.67
–
–
–
1796.45
59.68
1796.45
59.68
–
–
32.73
–
32.73
–
788.08
14256.03 15044.11
369.88
3716.28
4086.16
23(a) Loans guaranteed by directors R Nil (previous year:R Nil)
23(b) 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, short-term loans and advances from the banks, working capital
facilities and other non-fund based facilities viz. bank guarantees and letter of credit, are secured by hypothecation of inventories
and trade receivables. Amount of inventories and trade receivables that are pledged as collateral: R 6041.61 crore as at March 31,
2020 (March 31,2019 : R 6188.63 crore)
NOTE [24]
Current liabilities: Financial liabilities - Current maturities of long-term borrowings
Particulars
Unsecured:
Redeemable non-convertible fixed rate debentures
Term loans from banks
0.675% Foreign currency convertible bonds
As at 31-3-2020
As at 31-3-2019
v crore
3366.15
189.33
–
3555.48
v crore
–
2768.07
1363.39
4131.46
396
Notes forming part of the Financial Statements (contd.)
NOTE [25]
Current liabilities: Financial liabilities - Other trade Payables
Particulars
Acceptances
Due to related parties:
Subsidiary companies
Associate companies
Joint venture companies
Due to others
NOTE [26]
Current liabilities: Other financial liabilities
Particulars
Unclaimed dividend
Forward contract payable
Embedded derivative payable
Financial guarantee contracts
Due to others [1]
As at 31-3-2020
As at 31-3-2019
v crore
v crore
243.50
v crore
v crore
522.49
1071.65
13.04
1183.55
776.49
4.04
1006.51
2268.24
33737.77
36249.51
1787.04
33713.54
36023.07
As at 31-3-2020
As at 31-3-2019
v crore
114.27
458.23
95.11
12.99
1028.49
1709.09
v crore
84.64
237.02
68.17
8.57
1533.33
1931.73
[1] Due to others include due to directors R 29.13 crore (previous year: R 57.00 crore)
NOTE [27]
Other current liabilities
Contract Liabilities
Particulars
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
Due to customers (Construction and project related activity)
Advances from customers
6277.21
13780.04
6678.88
14593.57
Other Payables
20057.25
700.80
20758.05
21272.45
808.00
22080.45
397
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [28]
Current liabilities - provisions
Particulars
Provision for employee benefits:
Gratuity
Compensated absences
Employee pension scheme
Post-retirement medical benefits plan
Other Provisions (Ind AS 37 related)
NOTE [29]
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 that may arise in respect of which the Company is in
appeal
(e) Corporate and bank guarantees for debt given on behalf of subsidiary
companies/ joint venture companies
(f) Corporate and bank guarantees for performance given on behalf of
subsidiary companies/ joint venture companies
(g) Contingent liabilities, incurred in relation to interests in joint operations
(h) Share in contingent liabilities of joint operations for which the Company is
contingently liable
(i) Contingent liabilities in respect of liabilities of other joint operators of joint
operations
Notes:
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
87.01
621.76
25.64
13.01
103.26
592.75
24.52
7.84
747.42
807.97
1555.39
728.37
755.24
1483.61
As at 31-3-2020
As at 31-3-2019
v crore
3005.42
186.16
164.44
922.89
6130.39
27894.61
7460.44
64.05
5464.89
v crore
2199.74
157.68
218.41
677.83
6189.77
31292.90
7586.12
84.92
7187.07
1.
2.
3.
4.
5.
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 includes interest except 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 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.
In respect of matters at (g) to (i), the cash outflows, if any, could generally occur up to completion of projects undertaken by the
respective joint operations.
398
Notes forming part of the Financial Statements (contd.)
NOTE [30]
Commitments
Particulars
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
(a) Estimated amount of contracts remaining to be executed on capital
account (net of advances)
(i)
Estimated amount of contracts remaining to be executed on
Property,plant & equitpment
(ii) Estimated amount of contracts remaining to be executed on
Intangible assets
(b) Funding committed by way of equity/loans to subsidiary companies
Funding committed by way of equity (including investment through
(c)
purchase of investments from other parties) [1]
758.85
1.79
632.24
3.64
760.64
93.00
–
635.88
845.00
10732.85
[1] The Company had entered into a definitive share purchase agreement to acquire 20.32% stake in Mindtree Limited on March 18,
2019 at a price of R 980 per share aggregating to consideration of R 3269.00 crore. Further, the Company had placed a purchase
order with its stock broker for acquiring 15% stake through on-market purchases for an overall consideration amount not exceeding
R 2434.00 crore from any recognised stock exchange, but only after receipt of relevant approvals from regulatory authorities.
The Company had also made an open offer to acquire 31% stake for a consideration of R 5029.85 crore in accordance with the
requirements of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011.
NOTE [31]
Revenue from operations
Particulars
Sales and service:
Construction and project related activity
Manufacturing and trading activity
Property development activity
Engineering and service fees
Servicing
Commission
Other operational income:
Lease rentals
Profit/(loss) on sale of investment properties
Income from services to Group companies
Premium earned (net) on related forward exchange contracts
Miscellaneous Income
2019-20
2018-19
v crore
v crore
v crore
v crore
78091.00
2065.73
174.82
46.87
1141.31
98.25
78.70
–
62.61
38.59
585.77
77376.85
2098.23
642.08
10.06
808.52
160.16
81617.98
81095.90
126.58
565.60
91.15
26.22
381.97
765.67
82383.65
1191.52
82287.42
399
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [32]
Other income
Interest income:
Particulars
2019-20
2018-19
v crore
v crore
v crore
v crore
Subsidiaries, associates and joint venture companies
Others
Dividend income:
Subsidiary companies
Joint venture Companies
Others
Net gain/(loss) on sale or fair valuation of investments
Net gain/(loss) on derivatives at fair value through profit or loss
Net gain/(loss) on sale of property, plant and equipment
Lease rentals
Miscellaneous income (net of expenses)
214.63
405.07
1373.00
12.53
1.76
186.72
419.61
619.70
606.33
1313.98
19.44
178.70
1387.29
503.71
–
(30.92)
110.30
217.79
2807.87
1512.12
230.58
(22.60)
28.10
81.36
275.30
2711.19
400
Notes forming part of the Financial Statements (contd.)
NOTE [33]
Manufacturing, construction and operating expenses
Particulars
Materials consumed:
Raw materials and components
Less: Scrap sales
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 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:
Power and fuel
Royalty and technical know-how fees
Packing and forwarding
Engineering, technical and consultancy fees
Insurance
Rent and hire charges
Rates and taxes
Travelling and conveyance
Repairs to plant and equipment
Repairs to buildings
General repairs and maintenance
Bank guarantee charges
Provision/(reversal) for foreseeable losses on construction contracts
Other provisions
Miscellaneous expenses
2019-20
2018-19
v crore
v crore
v crore
v crore
5537.59
50.60
5764.78
52.24
5486.99
28632.03
855.63
1520.47
22488.74
5712.54
29482.65
906.49
2312.83
21647.74
18.12
308.36
5578.14
5904.62
2.74
291.28
5546.59
5840.61
1700.02
119.51
522.74
898.98
244.33
1948.27
568.57
744.57
67.48
20.87
560.36
223.62
(14.50)
23.58
333.96
2.74
291.28
5546.59
5840.61
6.69
224.34
4483.41
4714.44
(64.01)
(1126.17)
1675.98
42.86
435.47
1205.92
234.49
1859.73
527.80
715.24
64.38
21.98
393.61
193.17
35.37
175.23
336.55
7962.36
66882.21
7917.78
66853.86
401
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [34]
Employee benefits expense
Particulars
Salaries, wages and bonus
Contribution to and provision for :
Provident funds and pension fund
Superannuation/employee pension schemes
Gratuity funds
Expenses on employees stock option schemes
Insurance expenses - medical and others
Staff welfare expenses
Recoveries on account of deputation
2019-20
v crore
145.87
10.14
69.42
v crore
5294.89
2018-19
v crore
v crore
5318.48
120.75
14.11
60.91
225.43
47.40
100.10
584.16
(296.00)
5955.98
195.77
67.73
86.49
547.84
(483.71)
5732.60
[Employee benefits expense includes remuneration paid to employees engaged in CSR activities R 16.36 crore (previous year: R 17.02
crore). Refer to Note 60 for details of CSR expenses.]
2019-20
v crore
NOTE [35]
Sales, administration and other expenses
Particulars
Power and fuel
Packing and forwarding
Professional fees
Audit fees
Insurance
Rent & Hire charges
Rates and taxes
Travelling and conveyance
Repairs to buildings
General repairs and maintenance
Directors’ fees
Telephone, postage and telegrams
Advertising and publicity
Stationery and printing
Commission:
Distributors and agents
Others
Bank charges
Miscellaneous expenses[1]
Bad debts and advances written off (net of written back)
Less: Allowance for doubtful debts and advances written back
(48.58)
118.37
Allowance for doubtful debts and advances (net)
Exchange (gain)/loss (net)
Other provisions
Recoveries from subsidiary and associates
v crore
55.50
44.68
409.40
5.84
51.15
128.59
117.64
225.97
16.68
274.52
1.72
93.05
54.14
35.48
20.67
0.79
101.51
888.37
(166.95)
597.58
(175.72)
121.70
(194.97)
2707.34
2018-19
v crore
233.76
189.70
v crore
59.18
40.59
339.08
5.76
45.84
294.30
47.03
260.18
18.90
221.63
2.60
99.46
62.29
40.80
18.41
0.40
89.19
585.90
44.06
11.74
(119.38)
58.27
(178.36)
2047.87
[1] Miscellaneous expenses include expenditure incurred on CSR activities R 128.93 crore (previous year: R 104.66 crore). Refer to
Note 60 for details of CSR
402
Notes forming part of the Financial Statements (contd.)
NOTE [36]
Finance costs
Particulars
Interest expenses
Other borrowing costs
Exchange loss (attributable to finance costs)
2019-20
v crore
2225.99
7.30
33.27
2266.56
2018-19
v crore
1747.48
3.03
37.11
1787.62
NOTE [37]
Aggregation of expenses disclosed vide Note 33 - Manufacturing, construction and operating expenses, Note 34 - Employee benefits
expense and Note 35 - Sales, administration and other expenses.
2019-20
Note 34-
Employee
benefits
expense
Note 35 - Sales,
administration
and other
expenses
2018-19
Total
Note 33 -
Manufacturing,
construction and
operating expenses
Note 34-
Employee
benefits
expense
Note 35 -Sales,
administration and
other expenses
v crore
Total
–
–
100.10
–
–
–
–
–
–
55.50
44.68
51.15
128.59
117.64
225.97
16.68
274.52
888.37
1755.52
567.42
395.58
2076.86
686.21
970.54
37.55
834.88
1222.33
1675.98
435.47
234.49
1859.73
527.80
715.24
21.98
393.61
336.55
–
–
86.49
–
–
–
–
–
–
59.18
40.59
45.84
294.30
47.03
260.18
18.90
221.63
585.90
1735.16
476.06
366.82
2154.03
574.83
975.42
40.88
615.24
922.45
Note 33 -
Manufacturing,
construction
and operating
expenses
1700.02
522.74
244.33
1948.27
568.57
744.57
20.87
560.36
333.96
Sr.
No.
1
2
3
4
5
6
7
8
9
Nature of expenses
Power and fuel
Packing and forwarding
Insurance
Rent and hire charges
Rates and taxes
Travelling and conveyance
Repairs to buildings
General repairs and
maintenance
Miscellaneous expenses
NOTE [38]
Disclosure pursuant to Ind AS 103 “Business Combinations”:
L&T Shipbuilding Limited (LTSB), a wholly owned subsidiary, is merged with the Company under a scheme of amalgamation approved
by National Company Law Tribunal, Chennai on March 10, 2020 and National Company Law Tribunal, Mumbai on April 24, 2020. The
merger is effective from the appointed date April 01, 2019. LTSB has a registered office in Chennai, India and is engaged in the business
of Shipbuilding and Ship related activities.
No fresh shares are issued to effect the merger as LTSB is wholly owned subsidiary of the Company. Further the merger is accounted
using pooling of interest method, involving the following:
a.
b.
c.
The assets and liabilities of LTSB are reflected at their carrying amounts. No adjustment is made to reflect the fair values, or
recognise any new asset or liability.
The balance of Retained earnings appearing in the financial statements of LTSB is aggregated with the corresponding balance
appearing in the financial statements of the Company.
The excess of amount of investment by the Company in LTSB over the share capital of LTSB is treated as Capital reserve in
Company’s financial statements and the same is presented separately from other Capital reserves [Refer Note 18].
d. Restating the financials of the Company from April 01, 2018.
403
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [39]
Disclosure pursuant to Ind AS 105 “Non-current assets held for sale and discontinued operations”:
Group(s) of assets classified as held for sale
Liabilities associated with the group(s) of assets classified as held for sale
Particulars
R crore
As at
31-03-2020
2780.37
1367.58
As at
31-03-2019
41.72
–
The Company has following non-current assets/disposal group recognised as held for sale as at March 31, 2020:
(a) On May 1, 2018, the Company had signed, subject to regulatory approvals, definitive agreements with Schneider Electric
for strategic divestment of its Electrical and Automation (E&A) business [refer Note 40 for description of E&A business]. The
Competition Commission of India (CCI) accorded on April 18, 2019 its approval (the detailed order was uploaded on its website on
June 6, 2019) for acquisition of the Company’s Electrical & Automation (E&A) business by Schneider Electric, subject to fulfilment
of certain conditions.
As the sale was likely to be completed within the next one year from then, E&A business has been classified as discontinued
operation from q1 2019-20 onwards. The Company remains committed to its divestment plan. Based on the progress of the
divestment process and its current status, the Company continues to classify its Electrical & Automation (E&A) business as
discontinued operations.
i.
Financial performance related to discontinued operations:
Particulars
Revenue
Expense
Profit before tax
Income tax
Profit after tax
ii. Cash flow disclosure with respect to discontinued operations:
Cash flow from operating activities
Cash flow from investing activities[1]
Cash flow from financing activities
Particulars
2019-20
4557.34
3691.96
865.38
210.93
654.45
2019-20
560.79
(110.13)
–
R crore
2018-19
4930.56
4118.16
812.40
269.34
543.06
R crore
2018-19
562.06
(123.13)
–
Activities related to borrowings and investments of surplus funds have been managed at Corporate and accordingly form part
of unallocable corporate assets/liabilities (Refer to Note 40). There are no borrowings or investments specifically allocable to
EAIC business.
[1] represents additions & deletions to property, plant and equipment, investment property and intangible assets adjusted for
movement of (a) capital work-in-progress for property, plant and equipment and investment property and (b) Intangible assets
under development during the year.
404
Notes forming part of the Financial Statements (contd.)
NOTE [39]
Disclosure pursuant to Ind AS 105 “Non-current assets held for sale and discontinued operations” (contd.)
iii. Major classes of assets and liabilities classified as held for sale:
Particulars
R crore
As at
March 31, 2020
Group of assets classified as held for sale:
Property, plant and equipment
Capital work-in-progress
Intangible assets
Intangible assets under development
Loans
Inventories
Trade receivables
Cash and bank balances
Other assets
Total
Liabilities related to group of assets classified as held for sale:
Trade payables
Provisions
Other liabilities
Total
Amount recognised in OCI (cumulative) related to disposal group assets
Hedging Reserve (net of tax) [gain/(loss)]
Gain/(loss) on remeasurement of the defined benefits plan (net of tax)
Above assets and liabilities form part of “Electrical & Automation” segment [refer Note 40].
(b) Assets held for sale also include:
594.72
21.79
173.80
122.25
1.78
763.30
905.29
0.07
196.74
2779.74
937.95
126.53
303.10
1367.58
1.08
(6.18)
i.
ii.
Plant & Equipment of R 0.20 crore situated at Hazira, Gujarat. The asset forms part of “Defence Engineering” segment [refer
Note 40].
Building of R 0.43 crore situated at Chennai, Tamil Nadu. The asset forms part of Realty business which is reported under
“Others” segment [refer Note 40].
The Company has following non-current asset recognised as held for sale as at March 31, 2019:
Equity investment in L&T Technology Services Limited R 41.72 crore. Regulation 38 of the SEBI (Listing Obligation and Disclosure
Requirements) Regulation, 2015 requires a listed entity to comply with the minimum public shareholding requirements as specified
in rules 19(2) and 19A of the Securities Contracts (Regulation) Rules, 1957 (“SCRR). Rule 19(2)(b) of the SCRR requires the
maintenance of a minimum public shareholding of 25% at all times of each class or kind of equity shares or convertible debentures
issued by a listed company.
The Company was holding 78.88% in its listed subsidiary company L&T Technology Services Limited. In order to comply with the
said requirement, the Company planned to divest its investment in the said subsidiary in the open market within twelve months
from March 31, 2019.
The above investment forms part of the unallocable corporate assets. [refer Note 40].
405
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [40]
Disclosure pursuant to Ind AS 108 “Operating Segment”
(a)
Information about reportable segment
Particulars
For the year ended 31-3-2020
Inter-segment
External
For the year ended 31-3-2019
Total
External Inter-segment
Total
v crore
Revenue
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 39(a)(i)]
Others
Sub-total
Less: Revenue of discontinued operations
Less: Inter-segment revenue
Total
Segment result [Profit /(loss) before interest and tax]
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 39(a)(i)]
Others
Total
Result of discontinued operations
Inter-segment margins on capital jobs
Unallocable corporate income net of expenditure
Interest expense
Exceptional items
Profit before tax
Provision for Current tax
Provision for Deferred tax
Net profit after tax from continuing operations
Profit before tax from discontinued operations
Tax expense of discontinued operations
Net profit after tax from discontinued operations
Net profit after tax from continuing operations &
discontinued operations
69947.91
2300.06
3197.96
3973.42
4463.78
2964.30
86847.43
4463.78
–
82383.65
341.47
18.40
6.95
5.75
93.56
27.87
494.00
93.56
400.44
–
70289.38
2318.46
3204.91
3979.17
4557.34
2992.17
87341.43
4557.34
400.44
82383.65
4853.15
235.68
565.15
576.65
865.38
367.34
7463.35
(865.38)
(44.27)
2071.78
(2266.56)
626.99
6985.91
(1525.60)
564.45
6024.76
865.38
(210.93)
654.45
6679.21
68452.30
3975.77
2477.76
3752.32
4760.96
3629.27
87048.38
4760.96
–
82287.42
456.23
7.32
35.49
97.26
169.60
31.43
797.33
169.60
627.73
–
68908.53
3983.09
2513.25
3849.58
4930.56
3660.70
87845.71
4930.56
627.73
82287.42
5000.11
129.84
486.79
389.03
812.40
1230.27
8048.44
(812.40)
(10.11)
2138.80
(1787.62)
1642.35
9219.46
(2409.73)
138.60
6948.33
812.40
(269.34)
543.06
7491.39
v crore
Particulars
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation (discontinued operations) [Note 39(a)(iii)]
Others
Segment Total
Unallocable corporate assets/liabilities
Inter-segment assets/liabilities
Total assets/liabilities
Segment assets
Segment liabilities
As at
31-3-2020
74562.94
5000.45
3255.02
7270.89
2779.74
4160.76
97029.80
45167.17
(640.38)
141556.59
As at
31-3-2019
68926.08
5095.07
2932.34
7792.13
2726.08
3399.31
90871.01
34452.06
(663.34)
124659.73
As at
31-3-2020
48676.59
4381.75
1415.24
4246.42
1367.58
1892.15
61979.73
28041.89
(640.38)
89381.24
As at
31-3-2019
47253.59
4838.09
1528.56
4944.47
1562.30
1530.76
61657.77
13616.88
(663.34)
74611.31
406
Notes forming part of the Financial Statements (contd.)
NOTE [40]
Disclosure pursuant to Ind AS 108 “Operating Segment” (contd.)
Depreciation,
amortisation &
obsolescence included
in segment expense
Other non-cash
expenses included in
segment expense
Finance cost included
in segment expense
Interest income
included in segment
income
v crore
Additions to
non-current assets
For the
year
ended
31-3-2020
654.68
38.07
46.29
144.46
43.35
For the
year
ended
31-3-2019
708.05
47.16
44.95
132.94
139.16
For the
year
ended
31-3-2020
40.31
0.94
1.18
1.40
2.50
For the
year
ended
31-3-2019
46.40
2.99
2.12
2.59
6.37
For the
year
ended
31-3-2020
379.58
–
–
–
–
For the
year
ended
31-3-2019
297.87
–
–
–
–
For the
year
ended
31-3-2020
20.08
58.21
–
–
–
For the
year
ended
31-3-2019
34.29
–
–
–
–
For the
year
ended
31-3-2020
1244.77
97.67
176.76
159.50
201.05
For the
year
ended
31-3-2019
1137.18
62.96
107.94
219.31
240.35
Particulars
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation
[Discontinued
operations]
28.19
955.04
108.82
369.81
Others
2137.55
Total
227.05
Unallocated corporate
(82.26)
Inter-segment
Total
2282.34
Note : There is no impairment in non-financial assets of the segments. Unallocable corporate expenses include impariment loss of R Nil for the year ended
March 31,2020 (previous year: R 1929.10 crore)
367.66
2247.41
852.08
(8.64)
3090.85
–
297.87
(297.87)
–
379.58
(379.58)
37.27
1109.53
28.53
–
34.29
(34.29)
–
78.29
(78.29)
1.41
61.88
12.82
0.66
47.00
2.90
1138.06
1063.86
74.70
49.90
–
–
–
–
(b) Geographical information
India (i)
Foreign countries:
United Arab Emirates
qatar
Kuwait
Other countries
Total foreign countries (ii)
Total (i+ii)
Less: Discontinued operations
Total
India (i)
Foreign countries (ii)
Total (i+ii)
Particulars
Particulars
v crore
Revenue by location of
customers
For the year
ended
31-3-2020
68216.73
For the year
ended
31-3-2019
67779.36
3073.72
3559.21
2327.60
9670.17
18630.70
86847.43
4463.78
82383.65
5123.08
3913.10
800.73
9432.11
19269.02
87048.38
4760.96
82287.42
v crore
Non-current assets by location
of customers
As at
31-3-2020
12402.07
304.45
12706.52
As at
31-3-2019
12340.16
364.48
12704.64
407
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [40]
Disclosure pursuant to Ind AS 108 “Operating Segment” (contd.)
(c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed
ten percent of the Company’s total revenue.
(d) The Company’s reportable segments are organised based on the nature of products and services offered by these segments.
(e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment:
i)
Basis of identifying Operating segments:
Operating segments are identified as those components of the Company (a) that engage in business activities to earn
revenues and incur expenses (including transactions with any of the Company’s other components; (b) whose operating
results are regularly reviewed by the corporate executive management to make decisions about resource allocation and
performance assessment; and (c) for which discrete financial information is available.
The company has five reportable segments as described under “segment composition” below. The nature of products and
services offered by these businesses are different and are managed separately given the different sets of technology and
competency requirements.
ii)
Reportable segments
An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute
amount of result or assets exceed 10% or more of the combined total of all the operating segments.
iii) Segment profit
Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal
management reports that are reviewed by the corporate executive management.
iv) Segment composition
•
•
•
•
•
Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure,
heavy civil infrastructure, power transmission & distribution, water & effluent treatment, smart world & communication
projects and metallurgical & material handling systems.
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.
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 and Thermal & Nuclear
Power.
Defence engineering segment comprises (a) design, development, serial production and through lifesupport of
equipment, systems and platforms for Defence and Aerospace sectors and (b) design, construction, and repair/refit of
defence vessels.
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 (reported as a separate segment in the previous year which has been reclassified
and reported under “Others” segment as the thresholds for reportability have not been met in the current period),
Hydrocarbon, marketing and servicing of construction & mining machinery and parts thereof, manufacture and sale of
rubber processing machinery.
408
Notes forming part of the Financial Statements (contd.)
NOTE [41]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers”
(a) Disaggregation of revenue into Operating Segments and Geographical areas
i.
For the year ended March 31, 2020:
Segment
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation
(discontinued operations)
Others
Total
Less: Electrical & Automation
(discontinued operations)
Revenue as per Ind AS 115
Domestic
Foreign
Total
Other
Revenue
Total as per Profit and
Loss/Segment reporting
v crore
54911.98
14812.74
69724.72
223.19
1849.87
1735.83
3627.74
3963.15
385.96
1428.48
342.49
493.46
2235.83
3164.31
3970.23
4456.61
64.23
33.65
3.19
7.17
1791.18
1164.55
2955.73
8.57
67879.75
18627.68
86507.43
340.00
3963.15
493.46
4456.61
7.17
69947.91
2300.06
3197.96
3973.42
4463.78
2964.30
86847.43
4463.78
Revenue for continuing operations
63916.60
18134.22
82050.82
332.83
82383.65
ii.
For the year ended March 31, 2019:
Revenue as per Ind AS 115
Domestic
Foreign
Total
Other
Revenue
Total as per Profit and
Loss/Segment reporting
53180.19
15098.78
68278.97
173.33
68452.30
v crore
Segment
Infrastructure
Power
Heavy Engineering
Defence Engineering
2585.90
1383.77
3969.67
1256.63
1195.04
2451.67
3420.80
331.52
3752.32
Electrical & Automation
4259.81
482.13
4741.94
Others
Total
Less: Electrical & Automation
(discontinued operations)
2231.20
768.89
3000.09
66934.53
19260.13
86194.66
4259.81
482.13
4741.94
6.10
26.09
–
19.02
629.18
853.72
19.02
3975.77
2477.76
3752.32
4760.96
3629.27
87048.38
4760.96
Revenue for continuing operations
62674.72
18778.00
81452.72
834.70
82287.42
(b) Out of the total revenue recognised under Ind AS 115 during the year, R 78785.01 crore (previous year: R 78223.40 crore) is
recognised over a period of time and R 7722.42 crore (previous year: R 7971.27 crore) is recognised at a point in time.
409
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [41]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers” (contd.)
(c) Movement in Expected Credit Loss during the year:
Provision on Trade receivables
covered under Ind AS 115
Provision on Contract assets
v crore
Particulars
Opening balance as at April 1
Impact of Ind AS 115
Changes in loss allowance for expected credit loss:
Provision/(reversal) of allowance for expected credit loss
Additional provision (net) towards credit impaired receivables
Write off as bad debts
Less: Balance classified as held for sale
Closing balance as at March 31
(d) Contract balances:
i. Movement in contract balances during the year.
2019-20
2270.62
–
334.21
32.69
(157.19)
102.05
2378.28
2018-19
2240.91
–
68.72
188.35
(227.36)
–
2270.62
2019-20
639.20
–
127.12
–
–
0.93
765.39
2018-19
108.55
693.26
(162.61)
–
–
–
639.20
v crore
Particulars
Opening balance as at April 01
Closing balance as at March 31
Net Increase/(Decrease)
2019-20
2018-19
Contract
assets
40264.90
44988.94
4724.04
Contract
liabilities
21272.46
20057.25
(1215.21)
Net contract
balances
18992.44
24931.69
5939.25
Contract
assets
37257. 89
40264.90
3007.01
Contract
liabilities
19426.80
21272.46
1845.66
Net contract
balances
17831.09
18992.44
1161.35
Balances as at March 31, 2020 does not include balances classified as held for sale.
i.
During the current year, increase in net contract balances is primarily due to higher revenue recognition as compared to
progress bills raised.
During the previous year, increase in net contract balances is primarily due to higher revenue recognition as compared to
progress bills raised and Ind AS 115 transition adjustment.
ii.
Revenue recognised from opening balance of contract liabilities amounts to R 4689.36 crore (previous year: R 6313.77
crore)
iii. Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of
contract modifications) amounts to R 19.25 crore (previous year: R 29.11 crore)
(e) Cost to obtain the contract:
i.
Amortisation in Statement of Profit and Loss: Nil (previous year: Nil)
ii.
Recognised as contract assets at March 31, 2020: Nil (previous year: Nil)
410
Notes forming part of the Financial Statements (contd.)
NOTE [41]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers” (contd.)
(f) Reconciliation of contracted price with revenue during the year:
Opening contracted price of orders at the start of the year[1]
Particulars
Add:
Fresh orders/change orders received (net)
Increase due to additional consideration recognised as per contractual terms/(decrease) due to
scope reduction-net
Increase due to exchange rate movements (net)
Less:
Orders completed during the year
Closing contracted price of orders on hand at the end of the year[1]
Total Revenue recognised during the year:
a.
b.
Revenue out of orders completed during the year
Revenue out of orders under execution at the end of the year (I)
v crore
2019-20
2018-19
541935.92
469236.01
113719.79
109901.49
(23309.98)
3712.25
2015.38
2496.79
39155.88
41713.95
596908.10
541935.92
86507.43
86194.66
8236.06
9139.70
78271.37
77054.96
Revenue recognised upto previous year (from orders pending completion at the end of the year) (II)
265885.42
217974.38
Increase/(Decrease) due to exchange rate movements (net) (III)
Balance revenue to be recognised in future viz. Order book (IV)
Closing contracted price of orders on hand at the end of the year[1] (I+II+III+IV)
Closing contracted price of orders on hand at the end of the year – Continuing operations
Closing contracted price of orders on hand at the end of the year – Discontinued operations
1260.01
(109.65)
251491.30
247016.23
596908.10
541935.92
594723.33
2184.77
[1] including full value of partially executed contracts
(g) Remaining performance obligations and its expected conversion into revenue:
Remaining performance
obligation
Total
Expected conversion in revenue
Upto
1 Year
From
1 to 2 years
From
2 to 3 years
From
3 to 4 years
From
4 to 5 years
Beyond
5 years
Total
251491.30
89106.26
85065.38
52195.32
17343.83
3951.19
3829.32
Continuing
operations
Discontinued
operations
As at
March 31, 2020
As at
March 31, 2019
250162.34
87947.19
85018.42
52165.14
17320.66
3933.74
3777.19
1328.96
1159.07
46.96
30.18
23.17
17.45
52.13
247016.23
89614.61 89131.73
41302.97
16670.17
5893.87 4402.88
v crore
411
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [42]
Disclosure pursuant to Ind AS 1 “Presentation of financial statements”:
(a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date:
Particulars
Note
As at 31-3-2020
As at 31-3-2019
Within
twelve
months
After
twelve
months
Total
Within
twelve
months
After
twelve
months
v crore
Total
Inventories
Trade receivables
Loans
Other financial assets
Other current assets
9
11
14
15
16
1521.49
1248.40
2769.90
2283.31
1065.93
3349.24
27352.66
560.30
27912.96
27928.29
284.26
28212.55
515.13
1997.58
0.01
0.01
515.14
1305.94
1997.59
1955.40
–
–
1305.94
1955.40
41457.51
8204.10
49661.61
36841.33
7026.17
43867.50
(b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date:
Particulars
Note
As at 31-3-2020
As at 31-3-2019
Within
twelve
months
After
twelve
months
Total
Within
twelve
months
After
twelve
months
v crore
Total
Trade payables:
Due to micro enterprises and small
enterprises
Due to others
Lease Liability
Other financial liabilities
Other current liabilities
Provisions
NOTE [43]
323.62
56.26
379.88
193.80
8.16
201.96
34823.16
1426.35
36249.51
35235.94
787.13
36023.07
81.69
1690.15
50.58
18.94
132.27
–
–
–
1709.09
1909.06
22.67
1931.73
16060.48
4697.57
20758.05
17601.62
4478.83
22080.45
1375.38
180.01
1555.39
1332.10
151.51
1483.61
25
26
27
28
Disclosure pursuant to Ind AS 7 “Statement of Cash Flows” - Changes in liabilities arising from financing activities:
Particulars
Sr.
No.
1
2
3
4
5
6
Balance as at 1-4-2018
Changes from financing cash flows
The effect of changes in foreign
exchange rates
Interest accrued
Other changes (transfer within
categories)
Balance as at 31-3-2019
Non-current
borrowings
(Note 19)
Current
borrowings
(Note 23)
6875.00
789.41
–
5.01
4569.45
(616.54)
133.01
0.24
(3897.35)
–
3772.07
4086.16
Current
maturities
of long term
borrowings
(Note 24)
936.27
(974.33)
226.64
45.53
3897.35
4131.46
Lease liability
v crore
Total
NA
12380.72
(801.46)
359.65
50.78
–
11989.69
412
Notes forming part of the Financial Statements (contd.)
NOTE [43]
Disclosure pursuant to Ind AS 7 “Statement of Cash Flows” - Changes in liabilities arising from financing activities: (contd.)
Particulars
Sr.
No.
Non-current
borrowings
(Note 19)
Current
borrowings
(Note 23)
Current
maturities
of long term
borrowings
(Note 24)
Lease liability
v crore
Total
7
8
9
10
11
12
13
14
Lease liability recognised on Ind AS 116
transition (refer Note 54)
Additions to lease liability
(0.07)
–
–
–
–
–
125.70
98.70
125.63
98.70
Changes from financing cash flows
6617.46
10804.33
(4209.10)
(67.95)
13144.74
The effect of changes in foreign
exchange rates
Interest accrued
Other changes (transfer within
categories)
Conversion into equity
Balance as at 31-3-2020
22.52
146.20
137.79
15.83
(3372.47)
–
–
–
130.00
185.46
3372.47
(54.81)
–
–
–
–
290.31
347.49
–
(54.81)
7185.71
15044.11
3555.48
156.45
25941.75
Amounts reported in statement of cash flows under financing activities:
Particulars
Proceeds from non-current borrowings
Repayments of non-current borrowings
(Repayments)/Proceeds from other borrowings (net)
Repayments of lease liability
Total changes from financing cash flows (refer to Sr. No. 9 & 2 supra)
v crore
2019-20
2018-19
6617.46
789.41
(4209.10)
(974.33)
10804.33
(616.54)
(67.95)
–
13144.74
(801.46)
413
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
[NOTE 44]
Disclosure pursuant to Ind AS 12 “Income Taxes”
(a) Major components of tax expense/(income):
Sr.
No.
1.
Profit or Loss section
(i) Current Income tax:
Particulars
Current income tax expense
Tax expense in respect of earlier years
(ii) Deferred Tax:
Tax expense on origination and reversal of temporary differences
Minimum alternate tax (MAT) credit
Effect of previously unrecognised tax losses on which deferred tax benefit is recognised
Effect on deferred tax balances due to the change in income tax rate
Income tax expense reported in Profit or Loss [(i)+(ii)]
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operations
2.
Other Comprehensive Income (OCI) Section:
(i)
Items not to be reclassified to Profit or Loss in subsequent periods:
Current tax expense/(income):
On remeasurement of defined benefit plans
(ii)
Items to be reclassified to Profit or Loss in subsequent periods:
(A) Current tax expense/(income):
On gain/(loss) on cash flow hedges other than mark to market
On foreign currency translation of Joint Operations
(B) Deferred Tax:
On mark to market gain/(loss) on cash flow hedges
Net gain/(loss) on cost of hedge reserve
On gain/(loss) fair value of debt securities
On foreign currency translation of joint operations
Income tax expense reported in the OCI section [(i)+(ii)]
3.
Retained earnings:
Deferred tax
Income tax expense/(income) reported in retained earnings
414
v crore
2019-20
2018-19
1756.13
2460.08
(60.68)
227.14
(145.33)
230.23
(787.94)
179.67
1172.08
83.75
(230.23)
(0.27)
–
2540.47
961.15
210.93
2271.13
269.34
1,172.08
2,540.47
(43.81)
(43.81)
(10.94)
(10.94)
36.29
–
(76.46)
0.49
36.29
(75.97)
(83.89)
(7.11)
34.28
(4.45)
(61.17)
(68.69)
45.87
8.87
(16.68)
2.76
40.82
(46.09)
(1.86)
(1.86)
(335.11)
(335.11)
Notes forming part of the Financial Statements (contd.)
[NOTE 44]
Disclosure pursuant to Ind AS 12 “Income Taxes” (contd.)
(b) Reconciliation of tax expense and the accounting profit multiplied by domestic tax rate applicable in India:
Sr.
No.
(1)
Profit before tax from:
Continuing Operations
Discontinued Operations
Particulars
(2)
(3)
(4)
Corporate tax rate as per Income tax Act, 1961
Tax on accounting profit (3)=(1)*(2)
(i)
Tax on Income exempt from tax :
(A) Dividend income
(B) Long-term capital gains exempt from tax
(C)
Interest on tax free bonds
(ii) Tax on expenses not tax deductible:
(A) CSR expenses
(B) Expenses in relation to exempt income
(C) Tax on employee perquisites borne by the Company
v crore
2019-20
2018-19
6985.91
865.38
9219.46
812.40
7851.29
10031.86
25.17%
1976.01
34.94%
3505.53
(347.18)
(121.27)
(1.04)
(523.73)
(978.42)
(2.50)
36.57
36.42
2.08
42.52
28.35
1.52
(iii) Weighted deductions on R&D expenditure and deduction u/s 80IA
–
(147.05)
(iv) Effect of previously unrecognised tax losses used to reduce deferred tax expense
(787.94)
(0.27)
(v) Tax effect on impairment and fair valuation losses recognised on which deferred tax
asset is not recognised
(vi) Effect on deferred tax balances due to the change in income tax rate
(vii) Effect of current year net capital/business loss on which no deferred tax asset is
recognised
(viii) Effect of current tax related to earlier years
(ix) Effect of previously unrecognised tax losses used to reduce current tax expense
(x) Tax effect of losses in joint operation of current year on which no deferred tax asset is
recognised
(xi) Tax effect on various other items
(xii) Reversal of MAT credit entitlement
Total effect of tax adjustments [(i) to (xii)]
(5)
(6)
Tax expense recognised during the year (5)=(3)+(4)
Effective tax Rate (6)=(5)/(1)
–
685.62
179.67
–
–
(123.61)
(60.68)
227.14
–
(477.86)
3.87
25.34
230.23
(803.93)
1172.08
14.93%
37.68
18.33
–
(965.08)
2540.47
25.32%
The Company has opted to pay the tax under section 115BAA of the Income Tax Act,1961. Accordingly;
(I)
the provision for current and deferred tax has been determined at the rate of 25.17%,
(II)
the deferred tax assets and deferred tax liabilities as at April 1, 2019 have been restated at the rate of 25.17% and
(III)
the unutilised credit for minimum alternate tax as at April 1, 2019 has been written-off.
415
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
[NOTE 44]
Disclosure pursuant to Ind AS 12 “Income Taxes” (contd.)
(c)
(i) Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet
Sr.
No.
Particulars
Business loss and unabsorbed depreciation
As at 31-3-2020
As at 31-3-2019
Base Amount
(v crore)
Deferred Tax
(v crore)
Expiry date Base Amount
(v crore)
Deferred Tax
(v crore)
Expiry date
- Amount of losses having expiry
2028.43
510.52
FY 2021-28
2033.64
710.63 FY 2020-28
- Amount of losses having no expiry
Capital loss
Total
981.38
246.99
–
–
3009.81
757.51
981.38
3355.81
6370.83
342.93
614.38 FY 2025-27
1667.94
(ii) Unrecognised deductible temporary differences for which no deferred tax asset (DTA) is recognised in Balance Sheet
v crore
Particulars
As at 31-3-2020
As at 31-3-2019
Base Amount
Deferred Tax
Base Amount
Deferred Tax
Sr.
No.
1.
2.
3.
Deductible temporary differences towards provision for
diminution in value of investments on which DTA not created
Temporary differences arising out of revaluation of tax base of
assets (on account of indexation benefit)
Other items giving rise to temporary differences
Total
2966.98
686.82
3017.55
705.59
6541.94
78.08
9587.00
1496.80
19.65
2203.27
5813.32
78.08
8908.95
1354.27
27.29
2087.15
v crore
(d) Components of deferred tax (assets) and liabilities recognised in the Balance Sheet and Statement of Profit and loss
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
8.
Particulars
Disputed statutory liability claimed on payment basis u/s 43B of
the Income Tax Act, 1961
Items disallowed u/s 43B of Income Tax Act, 1961
Provision for doubtful debt and advances
Difference in book depreciation and income tax depreciation
Gain/(loss) on derivative transactions
Minimum alternate tax credit
Deferred tax on capital losses
Other temporary differences
Deferred tax expense/(income)
Balance Sheet
Statement of Profit or Loss
As at
31-3-2020
As at
31-3-2019
2019-20
2018-19
124.73
155.57
(243.05)
(257.89)
(877.60)
(1048.46)
(30.84)
14.84
170.65
406.52
(44.97)
507.75
(101.23)
46.03
–
19.10
(49.31)
58.27
(11.52)
–
–
(230.23)
230.23
(230.23)
(787.94)
–
(787.94)
(5.89)
(14.63)
(19.08)
(523.37)
–
66.94
(146.75)
Net deferred tax (assets)/liabilities
(1428.20)
(841.86)
416
Notes forming part of the Financial Statements (contd.)
[NOTE 44]
Disclosure pursuant to Ind AS 12 “Income Taxes” (contd.)
(e) Reconciliation of deferred tax (assets)/liabilities
Sr.
No.
1.
2.
3.
Particulars
Opening Balance as at April 1
Tax (income)/expense recognised in opening Retained earnings
Tax (income)/expense during the period recognised in:
(i) Statement of Profit and Loss in Profit or Loss section
(ii) Statement of Profit and Loss under OCI section
(iii) Hedge reserve (other than through OCI)
Closing balance as at March 31
v crore
2019-20
2018-19
(841.86)
(1.86)
(400.62)
(335.11)
(523.37)
(146.75)
(61.17)
0.06
40.82
(0.20)
(1428.20)
(841.86)
NOTE [45]
Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 “Employee Benefits”
i
Defined contribution plans: [Note [1](k)(ii)(A)]: Amount of R 81.68 crore (previous year: R 89.98 crore) is recognised as an expense.
Out of which R 6.54 crore (previous year: R 6.31 crore) pertains to discontinued operations.
ii
Defined benefit plans:[Note [1](k)(ii)(B)]:
a)
The amount recognised in Balance Sheet are as follows:
Particulars
Gratuity plan
Post-retirement medical
benefit plan
Company pension plan
Trust-managed provident
fund plan
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
v crore
A)
Present value of defined benefit obligation
-Wholly funded
-Wholly unfunded
Less: Fair value of plan assets
Amount to be recognised as liability/(asset)
B)
Amounts reflected in the Balance Sheet
618.49
87.71
706.20
511.12
195.08
497.14
103.26
600.40
433.39
167.02
–
297.18
297.18
–
–
197.10
197.10
–
–
365.27
365.27
–
– 2802.92
2503.86
332.88
–
–
332.88 2802.92
2503.86
– 2968.51
2516.99
297.18
197.10
365.27
332.88 (165.59)
(13.13)
Liabilities
Assets
Net liability/(asset)
Net liability/(asset)-current
Net liability/(asset)-Non current
Net liability/(asset) classified as Held for sale
194.38
167.02
284.60
197.10
365.27
332.88
25.55
27.10
–
194.38
194.38
–
0.70
–
167.02
167.02
–
–
–
–
–
–
–
–
284.60
197.10
365.27
332.88
25.55
27.10
13.01
7.84
25.64
24.52
25.55 [1] 27.10 [1]
271.60
189.26
339.63
308.36
12.57
–
–
–
–
–
–
–
[1] Employer’s and employees’ contribution due towards Provident Fund.
417
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [45]
Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 “Employee Benefits”: (contd.)
b)
The amounts recognised in Statement of Profit and Loss are as follows:
Particulars
1
2
3
4
5
6
7
8
i
ii
iii
iv
Current service cost
Interest cost
Interest income on plan assets
Actuarial losses/(gains) - others
Actuarial losses/(gains) - difference
between actual return on plan assets
and interest income
Past service cost
Actuarial gain/(loss) not recognised in
books
Amount capitalised out of the above/
recovered from S&A
Total (1 to 8)
Amount included in “Employee benefits
expense”
Amount included as part of “Finance cost”
Amount included as part of “Other
Comprehensive Income”
Amount included in “Profit from
discontinued operations”
Total (i+ii+iii+iv)
Actual return on plan assets
Gratuity plan
Post-retirement medical
benefit plan
Company pension plan
2019-20
73.66
34.39
(31.41)
79.87
2018-19
65.00
31.62
(28.80)
19.48
2019-20
10.87
14.45
–
86.60
2018-19
9.76
13.46
–
6.13
2019-20
3.42
23.98
–
27.25
2018-19
3.03
23.99
–
3.48
Trust-managed
provident fund plan
2019-20
71.76
215.97
(215.97)
–
2018-19
67.16
194.14
(194.14)
–
v crore
(19.12)
0.17
2.29
–
–
–
–
–
–
(0.10)
137.46
69.42
3.01
(0.07)
89.52
(0.03)
111.89
60.91
2.89
9.97
14.45
–
–
–
(0.01)
29.34
8.92
13.46
–
–
–
–
54.65
3.42
23.98
–
0.64
(134.52)
–
(2.84)
–
–
134.52
2.84
–
31.14
3.67
23.99
–
71.76
64.83
–
–
67.16
61.04
–
60.75
21.70
86.60
6.13
27.25
3.48
–
–
4.28
137.46
50.48
4.02
89.52
26.47
0.87
111.89
–
0.83
29.34
–
–
54.65
–
–
31.14
–
6.93
71.76
350.49
6.12
67.16
196.98
c)
The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances
thereof are as follows:
Opening balance of the present value of defined
benefit obligation
Add: Current service cost
Add: Interest cost
Add: Contribution by plan participants
i) Employee
ii) Transfer-in/(out)
Add/(less): Actuarial losses/(gains)
i) Actuarial (gains)/losses arising from
changes in demographic
assumptions
ii) Actuarial (gains)/losses arising from
changes in financial assumptions
iii) Actuarial (gains)/losses arising from
changes in experience adjustments
Less: Benefit paid
Add: Past service cost
Add/(less): Translation adjustments
Closing balance of the present value of
defined benefit obligation
Gratuity plan
As at
31-3-2020
As at
31-3-2019
Post-retirement medical
benefit plan
As at
31-3-2020
As at
31-3-2019
Company pension plan
v crore
Trust-managed
provident fund plan
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
600.40
73.66
34.39
539.00
65.00
31.62
–
–
–
–
197.10
10.87
14.45
–
–
–
178.83
9.76
13.46
–
–
–
332.88
3.42
23.98
–
–
–
323.70
3.03
23.99
–
–
–
2503.86
71.76
215.97
–
210.83
51.00
2270.10
67.16
194.14
–
190.97
45.57
(7.54)
3.43
6.11
(4.62)
(0.04)
(15.00)
74.56
6.05
32.29
5.40
23.97
6.51
–
–
–
–
12.85
(88.31)
0.17
6.02
10.00
(57.81)
–
3.11
48.20
(11.84)
–
–
5.35
(11.09)
–
–
3.32
(22.26)
–
–
11.97
(21.95)
0.64
–
–
(251.08)
–
0.58
–
(265.05)
–
0.97
706.20
600.40
297.17
197.10
365.27
332.88
2802.92
2503.86
418
Notes forming part of the Financial Statements (contd.)
NOTE [45]
Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 “Employee Benefits”: (contd.)
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: Interest income on plan assets [1]
Add/(Less): Actuarial gains/(losses):
Difference between actual return on plan assets and interest income
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
As at
31-3-2020
As at
31-3-2019
433.39
31.41
–
19.12
62.22
0.09
–
(35.11)
511.12
400.72
28.80
–
(2.29)
45.05
–
–
(38.89)
433.39
v crore
Trust-managed provident
fund plan
As at
31-3-2020
As at
31-3-2019
2516.99
2287.82
215.97
194.14
–
134.52
76.99
51.00
224.11
(251.08)
2968.51
–
2.84
64.57
45.57
187.10
(265.05)
2516.99
[1] Basis used to determine interest income on plan assets:
The Trust formed by the Company manages the investments of provident funds and gratuity fund. Interest income on plan
assets is determined by multiplying the fair value of the plan assets by the discount rate determined at the start of the annual
reporting period.
The Company expects to fund R 103.05 crore (previous year: R 60.97 crore) towards its gratuity plan and R 79.24 crore
(previous year: R 73.88 crore) towards its trust-managed provident fund plan during the year 2020-21.
e)
The fair values of major categories of plan assets are as follows:
Particulars
As at 31-3-2020
As at 31-3-2019
Gratuity plan
Cash and cash equivalents
Equity instruments
Debt instruments - Corporate Bonds
Debt instruments - Central government Bonds
Debt instruments - State government Bonds
Debt instruments - PSU Bonds
Mutual funds - Equity
Mutual funds - Debt
Mutual funds - Others
Insurer managed funds
Fixed Deposits
Special Deposit Scheme
Other (Payables)/Receivables
Closing balance of the plan assets
Quoted
–
10.24
229.45
140.89
90.66
8.74
11.62
–
0.25
–
–
–
–
491.85
Unquoted
2.05
–
–
–
–
–
9.35
–
2.62
0.82
3.00
1.49
(0.09)
19.24
Total
2.05
10.24
229.45
140.89
90.66
8.74
20.97
–
2.87
0.82
3.00
1.49
(0.09)
511.09
Quoted
–
15.81
172.10
132.95
77.63
8.41
6.90
–
–
–
–
–
–
413.80
Unquoted
0.61
–
–
–
–
–
9.88
4.75
–
0.85
1.85
1.49
0.16
19.59
v crore
Total
0.61
15.81
172.10
132.95
77.63
8.41
16.78
4.75
–
0.85
1.85
1.49
0.16
433.39
419
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [45]
Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 “Employee Benefits”: (contd.)
Particulars
As at 31-3-2020
As at 31-3-2019
Trust-managed provident fund plan
Cash and cash equivalents
Equity instruments
Debt instruments - Corporate Bonds
Debt instruments - Central government Bonds
Debt instruments - State government Bonds
Debt instruments - PSU Bonds
Mutual funds - Equity
Mutual funds - Debt
Mutual funds - Others
Fixed Deposits
Special Deposit Scheme
Other (Payables)/Receivables
Closing balance of the plan assets
Quoted
–
11.84
841.07
646.52
717.25
454.38
44.77
–
6.48
–
–
0.01
2722.32
Unquoted
17.12
–
–
–
–
–
40.65
–
–
–
188.43
–
246.20
Total
17.12
11.84
841.07
646.52
717.25
454.38
85.42
–
6.48
–
188.43
0.01
2968.52
Quoted
–
0.06
509.01
582.09
592.89
535.32
33.03
–
–
–
–
–
2252.40
Unquoted
4.78
–
–
–
–
–
46.57
21.47
1.12
–
190.60
0.04
264.58
v crore
Total
4.78
0.06
509.01
582.09
592.89
535.32
79.60
21.47
1.12
–
190.60
0.04
2516.98
f)
The average duration of the defined benefit plan obligations at the end of the reporting period is as follows:
Plans
As at 31-3-2020 As at 31-3-2019
1) Gratuity plan
2)
Post-retirement medical benefit plan
3) Company pension plan
7.24
13.88
7.78
6.17
13.86
7.67
g)
Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages):
Particulars
As at 31-3-2020 As at 31-3-2019
i)
Discount rate:
a) Gratuity plan
b) Company pension plan
c)
Post-retirement medical benefit plan
ii) Annual increase in healthcare costs (refer note vii infra)
iii) Salary growth rate:
a) Gratuity plan
b) Company pension plan
iv) Attrition Rate:
6.63%
6.63%
6.63%
5.00%
6.00%
8.00%
7.48%
7.48%
7.48%
5.00%
5.00%
7.00%
a)
For gratuity plan the attrition rate varies from 1% to 11% (previous year: 1% to 12%) for various age groups.
b)
c)
For Company pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age
groups.
For post-retirement medical benefit plan, the attrition rate varies from 1% to 11% (previous year: 1% to 11%) for
various age groups.
v)
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.
420
Notes forming part of the Financial Statements (contd.)
NOTE [45]
Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 “Employee Benefits”: (contd.)
vi) 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.
vii) 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 infra, has been assumed to increase at
5.00% p.a.
viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit
obligation of gratuity plan:
Particulars
Impact of change in salary growth rate
Impact of change in discount rate
Effect of 1% increase
Effect of 1% decrease
2019-20
2018-19
2019-20
2018-19
47.34
(41.58)
32.77
(28.82)
(42.19)
47.47
(29.71)
32.27
v crore
(B) One percentage point change in actuarial assumptions would have the following effects on the defined benefit
obligation of Company pension plan:
Particular
Impact of change in discount rate
Effect of 1% increase
Effect of 1% decrease
2019-20
(27.14)
2018-19
(24.05)
2019-20
2018-19
31.28
27.66
v crore
(C) One percentage point change in actuarial assumptions would have the following effects on the defined benefit
obligation of post-retirement medical benefit plan:
Particulars
Impact of change in health care cost
Impact of change in discount rate
h) Characteristics of defined benefit plans and associated risks:
1 Gratuity plan:
Effect of 1% increase
Effect of 1% decrease
2019-20
2018-19
2019-20
2018-19
20.59
(37.38)
19.99
(24.76)
(16.91)
47.25
(16.44)
30.96
v crore
The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to
fifteen days last salary 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.
The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate
from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There
are no minimum funding requirements of these plans. The funding of these plans are based on gratuity fund’s actuarial
measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared
to the assumptions set out in (g) supra. Employees do not contribute to any of these plans.
Unfunded gratuity represents a small part of gratuity plan which is not material. Further, the unfunded portion included
amounts payable in respect of the Company’s foreign operations which result in gratuity payable to employees engaged
as per local laws of country of operation.
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. The plan is unfunded. Employees do not contribute to the plan.
421
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [45]
Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 “Employee Benefits”: (contd.)
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. The plan is unfunded. Employees do not contribute to the plan.
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 mandates contribution by employer
at a fixed percentage of employee’s salary. Employees also contribute to the plan at a fixed percentage of their salary
as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by
Employees’ Provident Fund Organisation. 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.
All the above defined benefit plans expose the Company to general actuarial risks such as interest rate risk and market
(investment) risk.
NOTE [46]
Disclosure pursuant to Ind AS 20 “Accounting for Government Grants and Disclosure of Government Assistance”
The Company’s exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by
Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives and duty drawback amounts to
R 119.68 crore (previous year: R 200.57 crore).
NOTE [47]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “ Related Party Disclosures”
(a) List of related parties over which control exist and status of transactions entered during the year:
Sr
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Name of the Subsidiary Company
Nature of relationship
L&T Construction Equipment Limited
L&T Construction Machinery Limited
Bhilai Power Supply Company Limited
L&T Electricals and Automation Limited
Kesun Iron and Steel Company Private Limited
L&T Power Limited
L&T Aviation Services Private Limited
L&T Capital Company Limited
L&T Infra Contractors Private Limited
Larsen & Toubro International FZE
Larsen & Toubro (East Asia) SDN. BHD.
L&T Global Holdings Limited
L&T Cassidian Limited [4]
Larsen & Toubro Heavy Engineering LLC
Wholly owned subsidiary [WOS]
WOS
Subsidiary
WOS
Subsidiary
Subsidiary
WOS
WOS
WOS of L&T Capital Limited
WOS of L&T Global Holdings Limited
Subsidiary
WOS
WOS
Subsidiary of Larsen & Toubro International FZE
Transaction entered
during the year (Yes/
No)
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
422
Notes forming part of the Financial Statements (contd.)
NOTE [47]
(a) List of related parties over which control exist and status of transactions entered during the year: (contd.)
Sr
No.
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
50
51
52
53
54
Name of the Subsidiary Company
Nature of relationship
L&T Hydrocarbon Engineering Limited
L&T Modular Fabrication Yard LLC
L&T Overseas Projects Nigeria Limited
PT Larsen & Toubro Hydrocarbon Engineering Indonesia
Larsen & Toubro Kuwait Construction General Contracting
WOS
Subsidiary of Larsen & Toubro International FZE
WOS of Larsen & Toubro International FZE
Subsidiary of Larsen & Toubro International FZE
Subsidiary of Larsen & Toubro International FZE
Company WLL
Larsen Toubro Arabia LLC
L&T Hydrocarbon Saudi Company (formerly known as
Subsidiary
Subsidiary of L&T Hydrocarbon Engineering Limited
Larsen & Toubro ATCO Saudi LLC)
Larsen & Toubro Electromech LLC
L&T Gulf Private Limited [5]
Hi-Tech Rock Products and Aggregates Limited
L&T Geostructure LLP
L&T Geo – L&T JV for Maharatangarh project
L&T Geo – L&T UJV CMRL CS
L&T Infrastructure Engineering Limited
Larsen & Toubro (Oman) LLC
Larsen & Toubro qatar LLC [7]
Larsen & Toubro (Saudi Arabia) LLC
Larsen & Toubro T&D SA (Proprietary) Limited
L&T Seawoods Limited
L&T Asian Realty Project LLP
L&T Parel Project LLP
Chennai Vision Developers Private Limited
L&T Vision Ventures Limited
L&T Westend Project LLP
LTR SSM Private Limited [4]
L&T Valves Limited
L&T Valves Arabia Manufacturing LLC [15]
L&T Valves USA LLC [10]
L&T Finance Holdings Limited
L&T Housing Finance Limited
L&T Finance Limited
L&T Capital Markets Limited
L&T Investment Management Limited
L&T Mutual Fund Trustee 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 Financial Consultants Limited
Mudit Cement Private Limited
Subsidiary
WOS of L&T Hydrocarbon Engineering Limited
WOS
Subsidiary
WOS of L&T Geostructure LLP
WOS of L&T Geostructure LLP
WOS
Subsidiary of Larsen & Toubro International FZE
Subsidiary of Larsen & Toubro International FZE
Subsidiary
Subsidiary of Larsen & Toubro International FZE
WOS
Subsidiary of L&T Realty Limited
Subsidiary of L&T Realty Limited
WOS of L&T Realty Limited
Subsidiary of L&T Realty Limited
Subsidiary of L&T Realty Limited
Subsidiary
WOS
WOS of L&T Valves Limited
WOS of L&T Valves Limited
Subsidiary
WOS of L&T Finance Holdings Limited
WOS of L&T Finance Holdings Limited
WOS of L&T Finance Holding Limited
WOS of L&T Finance Holdings Limited
WOS of L&T Finance Holdings Limited
WOS of L&T Finance Holdings Limited
WOS of L&T Infrastructure Finance Company Limited
WOS of L&T Infrastructure Finance Company Limited
WOS of L&T Infrastructure Finance Company Limited
WOS of L&T Finance Holdings Limited
WOS of L&T Financial Consultants Limited
Transaction entered
during the year (Yes/
No)
Yes
Yes
No
No
Yes
Yes
No
No
Yes
Yes
Yes
No
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
423
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47]
(a) List of related parties over which control exist and status of transactions entered during the year: (contd.)
Sr
No.
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
Name of the Subsidiary Company
Nature of relationship
L&T Infra Investment Partners
L&T Capital Market (Middle East) Limited
Larsen & Toubro Infotech Limited
L&T Technology Services Limited
L&T Thales Technology Services Private Limited
Esencia Technologies India Private Limited
Syncordis Software Services India Private Limited
Larsen & Toubro Infotech LLC
Larsen & Toubro Infotech, GmbH
Larsen & Toubro Infotech Canada Limited
Larsen & Toubro LLC
L&T Infotech Financial Services Technologies Inc.
Larsen & Toubro Infotech South Africa (PTY) Limited
L&T Information Technology Services (Shanghai) Co.
Limited
Subsidiary of L&T Infrastructure Finance Company Limited
WOS of L&T Finance Holdings Limited
Subsidiary
Subsidiary
Subsidiary of L&T Technology Services Limited
Subsidiary of Esencia USA
Subsidiary of L&T Infotech Limited
WOS of Larsen & Toubro Infotech Limited
WOS of Larsen & Toubro Infotech Limited
WOS of Larsen & Toubro Infotech Limited
Subsidiary
WOS of Larsen & Toubro Infotech Limited
Subsidiary of Larsen & Toubro Infotech Limited
WOS of Larsen & Toubro Infotech Limited
L&T Technology Services LLC
L&T Information Technology Spain SL
Esencia Technologies Inc
L&T Infotech S. DE R.L. DE C.V.
Larsen & Toubro Infotech Norge AS
Syncordis S.A.
Syncordis SARL
Syncordis Limited
Syncordis PSF S.A. (formerly known as Syncordis Support
WOS of L&T Technology Services Limited
WOS of Larsen & Toubro Infotech Limited
Subsidiary of L&T Technology Services LLC
Subsidiary of L&T Infotech Limited
WOS of Larsen and Toubro Infotech Limited
WOS of Larsen and Toubro Infotech Gmbh
WOS of Syncordis S.A.
WOS of Syncordis S.A.
WOS of Syncordis S.A.
Services S.A.)
Graphene Semiconductor Services Private Limited
Graphene Solutions PTE Ltd.
Graphene Solutions SDN. BHD.
Graphene Solutions Taiwan Limited
Seastar Labs Private Limited
Nielsen+Partners Germany
Nielsen+Partners Switzerland
Nielsen+Partners Singapore
Nielsen+Partners Luxembourg
Nielsen+Partners Thailand
Nielsen+Partners Australia
Ruletronics Limited
Ruletronics Systems Inc.
Ruletronics Systems Private Limited [15]
Mindtree Limited [1]
Mindtree Software (Shanghai) Co. Limited [14]
Bluefin Solutions SDN. BHD. [14]
Lymbyc Solutions Inc. [11]
WOS of L&T Technology Services Limited
WOS of Graphene Semiconductor Services Private Limited
WOS of Graphene Semiconductor Services Private Limited
WOS of Graphene Semiconductor Services Private Limited
WOS of Graphene Semiconductor Services Private Limited
WOS Larsen & Toubro Infotech GmbH
WOS of Nielsen + Partners Germany
WOS of Nielsen + Partners Germany
WOS of Nielsen + Partners Germany
WOS of Nielsen + Partners Germany
WOS of Nielsen + Partners Germany
WOS of Larsen and Toubro Infotech Gmbh
WOS of Larsen and Toubro Infotech Gmbh
WOS of Larsen and Toubro Infotech Limited
Subsidiary
WOS of Mindtree Limited
WOS of Mindtree Limited
WOS of Lymbyc Solutions Private Limited
Transaction entered
during the year (Yes/
No)
No
No
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
Yes
No
No
No
No
No
No
No
Yes
No
No
No
No
Yes
No
No
No
No
No
No
No
No
Yes
Yes
No
424
Notes forming part of the Financial Statements (contd.)
NOTE [47]
(a) List of related parties over which control exist and status of transactions entered during the year: (contd.)
Sr
No.
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
Name of the Subsidiary Company
Nature of relationship
Lymbyc Solutions Private Limited [2]
Powerup Cloud Technologies Private Limited [3]
L&T Technology Services (Shanghai) Co. Limited [12]
L&T Technology Services (Canada) Limited [13]
L&T Power Development Limited
L&T Uttaranchal Hydropower Limited
L&T Arunachal Hydropower Limited
L&T Himachal Hydropower Limited
Nabha Power Limited
L&T Metro Rail (Hyderabad) Limited
Sahibganj Ganges Bridge-Company Private Limited [4]
Thalest Limited
Servowatch Systems Limited
L&T Electricals & Automation Saudi Arabia Company LLC
Tamco Switchgear (Malaysia) SDN. BHD.
Henikwon Corporation SDN. BHD.
Tamco Electrical Industries Australia Pty Limited
PT Tamco Indonesia
L&T Electrical & Automation FZE
Kana Controls General Trading & Contracting Company
W.L.L.
WOS of Larsen and Toubro Infotech Limited
WOS of Larsen and Toubro Infotech Limited
WOS of L&T Technology Services Limited
WOS of L&T Technology Services LLC
WOS
WOS of L&T Power Development Limited
WOS of L&T Power Development Limited
WOS of L&T Power Development Limited
WOS of L&T Power Development Limited
Subsidiary
WOS of L&T Capital Limited
WOS of Larsen & Toubro International FZE
WOS of Thalest Limited
Subsidiary of Larsen & Toubro International FZE
WOS of Larsen & Toubro International FZE
WOS of Tamco Switchgear (Malaysia) SDN. BHD
WOS of Larsen & Toubro International FZE
Subsidiary of Larsen & Toubro International FZE
WOS of Larsen & Toubro International FZE
Subsidiary of L&T Electrical & Automation FZE
L&T Hydrocarbon International FZE
L&T Realty Limited [6]
Larsen & Toubro Infotech Austria GmbH [8]
L&T Realty FZE [9]
Larsen & Toubro Hydrocarbon International Limited LLC [16]
Bluefin Solutions Inc. USA [17]
Bluefin Solutions Pte Limited [18]
WOS of L&T Hydrocarbon Engineering Limited
WOS
WOS of Larsen & Toubro Infotech Limited
WOS of L&T Realty Limited
Subsidiary
WOS of Mindtree Limited
WOS of Mindtree Limited
In process of liquidation
[1] The Company has acquired stake on July 2, 2019
[2] The Company through its subsidiary has acquired stake on August 29, 2019
[3] The Company through its subsidiary has acquired stake on October 25, 2019
[4] The Company is in process of being struck off from the register of companies.
[5] The Company is reclassified as subsidiary w.e.f. November 20, 2019
[6] Merged with L&T Construction Equipment Limited w.e.f. April 1, 2018
[7]
[8] Liquidated on August 20, 2019
[9] Liquidated on January 27, 2020
[10] Incorporated on May 28, 2019
[11] The Company through its subsidiary has acquired stake on August 29, 2019
[12] Incorporated on August 6, 2019
[13] Incorporated on August 20, 2019
[14] The Company through its subsidiary has acquired stake on July 2, 2019
[15] Incorporated on May 30, 2019
[16] Liquidated as on May 16, 2020
[17] Liquidated on December 17, 2019. The Company through its subsidiary had acquired stake on July 2, 2019
[18] Liquidated on March 20, 2020. The Company through its subsidiary had acquired stake on July 2, 2019
Transaction entered
during the year (Yes/
No)
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
No
No
Yes
Yes
No
No
Yes
No
No
No
No
No
425
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
(b)
(i) Name of associate companies with whom transactions were carried out during the year:
Sr. No
Associate Companies
1
2
3
L&T-Chiyoda Limited
L&T Camp Facilities LLC
Magtorq Private Limited
(ii) Names of joint venture companies with whom transactions were carried out during the year:
Sr. No.
1
3
5
Joint Venture Companies
L&T-MHPS Boilers Private Limited
L&T Howden Private Limited
L&T Special Steels and Heavy Forgings Private
Sr. No.
2
4
6
Joint Venture Companies
L&T-MHPS Turbine Generators Private Limited
L&T-Sargent & Lundy Limited
L&T MBDA Missile Systems Limited
Limited
L&T Sapura Offshore Private Limited
L&T-Gulf Private Limited [1]
L&T Rajkot-Vadinar Tollway Limited
L&T Samakhiali Gandhidham Tollway Limited
Krishnagiri Walajahpet Tollway Limited [3]
Krishnagiri Thopur Toll Road Limited [3]
Beawar Pali Pindwara Tollway Limited [3]
Panipat Elevated Corridor Limited
L&T Transportation Infrastructure Limited
Ahmedabad-Maliya Tollway Limited
L&T Kobelco Machinery Private Limited [2]
L&T Hydrocarbon Caspian LLC
PNG Tollway Limited
7
9
11
13
15
17
19
21
23
25
27
29
31
8
10
12
14
16
18
20
22
24
26
28
30
L&T Sapura Shipping Private Limited
L&T Infrastructure Development Projects Limited
L&T Deccan Tollways Limited
Kudgi Transmission Limited
Devihalli Hassan Tollway Limited [3]
Western Andhra Tollways Limited [3]
L&T Sambalpur-Rourkela Tollway limited
Vadodara Bharuch Tollway Limited
L&T Interstate Road Corridor Limited
L&T Halol-Shamlaji Tollway Limited
Raykal Aluminium Company Private Limited
L&T Chennai-Tada Tollway Limited
[1] Re-classified as subsidiary w.e.f. November 20, 2019 due to purchase of additional stake
[2] The Company has sold its stake on April 17, 2019
[3] The Company has sold its stake on May 4, 2018
(iii) Name of post-employment benefit plans with whom transactions were carried out during the year
Sr. No
1
2
3
4
5
Provident Fund Trust
Larsen & Toubro Officers & Supervisory Staff Provident Fund
Larsen & Toubro Limited Provident Fund of 1952
Larsen & Toubro Limited Provident Fund
L&T Kansbahal Officers & Supervisory Provident Fund
L&T Kansbahal Staff & Workmen Provident Fund
Sr. No Gratuity Trust
1
2
3
Larsen & Toubro Officers & Supervisors Gratuity Fund
Larsen & Toubro Gratuity Fund
L&T Shipbuilding Limited Employees Group Gratuity Assurance Scheme
Superannuation Trust
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme
426
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
(iv) Name of key management personnel and their relatives with whom transactions were carried out during the year:
(i)
Executive Director
Sr. No.
1
3
5
Mr. S. N. Subrahmanyan (Chief Executive Officer
and Managing Director)
Mr. Shailendra Roy (Whole-time Director)
Mr. M. V. Satish (Whole-time Director)
(ii)
Independent/Non-executive Director
Sr. No.
1
3
5
7
9
11
13
15
17
Mr. A.M. Naik (Group Chairman)
Mr. Subodh Bhargava
Mr. Vikram Singh Mehta
Mr. Akhilesh Krishna Gupta [1]
Mr. Thomas Mathew T [5]
Mr. Subramanian Sarma
Mr. Sanjeev Aga
Mr. Arvind Gupta [2]
Mr. Sushobhan Sarker [4]
Sr. No.
2
4
6
Sr. No.
2
4
6
8
10
12
14
16
Mr. R. Shankar Raman (Whole-time Director and
Chief Financial Officer)
Mr. D. K. Sen (Whole-time Director)
Mr. J. D. Patil (Whole-time Director)
Mr. M. M. Chitale
Mr. M. Damodaran
Mr. Adil Zainulbhai
Ms. Sunita Sharma
Mr. Ajay Shankar [6]
Ms. Naina Lal Kidwai
Mr. Narayanan Kumar
Mr. Hemant Bhargava [3]
[1] Ceased w.e.f. September 8, 2019
[2] Ceased w.e.f. March 26, 2020
[3] Appointed w.e.f. May 28, 2018
[4] Ceased w.e.f. May 2, 2018
[5] Ceased w.e.f. April 2, 2020
[6] Ceased w.e.f. May 29, 2020
(c) Disclosure of related party transactions:
Sr.
No.
Nature of transaction/relationship/major parties
i.
Purchase of goods & services (including commission paid)
Subsidiaries, including:
L&T Geostructure LLP
Hi-Tech Rock Products and Aggregates Limited
Tamco Switchgear (Malaysia) SDN. BHD.
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T-MHPS Turbine Generators Private Limited
Associates, including:
L&T-Chiyoda Limited
Magtorq Private Limited
Total
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
1210.51
1065.87
729.26
364.58
410.75
121.24
559.36
75.58
1073.38
10.87
7.44
10.47
1950.64
2146.69
400.56
360.04
773.12
158.57
1.07
6.37
427
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
ii.(a)
Sale of goods/contract revenue & services
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
Subsidiaries, including:
1288.28
1291.44
L&T Metro Rail (Hyderabad) Limited
L&T Hydrocarbon Engineering Limited
Larsen & Toubro (East Asia) SDN. BHD.
Joint ventures, including:
L&T MHPS Boilers Private Limited
Associate:
L&T-Chiyoda Limited
Total
ii(b)
Reversal of sale of goods/contract revenue & services
Subsidiary:
Nabha Power Limited
Joint ventures, including:
L&T Deccan Tollways Limited
Total
iii.
Purchase/lease of property, plant and equipment
Subsidiaries, including:
Larsen & Toubro (Oman) LLC
Larsen & Toubro Infotech Limited
Larsen & Toubro Heavy Engineering LLC
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T Kobelco Machinery Private Limited
Total
iv.
Sale of property, plant and equipment
Subsidiaries, including:
L&T Geostructure LLP
L&T Hydrocarbon Engineering Limited
Joint venture:
L&T-MHPS Boilers Private Limited
Key management personnel:
Mr. Shailendra Roy
Total
198.32
543.87
136.66
85.90
–
–
–
10.74
2.46
0.05
3.95
0.44
–
159.43
0.13
1451.00
4.16
25.99
30.15
50.25
0.38
50.63
5.58
0.69
6.25
12.52
371.94
570.22
–
147.20
0.13
4.16
23.86
9.25
6.16
33.48
0.13
0.13
0.12
1.95
3.07
0.69
6.25
89.53
–
1377.81
–
–
–
14.33
0.05
14.38
3.96
0.44
–
4.40
428
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
v.
Nature of transaction/relationship/major parties
Investments including subscription to equity and preference shares
(equity portion)
Subsidiaries, including:
L&T Metro Rail (Hyderabad) Limited
L&T Uttaranchal Hydropower Limited
Joint ventures:
L&T MBDA Missile Systems Limited
L&T-MHPS Turbine Generators Private Limited
Total
vi.
Subscription debentures/bonds net of redemption:
Subsidiary:
L&T Metro Rail (Hyderabad) Limited
Total
vii.
Sale/Redemption of investments in
Subsidiary:
L&T Seawoods Limited
Joint venture:
L&T Infrastructure Development Projects Limited
Total
viii. Net inter corporate deposits given/(repaid by)
Subsidiaries(net), including:
L&T Metro Rail (Hyderabad) Limited
Nabha Power Limited
L&T Hydrocarbon Engineering Limited
Hi-Tech Rock Products and Aggregates Limited
Joint venture:
L&T Special Steels and Heavy Forgings Private Limited
Total
ix.
Net inter corporate borrowing taken from/(repaid to)
Subsidiaries, including:
L&T Seawoods Limited
L&T Hydrocarbon Engineering Limited
Joint venture:
L&T MBDA Missile Systems Limited
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
233.82
488.11
222.00
0.33
1.18
0.33
234.15
–
–
22.42
692.04
1276.77
22.42
1238.94
115.21
1391.98
115.21
489.29
250.00
250.00
345.00
345.00
228.79
84.48
313.27
220.20
249.40
0.48
0.69
250.00
345.00
106.86
(210.88)
54.03
299.78
84.48
1756.61
(393.80)
57.50
497.78
1249.50
57.50
(275.34)
(129.91)
–
Total
1814.11
(393.80)
429
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
x.
Charges paid for miscellaneous services
Subsidiaries, including:
Larsen & Toubro Infotech Limited
L&T Aviation Services Private Limited
L&T Technology Services Limited
Joint ventures, including:
L&T-Sargent & Lundy Limited
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
185.45
153.83
135.26
19.57
22.02
7.08
7.55
5.42
Total
193.00
159.25
xi.
Rent paid, including lease rentals under leasing/hire purchase
arrangements
Subsidiaries, including:
L&T Electrical & Automation FZE
PT Tamco Indonesia
Larsen & Toubro Infotech Limited
Joint Ventures, including:
L&T Special Steels and Heavy Forgings Private Limited
Total
xii.
Rent received, overheads recovered and miscellaneous income
Subsidiaries, including:
Larsen & Toubro Infotech Limited
L&T Technology Services Limited
L&T Hydrocarbon Engineering Limited
L&T Geostructure LLP
L&T Finance Limited
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T Sargent & Lundy Limited
L&T-MHPS Turbine Generators Private Limited
L&T Infrastructure Development Projects Limited
Associate:
L&T-Chiyoda Limited
Key management personnel:
Mr. D.K. Sen
Total
1.30
3.41
4.71
0.69
0.28
3.20
0.97
1.24
2.21
510.53
510.30
84.95
54.02
155.98
74.24
72.03
77.84
28.30
11.38
8.31
7.93
12.26
–
12.26
–
16.87
0.03
594.82
605.04
430
114.79
16.58
4.92
0.26
0.31
0.31
1.20
77.24
55.58
132.20
68.87
53.55
35.00
11.75
8.03
16.87
0.03
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
xiii.(a) Charges incurred for deputation of employees from related parties
Subsidiaries, including:
12.94
9.75
L&T Electricals & Automation Saudi Arabia Company Limited LLC
L&T Electrical and Automation FZE
PT Tamco Indonesia
Kana Controls General Trading and Contracting Company WLL
Total
xiii.(b) Charges recovered for deputation of employees to related parties
Subsidiaries, including:
L&T Parel Project LLP
L&T Construction Equipment Limited
L&T Geostructure LLP
L&T Seawoods Limited
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T Infrastructure Development Projects Limited
Associate:
L&T- Chiyoda Limited
Total
xiv. Dividend received
Subsidiaries, including:
Larsen & Toubro Infotech Limited
L&T Technology Services Limited
L&T Finance Holdings Limited
L&T Hydrocarbon Engineering Limited
Mindtree Limited
L&T Construction Equipment Limited
Joint Ventures, including:
L&T-Sargent & Lundy Limited
L&T-MHPS Boilers Private Limited
12.94
67.58
7.83
1.34
1.52
7.14
12.82
7.22
9.75
87.87
1.42
3.58
0.77
0.66
6.59
12.88
104.33
6.59
75.59
1373.00
1313.98
364.48
164.27
242.73
326.21
269.06
12.53
19.44
11.94
1.00
5.95
1.45
18.59
13.30
13.97
0.61
1.35
1.62
12.88
353.60
163.90
331.21
–
318.00
7.50
11.94
Total
1385.53
1333.42
431
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
xv.
Commission received, including those under agency arrangements
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
Subsidiary:
L&T Construction Equipment Limited
Joint venture:
L&T Kobelco Machinery Private Limited
Total
xvi. Guarantee charges recovered from
Subsidiaries, including:
Nabha Power Limited
L&T Hydrocarbon Engineering Limited
Larsen Toubro Arabia LLC
Joint ventures, including:
L&T-MHPS Turbine Generators Private Limited
Total
xvii.
Interest paid to
Subsidiaries, including:
L&T Hydrocarbon Engineering Limited
L&T Seawoods Limited
Joint ventures:
L&T MBDA Missile Systems Limited
L&T MHPS Turbine Generators Private Limited
Total
xviii.
Interest received from
Subsidiaries, including:
Nabha Power Limited
L&T Finance Holdings Limited
L&T Metro Rail (Hyderabad) Limited
Hi-Tech Rock Products and Aggregates Limited
L&T Infrastructure Finance Company Limited
L&T Finance Limited
Joint ventures, including:
7.63
–
7.63
62.32
0.55
62.87
7.63
–
9.25
32.85
9.82
0.55
10.58
3.75
14.33
43.11
0.52
43.63
229.69
231.31
201.68
4.16
1.81
233.85
134.36
233.12
89.65
2.42
1.74
21.72
59.16
24.80
16.81
16.57
128.49
106.83
L&T Special Steels and Heavy Forgings Private Limited
L&T Infrastructure Development Projects Limited
104.14
21.56
Total
262.85
196.48
432
10.58
3.75
6.62
16.37
10.36
0.50
199.36
23.15
1.81
31.55
17.95
12.15
–
16.57
106.83
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
xix. Amount written off as bad debts
Subsidiaries, including:
Kesun Iron and Steel Company Private Limited
Bhilai Power Supply Company Limited
Joint venture:
PNG Tollway Limited
Total
xx.
Investments written off
Subsidiaries, including:
Seawoods Retail Private Limited
Seawoods Realty Private Limited
Total
xxi. Amount recognised/(reversed) in Profit and Loss as provision towards
bad and doubtful debts (including expected credit loss on account
of delay)
Subsidiaries, including:
L&T Metro Rail (Hyderabad) Limited
PT Tamco Indonesia
Nabha Power Limited
L&T Electricals & Automation Saudi Arabia Company Limited LLC
L&T Parel Project LLP
L&T Seawoods Limited
Larsen & Toubro Heavy Engineering LLC
L&T Uttaranchal Hydropower Limited
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
0.08
–
0.08
–
–
0.08
–
–
–
1.35
25.08
26.43
0.02
0.02
13.02
(2.09)
8.39
2.28
1.26
25.08
0.01
0.01
(1.48)
(1.74)
0.57
0.65
(0.53)
0.31
(0.09)
(0.33)
(1.54)
1.55
Joint ventures, including:
(0.33)
(0.38)
L&T Special Steels and Heavy Forgings Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Howden Private Limited
L&T Samakhiali Gandhidham Tollway Limited
L&T-MHPS Boilers Private Limited
0.08
0.10
(0.33)
(0.37)
Total
12.69
(2.47)
xxii. Amount recognised in Profit and Loss on account of impairment loss
on investment and inter-corporate deposit
Joint ventures:
L&T Infrastructure Development Projects Limited
L&T Special Steels and Heavy Forgings Private Limited
Total
–
–
1666.10
1666.10
773.00
1156.10
433
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
xxiii. Rent deposit returned
Key management personnel:
Mr. D.K. Sen
Total
xxiv. Guarantee given on behalf of
Subsidiaries, including:
L&T Hydrocarbon Engineering Limited
Larsen & Toubro Arabia LLC
Nabha Power Limited
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
–
–
–
0.08
0.08
0.08
4739.58
14766.31
1705.47
2500.00
9308.23
3217.46
Total
4739.58
14766.31
xxv. Contribution to post employment benefit plans
(a)
Towards employer’s contribution to provident fund trusts, including:
78.63
69.02
Larsen & Toubro Officers & Supervisory Staff Provident Fund
Larsen & Toubro Limited Provident Fund of 1952
67.79
8.11
59.19
8.22
Total
(b)
Towards employer’s contribution to gratuity fund trusts, including:
Larsen & Toubro Officers & Supervisors Gratuity Fund
Larsen & Toubro Gratuity Fund
Total
(c)
Towards employer’s contribution to superannuation trust:
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme
Total
78.63
60.95
60.95
10.99
10.99
69.02
45.08
55.65
43.35
10.99
45.08
9.78
9.78
9.78
“Major parties” denote entities accounting for 10% or more of the aggregate for that category of transaction during respective
period.
434
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
xxvi. Compensation paid to key management personnel:
Key Management Personnel
Executive Directors:
(a) Mr. S.N.Subrahmanyan
(b) Mr. R. Shankar Raman
(c) Mr. Shailendra Roy
(d) Mr. D. K. Sen
(e) Mr. M. V. Satish
(f) Mr. J. D. Patil
Non-Executive/Independent Directors:
(a) Mr. A.M. Naik
(b) Other Non-Executive/Independent Directors
Total
[1] Represents pension
(d) Amount due to/from related parties:
Sr.
No.
Category of balance/relationship/parties
i
Accounts receivable
Subsidiaries, including:
L&T Metro Rail (Hyderabad) Limited
L&T Hydrocarbon Engineering Limited
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T MBDA Missile Systems Limited
L&T Infrastructure Development Projects Limited
L&T Deccan Tollways Limited
Associate
L&T-Chiyoda Limited
Total
2019-20
Short-term
employee
benefits
Post-
employment
benefits
11.87
7.89
5.26
3.56
4.60
4.04
3.13
2.08
1.37
0.91
1.18
1.04
3.18
3.95
44.35
3.00 [1]
–
12.71
2018-19
Short-term
employee
benefits
Post-
employment
benefits
21.28
14.06
9.16
5.54
7.43
6.51
5.67
3.75
2.33
1.46
1.95
1.71
3.00 [1]
5.15
5.03
–
74.16 19.87
Total
15.00
9.97
6.63
4.47
5.78
5.08
6.18
3.95
57.06
v crore
Total
26.95
17.81
11.49
7.00
9.38
8.22
8.15
5.03
94.03
v crore
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
1064.16
1213.73
111.32
686.36
133.70
92.11
12.00
255.20
–
0.01
–
1175.48
1468.94
822.67
140.54
115.36
53.04
75.62
0.01
435
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Category of balance/relationship/parties
ii.
Accounts payables, including other payables
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
Subsidiaries, including:
1100.12
780.67
Tamco Switchgear (Malaysia) SDN. BHD.
L&T Geostructure LLP
Hi-Tech Rock Products and Aggregates Limited
Larsen and Toubro (Oman) LLC
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
Associates, including
Magtorq Private Limited
L&T Camp Facilities LLC
Total
iii.
Investment in debt securities [including preference shares (debt portion)]
Subsidiaries, including:
L&T Metro Rail (Hyderabad) Limited
L&T Finance Limited
Joint ventures, including:
L&T Special Steels and Heavy Forgings Private Limited
Kudgi Transmission Limited
L&T Infrastructure Development Private Limited
119.21
440.76
1184.92
1029.15
717.66
446.92
13.04
4.04
11.94
2298.08
1813.86
331.40
273.07
1049.70
289.77
41.64
213.17
569.93
266.60
955.11
Total
1381.10
1228.18
iv
Impairment loss on investment in debt securities
Joint venture:
L&T Special Steels and Heavy Forgings Private Limited
Total
v.
Loans & advances recoverable
Subsidiaries, including:
Hi-Tech Rock Products and Aggregates Limited
L&T Metro Rail (Hyderabad) Limited
Nabha Power Limited
Joint venture:
L&T Special Steels and Heavy Forgings Private Limited
Associates, including:
L&T- Chiyoda Limited
Magtorq Private Limited
Total
213.17
213.17
213.17
213.17
213.17
2895.19
1557.58
1892.57
3.26
342.39
1394.35
386.48
1635.62
0.93
2.34
1677.53
7.38
4791.02
3242.49
296.97
97.76
110.36
460.21
503.41
3.99
273.07
213.17
488.89
253.06
213.17
363.37
386.69
1539.83
4.94
2.44
436
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
Category of balance/relationship/parties
vi.
Impairment loss on loans & advances recoverable
Joint venture:
L&T Special Steels and Heavy Forgings Private Limited
Total
vii. Unsecured loans (including lease finance)
Subsidiaries, including:
L&T Hydrocarbon Engineering Limited
L&T Seawoods Limited
L&T Valves Limited
Joint venture:
L&T MBDA Missile Systems Limited
Total
viii. Advances received in the capacity of supplier of goods/services
classified as “advances from customers” in the Balance Sheet
Subsidiaries, including:
L&T Seawoods Limited
L&T Hydrocarbon Engineering Limited
L&T Metro Rail (Hyderabad) Limited
L&T Construction Equipment Limited
Joint venture:
L&T-MHPS Boilers Private Limited
Total
ix.
Due to directors : [1]
Key management personnel, including:
Mr. S. N. Subrahmanyan
Mr. R. Shankar Raman
Mr. Shailendra N Roy
Mr. D. K. Sen
Mr. M. V. Satish
Mr. J.D. Patil
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
263.00
263.00
1796.45
59.68
1856.13
263.00
1249.50
524.65
59.68
263.00
263.00
32.73
–
32.73
139.47
40.33
7.15
47.48
57.00
6.97
146.44
29.13
77.21
13.99
46.59
6.97
9.01
5.88
3.37
2.03
3.02
2.72
263.00
19.56
12.22
5.48
29.61
6.97
18.60
12.15
7.05
4.20
6.00
5.30
Total
29.13
57.00
[1] Includes commission due to Non-Executive directors R 3.10 crore (previous year: R 3.70 crore).
437
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme
3.91
Sr.
No.
x.
(a)
Category of balance/relationship/parties
Post-employment benefit plan
Due to provident fund trusts, including:
Larsen & Toubro Officers & Supervisory Staff Provident Fund
Total
(b)
Due to gratuity trusts:
Larsen & Toubro Officers & Supervisors Gratuity Fund
Larsen & Toubro Gratuity Fund
Total
(c)
Due to superannuation trust:
Total
xi.(a) Capital commitment given
Subsidiaries, including:
Larsen & Toubro (Oman) LLC
L&T Technology Services Limited
L&T Construction Machinery Limited
Larsen & Toubro Infotech Limited
Joint ventures:
L&T Special Steels and Heavy Forgings Private Limited
L&T-MHPS Turbine Generators Private Limited
Total
xi.(b) Revenue commitment given
Subsidiaries, including:
L&T Geostructure LLP
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Howden Private Limited
Associates, including:
Magtorq Private Limited
Total
xii. Commitment to Fund
Subsidiaries:
L&T Uttaranchal Hydropower Limited
L&T Metro Rail (Hyderabad) Limited
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
24.81
94.08
8.92
29.26
29.26
107.04
107.04
3.91
1.11
0.28
3.91
1.65
–
1.65
1084.75
2311.24
685.77
1224.91
668.92
27.73
27.73
63.76
63.76
7.99
7.99
2.15
0.12
2.27
1228.95
392.05
25.49
19.92
23.18
3421.48
1640.92
93.00
845.00
93.00
–
24.77
49.70
11.22
7.99
0.85
0.31
0.96
0.02
0.10
914.90
207.55
42.63
103.60
19.06
298.00
547.00
Total
93.00
845.00
438
Notes forming part of the Financial Statements (contd.)
NOTE [47] (contd.)
Sr.
No.
xiii.
Category of balance/relationship/parties
Revenue commitment received
Subsidiaries, including:
L&T Metro Rail (Hyderabad) Limited
L&T Parel Project LLP
Nabha Power Limited
L&T Asian Realty Project LLP
L&T Construction Equipment Limited
L&T Hydrocarbon Engineering Limited
Joint ventures, including:
L&T MBDA Missile Systems Limited
L&T-Gulf Private Limited
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
Total
xiv. Guarantee given on behalf of
Subsidiaries, including:
L&T Hydrocarbon Engineering Limited
Larsen Toubro Arabia LLC
Nabha Power Limited
Joint Ventures, including:
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
3264.93
2336.85
587.50
571.01
815.00
357.55
328.59
30.00
–
21.28
6.88
65.13
168.49
3330.06
2505.34
33510.25
36936.01
19593.31
4285.17
3916.00
514.74
546.66
651.26
969.27
320.82
69.19
18.77
80.18
18476.12
8442.15
4241.00
427.31
90.42
2.04
0.68
0.81
0.81
23.37
L&T-MHPS Turbine Generators Private Limited
L&T Special Steels and Heavy Forgings Private Limited
394.94
90.42
Total
34024.99
37482.67
xv.
Provision for doubtful debts related to the amount of outstanding
balances
Subsidiaries, including:
Nabha Power Limited
L&T Metro Rail (Hyderabad) Limited
L&T Hydrocarbon Engineering Limited
PT. Tamco Indonesia
L&T Parel Project LLP
Joint ventures, including:
L&T- MHPS Boilers Private Limited
Total
19.73
6.60
2.04
8.39
3.09
23.00
23.09
42.82
23.54
30.14
“Major parties” denote entities account for 10% or more of the aggregate for that category of balance during respective period.
Note : 1. All the related party contracts/arrangements have been entered on arm’s length basis.
2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash.
439
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [48]
Disclosure pursuant to Ind AS 27 “Separate Financial Statements”
Investment in following subsidiaries, associates and joint ventures is accounted at cost.
Subsidiaries:
Sr.
No.
Name of the subsidiary
As at 31-3-2020
As at 31-3-2019
Principal
place of
business
Proportion
of direct
ownership
(%)
Proportion
of effective
ownership
Interest (%)
Proportion
of effective
voting power
held (%)
Proportion
of direct
ownership
(%)
Proportion
of effective
ownership
Interest (%)
Proportion
of effective
voting power
held (%)
99.90
100.00
100.00
100.00
95.00
74.00
100.00
99.99
100.00
100.00
74.53
63.72
100.00
100.00
100.00
74.62
100.00
100.00
100.00
100.00
61.08
99.90
100.00
100.00
100.00
95.00
100.00
100.00
99.99
100.00
100.00
74.53
63.72
100.00
100.00
100.00
74.62
100.00
100.00
100.00
100.00
61.08
99.90
100.00
100.00
100.00
95.00
100.00
100.00
99.99
100.00
100.00
74.53
63.72
100.00
100.00
100.00
74.62
100.00
100.00
100.00
100.00
61.08
99.90
100.00
100.00
99.90
100.00
100.00
99.90
100.00
100.00
100.00
100.00
100.00
95.00
74.00
100.00
99.99
100.00
100.00
74.80
63.91
100.00
100.00
100.00
78.88
100.00
100.00
100.00
100.00
–
95.00
100.00
100.00
99.99
100.00
100.00
74.80
63.91
100.00
100.00
100.00
78.88
100.00
100.00
100.00
100.00
–
95.00
100.00
100.00
99.99
100.00
100.00
74.80
63.91
100.00
100.00
100.00
78.88
100.00
100.00
100.00
100.00
–
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Indian subsidiaries
Bhilai Power Supply Company Limited
L&T Electricals and Automation Limited
Hi-Tech Rock Products & Aggregates
Limited
L&T Seawoods Limited
India
India
India
India
Kesun Iron & Steel Company Private Limited India
L&T Geostructure LLP
L&T Valves Limited
L&T Power Limited
L&T Cassidian Limited [1]
L&T Aviation Services Private Limited
Larsen & Toubro Infotech Limited
L&T Finance Holdings Limited
L&T Capital Company Limited
L&T Power Development Limited
L&T Metro Rail (Hyderabad) Limited [4]
L&T Technology Services Limited
L&T Construction Equipment Limited [3]
L&T Infrastructure Engineering Limited
L&T Hydrocarbon Engineering Limited
L&T Construction Machinery Limited [3]
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
21 Mindtree Limited [2]
[1] Applied for strike off
[2] The Company has acquired stake on July 2, 2019
[3] Refer to Note 5[1]
[4] Proportion of ownership is more than 99.99%
440
Notes forming part of the Financial Statements (contd.)
NOTE [48] (contd.)
Foreign Subsidiaries:
Sr.
No.
1
2
3
4
Name of subsidiary company
Larsen & Toubro LLC
Larsen & Toubro Hydrocarbon International
Limited LLC [1]
Larsen & Toubro (Saudi Arabia) LLC
L&T Global Holdings Limited
[1] Liquidated on May 16, 2020
Associates:
Name of associate
Sr.
No.
1
2
Gujarat Leather Industries Limited [1]
Magtorq Private Limited
India
India
Principal
place of
business
USA
Kindgom of
Saudi Arabia
Kindgom of
Saudi Arabia
UAE
Principal
place of
business
As at 31-3-2020
Proportion
of effective
ownership
Interest (%)
98.79
Proportion
of direct
ownership
(%)
95.24
Proportion
of effective
voting power
held (%)
98.79
As at 31-3-2019
Proportion
of effective
ownership
Interest (%)
98.80
Proportion
of direct
ownership
(%)
95.24
Proportion
of effective
voting power
held (%)
98.80
90.00
100.00
100.00
90.00
100.00
100.00
4.35
100.00
100.00
100.00
100.00
100.00
4.35
100.00
100.00
100.00
100.00
100.00
As at 31-3-2020
Proportion
of effective
ownership
Interest (%)
50.00
42.85
Proportion
of direct
ownership
(%)
50.00
42.85
Proportion
of effective
voting power
held (%)
50.00
42.85
As at 31-3-2019
Proportion
of effective
ownership
Interest (%)
50.00
42.85
Proportion
of direct
ownership
(%)
50.00
42.85
Proportion
of effective
voting power
held (%)
50.00
42.85
[1] Under liquidation
joint ventures:
Sr.
No.
Name of the joint venture
Principal place
of business
L&T Chennai–Tada Tollway Limited
L&T Rajkot-Vadinar Tollway Limited
L&T Samakhiali Gandhidham Tollway Limited
L&T Infrastructure Development Projects Limited
L&T Transportation Infrastructure Limited
L&T Ahmedabad-Maliya Tollway Limited
L&T Halol-Shamlaji Tollway Limited
L&T Howden Private 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
PNG Tollway Limited
L&T Kobelco Machinery Private Limited [2]
L&T MBDA Missile Systems Limited
L&T-Sargent & Lundy Limited
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
[1] Proportion of direct ownership is less than 0.01%.
[2] The Company has sold its stake on April 17, 2019
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
As at 31-3-2020
As at 31-3-2019
Proportion of
direct
ownership
(%)
[1]
[1]
0.02
51.00
26.24
[1]
[1]
50.10
51.00
51.00
75.50
74.00
[1]
–
51.00
50.00
Proportion
of effective
ownership
Interest (%)
51.00
51.00
51.01
51.00
63.86
51.00
24.98
50.10
51.00
51.00
75.50
74.00
37.74
–
51.00
50.00
Proportion of
direct
ownership
(%)
[1]
[1]
0.02
97.45
26.24
[1]
[1]
50.10
51.00
51.00
75.50
74.00
13.26
51.00
51.00
50.00
Proportion
of effective
ownership
Interest (%)
97.45
97.45
97.45
97.45
98.12
97.45
47.75
50.10
51.00
51.00
75.50
74.00
72.11
51.00
51.00
50.00
441
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [49]:
Basic and diluted Earnings per share [EPS] computed in accordance with Ind AS 33 “Earnings per Share”:
Particulars
2019-20
2018-19
Basic earnings per share
Profit after tax from continuing operations as per accounts (R crore)
Profit after tax from discontinued operations as per accounts (R crore)
A
B
Profit after tax from continuing & discontinued operations as per accounts (R crore)
C=A+B
Weighted average number of equity shares outstanding
Basic EPS from continuing operations (R)
Basic EPS from discontinued operations (R)
Basic EPS from continuing & discontinued operations (R)
Diluted earnings per share
Profit after tax from continuing operations as per accounts (R crore)
Profit after tax from discontinued operations as per accounts (R crore)
D
A/D
B/D
C/D
A
B
Profit after tax from continuing & discontinued operations as per accounts (R crore)
C=A+B
6024.76
654.45
6679.21
6948.33
543.06
7491.39
1,40,33,69,848
1,40,20,87,033
42.93
4.66
47.59
6024.76
654.45
6679.21
49.56
3.87
53.43
6948.33
543.06
7491.39
Weighted average number of equity shares outstanding
Add: Weighted average number of potential equity shares on account of employee
stock options
D
E
1,40,33,69,848
1,40,20,87,033
18,52,930
24,57,688
Weighted average number of equity shares outstanding for diluted EPS
F=D+E
1,40,52,22,778
1,40,45,44,721
Diluted EPS from continuing operations (R)
Diluted EPS from discontinued operations (R)
Diluted EPS from continuing & discontinued operations (R)
Face value per share (R)
A/F
B/F
C/F
42.87
4.66
47.53
2
49.47
3.87
53.34
2
The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares
for the purpose of diluted earnings per share:
Weighted average number of potential equity shares on account of conversion of foreign currency
convertible bonds
51,90,133
95,20,455
Particulars
2019-20
2018-19
442
v crore
Total
755.24
545.11
(69.12)
Contractual
rectification
cost -
construction
contracts
445.73
397.14
(9.16)
(373.56)
(382.55)
–
–
0.92
(41.63)
807.97
Notes forming part of the Financial Statements (contd.)
NOTE [50]
Disclosures pursuant to Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets”
a) Movement in provisions:
Particulars
Product
warranties
Class of provisions
Expected tax
liability in
respect of
indirect taxes
Litigation
related
obligations
Sr.
No.
1
2
3
4
5
6
7
Balance as at 1.4.2019
Additional provision during the year
Provision used during the year
Provision reversed during the year
Additional provision for unwinding of interest and
change in discount rate
Classified as held for sale
Balance as at 31.3.2020 (6=1+2+3+4+5+6)
45.61
16.72
(13.58)
(0.01)
0.92
(41.63)
8.03
204.80
46.25
(45.54)
(8.98)
–
–
59.10
85.00
(0.84)
–
–
196.53
143.26
460.15
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, 2020 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 1 to 3 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 Ind AS 115 “ Revenue from
Contracts with customers ”.
c) Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet.
NOTE [51]
The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is R 198.74 crore
(Discontinued operations: R 80.97 crore) (previous year: R 168.23 crore (Discontinued operations: R 68.82 crore)). Further, the Company
has incurred capital expenditure on research and development activities as follows:
(a) on tangible assets of R 7.60 crore (Discontinued operations: R 4.19 crore) (previous year: R 5.46 crore (Discontinued operations:
R 2.95 crore)) ;
(b) on intangible assets being expenditure on new product development of R 32.27 crore (Discontinued operations: R 30.17 crore)
(previous year: R 40.53 crore (Discontinued operations: R 40.07 crore)); and
(c) on other intangible assets of R 1.14 crore (Discontinued operations: Nil) (previous year: R 1.96 crore (Discontinued operations: Nil)).
In addition, the Company has incurred expenditure of R 0.08 crore (Discontinued operations: Nil) (previous year: R 0.52 crore
(Discontinued operations: Nil)) which is customer funded.
443
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [52]
Disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”: Market risk management
(a) Foreign exchange rate and interest rate risk:
The Company regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone
basis and in conjunction with its underlying foreign currency and interest rate related exposures. The Company follows cash flow
hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge
contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However,
till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will
impact the Balance Sheet of the Company. Further, given the effective horizons of the Company’s risk management activities
which coincide with the durations of the projects under execution and could extend across 3-4 years and given the business
uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to
these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and,
therefore, may affect the Company’s financial condition and operating results. Hence, the Company monitors the potential risk
arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For
on-balance sheet exposures, the Company monitors the risks on net unhedged exposures.
(i)
Foreign exchange rate risk:
In general, the Company is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a
strengthening of the Indian Rupee may negatively affect the Company’s net sales and gross margins as expressed in Indian
Rupees. There is a risk that the Company will have to adjust local currency product pricing due to competitive pressures when
there have been significant volatility in foreign currency exchange rates.
The Company may enter into foreign currency forward and option contracts with financial institutions to protect against
foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted
future cash flows and net investments in foreign subsidiaries. In addition, the Company has entered, and may enter in future,
into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its
foreign-denominated debt issuances. The Company’s practice is to hedge a portion of its material foreign exchange exposures
with tenors in line with the project/business life cycle. However, the Company may choose not to hedge certain foreign
exchange exposures for a variety of reasons.
The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised
financial liabilities and derivatives is as follows:
Particulars
Net exposure to foreign currency risk in respect of
recognised financial assets/(recognised financial liabilities)
Derivatives including embedded derivatives for hedging
receivable/(payable) exposure with respect to non-financial
assets/(liabilities)
Derivatives including embedded derivatives for hedging
receivable/(payable) exposure with respect to firm
commitments and highly probable transactions
Receivable/(payable) exposure with respect to forward
contracts and embedded derivatives not designated as cash
flow hedge
v crore
As at 31-3-2020
As at 31-3-2019
US Dollars
including
pegged
currencies
EURO
Japanese
Yen
US Dollars
including
pegged
currencies
EURO
Japanese
Yen
(4303.15)
(573.33)
(419.49)
(3193.61)
136.84
(4.02)
217.94
(28.50)
–
552.57
222.95
–
2159.48
(1253.24)
962.38
1368.13
(833.18)
540.83
(518.73)
25.37
(27.02)
(104.88)
122.63
(24.22)
To provide a meaningful assessment of the foreign currency risk associated with the Company’s foreign currency derivative
positions against off Balance Sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities,
the Company uses a multi-currency correlated value-at-risk (“VAR”) model. The VAR model uses a Monte Carlo simulation
to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the
444
Notes forming part of the Financial Statements (contd.)
NOTE [52] (contd.)
correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot
exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk
estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Company uses
foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by
increases in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Company at
95% confidence level is R 28.78 crore as at March 31, 2020 and R 29.88 crore as at March 31, 2019.
Actual future gains and losses associated with the Company’s investment portfolio and derivative positions may differ
materially from the sensitivity analysis performed as at March 31, 2020 due to the inherent limitations associated with
predicting the timing and amount of changes in foreign currency exchange rates and the Company’s actual exposures and
position.
(ii)
Interest rate risk:
The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding floating rate debt. While
most of the Company’s outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk,
a major portion of foreign currency debt is linked to international interest rate benchmarks like LIBOR. The Company also
hedges a portion of these risks by way of derivative instruments like Interest rate swaps and currency swaps.
The exposure of the Company’s borrowing to interest rate changes at the end of the reporting period is as follows:
Floating rate borrowings
Particulars
As at 31-3-2020
v crore
As at 31-3-2019
7671.90
5926.55
A hypothetical 50 basis point shift in respective currency LIBORs and other benchmarks on the unhedged loans would result
in a corresponding increase/decrease in interest cost for the Company on a yearly basis as follows:
Particulars
Indian Rupee
Interest rates -increase by 0.5% in INR interest rate [1]
Interest rates -decrease by 0.5% in INR interest rate [1]
US Dollar
Interest rates -increase by 0.5% in USD interest rate [1]
Interest rates -decrease by 0.5% in USD interest rate [1]
[1] Holding all other variables constant
(b) Liquidity Risk Management:
Impact on Profit and Loss
after tax
2019-20
2018-19
v crore
Impact on Equity
As at
31-3-2020
As at
31-3-2019
(1.77)
1.77
(26.94)
26.94
(1.58)
1.58
(17.70)
17.70
(1.77)
1.77
(26.94)
26.94
(1.58)
1.58
(17.70)
17.70
The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding
through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Company maintains
flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly
monitors the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and
financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing
the liquidity position.
The Company’s investment policy and strategy are focused on preservation of capital and supporting the Company’s liquidity
requirements. The Company uses a combination of internal and external management to execute its investment strategy and
achieve its investment objectives. The Company typically invests in money market funds, large debt funds, Government of India
securities, equity funds and other highly-rated securities under a limits framework which governs the credit exposure to any one
issuer as defined in its investment policy. The policy requires investments generally to be investment grade, with the primary
objective of minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with
the Company’s investment portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices
of the securities on the value of the investment portfolio assuming a 0.5% movement in debt funds and debt securities and a
5% movement in the NAV of the equity funds. Based on the investment position, a hypothetical 0.5% change in the fair market
445
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [52] (contd.)
value of debt securities would result in a value change of +/- R 17.80 crore as at March 31, 2020 and +/- R 11.08 crore as at
March 31, 2019. A 5% change in the equity funds’ NAV would result in a value change of +/- R 3.90 crore as at March 31, 2020
and +/- R 38.91 crore as at March 31, 2019 respectively. The investments in money market funds are for the purpose of liquidity
management only and hence not subject to any material price risk.
(c) Credit Risk Management:
The Company’s customer profile include public sector enterprises, state owned companies and large private corporates.
Accordingly, the Company’s customer credit risk is low. The Company’s average project execution cycle is around 24 to 36 months.
General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90
days and certain retention money to be released at the end of the project. In some cases, retentions are substituted with bank/
corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within the
organisation to ensure proper attention and focus for realisation.
(i)
The Company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL
is as follows:
Opening balance as at April 1
Changes in allowance for expected credit loss:
Particulars
Provision/(reversal) of allowance for expected credit loss
Additional provision (net) towards credit impaired receivables
Write off as bad debts
Less: Balance reported under held for sale
Closing balance as at March 31[refer Note 11]
2019-20
2270.62
334.21
32.69
(157.19)
102.05
2378.28
v crore
2018-19
2240.91
68.72
188.35
(227.36)
2270.62
(ii) Trade receivable written off during the year but still enforceable for recovery amounts to Nil (previous year: Nil)
NOTE [53]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”:
(a) Category-wise classification for applicable financial assets:
Sr.
No.
I.
II.
Particulars
Investment in equity instruments
Investment in mutual funds
Measured at fair value through Profit or Loss (FVTPL):
(i)
(ii)
(iii) Investment in bonds
(iv) Derivative instruments not designated as cash flow hedges
(v) Embedded derivatives not designated as cash flow hedges
Sub-total (I)
Measured at amortised cost:
(i) Loans
(ii) Trade receivables
(iii) Advances recoverable in cash
(iv) Cash and cash equivalents and bank balances
(v) Other receivables
Sub-total (II)
III. Measured at fair value through Other Comprehensive Income (FVTOCI):
(i) Investment in government securities, bonds and debentures
(ii) Derivative financial instruments designated as cash flow hedges
(iii) Embedded Derivatives designated as cash flow hedges
Sub-total (III)
Total (I+II+III)
Note
5
10
10
7,15
7,15
6,14
11
15
7,12,13
10
7,15
7,15
As at
31-3-2020
R crore
As at
31-3-2019
73.42
2000.82
997.65
35.44
53.52
3160.85
4022.14
27912.96
671.68
4212.47
714.41
37533.66
3060.68
552.00
0.94
3613.62
44308.13
97.35
1643.56
656.38
9.84
12.40
2419.53
2585.69
28212.55
730.43
7909.71
887.22
40325.60
2406.91
602.56
0.19
3009.66
45754.79
446
Notes forming part of the Financial Statements (contd.)
NOTE [53] (contd.)
(b) Category-wise classification for applicable financial liabilities:
Sr.
No.
I.
II.
III.
IV.
Particulars
Measured at fair value through Profit or Loss (FVTPL):
(i) Derivative instruments not designated as cash flow hedges
(ii) Embedded derivatives not designated as cash flow hedges
Sub-total (I)
Measured at amortised cost:
(i) Borrowings
(ii) Trade payables
Due to micro enterprises and small enterprises
Due to others
(iii) Others
Sub-total (II)
Derivative instruments (including embedded derivatives) through Other
Comprehensive Income:
(i) Derivative instruments designated as cash flow hedges
(ii) Embedded derivatives designated as cash flow hedges
Sub-total (III)
Financial guarantee contracts
Total (I+II+III+IV)
(c)
Items of income, expense, gains or losses related to financial instruments:
25
20,26
20,26
20,26
Note
20,26
20,26
As at
31-3-2020
R crore
As at
31-3-2019
23.14
56.80
79.94
6.86
3.26
10.12
19,23,24
25785.29
11989.70
Sr.
No.
I
A
B
C
Particulars
Net gains/(losses) on financial assets, financial liabilities measured at fair value through Profit or Loss
and amortised cost:
(i)
Financial assets or financial liabilities mandatorily measured at fair value through Profit or Loss:
1. Gains/(losses) on fair valuation or sale of investments
2. Gains/(losses) on fair valuation/settlement of derivative:
a. On forward contracts not designated as cash flow hedges
b. On embedded derivatives contracts not designated as cash flow hedges
c. On futures not designated as cash flow hedges
Impairment loss on investments
3.
Sub-total (A)
Financial assets measured at amortised cost:
(i)
Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency
(trade receivables, loans given etc.)
(ii) Allowance/(reversal) for expected credit loss during the year in the Statement of Profit or Loss
(iii) Provision for impairment loss (other than expected credit loss) [net]
(iv) Gains/(losses) on derecognition:
1. Bad debts (written off)/written back (net)
2. Gains/(losses) on transfer of financial assets (on non-recourse basis)
Sub-total (B)
Financial liabilities measured at amortised cost:
(i)
Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency
(trade payables, borrowing availed etc.)
(ii) Unclaimed credit balances written back
Sub-total (C)
Total [I] = (A+B+C)
379.88
36249.51
1334.41
63749.09
201.95
36023.08
1655.08
49869.81
568.53
38.31
606.84
23.97
64459.84
236.92
91.54
328.46
19.76
50228.15
2019-20
R crore
2018-19
331.59
293.46
(94.69)
(13.75)
–
–
223.15
586.25
(334.21)
(171.67)
166.95
(27.13)
220.19
(666.44)
162.62
(503.82)
(60.48)
42.02
(9.51)
(22.60)
(213.17)
90.20
266.24
(68.72)
(412.47)
250.69
(31.68)
4.06
(410.37)
73.16
(337.21)
(242.95)
447
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [53]
(c)
Items of income, expense, gains or losses related to financial instruments: (contd.)
Particulars
Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other
Comprehensive Income:
Gains/(losses) recognised in Other Comprehensive Income:
(i)
Financial assets measured at fair value through Other Comprehensive Income:
1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc.
(ii) Derivative measured at fair value through Other Comprehensive Income :
1. Gains/(losses) on fair valuation or settlement of forward contracts designated as cash
flow hedges
2. Gains/(losses) on fair valuation or settlement of embedded derivative contracts
designated as cash flow hedges
Sub-total (A)
Less:
Gains/(losses) reclassified to Profit or Loss from Other Comprehensive Income:
(i)
Financial assets measured at fair value through Other Comprehensive Income :
1. On government securities, bonds, debentures etc. upon sale of government securities,
2019-20
R crore
2018-19
311.54
(141.74)
(111.09)
(153.74)
44.56
245.01
39.09
(256.39)
bonds, debentures etc.
154.47
(62.89)
(ii) Derivative measured at fair value through Other Comprehensive Income:
1. On forward contracts upon hedged future cash flows affecting the Profit or loss or
related asset or liability
319.29
247.47
2. On embedded derivative contracts upon hedged future cash flows affecting the Profit or
Loss or related asset or liability
Sub-total (B)
Net gains/(losses) recognised in Other Comprehensive Income [II]= (A)-(B)
Impairment loss on financial assets measured at fair value through Other Comprehensive Income
Other income/(expenses):
Dividend income:
Dividend income from investments measured at FVTPL
Sub-total (A)
Interest income:
(a) Financial assets measured at amortised cost
(b) Financial assets measured at fair value through Other Comprehensive Income
(c)
Sub-total (B)
Interest expense:
(a)
Financial assets measured at fair value through Profit or Loss
Derivative instruments (including embeded derivatives) that are measured at fair value through
Other Comprehensive Income (reclassified to Profit or Loss during the year)
Financial liabilities that are measured at amortised cost
Financial liabilities that are measured at fair value through Profit or Loss
(b)
(c)
Sub-total (C)
Total [III] = (A+B+C)
9.01
482.77
(237.76)
100.00
1.76
1.76
398.01
214.09
7.22
619.32
0.64
185.22
(441.62)
–
178.70
178.70
259.83
180.69
32.80
473.32
(150.06)
(1624.11)
5.95
(1768.22)
(1147.14)
(259.02)
(1147.88)
(0.06)
(1,406.96)
(754.94)
Sr.
No.
II
A
B
C
III
A
B
C
448
Notes forming part of the Financial Statements (contd.)
NOTE [53] (contd.)
(d) Fair value of financial assets and financial liabilities measured at amortised cost:
(i)
Financial assets measured at amortised cost:
The carrying amounts of trade receivables, loans, advances and cash and other bank balances are considered to be the same
as their fair values due to their short-term nature. The carrying amounts of long-term loans given with floating rate of interest
are considered to be close to the fair value.
(ii)
Financial liabilities measured at amortised cost:
Particulars
As at 31-3-2020
As at 31-3-2019
Carrying
amount
Fair Value
Carrying
amount
Fair Value
0.675 % Foreign currency convertible bond
–
–
1363.39
1375.81
Redeemable non-convertible fixed rate debentures
9781.06
9966.73
3560.86
3652.38
Term loan from banks
Total
90.67
95.34
90.67
101.09
9871.73
10062.07
5014.92
5129.28
v crore
Fair value
hierarchy
L2[1]
L2[1]
L2[1]
Note: The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short-
term nature. The carrying amounts of borrowings with floating rate of interest are considered to be close to the fair value.
[1] Valuation technique L2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread.
(e) Fair value hierarchy of financial assets and liabilities measured at fair value:
Particulars
Note
As at 31-3-2020
Level 2
Level 3
Level 1
Total
Level 1
As at 31-3-2019
Level 2
Level 3
v crore
Total
Financial assets:
Investments at FVTPL:
(i)
Equity shares (other than those held in subsidiary, joint
venture and associate companies)
(ii) Mutual fund units
(iii) Bonds
(iv) Derivative instruments not designated as cash flow
hedges
(v) Embedded derivative Instruments not designated as
cash flow hedges
Investments at FVTOCI:
(i) Debt instruments viz. government securities, bonds and
debentures
5
10
10
7,15
7,15
10
(ii) Derivative financial instruments designated as cash
7,15
flow hedges
(iii) Embedded derivative financial instruments designated
7,15
as cash flow hedges
Total
Financial Liabilities:
(i) At FVTPL - Designated at FVTPL:
(a) Derivative instruments not designated as cash flow
hedges
20,26
(b) Embedded derivative instruments not designated as
20,26
cash flow hedges
(ii) Designated at FVTOCI:
(a) Derivative financial instruments designated as cash
20,26
flow hedges
(b) Embedded derivative financial instruments designated
20,26
as cash flow hedges
Total
5.01
2000.82
997.65
–
–
–
68.41
–
–
73.42
31.67
2000.82 1643.56
656.38
997.65
–
–
–
65.68
97.35
– 1643.56
656.38
–
–
–
35.44
53.52
3060.68
–
–
552.00
–
–
–
–
35.44
53.52
–
–
9.84
12.40
–
–
9.84
12.40
3060.68 2406.91
–
– 2406.91
552.00
–
602.56
–
602.56
–
6064.16
0.94
641.90
–
68.41
0.94
–
6774.47 4738.52
0.19
624.99
–
0.19
65.68 5429.19
–
–
–
–
–
23.14
56.80
568.53
38.31
686.78
–
–
–
–
–
23.14
56.80
568.53
38.31
686.78
–
–
–
–
–
6.86
3.26
236.92
91.54
338.58
–
–
–
–
–
6.86
3.26
236.92
91.54
338.58
449
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [53]
(e) Fair value hierarchy of financial assets and liabilities measured at fair value: (contd.)
Valuation technique and key inputs used to determine fair value:
1.
Level-1: Mutual fund, bonds, debentures and government securities- quoted price in the active market
2.
Level-2: Derivative Instrument – Mark to market on forward covers and embedded derivative instruments is based on forward
exchange rates at the end of reporting period and discounted using G-sec rate plus applicable spread.
(f) Movement of items measured using unobservable inputs (Level 3):
Particulars
Balance as at 01-04-2018
Fair valuation gain recognised in Profit or Loss during 2018-19
Balance as at 31-3-2019
Fair valuation gain recognised in Profit or Loss during 2019-20
Balance as at 31-3-2020
R crore
Equity Investment in Tidel Park Limited
64.27
1.31
65.58
2.72
68.30
Significant unobservable inputs used in level 3 fair value measurements and sensitivity of the fair value measurement to changes in
unobservable inputs:
Particulars
Equity Investment in
“Tidel Park Limited”
Fair Value
as at
31-3-2020
68.30
Fair Value
as at
31-3-2019
Significant unobservable
inputs
65.58 31-3-2020:
1. Net realization per month
R 31.827 per sq/ft.
2. Capitalisation rate 12.25%
31-3-2019:
1. Net realization per month
R 30.90 per sq/ft.
2. Capitalisation rate 12.25%
v crore
Sensitivity
31-3-2020 : 1% change in net realisation would result in
+/- R 0.33 crore (post tax- R 0.24 crore)
25 bps change in capitalisation rate would result in +/- R 0.65
crore (post tax- R 0.49 crore)
31-3-2019 : 1% change in net realization would result in
+/- R 0.32 crore (post tax- R 0.21 crore)
25 bps change in capitalization rate would result in +/- R 0.63
crore (post tax- R 0.41 crore)
(g) Maturity profile of financial liabilities (undiscounted values):
Particulars
Note
As at 31-3-2020
Within
twelve
months
After twelve
months
As at 31-3-2019
Within
twelve
months
After twelve
months
Total
v crore
Total
A. Non-derivative liabilities:
Borrowings
Trade payables:
Due to micro enterprises and small enterprises
Due to others
Other financial liabilities
Lease liabilities
Total
B. Derivative liabilities:
Forward contracts
Embedded derivatives
Total
19, 23, 24
19522.50
8318.68
27841.18
8655.38
4586.26
13241.64
25
20, 26
20, 26
20, 26
323.48
34823.28
1155.74
91.21
55916.21
468.46
99.90
568.36
56.26
1426.35
46.18
89.21
9936.68
144.61
–
144.61
379.74
36249.63
1201.92
180.42
65852.89
193.80
35235.91
1600.37
–
45685.46
8.16
787.13
74.47
–
5456.02
201.96
36023.04
1674.84
–
51141.48
613.07
99.90
712.97
241.12
69.75
310.87
8.10
28.91
37.01
249.22
98.66
347.88
450
Notes forming part of the Financial Statements (contd.)
NOTE [53] (contd.)
(h) Details of outstanding hedge instruments for which hedge accounting is followed:
(i) Outstanding currency exchange rate hedge instruments:
(A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge:
Particulars
(a) Receivable hedges:
US Dollars
Bangladeshi Taka
Japanese Yen
qatari Riyals
Arab Emirates Dirham
EURO
Kuwaiti Dinars
Omani Riyal
Malaysian Ringgit
Mauritian Rupee
Saudi Riyal
Thai Baht
British Pound
Particulars
(b) Payable hedges:
US Dollars
EURO
Bangladeshi Taka
Japanese Yen
Arab Emirates Dirham
Mauritian Rupee
Swiss Franc
Kuwaiti Dinars
Chinese Yuan
Canadian Dollar
British Pound
Omani Riyal
Nominal
amount
(R crore)
6543.80
1859.64
1640.41
1401.35
1174.53
925.80
863.67
485.60
173.51
149.67
52.82
1.56
0.94
Nominal
amount
(R crore)
10530.38
2513.05
766.73
701.78
396.31
385.17
176.13
101.63
84.13
31.46
10.87
–
As at 31-3-2020
Average
rate
(R)
Within
twelve
months
(R crore)
75.80
5211.30
0.90 1,674.92
1324.82
0.69
1319.31
20.99
830.91
20.78
818.04
86.60
641.12
239.79
107.43
193.42
125.19
17.85
111.93
1.86
52.82
19.97
1.56
2.35
0.94
94.68
As at 31-3-2020
Average
rate
(R)
Within
twelve
months
(R crore)
75.14 10330.69
84.70 2222.79
766.73
587.70
396.31
385.17
176.13
101.63
75.36
31.46
10.87
–
0.88
0.70
20.75
1.86
76.89
239.12
10.67
54.37
96.00
–
After
twelve
months
(R crore)
Nominal
amount
(R crore)
1332.50 5602.72
184.72
–
315.59 1449.58
82.04 1551.27
343.62 1228.16
107.76 1208.20
695.55
222.55
230.00
378.17
113.99
48.32
–
37.74
96.64
–
–
–
3.15
–
As at 31-3-2019
Average
rate
(R)
Within
twelve
months
(R crore)
After
twelve
months
(R crore)
–
72.61 4131.54 1471.18
–
165.22
323.44
–
263.31
292.12
79.49
60.63
–
–
–
–
–
0.68 1284.36
19.72 1227.83
19.34 1228.16
944.89
85.76
403.43
235.50
150.51
187.51
53.36
17.54
–
–
96.64
21.04
–
–
3.15
96.62
After
twelve
months
(R crore)
Nominal
amount
(R crore)
As at 31-3-2019
Average
rate
(R)
Within
twelve
months
(R crore)
After
twelve
months
(R crore)
–
199.69 10554.47
290.26 3150.91
–
114.08 1058.26
–
–
294.76
–
–
–
–
726.06
70.53 9828.41
81.76 3016.81 134.10
–
0.66 874.72 183.54
–
–
–
–
–
–
–
–
–
–
72.76 294.76
8.69
–
40.53
30.52
28.71
8.69 235.83
–
–
54.04
40.53
95.54
30.52
28.71 180.36
–
–
–
–
8.77
–
–
–
(B) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge:
Particulars
Receivable:
Arab Emirates Dirham
qatari Riyal
US Dollars
Saudi Riyal
Nominal
amount
(R crore)
As at 31-3-2020
Average
rate
(R)
Within
twelve
months
(R crore)
After
twelve
months
(R crore)
Nominal
amount
(R crore)
As at 31-3-2019
Average
rate
(R)
Within
twelve
months
(R crore)
After
twelve
months
(R crore)
102.55
45.77
29.00
–
20.11
20.70
72.51
–
102.55
45.77
29.00
–
–
–
–
–
81.20
116.68
28.73
51.07
20.46
20.91
71.83
19.34
–
116.68
28.73
51.07
81.20
–
–
–
451
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [53] (contd.)
(ii) Outstanding interest rate hedge instruments:
Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge:
Particulars
Nominal
amount
(R crore)
As at 31-3-2020
Average
rate
(%)
Within
twelve
months
(R crore)
–
After
twelve
months
(R crore)
–
Nominal
amount
(R crore)
As at 31-3-2019
Average
rate
(%)
Within
twelve
months
(R crore)
365.26
365.26
7.17
US Dollars
–
–
(iii) Outstanding commodity price hedge instruments:
Commodity forward contract:
Nominal
amount
(R crore)
As at 31-3-2020
Average
rate
(R)
After twelve
months
(R crore)
Nominal
amount
(R crore)
As at 31-3-2019
Average
rate
(R)
Particulars
Copper(Tn)[1]
Aluminium(Tn)
Iron Ore(Tn)
Coking Coal(Tn)
Zinc(Tn)
Lead(Tn)
Within
twelve
months
(R crore)
(65.52)
179.91
15.18
15.50
–
28.98
(39.12)
179.91
25.71
24.58
–
28.98
447208.55
134905.03
5643.17
13101.74
–
145469.79
26.40
–
10.53
9.08
–
–
(305.35) 432547.41
199.84 149482.10
38.32
5469.41
39.27 13631.02
42.44 189480.24
27.21 143913.20
Within
twelve
months
(R crore)
(305.35)
199.84
29.47
29.26
42.44
27.21
[1] Negative nominal amount represents sell position.
(i) Carrying amounts of hedge instruments for which hedge accounting is followed:
Cash flow hedge:
After
twelve
months
(R crore)
–
After
twelve
months
(R crore)
–
–
8.85
10.01
–
–
R crore
As at 31-3-2020
Interest rate
exposure
Currency
exposure
Commodity
price
exposure
As at 31-3-2019
Interest rate
exposure
Currency
exposure
Commodity
price
exposure
449.39
398.37
19.87
68.63
–
59.55
–
–
–
–
–
–
83.69
78.32
–
1.71
–
–
382.66
248.92
99.28
32.58
–
–
–
–
48.84
0.88
–
–
56.94
46.85
–
–
–
–
Particulars
(i) Forward contracts
Current:
Asset-Other financial assets
Liability-Other financial liabilities
Non-current:
Asset-Other financial assets
Liability-Other financial liabilities
(ii) Swap contracts
Current:
Asset-Other financial assets
Non-current:
Liability-Other financial liabilities
452
Notes forming part of the Financial Statements (contd.)
NOTE [53]
(i) Carrying amounts of hedge instruments for which hedge accounting is followed (contd.)
Net investment hedge:
Particulars
(i) Forward contracts
Current:
Asset-Other financial assets
Liability-Other financial liabilities
Non-current:
Asset-Other financial assets
As at 31-3-2020
As at 31-3-2019
Currency
exposure
Interest rate
exposure
Commodity
price
exposure
Currency
exposure
Interest rate
exposure
Commodity
price
exposure
R crore
–
0.26
–
–
–
–
–
–
–
11.48
0.11
2.68
–
–
–
–
–
–
v crore
(j)
Breakup of Hedging reserve & Cost of hedging reserve balance:
As at 31-3-2020
As at 31-3-2019
Particulars
Balance towards continuing hedges
Balance for which hedge accounting discontinued
Cash flow
hedging
reserve
(76.81)
29.98
Cost of
hedging
reserve
(14.48)
Cash flow
hedging
reserve
89.10
–
(35.86)
(k) Reclassification of Hedging reserve & Cost of hedging reserve to Profit or Loss:
Cost of
hedging
reserve
5.05
(0.88)
v crore
Particulars
Future cash flows are no longer expected to occur:
Sales, administration and other expenses
Hedged expected future cash flows affecting Profit or Loss:
Progress billing
Revenue from operation
Manufacturing, construction and operating expenses
Finance costs
Sales, administration and other expenses
Discontinued operations
Hedging reserve/Cost of
hedging reserve
2019-20
2018-19
32.32
(13.47)
(75.17)
25.99
(46.53)
(40.72)
(2.34)
19.75
(150.06)
(259.02)
313.14
243.08
3.38
1.10
453
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [53] (contd.)
(l) Movement of Hedging reserve & Cost of hedging reserve:
Hedging reserve
Opening balance
Impact of Business combination
Impact due to change in tax rate
Changes in the spot element of the forward contracts
which is designated as hedging instrument for time
period related hedges
Changes in fair value of forward contracts designated as
hedging instruments
Changes in fair value of swaps
Amount reclassified to Profit or Loss
v crore
2019-20
2018-19
Gross
83.08
Tax
(29.84)
Net of Tax
53.24
–
–
–
8.35
–
8.35
Gross
175.13
(3.34)
–
Tax Net of Tax
114.50
(60.63)
–
–
(3.34)
–
258.34
(68.51)
189.83
256.53
(87.91)
168.62
(232.00)
61.57
(170.43)
(183.19)
60.60
(122.59)
53.23
(14.13)
39.10
59.67
(20.45)
39.22
(302.23)
80.21
(222.02)
(262.00)
92.35
(169.65)
Amount included in non-financial asset/liability
Amount included in Progress Billing in balance sheet
Closing balance
(0.17)
75.17
0.05
(19.95)
(0.12)
55.22
(64.58)
17.75
(46.83)
(0.44)
40.72
83.08
0.15
(13.95)
(29.84)
(0.29)
26.77
53.24
v crore
Cost of hedging reserve
Opening balance
Impact due to change in tax rate
Changes in the forward element of the forward contracts
where changes in spot element of forward contract is
designated as hedging instrument for time period related
hedges
2019-20
2018-19
Gross
6.41
Tax Net of Tax
4.17
(2.24)
Gross
(18.97)
Tax Net of Tax
(12.34)
6.63
–
0.63
0.63
–
–
–
(150.29)
37.82
(112.47)
(247.65)
86.54 (161.11)
Amount Included in carrying amount of hedge item
0.55
(0.14)
0.41
0.12
(0.04)
0.08
Amount reclassified to Profit or Loss
123.99
(31.21)
92.78
272.91
(95.37)
177.54
Closing balance
NOTE [54]
Disclosure pursuant to Ind AS 116 “Leases”
(a) Transition to Ind AS 116:
(19.34)
4.86
(14.48)
6.41
(2.24)
4.17
The Company has adopted Ind AS 116 “Leases” (“Standard”) effective April 1, 2019 (Initial application date). Ind AS 116
supersedes Ind AS 17 “Leases”. The Standard sets out the principles for recognition, measurement, presentation and disclosure
of leases. The Standard has brought major change with respect to lease accounting to be done by the lessee. It requires lessee to
account for right-of-use asset and lease liability for all the leases without lease classifications into operating and finance lease.
The Company has used modified retrospective method of transition. Accordingly, the Company has recognised a debit of R 3.97
crore (the cumulative effect of initially applying the Standard as an adjustment) to the opening balance of retained earnings at the
date of initial application. Accordingly, the figures of the previous year have not been restated.
The Company has availed of following practical expedients as provided by the Standard:
Leases for which the lease term ends within 12 months of the date of initial application are accounted in the same way as a
short-term lease.
The Company has not reassessed whether a contract is or contains a lease at the date of initial application and instead
applied the Standard to those contracts that were previously identified as leases under Ind AS 17.
The Company has excluded initial direct costs from the measurement of the right-of-use asset at the date of initial
application.
•
•
•
454
Notes forming part of the Financial Statements (contd.)
NOTE [54] (contd.)
For leases previously classified as operating leases under Ind AS 17 and which are not low value leases or short-term leases, the
Company has recognised:
•
•
a lease liability at present value of the remaining lease payments, discounted using Company’s incremental borrowing rate of
7.93% at transition date.
a right-of-use asset at its carrying amount as if the Standard has been applied since the lease commencement date but
discounted using Company’s incremental borrowing rate at the date of initial application.
For leases previously classified as finance leases under Ind AS 17, the carrying amount of lease asset and lease liability as at March
31, 2019 have been considered as right-of-use asset and lease liability respectively as at April 1, 2019 under Ind AS 116.
Reconciliation between operating lease commitments disclosed as per Ind AS 17 as at March 31, 2019 and lease liabilities
recognised in the balance sheet at the date of initial application i.e. April 1, 2019 is as follows:
Operating lease commitments under Ind AS 17 as at April 1, 2019
Less: Commitments pertaining to short-term leases
Less: Commitments pertaining to low value leases
Less: Impact of discounting of lease payments
Add: Extension and termination options reasonably certain to be exercised
Add: Commitments relating to leases previously classified as finance leases
Lease liabilities recognised under Ind AS 116 as at April 1, 2019
(b) Where the Company is a lessor:
v crore
34.02
5.22
0.68
8.75
106.26
0.07
125.70
Operating leases: The Company has given buildings and plant & equipment under operating lease. The lease income received
during the year is R 189.00 crore. Leases are renewed only on mutual consent and at a prevalent market price and sub-lease is
generally restricted.
Annual undiscounted lease payments receivable is as under:
Particulars
Amount
Upto 1 year
6.75
1 – 2 years
0.26
2-3 years
0.09
3-4 years
0.09
4-5years
0.09
Beyond 5 years
-
v crore
Total
7.28
(c) Where the Company is a lessee:
The Company has taken various assets on lease such as, plant & equipment, buildings, office premises, vehicles. Generally, leases
are renewed only on mutual consent and at a prevalent market price and sub-lease is restricted.
Details with respect to right-of-use assets:
Class of asset
Depreciation for the year
Land
Buildings
Plant & equipment
Vehicles
Total
3.79
33.74
37.37
0.11
74.91
v crore
Additions to right-of-use
asset during the year
–
27.54
78.39
0.15
106.08
Carrying amount of the asset
as at March 31, 2020
267.74
57.51
87.33
0.24
412.82
i.
ii.
Interest expense on lease liabilities amounts to R 12.65 crore.
The expense relating to payments not included in the measurement of the lease liability and recognised as expense in the
Statement of Profit and Loss during the year are as follows:
•
•
Low value leases - R 2.16 crore.
Short-term leases - R 1987.91 crore.
iii.
Total cash outflow for leases amounts to R 1983.09 crore during the year including cash outflow of short-term and low value
leases.
455
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [55]
The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as
at March 31, 2020. The disclosure pursuant to the said Act is as under:
Particulars
Principal amount due to suppliers under MSMED Act, 2006
Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid
Payment made to suppliers (other than interest) beyond the appointed day during the year
Interest paid to suppliers under MSMED Act (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
NOTE [56]
2019-2020
98.91
–
77.12
0.43
0.49
12.27
8.19
v crore
2018-19
133.56
0.11
124.38
0.30
0.55
10.97
8.14
There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2020.
NOTE [57]
Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015:
Name of the company
Balance as at
Maximum outstanding during
As at
31-3-2020
As at
31-3-2019
2019-20
2018-19
v crore
Loans and advances in the nature of loans given to subsidiaries:
L&T Seawoods Private Limited
–
–
–
147.29
L&T Special Steels & Heavy Forgings Private Limited
1605.35[1]
1507.65[1]
1605.35
1507.65
Sr.
No.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
L&T Hydrocarbon Engineering Limited
L&T Construction Equipment Limited
Nabha Power Limited
L&T Finance Limited
(vii)
L&T Metro Rail (Hyderabad) Limited
(viii)
L&T Finance Holdings Limited
(ix)
(x)
(xi)
Hi-Tech Rock Products & Aggregates Limited
L&T Infrastructure Development Projects Limited
L&T Infrastructure Finance Co. Ltd.
–
176.67
377.59
–
54.06
70.04
379.80
54.05
176.67
594.39
56.64
92.08
1009.87
–
–
1506.84
1372.83
109.00
1372.83
109.00
–
324.17
–
–
–
301.85
18.20
324.17
–
–
1013.98
–
1016.16
301.85
18.20
–
Total
3856.61
2440.60
[1] excluding impairment of R 263 crore.
Notes:
• Above figures include interest accrued.
• 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.
• Subsidiary classification is in accordance with the Companies Act, 2013.
456
Notes forming part of the Financial Statements (contd.)
NOTE [58]
Disclosure pursuant to section 186 of The Companies Act 2013:
Sr.
No.
(A)
Nature of the transaction (loans given/investments
made/guarantees given/security provided)
Loan and Advances
Purpose for which the loan/guarantee/security is
proposed to be utilised by the recipient
2019-20
v crore
2018-19
Project funding
176.67
70.04
Subsidiary Companies:
(a) L&T Construction Equipment Limited
(b)
L&T Special Steels & Heavy Forgings Private
Limited
L&T Hydrocarbon Engineering Limited
(c)
(d) Nabha Power Limited
(e) L&T Metro Rail (Hyderabad) Limited
(f)
(g)
Working Capital and Project funding
Working capital
Part financing of original project cost
Temporary project funding and Working capital
Hi-Tech Rock Products & Aggregates Limited General corporate purposes & investments
L&T Infrastructure Development Projects
Limited
General corporate purpose
Total
Guarantees
(B)
Subsidiary Companies:
(a) L&T Aviation Services Private Limited
(b)
L&T-MHPS Turbine Generators Private
Limited
(c) Nabha Power Limited
(d) L&T Global holdings Limited
(e) L&T Hydrocarbon Engineering Ltd
(f) L&T Metro Rail (Hyderabad) Ltd
(g) Larsen & Toubro ATCO Saudia LLC
(h) Larsen & Toubro Arabia LLC
L&T Technology Services Limited
(i)
(j)
L&T Technology Services LLC
(k) Larsen & Toubro (Saudi Arabia) LLC
(l)
(m) L&T - MHPS Boilers Private Limited
(n) Nabha Power Limited
(o)
L&T Special Steel & Heavy Forgings
Pvt Ltd
L&T Hydrocarbon Engineering Limited
Corporate Guarantee given for subsidiary’s Debt
Corporate Guarantee given for subsidiary’s project
performance
(p) L&T Metro Rail (Hyderabad) Ltd
Guarantee issued by bank out of the Company’s
sanctioned limits on behalf of LTMRHL towards DSRA
(Debt Service Reserve Account) to SBI Cap Trustee
(C)
Total
Investments in fully paid equity instruments and
Current Investments
[1] excluding impairment of R 263 crore.
1605.35 [1]
–
377.59
1372.83
324.17
–
3856.61
6.53
394.94
3700.00
691.30
809.62
250.00
2469.61
4285.17
564.31
151.33
1304.69
18783.70
29.38
216.00
90.42
1507.65 [1]
54.06
379.80
109.00
301.85
18.20
2440.60
11.94
427.31
4025.00
735.56
739.96
250.00
2260.03
8442.15
770.67
138.31
1610.23
17736.16
28.93
216.00
90.42
278.00
–
34025.00
37482.67
[Note 5 and Note 10]
457
NOTES FORMING PART OF THE FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Financial Statements (contd.)
NOTE [59]
Exceptional item for the year ended March 31, 2020 includes the following:
(i) Gain of R 626.99 crore on sale of the Company’s stake in subsidiary company viz. L&T Technology Services Limited
Exceptional items for the year ended March 31, 2019 include the following:
(i) Gain of R 3276.70 crore on sale of the Company’s stake in subsidiary companies viz. Larsen & Toubro Infotech Limited R 2142.90
crore and L&T Technology Services Limited R 1133.80 crore;
(ii) Write back of trade receivable and retention money of certain customer dues now considered recoverable R 294.75 crore
(iii)
impairment of investment in group companies viz L&T Infrastructure Development project Limited R 773.00 crore and L&T Special
Steels and Heavy Forging Private Limited R 1156.10 crore
NOTE [60]
Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year is R 144.80
crore (previous year: R 121.47 crore).
The amount recognised as expense in the Statement of Profit and Loss on CSR related activities is R 145.29 crore (previous year:
R 121.68 crore), which comprises:
v crore
Sr.
No.
(a)
Particulars
Disclosed
under
2019-20
2018-19
Paid
Provided
Total
Paid Provided
Total
Construction/acquisition of assets shown under
sales, administration, and other expenses
Note 35
6.69
0.74
7.43
3.80
0.18
3.98
(b) Other revenue expenses:
Shown under miscellaneous expenses in sales,
administration, and other expenses
Shown under employee benefits expense
Total
NOTE [61]
Auditors’ remuneration (excluding service tax):
Note 35
Note 34
109.52
11.98
121.50
16.36
–
16.36
91.02
16.99
132.57
12.72
145.29
111.81
9.66
0.03
9.87
100.68
17.02
121.68
Sr.
No.
a.
b.
c.
d.
e.
Particulars
Statutory audit fees
Limited review of standalone and consolidated financial statements on a quarterly basis
Paid as Auditor
(i)
(ii)
For Taxation matters
For Company law matters
For Other services including certification work
For reimbursement of expenses
2019-20
v crore
2018-19
2.05
1.65
0.60
0.35
1.39
0.10
1.90
1.50
0.55
0.30
1.62
0.13
NOTE [62]
The Company purchased Electoral Bonds for R 50 crore and issued the same to political parties as Company’s political contribution.
(previous year: R 35 crore).
NOTE [63]
Figures for the previous year have been regrouped/reclassified to conform to the figures of the current year.
458
DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Indiabulls Finance Centre, Tower 3
27th – 32nd Floor, Senapati Bapat Marg
Elphinstone Road (West)
Mumbai 400 013.
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF
LARSEN & TOUBRO LIMITED
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of Larsen & Toubro Limited (the “Parent”) and its subsidiaries,
(the Parent and its subsidiaries together referred to as the “Group”) which includes 35 joint operations of the Group accounted on
proportionate basis and the Group’s share of profit in its associates and joint ventures, which comprise the Consolidated Balance Sheet
as at 31st March 2020, and the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated
Statement of Cash Flows and the Consolidated Statement of Changes in Equity for the year then ended, and a summary of significant
accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration
of reports of the other auditors on separate financial information of the joint operations, subsidiaries, associates and joint ventures
referred to in the Other Matters section below, the aforesaid consolidated financial statements give the information required by the
Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting
Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended
(“Ind AS”), and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st
March 2020, and their consolidated profit, their consolidated total comprehensive income, their consolidated cash flows and their
consolidated changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing specified under section
143 (10) of the Act (“SA”s). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group, its associates and joint ventures
in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical
requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made
thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics.
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 the Other Matters section below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated
financial statements.
Emphasis of Matter
We draw attention to Note [1](III) to the Consolidated Financial Statements in which the Group describes the uncertainties arising from
the COVID-19 pandemic.
Our report is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matters described below to be the key audit matters to be communicated in our report.
459
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Revenue recognition – accounting for construction contracts
Key audit matter
description
As described in Note No. [1](II)(i) of the Consolidated Financial Statements, the Group recognises revenue
from contracts with customers when it satisfies its performance obligations.
Principal Audit
Procedures
Accounting for construction contracts is considered as a Key Audit Matter as there are significant accounting
judgements in estimating revenue to be recognised on contracts with customers, including estimation of
costs to complete and determining the timing of revenue recognition.
The Group recognises revenue and profit/loss based on stage of completion based on the proportion
of contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at
completion. The recognition of revenue is thus dependent on estimates in relation to total estimated costs of
each contract.
Cost contingencies are included in these estimates to take in to account specific uncertain risks, or disputed
claims against the Group, arising within each contract. These contingencies are reviewed by the Management
on a regular basis throughout the contract life and adjusted where appropriate.
The revenue on contracts may also include variable consideration (variations and claims). Variable
consideration is recognised when the probability of reversal of such revenue is low.
Further, Refer to Note No. 47 for the disclosures made in the Consolidated Financial Statements as per
Ind AS 115 ‘Revenue from Contracts with Customers’.
The procedures performed included the following:
•
•
•
•
•
•
•
•
obtained an understanding of the process followed by the Group in determination of the estimates and
contract revenue;
performed walkthrough procedures over the process of identification of performance obligation;
tested the design and implementation of internal control over the quantification of the estimates used
as well as the operating effectiveness of such control;
tested segregation of duties while recording the contracts in the Group’s information system and
recognising revenue from such contracts;
tested the General IT Controls over the relevant information technology systems’ access and change
management controls relating to contracts and related information used in recording and disclosing
revenue in accordance with Ind AS 115 – Revenue from Contracts with Customers;
tested sample of contracts for:
-
-
-
-
appropriate identification of performance obligations;
change orders and the impact on the estimated costs to complete;
evaluation of reasonability of estimates of costs to complete; and
tested the appropriateness of the timing of recognizing the revenue from the contracts;
tested the appropriateness of the variable considerations recognised based on the low probability of
reversal of such revenue; and
tested appropriateness of the disclosures in the financial statements in respect of such construction
contracts to ensure compliance with Ind AS 115.
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
Key audit matter
description
The Group, in its contract with customers, promises to transfer distinct services to its customers, which may
be rendered in the form of engineering, procurement, and construction (EPC) services through design-build
contracts, and other forms of construction contracts. The recognition of revenue is based on contractual
terms, which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting
date, revenue is accrued for costs incurred against work performed that may not have been invoiced.
Identifying whether the Group’s performance has resulted in a service that would be billable and collectable
where the works carried out have not been acknowledged by customers as of the reporting date, or in the
case of certain defence contracts, where the evidence of work carried out and cost incurred are covered by
confidentiality arrangements, involves a significant amount of judgment.
Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against
invoices raised which have remained unsettled for a significantly long period after the end of the contractual
credit period also involves a significant amount of judgment. Refer to Note No. [1](II)(i) and [1](II)(r) of the
Consolidated Financial Statements.
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Principal Audit
Procedures
The procedures performed included the following:
•
•
•
•
•
•
•
•
•
obtained an understanding of the Group’s processes in collating the evidence supporting execution of
work for each disaggregated type of revenue;
obtained an understanding of the Group’s processes in assessing the recoverability of amounts overdue
and process over estimating the expected credit loss allowance;
tested the design and operating effectiveness of the key controls over the completeness and accuracy of
the key inputs and assumptions into the provisioning model;
evaluated controls over authorisation and calculation of provisioning model;
for defence contracts which are covered under statutory confidentiality arrangements, for sample of
contracts, the auditors have compared the revenue recognised with amounts collected from customers
to ensure that the gap between revenue recognised and collections is below the materiality threshold;
evaluated the delivery and collection history of customers against whose contracts un-invoiced revenue
is recognised;
verified for the sample selected, receipts post balance sheet date upto the approval of the financial
statements by the Board of Directors of the Parent Company;
performed an overall assessment of the expected credit loss provision to determine if they were
reasonable considering the Group’s portfolio, risk profile, credit risk management practices and the
macroeconomic environment; and
tested the appropriateness of the disclosures in the financial statements to ensure compliance with Ind
AS 115.
Appropriateness of revenues and onerous obligations in respect of fixed price contracts involves critical estimates for
services relating to Information Technology & Technology Services Segment
Key audit matter
description
Estimated effort is a critical estimate to determine revenues and provision for onerous obligations on fixed
price contracts. This estimate has a high inherent uncertainty as it requires consideration of progress of the
contract, efforts/cost incurred till date, efforts/cost required to complete the remaining contract performance
obligations.
Refer to Note No. [1](II)(i) of the Consolidated Financial Statements.
Principal Audit
Procedures
The procedures performed by component auditors (being other firms of chartered accountants) included the
following:
•
•
•
•
•
evaluated the design and implementation of internal controls over recording of actual cost/efforts till
date and the process of estimation of cost/efforts required to complete the performance obligations;
tested the operating effectiveness of the said internal controls for a selected sample of contracts.
selected a sample of new and existing contracts and performed following procedures;
o
o
o
read, analysed and identified the distinct performance obligations in these contracts.
compared such performance obligations with those identified and recorded by the Group.
verified contract terms to determine the transaction price including any variable consideration
and verified allocation of the transaction price to each performance obligation after adjusting the
estimated variable consideration.
in respect of a sample of fixed price contracts, progress towards satisfaction of performance obligation
used to compute recorded revenue was verified with the efforts/cost recorded and estimated efforts/cost
from the corresponding information systems;
verified sample of contracts with unbilled revenues to identify possible delays in achieving milestones,
which require change in estimated efforts to complete the remaining performance obligations.
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AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Provision for expected credit losses for financial services segment
Key audit matter
description
Significant judgement is used in classifying loan assets measured at amortised cost and applying appropriate
measurement principles. The allowance for expected credit losses (“ECL”) on such loan assets, measured at
amortised cost, is a critical estimate involving greater level of management judgement.
As part of our risk assessment, we determined that the allowance for ECL on loan assets (including
undisbursed commitments) has a high degree of estimation uncertainty, with a potential range of reasonable
outcomes for the financial statements.
The elements in estimating ECL which involve increased level of audit focus are as follows:
•
•
•
•
•
Qualitative and quantitative factors used in staging the loan assets measured at amortised cost;
Basis used for estimating Probabilities of Default (“PD”);
Basis used for estimating Loss Given Default (“LGD”);
Judgements used in projecting economic scenarios and probability weights applied to reflect future
economic conditions;
Adjustments to model driven ECL results to address emerging trends.
Refer Note No. [1](II)(r)(i)(D) of the Consolidated Financial Statements
We have examined the policies approved by the Board of Directors of the Company that articulate the
objectives of managing each portfolio and their business models (including policies for sale out of amortised
cost business model). We have also verified the methodology adopted for computation of ECL (“ECL Model”)
that addresses policies approved by the Board of Directors, procedures and controls for assessing and
measuring credit risk on all lending exposures measured at amortised cost.
Additionally, we have confirmed that adjustments to the output of the ECL Model is consistent with the
documented rationale and basis for such adjustments and that the amount of adjustment has been approved
by the Audit Committee of the Board of Directors.
Our audit procedures related to the allowance for ECL included the following, among others:
•
Tested the design and effectiveness of internal controls over the:
–
–
–
completeness and accuracy of the Exposure at Default (“EAD”) and the classification thereof into
stages consistent with the definitions applied in accordance with the policy approved by the Board
of Directors including the appropriateness of the qualitative factors to be applied;
completeness and accuracy of information used in the estimation of the PD for the different stages
depending on the nature of the portfolio; and
computation of the ECL including methodology used to determine macro economic overlays and
adjustments to the output of the ECL Model.
•
Also, for a sample of ECL on loan assets:
– we tested the input data such as ratings and period of default and other related information used
in estimating the PD;
– we evaluated reasonableness of LGD estimates by comparing actual recoveries post the loan asset
becoming credit impaired with estimates of LGD;
– we evaluated the incorporation of the applicable assumptions into the ECL Model and tested the
mathematical accuracy and computation of the allowances by using the same input data used by
the Company.
• We also tested the adequacy of the adjustment after stressing the inputs used in determining the output
as per the ECL Model and ensured that the adjustment was in conformity with the amount approved by
the Audit Committee.
• We also assessed the disclosures made in relation to the ECL allowance to confirm compliance with the
provisions of Ind AS 107.
Principal Audit
Procedures
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Impairment of Toll Collection Rights of certain operating projects who have incurred continuous losses.
Key audit matter
description
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") and Design-
Build-Operate-Transfer (“DBOT”) projects. Toll collection rights are capitalised as intangible assets upon
completion of the project at the cumulative construction costs plus the present value of obligation towards
negative grants and additional concession fee payable to National Highways Authority of India ("NHAI")/
State Authorities, if any.
The Group has carried out an evaluation for impairment of such toll collection rights where indicators of
impairment were identified. Due to the multitude of factors and assumptions involved in determining the
forecasted revenues/cash flows and discount rate in the projection period, significant judgments are required
to estimate the recoverable values.
Management has estimated the future cash flows arising from achieving revenues and costs in line with the
increase in traffic as well as refinancing/restructuring. As such estimations involve complex and subjective
judgements by the Management, there is a risk that there may be an impairment that has not been recorded.
Refer Note No. [1](II)(o) of the Consolidated Financial Statements.
Principal Audit
Procedures
The component auditors (being other firms of chartered accountants) have performed the following audit
procedures:
•
•
•
•
•
conducted discussions with Company personnel to identify factors, if any, that should be taken into
account in the impairment analysis;
evaluated the design and implementation of the relevant controls and the operating effectiveness of
such internal controls in estimating the future projections including assumptions used in determining
the value in use;
compared the actual revenues and cash flows generated by the entities during the year as compared
to the projections and estimates considered in the previous year and evaluated the basis of future
projections with regard to the revenue and cash flows;
evaluated the appropriateness of key assumptions in the valuations including discount rate, growth
rate, and consulted internal specialists for such evaluation. The challenge was based on the auditors’
assessment of the historical accuracy of the Group’s estimates in the prior periods and an assessment
of the consistency of assumptions across all the subsidiaries and comparison of the assumptions with
public data wherever available;
the component auditors have also performed a sensitivity analysis to assess the impact of possible
different assumptions related to revenue and cost estimates including:
i.
ii.
Increase/decrease in revenue growth rate; and
Increase/decrease to cost forecasts.
Physical verification of inventory
Key audit matter
description
The Company’s management conducts physical verification of inventories during the year at reasonable
intervals, however, on account of the COVID-19 related lockdown restrictions, management was able
to perform year end physical verification of inventories, only at certain locations. Management has
carried out other procedures to validate the existence of its inventory as at the year end, such as carrying
out consumption analysis, and performing roll-back procedures from the subsequent year end physical
verification date to determine the quantities of the inventory at the balance sheet date.
Refer Note No. [1](II)(s) of the Consolidated Financial Statements.
The procedures performed included the following:
•
Understood the process and tested the Management’s internal controls to establish the existence of
inventory in relation to the process of periodic physical verification carried out by the management, the
scope and coverage of the periodic verification programme, the results of such verification including
analysis of discrepancies, if any;
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AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
•
•
•
At selected locations subsequent to year-end, where the management appointed third party
independent chartered accountants to perform physical verification, sent instructions to the third party
chartered accountants to carry out the physical verification and provided samples to be verified by
them. We have received the report of the physical verification carried out by the third party independent
chartered accountants. Obtained the roll back procedures performed by the management from the
subsequent year-end physical verification date to arrive at the quantities as at the balance sheet date.
Traced the samples physically verified by the third party independent chartered accountants roll back
workings provided by the management.
Inspected, for samples selected, supporting documentation relating to purchases and consumption, and
such other third party evidences where applicable.
Tested the analytical reviews performed by the Company such as consumption analysis.
Information Other than the Financial Statements and Auditor’s Report Thereon
i.
The Parent’s Company’s Board of Directors is responsible for the other information. The other information comprises the
information included in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business
Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the consolidated financial
statements, standalone financial statements and our auditor’s report thereon.
ii. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, compare with
the financial statements of the joint operations, subsidiaries, joint ventures and associates audited by the other auditors, to the extent it
relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information
is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or
otherwise appears to be materially misstated. Other information so far as it relates to the joint operations, subsidiaries, joint ventures
and associates, is traced from their financial statements audited by the other auditors.
If based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Management’s Responsibility for the Consolidated Financial Statements
The Parent’s Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the
preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated
financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group
including its associates and joint ventures in accordance with the Ind AS and other accounting principles generally accepted in India.
The respective Board of Directors of the companies included in the Group and of its associates and joint ventures are responsible for
maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group
and its associates and its joint ventures 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, which have been used for the purpose of preparation of the consolidated
financial statements by the Directors of the Parent Company, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and
of its associates and joint ventures are responsible for assessing the ability of the respective entities to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board
of Directors either intends to liquidate their respective entities or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group and of its associates and joint ventures are also responsible
for overseeing the financial reporting process of the Group and of its associates and joint ventures.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material
464
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Parent
Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the
Group and its associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group and its associates and joint ventures to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group and its associates and joint ventures to express an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the audit of the financial statements of such entities or business activities included in
the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated
financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction,
supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial statements may be influenced.
We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of
our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial statements.
We communicate with those charged with governance of the Parent Company and such other entities included in the consolidated
financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
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AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Other Matters
• We did not audit the financial information of 28 joint operations included in the standalone financial statements of the companies
included in the Group whose financial information reflect total assets of R 3,728.86 crore as at 31st March, 2020, total revenue
of R 4,112.64 crore, total net loss after tax of R 119.39 crore, total comprehensive loss of R 119.39 crore and net cash outflows
amounting to R 115.90 crore for the year ended 31st March, 2020, as considered in the respective standalone financial statements
of the companies included in the Group. The financial information of these joint operations have been audited by the other
auditors whose reports have been furnished to us by the Management, and our opinion in so far as it relates to the amounts and
disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so
far as it relates to the aforesaid joint operations, is based solely on the report of such other auditors.
• We did not audit the financial information of 68 subsidiaries, whose financial information reflect total assets of R 1,00,047.10
crore as at 31st March, 2020, total revenues of R 36,971.08 crore, total net profit after tax of R 3,965.32 crore, total
comprehensive income of R 3,236.04 crore and net cash inflows amounting to R 2,151.28 crore for the year ended 31st March,
2020, as considered in the consolidated financial statements. The consolidated financial statements also include the Group’s share
of loss after tax of R 29.61 crore for the year ended 31st March, 2020 and total comprehensive loss of R 2.81 crore for the year
ended 31st March, 2020, as considered in the consolidated financial statements, in respect of 3 associates and 8 joint ventures,
whose financial information have not been audited by us. These financial information 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, joint ventures and associates, and our report in
terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates is
based solely on the reports of the other auditors.
• We did not audit the financial information of 6 joint operations included in the standalone financial statements of the companies
included in the Group whose financial information reflect total assets of R 239.74 crore as at 31st March, 2020, total revenue
of R 257.69 crore, total net profit after tax of R 15.40 crore, total comprehensive income of R 15.40 crore and net cash inflows
amount to R 32.30 crore for the year ended 31st March, 2020, as considered in the respective standalone financial statements
of the companies included in the Group. These 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 joint operations, is based solely on such unaudited financial information. In our opinion and according
to the information and explanations given to us by the Management, these financial information are not material to the Group.
• We did not audit the financial information of 46 subsidiaries, whose financial information reflect total assets of R 1,019.63 crore
as at 31st March, 2020, total revenues of R 742.37 crore, total net loss after tax of R 6.01 crore, total comprehensive loss of
R 10.71 crore and net cash inflows amounting to R 36.85 crore for the year 31st March, 2020, as considered in the consolidated
financial statements. The consolidated financial statements also include the Group’s share of after tax of R 10.40 crore and total
comprehensive loss of R 10.36 crore for the year ended 31st March, 2020, as considered in the consolidated financial statements,
in respect of 3 associates and 6 joint ventures, financial information have not been audited by us. These 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, joint ventures and associates, is based solely
on such unaudited financial information. In our opinion and according to the information and explanations given to us by the
Management, these financial information are not material to the Group.
Our opinion on the consolidated financial statements above 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 information certified by the Management.
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the
separate financial information of the joint operations, subsidiaries, associates and joint ventures referred to in the Other Matters section
above 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)
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.
466
c)
The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the
Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity 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 Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors of the Parent Company as on 31st March, 2020 taken
on record by the Board of Directors of the Company and the reports of the statutory auditors of its joint operation companies,
subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group
companies, its associate companies and joint venture companies incorporated in India is disqualified as on 31st March, 2020 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 separate Report in “Annexure A” which is based on the auditors’ reports of the Parent company, subsidiary
companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion
on the adequacy and operating effectiveness of internal financial controls over financial reporting of those companies.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of
the Act, as amended,
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the
Parent Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to
us:
i.
ii.
The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the
Group, its associates and joint ventures;
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; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by
the Parent Company and its subsidiary companies, associate companies and joint venture companies incorporated in India.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Sanjiv V. Pilgaonkar
(Partner)
(Membership No. 039826)
UDIN: 20039826AAAADJ8143
Mumbai, June 5, 2020
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AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph “(f)” under ‘Report on Other Legal and Regulatory Requirements’ section 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, 2020,
we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as
“Parent”) and its subsidiary companies which includes one of the Group’s 35 joint operations which is a company incorporated in India,
its associate companies and joint ventures, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Parent, its subsidiary companies, its joint operation, its associate companies and joint ventures,
which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the
internal control over financial reporting criteria established by the respective Companies 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 (“ICAI”). 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 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary
companies, its joint operation, its associate companies and its joint ventures, which are companies incorporated in India, 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 ICAI and the Standards on Auditing (“SA”), 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 auditor’s 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 other auditors of the subsidiary companies,
joint operation, associate companies and joint ventures, which are companies incorporated in India, in terms of their reports referred
to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial
controls system over financial reporting of the Parent, its subsidiary companies, its joint operation, its associate companies and its joint
ventures, which are companies incorporated in India.
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
468
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 and based on the consideration of the
reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operation,
its associate companies and joint ventures, which are companies 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, 2020, based on the criteria for internal financial controls over financial reporting established by the
respective companies considering the essential components of internal control stated in the Guidance Note.
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 in so far as it relates to 31 subsidiary companies, 1 joint operation company, 3 associate companies and 7 joint
ventures, which are companies incorporated in India, is based solely on the corresponding reports of the 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 in so far as it relates to 12 subsidiary companies, 1 associate and 3 joint venture companies, which are
companies incorporated in India, whose financial information is unaudited and whose efficacy of internal financial controls over
financial reporting is based solely on the Management’s certification provided to us and our opinion on the adequacy and operating
effectiveness of the internal financial controls over financial reporting of the Group is not affected as the financial information of such
entities is not material to the Group.
Our opinion is not modified in respect of the above matters with respect to our reliance on the work done by and the reports of such
other auditors and the financial information certified by the Management.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)
Sanjiv V. Pilgaonkar
Partner
(Membership No. 039826)
UDIN: 20039826AAAADJ8143
Mumbai, June 5, 2020
469
CONSOLIDATED BALANCE SHEET ANNUAL REPORT 2019-20
Consolidated Balance Sheet as at March 31, 2020
ASSETS:
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment property
Goodwill
Other intangible assets
Intangible assets under development
Right-of-use assets
Financial assets
Investments in joint ventures and associates
Other investments
Loans towards financing activities
Other loans
Other financial assets
Deferred tax assets (net)
Other non-current assets
Current assets
Inventories
Financial assets
Investments
Trade receivables
Cash and cash equivalents
Other bank balances
Loans towards financing activities
Other loans
Other financial assets
Other current assets
Group(s) of assets classified as held for sale
TOTAL ASSETS
Note
As at 31-3-2020
v crore
v crore
As at 31-3-2019
v crore
v crore
2
2
3
4
5
5
61(c)(iii)
43(e)
6
7
8
9
51(d)
10
11
12
13
14
15
16
17
18
19
45(d)
2851.01
4496.72
58589.36
1522.33
638.15
12699.75
40731.52
11324.57
3793.21
41723.42
716.00
2927.87
10103.79
3224.91
3714.72
8011.40
19596.98
86.18
2226.49
10889.56
2483.56
4254.56
1826.91
4222.91
11435.93
–
2642.29
4318.64
57788.88
1481.08
1144.05
68097.57
3846.58
6541.62
67374.94
3418.93
5648.62
5746.65
6413.93
13946.17
36845.87
6509.49
5216.75
42530.82
626.69
2551.25
113916.34
58659.69
4367.21
308140.13
108227.04
52143.06
7.41
278347.36
470
Consolidated Balance Sheet as at March 31, 2020 (contd.)
EQUITY AND LIABILITIES:
Equity
Equity share capital
Other equity
Note
As at 31-3-2020
v crore
v crore
As at 31-3-2019
v crore
v crore
20
21
280.78
66442.44
280.55
62094.25
Equity attributable to owners of the Company
Non-controlling interests
66723.22
9520.83
62374.80
6826.11
Liabilities
Non-current liabilities
Financial liabilities
Borrowings
Lease liability
Other financial liabilities
Provisions
Deferred tax liabilities (net)
Other non-current liabilities
Current liabilities
Financial liabilities
Borrowings
Current maturities of long term borrowings
Lease liability
Trade payables:
Due to micro enterprises and small enterprises
Due to others
Other financial liabilities
Other current liabilities
Provisions
Current tax liabilities (net)
22
23
24
51(d)
25
26
27
28
29
30
31
Liabilities associated with group(s) of assets classified as held for sale
45(d)
TOTAL EQUITY AND LIABILITIES
CONTINGENT LIABILITIES
COMMITMENTS (capital and others)
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
32
33
1 to 64
82331.33
1741.60
901.14
74120.79
–
354.83
84974.07
708.67
1453.04
31.09
74475.62
556.84
311.13
0.55
35021.02
23654.77
424.95
479.51
43164.42
4923.23
29223.84
22210.54
–
261.12
42733.69
4622.78
107667.90
30816.67
2750.85
1509.62
1984.17
308140.13
99051.97
31166.55
2443.43
1137.16
3.20
278347.36
In terms of our report attached
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Firm’s Registration No.117366W/W-100018
by the hand of
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
June 5, 2020
471
CONSOLIDATED STATEMENT OF PROFIT AND LOSS ANNUAL REPORT 2019-20
Consolidated Statement of Profit and Loss for the year ended March 31, 2020
2019-20
2018-19
Note
v crore
v crore
v crore
v crore
34
35
36
37
38
39
48
51(a)
43(f)
45(e)
51(a)
Continuing operations
INCOME:
Revenue from operations
Other income
Total income
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,
stock-in-trade and property development
Other manufacturing, construction and operating expenses
Finance cost of financial services business and finance lease activity
Employee benefits expense
Sales, administration and other expenses
Finance costs
Depreciation, amortisation, impairment and obsolescence
Total expenses
Profit before exceptional items and tax
Exceptional items (net)
Profit before tax
Tax expense:
Current tax
Deferred tax (net)
Net profit after tax from continuing operations
Share in profit/(loss) after tax of joint ventures/associates (net)
Profit for the year from continuing operations
Discontinued operations
Profit from discontinued operations
Tax expense of discontinued operations
Net profit after tax from discontinued operations
Net profit after tax from continuing operations & discontinued operations
Other comprehensive income
A
Items that will not be reclassified to profit or loss:
Equity instruments through other comprehensive income
Income tax (expenses)/income on equity instruments through other
comprehensive income
Gain/(loss) on remeasurements of the net defined benefit plans
Income tax (expenses)/income on remeasurements of the net defined
benefit plans
B
Share in other comprehensive income of joint ventures/associates (net)
Items that will be reclassified to profit or loss:
Debt instruments through other comprehensive income
Income tax (expenses)/income on debt instruments through other
comprehensive income
Carried forward - Other comprehensive income
145452.36
2360.90
147813.26
135220.29
1836.53
137056.82
15548.66
30316.12
841.09
2184.46
26454.05
647.70
13328.71
8041.88
14771.56
31230.44
887.87
2812.31
26011.91
(731.11)
13264.43
7385.63
97362.67
23114.00
8646.71
2796.66
2462.27
134382.31
13430.95
–
13430.95
3564.58
(301.38)
4402.95
(335.86)
3263.20
10167.75
71.96
10239.71
883.25
228.68
654.57
10894.28
95633.04
17466.40
6791.21
1802.55
1923.03
123616.23
13440.59
294.75
13735.34
4067.09
9668.25
(21.00)
9647.25
845.57
276.24
569.33
10216.58
(386.05)
–
(205.94)
50.60
115.22
(19.46)
–
–
(386.05)
–
(30.47)
10.98
(63.01)
7.61
(19.49)
24.52
(55.40)
(50.37)
(155.34)
27.75
95.76
(417.88)
472
Consolidated Statement of Profit and Loss for the year ended March 31, 2020 (contd.)
2019-20
2018-19
Brought forward - Other comprehensive income
Foreign currency translation reserve
Income tax (expenses)/income on foreign currency translation reserve
Note
Effective portion of gains/(losses) on hedging instruments in a cash flow
hedge
Income tax (expenses)/income on effective portion of gains/(losses) on
hedging instruments in a cash flow hedge
Cost of hedging reserve
Income tax (expenses)/income on cost of hedging reserve
Share in other comprehensive income of joint ventures/associates (net)
Other comprehensive income for the year [net of tax]
Total comprehensive income for the year
Profit for the year attributable to:
- Owners of the Company
Non-controlling interests
-
Other comprehensive income for the year attributable to:
- Owners of the Company
Non-controlling interests
-
Total comprehensive income for the year attributable to:
- Owners of the Company
Non-controlling interests
-
Earnings per share (EPS) of R 2 each from continuing operations:
Basic earnings per equity share (R)
Diluted earnings per equity share (R)
Earnings per share (EPS) of R 2 each from discontinued operations:
Basic earnings per equity share (R)
Diluted earnings per equity share (R)
Earnings per share (EPS) of R 2 each from continuing operations &
discontinued operations:
Basic earnings per equity share (R)
Diluted earnings per equity share (R)
Face value per equity share (R)
55
55
55
55
55
55
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1 to 64
v crore
43.60
4.45
(1281.83)
334.42
(29.18)
8.14
v crore
(417.88)
48.05
(947.41)
(21.04)
23.62
(1314.66)
9579.62
9549.03
1345.25
10894.28
(1032.83)
(281.83)
(1314.66)
8516.20
1063.42
9579.62
63.38
63.29
4.66
4.66
68.04
67.95
2.00
v crore
(34.83)
(3.25)
(275.64)
106.69
26.65
(9.31)
v crore
(50.37)
(38.08)
(168.95)
17.34
10.18
(229.88)
9986.70
8905.13
1311.45
10216.58
(273.99)
44.11
(229.88)
8631.14
1355.56
9986.70
59.45
59.35
4.06
4.05
63.51
63.40
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
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
June 5, 2020
473
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ANNUAL REPORT 2019-20
Consolidated Statement of Changes in Equity for the year ended March 31, 2020
A. Equity share capital
Particulars
Issued, subscribed and fully paid up equity shares outstanding at the
beginning of the year
Add: Shares issued on exercise of employee stock options during the year
Add: Shares issued on conversion of foreign currency convertible bonds
during the year
Issued, subscribed and fully paid up equity shares outstanding at the end
of the year
2019-20
2018-19
Number of
shares
v crore
Number of
shares
1,40,27,29,385
7,83,249
280.55
0.16
1,40,13,69,456
13,59,929
v crore
280.27
0.28
3,79,388
0.07
–
–
1,40,38,92,022
280.78
1,40,27,29,385
280.55
B. Other equity
v crore
Reserves and surplus
Items of other comprehensive income
Particulars
Share
application
money
pending
allotment
Equity
component
of foreign
currency
convertible
bonds
Capital
reserve
Capital
redemption
reserve
Securities
premium
Employee
share
options
(net)
Statutory
reserves
Retained
earnings
Foreign
currency
translation
reserve
Hedging
reserve
Debt
instruments
through
other
compre-
hensive
income
Equity
instruments
through
other
compre-
hensive
income
Total other
equity
Non-
controlling
interests
Total
153.20
–
153.20
–
–
282.44
–
282.44
–
–
42.00
–
42.00
–
–
8363.02
–
8363.02
–
–
313.56
–
313.56
–
–
3352.91 41077.32
– (1237.65)
3352.91 39839.67
8905.13
(18.72)
–
–
572.67
–
572.67
–
(31.94)
437.77
–
437.77
–
(192.40)
24.78
–
24.78
–
(55.15)
– 54623.23
– (1237.65)
– 53385.58
8905.13
–
(273.99)
24.22
5201.43 59824.66
(1240.38)
(2.73)
5198.70 58584.28
1311.45 10216.58
(229.88)
44.11
–
8886.41
(31.94)
(192.40)
(55.15)
24.22
8631.14
1355.56
9986.70
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
108.97
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(12.19)
35.68
–
(486.58)
498.77
–
–
– (2243.18)
–
–
–
–
(427.02)
–
2634.66
–
(27.65)
–
–
–
–
–
–
–
–
–
(0.37)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
105.41
(0.37)
6.50
–
111.91
(0.37)
–
–
–
35.68
– (2243.18)
–
117.43
(199.53)
–
153.11
(2442.71)
–
–
–
(427.02)
(50.01)
(477.03)
2634.66 (2634.66)
–
(27.65)
3032.12
3004.47
153.20
282.44
42.00
8471.99
337.05
3851.68 48176.31
540.73
245.00
(30.37)
24.22 62094.25
6826.11 68920.36
Balance as at 31-3-2018
Change in accounting policy [Ind AS 115]
Restated balance as at 1-4-2018
Profit for the year (a)
Other comprehensive income (b)
Total comprehensive income for the
year (a+b)
Issue of equity shares
Transfer to non- financial assets/liabilities
Transfer from/(to) retained earnings during
the year
Employee share options (net)
Dividend paid for previous year
Additional tax on dividend paid for the
previous year
Net gain/loss on transactions with
non-controlling interests
Increase in non-controlling interest due to
dilution/divestment/acquisition
Balance as at 31-3-2019
3.56
–
3.56
–
–
–
(3.56)
–
–
–
–
–
–
–
–
474
Consolidated Statement of Changes in Equity for the year ended March 31, 2020 (contd.)
v crore
Reserves and surplus
Items of other comprehensive income
Particulars
Share
application
money
pending
allotment
Equity
component
of foreign
currency
convertible
bonds
Capital
reserve
Capital
redemption
reserve
Securities
premium
Employee
share
options
(net)
Statutory
reserves
Retained
earnings
Foreign
currency
translation
reserve
Hedging
reserve
Debt
instruments
through
other
compre-
hensive
income
Equity
instruments
through
other
compre-
hensive
income
Total other
equity
Non-
controlling
interests
Total
–
153.20
282.44
42.00
8471.99
337.05
3851.68 48176.31
540.73
245.00
(30.37)
24.22 62094.25
6826.11 68920.36
Balance as at 31-3-2019
Change in accounting policy [Ind AS 116]
[Note 61]
Restated balance as at 1-4-2019
Profit for the year (c)
Other comprehensive income (d)
Total comprehensive income for the
year (c+d)
Issue of equity shares
Transfer to non- financial assets/liabilities
Transfer from/(to) retained earnings during
the year
Employee share options (net)
Dividend paid (including interim dividend)
Additional tax on dividend paid
Non-controlling interest on acquisition of
a subsidiary
Net gain/loss on transactions with
non-controlling interests
Increase in non-controlling interest due to
dilution/divestment/acquisition
Balance as at 31-3-2020
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(153.20)
–
–
–
–
–
–
–
–
153.20
–
–
–
282.44
–
–
–
42.00
–
–
–
8471.99
–
–
–
337.05
–
–
–
(79.09)
3851.68 48097.22
9549.03
(150.88)
–
–
–
540.73
–
41.83
–
245.00
–
(682.12)
–
(30.37)
–
95.70
(79.09)
24.22 62015.16
9549.03
(1032.83)
–
(337.36)
(24.24)
(103.33)
6801.87 68817.03
1345.25 10894.28
(1314.66)
(281.83)
–
9398.15
41.83
(682.12)
95.70
(337.36)
8516.20
1063.42
9579.62
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
127.61
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(10.68)
75.12
–
–
(471.88)
305.87
–
–
– (3929.61)
(748.05)
–
–
–
–
–
–
–
360.90
–
24.91
–
–
–
–
–
–
–
–
–
–
0.20
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
127.61
0.20
–
–
127.61
0.20
–
329.89
–
75.12
– (3929.61)
(748.05)
–
–
7.32
(486.90)
(96.42)
–
82.44
(4416.51)
(844.47)
–
–
–
–
2023.88
2023.88
360.90
(360.90)
–
24.91
568.56
593.47
282.44
42.00
8599.60
401.49
4157.55 52731.64
582.56
(436.92)
65.33
16.75 66442.44
9520.83 75963.27
In terms of our report attached
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Firm’s Registration No.117366W/W-100018
by the hand of
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
June 5, 2020
475
CONSOLIDATED STATEMENT OF CASH FLOWS ANNUAL REPORT 2019-20
Consolidated Statement of Cash Flows for the year ended March 31, 2020
A. Cash flow from operating activities:
Profit before tax (excluding non-controlling interests and exceptional items) from -
- Continuing operations
- Discontinued operations
Profit before tax including discontinued operations (excluding non-controlling
interest and exceptional items)
Adjustments for:
Dividend received
Depreciation, amortisation, impairment and obsolescence
Exchange difference on items grouped under financing/investing activities
Effect of exchange rate changes on cash and cash equivalents
Expenditure on share buy back
Finance costs
Interest income
(Profit)/loss on sale of property, plant and equipment and investment property (net)
(Profit)/loss on sale/fair valuation of investments (net)
(Profit)/loss on sale of stake in a subsidiary of developmental projects segment
(Gain)/loss on derivatives at fair value through profit or loss
Employee stock option-discount forming part of employee benefits expense
Non-cash items related to discontinued operations
Business combination expenses
Impairment of debt instruments
Impairment loss recognised on non-current assets held for sale
(Gain)/loss on de-recognition of lease liability/right-of-use assets
Interest expenses/(income) related to discontinued operations
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 (including advance received)
Purchase of non-current investments
Sale of non-current investments
(Purchase)/sale of current investments (net)
Change in other bank balance and cash not available for immediate use
Deposits/loans given to associates, joint ventures and third parties
Deposits/loans repaid by associates, joint ventures and third parties
Interest received
Dividend received from joint ventures/associates
Dividend received on other investments
Settlement of derivative contracts related to current investments
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 (of subsidiaries) classified as held for sale (other than discontinued
operations)
Consideration paid on acquisition of additional stake in a joint venture
Net cash (used in)/from investing activities
2019-20
v crore
13430.95
883.25
14314.20
(101.60)
2462.27
5.69
(88.14)
–
2796.66
(829.07)
33.28
(733.84)
–
(13.19)
190.84
49.44
84.28
350.59
3.93
(1.85)
1.33
18524.82
(11278.83)
353.19
3134.23
10733.41
6.92
10740.33
(4046.45)
6693.88
(3436.82)
137.39
(1870.64)
2245.29
2065.74
1439.82
(115.21)
17.69
837.54
12.53
101.60
13.19
–
43.16
(9895.93)
210.72
(14.34)
(48.00)
(8256.27)
476
2018-19
v crore
13440.59
845.57
14286.16
(236.91)
1923.03
(97.48)
7.40
17.38
1802.55
(894.99)
(590.36)
(65.33)
(415.61)
21.81
151.00
166.92
–
–
–
–
(2.10)
16073.47
(9240.98)
330.58
6819.06
13982.13
(13855.16)
126.97
(4882.80)
(4755.83)
(4307.38)
807.97
(1862.44)
653.36
(3032.80)
(3988.12)
(88.67)
43.75
726.80
19.44
236.91
(21.81)
67.00
–
(309.86)
33.05
–
–
(11022.80)
Consolidated Statement of Cash Flows for the year ended March 31, 2020 (contd.)
C. Cash flow from financing activities:
Proceeds from issue of share capital (including share application money)
Proceeds from non-current borrowings [Note 50]
Repayment of non-current borrowings [Note 50]
Proceeds from other borrowings (net) [Note 50]
Payment (to)/from non-controlling interest (net)- including sale proceeds on divestment of part
stake in subsidiary companies
Settlement of derivative contracts related to borrowings
Dividends paid
Additional tax on dividend
Repayment of lease liability [Note 50]
Interest paid on lease liability
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 for discontinued operations (classified as held for sale)
Cash and cash equivalents at end of the year
2019-20
v crore
17.56
42587.43
(33685.03)
4915.20
(60.05)
308.29
(3929.61)
(621.72)
(258.03)
(162.79)
(2739.70)
6371.55
4809.16
6460.23
(151.44)
11117.95
2018-19
v crore
11.31
24181.62
(14081.42)
7765.14
2884.85
308.95
(2243.18)
(403.93)
–
–
(2983.17)
15440.17
(338.46)
6798.69
–
6460.23
Notes:
1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7
“Statement of Cash Flows” as specified in the Companies (Indian Accounting Standards) Rules, 2015.
2. Purchase & Sale of fixed assets represents additions & deletions to property, plant and equipment, investment property and
intangible assets adjusted for movement of (a) capital work-in-progress for property, plant and equipment and investment property
and (b) Intangible assets under development during the year.
3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following:
(a) Cash and cash equivalents disclosed under current assets [Note 14]
(b) Other bank balances disclosed under current assets [Note 15]
(c) Cash and bank balances disclosed under non-current assets [Note 9]
Total cash and cash equivalents as per Balance Sheet
Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents (reflected in Statement
of Profit and loss)
Add: (ii) Unrealised exchange (gain)/loss on cash and cash equivalents (reflected in Other
Comprehensive Income)
Less: (iii) Other bank balances disclosed under current assets [Note 15]
Less: (iv) Cash and bank balances disclosed under non-current assets [Note 9]
Total cash and cash equivalents as per Statement of Cash Flows
4. Previous year’s figures have been regrouped/reclassified wherever applicable.
2019-20
v crore
11324.57
3793.21
273.82
15391.60
(116.39)
(90.23)
3793.21
273.82
11117.95
2018-19
v crore
6509.49
5216.75
290.07
12016.31
(28.25)
(21.01)
5216.75
290.07
6460.23
In terms of our report attached
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
Firm’s Registration No.117366W/W-100018
by the hand of
SANJIV V. PILGAONKAR
Partner
Membership No. 39826
Mumbai
S.N.SUBRAHMANYAN
Chief Executive Officer & Managing Director
(DIN 02255382)
Chennai
R.SHANKAR RAMAN
Whole-time Director & Chief Financial Officer
(DIN00019798)
Mumbai
M.M.CHITALE
Independent Director
(DIN00101004)
Mumbai
SIVARAM NAIR A
Company Secretary & Compliance Officer
M. No. FCS3939
Mumbai
June 5, 2020
477
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements
NOTE [1](I)
Corporate Information
The Consolidated Financial Statements comprise financial statements of “Larsen & Toubro Limited” (“L&T”, the “Parent Company”) and
its subsidiaries (collectively referred to as “the Group”) for the year ended March 31, 2020.
The principal activities of the Group, its Joint Ventures and associates consist of providing Engineering and Construction solutions in
key sectors such as Infrastructure, Hydrocarbon, Power, Process Industries and Defence, Information Technology and Financial Services.
Further details of the business operations of the Group are mentioned in Note [46] Segment Information.
NOTE [1](II)
Significant Accounting Policies
(a) Statement of compliance
The Group’s financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the
Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments
thereof issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013.
In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied
except where compliance with other statutory promulgations require a different treatment. These financials statements have been
approved for issue by the Board of Directors at their meeting held on June 5, 2020.
(b) Basis of accounting
The Group maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities that
are measured at fair value in accordance with Ind AS.
Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety:
(i)
(ii)
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at
measurement date
Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either
directly or indirectly; and
(iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities
Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair
value hierarchy unless the circumstances change warranting such transfer.
(c) Presentation of financial statements
The Balance Sheet, Statement of Profit and Loss and Statement of Changes in Equity are prepared and presented in the format
prescribed in the Schedule III to the Companies Act, 2013 (“the Act”). The Statement of Cash Flows has been prepared and
presented as per the requirements of Ind AS 7 “Statement of Cash Flows”. 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 the financial statements along with the other notes required to be disclosed under the notified Accounting
Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended.
Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal
places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimal
places.
(d) Basis of consolidation
(i)
The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries. For
this purpose, an entity which is, directly or indirectly, controlled by the Parent Company is treated as subsidiary. The Parent
Company together with its subsidiaries constitute the Group. Control exists when the Parent Company, directly or indirectly,
has power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its
power to affect its investor’s returns.
478
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
(ii) Consolidation of a subsidiary begins when the Parent Company, directly or indirectly, obtains control over the subsidiary and
ceases when the Parent Company, directly or indirectly, loses control of the subsidiary. Income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated Statement of Profit and Loss from the date the
Parent Company, directly or indirectly, gains control until the date when the Parent Company, directly or indirectly, ceases to
control the subsidiary.
(iii) The consolidated financial statements of the Group combines financial statements of the Parent Company and its subsidiaries
line-by-line by adding together the like items of assets, liabilities, income and expenses. All intra-group assets, liabilities,
income, expenses and unrealised profits/losses on intra-group transactions are eliminated on consolidation. The accounting
policies of subsidiaries have been harmonised to ensure the consistency with the policies adopted by the Parent Company.
The consolidated financial statements have been presented to the extent possible, in the same manner as Parent Company’s
standalone financial statements.
Profit or loss and other comprehensive income are attributed to the owners of the Parent Company and to the non-
controlling interests and have been shown separately in the financial statements.
(iv) Non-controlling interests represent that part of the total comprehensive income and net assets of subsidiaries attributable to
interest which is not owned, directly or indirectly, by the Parent Company.
(v) The gains/losses in respect of part divestment/dilution of stake in subsidiary companies not resulting in ceding of control, are
recognised directly in other equity attributable to the owners of the Parent Company.
(vi) The gains/losses in respect of divestment of stake resulting in ceding of control in subsidiary companies are recognised in
the Statement of Profit and Loss. The investment representing the interest retained in a former subsidiary, if any, is initially
recognised at its fair value with the corresponding effect recognised in the Statement of Profit and Loss as on the date the
control is ceded. Such retained interest is subsequently accounted as an associate or a joint venture or a financial asset.
(e)
Investments in joint ventures and associates
When the Group has with other parties joint control of the arrangement and rights to the net assets of the joint arrangement,
it recognises its interest as joint ventures. Joint control exists when the decisions about the relevant activities require unanimous
consent of the parties sharing the control. When the Group has significant influence over the other entity, it recognises such
interests as associates. Significant influence is the power to participate in the financial and operating policy decisions of the entity
but is not control or joint control over the entity.
The results, assets and liabilities of joint ventures and associates are incorporated in the consolidated financial statements using
equity method of accounting after making necessary adjustments to achieve uniformity in application of accounting policies,
wherever applicable.
An investment in joint venture or associate is initially recognised at cost and adjusted thereafter to recognise the Group’s share of
profit or loss and other comprehensive income of the joint venture or associate. Gain or loss in respect of changes in other equity
of joint ventures or associates resulting in divestment or dilution of stake in the joint ventures and associates is recognised in the
Statement of Profit and Loss. On acquisition of investment in a joint venture or associate, any excess of cost of investment over the
fair value of the assets and liabilities of the joint venture and associate, is recognised as goodwill and is included in the carrying
value of the investment in the joint venture and associate. The excess of fair value of assets and liabilities over the investment is
recognised directly in equity as capital reserve. The unrealised profits/losses on transactions with joint ventures and associates are
eliminated by reducing the carrying amount of investment.
The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, if any, when there is
evidence of impairment.
When the Group’s share of losses of a joint venture or an associate exceeds the Group’s interest in that joint venture or associate
(which includes any long term interests that, in substance, form part of the Group’s net investment in the joint venture or
associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that
the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture or associate.
479
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
(f)
Interests in joint operations
When the Group has joint control of the arrangement based on contractually determined right to the assets and obligations for
liabilities, it recognises such interests as joint operations. Joint control exists when the decisions about the relevant activities require
unanimous consent of the parties sharing the control. In respect of its interests in joint operations, the Group recognises its share
in assets, liabilities, income and expenses line-by-line in the standalone financial statements of the entity which is party to such
joint arrangement which then becomes part of the consolidated financial statements of the Group when the financial statements
of the Parent Company and its subsidiaries are combined for consolidation. Interests in joint operations are included in the
segments to which they relate.
(g) Business Combination/Goodwill on consolidation
The Group accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised
in the Statement of Profit and Loss as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the
condition for recognition are recognised at their fair values at the acquisition date.
Goodwill on consolidation as on the date of transition i.e. April 1, 2015 represents the excess of cost of acquisition at each point
of time of making the investment in the subsidiary over the Group’s share in the net worth of a subsidiary. 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 excess of the Group’s share in the net worth of a subsidiary over the cost of acquisition
at each point of time of making the investment in the subsidiary.
Goodwill on consolidation arising on acquisitions on or after the date of transition represents the excess of (a) consideration
paid for acquiring control and (b) acquisition date fair value of previously held ownership interest, if any, in a subsidiary over the
Group’s share in the fair value of the net assets (including identifiable intangibles) of the subsidiary as on the date of acquisition of
control.
Goodwill on consolidation is allocated to cash generating units or group of cash generating units that are expected to benefit from
the synergies of the acquisition.
Goodwill arising on consolidation is not amortised, however, it is tested for impairment annually. In the event of cessation of
operations of a subsidiary, the unimpaired goodwill is written off fully.
Business combinations arising from transfers of interests in entities that are under common control are accounted at historical
cost. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the
acquired entity are recorded in shareholders’ equity.
(h) Operating cycle for current and non-current classification
Operating cycle for the business activities of the Group 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.
(i) Revenue recognition
The Group recognises revenue from contracts with customers when it satisfies a performance obligation by transferring promised
goods or service to a customer. The revenue is recognised to the extent of transaction price allocated to the performance
obligation satisfied. Performance obligation is satisfied over time when the transfer of control of good or service to a customer
is done over time and in other cases, performance obligation is satisfied at a point in time. For performance obligation satisfied
over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation.
The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the
performance obligation.
Transaction price is the amount of consideration to which the Group expects it to be entitled in exchange for transferring goods
or services to a customer excluding amounts collected on behalf of a third party. Variable consideration is estimated using the
expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are
as per business practice and the financing component, if significant, is separated from the transaction price and accounted as
interest income.
480
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in profit & loss
immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to
fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a
proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.
Significant judgments are used in:
a. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time. Revenue
recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is
measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance
obligation.
b. Determining the estimated losses, which are recognised in the period in which such losses become probable based on the
expected total contract cost as at the reporting date.
c. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price.
Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims,
which are not ascertainable/acknowledged by customers are not taken into account.
A. Revenue from sale of goods including contracts for supply/commissioning of complex plant and equipment is recognised as
follows:
Revenue from sale of manufactured and traded goods is recognised when the control of the same is transferred to the
customer and it is probable that the Group will collect the consideration to which it is entitled for the exchanged goods.
Performance obligations in respect of contracts for sale of manufactured and traded goods is considered as satisfied at a
point in time when the control of the same is transferred to the customer and where there is an alternative use of the asset
or the company does not have either explicit or implicit right of payment for performance completed till date. In case where
there is no alternative use of the asset and the company has either explicit or implicit right of payment considering legal
precedents, performance obligation is considered as satisfied over a period of time and revenue is recognised over time.
B.
Revenue from construction/project related activity is recognised as follows:
•
•
Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the
extent performance obligations have been satisfied. The amount of transaction price allocated to the performance
obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the
customer.
Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and
control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents
the 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.
Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in profit or loss to the
extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the company expects
to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining
performance obligations). In addition, the Group recognises impairment loss (termed as provision for expected credit loss on
contract assets in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss
model on similar basis as applicable to trade receivables.
For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the
case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as “Due from customers”. For
contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus recognised profits (or minus
recognised losses, as the case may be), the surplus is shown as contract liability and termed as “Due to customers”. Amounts
received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as “Advances
from customer”. The amounts billed on customer for work performed and are unconditionally due for payment i.e only
passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of
481
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset
and is reclassified as trade receivables when it becomes due for payment.
C. Revenue from construction/project related activity and contracts executed in joint arrangements under work-sharing
arrangement [being joint operations, in terms of Ind AS 111 “Joint Arrangements”], is recognised on the same basis as
adopted in respect of contracts independently executed by the Group.
D.
E.
Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains
control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer
exists. The costs incurred on property development activities are carried as “Inventories” till such time the aforesaid conditions
are fulfilled.
In the case of the developmental project business and the realty business, revenue includes profit on sale of investment
properties or sale of stake in the subsidiary and/or joint venture companies as the sale/divestments are inherent in the
business model.
F.
Rendering of services
Revenue from rendering of services is recognised over time as and when the customer receives the benefit of the company’s
performance and the company has an enforceable right to payment for services transferred.
Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.
In respect of information technology (IT) business and technology services business, revenue from contracts awarded on time
and material basis is recognised over a period of time when relevant services are rendered and related costs are incurred.
Revenue from fixed price contracts is recognised over a period of time using the proportionate completion method.
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 the same basis as stated in (i) B above.
G.
Income from interest-bearing loans is recognised on accrual basis over the life of the loans based on the effective yield.
Income from bill discounting, advisory and syndication services and other financing activities is accounted on accrual basis.
H. Revenue on account of 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 fare/toll collections of such projects from users of facilities is accounted when the
amount is due and recovery is certain. License fees for way-side amenities are accounted on accrual basis.
I.
J.
Commission income is recognised as and when the terms of the contract are fulfilled.
Income from investment management fees is recognised in accordance with the contractual terms and the 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 the related contracts entered
with the clients over the period of the agreement. Trusteeship fees are accounted on accrual basis.
K. Revenue from port operation services (upto the date of sale) is recognised on completion of respective services or as per terms
agreed with the port operator, wherever applicable.
L.
Revenue from charter hire is recognised based on the terms of the time charter agreement.
M. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is
recognised on accrual basis.
N. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the
performance obligation is satisfied and the right to receive the income is established as per the terms of the contract.
(j) Other income
A.
Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the
effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other
482
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on
accrual basis provided there is no uncertainty towards its realisation.
B. Dividend income is accounted in the period in which the right to receive the same is established.
C. Government grants, which are revenue in nature and are towards compensation for the qualifying costs, incurred by the
Group, are recognised as other income/ reduced from underlying expenses in the Statement of Profit and Loss in the period in
which such costs are incurred. Government grant receivable in the form duty credit scrips is recognised as other income in the
Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent
there is no uncertainty towards its receipt.
D. Other items of income are accounted as and when the right to receive such income arises and it is probable that the
economic benefits will flow to the group and the amount of income can be measured reliably.
(k) Exceptional items
An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the
performance of the Group is treated as an exceptional item and the same is disclosed in the notes to accounts. (read with Note [1]
(II)(y)(i)(b))
(l) Property, plant and equipment (PPE)
PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation
and cumulative impairment, if any.
All directly attributable costs related to the acquisition of PPE and borrowing costs in case of qualifying assets are capitalised in
accordance with the Group’s accounting policy.
Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general
overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition
are allocated and capitalised as a part of the cost of the PPE.
Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
PPE not ready for the intended use on the date of the Balance Sheet are disclosed as “capital work-in-progress”. (Also refer to
policies on leases, borrowing costs, impairment of assets and foreign currency transactions below).
Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and
properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013,
or in case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation
method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits
embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end with the effect of
any change in the estimates of useful life/residual value is accounted on prospective basis.
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.
Depreciation on additions to/deductions from, owned assets is calculated pro rata from the date it is ready for use.
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.
Freehold land is not depreciated. PPE is derecognised upon disposal or when no future economic benefits are expected from its use
or disposal.
Any gain or loss arising on derecognition is recognised in the Statement of Profit and Loss in the same period.
483
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
(m) Investment property
Properties (including those under construction) held to earn rentals and/or capital appreciation are classified as investment
property and are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in
accordance with the Group’s accounting policy.
Depreciation is recognised using straight line method so as to write off the cost of the investment property less their residual
values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was
determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end
to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful
life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/
residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and
no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of property is recognised in
the Statement of Profit and Loss in the same period.
(n)
Intangible assets
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 stated at original cost net of tax/duty credits
availed, if any, including borrowing costs capitalised for qualifying assets and reduced by accumulated amortisation and cumulative
impairment. 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.
Research and development expenditure on new products:
(i)
Expenditure on research is expensed under respective heads of account in the period in which it is incurred
(ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
A.
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
B.
the Group has intention to complete the intangible asset and use or sell it;
C.
the Group has ability to use or sell the intangible asset;
D.
E.
F.
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
the Group has ability to reliably measure the expenditure attributable to the intangible asset during its development.
Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “intangible assets under
development”.
Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life are
reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective
basis. The estimated useful life for major categories of the intangible assets are as follows:
(i)
Specialised software: over a period of three to ten years;
(ii) Technical know-how: over a period of three to seven years;
(iii) Development costs for new products: over a period of five years;
(iv) Customer contracts and relationships: over a period of the contract which generally is over three to ten years;
(v) Tradename: over a period of 5 years;
(vi)
Intangible assets with indefinite useful life that are acquired separately are carried at cost less accumulated impairment losses;
484
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
(vii) Fare collection rights obtained in consideration for rendering construction services represent the right to collect fare during
the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Fare collection rights are
capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins.
Till the completion of the project, the same is recognised as intangible assets under development. Fare collection rights are
amortised using the straight-line method over the period of concession; and
(viiii) Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate
the asset’s revised carrying amount over its remaining useful life.
(o)
Impairment of assets
As at the end of each accounting year, the Group reviews the carrying amounts of its PPE, investment property and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the
PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill
and the intangible assets with indefinite life are tested for impairment each year.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is
determined:
(i)
in the case of an individual asset, at the higher of the net selling price and the value in use; and
(ii)
in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the
higher of the cash generating unit’s net selling price and the value in use.
(The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset,
which may vary based on the future performance of the entity and from its disposal at the end of its useful life. For this purpose,
the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks
specified to the estimated cash flows of the asset).
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is
recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash
generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash
generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to
reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated
goodwill, is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in
prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the
Statement of Profit and Loss.
(p) Employee benefits
(i)
Short term employee benefits:
Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia, and
performance linked rewards falling due wholly within twelve months of rendering the service are classified as short term
employee benefits and are expensed in the period in which the employee renders the related service.
(ii) Post-employment benefits:
A. Defined contribution plans: The Group’s superannuation scheme, state governed provident fund scheme, employee
state insurance scheme, social security contributions 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.
B. Defined benefit plans: The employees’ gratuity fund schemes and employee provident fund schemes managed by board
of trustees established by the company, the post-retirement medical care plan and the Parent Company pension plan
represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on
actuarial valuation using the Projected Unit Credit Method.
485
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market
yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit
obligations at the Balance Sheet date.
Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other
comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss.
Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised
in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is
recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan
are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or
curtailment and when the Group recognises related restructuring costs or termination benefits.
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.
(iii) Long term employee benefits:
The obligation recognised in respect of long term benefits such as compensated absences, long service award etc. is
measured at present value of estimated future cash flows expected to be made by the Group and is recognised in a similar
manner as in the case of defined benefit plans vide (ii) B above.
Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements,
re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit
expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under
finance cost.
(iv) Termination benefits:
Termination benefits such as compensation under employee separation schemes are recognised as expense when the
company’s offer of the termination benefit is accepted or when the Group recognises the related restructuring costs
whichever is earlier.
(q) Leases
Leases are accounted as per Ind AS 116 which has become mandatory from April 1, 2019.
Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is accounted at the lease
commencement date.
Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives
received.
The lease liability is initially measured at the present value of the lease payments, discounted using the Group’s incremental
borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or
a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation/impairment
losses . The right-of-use asset is depreciated using the straight-line method from the commencement date to the end of the lease
term or useful life of the underlying asset whichever is lower. Carrying amount of lease liability is increased by interest on lease
liability and reduced by lease payments made.
486
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
Lease payments associated with following leases are recognised as expense on straight-line basis:
(i)
Low value leases; and
(ii)
Leases which are short-term.
Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset. Initially asset held under finance lease is
recognised in balance sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income
is recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on Group’s net investment in the
lease. A lease which is not classified as a finance lease is an operating lease.
The Group recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The Group
presents underlying assets subject to operating lease in its balance sheet under the respective class of asset.
(Also refer to policy on depreciation, supra)
(r) Financial instruments
Financial assets and/or financial liabilities are recognised when the Group becomes party to a contract embodying the related
financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction
values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from, as the case may be, the fair value of such financial assets or liabilities on
initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in profit or loss.
A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally
enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle
the liability simultaneously.
(i)
Financial assets
A. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value,
depending on the classification of the financial assets as follows:
1.
Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value
2. Other investments in debt instruments – at amortised cost, subject to following conditions:
•
•
The asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows; and
The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
3. Debt instruments that meet the following conditions are subsequently measured at fair value through other
comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss)
•
•
The asset is held within a business model whose objective is achieved both by collecting contractual cash flows
and selling financial assets; and
The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
4. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in
profit or loss.
487
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
5.
Investments in equity instruments are classified as FVTPL, unless the related instruments are not held for trading
and the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other
comprehensive income.
6.
Trade receivables, security deposits, cash and cash equivalents, employee and other advances – at amortised cost
7.
The group has elected to measure the investments in associates and joint ventures held through unit trusts at
FVTPL.
B.
For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment
and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other
than on account of above income or expense) are recognised in other comprehensive income and accumulated in other
equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity
is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to
profit or loss on disposal of investments.
C. A financial asset is primarily derecognised when:
1.
the right to receive cash flows from the asset has expired, or
2.
the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a pass-through arrangement; and a) the
group has transferred substantially all the risks and rewards of the asset, or b) the group has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the
date of derecognition and the consideration received is recognised in profit or loss.
D.
Impairment of financial assets: The Group recognises impairment loss on trade receivables using expected credit loss
model which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted
under Ind AS 109.
For all other financial assets, expected credit losses are measured at an amount equal to 12-month expected credit losses
or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly
since initial recognition.
In respect of financial services business, the Group applies a separate model of the expected credit loss for recognising
impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade
receivables and other contractual rights to receive cash or other financial asset and financial guarantees not designated as at
FVTPL as follows:
•
•
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the
weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance with
the contract and all the cash flows that the Group expects to receive (i.e. all cash shortfalls), discounted at the original
effective interest rate (or credit- adjusted effective interest rate for purchased or originated credit-impaired financial
assets). The Group estimates cash flows by considering all contractual terms of the financial instrument (for example,
prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit
losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk
on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance
for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses
are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if default occurs
within the 12 months weighted by the probability of default after the reporting date and thus, are not cash shortfalls
that are predicted over the next 12 months.
488
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
• When making the assessment of whether there has been a significant increase in credit risk since initial recognition,
the Group uses the change in the risk of a default occurring over the expected life of the financial instrument instead
of the change in the amount of expected credit losses. To make that assessment, the Group compares the risk of a
default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition and considers reasonable and supportable information, that is available
without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
(ii)
Financial liabilities
A.
Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL
are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of
impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher.
All other financial liabilities including loans and borrowings, trade and other payables are initially recognised at fair value
and subsequently measured at amortised cost using Effective Interest Rate (EIR) method.
B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled.
(iii) The Group designates certain hedging instruments such as derivatives, embedded derivatives and in respect of foreign
currency risk, certain non-derivatives as either fair value hedges, cash flow hedges, or hedges of net investments in foreign
operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges.
A.
Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are
recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold,
terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying
amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date.
B. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in
equity as ‘hedging reserve’. The gain or loss relating to the ineffective portion is recognised immediately in profit or
loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective
portion are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as
the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the
hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from
the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion.
In case of time period related hedges, the premium element and the spot element of a forward contract is separated and
only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly,
wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the
designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the
fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is
accumulated in a separate component of equity as ‘cost of hedging’. The changes in the fair value of such premium element
or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight-line basis over
the period of the forward contract or the financial instrument.
The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast
transaction results in the recognition of a non-financial asset, such gains / losses are transferred from Hedge Reserve (but not
as reclassification adjustment) and included in the initial measurement cost of the non-financial asset.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no
longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity
at that time remains in equity and is recognised in profit or loss when the forecast transaction is ultimately recognised in
profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised
immediately in profit or loss.
489
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
(iv) Compound financial instruments issued by the Group which can be converted into fixed number of equity shares at the
option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the
liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability
that does not have an equity conversion option. The equity component is initially recognised at the difference between
the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly
attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying
amounts.
Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured
subsequently.
(s)
Inventories
Inventories are valued after providing for obsolescence, as under:
(i)
Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net
realizable 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.
(ii) 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.
(iii) 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 costs of purchases, costs of conversion and other costs incurred in bringing the inventories to
their present location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.
(iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically
identifiable cost or net realisable value.
Assessment of net realisable value is made at each subsequent period end and when the circumstances that previously caused
inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value
because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original
amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value.
(t) 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 subject to more than insignificant risk of
change in value, are not included as part of cash and bank balances.
(u) Securities premium
(i)
Securities premium includes:
A.
The difference between the face value of the equity shares and the consideration received in respect of shares issued.
B.
The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock
Options Scheme.
(ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium.
(v) Borrowing Costs
Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired
on lease and exchange differences arising on foreign currency borrowings, to the extent they are regarded as an adjustment to
finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings
and are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortization of premium
element of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument.
490
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the
acquisition, construction or production of a qualifying asset are capitalised/inventoried 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 in profit or loss in the period in which they are
incurred.
(w) Share-based payment arrangements
The stock options granted to employees pursuant to the Group’s Stock Options Schemes, are measured at the fair value of the
options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over
the vesting period on a straight line basis. The amount recognised as expense in 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 within equity. The share based payment equivalent to the fair value as on the date
of grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of
grant.
(x) Foreign currencies
(i)
The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign
operations has been determined based on the primary economic environment in which the Group and its foreign operations
operate considering the currency in which funds are generated, spent and retained.
(ii) Transactions in currencies other than the Group’s functional currency are recorded on initial recognition using the exchange
rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot
rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange
differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the
closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for:
A.
exchange differences on foreign currency borrowings relating to assets under construction for future productive use,
which are included in the cost of those assets when they are regarded as an adjustment to finance costs on those
foreign currency borrowings;
B.
exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
C.
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is
neither planned nor likely to occur (therefore forming part of the net investment in foreign operation), which are
recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the
monetary items.
(iii) Exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt
of advance consideration is used for initial recognition of related asset, expense or income.
(iv) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian
Rupees as follows:
A.
assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet;
B.
income and expenses for each income statement are translated at average exchange rates; and
C.
all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign
currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations.
The portion of foreign currency translation reserve attributed to non-controlling interests is reflected as part of non-
controlling interests.
(y) Accounting and reporting of information for Operating Segments
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating
decision making body in the Group to make decisions for performance assessment and resource allocation. The reporting of
segment information is the same as provided to the management for the purpose of the performance assessment and resource
allocation to the segments.
491
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
Segment accounting policies are in line with the accounting policies of the Group. 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) Power Generation projects under Developmental Projects segment which are
classified as assets given on finance lease, the finance costs on borrowings are accounted as segment expenses.
(iii) Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment
revenue estimated at the beginning of the reported period.
(iv)
Income which relates to the Group as a whole and not allocable to segments is included in “unallocable corporate income”.
(v) Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the
Group.
(vi) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in
“unallocable corporate income”
(vii) Segment results are not adjusted for the exceptional item attributable to the corresponding segment. The said exceptional
item has been included in “unallocable corporate income net of expenditure”. The corresponding segment assets are being
carried under the respective segments without adjusting the exceptional item.
(viii) Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) Financial
Services segment, and (b) Power Generation projects under Developmental Projects segment which are classified as assets
given on finance lease, segment liabilities include borrowings as the finance costs on borrowings are accounted as segment
expenses in respect of the segment and projects. Investment in joint ventures and associates identified with a particular
segment are reported as part of the segment assets of those respective segments.
Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Group as a whole.
(ix) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is
accounted as employee compensation cost [see Note 1(w) above] and is allocated to the segment.
(x) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which
are either determined to yield a desired margin or agreed on a negotiated basis.
(z) Taxes on income
Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever
minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the applicable tax laws and
based on the expected outcome of assessments/appeals.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group’s financial
statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws
enacted or substantively enacted as on the Balance Sheet date.
Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated
with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are generally recognised for all temporary differences to the extent that is probable that taxable profits will
be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be recovered.
492
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head “capital gains”/ other temporary
differences are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing
other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.
Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax and dividend distribution tax
paid or payable by the subsidiary companies are recognised, to the extent it is probable that such unutilised tax credits will get
realised, in the period in which such determination is made.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which
the Group expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities.
Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity or in case of
business combination, is recorded along with the tax as applicable.
The Group uses estimates and judgements based on the relevant rulings in the areas of allowances and disallowances which is
exercised while determining the provision for income tax.
(aa) Provisions, contingent liabilities and contingent assets
Provisions are recognised only when:
(i)
the Group entity has a present obligation (legal or constructive) as a result of a past event; and
(ii)
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
(iii) a reliable estimate can be made of the amount of the obligation
Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money
is material, the carrying amount of the provision is the present value of those cash flows. 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:
(i)
a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle
the obligation; and
(ii) a present obligation arising from past events, when no reliable estimate is possible.
Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent
assets are reviewed at each Balance Sheet date.
Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received
under such contract, the present obligation under the contract is recognised and measured as a provision.
(ab) Commitments
Commitments are future liabilities for contractual expenditure, 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 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.
493
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [1](II) (contd.)
(ac) Discontinued Operations and non-current assets held for sale
Discontinued operation is a component of the Group that has been disposed of or classified as held for sale and represents a major
line of business.
Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally
through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present
condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly
probable and is expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less
costs to sell.
(ad) Statement of Cash Flows
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method adjusting the net profit for the effects of:
i.
ii.
changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;
non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and
undistributed profits of associates and joint ventures; and
iii. all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available
for general use as at the date of Balance Sheet.
(ae) Key sources of estimation
The preparation of financial statements in conformity with Ind AS requires that the management of the Group 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. The estimates and
underlying assumptions made by the management have been explained under respective policies and are reviewed on an ongoing
basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for
doubtful debts/advances, future obligations in respect of retirement benefit plans, expected cost of completion of contracts,
provision for rectification costs, fair value measurement etc. Difference, if any, between the actual results and estimates is
recognised in the period in which the results are known.
NOTE [1](III)
The Group has assessed the impact of COVID-19 on its financial statements based on the internal and external information upto
the date of approval of these financial statements and expects to recover the carrying amounts of its investments, intangible assets,
goodwill, trade receivable, project work-in-progress and inventories. The Group will continue to monitor the future economic conditions
and update its assessment.
494
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [2]
Property, plant and equipment and Capital work-in-progress
Cost
As at
1-4-2019
Transfer to
right-of-
use assets
Business
combination
Additions
Foreign
currency
fluctuation
Classified
as held for
sale
Deductions
As at
31-3-2020
Up to
31-3-2019
Transfer to
right-of-
use assets
Business
combination
Depreciation
Foreign
currency
fluctuation
For the
year
Classified
as held for
sale
v crore
Impairment
Book value
Deductions
Up to
31-3-2020
Up to
31-3-2019
Up to
31-3-2020
As at
31-3-2020
As at
31-3-2019
–
1044.92
23.99
140.69
1185.61
23.99
3943.27 637.27
–
(15.27)
(15.27)
–
–
–
–
169.05
–
3.22
3.22
157.64
921.18
–
440.81 (297.45)
1361.99 (297.45)
–
3840.03
39.91
105.60
–
–
105.60
39.91
449.32 292.40
7848.42
184.37
8032.79
848.53
0.28
848.81
376.21
0.02
376.23
404.88
7.89
412.77
423.86
13.65
437.51
244.45
129.52
1013.44
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
102.88 539.32
27.04
102.88 566.36
–
390.21 293.89
–
390.21 293.89
–
115.23
–
115.23
77.24
–
77.24
52.92
–
52.92
3.06
–
3.06
–
–
59.58
–
59.58
52.13
–
52.13
–
55.60
–
1.11
(0.09)
0.97
0.88
33.28
71.39
–
71.39
3.57
–
3.57
3.62
–
3.62
6.68
–
6.68
10.03
–
10.03
–
–
–
19.88
3.64
23.52
452.86
685.15
–
685.15
51.65
–
51.65
16.75
–
16.75
41.46
–
41.46
9.88
–
9.88
–
–
–
1.80
–
1.80
218.90
320.93
71.09
392.02
53.76
–
53.76
12.63
–
12.63
21.88
–
21.88
47.63
9.32
56.95
7555.93 3559.16
15.00
140.32
7696.25 3574.16
1430.79 483.66
0.26
1431.07 483.92
0.28
542.92 239.01
–
542.94 239.01
0.02
460.72 221.06
5.78
468.61 226.84
7.89
431.57 209.15
6.55
435.90 215.70
4.33
–
–
244.45
185.12
30.05
19.96
–
1014.55 210.53
–
0.32
0.32
13.77
44.80
–
44.80
2.20
–
2.20
3.12
–
3.12
5.91
–
5.91
8.02
–
8.02
–
–
–
0.94
0.94
92.20
348.10
–
348.10
28.12
–
28.12
–
–
–
48.10
–
–
–
11.32
–
11.32
837.43 195.54
–
–
–
207.79
921.18
1044.92
416.82
129.37
1174.29 1338.00
2898.05 3007.22
211.00 3914.66
22.87
218.07 3937.53
7.07
28.95
–
28.95
29.93
–
29.93
–
3611.34 4260.31
169.37
117.45
3728.79 4429.68
51.80
–
51.80
939.67
0.26
939.93
8.87
–
8.87
12.13
–
12.13
380.74
–
380.74
20.13
–
20.13
3.29
–
3.29
–
–
–
18.12
–
18.12
34.71
5.81
40.52
273.60
6.34
279.94
234.34
2.08
236.42
–
–
43.94
34.14
–
263.87
–
–
–
0.01
–
0.01
0.24
–
0.24
–
–
–
–
–
–
–
–
–
491.12
0.02
491.14
364.87
0.02
364.89
0.01
–
0.01
0.24
–
0.24
–
–
–
–
–
162.17
0.02
162.19
137.19
0.02
137.21
186.88
1.55
188.43
197.23
2.25
199.48
200.51
150.98
183.58
2.11
185.69
214.71
7.10
221.81
214.40
109.56
–
750.68
802.91
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
92.17
–
92.17
310.04
–
310.04
777.63
14.94
792.57
223.69
–
223.69
92.11
–
92.11
67.50
–
67.50
35.66
–
35.66
3.06
–
3.06
–
–
49.22
0.56
49.78
52.11
1.34
53.45
13.89
14.18
–
53.34
Class of assets
Land
Freehold
Land - leasehold
Sub-total
Buildings
Plant &
equipment
Owned
Leased out
Sub-total
Computers
Owned
Leased out
Sub-total
Office
equipment
Owned
Leased out
Sub-total
Furniture and
fixtures
Owned
Leased out
Sub-total
Vehicles
Owned
Leased out
Sub-total
Other assets
Aircraft
Ships
Dredged
channel and
Breakwater
structures
Leasehold
Improvements
–
140.71
1528.12
–
16838.25 (297.45)
–
15250.34
Sub-total
Total
Previous year
Add: Capital work-in-progress
73.75
166.37
166.37 130.46
1385.59 1511.97
3.40 1863.01
0.05
0.05
129.50
86.26
1.48
1.48
1282.75
10.81
10.81
768.75
62.52
368.59
1812.71 323.06
17516.36 5723.95
– 364.76 16838.25 4390.38
–
–
(15.27)
–
30.54
127.81
127.81
111.95
829.90 1459.80
1.76 1523.39
0.04
0.04
78.18
43.10
1.33
1.33
502.98
–
209.34
10.24
10.24
–
551.29
398.98 7174.60 224.74
–
–
78.19
159.25
1261.42 1205.06
237.97 10103.79 10889.56
– 234.68 5723.95
– 224.74
3224.91 2483.56
13328.70 13373.12
Notes:
(a) Carrying value of property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2020
R 1824.66 crore (previous year: R 2073.80 crore).
(b) Carrying value of property, plant and equipment having restriction on title as at March 31, 2020 R 1808.84 crore (previous year:
R 2047.41 crore).
(c) Depreciation for the year includes R 5.23 crore (previous year: R 7.92 crore) on account of obsolescence.
(d)
Increase in impairment as on March 31, 2020 is on account of foreign currency fluctuation R 11.15 crore (previous year: R 6.82
crore). Further impairment on capital work-in-progress during the year is Nil (previous year: R 175.55 crore).
495
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [2] (contd.)
(e) Owned assets given on operating lease have been presented separately under respective class of assets as “Leased out” pursuant
to Ind AS 116 “Leases”.
(f) Cost as at April 1, 2019 of individual assets has been reclassified, wherever necessary.
(g) Range of useful life of property, plant and equipment is as below:
Class of assets
Sr.
no.
1
2
3
4
5
6
7
8
9
10 Dredged channel and Breakwater structures
Leasehold land
Owned buildings
Owned plant and equipment
Computers
Office equipment
Furniture and fixtures
Owned vehicles
Aircraft
Ships
Minimum useful life
(in years)
15
3
3
2
3
3
3
18
5
41
Maximum useful life
(in years)
99
61
35
7
30
12
15
18
15
50
NOTE [3]
Investment property
Cost
Depreciation
Impairment
Book value
v crore
Class of assets
As at
1-4-2019
Additions
Foreign
currency
fluctuation
Classified
as held for
sale
Deductions
As at
31-3-2020
Up to
31-3-2019
For the
period
Foreign
currency
fluctuation
Classified
as held for
sale
Land
Buildings
Total
553.78
1374.62
1928.40
112.17
336.56
448.73
Previous year 1978.65 219.79
Add: Capital work-in-progress
1.01
–
1.01
0.62
2.02
37.90
39.92
11.74
547.64
8.11 1607.39
19.85 2155.03
12.68
38.63
51.31
9.48
31.37
40.85
– (158.02) 112.64 1928.40
34.95
34.78
–
2.79
2.79
–
–
–
–
Transfer
(to)/from
inventories
and
owners
occupied
property
(105.56)
(57.78)
(163.34)
Transfer
(to)/from
inventories
and
owners
occupied
property
–
(0.76)
(0.76)
Deductions
Up to
31-3-2020
Up to
31-3-2019
Up to
31-3-2020
As at
31-3-2020
As at
31-3-2019
–
0.22
0.22
22.16
66.23
88.39
4.71
–
4.71
–
525.48 536.39
– 1541.16 1335.99
– 2066.64 1872.38
–
(5.17)
13.25
51.31
–
4.71
1648.08 2382.18
3714.72 4254.56
Notes:
(a) Carrying value of investment property pledged as collateral for liabilities and/or commitments and having restriction on title as at
March 31, 2020 R 0.16 crore (previous year: R 0.16 crore).
(b) Useful life of building included in investment property: 20 to 60 years.
(c) Amount recognised in the Statement of Profit and Loss for investment property:
Sr. no.
1
2
3
Rental income derived from investment property
Direct operating expenses arising from investment property that generated rental income
Direct operating expenses arising from investment property that did not generate rental income
Particulars
(d) Fair value of investment property: R 5582.46 crore as at March 31, 2020 (previous year: R 6456.76 crore).
2019-20
129.29
5.24
0.63
v crore
2018-19
148.71
7.37
0.67
496
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [3] (contd.)
(e) The fair values of investment property have been determined with the help of internal architectural department and independent
valuer on a case to case basis. Fair value of property that are evaluated by independent valuer amounted to R 3279.01 crore
(previous year: R 2693.38 crore). Valuation is based on government rates, market research, marked trend and comparable values as
considered appropriate.
(f) Depreciation for the year includes R 15.28 crore impairment, of which R 12.00 crore in respect of investment property classified as
held for sale. The investment property having impairment of R 4.71 crore as on 31-3-2019 and R 3.28 crore recognised during the
year has been disposed off during the current year.
NOTE [4]
Goodwill
Class of assets
Goodwill on consolidation
Previous year
As at
1-4-2019
1875.01
1609.88
Business
combination
6467.91
259.67
Cost
Foreign currency
fluctuation
48.00
5.46
Additions
2.02
–
Classified as
held for sale
333.44
–
Deductions
–
–
As at
31-3-2020
8059.50
1875.01
NOTE [5]
Other Intangible assets and Intangible assets under development
Impairment
As at
31-3-2020
48.10
48.10
v crore
As at
31-3-2019
1826.91
Book value
As at
31-3-2020
8011.40
1826.91
Specialised software
Technical knowhow
Trade names
New product design
and development
Customer contracts
and relationship
Class of assets
As at
1-4-2019
Business
Combination
Additions
Deductions
As at
31-3-2020
Up to
31-3-2019
Business
Combination
1204.86
120.98
10.10
132.38
–
297.00
137.30
8.34
–
1449.64
115.12
307.10
978.16
57.32
10.10
114.27
–
–
Cost
Foreign
currency
fluctuation
12.59
–
–
Classified
as held for
sale
33.07
14.20
–
Amortisation
Foreign
currency
fluctuation
10.29
–
–
For the
year
122.43
24.47
44.55
Classified
as held for
sale
26.46
13.72
–
292.54
–
58.11
2.03
342.19
10.33
143.72
–
9.63
1.13
145.94
268.69
Fare collection rights 3723.40
5620.57
Total
3015.60
1.21
– 12659.63
3444.98 12864.59
Previous year
Add: Intangible assets under development
3178.66
57.73 2386.69
–
–
389.46
12.84
–
27.46
12.93
3298.34
16383.03
21563.56
160.72
47.64
1397.66
–
–
114.27
308.15
117.05
626.28
–
15.44
5620.57
1148.15
0.01
257.22
–
–
186.12
7.08
–
18.50
7.31
4.42
–
–
0.16
–
–
4.58
v crore
Book value
Deductions
Up to
31-3-2020
As at
31-3-2020
As at
31-3-2019
3.95
–
–
0.06
–
–
4.01
1194.74
68.07
54.65
254.90
47.05
252.45
226.70
63.66
–
8.48
1.85
148.82
475.95
164.69
1966.58
2822.39
107.97
16218.34 3675.76
19596.98 4222.91
–
15.03 1397.66
86.18 11435.93
19683.16 15658.84
Addition to other intangible assets include internally developed intangible assets: R 106.43 crore (previous year: R 88.02 crore)
Notes:
(a) Borrowing cost capitalised in accordance with Ind AS 23 “Borrowing Costs” is as follows:
Investment property
Capital work-in-progress (Property, plant and equipment)
Intangible assets under development
Class of assets
(b) The average capitalisation rate for borrowing cost is 9.83% (previous year: 9.70%).
2019-20
5.73
130.16
726.84
862.73
v crore
2018-19
13.89
134.34
942.07
1090.30
497
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [6]
Non-current assets: Financial assets - Other investments
Particulars
Equity instruments
Preference shares
Government and trust securities
Debentures and bonds
Mutual funds
Security receipts
Units of fund
Other investments
NOTE [7]
Non-current assets: Financial assets - Loans towards financing activities
Particulars
Considered good - secured
Less: Allowance for expected credit loss
Considered good - unsecured
Less: Allowance for expected credit loss
Having significant increase in credit risk
Less: Allowance for expected credit loss
Credit impaired
Less: Allowance for expected credit loss
As at 31-3-2020
As at 31-3-2019
v crore
579.87
89.20
0.07
1098.28
93.21
2498.65
106.44
31.00
4496.72
v crore
574.21
99.13
1832.55
813.20
19.69
791.07
188.79
–
4318.64
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
39485.69
199.75
14466.13
129.70
3469.63
188.53
5470.39
3784.50
38843.70
155.71
39285.94
38687.99
14988.60
139.05
14336.43
14849.55
2029.89
178.47
3281.10
1851.42
6270.60
3870.68
1685.89
58589.36
2399.92
57788.88
498
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [8]
Non-current assets: Financial assets - Other loans
Particulars
Security deposits
Considered good - unsecured
Less: Allowance for expected credit loss
Loans and advances to related parties
Considered good - unsecured
Other loans
Considered good - secured
Considered good - unsecured
Less: Allowance for expected credit loss
NOTE [9]
Non-current assets: Financial assets - Others
Particulars
Cash and bank balances not available for immediate use
Fixed deposits with banks (maturity more than 12 months)
Forward contract receivables
Embedded derivative receivables
Other receivables
NOTE [10]
Other non-current assets
Particulars
Capital advances:
Secured
Unsecured
Advance recoverable other than in cash
Current tax receivable (net)
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
425.26
36.54
244.12
28.30
388.72
1072.90
215.82
1264.11
–
0.08
174.51
113.80
114.87
113.80
60.71
1522.33
1.07
1481.08
As at 31-3-2020
As at 31-3-2019
v crore
273.82
1.04
257.00
54.20
52.09
638.15
v crore
290.07
201.04
432.32
6.15
214.47
1144.05
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
0.78
271.23
5.38
165.72
272.01
2125.54
4144.07
6541.62
171.10
1986.60
3490.92
5648.62
499
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [11]
Current assets: Inventories
Particulars
Raw materials [include goods-in-transit R 16.56 crore
(previous year: R 53.34 crore)]
Components [include goods-in-transit R 15.89 crore
(previous year: R 31.55 crore)]
Construction materials [include goods-in-transit R 17.13 crore
(previous year: R 114.55 crore)]
Manufacturing work-in-progress
Finished goods
Stock-in-trade (in respect of goods acquired for trading) [include
goods-in-transit R 37.10 crore (previous year: R 38.79 crore)]
Stores and spares [include goods-in-transit R 1.14 crore
(previous year: R 2.25 crore)]
Loose tools [include goods-in-transit Nil (previous year: R 0.05 crore)]
Property development projects (including land)
As at 31-3-2020
As at 31-3-2019
v crore
860.49
403.39
95.86
467.87
98.56
308.36
295.98
13.38
3202.76
5746.65
v crore
722.75
529.55
221.57
651.70
301.74
386.27
295.49
14.66
3290.20
6413.93
Note: During the year R 83.39 crore (previous year: R 468.74 crore) was recognised as expense towards write-down of inventories.
NOTE [12]
Current assets: Financial assets - Investments
Particulars
Equity shares
Preference shares
Government and trust securities
Debentures and bonds
Mutual funds
Other investments
NOTE [13]
Current assets: Financial assets - Trade receivables
Particulars
Considered good - secured
Considered good - unsecured
Less: Allowance for expected credit loss
Credit impaired
Less: Allowance for expected credit loss
500
As at 31-3-2020
As at 31-3-2019
v crore
3.04
0.68
758.35
3959.79
7677.60
300.29
v crore
8.28
0.68
962.66
4192.93
8781.62
–
12699.75
13946.17
As at 31-3-2020
As at 31-3-2019
v crore
42365.84
1963.85
1386.52
1217.36
v crore
160.37
v crore
38576.64
1989.56
v crore
68.99
40401.99
36587.08
1201.07
1011.27
169.16
40731.52
189.80
36845.87
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [14]
Current assets: Financial assets - Cash and cash equivalents
Particulars
Balance with banks
Cheques and drafts on hand
Cash on hand
Fixed deposits with banks (maturity less than 3 months)
NOTE [15]
Current assets: Financial assets - Other bank balances
Particulars
Fixed deposits with banks
Earmarked balances with banks-unclaimed dividend
Earmarked balances with banks-Section 4(2)(l)(D) of RERA*
Earmarked balances with banks-others
Margin money deposits with banks
Cash and bank balances not available for immediate use
* Real Estate (Regulation and Development) Act, 2016
NOTE [16]
Current assets: Financial assets - Loans towards financing activities
Particulars
Considered good - secured
Less: Allowance for expected credit loss
Less: Net fair value changes
Considered good - unsecured
Less: Allowance for expected credit loss
Having significant increase in credit risk
Less: Allowance for expected credit loss
As at 31-3-2020
As at 31-3-2019
v crore
4535.56
173.66
6.64
6608.71
11324.57
v crore
4261.34
624.49
37.44
1586.22
6509.49
As at 31-3-2020
As at 31-3-2019
v crore
1876.65
120.08
0.25
505.61
930.84
359.78
3793.21
v crore
845.70
85.34
0.41
1.10
149.08
4135.12
5216.75
As at 31-3-2020
As at 31-3-2019
v crore
33534.47
61.72
220.84
7584.55
169.82
1147.73
90.95
v crore
v crore
v crore
34028.69
52.19
130.77
33251.91
33845.73
8108.95
146.77
7414.73
7962.18
801.03
78.12
1056.78
41723.42
722.91
42530.82
501
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [17]
Current assets: Financial assets - Other loans
Particulars
Security deposits
Considered good - unsecured
Less: Allowance for expected credit loss
Credit impaired
Less: Allowance for expected credit loss
Loans and advances to related parties
Considered good - unsecured
Other loans
Considered good - secured
Considered good - unsecured
NOTE [18]
Current assets: Financial assets - Others
Particulars
Advances to related parties:
Associate companies
Joint venture companies
Advances recoverable in cash
Forward contract receivables
Embedded derivative receivables
Doubtful advances:
Deferred credit sale of ships
Other loans and advances
Less: Allowance for expected credit loss
502
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
502.72
0.97
–
–
508.60
0.46
501.75
508.14
5.07
5.07
–
194.87
0.07
19.31
716.00
–
66.46
0.15
51.94
626.69
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
8.73
51.83
11.56
61.11
60.56
1748.66
886.42
232.23
72.67
1519.17
919.66
39.75
27.11
758.73
785.84
785.84
27.11
617.30
644.41
644.41
–
2927.87
-
2551.25
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [19]
Other current assets
Contract assets [Note 47(d)(i)]
Particulars
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
Due from customers (construction and project related activity)
Retention money including unbilled revenue
36124.80
15724.83
31847.85
14627.48
Balance with customs, port trust, etc.
Advance recoverable other than in cash
Government grant receivable
Other loans and advances
Less: Allowance for expected credit loss
Others
NOTE [20]
Equity share capital
7.00
7.00
51849.63
5.95
6420.65
149.91
–
233.55
58659.69
7.00
7.00
46475.33
16.88
5276.50
123.51
–
250.84
52143.06
(a) Share capital authorised, issued, subscribed and paid up:
Particulars
Authorised:
Equity shares of R 2 each
Issued, subscribed and fully paid up:
Equity shares of R 2 each
As at 31-3-2020
As at 31-3-2019
Number of
shares
v crore
Number of
shares
v crore
1,62,50,00,000
325.00
1,62,50,00,000
325.00
1,40,38,92,022
280.78
1,40,27,29,385
280.55
(b) Reconciliation of the number of equity shares and share capital:
Particulars
2019-20
2018-19
Number of
shares
v crore
Number of
shares
Issued, subscribed and fully paid up equity shares outstanding at the beginning
of the year
1,40,27,29,385
280.55 1,40,13,69,456
Add: Shares issued on exercise of employee stock options during the year
7,83,249
0.16
13,59,929
v crore
280.27
0.28
Add: Shares issued on conversion of foreign currency convertible bonds during
the year
3,79,388
0.07
–
–
Issued, subscribed and fully paid up equity shares outstanding at the end of the
year
1,40,38,92,022
280.78 1,40,27,29,385
280.55
(c) Terms/rights attached to equity shares:
The Company has only one class of share capital, i.e., equity shares having face value of R 2 per share. Each holder of equity share
is entitled to one vote per share.
503
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [20] (contd.)
(d) Shareholder holding more than 5% of equity shares as at the end of the year:
Name of the shareholder
Life Insurance Corporation of India
L&T Employees Trust
As at 31-3-2020
As at 31-3-2019
Number of
shares
20,91,83,856
18,55,24,682
Shareholding
%
14.90
13.22
Number of
shares
24,66,76,682
17,21,28,421
Shareholding
%
17.59
12.27
(e) 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 31-3-2020
As at 31-3-2019
Number of
equity shares
to be issued
as fully paid
25,21,389@
R crore
(at face
value)
0.50*
Number of
equity shares
to be issued as
fully paid
28,85,240@
R crore
(at face
value)
0.58*
–
–
95,20,455@
1.90**
*
The equity shares will be issued at a premium of R 63.06 crore (previous year: R 71.99 crore)
** The equity shares will be issued at a premium of Nil (previous year: R 1214.50 crore) on the exercise of options by the bond holders
#
@
Note 20 (h) for terms of employee stock option schemes
The number of options have been adjusted consequent to bonus issue wherever applicable
(f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended
March 31, 2020 are 46,67,64,755 (previous period of five years ended March 31, 2019: 46,67,64,755 shares).
(g) 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, 2020– Nil (previous period of five years ended March 31, 2019: Nil).
(h) Stock option of the parent company:
i.
Terms:
A.
The grant of options to the employees under the stock option schemes is on the basis of their performance and other
eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject
to the discretion of the management and fulfillment of certain conditions.
B. 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.
ii.
The details of the grants under the aforesaid schemes under various series are summarised below:
Sr.
No.
i.
ii.
iii.
iv.
v.
vi.
Series reference
Particulars
Grant price - (R)
Grant dates
Vesting commences on
Options granted and outstanding
at the beginning of the year
Options lapsed
Options granted
vii. Options exercised
2000
2002(A)
2002(B)
2003(A)
2003(B)
2006(A)
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2.00
2:00
2.00
2.00
2.00
2.00
7.80
7.80
7.80
7.80
267.10
267.10
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
1-7-2007 onwards
23-5-2004 onwards
23-5-2004 onwards
1-7-2008 onwards
–
–
–
–
19,800
19,800
–
–
48,375
48,375
–
–
–
–
–
89,325
89,325
–
–
–
–
–
–
–
–
–
70,767
1,73,309
4,87,892 27,11,931 35,49,464
70,767
–
–
13,837
38,700
52,237
1,05,342
2,64,380
3,51,935
25,200
6,58,915
6,39,890
2,34,441
7,31,012 11,25,488
504
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [20] (contd.)
Sr.
No.
Series reference
Particulars
viii. Options granted and outstanding
at the end of the year, of which
Options vested
Options yet to vest
ix. Weighted average remaining
contractual life of options (in
years)
2000
2002(A)
2002(B)
2003(A)
2003(B)
2006(A)
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,45,935
1,73,309 23,75,454 27,11,931
49,762
96,173
10,750
6,51,653
9,76,795
1,62,559 17,23,801 17,35,136
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
4.63
4.95
4.61
4.15
iii. The number and weighted average exercise price of stock options are as follows:
2019-20
2018-19
Particulars
No. of stock
options
Weighted
average
exercise price
(R)
223.35
257.28
222.40
139.58
251.52
264.28
iv. Weighted average share price at the date of exercise for stock options exercised during the year is R 1065.30 (previous year:
(A) Options granted and outstanding at the beginning of the year
(B) Options granted
(C) Options allotted
(D) Options lapsed
(E) Options granted and outstanding at the end of the year
(F) Options exercisable at the end of the year out of (E) supra
Weighted
average
exercise price
(R)
251.52
252.72
249.81
254.20
252.09
248.70
42,65,623
6,65,090
13,59,929
6,85,544
28,85,240
9,87,545
28,85,240
6,97,615
7,83,249
2,78,217
25,21,389
7,01,415
No. of stock
options
v.
R 1272.80) per share.
In respect of stock options granted pursuant to the Company’s stock options schemes, the fair value of the options is treated
as discount and accounted as employee compensation over the vesting period.
vi. Weighted average fair values of options granted during the year is R 804.63 (previous year: R 986.95) per option.
vii. 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.
(A) Weighted average risk-free interest rate
(B) Weighted average expected life of options
(C) Weighted average expected volatility
(D) Weighted average expected dividends over the life of the option
(E) Weighted average share price
(F) Weighted average exercise price
(G) Method used to determine expected volatility
2019-20
2018-19
6.23%
4.12 years
25.40%
R 74.07 per option
R 1056.34 per option
R 252.72 per share
7.44%
4.09 years
25.73%
R 65.41 per option
R 1225.00 per option
R 257.28 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.
viii. The balance in share options (net) account as at March 31, 2020 is R 99.91 crore (previous year: R 106.91 crore), including
R 47.54 crore (previous year: R 52.29 crore) for which the options have been vested to employees as at March 31, 2020.
(i) During the year ended March 31, 2020, the Company paid the final dividend of R 18 per equity share for the year ended
March 31, 2019.
(j) During the year ended March 31, 2020, the Company paid interim dividend of R 10 per equity share amounting to R 1403.89
crore.
(k) On June 5, 2020, the Board of Directors recommended a final dividend of R 8 per equity share for the year ended March 31, 2020
subject to approval from shareholders. On approval, the total dividend payment based on number of shares outstanding as on
March 31, 2020 is expected to be R 1123.11 crore.
505
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [20] (contd.)
(l) Capital Management
The Group continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating.
Low gearing levels also equip the Group 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. The gross debt equity ratio is 1.85:1 (as at 31-3-2019: 1.81:1).
(i)
(m) Stock option scheme of subsidiary companies:
Larsen & Toubro Infotech Limited
Employee Stock Ownership Scheme (‘ESOS Plan’)
(A) The options are vested equally over a period of 5 years subject to the discretion of the management and fulfilment of
certain conditions. The 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:
ESOP Scheme 2000
ESOP Scheme 2000
Particulars
I,II & III
IV - XXI
U.S. Stock Option
Sub-plan
2006
ESOP Scheme
2015
Grant price
Grant dates
Vesting commences on
2019-20
R 5
2018-19
R 5
2019-20
R 2
2018-19
R 2
2019-20
USD 2.4
2018-19
USD 2.4
2019-20
R 1
2018-19
R 1
1 April 2001
onwards
1 April 2002
onwards
1 October 2001
onwards
1 October 2002
onwards
15 March 2007
onwards
15 March 2008
onwards
10 June 2016
onwards
10 June 2017
onwards
Sr.
no.
i
ii
iii
iv
11,840
–
–
21,345
–
–
58,190
–
–
6,85,302
–
–
33,000
–
–
39,000 21,16,860 28,50,140
–
3,59,400
–
63,660
–
–
Options granted and outstanding
at the beginning of the year
Options reinstated during the year
Options granted during the year
v
vi
vii Options allotted/exercised during
the year
2,055
9,130
15,065
6,15,091
–
6,000
5,99,565
8,80,600
viii Options lapsed/cancelled during
the year
9,785
375
43,125
12,021
33,000
–
55,560
2,12,080
ix
x
xi
Options granted and outstanding
at the end of the year
Options vested at the end of the
year out of (ix)
Options unvested at the end of the
year out of (ix)
xii Weighted average remaining
contractual life of options (in
years)
–
–
–
–
11,840
11,840
–
–
–
–
–
–
58,190
58,190
–
–
–
–
–
–
33,000 15,25,395 21,16,860
33,000
6,24,400
1,02,360
–
9,00,995 20,14,500
–
3.8
4.7
(C) The number and weighted average exercise price of stock options are as follows:
Sr.
no.
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
v
vi
Options lapsed/cancelled during the year
Options granted and outstanding at the end of the year
Options vested at the end of the year out of (v)
2019-20
2018-19
No. of stock
options
Weighted
average
exercise price
(R)
No. of stock
options
Weighted
average
exercise price
(R)
22,19,890
63,660
6,16,685
1,41,470
15,25,395
6,24,400
3.50
1.00
1.04
40.06
1.00
1.00
35,95,787
3,59,400
15,10,821
2,24,476
22,19,890
2,05,390
2.89
1.00
2.09
1.06
3.50
28.02
506
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [20] (contd.)
(D) Weighted average share price at the date of exercise for stock options exercised during the year is R 1581.00 per share
(previous year: R 1617.00 per share).
(E) Weighted average fair value of options granted during the year is R 1540.66 per share (previous year: R 1649.62 per
share).
(F) The fair value has been calculated using the Black-Scholes Option Pricing model and significant assumptions and inputs
to estimate the fair value options granted during the year are as follows:
Sr. no.
Particulars
i
ii
iii
iv
v
vi
Weighted average risk-free interest rate
Weighted average expected life of options
Weighted average expected volatility
Weighted average expected dividends over the life of option
Weighted average share price
Weighted average exercise price
2019-20
6.18%
3 years
17.44%
R 148.29
R 1541.55
R 1
2018-19
7.49%
3 years
17.72%
R 108.91
R 1650.48
R 1
vii
Method used to determine expected volatility
The expected volatility has been calculated
entirely based on historic volatility of the IT Index.
(ii)
L&T Technology Services Limited
(A) Employee stock option plan (ESOP)
(i)
The objective of the ESOP Scheme, 2016 is to reward those employees who contribute significantly to the
Company’s profitability and shareholder’s value as well as encourage improvement in performance and retention
of talent. The options are vested equally over a period of 5 years subject to the discretion of the management and
fulfillment of certain conditions.
(ii) The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years (84 months) from
the date of grant of options or six years (72 months) from the date of first vesting or three years (36 months) from
the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The
exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on
such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the
par value of the equity share of our Company and shall not be more than the market price as defined in the SEBI
(Share Based Employee Benefits) Regulations, 2014 and shall be subject to compliance with accounting policies
under the said regulation. The number of shares to be allotted on exercise of options should not exceed the total
number of unexercised vested options that may be exercised by the employee. Details of grant under ESOP Scheme,
2016 is summarised below:
Sr.
no.
i
ii
iii
iv
v
vi
vii
viii
Particulars
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-(a)
of (a) above - vested outstanding options
of (a) above - unvested outstanding options
ix
Weighted average remaining contractual life of options (in years)
ESOP scheme, 2016
2019-20
R 2
28-07-2016 onwards
28-07-2017 onwards
17,38,667
84,000
1,66,000
4,98,233
13,22,434
1,05,074
12,17,360
2.99
2018-19
R 2
32,24,945
1,64,000
2,35,000
15,57,278
17,38,667
82,187
16,56,480
4.51
507
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [20] (contd.)
(B) No options were granted to key managerial personnel during the current year as well as previous year.
(C) The number and weighted average exercise price of stock options are as follows:
Particulars
Options granted and outstanding at the
beginning of the year
Options granted during the year
Options exercised during the year
Options lapsed during the year
Options granted and outstanding at the end of
Sr.
no.
i
ii
iii
iv
v
vi
2019-20
2018-19
No. of stock
options
Weighted
average exercise
price (R)
No. of stock
options
Weighted
average exercise
price (R)
17,38,667
1,66,000
4,98,233
84,000
2.00
2.00
2.00
2.00
32,24,945
2,35,000
15,57,278
1,64,000
2.00
2.00
2.00
2.00
2.00
2.00
the year
13,22,434
2.00
17,38,667
Options exercisable at the end of the year out
of (v) above
1,05,074
2.00
82,187
(D) Weighted average share price at the date of exercise for stock options exercised during the year is R 1619.53 per share
(previous year: R 1435.59 per share).
(E)
In respect of stock options granted pursuant to the Company’s stock options schemes, the fair value of the options is
treated as discount and accounted as employee compensation over the vesting period.
(F) The fair value at grant date of options granted during the year ended 31-3-2020 is R 1588.88 per option and R 1527.59
per option (previous year: R 1231.30 per option). The fair value of grant date is determined using the Black-Scholes
Option Pricing Model which takes into account the exercise price, term of option, share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option. The model inputs for options granted during the year included:
Sr. no.
i
ii
iii
iv
Particulars
Weighted average exercise price
Grant date
Expiry date
Weighted average share price at grant date
v
vi
Weighted average expected price volatility of
company’s share
Weighted average expected dividend yield over life of
option
vii Weighted average risk-free interest
viii Method used to determine expected volatility
2019-20
R 2.00
19-Jul-19
18-Jul-26
R 1660.45 per
option
R 2.00
18-Oct-19
17-Oct-26
R 1593.30 per
option
2018-19
R 2.00
23-Jul-18
22-Jul-25
R 1281.80 per
option
24.01%
23.21%
22.47%
5.30%
6.22%
5.08%
6.03%
5.06%
7.67%
The expected price volatility is based on the historic
volatility (based on the remaining life of the options),
adjusted for any expected changes to future volatility
due to publicly available information.
(iii) L&T Finance Holdings Limited
The Company has formulated Employee Stock Option Schemes 2010 (ESOP Scheme 2010) and 2013 (ESOP Scheme 2013).
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 allotted under the scheme 2010 are vested over a period of four years in the ratio of 15%,
20%, 30% and 35% respectively from the end of 12 months from the date of grant, subject to the discretion of the
management and fulfillment of certain conditions. The options granted under the scheme 2013 are vested in a graded
manner over a period of four years with 0%, 33%, 33% and 34% of grants vesting each year, commencing from the end of
24 months from the date of grant or w.e.f. July 10, 2019 vested in a graded manner over a period of four years with 25%,
25%, 25% and 25% of grants vesting each year, commencing from the end of 12 months from the date of grant.
508
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [20] (contd.)
(A) The details of the grants are summarised below:
Sr.
no.
Particulars
i
ii
Grant Price
Options granted and outstanding at the beginning of the
year
iii Options granted during the year
iv
v
vi
Options cancelled/lapsed during the year
Options exercised and shares allotted during the year
Options granted and outstanding at the end of the year
of which:
Options vested
Options yet to vest
vii Weighted average remaining contractual life of options (in
years)
* w.e.f. July 10, 2019
Scheme 2010
Scheme 2013
2019-20
2018-19
2019-20
2018-19
R 44.20
R 10.00*/Market Price
49,52,000
2,45,000
12,59,250
10,17,250
29,20,500
42,04,925
15,10,000
3,77,125
3,85,800
49,52,000
4,16,34,600
1,56,63,240
67,64,000
50,04,000
4,51,95,840
3,00,90,000
1,64,90,000
21,95,800
27,49,600
4,16,34,600
6,19,250
23,01,250
5,04,000
44,48,000
89,77,400
3,62,18,440
44,32,000
3,72,02,600
4.78
5.63
5.80
5.92
(B) Average fair value of options granted during the year is R 108.82 per option (previous year: R 58.54 per option).
(C) 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.
i
ii
iii
iv
v
vi
v
Particulars
Weighted average risk-free interest rate
Weighted average expected life of options
Weighted average expected volatility
Weighted average expected dividends
Weighted average share price
Weighted average exercise price
Method used to determine expected volatility
2019-20
6.10%
2.94 years
35.28%
R 3.25 per option
R 120.25 per option
R 10.53 per option
2018-19
7.42%
3.24 years
32.78%
R 3.65 per option
R 168.93 per option
R 161.05 per option
Expected volatility is based on the historical volatility
of the Company’s share price applicable to the
expected life of each option.
(iv) Mindtree Limited
(A) Employee Restricted Stock Purchase Plan 2012 (‘ERSP 2012’)
ERSP 2012 was instituted with effect from July 16, 2012 to issue equity shares of nominal value of R 10.00 each.
Shares under this program are granted to employees at an exercise price of not less than R 10.00 per equity share or
such higher price as determined by the Nomination and Remuneration Committee. Shares shall vest over such term as
determined by the Nomination and Remuneration Committee not exceeding ten years from the date of the grant. All
shares will have a minimum lock in period of one year from the date of allotment.
Sr. no.
Particulars
2019-20
No. of stock options
Weighted average
exercise price (R)
i
ii
iii
iv
v
vi
Options granted and outstanding at the beginning of the year
Options granted during the year
Options exercised during the year
Options lapsed/forfeited during the year
Options granted and outstanding at the end of the year
Options vested at the end of the year out of (v)
–
3,60,025
3,60,025
–
–
–
–
10.00
10.00
–
–
–
509
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [20] (contd.)
(B) Other Stock based compensation arrangements
The Group has also granted phantom stock options and letter of intent to issue shares under ERSP 2012 plan to certain
employees which is subject to certain vesting conditions. Details of the outstanding options/units as at March 31, 2020
are given below:
Sr.
no.
Particulars
Total no. of units/shares
Vested units/shares
Lapsed units/shares
Forfeited units/shares
Cancelled units/shares
i
ii
iii
iv
v
vi Contractual life
vii Grant date
viii Grant price per share/unit
2019-20
Phantom stock options plan
5,00,000
4,25,000
–
–
75,000
1 year
1-Apr-2018, 24-Jul-2019
R 772 per share/ R 930 per share
Sr.
no.
i
ii
Particulars
Outstanding units/shares as at the beginning of the year
Number of units/shares granted under letter of intent during the
2019-20
Employee Restricted Stock Option Plan 2012 **
3,69,650
year
Vested units/shares
iii
Lapsed units/shares
iv
v
Forfeited units/shares
vi Cancelled units/shares
vii Outstanding units/shares as at the end of the year
viii Contractual life
ix Grant date*
x Grant price per share/ unit*
*Based on letter of intent
**Does not include direct allotment of shares
3,12,900
3,60,025
–
–
82,075
2,40,450
1-2 years
24-Jul-2019, 2-Aug-2019,
24-Oct-2019, 28-Jan-2020
R 10 per share
The weighted average fair value of each unit under the above mentioned ERSP 2012 plan, granted during the year
ended March 31, 2020 was R 697.78 using the Black-Scholes model with the following assumptions:
Sr. no.
Particulars
i
ii
iii
iv
v
vi
Weighted average grant date share price
Weighted average exercise price
Dividend yield %
Expected life
Risk-free interest rate
Volatility
2019-20
R 697.78
R 10.00
0.43%
1-2 years
5.96%
34.72%
510
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [21]
Other equity
Particulars
Equity component of foreign currency convertible bonds
Capital reserve [Note 1(II)(g)]
Capital reserve
Capital reserve on consolidation
Capital redemption reserve*
Securities premium account [Note 1(II)(u)]
Employee share options (net) [Note 1(II)(w)]
Employee share options outstanding
Deferred employee compensation expense
Statutory reserves
Debenture redemption reserve ^
Reserve u/s 45 IC of Reserve Bank of India Act, 1934
Reserve u/s 29C of National Housing Bank Act, 1987
Reserve u/s 36(1)(viii) of Income tax Act, 1961
Impairment reserve as per Reserve Bank of India #
Retained earnings
Foreign currency translation reserve [Note 1(II)(x)(iv)]
Hedging reserve [Note 1(II)(r)(iii)(B)]
Cash flow hedging reserve
Cost of hedging reserve
Debt instruments through other comprehensive income [Note 1(II)(r)(i)(B)]
Equity instruments through other comprehensive income [Note 1(II)(r)(i)(B)]
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
–
153.20
10.52
271.92
10.52
271.92
282.44
42.00
8599.60
282.44
42.00
8471.99
525.76
(188.71)
401.49
337.05
1423.04
1694.87
146.46
587.31
–
580.76
(179.27)
1407.28
1919.93
168.81
645.71
15.82
4157.55
52731.64
582.56
(421.77)
(15.15)
239.11
5.89
(436.92)
65.33
16.75
66442.44
3851.68
48176.31
540.73
245.00
(30.37)
24.22
62094.25
* Capital redemption reserve (CRR): CRR has been created on redemption of preference shares (by a subsidiary) out of profits in
accordance with Section 55(2)(c) of the Companies Act, 2013.
^ Debenture redemption reserve (DRR): DRR has been created on non-convertible debentures in accordance with the Companies (Share
capital and Debenture) Rules, 2014 (as amended).
# Impairment reserve as per Reserve Bank of India: Impairment reserve has been created pursuant to circular issued by the Reserve Bank
of India where impairment allowance as per Ind AS 109 is lower than the provisioning required as per extant prudential norms.
511
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [22]
Non-current liabilities: Financial liabilities - Borrowings
Particulars
Secured Unsecured
Total
Secured Unsecured
Total
v crore
v crore
v crore
v crore
v crore
v crore
As at 31-3-2020
As at 31-3-2019
29336.17 12055.08 41391.25 28587.12
–
124.11
124.11
1404.03
–
1404.03
2227.91 39411.94 28711.08
–
–
–
37184.03
–
–
–
120.48
976.29
7865.92 36453.04
120.48
976.29
7859.84 36570.92
0.06
0.06
66520.20 15811.13 82331.33 57298.20 16822.59 74120.79
As at 31-3-2020
As at 31-3-2019
v crore
696.66
0.21
0.44
203.83
901.14
v crore
12.80
139.78
0.65
201.60
354.83
As at 31-3-2020
As at 31-3-2019
v crore
339.63
318.66
19.86
30.52
708.67
v crore
308.36
226.66
14.09
7.73
556.84
Redeemable non-convertible fixed rate debentures
Redeemable non-convertible inflation indexed debentures
Preference shares
Term loans from banks
Finance lease obligation
Loans guaranteed by directors Nil (previous year: Nil)
NOTE [23]
Non-current liabilities: Other financial liabilities
Particulars
Forward contract payables
Embedded derivative payables
Financial guarantee contracts
Due to others
NOTE [24]
Non-current liabilities: Provisions
Particulars
Employee pension scheme [Note 52(b)(i)]
Post-retirement medical benefits plan [Note 52(b)(i)]
Provision for other employee benefits
Other provisions [Note 56(a)]
512
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [25]
Other non-current liabilities
Particulars
Other payables
NOTE [26]
Current liabilities: Financial liabilities - Borrowings
As at 31-3-2020
As at 31-3-2019
v crore
31.09
31.09
v crore
0.55
0.55
Particulars
Secured Unsecured
Total
Secured Unsecured
Total
As at 31-3-2020
As at 31-3-2019
Loans repayable on demand
Short term loans and advances from banks
Short term loans from others
Loans from related parties
Commercial paper
v crore
v crore
v crore
v crore
v crore
v crore
4376.42 11953.90
7577.48
7883.29 10726.52
2843.23
3.19
–
–
59.68
– 12277.73 12277.73
3.19
59.68
5585.82
1611.78
3974.04
6609.75
4063.24
2546.51
5.99
5.99
–
–
–
–
– 17022.28 17022.28
10420.71 24600.31 35021.02
6520.55 22703.29 29223.84
NOTE [27]
Current liabilities: Financial liabilities - Current maturities of long term borrowings
Particulars
Secured Unsecured
Total
Secured Unsecured
Total
As at 31-3-2020
As at 31-3-2019
Redeemable non-convertible fixed rate debentures
Preference shares
0.675% Foreign currency convertible bonds
Term loans from banks
Loans guaranteed by directors Nil (previous year: Nil)
v crore
v crore
v crore
v crore
v crore
v crore
9474.52
–
–
7930.00
4863.05 14337.57
669.98
–
8647.22
669.98
–
717.22
9111.04
–
–
4160.98
3073.62 12184.66
184.19
1363.39
8478.30
184.19
1363.39
4317.32
17404.52
6250.25 23654.77 13272.02
8938.52 22210.54
513
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [28]
Current liabilities: Financial liabilities - Other trade payables
Particulars
Acceptances
Due to related parties:
Associate companies
Joint venture companies
Due to others
NOTE [29]
Current liabilities: Other financial liabilities
Particulars
Unclaimed dividend
Unclaimed interest on debentures
Financial guarantee contracts
Forward contract payables
Embedded derivative payables
Due to others
NOTE [30]
Other current liabilities
As at 31-3-2020
As at 31-3-2019
v crore
v crore
237.30
v crore
v crore
520.99
109.26
1300.77
47.68
1092.73
1410.03
41517.09
43164.42
1140.41
41072.29
42733.69
As at 31-3-2020
As at 31-3-2019
v crore
114.27
17.99
0.58
1277.04
118.21
3395.14
4923.23
v crore
84.64
15.31
1.13
380.65
145.48
3995.57
4622.78
Particulars
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
Contract liabilities [Note 47(d)(i)]
Due to customers (construction and project related activity)
Advances from customers
Other payables
11666.09
16353.36
11001.87
17270.56
28019.45
2797.22
30816.67
28272.43
2894.12
31166.55
514
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [31]
Current liabilities: Provisions
Particulars
Provision for employee benefits:
Gratuity [Note 52(b)(i)]
Compensated absences
Employee pension scheme [Note 52(b)(i)]
Post-retirement medical benefits plan [Note 52(b)(i)]
Others
Others:
Additional tax on dividend
Other provisions [Note 56(a)]
NOTE [32]
Contingent Liabilities
Particulars
a) Claims against the Group 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 Group in Writ
d) Income tax liability (including penalty) that may arise in respect of which
the Group is in appeal
e) Guarantees or Letter of credit or letter of comfort given to third parties
f) Corporate guarantees for debt given on behalf of joint ventures
g) Bank guarantees given on behalf of joint ventures
h) Contingent Liabilities incurred in relation to interest in joint operations
i) Share in contingent liabilities of joint operations for which the Group is
contingently liable
j) Contingent liabilities in respect of liabilities of other joint operators in
respect of joint operations
k) Share of contingent liabilities incurred jointly with other investors of the
associate
l) Share of joint ventures’ contingent liabilities in respect of a legal claim(s)
lodged against the entity
As at 31-3-2020
As at 31-3-2019
v crore
v crore
v crore
v crore
233.47
1337.85
29.49
21.61
0.83
–
1127.60
254.53
1133.19
28.92
14.97
0.84
1623.25
1432.45
91.62
919.36
1127.60
2750.85
1010.98
2443.43
As at 31-3-2020
As at 31-3-2019
v crore
3630.92
305.37
736.87
1239.61
2258.84
394.94
29.38
7460.44
64.05
5464.89
0.68
193.53
v crore
3354.54
257.37
387.28
947.52
2566.68
427.31
28.93
7586.12
84.92
7187.07
0.68
240.08
Notes:
(i)
(ii)
The Group expects reimbursements of R 11.25 crore (previous year: R 9.30 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 Group has determined that the possibility of such levy is remote.
In respect of matters at (e), the cash outflows, if any, could occur any time during the subsistence of the underlying agreement.
In respect of matters at (f), the cash outflows, if any, could generally occur up to ten years, being the period over which the validity
of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of
the borrowing to which the guarantees relate.
In respect of matters at (g), the cash outflows, if any, could generally occur up to three years, being the period over which the
validity of the guarantees extends.
In respect of matters at (h) to (j), the cash outflows, if any, could generally occur upto completion of projects undertaken by the
respective joint operations.
(iii)
(iv)
(v)
(vi)
(vii) In respect of matters at (k) and (l), the cash outflows, in any, could generally occur any time up to settlement of claims or during
subsistence of the underlying agreements.
515
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [33]
Commitments
Particulars
As at 31-3-2020
As at 31-3-2019
v crore
v crore
(a) Estimated amount of contracts remaining to be executed on capital
account (net of advances):
(i) Property, plant and equipment
(ii) Intangible assets
(iii) Investment property
(b) Funding committed by way of equity/loans to Joint venture companies/
other companies:
(i)
(ii) Other companies (including investment through purchase of
Joint venture companies
investments from other parties)*
1188.49
187.14
117.02
19.56
–
795.18
929.85
183.83
42.87
10732.85
*
The Company had entered into a definitive share purchase agreement to acquire 20.32% stake in Mindtree Limited on
March 18, 2019 at a price of R 980 per share aggregating to consideration of R 3269.00 crore. Further, the company had placed
a purchase order with its stock broker for acquiring 15% stake through on-market purchases for an overall consideration amount
not exceeding R 2434.00 crore from any recognised stock exchange, but only after receipt of relevant approvals from regulatory
authorities. The Company had also made an open offer to acquire 31% stake for a consideration of R 5029.85 crore in accordance
with the requirements of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011.
NOTE [34]
Revenue from operations
Particulars
Sales & service:
Construction and project related activity
Manufacturing and trading activity
Engineering service fees
Software development products and services
Income from financing activity/annuity based projects
Property development activity
Fare collection and related activity
Servicing fees
Commission
Charter hire income
Investment/portfolio management and trusteeship fees
Fees for operation and maintenance of power plant
Other operational income:
Lease rentals
Property maintenance recoveries
Premium earned (net) on related forward exchange contracts
Profit on sale of a subsidiary under developmental projects segment
Profit on sale of investment property
Technical fees
Miscellaneous income
516
2019-20
2018-19
v crore
v crore
v crore
v crore
97452.17
3225.64
5649.10
16620.95
14442.06
2065.94
370.14
1321.35
123.38
1.78
353.25
2682.29
150.91
69.71
44.55
–
–
0.06
879.08
95787.45
3123.29
5172.01
9330.75
13009.42
2255.75
166.49
857.01
198.45
1.27
618.64
2821.67
144308.05
133342.20
170.00
48.48
32.76
415.61
565.60
1.02
644.62
1144.31
145452.36
1878.09
135220.29
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [35]
Other income
Particulars
2019-20
2018-19
v crore
v crore
v crore
v crore
Interest income [Note 46(a)]:
Loans and advances to joint venture and associate companies
Investments
Others
Dividend income:
Trade investments
Current investments
Others
Net gain/(loss) on sale or fair valuation of investments
Net gain/(loss) on derivatives at fair value through profit or loss
Net gain/(loss) on sale of property, plant and equipment
Lease rentals
Miscellaneous income (net of expenses)
NOTE [36]
Manufacturing, construction and operating expenses
Particulars
Cost of raw materials, components consumed:
Raw materials and components
Less: Scrap sales
Construction materials consumed
Purchase of stock-in-trade
Stores, spares and tools consumed
Sub-contracting charges
Changes in inventories of finished goods, stock-in-trade, work-in-progress and
property development:
Closing stock:
Finished goods
Stock-in-trade
Work-in-progress
Cost of built up space and property development land:
Work-in-progress
Completed property
109.34
378.65
341.08
1.76
0.60
99.24
113.16
389.71
392.12
829.07
894.99
2.09
176.73
58.09
101.60
733.84
13.19
(33.28)
19.94
696.54
236.91
65.33
(21.81)
24.76
5.07
631.28
2360.90
1836.53
2019-20
2018-19
v crore
v crore
v crore
v crore
15632.01
83.35
14887.42
115.86
15548.66
30316.12
841.09
2184.46
26454.05
14771.56
31230.44
887.87
2812.31
26011.91
98.56
308.36
5748.17
3130.39
72.37
9357.85
55.09
291.28
5609.37
3174.88
115.32
9245.94
Carried forward
9357.85
75344.38
9245.94
75714.09
517
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [36]
Manufacturing, construction and operating expenses (contd.)
Particulars
Brought forward
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
Inventorisation of investment property
Other manufacturing, construction and operating expenses:
Power and fuel
Royalty and technical know-how fees
Packing and forwarding
Rent and hire charges
Bank guarantee charges
Engineering, professional, technical and consultancy fees
Insurance
Rates and taxes
Travelling and conveyance
Repairs to plant and equipment
Repairs to buildings
General repairs and maintenance
Provision/(reversal) for foreseeable losses on construction contracts
Other provisions
Expenses on construction job in realty business
Software development expenses
Miscellaneous expenses
Finance cost of financial services business and finance lease activity:
Interest and other financing charges
2019-20
2018-19
v crore
9357.85
v crore
75344.38
v crore
9245.94
v crore
75714.09
55.09
291.28
5609.37
3174.88
115.32
9245.94
(111.91)
759.61
1922.13
119.52
572.93
2714.02
248.67
2003.15
321.32
632.18
1113.94
90.48
22.22
640.32
(103.28)
12.84
392.48
1759.24
866.55
61.84
224.81
4345.49
3744.40
138.29
8514.83
(731.11)
–
647.70
(731.11)
2085.09
42.94
485.06
2930.62
208.40
2084.53
285.08
622.53
1113.65
77.64
23.00
473.21
183.51
148.06
850.63
933.07
717.41
13328.71
13264.43
8041.88
97362.67
7385.63
95633.04
518
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [37]
Employee benefits expense
Particulars
Salaries, wages and bonus
Contribution to and provision for:
2019-20
2018-19
v crore
v crore
20821.99
v crore
v crore
15760.62
Provident fund and pension fund
Superannuation/employee pension and social security schemes
Gratuity funds [Note 52(b)(ii)]
407.06
199.13
154.25
289.91
212.55
144.75
Expenses on employee stock option scheme
Employee medical and other insurance premium expenses
Staff welfare expenses
Recoveries on account of deputation charges
NOTE [38]
Sales, administration and other expenses
Particulars
Power and fuel
Packing and forwarding
Insurance
Rent and hire charges
Rates and taxes
Travelling and conveyance
Repairs to buildings
General repairs and maintenance
Professional fees
Directors’ fees
Telephone, postage and telegrams
Advertising and publicity
Stationery and printing
Commission:
Distributors and agents
Others
Bank charges
Miscellaneous expenses
Bad debts and advances written off (net of written back)
Less: Allowances for doubtful debts and advances written back
Receivable discounting charges -non recourse
Impairment of debt instruments
Allowances for expected credit loss
Loss on fair valuation of loans towards financing activities (net)
Recoveries from joint venture and associate companies
Exchange (gain)/loss (net)
Other provisions
760.44
190.84
411.48
1133.82
(204.57)
23114.00
647.21
151.00
196.85
1052.56
(341.84)
17466.40
2019-20
v crore
62.30
1.61
1759.76
1885.56
v crore
157.71
67.30
113.37
244.17
392.89
946.82
98.85
544.72
1176.94
11.64
227.03
206.94
69.61
63.91
182.24
1230.03
(125.80)
29.38
350.59
2724.43
93.31
(40.40)
(438.96)
319.99
8646.71
2018-19
v crore
378.76
2.30
1830.59
1653.15
v crore
120.51
66.45
90.18
526.66
209.28
704.26
38.86
466.49
920.36
8.95
202.14
169.40
68.75
381.06
150.55
796.70
177.44
39.36
–
1789.07
77.62
(46.22)
(235.08)
68.42
6791.21
519
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [39]
Finance costs
Particulars
Interest expenses
Other borrowing costs
Exchange (gain)/loss [net] (attributable to finance costs)
2019-20
v crore
2723.26
12.71
60.69
2796.66
2018-19
v crore
1752.65
12.79
37.11
1802.55
39(a) Aggregation of expenses disclosed vide [Note 36 -Manufacturing, construction and operating expenses], [Note 37 -Employee
benefits expense], [Note 38 - Sales, administration and other expenses] and [Note 39 - Finance costs]
2019-20
Note 38:
Sales,
administration
and other
expenses
157.71
67.30
113.37
244.17
392.89
946.82
–
98.85
544.72
1176.94
Note 39:
Finance costs
Total
Note 36:
Manufacturing,
construction
and operating
expenses
Note 37:
Employee
benefits
expense
2018-19
Note 38:
Sales,
administration
and other
expenses
R crore
Note 39:
Finance costs
Total
285.08
196.85
–
–
–
–
–
–
–
–
–
–
2079.84
2085.09
640.23
846.17
2958.19
1025.07
2060.76
90.48
121.07
485.06
2930.62
622.53
1113.65
77.64
23.00
1185.04
473.21
3180.09
2084.53
–
–
–
–
–
–
–
–
–
–
–
120.51
66.45
90.18
526.66
209.28
704.26
–
38.86
466.49
920.36
–
–
–
–
–
–
–
–
–
–
2205.60
551.51
572.11
3457.28
831.81
1817.91
77.64
61.86
939.70
3004.89
–
1802.55
9188.18
796.70
–
1514.11
–
2796.66
10838.54
7385.63
1230.03
–
2096.58
717.41
Sr.
No.
1
2
3
4
5
6
7
8
9
Nature of expenses
Power and fuel
Packing and forwarding
Insurance
Rent and hire charges
Rates and taxes
Travelling and conveyance
Repairs to plant and
equipment
Repairs to buildings
General repairs and
maintenance
10
11
Engineering, professional,
technical and consultancy fees
Interest and other financing
charges
12 Miscellaneous expenses
Note 36:
Manufacturing,
construction
and operating
expenses
1922.13
572.93
Note 37:
Employee
benefits
expense
–
–
321.32
411.48
2714.02
632.18
1113.94
90.48
22.22
640.32
2003.15
8041.88
866.55
–
–
–
–
–
–
–
–
–
520
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [40]
The List of subsidiaries, associates, joint ventures and joint operations included in the Consolidated Financial Statements are as under:
Sr.
no.
Name of subsidiaries
Principal place of
business
As at 31-3-2020
As at 31-3-2019
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Indian subsidiaries
Hi-Tech Rock Products and Aggregates Limited
L&T Geostructure LLP
L&T Geo – L&T JV for Maharatangarh project
L&T Geo – L&T UJV CMRL CS
L&T Infrastructure Engineering Limited
L&T Cassidian Limited #
L&T Hydrocarbon Engineering Limited
L&T Gulf Private Limited ##
Larsen & Toubro Infotech Limited
Syncordis Software Services India Private Limited
Ruletronics Systems Private Limited
Lymbyc Solutions Private Limited %
Powerup Cloud Technologies Private Limited @
L&T Technology Services Limited
L&T Thales Technology Services Private Limited
Graphene Semiconductor Services Private Limited
Seastar Labs Private Limited
Esencia Technologies India Private Limited
Mindtree Limited @@
L&T Capital Markets Limited
L&T Finance Holdings 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 Financial Consultants Limited
Mudit Cement Private Limited
L&T Finance Limited
L&T Infra Investment Partners
L&T Metro Rail (Hyderabad) Limited
Sahibganj Ganges Bridge-Company Private Limited #
L&T Arunachal Hydropower Limited
L&T Himachal Hydropower Limited
L&T Power Development Limited
L&T Uttaranchal Hydropower Limited
Nabha Power Limited
Chennai Vision Developers Private Limited
L&T Asian Realty Project LLP
L&T Parel Project LLP
L&T Realty Limited *
L&T Westend Project LLP
LTR SSM Private Limited #
L&T Seawoods Limited
L&T Vision Ventures Limited
L&T Electricals and Automation Limited
L&T Construction Equipment Limited
L&T Construction Machinery Limited
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
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
50
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
74.53
74.53
74.53
74.53
74.53
74.62
55.22
74.62
74.62
74.62
61.08
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
34.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
NA
100.00
99.00
100.00
68.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
74.53
74.53
74.53
74.53
74.53
74.62
55.22
74.62
74.62
74.62
61.08
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
63.72
34.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
NA
100.00
99.00
100.00
68.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
74.80
74.80
74.80
–
–
78.88
58.37
78.88
78.88
78.88
–
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
35.11
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
NA
100.00
99.00
100.00
68.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
74.80
74.80
74.80
–
–
78.88
58.37
78.88
78.88
78.88
–
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
63.91
35.11
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
NA
100.00
99.00
100.00
68.00
100.00
100.00
100.00
521
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [40] (contd.)
Name of subsidiaries
Principal place of
business
As at 31-3-2020
As at 31-3-2019
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Indian subsidiaries
L&T Valves Limited
L&T Shipbuilding Limited **
Bhilai Power Supply Company Limited
L&T Power Limited
Kesun Iron and Steel Company Private Limited
L&T Aviation Services Private Limited
L&T Capital Company Limited
L&T Infra Contractors Private Limited
India
India
India
India
India
India
India
India
100.00
NA
99.90
99.99
95.00
100.00
100.00
100.00
100.00
NA
99.90
99.99
95.00
100.00
100.00
100.00
100.00
97.00
99.90
99.99
95.00
100.00
100.00
100.00
100.00
97.00
99.90
99.99
95.00
100.00
100.00
100.00
Sr.
no.
51
52
53
54
55
56
57
58
The company is in process of being struck off from the register of companies
The company is reclassified as subsidiary w.e.f. November 20, 2019 due to purchase of additional stake
The Group has acquired stake on August 29, 2019
The Group has acquired stake on October 25, 2019
#
##
%
@
@@ The Group has acquired stake on July 2, 2019
*
**
The company is merged with L&T Construction Equipment Limited w.e.f. April 1, 2018
The company is merged with Larsen & Toubro Limited w.e.f. April 1, 2019
Sr.
no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Name of subsidiaries
Foreign subsidiaries
Larsen & Toubro (Oman) LLC
Larsen & Toubro Qatar LLC #
Larsen & Toubro Saudi Arabia LLC
Larsen & Toubro T&D SA (Proprietary) Limited
Larsen & Toubro Heavy Engineering LLC
Larsen & Toubro Hydrocarbon International Limited
LLC ##
L&T Modular Fabrication Yard LLC
L&T Overseas Projects Nigeria Limited
Larsen Toubro Arabia LLC
L&T Hydrocarbon Saudi Company
Larsen & Toubro Kuwait Construction General
Contracting Company WLL
PT Larsen & Toubro Hydrocarbon Engineering
Indonesia
Larsen & Toubro Electromech LLC
L&T Hydrocarbon International FZE
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 (Proprietary)
Limited
522
Principal place of
business
As at 31-3-2020
As at 31-3-2019
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Sultanate of
Oman
Qatar
Kingdom of
Saudi Arabia
South Africa
Sultanate of
Oman
Kingdom of
Saudi Arabia
Sultanate of
Oman
Nigeria
Kingdom of
Saudi Arabia
Kingdom of
Saudi Arabia
Kuwait
Indonesia
Sultanate of
Oman
UAE
China
Canada
Canada
USA
South Africa
65.00
49.00
100.00
72.50
70.00
100.00
70.00
100.00
75.00
100.00
49.00
95.00
70.00
100.00
74.53
74.53
74.53
74.53
55.83
65.00
100.00
100.00
72.50
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.00
100.00
100.00
74.53
74.53
74.53
74.53
55.83
65.00
49.00
100.00
72.50
70.00
100.00
70.00
100.00
75.00
100.00
49.00
95.00
70.00
100.00
74.80
74.80
74.80
74.80
56.02
65.00
100.00
100.00
72.50
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.00
100.00
100.00
74.80
74.80
74.80
74.80
56.02
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [40] (contd.)
Principal place of
business
As at 31-3-2020
As at 31-3-2019
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Proportion
of effective
ownership
interest (%)
Proportion of
voting power
held (%)
Sr.
no.
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
50
51
52
53
54
55
56
57
58
59
60
61
62
Name of subsidiaries
Foreign subsidiaries
Larsen & Toubro Infotech GmbH
Larsen & Toubro Infotech Austria GmbH %
L&T Information Technology Spain SL
Larsen & Toubro Infotech Norge AS
Larsen & Toubro LLC
L&T Infotech S. DE R.L. DE C.V.
Syncordis S.A.
Syncordis SARL
Syncordis Limited
Syncordis PSF S.A. (formerly known as Syncordis
Support Services S.A.)
Nielsen+Partner Unternehmensberater GmbH
Nielsen+Partner Unternehmensberater AG
Nielsen+Partner Pte Ltd
NIELSEN+PARTNER S.A.
Nielsen&Partner Company Limited
Nielsen&Partner Pty Ltd
Ruletronics Limited
Ruletronics Systems Inc.
Lymbyc Solutions Inc. @
L&T Technology Services LLC
Graphene Solutions PTE Ltd.
Graphene Solutions SDN. BHD.
Graphene Solutions Taiwan Limited
Esencia Technologies Inc.
L&T Technology Services (Shanghai) Co. Ltd @@
L&T Technology Services (Canada) Ltd *
Mindtree Software (Shanghai) Co. Limited **
Bluefin Solutions Sdn. Bhd. **
L&T Realty FZE $
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
Limited LLC
PT. Tamco Indonesia
Servowatch Systems Limited
Tamco Electrical Industries Australia Pty Limited
Tamco Switchgear (Malaysia) SDN BHD
Thalest Limited
Larsen & Toubro (East Asia) Sdn.Bhd.
Larsen & Toubro International FZE
L&T Global Holdings Limited
L&T Capital Markets (Middle East) Ltd
L&T Valves Arabia Manufacturing LLC $$
L&T Valves USA LLC ^
The company is in process of liquidation
The company is liquidated on August 20, 2019
63
#
%
@@ The company has been incorporated on August 6, 2019
**
$$
The Group has acquired stake on July 2, 2019
The company has been incorporated on May 30, 2019
Germany
Austria
Spain
Norway
USA
Mexico
Luxembourg
France
UK
Luxembourg
Germany
Switzerland
Singapore
Luxembourg
Thailand
Australia
UK
USA
USA
USA
Singapore
Malaysia
Taiwan
USA
China
Canada
China
Malaysia
UAE
Malaysia
Kuwait
UAE
Kingdom of
Saudi Arabia
Indonesia
UK
Australia
Malaysia
UK
Malaysia
UAE
UAE
UAE
Kingdom of
Saudi Arabia
USA
74.53
-
74.53
74.53
98.79
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.62
74.62
74.62
74.62
74.62
74.62
74.62
61.08
61.08
-
100.00
49.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
30.00
100.00
100.00
63.72
74.53
-
74.53
74.53
98.79
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.53
74.62
74.62
74.62
74.62
74.62
74.62
74.62
61.08
61.08
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
63.72
74.80
74.80
74.80
74.80
98.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
-
78.88
78.88
78.88
78.88
78.88
-
-
-
-
100.00
100.00
49.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
30.00
100.00
100.00
63.91
74.80
74.80
74.80
74.80
98.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
74.80
-
78.88
78.88
78.88
78.88
78.88
-
-
-
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
63.91
–
–
–
–
100.00
100.00
100.00
100.00
## The company is liquidated on May 16, 2020
@ The Group has acquired stake on August 29, 2019
*
$
^
The company has been incorporated on August 20, 2019
The company is liquidated on January 27, 2020
The company has been incorporated on May 28, 2019
Note: The Group has acquired stake in Bluefin Solutions Inc., USA and Bluefin Solutions Pte Ltd, Singapore on July 2, 2019. These companies have been
liquidated on December 17, 2019 and March 20, 2020 respectively.
523
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [40] (contd.)
Name of associates
Principal place of
business
L&T-Chiyoda Limited
Gujarat Leather Industries Limited #
Larsen & Toubro Qatar & HBK Contracting Co. WLL
L&T Camp Facilities LLC
Magtorq Private Limited
Magtorq Engineering Solutions Private Limited
India
India
Qatar
UAE
India
India
Sr.
no.
1
2
3
4
5
6
As at 31-3-2020
As at 31-3-2019
Proportion
of effective
ownership
interest (%)
50.00
50.00
50.00
49.00
42.85
39.28
Proportion of
voting power
held (%)
50.00
50.00
50.00
49.00
42.85
39.28
Proportion
of effective
ownership
interest (%)
50.00
50.00
50.00
49.00
42.85
39.28
Proportion of
voting power
held (%)
50.00
50.00
50.00
49.00
42.85
39.28
# The company is under liquidation
Sr. no. Name of joint ventures
Joint ventures
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Howden Private Limited
L&T-Sargent & Lundy Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T MBDA Missile Systems Limited
L&T Sapura Offshore Private Limited
L&T Sapura Shipping Private Limited
L&T-Gulf Private Limited #
L&T Hydrocarbon Caspian LLC
L&T Infrastructure Development Projects Limited
L&T Chennai–Tada Tollway Limited
L&T Rajkot-Vadinar Tollway Limited
L&T Deccan Tollways Limited
L&T Samakhiali Gandhidham Tollway Limited
Kudgi Transmission Limited
L&T Sambalpur-Rourkela Tollway limited
Panipat Elevated Corridor Limited
Vadodara Bharuch Tollway Limited
L&T Transportation Infrastructure Limited
L&T Interstate Road Corridor Limited
Ahmedabad-Maliya Tollway Limited
L&T Halol-Shamlaji Tollway Limited
PNG Tollway Limited
L&T Kobelco Machinery Private Limited ##
Raykal Aluminium Company Private Limited
Indiran Engineering Projects and Systems Kish PJSC
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
As at 31-3-2020
As at 31-3-2019
Principal place of
business
Proportion of effective
ownership interest (%)
Proportion of effective
ownership interest (%)
India
India
India
India
India
India
India
India
India
Azerbaijan
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
Iran
51.00
51.00
50.10
50.00
74.00
51.00
60.00
60.00
–
50.00
51.00
51.00
51.00
52.89
51.01
51.00
51.00
51.00
51.00
63.86
51.00
51.00
24.98
37.74
–
75.50
50.00
51.00
51.00
50.10
50.00
74.00
51.00
60.00
60.00
50.00
50.00
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
97.45
98.12
97.45
97.45
47.75
72.11
51.00
75.50
50.00
#
##
The company is reclassified as subsidiary w.e.f. November 20, 2019 due to purchase of additional stake
The Group has sold its stake on April 17, 2019
524
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [40] (contd.)
Sr.
no.
1
2
Name of joint operations (with specific ownership interest in the
arrangement)
Desbuild L&T Joint Venture
Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint
Principal place of
business
India
As at 31-3-2020
Proportion of effective
ownership interest (%)
49.00
As at 31-3-2019
Proportion of effective
ownership interest (%)
49.00
Venture
Al Balagh Trading & Contracting Co W.L.L- L&T Joint Venture
L&T-AM Tapovan Joint Venture
HCC-L&T Purulia Joint Venture
International Metro Civil Contractors Joint Venture
Metro Tunneling Group
L&T-Hochtief Seabird 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
L&T-Shanghai Urban Construction (Group) Corporation Joint
Venture CC27 Delhi
Aktor-Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering
India
Qatar
India
India
India
India
India
India
India
India
Joint Venture
Civil Works Joint Venture
Qatar
Kingdom of Saudi
Arabia
L&T-Shanghai Urban Construction (Group) Corporation Joint
Venture
DAEWOO and L&T Joint Venture
L&T-STEC JV MUMBAI
L&T-ISDPL (JV)
L&T-IHI Consortium
L&T-Eastern Joint Venture
Larsen and Toubro Limited-Scomi Engineering BHD Consortium-
Residual Joint Works Joint Venture
Larsen and Toubro Limited-Scomi Engineering BHD Consortium-
India
India
India
India
India
UAE
India
O&M Joint Venture
L&T- Inabensa Consortium
L&T-Delma Mafraq Joint Venture
L&T-AL-Sraiya LRDP 6 Joint Venture
Larsen & Toubro Limited & NCC Limited Joint Venture
Besix-Larsen & Toubro Joint Venture
Larsen & Toubro Ltd - Passavant Energy & Environment JV
LNT-Shriram EPC Tanzania UJV
LTH Milcom Private Limited
L&T-Tecton JV
L&T-Powerchina JV #
Bauer- L&T Geo Joint Venture
EMAS Saudi Arabia Ltd
India
India
UAE
Qatar
India
UAE
India
Tanzania
India
India
UAE
India
Kingdom of Saudi
Arabia
L&T Infrastructure Engineering - LEA Associates South Asia JV @ India
L&T Infra Engineering JV United Consultancy @@
Bhutan
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
The joint arrangement was entered into on November 27, 2019
#
@
The joint arrangement was entered into on February 12, 2020
@@ The joint arrangement was entered into on December 7, 2019
50.00
80.00
65.00
43.00
26.00
26.00
90.00
75.00
60.00
68.00
22.00
29.00
51.00
50.00
65.00
100.00
100.00
65.00
60.00
50.00
100.00
100.00
75.00
55.00
50.00
50.00
90.00
56.67
60.00
55.00
50.00
50.00
61.00
75.81
50.00
80.00
65.00
43.00
26.00
26.00
90.00
75.00
60.00
68.00
22.00
29.00
51.00
50.00
65.00
100.00
100.00
65.00
60.00
50.00
100.00
100.00
75.00
55.00
50.00
50.00
90.00
56.67
60.00
–
50.00
50.00
–
–
525
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [40] (contd.)
Sr. no. Name of joint operations (with specific proportion of activity carried out through the arrangement)
Principal place of business
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
L&T Sojitz Consortium
L&T-KBL (UJV) Hyderabad
L&T-KBL-MAYTAS UJV
Mallanna Sagar Reservoir LnT-Prasad-RK Infra JV
Larsen & Toubro Limited Waterleau Consortium
L&T-BRAPL JV (package II)
L&T-BRAPL JV (package III)
IIS-L&T Consortium
PES Engg P ltd-L&T Consortium
L&T ISDPL - DI (JV)
L&T Galfar Consortium
Sojitz Corporation-L&T Consortium
Sojitz Corporation-Gayathri Projects Ltd-L&T Consortium
PESB and Larsen & Toubro Joint Venture
Scomi Engineering Bhd-L&T Consortium
L&T-PCIPL JV
Consortium of M/s. J. Ray McDermott Sdn. Bhd. and M/s. L&T Hydrocarbon Engineering Limited
India
India
India
India
Qatar
India
India
India
India
India
Oman
India
India
Malaysia
India
India
India
Consortium of L&T Hydrocarbon Engineering Limited and EMAS AMC Pte. Ltd.
Kingdom of Saudi Arabia
Consortium of L&T Hydrocarbon Engineering Limited and Reliance Naval and Engineering Limited
Consortium of L&T Hydrocarbon Engineering Limited, GE Oil & Gas UK Ltd, McDermott International Management S.
de RL, Berlian McDermott Sdn Bhd and Vetco Gray Pte Ltd
Consortium of L&T Hydrocarbon Engineering Limited, Technip France and Technic India Limited
L&T Parel Project LLP-Omkar Realtors & Developers Pvt. Ltd. (Crescent bay)
L&T Asian Realty Project LLP-Nirmal Life Style Developers Pvt. Ltd. (Nirmal Lifestyle)
L&T Infrastructure Engineering Limited-Fortress Infrastructure Advisory Services (for 4 projects)
L&T Infrastructure Engineering Limited-Mahindra Consulting Engineers Ltd.
L&T Infrastructure Engineering Limited-Pricewaterhouse Coopers Pvt.Ltd.(for 2 projects)
L&T Infrastructure Engineering Limited-Rajendran Associates (for 2 projects)
L&T Infrastructure Engineering Limited-Transtek Engineers & Services Pvt.Ltd.
L&T Infrastructure Engineering Limited-Vax Consultants Pvt.Ltd.(for 5 projects)
L&T Infrastructure Engineering Limited-Aakar Abhinav Consultants Pvt Ltd
L&T Infrastructure Engineering Limited-Centre for Symbiosis of Technology Environment & Management (STEM)
L&T Infrastructure Engineering Limited-CRISIL Risk & Infrastructure Solutions Ltd
L&T Infrastructure Engineering Limited-Rites Ltd and KPMG
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
NOTE [41]
The components of other equity shown in the Consolidated Balance Sheet include the Group’s share in the respective reserves of
subsidiaries. Reserve attributable to non-controlling interest is reported separately in the Consolidated Balance Sheet. Retained earnings
comprise Group’s share in general reserve and balance of Profit and Loss.
526
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [42]
Disclosure pursuant to Ind AS 112 “Disclosure of Interest in other entities”: Subsidiaries
(a) Change in the Group’s ownership interest in a subsidiary (without ceding control)
(i) On account of divestment of part stake
During the year 2019-20, the Group has sold 3.89% stake in L&T Technology Services Limited. The proceeds on disposal of
R 668.95 crore were received in cash. An amount of R 118.37 crore (being the proportionate share of the carrying amount
of the net assets of L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of
R 550.58 crore between the consideration received and the increase in the non-controlling interests has been credited to
retained earnings.
During the year 2018-19, the Group has sold 7.44% stake in Larsen & Toubro Infotech Limited and 8.43% stake in L&T
Technology Services Limited. The proceeds on disposal of R 3378.02 crore were received in cash. An amount of R 417.19
crore (being the proportionate share of the carrying amount of the net assets of Larsen & Toubro Infotech Limited and L&T
Technology Services Limited) has been transferred to non-controlling interests. The difference of R 2960.83 crore between the
consideration received and the increase in the non-controlling interests has been credited to retained earnings.
(ii) On account of dilution
During the year 2019-20, the Group’s continuing interest has reduced on account of dilution due to exercise of ESOPs by
0.19%, 0.26%, 0.38% and 0.04% in L&T Finance Holdings Limited, in Larsen & Toubro Infotech Limited, in L&T Technology
Services Limited and Mindtree Limited respectively. The proceeds on dilution of R 39.98 crore were received in cash. An
amount of R 89.68 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings
Limited, Larsen & Toubro Infotech Limited, L&T Technology Services Limited and Mindtree Limited) has been transferred
to non-controlling interests. The difference of R 49.70 crore between the increase in the non-controlling interests and the
consideration received has been debited to retained earnings.
During the year 2018-19, the Group’s continuing interest has reduced on account of dilution due to exercise of ESOPs by
0.10%, 0.72% and 1.33% in L&T Finance Holdings Limited, in Larsen & Toubro Infotech Limited and in L&T Technology
Services Limited respectively. The proceeds on dilution of R 22.13 crore were received in cash. An amount of R 132.23 crore
(being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited, Larsen & Toubro
Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of
R 110.10 crore between the increase in the non-controlling interests and the consideration received has been debited to
retained earnings.
(b) The effect of divestment with ceding of control in subsidiary during the period is as under:
Name of subsidiary
Marine Infrastructure Developer Private Limited
Total
v crore
Effect on consolidated profit/
(loss) after non-controlling
interest
Line item in Statement of Profit & Loss
in which the gain/(loss) is recognised
2019-20
–
–
2018-19
415.61 Other operational income
415.61
527
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [42] (contd.)
(c) Disclosure of subsidiaries having material non-controlling interest:
(i)
Summarised Statement of Profit and Loss
Particulars
Revenue
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income
Effective % of non-controlling interest
Profit/(loss) allocated to non-controlling interest (including
v crore
L&T Finance Limited
2019-20
8184.78
366.28
(149.36)
216.92
36.28%
2018-19
6890.59
845.93
(1.38)
844.55
36.09%
L&T Finance Holdings Limited
2018-19
481.73
267.79
(0.32)
267.47
36.09%
2019-20
475.28
266.81
(0.11)
266.70
36.28%
consolidation adjustments)
370.93
539.68
(58.38)
(28.76)
Dividend (including dividend distribution tax) to non-
controlling interest
–
–
137.30
71.87
v crore
Particulars
Revenue
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income
Effective % of non-controlling interest
Profit/(loss) allocated to non-controlling interest (including
consolidation adjustments)
Dividend (including dividend distribution tax) to non-
Larsen & Toubro Infotech
Limited
L&T Technology Services
Limited
2019-20
10287.59
1552.36
(438.10)
1114.26
25.46%
2018-19
9016.17
1475.06
25.87
1500.93
25.20%
2019-20
5225.65
790.03
(260.32)
529.71
25.38%
2018-19
4781.37
700.10
(2.13)
697.97
21.12%
367.53
314.13
189.98
118.82
controlling interest
143.38
115.89
66.10
37.66
Particulars
Revenue
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income
Effective % of non-controlling interest
Profit/(loss) allocated to non-controlling interest (including consolidation adjustments)
Dividend (including dividend distribution tax) to non-controlling interest
v crore
Mindtree Limited
(consolidated)#
2019-20
5917.18
538.17
(438.10)
100.07
38.92%
144.33
211.01
# from the date of acquisition
(ii) Summarised Balance Sheet
Particulars
Current assets (a)
Current liabilities (b)
Net current assets (c)=(a) - (b)
Non-current assets (d)
Non-current liabilities (e)
Net non-current assets (f)=(d) - (e)
Net assets (g)=(c) + (f)
Accumulated non-controlling interest
528
v crore
L&T Finance Limited
L&T Finance Holdings Limited
As at
31-3-2020
29825.41
20300.36
9525.05
23163.98
23795.26
(631.28)
8893.77
1734.51
As at
31-3-2019
32026.49
20353.11
11673.38
23810.66
26583.43
(2772.77)
8900.61
1492.01
As at
31-3-2020
1153.20
2099.72
(946.52)
10101.69
1393.23
8708.46
7761.94
2765.91
As at
31-3-2019
866.85
1370.42
(503.57)
9182.03
848.11
8333.92
7830.35
2766.57
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [42] (contd.)
Particulars
Current assets (a)
Current liabilities (b)
Net current assets (c)=(a) - (b)
Non-current assets (d)
Non-current liabilities (e)
Net non-current assets (f)=(d) - (e)
Net assets (g)=(c) + (f)
Accumulated non-controlling interest
Current assets (a)
Current liabilities (b)
Net current assets (c)=(a) - (b)
Non-current assets (d)
Non-current liabilities (e)
Net non-current assets (f)=(d) - (e)
Net assets (g)=(c) + (f)
Accumulated non-controlling interest
(iii) Summarised Statement of Cash Flows
Particulars
Larsen & Toubro Infotech
Limited
L&T Technology Services
Limited
v crore
As at
31-3-2020
5985.20
2084.65
3900.55
2331.61
1003.32
1328.29
5228.84
1320.47
As at
31-3-2019
4838.98
1482.92
3356.06
1379.71
22.32
1357.39
4713.45
1177.75
As at
31-3-2020
2779.82
980.61
1799.21
1301.88
481.06
820.82
2620.03
672.69
As at
31-3-2019
2271.41
783.45
1487.96
953.93
5.97
947.96
2435.92
507.15
v crore
Mindtree Limited
(consolidated)
As at 31-3-2020
3208.74
1323.75
1884.99
1901.73
676.13
1225.60
3110.59
1829.41
v crore
Particulars
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
L&T Finance Limited
2019-20
4266.99
676.41
(3756.15)
1187.25
2018-19
(7560.70)
(2145.81)
10888.36
1181.85
L&T Finance Holdings Limited
2018-19
774.99
(1306.32)
520.56
(10.77)
2019-20
82.24
(1006.23)
924.08
0.09
v crore
Particulars
Larsen & Toubro Infotech
Limited
L&T Technology Services
Limited
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Particulars
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
# from the date of acquisition
2019-20
1643.93
(578.11)
(918.39)
147.43
2018-19
1247.62
(682.89)
(595.07)
(30.34)
2019-20
664.41
(280.52)
(377.23)
6.66
2018-19
739.58
(489.03)
(202.13)
48.42
v crore
Mindtree Limited
(consolidated)#
2019-20
634.00
153.40
(614.70)
172.70
529
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [43]
Disclosures pursuant to Ind AS 112 “Disclosure of interest in other entities”:- Joint Ventures and Associates
(a) Summarised Balance Sheet of material joint ventures:
Particulars
Current assets:
Cash and bank balances
Other assets
Total current assets
Total non-current assets (including Goodwill)
Current liabilities:
Financial liabilities (excluding trade payables)
Other liabilities (including trade payables)
Total current liabilities
Non-current liabilities:
Financial liabilities (excluding trade payables)
Other liabilities (including trade payables)
Total non-current liabilities
Non-controlling interest (NCI)
Net assets
(D)
(E)
(A+B-C-D-E)
L&T-MHPS Boilers
Private Limited
L&T Special Steels and
Heavy Forgings Private
Limited
L&T Infrastructure
Development Projects
Limited (consolidated)
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
v crore
850.71
2500.57
3351.28
514.40
318.67
3112.87
3431.54
501.86
0.05
312.31
312.36
1198.72
0.15
278.67
278.82
923.34
1220.91
2739.12
1089.26
3662.46
2310.17
1255.08 11504.11 11799.38
469.40
1663.34
2132.74
565.09
1918.24
2483.33
1710.89
146.66
1857.55
1585.44
138.37
1723.81
1233.69
420.88
1654.57
2184.58
297.50
2482.08
(A)
(B)
(C)
–
–
–
–
1732.94
4.65
–
4.65
–
1445.42
672.74
15.78
688.52
–
(1034.99)
606.25
16.32
622.57
–
(812.48)
511.95
9341.03 10690.79
434.73
9852.98 11125.52
161.26
1692.98
163.78
2142.95
(b) Reconciliation of carrying amounts of material joint ventures:
Particulars
Opening net assets
Profit/(loss) for the year (net of NCI)
Dividend distributed during the year (including
dividend tax)
Other comprehensive income (net of NCI)
Infusion during the year (including securities
premium)
Amount adjusted against securities premium
Equity component of other financial instruments
Other adjustments
Closing net assets
Group’s share (%)
Group’s share
Impairment
Parent’s investment in group companies
Adjusted against other long term interest
Other adjustments
Carrying amount
v crore
L&T-MHPS Boilers
Private Limited
L&T Special Steels and
Heavy Forgings Private
Limited
L&T Infrastructure
Development Projects
Limited (consolidated)
As at
31-3-2020
1445.42
312.20
As at
31-3-2019
1185.66
279.96
As at
31-3-2020
(812.48)
(222.12)
As at
31-3-2019
(598.57)
(213.89)
As at
31-3-2020
1692.98
(284.03)
As at
31-3-2019
1349.86
588.70
(28.22)
3.54
(28.22)
8.02
–
(0.26)
–
(0.02)
–
56.01
–
24.71
–
–
–
–
1732.94
51.00%
883.80
–
–
–
–
883.80
–
–
–
–
–
–
(0.12)
–
1445.42
(1034.98)
51.00% 74.00%
(765.88)
737.16
–
–
–
–
731.75
–
34.13
–
–
737.16
863.00
–
(148.29)
–
(70.00)
–
33.28
–
(812.48)
2142.95
74.00% 51.00%
1247.68
(601.24)
–
–
10.88
–
–
594.41
6.83
36.33
1294.89
–
–
(246.59)
70.00
(93.70)
1692.98
97.45%
1657.53
(288.44)
33.30
–
(127.58)
1274.81
530
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [43] (contd.)
(c) Summarised Statement of Profit and Loss of material joint ventures:
Particulars
Revenue
Interest Income
v crore
L&T-MHPS Boilers
Private Limited
L&T Special Steels and
Heavy Forgings Private
Limited
L&T Infrastructure
Development Projects
Limited (consolidated)
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19
2035.62
2735.70
222.78
211.63
1759.15
1666.57
36.22
20.26
0.20
0.12
137.25
29.71
Depreciation and amortisation
(65.00)
(62.32)
(48.59)
(47.65)
(487.30)
(452.16)
Finance cost
Tax expense
(5.19)
(17.72)
(199.45)
(181.59)
(1063.40)
(1070.17)
(117.60)
(137.93)
–
–
(118.47)
(36.97)
Profit/(loss) from continuing operations (net of NCI)
312.20
279.96
(222.12)
(213.89)
(284.03)
607.52
Profit from discontinued operations (net of NCI)
–
–
–
–
–
(18.82)
Profit/(loss) for the year (net of NCI)
312.20
279.96
(222.12)
(213.89)
(284.03)
588.70
Other comprehensive income (net of NCI)
3.54
8.02
(0.26)
(0.02)
56.01
24.71
Total comprehensive income (net of NCI)
315.74
287.98
(222.38)
(213.91)
(228.02)
613.41
(d) Financial Information in respect of individually not material joint ventures/associates
Particulars
Aggregate carrying amount of investment in individually not material joint ventures/associates
Aggregate amounts of the Group’s share of:
Profit/(loss) for the year
Other comprehensive income for the year
Total comprehensive income for the year
(e) Carrying amount of investments in joint ventures/associates
Particulars
Non-material associates
Non-material joint ventures
Sub-total
Material joint ventures
Total
(f)
Share in profit /(loss) of joint ventures/associates (net)
Particulars
Non-material associates
Non-material joint ventures
Sub-total
Material joint ventures
Total
As at
31-3-2020
672.32
v crore
As at
31-3-2019
630.32
55.20
24.93
80.13
66.11
6.02
72.13
As at
31-3-2020
115.02
557.30
672.32
2178.69
2851.01
2019-20
25.88
29.32
55.20
16.76
71.96
v crore
As at
31-3-2019
88.52
541.80
630.32
2011.97
2642.29
v crore
2018-19
17.72
48.39
66.11
(87.11)
(21.00)
531
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [44]
Disclosure pursuant to Ind AS 103 “Business Combinations”:
(a) Acquisition of Mindtree Limited:
(i)
Pursuant to completion of Open Offer on July 2, 2019, the Company acquired 60.06% stake in Mindtree Limited, which is a
multinational information technology and outsourcing company headquartered in Bengaluru, India and New Jersey, USA. The
stake was acquired in stages through direct share purchase, open market purchases and open offer.
The acquisition is in line with the Company’s strategy of expanding its asset light services business portfolio.
(ii) Assets acquired and liabilities recognised on the date of acquisition are as follows:
v crore
Mindtree Limited
Assets
Non-current assets
Customer relationships
Customer contracts
Trade names
Property, plant and equipment
Fair value of land/building over book value
Other non-current assets
Current assets
Trade receivables
Cash and bank balances
Other current assets
Total Assets
Liabilities
Non-current liabilities
Deferred tax liabilities
Other non-current liabilities
Current Liabilities
Trade payables
Other current financial liabilities
Other current liabilities
Contingent liability taken over [Note(vi)]
Total Liabilities
Net Assets acquired
(iii) Calculation of Goodwill:
Purchase consideration for 31.20% stake purchased in open offer (A)
Fair valuation of existing 28.86% stake (B)
Total consideration (C)=(A+B)
Add: Non-controlling interest
Less: Fair value of net assets acquired
Goodwill
532
2826.40
189.20
297.00
377.70
177.78
974.95
1315.30
190.00
1314.40
1126.18
512.30
235.00
294.10
400.44
26.85
4843.03
2819.70
7662.73
1638.48
956.39
2594.87
5067.86
v crore
Mindtree Limited
5038.57
4333.96
9372.53
2023.88
5067.86
6328.55
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [44] (contd.)
(iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce. The
goodwill is not deductible for income tax purposes.
(v) The transaction cost of R 96.39 crore (including R 12.12 crore in previous year) have been expensed in the Statement of Profit
and Loss .
(vi) Contingent liability of R 26.85 crore has been recognised in respect of certain claims (mainly tax disputes) which have not
been acknowledged as debt.
(vii) The non-controlling interest (39.94% ownership in Mindtree Limited) recognised at the acquisition date was measured at
proportionate share of Mindtree Limited’s net assets.
(viii) The Company fair valued its acquisition date stake of 28.86% as on July 2, 2019 and consequently, a loss of R 329.89 crore
was recognised in other comprehensive income.
(ix) MIndtree Limited has reported revenue of R 5917.18 crore and profit after tax of R 538.17 crore from the date of acquisition
till March 31, 2020. Had the entity been acquired from April 1, 2019, it would have reported revenue of R 7764.25 crore and
profit after tax of R 630.87 crore during 2019-20.
(x) Out of the R 1315.30 crore trade receivables acquired, R 1249.54 crore have been collected during the year.
(b) Acquisition of Lymbyc Group:
(i) On August 29, 2019, the Group has acquired 100% stake in Lymbyc Solutions Private Limited, a Bengaluru based company,
operating in the IT & Technology Services segment.
Lymbyc is a specialist Al, machine learning and advanced analytics company with their proprietary product ‘Leni’. The
platform has a combination of natural language processing, data visualisation and predictive analytics capabilities.
(ii) Assets acquired and liabilities recognised on the date of acquisition are as follows:
v crore
Lymbyc Group
Assets
Non-current assets
Intangible assets (including under development)
Software development asset
Property, plant and equipment
Other non-current assets
Current assets
Trade receivables
Cash and bank balances
Other current assets
Total Assets
Liabilities
Non-current liabilities
Long term borrowings
Deferred tax laibilty
Other non-current liabilities
Current liabilities
Trade payables
Other current liabilities
Total Liabilities
Net Assets acquired
3.70
13.94
0.06
0.86
1.84
0.02
0.23
0.20
3.51
0.60
0.56
3.54
18.56
2.09
20.65
4.31
4.10
8.41
12.24
533
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [44] (contd.)
(iii) Calculation of Goodwill:
Purchase consideration:
Cash (A)
Deferred consideration (B)
Present value of contingent consideration payable over future years (C)
Purchase consideration (D=A+B+C)
Less: Fair value of net assets acquired
Goodwill
v crore
Lymbyc Group
12.94
5.00
14.42
32.36
12.24
20.12
(iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce. The
goodwill is not deductible for income tax purposes.
(v) The Group has recognised contingent consideration in accordance with the terms of the share purchase agreement. The
maximum contingent consideration of R 16.00 crore is payable to the promoters of Lymbyc upon achievement of the specified
financial targets. The fair value of the contingent consideration is determined by assigning probabilities to achievement of
targets.
(vi) These entities have reported revenue of R 6.33 crore and profit after tax of R 1.06 crore from the date of acquisition till March
31, 2020. Had the entities been acquired from April 1, 2019, they would have reported revenue of R 9.54 crore and profit
after tax of R 0.71 crore during 2019-20.
(vii) The transaction costs of R 0.40 crore related to the acquisition have been included in the Statement of Profit and Loss for the
year ended March 31, 2020.
(viii) Trade receivables acquired have been collected during the year.
(c) Acquisition of Powerup Cloud Technologies Private Limited (“Powerup”)
(i) On October 25, 2019, the Group has acquired 100% stake in Powerup Cloud Technologies Private Limited, a Bengaluru based
company, operating in the IT & Technology Services segment. Powerup is an AWS premier consulting partner with capabilities
in cloud consulting, migration, cloud native application development and managed services and also specialises in Azure and
GCP cloud Platforms.
(ii) Assets acquired and liabilities recognised on the date of acquisition are as follows:
Assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Other non-current assets
Current assets
Trade receivables
Cash and bank balances
Other current assets
Total Assets
534
v crore
Powerup
0.01
2.09
7.69
6.98
0.95
7.09
9.79
15.02
24.81
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [44] (contd.)
Liabilities
Non-current liabilities
Long term borrowings
Other non-current liabilities
Current liabilities
Trade payables
Other current liabilities
Total Liabilities
Net Assets acquired
(iii) Calculation of Goodwill:
Purchase consideration:
Cash (A)
Deferred consideration (B)
Contingent consideration payable over one year (C)
Purchase consideration (D=A+B+C)
Less: Fair value of net assets acquired
Goodwill
v crore
Powerup
0.95
7.92
5.90
23.25
Powerup
8.87
29.15
38.02
(13.21)
v crore
28.80
5.00
46.65
80.45
(13.21)
93.66
(iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce. The
goodwill is not deductible for income tax purposes.
(v) The Group has recognised contingent consideration in accordance with terms of share purchase and subscription agreement.
The maximum contingent consideration of R 52.13 crore is payable to the promoters and identified employees of Powerup
upon achievement of specified financial targets. The fair value of contingent consideration is determined by assigning
probabilities to achievement of the targets.
(vi) The entity has reported revenue of R 16.12 crore and loss of R 1.55 crore from the date of acquisition till March 31, 2020.
Had the entity been acquired from April 1, 2019, it would have reported revenue of R 34.86 crore and loss of R 13.85 crore
during 2019-20.
(vii) The transaction costs of R 0.47 crore related to the acquisition have been included in the Statement of Profit and Loss for the
year ended March 31, 2020.
(viii) Out of R 6.98 crore of trade receivables acquired, R 6.62 crore have been collected during the year.
535
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [44] (contd.)
(d) Acquisition of further stake in L&T Gulf Private Limited
(i) On November 20, 2019, the Group has acquired further 50% stake in L&T Gulf Private Limited. The entity has become a
wholly owned subsidiary. It operates in the Hydrocarbon segment.
(ii) Assets acquired and liabilities recognised on the date of acquisition are as follows:
Assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Other non-current assets
Current assets
Trade receivables
Cash and bank balances
Other current assets
Total Assets
Liabilities
Current liabilities
Trade payables
Other current liabilities
Total Liabilities
Net Assets acquired
(iii) Calculation of Goodwill:
Purchase consideration paid in cash for 50% stake (A)
Fair valuation of existing 50% stake (B)
Total (C=A+B)
Less: Fair value of net assets acquired
Goodwill
L&T Gulf Private Limited
0.41
0.48
0.85
4.66
19.76
3.47
3.43
1.78
L&T Gulf Private Limited
v crore
1.74
27.89
29.63
5.21
5.21
24.42
v crore
25.00
25.00
50.00
24.42
25.58
(iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce. The
goodwill is not deductible for income tax purposes.
(v) The entity has reported revenue of R 12.13 crore and profit after tax of R 8.65 crore from the date of acquisition till March 31,
2020. Had the entity been acquired from April 1, 2019, it would have reported revenue of R 14.76 crore and profit after tax
of R 1.63 crore during 2019-20.
(vi) Out of R 4.66 crore of trade receivables acquired, R 3.40 crore have been collected during the year.
(e) The Hon’ble National Company Law Tribunal, Chennai Bench vide order dated March 10, 2020 and the Hon’ble National Company
Law Tribunal, Mumbai Bench vide order dated April 24, 2020 have approved the scheme of amalgamation of L&T Shipbuilding Ltd
(wholly-owned subsidiary) with the Company (‘the Scheme’), the appointed date being April 1, 2019. Accordingly, the effect of
the Scheme has been given in the standalone financials of the Company for the year 2019-20 and 2018-19.
(f)
The Hon’ble National Company Law Tribunal, Mumbai Bench vide its order dated April 23, 2020 approved the composite scheme
of arrangement between L&T Realty Limited, L&T Construction Equipment Limited and L&T Construction Machinery Limited (all
wholly-owned subsidiaries of the Company) and their respective shareholders and creditors (‘the Scheme’), the appointed date
being April 1, 2018. Accordingly, the effect of the Scheme has been given in the standalone financials of the respective companies
for the year 2019-20 and 2018-19.
536
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [45]
Disclosure pursuant to Ind AS 105 “Non-current Assets Held for Sale and Discontinued Operations”:
(a) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2020
Assets/disposal group
Electrical & Automation business [Note (i)]
Wealth management business [L&T Capital Markets Limited & L&T Capital Markets
(Middle East) Limited] [Note (ii)]
Non-current assets (buildings) (L&T Financial Consultants Limited)
Current assets (L&T Vision Ventures Limited)
Non-current assets (land taken on finance lease and buildings) (Mindtree Limited)
Reportable segment
Electrical & Automation
Financial Services
Financial Services
Others
IT and Technology Services
Notes:
(i) On May 1, 2018, the Group had signed, subject to regulatory approvals, definitive agreements with Schneider Electric for
strategic divestment of its Electrical & Automation (E&A) business [Note 46-composition of E&A business]. The Competition
Commission of India (CCI) accorded on April 18, 2019 its approval (the detailed order was uploaded on its website on June 6,
2019) for acquisition of the Group’s E&A business by Schneider Electric subject to fulfilment of certain conditions.
As the sale was likely to be completed within the next one year from then, E&A business had been classified as discontinued
operations from Q1 2019-20 onwards. The Group remains committed to its divestment plan. Based on the progress of the
divestment process and its current status, the Group continues to classify its E&A business as discontinued operation.
(ii) Subsequent to the year under review, the Group has divested its entire stake in L&T Capital Markets Limited to IIFL Wealth
Finance Limited on April 24, 2020.
(b) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2019
Assets/disposal group
Non-current assets (buildings) (L&T Financial Consultants Limited)
Current assets (L&T Vision Ventures Limited)
Reportable segment
Financial Services
Others
(c) The proposed sale is expected to be completed within 1 year from the respective reporting dates.
(d) The details of assets/disposal group classified as held for sale and liabilities associated thereto are as under:
Group(s) of assets classified as held for sale:
Particulars
Property, plant and equipment
Capital work-in-progress
Investment property
Goodwill
Other intangible assets
Intangible assets under development
Right-of-use assets
Other loans
Inventories
Trade receivables
Cash and cash equivalents
Tax assets
Other assets
Total
As at
31-3-2020
v crore
As at
31-3-2019
780.95
21.79
25.13
333.44
203.35
122.25
32.83
3.52
1009.04
1184.41
165.78
4.74
479.98
4367.21
1.17
–
–
–
–
–
–
–
–
–
–
–
6.24
7.41
537
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [45]
(d) The details of assets/ disposal group classified as held for sale and liabilities associated thereto are as under: (contd.)
Liabilities associated with group(s) of assets classified as held for sale:
Particulars
Borrowings
Trade payables
Provisions
Tax liabilities (net)
Other liabilities
Total
(e) The financial performance related to discontinued operations is as under:
Particulars
Sr.
no.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Revenue from operations
Other Income
Total Income [(i)+(ii)]
Total expenses
Profit/(loss) before tax [(iii)-(iv)]
Tax expenses
(vii)
Profit/(loss) after tax [(v)-(vi)]
As at
31-3-2020
v crore
As at
31-3-2019
61.26
1240.34
203.84
21.30
457.43
1984.17
–
–
–
–
3.20
3.20
v crore
2019-20
2018-19
5566.99
6093.63
15.38
5582.37
4699.12
883.25
228.68
654.57
16.02
6109.65
5264.08
845.57
276.24
569.33
(viii) Non-controlling interest - discontinued operations
–
(0.23)
(ix)
(x)
(xi)
Profit for the year attributable to owners of the Company [(vii)-(viii)]
Other comprehensive income
Total comprehensive income [(ix)+(x)]
(f)
Summarised statement of cash flows of discontinued operations:
Particulars
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
654.57
22.02
676.59
569.10
17.17
586.27
v crore
2019-20
2018-19
570.74
699.92
(118.14)
(143.05)
(31.00)
421.60
(95.58)
461.29
538
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [46]
Disclosure pursuant to Ind AS 108 “Operating Segment”:
(a)
Information about reportable segments
Particulars
Revenue
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 45]
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Total
Less: Revenue from discontinued operations
Elimination
Total
Segment result [Profit/(Loss) before interest and tax]
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 45]
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Total
Result of discontinued operations
Inter-segment margins on capital jobs
Finance costs
Unallocated corporate income net of expenditure
Exceptional items (net)
Profit before tax
Tax expense:
Current tax
Deferred tax (net)
Net profit after tax from continuing operations
Share in profit/(loss) after tax of joint ventures/associates
(net)
Profit for the year from continuing operations
Discontinued operations
Profit from discontinued operations
Tax expense of discontinued operations
Net profit after tax from discontinued operations
Net profit after tax from continuing operations &
discontinued operations
Non-controlling interest for the year
Net profit after tax, non-controlling interests and
share in profit/(loss) of joint ventures/associates
For the year ended 31-3-2020
Inter-segment
External
For the year ended 31-3-2019
Total
External Inter-segment
Total
v crore
73036.56
2293.62
2853.18
3970.47
5232.29
17420.45
22135.33
13822.36
4850.33
5070.06
150684.65
5232.29
–
145452.36
740.75
24.84
351.86
8.70
334.70
25.02
199.91
–
–
238.66
1924.44
334.70
1589.74
–
73777.31
2318.46
3205.04
3979.17
5566.99
17445.47
22335.24
13822.36
4850.33
5308.72
152609.09
5566.99
1589.74
145452.36
5207.37
236.11
566.01
575.84
888.06
1746.18
3693.23
2678.65
387.28
969.43
16948.16
(888.06)
(63.01)
(2796.66)
230.52
–
13430.95
(3564.58)
301.38
10167.75
71.96
10239.71
883.25
(228.68)
654.57
10894.28
(1345.25)
9549.03
72418.05
3971.50
2174.22
3751.97
5786.81
15131.58
14371.36
12637.69
5068.04
5695.88
141007.10
5786.81
–
135220.29
73203.76
785.71
3983.09
11.59
2513.66
339.44
3849.24
97.27
6093.63
306.82
15176.23
44.65
14553.10
181.74
12637.69
–
5068.04
–
239.10
5934.99
2006.33 143013.43
6093.63
306.82
1699.51
1699.51
– 135220.29
5388.77
129.88
487.01
472.22
850.09
1178.10
3084.20
3052.64
314.35
776.20
15733.46
(850.09)
(5.50)
(1802.55)
365.27
294.75
13735.34
(4402.95)
335.86
9668.25
(21.00)
9647.25
845.57
(276.24)
569.33
10216.58
(1311.45)
8905.13
539
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [46]
(a)
Information about reportable segments (contd.)
Particulars
As at
As at
As at
As at
Segment Assets
Segment Liabilities
v crore
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 45]
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Segment total
Corporate unallocated assets/liabilities
Inter-segment assets/liabilities
31-3-2020
31-3-2019
31-3-2020
31-3-2019
80369.92
74848.71
52090.81
50908.92
6126.80
4320.26
7279.68
4370.28
15355.49
26514.97
6030.51
4020.13
7826.76
4183.22
4381.75
1414.15
4265.88
1973.08
4838.09
1517.38
4964.28
2053.88
12224.57
12475.30
10096.59
9647.21
6876.49
2575.96
108481.90
104842.19
95021.16
92973.64
33166.54
10681.05
30998.97
9819.89
8768.35
3546.15
9368.08
3936.13
296666.89
264442.16
190813.12
183232.95
15365.22
(3891.98)
16165.54
(2260.34)
44974.94
(3891.98)
28173.84
(2260.34)
Consolidated total assets/liabilities
308140.13
278347.36
231896.08
209146.45
Particulars
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 45]
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Segment total
Unallocable
Less: Relates to discontinued operations
Inter-segment
Consolidated total
v crore
Depreciation, amortisation,
impairment & obsolescence
included in segment expense
Non-cash expenses other
than depreciation included in
segment expense
2019-20
704.44
2018-19
764.59
2019-20
40.31
2018-19
46.40
38.07
46.29
145.26
46.94
151.56
941.28
78.44
151.77
92.48
2396.53
131.89
46.94
19.21
47.16
56.98
134.03
161.63
151.83
251.34
49.01
207.22
96.77
1920.56
164.10
161.63
–
0.94
1.18
1.40
2.50
2.81
52.08
88.64
–
0.58
190.44
2.90
2.50
–
2.99
2.19
2.59
6.97
7.82
7.25
68.15
–
1.46
145.82
12.15
6.97
–
2462.27
1923.03
190.84
151.00
Note: Impairment loss included in segment expense: Financial Services segment R 12 crore (previous year: Nil), Developmental
Projects segment Nil (previous year: R 127.94 crore), Other segment R 3.28 crore (previous year: R 2.08 crore) and Corporate
Unallocated R 2.09 crore (previous year: R 146.93 crore).
540
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [46]
(a)
Information about reportable segments (contd.)
Interest income included in
segment income
Finance costs included in
segment expense
v crore
Profit/(loss) of associates and
joint ventures accounted
applying equity method not
included in segment result
2018-19
2019-20
2018-19
Particulars
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 45]
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Segment total
Unallocable
Less: Relates to discontinued
operations
Inter-segment
Consolidated total
2019-20
2018-19
2.52
6.37
2019-20
379.58
–
–
(0.11)
3.21
242.95
36.43
232.10
2.35
60.52
579.97
626.12
3.21
373.81
829.07
–
–
1.29
6.61
244.92
5.20
286.25
1.17
66.58
618.39
629.65
6.61
346.44
894.99
–
–
–
–
–
–
7519.97
562.24
–
8461.79
(365.83)
–
54.08
8041.88
297.87
–
–
–
–
–
–
6859.46
599.54
–
7756.87
(297.87)
–
73.37
7385.63
Particulars
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation [Note 45]
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Segment total
Unallocable
Inter-segment
Consolidated total
Additions to non-current assets
2019-20
2018-19
1287.98
1251.62
97.67
176.76
185.09
235.19
300.18
12711.68
474.70
2007.26
662.33
18138.84
852.08
(54.47)
18936.45
62.96
76.76
219.15
258.30
386.99
667.31
860.12
2938.11
629.99
7351.31
228.58
(105.29)
7474.60
0.80
204.81
(162.88)
(1.14)
–
9.98
–
–
(16.88)
(0.03)
34.66
37.30
–
–
0.96
183.60
(156.81)
0.40
–
17.70
–
–
(90.38)
6.24
(38.29)
17.29
–
–
71.96
(21.00)
v crore
Investment in associates and
joint ventures accounted
applying equity method
included in segment assets
As at
31-3-2020
As at
31-3-2019
6.22
1123.84
–
5.71
–
4.70
933.37
–
6.36
–
419.82
394.60
–
–
1296.49
0.20
2852.28
(1.27)
–
–
–
1275.49
26.93
2641.45
0.84
–
2851.01
2642.29
541
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [46] (contd.)
(b) Geographical information
Particulars
India (i)
Foreign countries (ii):
United States of America
Kingdom of Saudi Arabia
Sultanate of Oman
United Arab Emirates
Qatar
Netherland
Other countries
Total foreign countries (ii)
Total (i+ii)
Less: Discontinued operations
Total
Revenue by location of customers
v crore
2019-20
100897.26
14143.55
4938.82
2966.19
3851.08
3692.20
2677.88
17517.67
49787.39
150684.65
5232.29
145452.36
2018-19
95898.05
8826.86
6575.22
3031.69
6306.93
4146.69
2941.18
13280.48
45109.05
141007.10
5786.81
135220.29
v crore
Non-current assets
Particulars
As at
31-3-2019
38648.66
2113.39
40762.05
(c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed
As at
31-3-2020
51262.37
2243.72
53506.09
India
Foreign countries
Total
ten percent of the group’s total revenue.
(d) The group’s reportable segments are organised based on the nature of products and services offered by these segments.
(e) Segment reporting: basis of identifying operating segments, reportable segments and definition of each reportable segment:
(i)
Basis of identifying operating segments:
Operating segments are identified as those components of the groups (a) that engage in business activities to earn revenues
and incur expenses (including transactions with any of the group’s other components); (b) whose operating results are
regularly reviewed by the Group’s Corporate Executive Management to make decisions about resource allocation and
performance assessment; and (c) for which discrete financial information is available.
The group has nine reportable segments [described under “segment composition”] which are the group’s independent
businesses. The nature of products and services offered by these businesses are different and are managed separately given
the different sets of technology and competency requirements. In arriving at the reportable segment, the seven operating
segments have been aggregated and reported as “infrastructure segment” as these operating segments have similar
economic characteristics in terms of long term average gross margins, nature of the products and services, type of customers,
methods used to distribute the products and services and the nature of regulatory environment applicable to them.
(ii) Reportable segments
An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute
amount of result or assets exceed 10% or more of the combined total of all the operating segments.
(iii) Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal
management reports that are reviewed by the Group’s Corporate Executive Management. The performance of financial
services segment and finance lease activities of power development segment are measured based on segment profit (before
tax) after deducting the interest expense.
542
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [46] (contd.)
(iv) Segment composition
•
•
•
•
•
•
•
•
•
Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure,
heavy civil infrastructure, power transmission & distribution, water & effluent treatment, smart world & communication
projects and metallurgical & material handling systems.
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.
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 and Thermal & Nuclear
Power.
Defence Engineering segment comprises (a) design, development, serial production and through life-support of
equipment, systems and platforms for Defence and Aerospace sectors and (b) design, construction and repair/refit of
defence vessels.
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.
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 rural finance, housing finance, wholesale finance, mutual fund and wealth
management.
Developmental projects segment comprises development, operation and maintenance of basic infrastructure projects,
toll and fare collection, power development, development and operation of port facilities (till the date of sale) and
providing related advisory services.
• Others segment includes realty, manufacture and sale of industrial valves, 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, mining and aviation. None of the businesses reported as part
of others segment meet any of the quantitative thresholds for determining reportable segments for the year ended
March 31, 2020.
543
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [47]
Disclosure pursuant to Ind AS 115 “Revenue from Contracts with Customers”:
(a) Disaggregation of revenue into operating segments and geographical areas:
Segment
Domestic
Foreign
Total
Other revenue
Revenue as per Ind AS 115
2019-20
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation
(discontinued operations)
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Total
Less: Revenue from discontinued
operations
Revenue from continuing operations
54988.27
1848.75
1390.92
3624.88
3904.50
9804.07
1834.31
669.83
3712.05
4448.14
86225.72
3904.50
82321.22
17883.72
385.96
1428.61
342.40
1320.59
7527.39
20301.02
–
–
570.69
49760.38
72871.99
2234.71
2819.53
3967.28
5225.09
17331.46
22135.33
669.83
3712.05
5018.83
135986.10
164.57
58.91
33.65
3.19
7.20
88.99
–
13152.53
1138.28
51.23
14698.55
1320.59
48439.79
5225.09
130761.01
7.20
14691.35
5232.29
145452.36
Segment
Domestic
Foreign
Total
Other revenue
Revenue as per Ind AS 115
2018-19
Infrastructure
Power
Heavy Engineering
Defence Engineering
Electrical & Automation
(discontinued operations)
Hydrocarbon
IT & Technology Services
Financial Services
Developmental Projects
Others
Total
Less: Revenue from discontinued
operations
Revenue from continuing operations
53212.17
2583.78
964.08
3420.43
4234.45
7174.51
1217.91
1135.97
3521.39
4581.92
82046.61
4234.45
77812.16
544
19095.51
1383.77
1184.05
331.54
1533.30
7945.69
13153.45
–
–
443.95
45071.26
72307.68
3967.55
2148.13
3751.97
5767.75
15120.20
14371.36
1135.97
3521.39
5025.87
127117.87
110.37
3.95
26.09
–
19.06
11.38
–
11501.72
1546.65
670.01
13889.23
1533.30
43537.96
5767.75
121350.12
19.06
13870.17
5786.81
135220.29
v crore
Total as per
Statement of
Profit and Loss/
Segment report
73036.56
2293.62
2853.18
3970.47
5232.29
17420.45
22135.33
13822.36
4850.33
5070.06
150684.65
v crore
Total as per
Statement of
Profit and Loss/
Segment report
72418.05
3971.50
2174.22
3751.97
5786.81
15131.58
14371.36
12637.69
5068.04
5695.88
141007.10
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [47] (contd.)
(b) Break up of revenue (as per Ind AS 115) into over a period of time and at a point in time:
Year
2019-20
2018-19
Continuing
operations
120248.36
110735.81
Over a period of time
At a point in time
Discontinued
operations
Total
Continuing
operations
Discontinued
operations
276.15
462.40
120524.51
111198.21
10512.65
10614.31
4948.94
5305.35
15461.59
15919.66
v crore
Total
(c) Movement in expected credit loss (“ECL”) during the year:
Particulars
Opening balance as at April 1
Transition impact of Ind AS 115
Changes in allowance for ECL:
Provision/(reversal) of allowance for ECL
Additional provision (net)
Write off as bad debts
Translation adjustment
Classified as held for sale
Addition on account of business combination
Closing balance as at March 31
(d) Contract balances:
(i) Movement in contract balances during the year -
Provision on trade receivables
Provision on contract assets
v crore
2019-20
3000.83
–
313.00
178.37
(194.62)
12.12
(154.10)
25.61
3181.21
2018-19
2900.10
–
84.34
265.62
(249.23)
–
–
–
2019-20
856.31
–
2018-19
121.85
780.87
173.42
(198.80)
2.14
–
3.40
(23.25)
0.03
155.14
(2.75)
–
–
–
3000.83
1012.05
856.31
2019-20
2018-19
v crore
Particulars
Contract
assets
(A)
Contract
liabilities
(B)
Net contract
balances
(A-B)
Contract
assets
(A)
Contract
liabilities
(B)
Net contract
balances
(A-B)
Opening balance as at April 1
46475.33
28272.43
18202.90
42194.20
24196.28
17997.92
Closing balance as at March 31
51849.63
28019.45
23830.18
46475.33
28272.43
18202.90
Net increase/(decrease)
5374.30
(252.98)
5627.28
4281.13
4076.15
204.98
Balances as at March 31, 2020 does not include balances classified as held for sale.
Note:
During the current year, increase in net contract balances is primarily due to higher revenue recognition as compared to
progress bills raised.
During the previous year, increase in net contract balances is primarily due to higher revenue recognition as compared to
progress bills raised and Ind AS 115 transition adjustment.
545
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [47] (contd.)
(ii) Revenue recognised from opening balance of contract liabilities amounts to R 7536.12 crore (previous year: R 9724.78 crore).
(iii) Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of
contract modifications) amounts to R 295.31 crore (previous year: R 221.00 crore).
(e) Cost to obtain/fulfil the contract:
(i) Amortisation in Statement of Profit and Loss: R 18.97 crore (previous year: R 5.32 crore).
(ii) Recognised as contract assets as at March 31, 2020 R 118.87 crore (as at March 31, 2019 R 30.26 crore)
(f) Reconciliation of contracted price with revenue during the year:
v crore
Opening contracted price of orders on hand as at April 1*
640145.61
560785.57
Particulars
2019-20
2018-19
Add:
Fresh orders/change orders received (net)
176430.35
160021.63
Increase due to additional consideration recognised as per
contractual terms/(decrease) due to scope reduction (net)
Addition on account of business combination
Increase due to exchange rate movements (net)
Less:
Orders completed during the year
Closing contracted price of orders on hand as at March 31*
(24041.59)
2320.76
6929.54
75306.08
726478.59
2164.52
–
2798.27
85624.38
640145.61
Total revenue recognised during the year
Less: Revenue out of orders completed during the year
135986.10
34451.56
127117.87
27545.23
Revenue out of orders under execution at the end of the year (I)
101534.54
99572.64
Revenue recognised upto previous year (from orders pending
completion at the end of the year) (II)
Increase/(decrease) due to exchange rate movements (net) (III)
Balance revenue to be recognised in future viz. Order book (IV)
Closing contracted price of orders on hand as at March 31* (I+II+III+IV)
Closing contracted price of orders on hand at the end of the year -
Continuing operations
Closing contracted price of orders on hand at the end of the year -
Discontinued operations
* including full value of partially executed contracts
(g) Remaining performance obligations and its expected conversion into revenue:
304746.53
2422.33
317775.19
726478.59
722210.41
4268.18
242938.20
(68.63)
297703.40
640145.61
v crore
Remaining performance
obligation
As at March
31, 2020
Total
Continuing
operations
Discontinued
operations
As at March 31, 2019
Total
317775.19
Upto
1 Year
126750.06
From
1 to 2 years
104518.84
Expected conversion in revenue
From
3 to 4 years
19742.88
From
2 to 3 years
58127.31
From
4 to 5 years
4517.78
Beyond
5 years
4118.32
315199.16
124719.69
104141.46
58051.78
19719.71
4500.33
4066.19
2576.03
297703.40
2030.37
116804.46
377.38
108730.85
75.53
44795.85
23.17
16996.20
17.45
5926.62
52.13
4449.42
546
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [47] (contd.)
(h) The Group has undertaken a project for construction, operation and maintenance of the Metro Rail System on Design-Build-
Finance-Operate-Transfer (DBFOT) basis as per the concession agreement with the government authorities. The significant terms of
the arrangement are as under:
Period of the
concession
Remuneration
Initial period of 35 years and extendable by another 25 years at the option of the concessionaire subject
to fulfilment of certain conditions under concession agreement.
Fare collection rights from the users of the Metro Rail System, license to use land provided by the
government for constructing depots and for transit oriented development and earn lease rental income
on such development and grant of viability gap fund.
Funding from grantor
Viability Gap Funding of R 1458 crore.
Infrastructure return
at the end of the
concession period
Renewal and
termination options
Being DBFOT project, the project assets have to be transferred at the end of concession period.
Further extension of 25 years will be granted at the option of the concessionaire upon satisfaction of
Key Performance Indicators laid under the concession agreement. This option is to be exercised by the
concessionaire during the 33rd year of the initial concession period. Termination of the concession
agreement can either be due to (a) Force Majeure (b) Non Political event (c) Indirect political event
(d) Political event. On occurrence of any of the above events, the obligations, dispute resolution,
termination payments etc are as detailed in the concession agreement.
Rights & Obligations
Major obligations of the concessionaire are relating to –
(a) project agreements
(b) change in ownership
(c)
issuance of Golden Share to the Government
(d) maintenance of aesthetic quality of the Rail System
(e) operation and maintenance of the rolling stock and equipment necessary and sufficient for
handling Users equivalent to 110% of the Average PHPDT etc.
Major obligations of the Government are –
(a) providing required constructible right of way for construction of rail system and land required for
construction of depots and transit oriented development
(b) providing reasonable support and assistance in procuring applicable permits required for
construction
(c) providing reasonable assistance in obtaining access to all necessary infrastructure facilities and
utilities
(d) obligations relating to competing facilities
(e) obligations relating to supply of electricity etc.
Intangible assets have been recognised towards rights to charge the users of the utility
R 512.75 crore (previous year: R 387.33 crore) [included in Note 47 (a) above]
Classification of
service arrangement
Construction revenue
recognised
NOTE [48]
Exceptional item for 2018-19 represents recognition of certain customer dues which were written off earlier subsequently considered
recoverable.
547
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [49]
Disclosure pursuant to Ind AS 1 ”Presentation of financial statements“:
(a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date:
Sr.
No.
1
2
3
4
5
Particulars
Inventories
Trade receivables
Other loans
Other financial assets
Other current assets
Note
As at 31-3-2020
As at 31-3-2019
Within
twelve
months
After
twelve
months
Total
Within
twelve
months
After
twelve
months
v crore
Total
11
13
17
18
19
3637.58
2109.07
5746.65
5318.60
1095.33
6413.93
40284.22
447.30
40731.52 36453.46
392.41 36845.87
716.00
2926.52
–
716.00
625.59
1.10
626.69
1.35
2927.87
2551.25
–
2551.25
49689.89
8969.80
58659.69 44772.56
7370.50 52143.06
(b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date:
Sr.
No.
1
2
3
4
5
Particulars
Lease liability
Trade payables:
Due to micro enterprises and
small enterprises
Due to others
Other financial liabilities
Other current liabilities
Provisions
Note
As at 31-3-2020
As at 31-3-2019
Within
twelve
months
After
twelve
months
Total
Within
twelve
months
After
twelve
months
v crore
Total
374.37
50.58
424.95
–
–
–
423.25
56.26
479.51
252.96
8.16
261.12
28
29
30
31
41695.77
1468.65
43164.42 41583.63
1150.06 42733.69
4902.41
20.82
4923.23
4542.62
80.16
4622.78
25575.15
5241.52
30816.67 26333.88
4832.67 31166.55
2536.17
214.68
2750.85
2270.39
173.04
2443.43
548
Sr.
No.
a
b
c
d
e
f
g
h
i
j
k
l
n
o
p
q
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [50]
Disclosure pursuant to Ind AS 7 “Statement of Cash Flows” - Changes in liabilities arising from financing activities:
Particulars
Non-
current
borrowings
(Note 22)
Current
borrowings
(Note 26)
Current
maturities
of long
term
borrowings
(Note 27)
Non-
current
lease
liability
Current
lease
liability
Balance as at 1-4-2018
72914.76
19331.85
15277.47
Changes from financing cash flows
8493.76
7765.14
1606.44
The effect of changes in foreign exchange rates
46.45
210.74
240.30
NA
Interest accrued (net of interest paid)
(250.03)
0.11
(81.82)
Other changes (transfer within categories)
(7084.15)
1916.00
5168.15
v crore
Total
107524.08
17865.34
497.49
(331.74)
–
Balance as at 31-3-2019 (f = a to e)
74120.79
29223.84
22210.54
–
– 125555.17
Transition impact of Ind AS 116
Additions to lease liability
(0.06)
–
–
–
–
–
876.58
380.66
298.48
1175.00
279.57
660.23
Changes from financing cash flows
29105.80
4915.20
(20203.40)
(58.66)
(199.37)
13559.57
The effect of changes in foreign exchange rates
391.81
246.68
157.81
41.25
4.61
842.16
Interest accrued (net of interest paid)
(142.63)
696.56
399.10
–
–
953.03
Other changes (transfer within categories)
(21145.53)
21145.53
(58.90)
58.90
–
m
Conversion to equity
De-recognition of lease liability
Liabilities classified as held for sale
–
–
–
(61.26)
–
–
–
(54.81)
–
–
(15.17)
(1.12)
–
(17.57)
–
–
–
(54.81)
(16.29)
(78.83)
Addition on account of business combination
1.15
–
575.84
1.45
578.44
Balance as at 31-3-2020 (q = f to p)
82331.33
35021.02
23654.77
1741.60
424.95 143173.67
Amounts reported in Statement of Cash Flows under financing activities -
Sr. No.
Particulars
a
b
c
d
e
Proceeds from non-current borrowings
Repayment of non-current borrowings
Proceeds from other borrowings (net)
Repayment of lease liability
Total changes from financing cash flows (e = a to d)
2019-20
42587.43
v crore
2018-19
24181.62
(33685.03)
(14081.42)
4915.20
(258.03)
7765.14
–
13559.57
17865.34
549
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [51]
Disclosure pursuant to Ind AS 12 “Income Taxes”:
(a) Major components of tax expense/(income):
Sr.
No.
(a)
Particulars
Consolidated Statement of Profit and Loss:
Profit and Loss section:
(i) Current income tax:
Current income tax expense
Effect of previously unrecognised tax losses and tax offsets used during the current year
Tax expense in respect of earlier years
(ii) Deferred tax:
Tax expense on origination and reversal of temporary differences
Effect of previously unrecognised tax losses and tax offsets on which deferred tax benefit
is recognised
Effect on deferred tax balances due to the change in income tax rate
Income tax expense/(income) reported in the consolidated Statement of Profit and
Loss [(i)+(ii)]
Income tax expense attributable to:
Profit from continuing operations
Profit from discontinued operations
(b) Other comprehensive income section:
(i) Items not to be reclassified to profit or loss in subsequent periods:
(A) Current tax expense/(income):
On re-measurement of defined benefit plans
(B) Deferred tax expense/(income):
On re-measurement of defined benefit plans
(ii) Items to be reclassified to profit or loss in subsequent periods:
(A) Current tax expense/(income):
On gain/(loss) on cash flow hedges other than mark to market
On foreign currency translation
(B) Deferred tax expense/(income):
Net gain/(loss) on cost of hedging reserve
On mark to market gain/(loss) on cash flow hedges
On gain/(loss) on fair value of debt securities
On foreign currency translation
(c)
Income tax expense/(income) reported in the other comprehensive income [(i)+(ii)]
Retained earnings:
Deferred tax
Income tax expense/(income) reported in retained earnings
2019-20
v crore
2018-19
3983.86
(148.77)
(80.96)
3754.13
5001.69
(567.92)
259.55
4693.32
(251.71)
(349.72)
(752.38)
741.84
(262.25)
(0.27)
–
(349.99)
3491.88
4343.33
3263.20
228.68
3491.88
4067.09
276.24
4343.33
(49.19)
(49.19)
(1.41)
(1.41)
36.29
–
36.29
(8.14)
(370.71)
19.46
(4.45)
(363.84)
(378.15)
(31.03)
(31.03)
(11.37)
(11.37)
0.39
0.39
(88.36)
0.49
(87.87)
9.31
(18.33)
(7.61)
2.76
(13.87)
(112.72)
(606.15)
(606.15)
550
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [51] (contd.)
(b) Reconciliation of income tax expense and accounting profit multiplied by domestic tax rate applicable in India:
Sr. No.
(a)
(b)
(c)
(d)
Particulars
Profit before tax from:
Continuing operations
Discontinued operations
Corporate tax rate as per Income tax Act, 1961
Tax on accounting profit [(c)=(a)*(b)]
Tax on Income exempt from tax:
(i)
Dividend income and interest on tax free bonds
Tax on expense not tax deductible:
(A) Corporate Social Responsibility expenses
(B) Expenses in relation to exempt income
(C) Tax on employee perquisites borne by the Group
(ii)
(iii) Weighted deduction on Research & Development expenditure and deduction u/s 80 IA
(iv)
Tax effect on impairment and fair valuation losses recognised on which deferred tax
asset is not recognised
Effect of previously unrecognised tax losses and unutilised tax credits used to reduce
tax expense
Tax effect of losses of current year on which no deferred tax benefit is recognised
(v)
(vi)
(vii) Effect of tax paid on foreign source income which is exempt from tax in India
(viii) Effect on deferred tax due to change in income tax rate
(ix)
(x)
Total effect of tax adjustments [(i) to (x)]
Tax expense recognised during the year[(e)=(c)-(d)]
Effective tax rate [(f)=(e)/(a)]
Effect of tax benefit on business combination under common control
Tax effect on various other Items
(e)
(f)
2019-20
13430.95
883.25
14314.20
25.17%
3602.60
v crore
2018-19
13735.34
845.57
14580.91
34.94%
5095.16
(7.08)
(69.75)
69.39
80.04
2.08
(0.76)
60.10
48.58
1.57
(151.25)
(6.83)
168.15
(856.79)
106.56
(254.55)
741.84
(164.47)
179.85
(110.72)
3491.88
24.39%
(773.88)
580.92
(321.18)
–
(228.35)
(66.74)
(751.83)
4343.33
29.79%
The Parent Company and some of the subsidiaries have opted to pay the tax under section 115BAA of the Income Tax Act,1961.
Accordingly, (a) the provision for current and deferred tax has been determined at the rate of 25.17%, (b) the deferred tax assets
and deferred tax liabilities as on April 1, 2019 have been restated at the rate of 25.17% and (c) the unutilised credit for minimum
alternate tax as on April 1, 2019 has been written-off.
(c)
(i) Unused tax losses and unused tax credits for which no deferred tax asset is recognised in Balance Sheet:
Particulars
As at 31-3-2020
v crore
Expiry year
As at 31-3-2019
v crore
Expiry year
Tax losses (Business loss and unabsorbed depreciation)
- Amount of losses having expiry
- Amount of losses having no expiry
Tax losses (Capital loss)
Unused tax credits [Minimum Alternate Tax (MAT) credit not
recognised]
Total
FY 2021-35
FY 2021-28
3554.29
10425.08
614.58
–
14593.95
3615.27
8084.24
3901.55
199.12
15800.18
FY 2020-34
FY 2020-27
FY 2029-34
551
v crore
As at
31-3-2019
783.94
2491.23
78.08
3353.25
v crore
Deferred tax
liabilities/
(assets) as at
31-3-2020
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [51] (contd.)
(ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet:
Sr.
No.
(a)
(b) Arising out of upward revaluation of tax base of assets (on account of indexation
Towards provision for diminution in value of investments
Particulars
benefit)
(c) Other items giving rise to temporary differences
Total
(d) Major components of deferred tax liabilities and deferred tax assets:
As at
31-3-2020
628.25
2718.10
78.08
3424.43
Particulars
Deferred tax liabilities:
- Difference between book base and tax
base of property, plant & equipment,
investment property and intangible
assets
- Disputed statutory liabilities paid and
claimed as deduction for tax purposes
but not debited to Statement of Profit
and Loss
- Gain on derivative transactions to be
offered for tax purposes in the year of
transfer/settlement
- Other items giving rise to temporary
differences
Deferred tax liabilities:
Offsetting of deferred tax liabilities with
deferred tax (assets)
Net deferred tax liabilities
Deferred tax (assets):
- Provision for doubtful debts, loans &
advances and contract assets
- Unpaid statutory liabilities
- Unabsorbed depreciation
- Carried forward tax losses
- Unutilised MAT credit
- Loss on derivative transactions to be
claimed for tax purposes in the year of
transfer/settlement
- Difference between book base and tax
base of property, plant & equipment,
investment property and intangible
assets
- Other items giving rise to temporary
differences
Deferred tax (assets):
Offsetting of deferred tax (assets) with
deferred tax liabilities
Net deferred tax (assets)
Net deferred tax liability/(assets)
552
Deferred tax
liabilities/
(assets) as at
31-3-2019
Charge/
(credit) to
retained
earnings
Charge/
(credit) to
Statement
of Profit and
Loss
Effect due to
acquisition/
disposal
Classified
as held for
sale
Charge/(credit)
to other
comprehensive
income
Exchange
difference
Debit/(credit)
to hedge
reserve (other
than through
OCI)
Reversal of
deferred tax
asset on DDT
credit utilised
during the
year
1663.57
–
(242.14)
157.21
–
(23.55)
–
–
–
–
–
–
–
–
(68.68)
–
(68.68)
–
(217.84)
(483.53)
1170.38
1170.38
(19.72)
(19.72)
70.71
(401.53)
1489.96
(1178.83)
311.13
(2206.94)
(291.32)
(283.03)
(119.18)
(793.84)
40.08
–
–
–
–
–
–
–
–
–
470.09
(63.40)
86.50
(737.86)
480.86
(5.03)
–
–
(2.15)
–
–
–
–
–
3.98
–
(1.13)
–
–
–
9.13
–
–
(280.44)
0.07
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1421.43
–
133.66
–
2.03
(1.87)
(1.87)
529.42
2086.54
(633.50)
1453.04
–
–
–
–
–
(1741.88)
(355.85)
(196.53)
(859.19)
(309.00)
–
(231.16)
–
2.09
248.03
248.03
(1.67)
(1.67)
(788.56)
(4480.08)
14.66
–
(4.12)
(8.59)
0.14
–
(958.19)
(4597.76)
(31.03)
(31.03)
(19.92)
221.28
(27.55)
(43.32)
16.77
20.89
(15.00)
(296.57)
–
–
0.07
1178.83
(3418.93)
(3107.80)
(31.03)
(262.25)
1127.06
1.17
(365.25)
0.07
248.03
(3.54)
633.50
(3846.58)
(2393.54)
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52]
Disclosure pursuant to Ind AS 19 “Employee Benefits” [Note 1(II)(p)]:
(a) Defined contribution plans: Amount of R 463.20 crore (previous year: R 403.86 crore) is recognised as an expense. Out of above,
R 443.18 crore (previous year: R 386.24 crore) is included in “employee benefit expense” [Note 37] and R 19.61 crore (previous
year: R 16.82 crore) pertains to discontinued operations in the Statement of Profit and Loss and R 0.41 crore (previous year: R 0.80
crore) has been capitalised.
(b) Defined benefit plans:
(i)
The amounts recognised in Balance Sheet are as follows:
Particulars
Gratuity plan
As at
31-3-2020
As at
31-3-2019
Post-retirement medical
benefit plan
As at
31-3-2020
As at
31-3-2019
Pension plan
Trust-managed
provident fund plan
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
v crore
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
1051.92
233.47
1285.39
851.04
–
753.52
254.53
1008.05
649.28
–
–
340.27
340.27
–
–
–
241.63
241.63
–
–
–
369.12
369.12
–
–
–
337.28
337.28
–
–
4671.90
–
4671.90
4960.42
–
4090.42
–
4090.42
4128.60
–
[limit in para 64(b)]
1.40
3.24
–
–
–
–
6.34
3.38
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
435.75
362.01
340.27
241.63
369.12
337.28
(282.18)
(34.80)
438.09
(2.34)
435.75
435.75
–
364.96
(2.95)
362.01
362.01
–
340.27
–
340.27
21.61
318.66
241.63
–
241.63
14.97
226.66
369.12
–
369.12
29.49
339.63
337.28
–
337.28
28.92
308.36
51.82
–
51.82
51.82
–
(ii)
The amounts recognised in Statement of Profit and Loss are as follows:
Particulars
Gratuity plan
Post-retirement medical
benefit plan
Pension plan
2019-20
164.01
62.53
(50.73)
2018-19
149.50
53.22
(44.24)
2019-20
22.41
17.65
–
2018-19
20.01
16.71
–
2019-20
3.57
24.31
–
Trust-managed
provident fund plan
2018-19
2018-19 2019-20
3.14 157.67 $ 136.98 $
314.71
24.22 357.39
(314.71)
– (357.39)
46.33
(0.10)
46.23
46.23
–
v crore
1
2
3
4
5
6
7
Current service cost
Interest cost
Interest income on plan assets
Actuarial losses/(gains) - Difference
between actual return on plan assets and
interest income
Actuarial losses/(gains) - Others
Past service cost
Actuarial gain/(loss) not recognised in
books
Adjustment for earlier years
Effect of the limit in para 64(b)
8
9
10 Translation adjustments
11 Amount capitalised out of the above
Total (1 to 11)
(21.53)
117.60
0.17
–
–
(0.33)
(2.14)
(0.34)
269.24
5.74
28.77
–
–
1.29
(2.76)
1.22
(1.19)
191.55
–
83.68
–
–
–
–
–
(0.03)
123.71
–
(5.40)
0.05
–
–
–
–
(0.01)
31.36
–
26.24
–
–
–
–
–
–
54.12
– (253.37)
–
–
4.57
0.63
(18.86)
–
–
– 253.37
–
–
–
–
–
–
–
–
32.56 157.67
18.86
–
–
–
–
136.98
553
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52] (contd.)
v crore
Particulars
Gratuity plan
Post-retirement medical
benefit plan
Pension plan
2019-20
2018-19
2019-20
2018-19
2019-20
2018-19 2019-20
Trust-managed
provident fund plan
2018-19
I.
Amount included in “Employee benefits
expense”
II. Amount included as part of
“Manufacturing, construction and
operating expenses”
Amount included as part of “Finance
costs”
III.
IV. Amount included as part of “Other
V.
comprehensive income”
Amount included in “Profit from
discontinued operations”
Total (I+II+III+IV+V)
Actual return on plan assets
154.25
144.75
21.51
20.93
3.57
3.77
150.74
130.86
0.64
0.31
–
–
–
–
10.54
7.47
17.65
15.00
24.31
24.22
96.02
31.12
83.68
(5.40)
26.24
4.57
–
–
–
–
–
–
7.79
269.24
72.26
7.90
191.55
38.50
0.87
123.71
–
0.83
31.36
–
–
54.12
–
–
32.56
–
6.93
157.67
610.76
6.12
136.98
333.57
(iii) 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) arising
from changes in -
i)
ii)
iii)
Demographic assumptions
Financial assumptions
Experience adjustments
Less: Benefits paid
Less: Unfunded liability classified as held
for sale
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
554
Gratuity plan
As at
31-3-2020
As at
31-3-2019
Post-retirement medical
benefit plan
As at
31-3-2020
As at
31-3-2019
Pension plan
Trust-managed provident
fund plan
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
v crore
1008.05
164.01
62.53
892.09
149.50
53.22
241.63
22.41
17.65
222.16
20.01
16.71
337.28
3.57
24.31
326.68 4090.42
3633.31
157.67 $ 136.98 $
314.71
357.39
3.14
24.22
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
414.78
–
–
352.78
–
(1.98)
93.00
26.26
(158.46)
(23.40)
0.17
6.32
11.66
10.79
(109.45)
6.78
40.13
36.76
(12.52)
(11.43)
8.40
(2.37)
(11.85)
(0.04)
24.41
1.87
(22.28)
(15.00)
7.60
11.96
–
–
–
(21.96) (483.54)
–
–
–
(477.56)
–
–
(12.57)
–
0.46
95.16
(0.17)
19.76
(15.31)
0.19
1.48
7.56
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.64
–
–
–
–
–
–
–
–
134.63
–
(0.07)
0.62
128.71
–
–
1.49
1285.39
1008.05
340.27
241.63
369.12
337.28 4671.90
4090.42
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52] (contd.)
(iv) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:
v crore
Particulars
Opening balance of the fair value of the plan assets
Add: Interest income on plan assets*
Add/(less): Actuarial gains/(losses) - Difference between
actual return on plan assets and interest income
Add: Contribution by the employer
Add: Contribution by plan participants
Add: Assets assumed on transfer of employees
Add: Business combination/disposal (net)
Less: Benefits paid
Add: Adjustment for earlier years
Less: Settlements
Gratuity plan
Trust-managed provident
fund plan
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
649.28
50.73
21.53
136.91
–
0.10
63.80
610.99
4128.60
3676.19
44.24
357.39
314.71
(5.74)
69.11
–
–
–
253.37
160.88
408.23
135.02
–
18.86
132.76
334.82
128.98
–
(71.31)
(69.16)
(483.54)
(477.56)
–
–
–
(0.16)
0.47
–
0.18
(0.34)
Closing balance of the plan assets
851.04
649.28
4960.42
4128.60
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 interest income on plan assets:
The Trust formed by the Parent Company and a few subsidiaries manage the investments of provident funds and gratuity
fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate
stated in (vii) below both determined at the start of the annual reporting period.
The Group expects to fund R 168.82 crore (previous year: R 111.90 crore) towards its gratuity plan and R 174.71 crore
(previous year: R 143.83 crore) towards its trust-managed provident fund plan during the year 2020-21.
$
Employer’s contribution to provident fund.
(v) The fair value of major categories of plan assets are as follows:
Particulars
Cash and cash equivalents
Equity instruments
Debt instruments - Corporate bonds
Debt instruments - Central Government bonds
Debt instruments - State Government bonds
Debt instruments - Public Sector Unit bonds
Mutual funds - Equity
Mutual funds - Debt
Gratuity plan
As at 31-3-2020
Quoted
Unquoted
–
3.06
11.62
244.33
170.41
92.54
14.91
11.62
–
–
–
–
–
–
9.35
–
Total
3.06
11.62
244.33
170.41
92.54
14.91
20.97
–
As at 31-3-2019
Quoted
Unquoted
–
1.78
15.81
193.00
162.66
77.63
8.41
7.20
–
–
–
–
–
–
9.88
4.75
v crore
Total
1.78
15.81
193.00
162.66
77.63
8.41
17.08
4.75
555
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52] (contd.)
Particulars
Mutual funds - Others
Special deposit scheme
Fixed deposits
Insurer managed fund
Other (payables)/receivables
Closing balance of the plan assets
Particulars
Cash and cash equivalents
Equity instruments
Debt instruments - Corporate bonds
Debt instruments - Central Government bonds
Debt instruments - State Government bonds
Debt instruments - Public Sector Unit bonds
Mutual funds - Equity
Mutual funds - Debt
Mutual funds - Others
Special deposit scheme
Fixed deposits
Other (payables)/receivables
Gratuity plan
As at 31-3-2020
Quoted
Unquoted
0.25
–
–
–
–
545.68
2.62
2.60
3.00
277.54
7.19
305.36
Total
2.87
2.60
3.00
277.54
7.19
851.04
As at 31-3-2019
Quoted
Unquoted
–
1.49
1.85
–
–
–
–
–
163.17
163.17
1.65
1.65
464.71
184.57
649.28
Trust-managed provident fund plan
As at 31-3-2019
Quoted
Unquoted
As at 31-3-2020
Quoted
Unquoted
–
24.63
Total
24.63
16.09
1391.85
1069.27
1236.85
774.67
144.66
0.09
10.88
–
–
–
–
–
66.76
–
0.04
7.28
–
–
–
–
–
75.28
34.09
1.98
–
0.06
831.42
956.71
988.14
890.85
56.48
0.34
–
–
–
7.99
271.69
271.69
2.13
4.35
2.13
17.61
271.20
271.20
2.60
4.18
2.60
12.17
16.09
1391.85
1069.27
1236.85
774.67
77.90
0.09
10.84
–
–
13.26
v crore
Total
–
1.49
1.85
v crore
Total
7.28
0.06
831.42
956.71
988.14
890.85
131.76
34.43
1.98
Closing balance of the plan assets
4590.82
369.60
4960.42
3731.99
396.61
4128.60
(vi) The average duration of the defined benefit obligation at the end of the reporting period is as follows:
Plans
As at 31-3-2020 As at 31-3-2019
1. Gratuity
2.
3.
Post-retirement medical benefit plan
Pension plan
6.83
14.60
7.81
6.16
14.60
7.70
556
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52] (contd.)
(vii) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted average):
Plans
As at 31-3-2020 As at 31-3-2019
(A) Discount rate:
(a) Gratuity plan
(b) Pension plan
(c) Post-retirement medical benefit plan
(B) Annual increase in healthcare costs (see note below)
(C)
Salary growth rate:
(a) Gratuity plan
(b) Pension plan
(D) Attrition Rate:
6.48%
6.48%
6.48%
5.00%
5.77%
7.92%
7.31%
7.31%
7.31%
5.00%
5.12%
7.00%
(a) For gratuity plan, the attrition rate varies from 1% to 25% (previous year: 1% to 25%) for various age groups.
(b) For pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age groups.
(c)
For post-retirement medical benefit plan, the attrition rate varies from 1% to 19% (previous year: 1% to 11%) for
various age groups.
(E) 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.
(F) 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.
(G) The obligation of the Group 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.
(H) One percentage point change in actuarial assumptions would have the following effects on defined benefit obligation:
Particulars
Gratuity
Impact of change in salary growth rate
Impact of change in discount rate
Post-retirement medical benefit plan
Impact of change in health care cost
Impact of change in discount rate
Company pension plan
Effect of 1% increase
Effect of 1% decrease
As at
31-3-2020
As at
31-3-2019
As at
31-3-2020
As at
31-3-2019
v crore
86.20
(76.50)
27.19
(46.36)
58.64
(51.99)
26.97
(33.66)
(76.84)
86.74
(22.27)
59.00
(53.14)
58.35
(22.03)
41.66
Impact of change in discount rate
(27.51)
(24.45)
31.72
28.13
(viii) Characteristics of defined benefit plans and associated risks:
(A) Gratuity plan:
The Parent 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
557
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [52] (contd.)
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 The Payment of Gratuity Act, 1972.
The defined benefit plans for gratuity of the Parent Company and material domestic subsidiary companies are
administered by separate gratuity funds that are legally separate from the Parent Company and the material domestic
subsidiary companies. The trustees nominated by the Group are responsible for the administration of the plans. There
are no minimum funding requirements of these plans. The funding of these plans is based on gratuity fund’s actuarial
measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared
to the assumptions set out in (vii) supra. An insignificant portion of the gratuity plan of the group attributable to
subsidiary companies is administered by the respective subsidiary companies and is funded through insurer managed
funds. A part of the gratuity plan is unfunded and managed within the Group. Further, the unfunded portion also
includes amounts payable in respect of the Group’s foreign operations which result in gratuity payable to employees
engaged as per the local laws of country of operation. Employees do not contribute to any of these plans.
(B) 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. The plan is unfunded. Employees do not contribute to the plan.
(C) Pension plan:
In addition to contribution to state-managed pension plan (EPS scheme), the Group 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. The plan is unfunded. Employees do not contribute to the plan.
(D) Trust-managed provident fund plan:
The Parent Company and a few subsidiaries manage provident fund plan through a provident fund trust for its
employees which is permitted under The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The plan
mandates contribution by employer at a fixed percentage of employee’s salary. Employees also contribute to the plan at
a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan 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.
All the above defined benefit plans expose the Group to general actuarial risks such as interest rate risk and market
(investment) risk.
NOTE [53]
Disclosure pursuant to Ind AS 20 “Accounting for Government Grants and Disclosure of Government Assistance”:
The Group’s exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed
by Department General of Foreign Trade India (DGFT). Income/reduction from underlying expenses recognised towards such export
incentives and duty drawback amounts to R 253.61 crore (previous year: R 252.91crore).
558
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54]
Disclosure of related parties/related party transactions pursuant to Ind AS 24 “Related Party Disclosures”
(a) List of related parties:
(i) Name of associate companies with whom transactions were carried out during the year:
Associate Companies:
1 L&T-Chiyoda Limited
3 L&T Camp Facilities LLC
2 Magtorq Private Limited
4 Larsen & Toubro Qatar & HBK Contracting Co. WLL
(ii) Name of joint venture companies with whom transactions were carried out during the year:
Joint Venture Companies:
1 L&T Interstate Road Corridor Limited
3 Ahmedabad - Maliya Tollway Limited
5 L&T Chennai-Tada Tollway Limited
7 Beawar Pali Pindwara Tollway Limited*
9 L&T Rajkot-Vadinar Tollway Limited
11 L&T Deccan Tollways Limited
13 L&T Samakhiali Gandhidham Tollway Limited
15 Kudgi Transmission Limited
17 L&T Sambalpur- Rourkela Tollway limited
19 L&T Infrastructure Development Projects Limited
21 Panipat Elevated Corridor Limited
23 Krishnagiri Thopur Toll Road Limited*
25 Western Andhra Tollways Limited*
27 Vadodara Bharuch Tollway Limited
29 L&T Transportation Infrastructure Limited
31 L&T Hydrocarbon Caspian LLC
2 L&T-Sargent & Lundy Limited
4 L&T Halol-Shamlaji Tollway Limited
6 Krishnagiri Walajahpet Tollway Limited*
8 Devihalli Hassan Tollway Limited*
10 L&T Howden Private Limited
12 L&T Sapura Shipping Private Limited
14 L&T Sapura Offshore Private Limited
16 L&T-Gulf Private Limited @
18 L&T-MHPS Boilers Private Limited
20 L&T-MHPS Turbine Generators Private Limited
22 Raykal Aluminium Company Private Limited
24 L&T Special Steels and Heavy Forgings Private Limited
26 PNG Tollway Limited
28 L&T Kobelco Machinery Private Limited **
30 L&T MBDA Missile Systems Limited
* The Group has sold its stake on May 4, 2018
** The Group has sold its stake on April 17, 2019
@ Reclassified as subsidiary w.e.f. November 20, 2019 due to purchase of additional stake.
(iii) Name of post-employment benefit plans with whom transactions were carried out during the year:
Provident Fund Trusts:
1 Larsen & Toubro Officers & Supervisory Staff Provident Fund
2 Larsen & Toubro Limited Provident Fund of 1952
3 Larsen & Toubro Limited Provident Fund
4 L&T Kansbahal Officers & Supervisory Provident Fund
5 L&T Kansbahal Staff & Workmen Provident Fund
6 L&T Construction Equipment Provident Fund Trust
7 L&T Valves Employees Provident Fund
Gratuity Trusts:
1 Larsen & Toubro Officers & Supervisors Gratuity Fund
2 Larsen & Toubro Gratuity Fund
3 L&T Technology Services Limited Employee Group Gratuity Scheme
4 L&T Shipbuilding Limited Employees Group Assurance Scheme
5 Nabha Power Limited Employees’ Group Gratuity Assurance Scheme
6 L&T Hydrocarbon Engineering Ltd Group Gratuity Scheme
7 Mindtree Limited Employees Gratuity Fund Trust *
* w.e.f. July 2, 2019
Superannuation Trust
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme
559
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
(iv) Name of Key Management Personnel (of the parent company) and their relatives with whom transactions were carried out
during the year:
(A) Executive Directors:
1 Mr. S. N. Subrahmanyan (Chief Executive Officer and
2 Mr. R. Shankar Raman (Whole-time Director and
Managing Director)
3 Mr. Shailendra Roy (Whole-time Director)
5 Mr. M. V. Satish (Whole-time Director)
(B) Independent/Non-executive Directors:
Chief Financial Officer)
4 Mr. D. K. Sen (Whole-time Director)
6 Mr. J.D. Patil (Whole-time Director)
1 Mr. A.M. Naik (Group Chairman)
3 Mr. Subodh Bhargava
5 Mr. Vikram Singh Mehta
7 Mr. Akhilesh Gupta *
9 Mr. Thomas Mathew T $
11 Mr. Subramanian Sarma
13 Mr. Sanjeev Aga
15 Mr. Arvind Gupta **
17 Mr. Sushobhan Sarker ##
* Ceased w.e.f. September 8, 2019
$ Ceased w.e.f. April 2, 2020
2 Mr. M. M. Chitale
4 Mr. M. Damodaran
6 Mr. Adil Zainulbhai
8 Mrs. Sunita Sharma
10 Mr. Ajay Shankar #
12 Mrs. Naina Lal Kidwai
14 Mr. N. Kumar
16 Mr.Hemant Bhargava @
** Ceased w.e.f. March 26, 2020
# Ceased w.e.f. May 29, 2020
@ Appointed w.e.f. May 28, 2018
## Ceased w.e.f. May 2, 2018
(v) Entity with common Key Management Personnel
Mindtree Foundation*
*w.e.f. September 17, 2019
(b) Disclosure of related party transactions:
Sr.
No.
Nature of transaction/relationship/major parties
(i)
Purchase of goods & services (including commission paid)
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
Associates, including:
L&T-Chiyoda Limited
Total
(ii) (A) Sale of goods/contract revenue & services
Joint ventures, including:
L&T-MHPS Boilers Private Limited
Associate:
L&T-Chiyoda Limited
Total
(B) Reversal of sale of goods/contract revenue & services
Joint ventures:
L&T Deccan Tollways Limited
L&T Samakhiali Gandhidham Tollway Limited
L&T-Sargent & Lundy Limited
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
853.97
1210.35
249.53
1103.50
104.31
–
104.31
0.01
587.70
117.38
234.65
96.79
–
–
–
0.01
162.15
1372.50
184.85
0.13
184.98
25.99
779.49
187.78
154.52
168.41
0.13
23.86
2.13
–
Total
0.01
25.99
560
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
(iii)
Purchase/lease of property, plant and equipment
Joint ventures:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T Sapura Shipping Private Limited
L&T Kobelco Machinery Private Limited
Total
(iv)
Sale of property, plant and equipment
Joint venture:
L&T-MHPS Boilers Private Limited
Key management personnel:
Mr. Shailendra Roy
Total
(v)
Investments including subscription to equity shares and preference
shares (equity portion) and other equity transactions
Joint ventures:
L&T-MHPS Turbine Generators Private Limited
L&T MBDA Missile Systems Limited
Total
(vi)
Sale/Redemption of investments
Joint venture:
L&T Infrastructure Development Projects Limited
Total
(vii)
Inter-corporate deposits given/(repaid) - net
Joint ventures:
L&T Special Steels and Heavy Forgings Private Limited
L&T Sapura Shipping Private Limited
Total
(viii) Net inter-corporate borrowing taken/(repaid)
Joint ventures:
L&T MBDA Missile Systems Limited
Total
(ix)
Charges paid for miscellaneous services
Joint ventures, including:
L&T-Sargent & Lundy Limited
L&T-MHPS Boilers Private Limited
Associate:
L&T-Chiyoda Limited
Total
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
0.20
0.54
0.05
–
–
0.15
–
0.44
–
0.33
–
22.42
115.21
(17.69)
57.50
8.21
1.63
7.29
0.20
0.44
–
0.44
0.33
0.33
22.42
22.42
97.52
97.52
57.50
57.50
9.90
7.29
17.19
0.54
0.69
6.25
6.94
1.18
1.18
–
–
55.86
55.86
–
–
6.65
0.97
7.62
–
0.13
0.13
0.16
0.12
0.69
6.25
0.70
0.48
–
84.48
(28.62)
–
4.92
1.05
0.97
561
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
(x)
Rent paid, including lease rentals under leasing arrangements
Joint ventures, including:
L&T Special Steels and Heavy Forgings Private Limited
Total
(xi)
Rent received, overheads recovered and miscellaneous income
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T-Sargent & Lundy Limited
L&T-MHPS Turbine Generators Private Limited
L&T Infrastructure Development Projects Limited
Associate:
L&T-Chiyoda Limited
Key management personnel:
Mr. D. K. Sen
Total
(xii) (A) Charges incurred for deputation of employees from related parties
Joint venture:
L&T Infrastructure Development Projects Limited
Total
(B) Charges recovered for deputation of employees to related parties
Joint ventures, including:
L&T Infrastructure Development Projects Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T Sapura Shipping Private Limited
Associate:
L&T-Chiyoda Limited
Total
(xiii) Dividend received
Joint ventures:
L&T-MHPS Boilers Private Limited
L&T Kobelco Machinery Private Limited
L&T-Sargent & Lundy Limited
Total
(xiv) Commission received, including those under agency arrangements
Joint ventures:
L&T-MHPS Boilers Private Limited
L&T Kobelco Machinery Private Limited
Total
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
3.49
3.49
72.71
18.44
–
91.15
–
–
5.50
6.59
12.09
12.53
12.53
0.05
0.05
3.20
28.40
11.39
8.32
7.93
18.44
–
–
0.66
0.77
4.08
6.59
11.94
0.59
–
0.05
–
1.24
1.24
79.40
23.20
0.03
102.63
1.00
1.00
7.71
12.88
20.59
19.44
19.44
3.80
3.80
1.20
35.10
11.77
8.04
6.06
23.20
0.03
1.00
1.62
1.35
4.13
12.88
11.94
–
7.50
0.05
3.75
562
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
(xv) Guarantee charges recovered from
Joint ventures, including:
L&T-MHPS Turbine Generators Private Limited
Total
(xvi)
Interest paid to
Joint ventures:
L&T MBDA Missile Systems Limited
L&T-MHPS Turbine Generators Private Limited
Total
(xvii)
Interest received from
Joint ventures, including:
L&T Special Steels and Heavy Forgings Private Limited
L&T Infrastructure Development Projects Limited
Associate:
L&T Camp Facilities LLC
Total
(xviii) Amount written off as bad debts
Joint venture:
PNG Tollway Limited
Total
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
0.55
0.55
4.16
4.16
133.10
–
133.10
–
–
0.55
2.42
1.74
104.14
21.56
–
–
0.52
0.52
1.81
1.81
111.86
0.26
112.12
25.08
25.08
(xix) Amount recognised/(reversed) in P&L as provision towards bad and
doubtful debts (including expected credit loss on account of delay)
Joint ventures:
4.76
(0.38)
L&T Special Steels and Heavy Forgings Private Limited
L&T Howden Private Limited
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Sapura Offshore Private Limited
L&T Samakhiali Gandhidham Tollway Limited
Total
(xx) Donation Given:
Entity with common key management personnel:
Mindtree Foundation
Total
(xxi)
Rent deposit returned:
Key management personnel:
Mr. D.K. Sen
Total
0.08
(0.13)
(0.37)
0.10
5.08
–
1.15
–
4.76
1.15
1.15
–
–
(0.38)
–
–
0.08
0.08
0.50
–
1.81
106.83
–
0.26
25.08
(0.09)
(0.33)
1.55
0.03
–
(1.54)
–
0.08
563
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
Sr.
No.
Nature of transaction/relationship/major parties
(xxii) Contribution to post employment benefit plan
(A)
Towards Employer’s contribution to provident fund trusts, including:
Larsen & Toubro Officers & Supervisory Staff Provident Fund
Total
(B)
Towards Employer’s contribution to gratuity fund trusts, including:
Larsen & Toubro Officers & Supervisors Gratuity Fund
L&T Technology Services Limited Employee Group Gratuity Scheme
Mindtree Limited Employees Gratuity Fund Trust
Total
(C)
Towards Employer’s contribution to superannuation trust:
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme
Total
2019-20
2018-19
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
165.75
165.75
110.32
110.32
10.99
10.99
152.29
55.65
17.32
22.56
10.99
142.15
142.15
59.56
59.56
9.78
9.78
129.63
43.35
13.03
–
9.78
“Major parties” denote entities accounting for 10% or more of the aggregate for that category of transaction during respective
periods.
(xxiii) Compensation to Key Management Personnel (KMP):
Key Management Personnel
Executive Directors:
(a) Mr. S. N. Subrahmanyan
(b) Mr. R. Shankar Raman
(c) Mr. Shailendra Roy
(d) Mr. D. K. Sen
(e) Mr. M. V. Satish
(f) Mr. J. D. Patil
Independent/Non-Executive Directors:
(a) Mr. A. M. Naik (Group Chairman)
(b) Mr. Subramanian Sarma
(c) Other Independent/Non-Executive Directors
Total
# Represents pension
Short term
employee
benefits
2019-20
Post
employment
benefits
11.87
7.89
5.26
3.56
4.60
4.04
9.13
16.33
5.01
3.13
2.08
1.37
0.91
1.18
1.04
3.00 #
–
–
67.69
12.71
2018-19
Short term
employee
benefits
Post
employment
benefits
21.28
14.06
9.16
5.54
7.43
6.51
5.67
3.75
2.33
1.46
1.95
1.71
9.21
3.00 #
14.00
6.20
–
–
v crore
Total
26.95
17.81
11.49
7.00
9.38
8.22
12.21
14.00
6.20
93.39
19.87
113.26
Total
15.00
9.97
6.63
4.47
5.78
5.08
12.13
16.33
5.01
80.40
564
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
(c) Amount due to/from related parties (including commitments):
Sr.
No.
Category of balance/relationship/major parties
(i)
Accounts receivable
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T Infrastructure Development Projects Limited
L&T MBDA Missile Systems Limited
L&T Deccan Tollways Limited
Associates:
L&T-Chiyoda Limited
Larsen & Toubro Qatar & HBK Contracting Co. WLL
Total
(ii)
Accounts payable including other payable
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
Associates:
L&T-Chiyoda Limited
Magtorq Private Limited
L&T Camp Facilities LLC
Total
(iii)
Investment in debt securities [including preference shares (debt portion)]
Joint ventures:
L&T Special Steels and Heavy Forgings Private Limited
L&T Infrastructure Development Projects Limited
Kudgi Transmission Limited
Total
(iv)
Loans & advances recoverable
Joint ventures, including:
L&T Special Steels and Heavy Forgings Private Limited
L&T Sapura Shipping Private Limited
Associates, including:
L&T Camp Facilities LLC
L&T-Chiyoda Limited
Total
(v)
Unsecured loans taken (including lease finance)
Joint venture:
L&T MBDA Missile Systems Limited
Total
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
118.38
267.98
98.03
1.11
12.00
–
–
0.21
746.15
476.41
92.02
5.29
11.94
213.17
266.60
569.93
1635.67
167.34
16.87
8.37
127.37
53.17
–
75.62
0.01
0.39
463.50
506.61
23.88
5.35
–
213.17
253.06
488.89
1539.83
167.38
19.56
11.54
0.40
268.38
1113.56
29.23
1142.79
955.12
955.12
1852.69
33.54
0.21
118.59
1302.14
109.25
1411.39
1049.70
1049.70
2065.71
27.58
2093.29
1886.23
59.68
59.68
59.68
–
–
–
565
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
Sr.
No.
Category of balance/relationship/major parties
(vi) Advances received in the capacity of supplier of goods/ services
classified as ”advances from customers”
Joint venture:
L&T-MHPS Boilers Private Limited
Total
(vii) Due to Directors#:
Key management personnel, including:
Mr. A. M. Naik
Mr. S. N. Subrahmanyan
Mr. R. Shankar Raman
Mr. Shailendra Roy
Mr. D. K. Sen
Mr. M. V. Satish
Mr. J.D. Patil
Mr. Subramanian Sarma
Total
Post employment benefit plans
(viii)
(A) Due to provident fund trusts, including:
Larsen & Toubro Officers & Supervisory Staff Provident Fund
Total
(B)
Due to gratuity trusts:
Larsen & Toubro Officers & Supervisors Gratuity Fund
L&T Technology Services Limited Employee Group Gratuity Scheme
Larsen & Toubro Gratuity Fund
Mindtree Limited Employees Gratuity Fund Trust
Total
(C ) Due to superannuation fund:
Larsen & Toubro Limited Senior Officers’ Superannuation Scheme
Total
(ix) Capital commitment given
Joint ventures:
L&T Special Steels and Heavy Forgings Private Limited
L&T-MHPS Turbine Generators Private Limited
Total
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
6.97
6.97
40.29
40.29
53.33
53.33
159.35
159.35
3.91
3.91
–
–
6.97
2.06
9.01
5.88
3.37
2.03
3.02
2.72
8.33
48.19
94.08
17.00
8.92
27.24
3.91
–
–
7.15
7.15
66.27
66.27
43.05
43.05
72.45
72.45
7.99
7.99
34.07
34.07
6.97
1.75
18.60
12.15
7.05
4.20
6.00
5.30
6.68
39.55
49.70
8.69
11.22
–
7.99
0.02
34.05
566
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [54] (contd.)
Sr.
No.
(x)
Category of balance/relationship/major parties
Revenue commitment given
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Howden Private Limited
Associates, including:
L&T-Chiyoda Limited
Total
(xi)
Revenue commitment received
Joint ventures, including:
L&T-MHPS Boilers Private Limited
L&T Special Steels and Heavy Forgings Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T MBDA Missile Systems Limited
L&T-Gulf Private Limited
Total
(xii)
Provision for doubtful debts on outstanding balances in respect of
Joint ventures, including:
L&T-MHPS Boilers Private Limited
Total
(xiii) Guarantees given on behalf of
Joint ventures:
As at 31-3-2020
As at 31-3-2019
Amount Amounts for
major parties
Amount Amounts for
major parties
v crore
2316.16
401.52
1224.92
668.92
160.70
220.96
15.85
5.90
6.88
30.00
–
23.00
245.94
2562.10
59.70
59.70
23.09
23.09
205.99
607.51
88.31
88.31
23.55
23.55
514.74
546.66
207.56
42.63
103.60
186.89
–
0.29
–
69.19
18.77
23.37
28.93
427.31
90.42
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private Limited
L&T Special Steels and Heavy Forgings Private Limited
29.38
394.94
90.42
Total
514.74
546.66
“Major parties” denote entities accounting for 10% or more of the aggregate for that category of balance during respective
periods.
# includes commission due to other Non-executive directors R 3.87 crore (as at 31-3-2019 : R 4.54 crore)
Note: 1. All related party contracts/arrangements have been entered on arm’s length basis.
2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash.
567
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [55]
Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 ”Earnings per Share”:
Particulars
2019-20
2018-19
Basic EPS
Profit after tax from continuing operations as per accounts (R crore)
Profit after tax from discontinued operations as per accounts (R crore)
A
B
8894.46
654.57
8336.03
569.10
Profit after tax from continuing operations & discontinued operations as per
accounts (R crore)
C=A+B
9549.03
8905.13
Weighted average number of equity shares outstanding
Basic EPS from continuing operations (R)
Basic EPS from discontinued operations (R)
Basic EPS from continuing operations & discontinued operations (R)
Diluted EPS
Profit after tax from continuing operations as per accounts (R crore)
Profit after tax from discontinued operations as per accounts (R crore)
Profit after tax from continuing operations & discontinued operations as per
D
A/D
B/D
C/D
A
B
1,40,33,69,848
1,40,20,87,033
63.38
4.66
68.04
59.45
4.06
63.51
8894.46
654.57
8336.03
569.10
accounts (R crore)
C=A+B
9549.03
8905.13
Weighted average number of equity shares outstanding
Add: Weighted average number of potential equity shares on account of employee
stock options
D
E
1,40,33,69,848
1,40,20,87,033
18,52,930
24,57,688
Weighted average number of equity shares outstanding for diluted EPS
F=D+E
1,40,52,22,778
1,40,45,44,721
Diluted EPS from continuing operations (R)
Diluted EPS from discontinued operations (R)
Diluted EPS from continuing operations & discontinued operations (R)
Face value per share (R)
A/F
B/F
C/F
63.29
4.66
67.95
2
59.35
4.05
63.40
2
The following potential equity shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares
for the purpose of diluted earnings per share:
Weighted average number of potential equity shares on account of conversion of foreign currency
convertible bonds
51,90,133
95,20,455
Particulars
2019-20
2018-19
568
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [56]
Disclosure pursuant to Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets”:
(a) Movement in provisions:
Sr.
No.
1
2
3
4
5
6
7
8
9
Particulars
Balance as at 1-4-2019
Additional provision during the year
Provision used during the year
Unused provision reversed during the period
Addition on account of business combination
Classified as held for sale
Translation adjustments
Additional provision for unwinding of interest and
change in discount rate
Balance as at 31-3-2020 (1 to 8)
Product
warranties
Expected tax
liability in
respect of
indirect taxes
63.71
26.34
(16.06)
(3.03)
0.92
(60.73)
0.98
1.02
13.15
243.55
125.97
(45.54)
(15.95)
–
–
–
–
308.03
Class of provisions
Litigation
related
obligations
Contractual
rectification
cost-
construction
contracts
532.85
452.14
(9.16)
(415.64)
–
–
1.16
59.53
146.34
(0.84)
–
9.12
–
–
–
214.15
v crore
Others*
Total
27.45
66.20
(2.98)
(2.64)
0.53
(27.94)
0.82
927.09
816.99
(74.58)
(437.26)
10.57
(88.67)
2.96
–
561.35
–
61.44
1.02
1158.12
* includes backwork charges, provision for foreseeable losses and onerous contract.
Breakup of provisions:
Particulars
Balance as at 1-4-2019
Balance as at 31-3-2020
(b) Nature of provisions:
Note 24
7.73
30.52
Note 31
919.36
1127.60
v crore
Total
927.09
1158.12
(i)
Product warranties: The Group 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, 2020 represents the amount of the expected cost of meeting such obligations of rectification/
replacement. The timing of the outflows is expected to be within a period of five years from the date of Balance Sheet.
(ii) Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-
collection of declaration forms 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) Contractual rectification cost represents the estimated cost the Group is likely to incur during defect liability period as per
the contract obligations and in respect of completed construction contracts accounted under Ind AS 115 “Revenue from
contracts with customers”.
(c) Disclosure in respect of contingent liabilities is given in Note 32.
NOTE [57]
Research & Development
The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is R 247.69 crore
(including R 88.32 crore pertaining to discontinued operations) [previous year: R 232.27 crore (including R 76.30 crore pertaining to
discontinued operations)]
Further, the Group has incurred capital expenditure on research and development activities as follows:
a)
on property, plant & equipment R 7.60 crore (including R 4.19 crore pertaining to discontinued operations) [previous
year: R 5.59 crore (including R 2.95 crore pertaining to discontinued operations)]
on intangible assets being expenditure on new product development R 34.28 crore (including R 30.17 crore pertaining to
discontinued operations) [previous year: R 52.54 crore (including R 46.61 crore pertaining to discontinued operations)]
on other intangible assets R 3.07 crore (including R 1.93 crore pertaining to discontinued operations) [previous year: R 1.96 crore
(including Nil pertaining to discontinued operations)]
b)
c)
In addition,the Group has incurred expenditure of R 0.08 crore (including Nil pertaining to discontinued operations) [previous
year: R 0.52 crore (including Nil pertaining to discontinued operations)] which is customer funded.
569
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [58]
Disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”: Market risk management
(a) Foreign exchange rate and interest rate risk:
The Group regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone basis
and in conjunction with its underlying foreign currency and interest rate related exposures. The Group primarily follows cash flow
hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge
contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However,
till the point of time the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will impact the
Balance Sheet of the Group. Further, given the effective horizons of the Group’s risk management activities which coincide with
the durations of the projects under execution and could extend across 3-4 years and given the business uncertainties associated
with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may
not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect
the Group’s financial condition and operating results. Hence, the Group monitors the potential risk arising out of the market
factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-balance sheet
exposures, the Group monitors the risks on net unhedged exposures.
(i)
Foreign exchange rate risk:
In general, the Group is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a
strengthening of the Indian Rupee, will negatively affect the Group’s net sales and gross margins as expressed in Indian
Rupee. There is a risk that the Group may have to adjust local currency product pricing due to competitive pressures when
there have been significant volatility in foreign currency exchange rates.
The Group may enter into foreign currency forward and option contracts with financial institutions to protect against foreign
exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future
cash flows and net investments in foreign subsidiaries. In addition, the Group has entered, and may enter in the future, into
non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign
denominated debt issuances. The Group’s practice is to hedge a portion of its material net foreign exchange exposures with
tenors in line with the project/business life cycle. However, the Group may choose not to hedge certain foreign exchange
exposures for a variety of reasons.
The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets and recognised
financial liabilities and derivatives is as follows:
As at 31-3-2020
As at 31-3-2019
Particulars
US Dollar
including
pegged
currencies
EURO Malaysian
Ringgit
Canadian
Dollar
Japanese
Yen
Kuwaiti
Dinar
US Dollar
including
pegged
currencies
EURO Malaysian
Ringgit
Canadian
Dollar
Japanese
Yen
Kuwaiti
Dinar
v crore
Net exposure to foreign currency risk in
respect of recognised financial assets/
(recognised financial liabilities)
Derivatives including embedded derivatives
for hedging receivable/(payable) exposure
with respect to non-financial assets/
(non-financial liabilities)
Derivatives including embedded derivatives
for hedging receivable/(payable)
exposures with respect to firm
commitments and highly probable
forecast transactions
Receivable/(payable) exposures with respect
to forward contracts and embedded
derivatives not designated as cash flow
hedge
Options (written) not designated as cash
flow hedge
(5875.09)
320.56
127.86
129.31
(394.37)
314.93 (5395.96)
286.37
67.37
91.74
(10.43) 162.25
494.65
(28.50)
–
–
–
–
552.57
222.95
–
–
–
–
27222.66
(213.93)
163.93
(29.22)
890.32
877.29 16327.53
(813.82)
102.09 (38.66) 538.14 974.77
(2991.34)
56.90
–
(776.25)
–
–
–
–
21.08
– (1237.61)
586.94
–
–
(527.50)
(533.77)
–
–
–
31.73
–
–
–
–
570
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [58] (contd.)
To provide a meaningful assessment of the foreign currency risk associated with the Group’s foreign currency derivative
positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities,
the Group uses a multi-currency correlated value-at-risk (“VAR”) model. The VAR model uses a Monte Carlo simulation
to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the
correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot
exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk
estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Group uses
foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset
by increase in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Group at
95% confidence level is R 111.39 crore as at March 31, 2020 and R 106.11 crore as at March 31, 2019.
Actual future gains and losses associated with the Group’s investment portfolio and derivative positions may differ materially
from the sensitivity analysis performed as at March 31, 2020 due to the inherent limitations associated with predicting the
timing and amount of changes in foreign currency exchange rates and the Group’s actual exposures and position.
(ii)
Interest rate risk:
The Group’s exposure to changes in interest rates relates primarily to the Group’s outstanding floating rate debt and lending.
The Group’s outstanding debt in local currency is a combination of fixed rate and floating rate. For the portion of local
currency debt on fixed rate basis, there is no interest rate risk. For the portion of local currency debt on floating rate basis,
there is a natural hedge with receivables in respect of financial services business. There is a portion of debt that is linked
to international interest rate benchmarks like LIBOR. The Group also hedges a portion of these risks by way of derivative
instruments like interest rate swaps and currency swaps.
The exposure of the Group’s borrowing to interest rate changes at the end of the reporting period is as follows:
Floating rate borrowings
Particulars
v crore
As at
31-3-2020
As at
31-3-2019
59703.45
49107.01
A hypothetical 50 basis point shift in respective currency LIBOR and other benchmarks on the unhedged loans would result in
a corresponding increase/decrease in interest cost for the Group on a yearly basis as follows:
Particulars
2019-20
2018-19
As at
31-3-2020
As at
31-3-2019
Impact on profit after tax
Impact on equity
v crore
Indian Rupee
Interest rates - increase by 0.50% in INR interest rate*
Interest rates - decrease by 0.50% in INR interest rate*
US Dollar
Interest rates - increase by 0.50% in USD interest rate*
Interest rates - decrease by 0.50% in USD interest rate*
* Holding all other variables constant
(b) Liquidity risk management:
(24.65)
24.65
(30.02)
30.02
1.63
(1.63)
(20.44)
20.44
(24.65)
24.65
(30.02)
30.02
1.63
(1.63)
(20.44)
20.44
The Group manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through
an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Group maintains flexibility in
funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors
the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and financial
liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the
liquidity position.
The Group’s investment policy and strategy are focused on preservation of capital and supporting the Group’s liquidity
requirements. The Group uses a combination of strategies to achieve its investment objectives. The Group typically invests in
money market funds, large debt funds, Government of India securities, equity and equity marketable securities and other highly
rated securities under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy.
571
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [58] (contd.)
The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of
principal loss. To provide a meaningful assessment of the price risk associated with the Group’s investment portfolio, the Group
performed a sensitivity analysis to determine the impact of change in prices of the securities on the value of the investment
portfolio assuming a 0.50% movement in debt funds and debt securities and a 5% movement in the NAV of the equity and equity
marketable securities. Based on the investment position, a hypothetical 0.50% change in the fair market value of debt securities
would result in a value change of +/- R 39.42 crore as at March 31, 2020 and +/- R 38.01 crore as at March 31, 2019. A 5%
change in the equity funds’ NAV would result in a value change of +/- R 6.49 crore as at March 31, 2020 and +/- R 39.16 crore
as at March 31, 2019 respectively. The investments in money market funds are for the purpose of liquidity management only and
hence not subject to any material price risk.
(c) Credit risk management:
(i)
Financial services business:
Financial services business has a risk management framework that monitors and ensures that the business lines operate within
the defined risk appetite and risk tolerance levels as defined by the senior management. Risk management function is closely
involved in management and control of credit risk, portfolio monitoring, market risks including liquidity risk and operational
risks. The credit risk function independently evaluates proposals based on well-established sector specific internal frameworks,
in order to identify, mitigate and allocate risks as well as to enable risk-based pricing of assets. Regulatory and process risks
are identified, mitigated and managed by a separate Group. Risk management policies are made under the guidance of Risk
Management Committee and are approved by Board of Directors.
(ii) Other than financial services business:
The Group’s customer profile include public sector enterprises, state owned companies and large private corporates.
Accordingly, the Group’s customer credit risk is low. The Group’s average project execution cycle is around 24 to 36 months.
General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90
days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/
corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within
the organisation to ensure proper attention and focus for realisation.
(iii) Reconciliation of loss allowance provision for financial services business - Loans:
Particulars
Loss allowance as at 1-4-2018
Provision on new financial assets
Transferred to and from 12-month ECL to
life time ECL
Loss allowance
measured at
12-month ECL
279.81
313.71
28.36
Higher/(lower) provision on existing
(141.88)
financial assets
Loss allowance as at 31-3-2019
Provision on new financial assets
Transferred to and from 12-month ECL to
life time ECL
480.00
339.90
29.05
Higher/(lower) provision on existing
(278.60)
financial assets
Loss allowance as at 31-3-2020
570.35
v crore
Loss allowance measured at life time ECL
Financial assets for which
credit risk has increased
significantly and credit not
impaired
Financial assets for which
credit risk has increased
significantly and credit
impaired
192.61
33.49
(25.78)
27.79
228.11
34.94
(177.03)
182.61
268.63
4920.40
123.00
(2.58)
(1127.94)
3912.88
77.01
147.98
(355.16)
3782.71
572
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [58] (contd.)
(iv) Reconciliation of allowance for expected credit loss (“ECL”) on trade receivables (other than financial services business):
Particulars
Opening balance as at April 1
Changes in allowance for ECL:
Provision/(reversal) of allowance for ECL
Additional provision (net)
Write off as bad debts
Translation adjustment
Classified as held for sale
Addition on account of business combination
Closing balance as at March 31 (Note 13)
(v) Amounts written off:
2019-20
3000.83
313.00
178.37
(194.62)
12.12
(154.10)
25.61
3181.21
v crore
2018-19
2900.10
84.34
265.62
(249.23)
–
–
–
3000.83
v crore
Amount of financial assets written off during the period but still enforceable
Particulars
2019-20
2018-19
900.38
1534.95
NOTE [59]
Other disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”:
(a) Category-wise classification for applicable financial assets:
Sr.
No.
Particulars
I. Measured at fair value through Profit or Loss (FVTPL):
Investment in equity instruments
Investment in preference shares
(i)
(ii)
(iii) Investment in mutual funds and units of fund
(iv) Investment in government securities, debentures and bonds
(v) Derivative instruments not designated as cash flow hedges
(vi) Embedded derivatives not designated as cash flow hedges
(vii) Investment in security receipts
(viii) Loans
(ix) Other investments
Sub-total (I)
II. Measured at amortised cost:
Investment in government securities, debentures and bonds
(i) Loans
(ii)
(iii) Other investments
(iv) Trade receivables
(v) Advances recoverable in cash
(vi) Cash and bank balances
(vii) Other receivables
Sub-total (II)
III. Measured at fair value through Other Comprehensive Income (FVTOCI):
Investment in government securities, debentures and bonds
(i)
Investment in equity instruments
(ii)
(iii) Investment in preference shares
(iv) Derivative instruments designated as cash flow hedges
(v) Embedded derivatives designated as cash flow hedges
Sub-total (III)
Total (I+II+III)
Note
As at
31-3-2020
6,12
6,12
6,12
6,12
9,18
9,18
6
7,8,16,17
6,12
7,8,16,17
6,12
6,12
13
18
9,14,15
6,12
6,12
6,12
9,18
9,18
582.81
89.21
7877.25
1798.48
99.93
177.84
2498.65
24877.64
0.94
38002.75
77673.47
59.73
330.35
40731.52
1748.66
15392.64
112.65
136049.02
3958.28
0.10
0.67
1043.49
108.59
5111.13
179162.90
v crore
As at
31-3-2019
582.49
99.81
8990.10
1523.26
139.12
28.40
791.07
24395.92
–
36550.17
78031.55
1832.55
–
36845.87
1519.17
12217.35
287.14
130733.63
4445.53
–
–
1212.86
17.50
5675.89
172959.69
573
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(b) Category-wise classification for applicable financial liabilities:
Sr.
No.
Particulars
I. Measured at fair value through Profit or Loss (FVTPL):
(i) Derivative instruments not designated as cash flow hedges
(ii) Embedded derivatives not designated as cash flow hedges
(iii) Others
Sub-total (I)
II. Measured at amortised cost:
(i) Borrowings
(ii) Trade payables
Due to micro enterprises and small enterprises
Due to others
(iii) Lease liability
(iv) Others
Sub-total (II)
III. Derivative instruments (including embedded derivatives) through Other
Comprehensive Income:
(i) Derivative instruments designated as cash flow hedges
(ii) Embedded derivatives designated as cash flow hedges
Sub-total (III)
IV.
Financial guarantee contracts
Total (I+II+III+IV)
(c)
Items of income, expenses, gains or losses related to financial instruments:
Note
23,29
23,29
v crore
As at
31-3-2020
As at
31-3-2019
158.76
57.18
218.20
434.14
24.93
99.41
157.00
281.34
22,26,27
141007.12
125555.17
479.51
261.12
28
43164.42
42733.69
2166.55
3513.03
–
4140.12
190330.63
172690.10
23,29
23,29
23,29
1814.94
61.24
1876.18
1.02
368.52
185.85
554.37
1.78
192641.97
173527.59
Sr.
No.
Particulars
I.
Net gains/(losses) on financial assets and financial liabilities measured at fair value through
Profit or Loss and amortised cost:
A.
(i) Financial assets or financial liabilities mandatorily measured at fair value through Profit or
Loss:
1. Gains/(losses) on fair valuation or sale of investments
2. Gains/(losses) on fair valuation or sale of loans (Financial Services)
3. Gains/(losses) on fair valuation/settlement of derivative:
(a) Gains/(losses) on fair valuation or settlement of forward contracts not designated as
cash flow hedges
(b) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not
designated as cash flow hedges
(c) Gains/(losses) on fair valuation or settlement of futures not designated as cash flow
hedges
Sub-total (A)
2019-20
v crore
2018-19
561.72
(93.31)
137.91
(77.62)
(300.59)
7.73
124.73
(1.65)
13.19
(21.81)
305.74
44.56
574
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
Sr.
No.
Particulars
2019-20
v crore
2018-19
B.
Financial assets measured at amortised cost:
(i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in
1076.54
464.22
foreign currency (trade receivables, loans given etc.)
(ii) (Allowance)/reversal for expected credit loss during the year
(iii) Provision for impairment loss (other than ECL) [net]
(iv) Gains/(losses) on derecognition:
(a) Bad debts written off (net)
(b) Gains/(losses) on transfer of financial assets (non-recourse)
Sub-total (B)
C.
Financial liabilities measured at amortised cost:
(1950.15)
(699.45)
(311.09)
(815.30)
175.60
442.28
(78.35)
(363.83)
(1087.45)
(972.08)
(i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in
(777.86)
(454.18)
foreign currency (trade payables, borrowing availed etc.)
(ii) Unclaimed credit balances written back
Sub-total (C)
Total [I] = (A+B+C)
190.30
79.98
(587.56)
(374.20)
(1369.27)
(1301.72)
II. Net gains/(losses) on financial assets and financial liabilities measured at fair value through
Other Comprehensive Income:
A. Gains recognised in Other Comprehensive Income:
(i) Financial assets measured at fair value through Other Comprehensive Income:
(a) Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc.
269.68
(125.90)
(ii) Derivative measured at fair value through Other Comprehensive Income:
Gains/(losses) on fair valuation or settlement of forward contracts designated as cash
flow hedges
(1039.11)
(231.75)
Gains/(losses) on fair valuation or settlement of embedded derivative contracts
designated as cash flow hedges
100.98
18.49
(668.45)
(339.16)
(a)
(b)
Sub-total (A)
Less:
B. Gains reclassified to Profit or Loss from Other Comprehensive Income:
(i) Financial assets measured at fair value through Other Comprehensive Income:
1. On government securities, bonds, debentures etc. upon sale
154.47
(62.89)
(ii) Derivative measured at fair value through Other Comprehensive Income:
1.
2.
On forward contracts upon hedged future cash flows affecting the Profit or Loss or
related assets or liabilities
On embedded derivative contracts upon hedged future cash flows affecting the Profit
or Loss or related assets or liabilities
Sub-total (B)
Net gains recognised in Other Comprehensive Income (A-B)
C.
Impairment loss recognised in Statement of Profit and Loss
Total [II] = (A-B+C)
355.35
347.80
(18.39)
15.42
491.43
300.33
(1159.88)
(639.49)
(350.59)
–
(1510.47)
(639.49)
575
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
Sr.
No.
III. Other income/(expense):
A. Dividend Income:
Particulars
Dividend income from investments measured at FVTPL
Sub-total (A)
B.
Interest Income:
(i) Financial assets measured at amortised cost
(ii) Financial assets measured at fair value through Other Comprehensive Income
(iii) Financial assets measured at fair value through Profit or Loss
Sub-total (B)
C.
Interest expense:
(i) Financial liabilities measured at amortised cost
(ii) Derivative instruments (including embedded derivatives) that are measured at fair value
through Other Comprehensive Income (reclassified to Profit or Loss during the year)
(iii) Financial liabilities measured at fair value through Profit or Loss
Sub-total (C)
Total [III] =(A+B+C)
2019-20
v crore
2018-19
101.62
101.62
236.91
236.91
11306.24
10895.57
371.43
356.91
3332.76
2197.22
15010.43
13449.70
(10168.49)
(8526.13)
(150.06)
(259.02)
5.95
(0.06)
(10312.60)
(8785.21)
4799.45
4901.40
(d) Fair value of financial assets and financial liabilities measured at amortised cost:
Particulars
Note
As at 31-3-2020
As at 31-3-2019
Carrying
amount
Fair value
Carrying
amount
Fair value
v crore
Financial assets:
Loans
7,8,16,17
62953.79
58651.32
62234.11
57890.20
Government securities, debentures and bonds
6,12
59.73
59.73
1832.55
1899.07
Total
Financial liabilities:
Borrowings
Total
Notes:
63013.52
58711.05
64066.66
59789.27
22,26,27
57893.50
57893.50
58847.68
58847.68
51252.31
51656.55
51252.31
51656.55
1. Carrying amount of loans is gross of provision for expected credit losses.
2.
The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables are considered to
be the same as their fair values due to their short term nature. The carrying amounts of loans given and borrowings taken for
short term or at floating rate of interest are considered to be close to the fair value. Accordingly these items have not been
included in the above table.
576
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(e) Disclosure pursuant to Ind AS 113 “Fair Value Measurement” - Fair value hierarchy of financial assets and financial liabilities
measured at amortised cost:
As at 31-3-2020
Level 1
Level 2
Level 3
Total
v crore
Valuation technique for
level 3 items
Financial assets:
Loans
Government securities, debentures and bonds
Total
Financial liabilities:
Borrowings
Total
–
8663.10
49988.22
58651.32 Discounted cash flow
59.66
59.66
0.07
-
59.73 Discounted cash flow
8663.17
49988.22
58711.05
737.02
13948.82
44161.84
58847.68 Discounted cash flow
737.02
13948.82
44161.84
58847.68
As at 31-3-2019
Level 1
Level 2
Level 3
Total Valuation technique for
level 3 items
Financial assets:
Loans
Government securities, debentures and bonds
Total
Financial liabilities:
Borrowings
Total
–
–
8783.50 49106.70 57890.20 Discounted cash flow
1899.07
–
1899.07 Discounted cash flow
– 10682.57 49106.70 59789.27
737.02
9360.96 41558.57 51656.55 Discounted cash flow
737.02
9360.96 41558.57 51656.55
v crore
Valuation technique Level 2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread.
(f)
Fair value hierarchy of financial assets and financial liabilities at fair value:
Particulars
Note
As at 31-3-2020
As at 31-3-2019
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
v crore
Financial assets:
Financial assets at FVTPL:
(i) Equity shares
(ii) Preference shares
(iii) Mutual fund
(iv) Debt instruments viz. government securities,
bonds and debentures
6, 12
6, 12
6, 12
6, 12
39.66
–
7770.81
997.64
–
–
–
–
543.15
582.81
39.93
89.21
89.21
–
–
7770.81
8801.31
–
–
–
542.56
582.49
99.81
99.81
–
8801.31
800.84
1798.48
656.38
0.53
866.35
1523.26
(v) Derivative instruments not designated as cash
9,18
flow hedges
(vi) Embedded derivative instruments not
designated as cash flow hedges
(vii) Other investments
(viii) Loans (Financial Services)
9,18
6, 12
16
–
–
–
–
99.93
177.84
–
–
99.93
177.84
0.94
2605.09
2606.03
–
24877.64
24877.64
–
–
–
–
139.12
28.40
–
–
139.12
28.40
–
979.86
979.86
– 24395.92 24395.92
577
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
Particulars
Note
As at 31-3-2020
As at 31-3-2019
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
v crore
Financial assets at FVTOCI:
(i)
Debt instruments viz. government securities,
bonds and debentures
6, 12
2729.27
1162.42
66.58
3958.27
2133.84
2303.29
8.40
4445.53
(ii) Preference shares
(iii) Equity shares
6
6
(iv) Derivative financial instruments designated as
9,18
cash flow hedges
(v) Embedded derivative financial instruments
9,18
designated as cash flow hedges
–
–
–
–
–
–
1043.49
108.60
0.67
0.10
–
–
0.67
0.10
1043.49
108.60
–
–
–
–
–
–
1212.86
17.50
–
–
–
–
–
–
1212.86
17.50
Total
Financial liabilities:
Financial liabilities at FVTPL:
(i) Designated at FVTPL:
11537.38
2593.22
28983.28
43113.88 11631.46
3701.70 26892.90 42226.06
(a) Derivative instruments not designated as
23,29
cash flow hedges
(b) Embedded derivative instruments not
designated as cash flow hedges
(c) Others
(ii) Designated at FVTOCI:
(a) Derivative financial instruments
designated as cash flow hedges
23,29
23,29
23,29
(b) Embedded derivative financial instruments
23,29
designated as cash flow hedges
Total
–
–
–
–
–
–
158.76
57.18
–
–
158.76
57.18
–
218.20
218.20
1814.94
61.24
–
–
1814.94
61.24
2092.12
218.20
2310.32
–
–
–
–
–
–
24.93
99.41
–
–
24.93
99.41
–
157.00
157.00
368.52
185.85
–
–
368.52
185.85
678.71
157.00
835.71
Valuation technique and key inputs used to determine fair value:
A.
B.
Level 1: Mutual funds, bonds, debentures and government securities - quoted price in the active market.
Level 2: (a) Derivative Instruments – Present value technique using forward exchange rates at the end of reporting period.
(b) Preference share and government securities, bonds and debentures – Future cash flows are discounted using G-sec rates as at reporting
date.
578
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(g) Movement of items measured using unobservable inputs (Level 3):
Particulars
Equity shares
Balance as at 31-3-2018
Addition during the year
Disposal during the year
Gains/(losses) recognised in Profit or Loss
Balance as at 31-3-2019
Addition during the year
Disposal during the year
Gains/(losses) recognised in Profit or Loss
Balance as at 31-3-2020
741.83
565.76
(571.03)
(194.00)
542.56
0.10
–
0.59
543.25
Preference
shares
69.67
–
–
30.14
99.81
0.67
(6.17)
(4.43)
89.88
Debt
instruments
918.35
11.19
(33.33)
(21.46)
874.75
–
(6.10)
(1.23)
867.42
Loans
16836.61
14248.11
(6688.80)
–
24395.92
6927.18
(6415.32)
(30.14)
24877.64
Other
investments
1145.50
192.46
(123.44)
(234.66)
979.86
2099.75
(298.05)
(176.47)
2605.09
v crore
Total
19711.96
15017.52
(7416.60)
(419.98)
26892.90
9027.70
(6725.64)
(211.68)
28983.28
(h) Sensitivity disclosure for level 3 fair value measurements:
Fair value as at
Particulars
As at
31-3-2020
As at
31-3-2019
Significant unobservable
inputs
v crore
474.95
476.98 Book value
68.30
Equity shares
65.58 31-3-2020:
1.
2.
Net realisation per
month R 31.83 per sq/ft.
Capitalisation rate
12.25%
31-3-2019:
1.
Net realisation per
month R 30.90 per sq/ft.
Capitalisation rate
12.25%
2.
Preference
shares
89.88
99.81 Expected yield
Debt instruments
867.42
874.75 Expected yield
Loans
24877.64
24395.92 Expected yield
Other
investments
2605.09
979.83 Net Assets Value (NAV)
Sensitivity
2020: Increase/(decrease) of 5% in the book value would result in impact on
profit or loss by R 19.57 crore
2019: Increase/(decrease) of 5% in the book value would result in impact on
profit or loss by R 18.02 crore”
2020 : 1% change in net realisation would result in +/- R 0.33 crore (post
tax- R 0.24 crore)
25 bps change in capitalisation rate would result in +/- R 0.65 crore (post
tax- R 0.49 crore)
2019 : 1% change in net realisation would result in +/- R 0.32 crore (post
tax- R 0.21 crore)
25 bps change in capitalisation rate would result in +/- R 0.63 crore (post
tax- R 0.41 crore)
2020: Increase/(decrease) in the fair value by 5% would result in impact on
profit or loss by R 4.44 crore
2019: Increase/(decrease) in the fair value by 5% would result in impact on
profit or loss by R 4.74 crore
2020: Increase/(decrease) in fair value by 0.25% would result in impact on
profit or loss by R 1.79 crore
2019: Increase/(decrease) in fair a by 0.25% would result in impact on profit
or loss by R 1.65 crore
2020: Increase/(decrease) in fair value by 0.25% would result in impact on
profit or loss by R 46.54 crore
2019: Increase/(decrease) in fair value by 0.25% would result in impact on
profit or loss by R 39.68 crore
2020: Increase/(decrease) in the NAV by 5% would result in impact on profit
or loss R 97.47 crore
2019: Increase/(decrease) in the NAV by 5% would result in impact on profit
or loss R 31.87 crore
579
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(i) Movement of financial liabilities measured using unobservable inputs (Level 3):
Particulars
Contingent consideration
v crore
Balance as at 31-3-2018
Acquisitions during the year
Charge recognised in Statement of Profit and Loss
Amounts settled during the year
Foreign exchange difference
Balance as at 31-3-2019
Acquisitions during the year
Charge recognised in Statement of Profit and Loss
Amounts settled during the year
Foreign exchange difference
Balance as at 31-3-2020
121.60
75.01
(1.60)
(33.13)
(4.88)
157.00
60.20
9.64
(20.67)
12.03
218.20
Note: A one percentage point change in the unobservable inputs used in fair valuation of Level 3 liabilities does not have a
significant impact on the value.
(j) Maturity profile of financial liabilities based on undiscounted cash flows:
Particulars
A. Non-derivative liabilities:
Borrowings
Trade payables:
Note
As at 31-3-2020
As at 31-3-2019
Within
twelve
months
After
twelve
months
Total
Within
twelve
months
After
twelve
months
v crore
Total
22,26,27
64508.28
95134.82
159643.10
53909.10
84473.80 138382.90
Due to micro enterprises and small enterprises
423.25
56.26
479.51
252.96
8.16
261.12
Due to others
Other financial liabilities
Lease liability
Total
B. Derivative liabilities:
Forward contracts
Embedded derivatives
Total
28
23,29
23,29
23,29
41695.77
1468.65
43164.42
41583.63
1150.06
42733.69
3458.62
272.61
3731.23
4069.35
227.76
4297.11
407.46
1783.06
2190.52
–
–
–
110493.38
98715.40
209208.78
99815.04
85859.78 185674.82
1287.28
707.84
1995.12
121.12
2.09
123.21
1408.40
709.93
2118.33
384.74
147.05
531.79
14.14
142.08
156.22
398.88
289.13
688.01
580
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(k) Details of outstanding hedge instruments for which hedge accounting is followed:
(i) Outstanding currency exchange rate hedge instruments:
(A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge:
Particulars
(a) Receivable hedges
US Dollar
EURO
Malaysian Ringgit
Omani Riyal
Arab Emirates Dirham
British Pound
Japanese Yen
Kuwaiti Dinar
Qatari Riyal
Bangladesh Taka
Saudi Riyal
South African Rand
Mauritian Rupee
Thai Baht
(b) Payable hedges
US Dollar
EURO
Arab Emirates Dirham
British Pound
Japanese Yen
Kuwaiti Dinar
Omani Riyal
Swiss Franc
Chinese Yuan
Bangladesh Taka
Norwegian Krone
Mauritian Rupee
Canadian Dollar
As at 31-3-2020
As at 31-3-2019
Nominal
amount
(v crore)
Average
rate
(v)
Within
twelve
months
(v crore)
After
twelve
months
(v crore)
Nominal
amount
(v crore)
Average
rate
(v)
Within
twelve
months
(v crore)
After
twelve
months
(v crore)
16377.55
73.86
12888.45
3489.10 13738.88
70.57 12789.54
84.32
4086.26
290.26
4472.40
81.43
4338.30
33569.57
2277.73
173.51
485.60
1174.53
55.12
1640.41
1393.32
1401.35
1859.64
52.82
2.96
149.67
1.56
4376.52
396.31
47.35
771.37
409.62
–
176.13
84.13
766.73
–
76.26
84.47
17.85
193.42
20.78
99.23
0.69
20.99
0.90
19.97
5.00
1.91
2.35
125.19
107.43
830.91
55.12
1324.82
1319.32
1674.92
52.82
2.96
238.30
1170.76
20.75
396.31
94.10
0.70
236.91
–
76.89
10.67
0.88
–
47.35
657.29
409.62
–
176.13
75.37
766.73
–
385.17
1.86
385.17
31.46
54.37
31.46
19267.26
14302.31 24682.61
73.43 15833.62
8848.99
2068.58
209.15
2373.28
1643.94
729.34
48.32
378.17
343.62
113.99
230.00
1228.16
–
87.48
315.59
222.56
1449.58
1524.52
84.81
17.54
53.37
187.51
150.51
19.34
96.74
1228.16
87.48
0.68
1284.36
237.38
1232.40
82.03
1551.27
19.72
1227.83
184.72
–
–
873.53
96.64
0.88
854.91
21.04
96.64
–
–
–
–
–
–
–
–
–
111.93
37.74
1.56
–
60.62
79.49
–
–
165.22
292.12
323.44
18.62
–
–
–
–
949.34
134.10
–
–
–
–
–
–
–
71.10
94.52
71.10
114.08
1060.96
0.66
877.42
183.54
–
–
–
8.76
–
–
–
–
531.77
232.14
531.77
28.71
180.36
28.71
302.59
72.69
302.59
–
–
5.20
–
–
–
9.16
–
–
–
5.20
–
40.53
54.04
40.53
–
–
–
–
–
–
–
–
581
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(B) Options taken to hedge exchange rate risk and accounted as cash flow hedge:
Particulars
(a) Receivable hedges:
US Dollars/Indian Rupees
EURO/US Dollars
(b) Payable hedges:
US Dollars/Indian Rupees
Nominal
amount
(v crore)
As at 31-3-2020
Average
rate
(v)
Within
twelve
months
(v crore)
After
twelve
months
(v crore)
Nominal
amount
(v crore)
As at 31-3-2019
Average
rate
(v)
Within
twelve
months
(v crore)
After
twelve
months
(v crore)
915.51
R 87.19
–
915.51
970.48
$ 1.16 to
$ 1.25
516.55
453.93
1422.50 R 71.13 to
R 74.94
632.65 $ 1.17 to
$ 1.25
1422.50
–
363.68
268.97
–
–
–
–
750.00 R 67.69 to
R 75
750.00
–
(C) Forward covers taken to hedge exchange rate risk and accounted as fair value hedge:
Particulars
(a) Receivable hedges
US Dollar
Canadian Dollar
British Pound
Australian Dollar
South African Rand
Danish krone
Norwegian Krone
Swedish krona
Nominal
amount
(v crore)
1694.48
14.45
40.12
10.60
37.99
4.41
3.70
18.46
As at 31-3-2020
Average
rate
(v)
Within
twelve
months
(v crore)
After
twelve
months
(v crore)
73.82
53.00
89.00
44.00
5.00
11.00
7.00
8.00
1694.48
14.45
40.12
10.60
37.99
4.41
3.70
18.46
–
–
–
–
–
–
–
–
Nominal
amount
(v crore)
1094.17
21.84
10.54
9.03
10.67
2.10
3.64
5.46
As at 31-3-2019
Average
rate
(v)
Within
twelve
months
(v crore)
After
twelve
months
(v crore)
71.00
52.00
92.00
49.00
5.00
11.00
8.00
8.00
1094.17
21.84
10.54
9.03
10.67
2.10
3.64
5.46
(D) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge:
Particulars
(a) Receivable hedges:
US Dollar
Arab Emirates Dirham
Qatari Riyal
Saudi Riyal
Nominal
amount
(v crore)
29.00
102.55
45.77
–
As at 31-3-2020
Average
rate
(v)
Within
twelve
months
(v crore)
72.51
20.11
20.70
–
29.00
102.55
45.77
–
After
twelve
months
(v crore)
Nominal
amount
(v crore)
As at 31-3-2019
Average
rate
(v)
Within
twelve
months
(v crore)
–
–
–
–
28.73
81.20
116.68
51.07
71.83
20.46
20.91
19.34
28.73
–
116.68
51.07
582
–
–
–
–
–
–
–
–
After
twelve
months
(v crore)
–
81.20
–
–
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(ii) Outstanding interest rate hedge instruments:
Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge:
Particulars
Nominal
amount
(v crore)
As at 31-3-2020
Average
rate
(%)
Within
twelve
months
(v crore)
4.32
Nominal
amount
(v crore)
As at 31-3-2019
Average
rate
(%)
Within
twelve
months
(v crore)
369.58
373.90
7.26
Floating interest rate borrowings - US
Dollar
4.32
7.35
(iii) Outstanding commodity price hedge instruments:
Commodity forward Contract:
Particulars
Nominal
amount
(v crore)
As at 31-3-2020
Average
rate
(v)
Nominal
amount
(v crore)
As at 31-3-2019
Average
rate
(v)
After
twelve
months
(v crore)
-
After
twelve
months
(v crore)
26.40
–
10.53
9.08
–
–
–
Within
twelve
months
(v crore)
27.25
355.02
15.18
15.50
–
42.56
112.49
Within
twelve
months
(v crore)
(271.25)
202.04
29.47
29.26
42.44
33.63
–
(271.25) 514615.22
202.04 148790.59
38.32
5469.41
39.27 13631.02
42.44 189480.24
33.63 142435.43
–
–
Copper (Tn)*
Aluminium (Tn)
Iron Ore (Tn)
Coking Coal (Tn)
Zinc (Tn)
Lead (Tn)
Nickel (Tn)
*Negative nominal amount represents sell position.
53.65 404260.66
355.02 133756.31
5643.17
25.71
13101.74
24.58
–
–
42.56 146921.65
112.49 992854.36
(l) Carrying amounts of hedge instruments for which hedge accounting is followed:
(A) Cash flow hedge:
Particulars
(i) Forward contracts
(a) Current:
Asset - Other financial assets
Liability - Other financial liabilities
(b) Non-current:
Asset - Other financial assets
Liability - Other financial liabilities
(ii) Swap contracts
(a) Current:
Asset - Other financial assets
Liability - Other financial liabilities
(b) Non-current:
Asset - Other financial assets
Liability - Other financial liabilities
(iii) Option contracts
(a) Current:
Asset - Other financial assets
Liability - Other financial liabilities
(b) Non-current:
Asset - Other financial assets
Liability - Other financial liabilities
As at 31-3-2020
Interest rate
exposure
Currency
exposure
Commodity
price
exposure
As at 31-3-2019
Interest rate
exposure
Currency
exposure
795.47
1055.95
53.00
580.21
–
–
155.06
59.55
26.61
8.97
39.13
33.36
(0.96)
–
83.78
136.18
–
–
–
–
–
–
–
–
–
–
–
1.71
–
–
–
–
–
–
–
–
714.76
396.78
366.37
109.95
49.11
–
–
–
22.43
0.96
6.51
–
(0.40)
–
(0.40)
–
0.88
–
–
–
–
–
–
–
After
twelve
months
(v crore)
4.32
After
twelve
months
(v crore)
–
–
8.85
10.01
–
–
–
v crore
Commodity
price
exposure
56.94
46.57
–
–
–
–
–
–
–
–
–
–
583
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(B) Fair value hedge:
Particulars
(i) Forward contracts
(a) Current:
Asset - Other financial assets
Liability - Other financial liabilities
(b) Non-current:
Asset - Other financial assets
Liability - Other financial liabilities
(ii) Option contracts
(a) Current:
Asset - Other financial assets
Liability - Other financial liabilities
(b) Non-current:
Asset - Other financial assets
Liability - Other financial liabilities
(C) Net investment hedge:
Particulars
(i) Forward contracts
(a) Current:
Asset - Other financial assets
Liability - Other financial liabilities
(b) Non-current:
Asset - Other financial assets
Liability - Other financial liabilities
As at 31-3-2020
Currency
exposure
Interest rate
exposure
Commodity
price
exposure
As at 31-3-2019
Currency
exposure
Interest rate
exposure
v crore
Commodity
price
exposure
–
63.86
–
–
4.84
–
4.67
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20.90
–
–
–
3.08
–
–
–
–
–
–
–
–
–
As at 31-3-2020
Currency
exposure
Interest rate
exposure
Commodity
price
exposure
As at 31-3-2019
Currency
exposure
Interest rate
exposure
–
0.26
–
–
–
–
–
–
–
–
–
–
11.48
0.11
2.68
–
–
–
–
–
–
–
–
–
–
–
–
–
v crore
Commodity
price
exposure
–
–
–
–
v crore
(m) Breakup of cash flow hedging reserve and cost of hedging reserve:
Particulars
Balance towards continuing hedges
Balance for which hedge accounting discontinued
Total
As at 31-3-2020
As at 31-3-2019
Cash flow
hedging reserve
Cost of hedging
reserve
Cash flow
hedging reserve
Cost of hedging
reserve
(412.63)
(9.14)
(421.77)
(13.78)
(1.37)
(15.15)
360.54
(121.43)
239.11
6.77
(0.88)
5.89
584
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [59] (contd.)
(n) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss:
Particulars
(A) Future cash flows are no longer expected to occur:
(i)
Revenue from operations
(ii) Manufacturing, construction and operating expenses
(iii) Sales, administration and other expenses
(iv) Other income
(B) Hedged expected future cash flows affecting Profit or Loss:
(i)
Progress billing
(ii) Revenue from operations
(iii) Manufacturing, construction and operating expenses
(iv) Finance costs
(v) Sales, administration and other expenses
(vi) Discontinued operations
(o) Movement of cash flow hedging reserve and cost of hedging reserve:
Opening balance
Cash flow hedging reserve
Changes in the spot element of the forward contracts which is designated as hedging
instruments for time period related hedges
Changes in fair value of forward contracts designated as hedging instruments
Changes in intrinsic value of option contracts
Changes in fair value of swaps
Amount reclassified to Profit or Loss
Amount included in non-financial asset/liability
Amount included in progress billing in Balance Sheet
Taxes related to above
Closing balance
Opening balance
Cost of hedging reserve
Changes in the forward element of the forward contracts where changes in spot element of
forward contract is designated as hedging instruments for time period related hedges
Included in carrying amount of hedge item
Amount reclassified to Profit or Loss
Taxes related to above
Closing balance
v crore
2019-20
2018-19
–
–
(16.65)
–
(100.64)
167.20
(131.85)
(150.26)
313.90
3.38
2019-20
239.11
248.63
(1001.89)
3.64
(43.85)
109.03
–
(45.53)
0.34
(28.32)
67.98
(24.26)
(259.35)
262.37
1.10
v crore
2018-19
449.22
261.47
(301.78)
–
59.82
(307.86)
(364.94)
5.39
100.64
334.42
(421.77)
0.31
28.32
106.69
239.11
v crore
2019-20
2018-19
5.89
(11.45)
(151.87)
(226.43)
0.55
122.14
8.14
(15.15)
0.13
252.95
(9.31)
5.89
585
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [60]
Value of financial assets and inventories pledged as collateral for liabilities and/or commitments and/or contingent liabilities:
Particulars
Current:
Investments
Inventories and trade receivables
Cash and cash equivalents
Loans
Other assets
Total inventories and current financial assets pledged as collateral
Non-current:
Investments
Loans
Total non-current financial assets pledged as collateral
NOTE [61]
Disclosure pursuant to Ind AS 116 “Leases”:
(a) Transition disclosure:
v crore
As at
31-3-2020
As at
31-3-2019
–
22.90
16023.44
13604.92
199.81
683.26
29479.39
24703.11
965.59
749.80
46668.23
39763.99
1447.99
58312.78
59760.77
87.48
42797.67
42885.15
The Group has adopted Ind AS 116 “Leases” (“Standard”) effective April 1, 2019 (initial application date). Ind AS 116 supersedes
Ind AS 17 “Leases”. The Standard sets out the principles for recognition, measurement, presentation and disclosure of leases. The
Standard has brought major changes with respect to lease accounting for the lessee. It requires a lessee to account for right-of-use
asset and lease liability for all the leases without classification into operating and finance lease.
The Group has used modified retrospective method of transition. Accordingly, the Group has recognised a debit of R 79.09 crore
(the cumulative effect of initially applying the Standard as an adjustment) to the opening balance of retained earnings at the date
of initial application. Accordingly, the figures of the previous year have not been restated.
The Group has availed of following practical expedients as at the transition date as provided by the Standard:
•
•
Leases for which the lease term ends within 12 months of the date of initial application are accounted in the same way as
short term leases.
The Group has not reassessed whether a contract is or contains a lease at the date of initial application and instead applied
the Standard to those contracts that were previously identified as leases under Ind AS 17.
•
The Group has excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application.
For leases previously classified as operating leases under Ind AS 17 and which are neither low value leases nor short term leases,
the Group has recognised:
•
•
a lease liability at present value of the remaining lease payments, discounted using Group’s incremental borrowing rate of
8.11% at the transition date.
a right-of-use asset at its carrying amount as if the Standard has been applied since the lease commencement date but
discounted using Group’s incremental borrowing rate at the date of initial application, except in few cases wherein the
right-of-use asset is determined as an amount equal to the lease liability as at the transition date.
For leases previously classified as finance leases under Ind AS 17, the carrying amount of lease asset and lease liability as at
March 31, 2019 have been considered as right-of-use asset and lease liability respectively as at April 1, 2019 under Ind AS 116.
586
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [61] (contd.)
Reconciliation between operating lease commitments disclosed as per Ind AS 17 as at March 31, 2019 and lease liabilities
recognised in the Balance Sheet at the date of initial application i.e. April 1, 2019 is as follows:
Particulars
Operating lease commitments under Ind AS 17 as at March 31, 2019
Less: Commitments pertaining to short term leases
Less: Commitments pertaining to low value leases
Less: Impact of discounting of lease payments under Ind AS 116
Add: Extension and termination options reasonably certain to be exercised
Add: Commitments relating to leases previously classified as finance leases
Lease liability recognised under Ind AS 116 as at April 1, 2019
v crore
1258.68
79.69
11.21
368.48
375.70
0.06
1175.06
(b) Where the Group is a lessor:
Finance leases:
A. Assets given under leases mainly include power plant where the Group has agreed to manufacture/construct an
(i)
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.
B.
Finance lease income recognised in the Statement of Profit and Loss during the year amounts to R 1035.33 crore
(R 1003.04 crore is on the net investment in finance lease and R 32.29 crore is income relating to variable lease
payments not included in the measurement of the net investment in finance leases). Further, an amount of R 0.25 crore
is accounted as sub-lease income classified as finance lease.
C.
The gross investment in these leases and the present value of minimum lease payments receivable is as under:
Sr.
No.
1
2
3
4
5
6
7
Particulars
Receivable not later than 1 year
Receivable later than 1 year and not later than 2 years
Receivable later than 2 years and not later than 3 years
Receivable later than 3 years and not later than 4 years
Receivable later than 4 years and not later than 5 years
Receivable later than 5 years
Unguaranteed residual value
Gross investment in leases (1+2+3+4+5+6+7)
Less: Unearned finance income
Present value of minimum lease payments receivable
v crore
Present value of
minimum lease
payments
As at 31-3-2020
214.76
185.55
306.33
637.00
476.96
6087.22
990.36
8898.18
Minimum Lease
Payments
As at 31-3-2020
1189.58
1137.71
1231.54
1511.98
1289.63
13467.38
990.36
20818.18
11920.00
8898.18
D. Reconciliation of carrying amount of net investment in finance lease receivables is as under:
Sr. No.
1
2
3
4
5
Particulars
Opening balance as at April 1, 2019
Impact of Ind AS 116 - derecognition of right-of-use asset on sub-lease
treated as finance lease
Finance income/sub-lease income recognised during the year
Addition to finance lease during the year
Lease rental received during the year
Closing balance as at March 31, 2020 (1+2+3+4+5)
v crore
Net investment in finance lease
9067.70
3.26
1003.29
76.10
(1252.17)
8898.18
587
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [61] (contd.)
(ii) Operating leases:
A.
The Group has given certain assets under non-cancellable operating lease such as buildings, plant & equipment
and vehicles. Leases are renewed only on mutual consent and at a prevalent market price and sub-lease is generally
restricted.
B. Operating lease income recognised in the Statement of Profit and Loss during the year amounts to R 170.85 crore.
Further, an amount of R 1.28 crore is accounted as sub-lease income classified as operating lease.
C. Annual undiscounted lease payments receivable is as under:
Sr. No.
1
2
3
4
5
6
Particulars
Receivable not later than 1 year
Receivable later than 1 year and not later than 2 years
Receivable later than 2 years and not later than 3 years
Receivable later than 3 years and not later than 4 years
Receivable later than 4 years and not later than 5 years
Receivable later than 5 years
Total (1+2+3+4+5+6)
v crore
As at 31-3-2020
116.97
81.77
50.78
27.28
7.41
0.61
284.82
(c) Where the Group is a lessee:
(i)
The Group has taken various assets on lease such as plant & equipment, buildings, office premises, vehicles. Generally, leases
are renewed only on mutual consent and at a prevalent market price and sub-lease is restricted.
(ii) The Group during the year has leased out surplus capacity in leased assets and has accounted an income of R 1.53 crore on
such sub-leases.
(iii) Details with respect to right-of-use assets:
Class of asset
Depreciation for the year*
Land
Buildings
Plant & equipment
Furniture & fixtures
Vehicles
Total
17.81
288.15
45.60
1.67
0.21
353.44
Addition to right-of-use
asset during the year**
26.57
1125.51
114.52
–
0.15
1266.75
v crore
Carrying amount of asset
as at 31-3-2020
385.44
1716.20
117.77
6.81
0.27
2226.49
* Depreciation for the year includes depreciation on land R 0.14 crore and on buildings R 0.04 crore pertaining to
discontinued operations.
** Addition to right-of-use asset during the year includes addition on account of business combination R 607.03 crore
(R 23.89 crore in land and R 583.14 crore in buildings).
Interest expense on lease liabilities amounts to R 162.79 crore (including R 0.74 crore pertaining to discontinued operations).
The expense relating to payments not included in the measurement of the lease liability and recognised as expense in the
Statement of Profit and Loss during the year are as follows:
A.
B.
Short term leases - R 2749.00 crore (including R 10.91 crore pertaining to discontinued operations);
Low value leases - R 48.45 crore (including Nil pertaining to discontinued operations).
(iv)
(v)
(vi) Total cash outflow for leases amounts to R 3090.44 crore (including R 13.63 crore pertaining to discontinued operations)
during the year including cash outflow of short term and low value leases.
(vii) The Group has entered into certain lease agreements, which had not commenced by the year end and as a result, a lease
liability and right-of-use asset has not been recognised as at March 31, 2020. The aggregate future cash flows to which the
Group is exposed in respect of these contracts are: Fixed payments of R 17.99 crore per year, over the lease term ranging from
1 to 9 years.
588
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [62]
Additional information pursuant to Schedule III to the Companies Act, 2013 for the year ended 31-3-2020:
Net Assets, i.e., total
assets minus total
liabilities
Share in profit or (loss)
Share in other
comprehensive income
Share in total
comprehensive income
Name of the entity
As % of
consolidated
net assets
Amount
(R crore)
As % of
consolidated
profit or loss
Amount
(R crore)
As % of
consolidated
other
comprehensive
income
Amount
(R crore)
As % of
consolidated
total
comprehensive
income
Amount
(R crore)
Parent Company
Larsen and Toubro Limited
Indian Subsidiaries
Infrastructure:
Hi-Tech Rock Products and Aggregates
Limited
L&T Geostructure LLP
L&T Infrastructure Engineering Limited
Heavy Engineering:
L&T Cassidian Limited
Hydrocarbon:
78.20% 52175.35
69.95%
6679.21
50.24%
(518.92)
72.34%
6160.29
(0.01%)
0.30%
0.07%
(5.50)
199.22
45.18
(0.21%)
0.51%
0.01%
(19.65)
48.58
1.24
–
0.01%
0.01%
–
(0.06)
(0.07)
(0.23%)
0.58%
0.01%
(19.65)
48.52
1.17
–
–
–
–
–
–
–
–
L&T Hydrocarbon Engineering Limited
L&T-Gulf Private Limited
IT & Technology Services:
Larsen & Toubro Infotech Limited
L&T Technology Services Limited
Mindtree Limited (Consolidated)
L&T Thales Technology Services Private
4.07%
0.05%
7.84%
3.93%
4.73%
2720.29
33.10
9.86%
0.09%
941.71
8.65
(17.45%)
–
180.26
0.01
13.17%
0.10%
1121.97
8.66
5228.84
2620.03
3156.72
16.26%
8.27%
5.64%
1552.36
790.03
538.17
42.42%
25.20%
20.25%
(438.10)
(260.32)
(209.15)
13.08%
6.22%
3.86%
1114.26
529.71
329.02
Limited
0.04%
25.36
0.15%
14.64
(0.01%)
0.11
0.18%
14.75
Syncordis Software Services India Private
Limited
Graphene Semiconductor Services Private
Limited
Seastar Labs Private Limited
Ruletronics Systems Private Limited
Esencia Technologies India Private Limited
Lymbyc Solutions Private Limited
Powerup Cloud Technologies Private
Limited
Financial Services:
L&T Capital Markets Limited
L&T Finance Holdings Limited
L&T Housing Finance Limited
L&T Infra Debt Fund Limited
L&T Infra Investment Partners Advisory
L&T Infra Investment Partners Trustee
Private Limited
L&T Infrastructure Finance Company
Limited
L&T Investment Management Limited
–
2.67
0.01%
0.92
0.04%
–
0.01%
–
0.01%
28.15
(0.29)
3.90
0.62
3.79
0.08%
–
–
–
0.01%
6.94
–
0.08
(0.09)
1.06
0.01%
7.71
(0.02%)
(1.55)
–
–
–
–
–
–
–
–
–
–
–
–
–
0.01%
0.92
0.09%
–
–
–
0.01%
6.94
–
0.08
(0.09)
1.06
(0.04)
(0.02%)
(1.59)
0.10%
11.76%
2.28%
1.91%
66.44
7844.84
1521.71
1274.05
(0.04%)
2.79%
0.48%
2.23%
–
0.06
–
(3.73)
266.81
46.31
212.98
3.42
0.01
(0.03%)
0.01%
1.11%
0.02%
0.33
(0.11)
(11.50)
(0.16)
–
–
–
–
(0.04%)
3.13%
0.41%
2.51%
0.04%
–
(3.40)
266.70
34.81
212.82
3.42
0.01
7.81%
0.87%
5210.39
577.39
2.92%
2.10%
279.25
200.08
(0.17%)
0.10%
1.78
(1.07)
3.30%
2.34%
281.03
199.01
589
Private Limited
0.02%
14.63
0.04%
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [62] (contd.)
Net Assets, i.e., total
assets minus total
liabilities
Share in profit or (loss)
Share in other
comprehensive income
Share in total
comprehensive income
Name of the entity
As % of
consolidated
net assets
Amount
(R crore)
As % of
consolidated
profit or loss
Amount
(R crore)
L&T Mutual Fund Trustee Limited
L&T Financial Consultants Limited
Mudit Cement Private Limited
L&T Finance Limited
L&T Infra Investment Partners (The Fund)
–
0.12%
(0.06%)
13.33%
0.73%
1.31
82.16
(42.16)
8893.59
489.24
–
0.55%
(0.17%)
3.84%
–
(0.12)
52.75
(15.96)
366.29
0.20
As % of
consolidated
other
comprehensive
income
–
–
–
14.46%
–
Amount
(R crore)
–
(0.03)
–
(149.37)
–
As % of
consolidated
total
comprehensive
income
–
0.63%
(0.19%)
2.55%
–
Amount
(R crore)
(0.12)
52.72
(15.96)
216.92
0.20
Developmental Projects:
L&T Metro Rail (Hyderabad) Limited
Sahibganj Ganges Bridge-Company
Private Limited
Power Development:
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
L&T Asian Realty Project LLP
L&T Parel Project LLP
L&T Construction Equipment Limited
LTR SSM Private Limited
L&T Seawoods Limited
L&T Vision Ventures Limited
L&T Electricals and Automation Limited
Valves, Construction Equipment and
Others:
L&T Construction Machinery Limited
L&T Valves Limited
Others:
Bhilai Power Supply Company Limited
L&T Power Limited
Kesun Iron and Steel Company Private
Limited
L&T Aviation Services Private Limited
L&T Capital Company Limited
L&T Infra Contractors 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
Larsen & Toubro (East Asia) Sdn. Bhd.
590
2.76%
1842.71
(4.00%)
(382.21)
(0.47%)
4.85
(4.43%)
(377.36)
–
–
–
–
–
–
–
–
(0.07)
(1.29)
(113.73)
(5.74)
243.03
(0.01)
(3.88)
171.71
239.88
(0.05)
38.66
(0.02)
(1.73)
1.97
3.34
–
0.28
0.27
0.94
0.16
–
–
–
4.28%
2.28%
5.25%
–
(0.05%)
0.34%
0.90%
–
4.11%
(0.01%)
–
0.30%
0.64%
–
0.01%
–
0.05%
0.01%
–
0.67%
–
0.84%
–
–
(0.18)
(2.29)
2854.22
1518.79
3503.86
(0.02)
(30.77)
227.93
599.29
0.05
2744.20
(4.67)
0.30
–
(0.01%)
(1.19%)
(0.06%)
2.55%
–
(0.04%)
1.80%
2.51%
–
0.40%
–
(0.02%)
199.74
424.28
0.02%
0.03%
0.05
5.54
–
34.82
5.04
(0.01)
446.44
0.20
558.07
2.81
2.42
–
–
–
0.01%
–
–
0.25%
–
1.41%
–
0.01%
–
–
–
–
(1.52%)
–
–
–
–
–
–
–
–
–
–
–
–
15.74
–
–
0.02
–
–
(0.01)
–
–
–
(0.02%)
(1.34%)
(0.07%)
3.04%
–
(0.05%)
2.03%
2.82%
–
0.45%
–
(0.02%)
(0.07)
(1.29)
(113.73)
(5.74)
258.77
(0.01)
(3.88)
171.73
239.88
(0.05)
38.65
(0.02)
(1.73)
0.21%
1.75%
(2.19)
(18.10)
–
(0.17%)
(0.22)
(14.76)
–
–
–
–
–
–
–
–
–
(0.04)
–
–
39.61
0.02
13.99
(0.36)
0.07
–
–
–
0.01%
–
–
0.75%
–
1.76%
–
0.02%
–
0.28
0.27
0.90
0.16
–
63.19
(0.30)
148.94
(0.16)
1.38
23.58
(0.32)
134.95
(3.84%)
–
(1.35%)
0.20
1.31
0.03%
(0.01%)
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [62] (contd.)
Net Assets, i.e., total
assets minus total
liabilities
Share in profit or (loss)
Share in other
comprehensive income
Share in total
comprehensive income
Name of the entity
As % of
consolidated
net assets
Amount
(R crore)
As % of
consolidated
profit or loss
Amount
(R crore)
As % of
consolidated
other
comprehensive
income
Amount
(R crore)
As % of
consolidated
total
comprehensive
income
Amount
(R crore)
Hydrocarbon:
Larsen & Toubro Heavy Engineering LLC
Larsen & Toubro Hydrocarbon
International Limited LLC
L&T Modular Fabrication Yard LLC
L&T Overseas Projects Nigeria Limited
Larsen Toubro Arabia LLC
L&T Hydrocarbon Saudi Company
Larsen & Toubro Kuwait Construction
General Contracting company WLL
PT Larsen & Toubro Hydrocarbon
Engineering Indonesia
Larsen & Toubro Electromech LLC
L&T Hydrocarbon International FZE
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 and Toubro Infotech South Africa
(Proprietary) Limited
Larsen & Toubro Infotech GmbH
L&T Information Technology Spain SL
Larsen & Toubro Infotech Norge AS
Larsen & Toubro LLC
L&T Infotech S. DE R.L. DE C.V.
Syncordis S.A.
Syncordis SARL
Syncordis Limited
Syncordis PSF S.A. (formerly known as
Syncordis Support Services S.A.)
Nielsen+Partner Unternehmensberater
GmbH
Nielsen+Partner Unternehmensberater AG
Nielsen+Partner Pte Ltd
Nielsen+Partner S.A
Nielsen&Partner Company Limited
Nielsen&Partner Pty Ltd
Ruletronics Limited
Ruletronics Systems Inc
Lymbyc Solutions Inc.
L&T Technology Services LLC
(0.11%)
(74.69)
(0.04%)
(3.96)
–
–
(0.05%)
(3.96)
–
0.30%
–
(0.55%)
(0.82%)
–
201.21
(0.08)
(369.15)
(547.87)
0.03%
1.05%
–
0.56%
(0.34%)
2.79
100.74
(0.06)
53.39
(32.20)
0.01%
–
–
3.16%
–
(0.07)
–
–
(32.68)
–
0.03%
1.18%
–
0.24%
(0.38%)
2.72
100.74
(0.06)
20.71
(32.20)
0.01%
4.91
0.03%
3.08
(0.03%)
0.31
0.04%
3.39
–
0.11%
–
–
76.29
(0.19)
–
1.55%
–
–
147.73
(0.30)
–
(0.23%)
–
–
2.38
–
–
1.76%
–
–
150.11
(0.30)
–
(1.39)
(0.01%)
(0.96)
0.01%
(0.06)
(0.01%)
(1.02)
0.37%
0.04%
0.01%
0.01%
0.50%
–
–
–
–
0.03%
(0.01%)
(0.02%)
248.76
24.28
3.99
4.10
332.94
1.67
0.32
2.88
0.30
18.27
(4.78)
(16.39)
0.73%
0.12%
–
0.02%
(0.05%)
(0.01%)
–
–
0.01%
(0.04%)
(0.06%)
(0.12%)
70.00
11.42
0.32
1.46
(5.02)
(0.93)
0.32
0.04
0.99
(4.01)
(5.29)
(11.28)
(0.71%)
(0.05%)
(0.03%)
0.05%
0.80%
(0.01%)
–
(0.02%)
0.01%
(0.10%)
–
0.05%
7.35
0.50
0.34
(0.49)
(8.22)
0.12
–
0.25
(0.09)
1.03
(0.04)
(0.56)
0.91%
0.14%
0.01%
0.01%
(0.16%)
(0.01%)
–
–
0.01%
(0.03%)
(0.06%)
(0.14%)
77.35
11.92
0.66
0.97
(13.24)
(0.81)
0.32
0.29
0.90
(2.98)
(5.33)
(11.84)
0.01%
3.36
(0.01%)
(0.89)
(0.01%)
0.13
(0.01%)
(0.76)
0.02%
–
0.03%
0.02%
–
–
0.01%
–
–
0.28%
11.68
3.25
22.11
12.47
(0.24)
0.04
7.26
1.96
(0.39)
184.13
(0.03%)
0.01%
0.13%
0.07%
–
–
–
(0.02%)
–
0.34%
(2.77)
0.78
12.16
7.04
(0.10)
(0.47)
0.34
(1.56)
(0.02)
32.58
(0.06%)
(0.04%)
(0.08%)
(0.07%)
(0.01%)
–
(0.02%)
(0.02%)
–
(1.45%)
0.59
0.41
0.84
0.71
0.06
0.01
0.25
0.23
(0.01)
15.01
(0.03%)
0.01%
0.15%
0.09%
–
(0.01%)
0.01%
(0.02%)
–
0.56%
(2.18)
1.19
13.00
7.75
(0.04)
(0.46)
0.59
(1.33)
(0.03)
47.59
591
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2019-20
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [62] (contd.)
Net Assets, i.e., total
assets minus total
liabilities
Share in profit or (loss)
Share in other
comprehensive income
Share in total
comprehensive income
Name of the entity
As % of
consolidated
net assets
Amount
(R crore)
As % of
consolidated
profit or loss
Amount
(R crore)
As % of
consolidated
other
comprehensive
income
–
–
–
(0.09%)
Amount
(R crore)
0.04
0.01
–
0.89
As % of
consolidated
total
comprehensive
income
(0.01%)
–
(0.01%)
0.18%
Amount
(R crore)
(0.53)
(0.01)
(0.69)
15.28
Graphene Solutions PTE Ltd.
Graphene Solutions SDN .BHD
Graphene Solutions Taiwan Limited
Esencia Technologies Inc
L&T Technology Services (Shanghai) Co.
Ltd
Financial Services:
–
–
–
0.02%
0.97
0.16
0.64
14.55
(0.01%)
–
(0.01%)
0.15%
(0.57)
(0.02)
(0.69)
14.39
–
1.95
(0.02%)
(1.50)
–
–
(0.02%)
(1.50)
L&T Capital Markets (Middle East) Ltd
0.02%
10.45
0.02%
1.91
(0.10%)
1.00
0.03%
2.91
Realty:
L&T Realty FZE
Valves, Construction Equipment and
Others:
L&T Valves Arabia Manufacturing LLC
L&T Valves USA LLC
Electrical & Automation:
Henikwon Corporation Sdn. Bhd.
Kana Controls General Trading and
Contracting company WLL
L&T Electrical & Automation FZE
L&T Electricals & Automation Saudi
Arabia company Limited LLC
PT. Tamco Indonesia
Servowatch Systems Limited
Tamco Electrical Industries Australia Pty
Ltd.
Tamco Switchgear (Malaysia) SDN BHD
Thalest Limited
Others:
Larsen & Toubro International FZE
L&T Global Holdings Limited
Total Subsidiaries
Non-controlling Interest in all subsidiaries
Indian Associates
L&T-Chiyoda Limited
Gujarat Leather Industries Limited
Magtorq Private Limited
Magtorq Engineering Solutions Private
Limited
Foreign Associates
Larsen & Toubro Qatar & HBK Contracting
Co. WLL
L&T Camp Facilities LLC
Total Associates
–
–
(0.04%)
(3.41)
(0.01%)
0.13
(0.04%)
(3.28)
–
0.01%
0.65
3.36
(0.01%)
–
(1.29)
(0.40)
–
–
–
–
(0.02%)
–
(1.29)
(0.40)
–
0.03
(0.03%)
(2.94)
0.01%
(0.14)
(0.04%)
(3.08)
0.01%
0.20%
9.31
132.19
0.03%
(0.41%)
3.33
(39.45)
(0.03%)
(1.15%)
0.10%
–
(0.03%)
–
0.73%
0.01%
1.33%
0.91%
(14.27%)
70.09
1.03
(19.78)
2.28
486.19
7.85
886.63
606.62
57302.44
(9520.83)
0.10%
(0.19%)
0.06%
(0.03%)
0.30%
–
2.30%
1.58%
(14.09%)
8.43
(18.54)
5.48
(2.88)
28.97
(0.17)
219.76
150.90
6379.28
(1345.25)
(0.34%)
0.02%
0.06%
0.02%
(1.83%)
(0.02%)
(7.28%)
(4.68%)
(27.29%)
0.15%
–
0.01%
101.84
–
4.63
0.26%
–
–
25.20
–
(0.12)
(0.01%)
–
–
–
0.44
–
0.06
–
(0.01%)
0.01%
(3.97)
6.21
109.15
–
0.01%
–
0.80
25.94
0.02%
(0.01%)
0.30
11.89
3.49
(0.19)
(0.61)
(0.19)
18.86
0.25
75.21
48.36
(686.28)
281.83
0.09
–
–
–
(0.22)
0.08
(0.05)
0.04%
(0.32%)
0.14%
(0.22%)
0.06%
(0.04%)
0.56%
–
3.46%
2.34%
(12.49%)
3.63
(27.56)
11.92
(18.73)
4.87
(3.07)
47.83
0.08
294.97
199.26
5693.00
(1063.42)
0.30%
–
–
25.29
–
(0.12)
–
0.06
–
0.01%
(0.22)
0.88
25.89
592
Notes forming part of the Consolidated Financial Statements (contd.)
NOTE [62] (contd.)
Net Assets, i.e., total
assets minus total
liabilities
Share in profit or (loss)
Share in other
comprehensive income
Share in total
comprehensive income
Name of the entity
As % of
consolidated
net assets
Amount
(R crore)
As % of
consolidated
profit or loss
Amount
(R crore)
As % of
consolidated
other
comprehensive
income
Amount
(R crore)
As % of
consolidated
total
comprehensive
income
Amount
(R crore)
Indian Joint Ventures
Power:
L&T-MHPS Boilers Private Limited
L&T-MHPS Turbine Generators Private
Limited
L&T Howden Private Limited
L&T-Sargent & Lundy Limited
Heavy Engineering:
L&T Special Steels and Heavy Forgings
Private Limited
Defence Engineering:
1.32%
883.79
1.67%
159.22
(0.18%)
1.81
1.89%
161.03
0.25%
0.08%
0.06%
169.81
52.86
41.08
0.26%
0.09%
0.13%
25.06
7.48
11.29
0.19%
–
0.07%
(1.96)
(0.01)
(0.69)
0.27%
0.09%
0.12%
23.10
7.47
10.60
(1.15%)
(765.89)
(1.72%)
(164.37)
0.02%
(0.19)
(1.93%)
(164.56)
L&T MBDA Missile Systems Limited
–
(0.57)
(0.01%)
(1.02)
–
–
(0.01%)
(1.02)
Hydrocarbon:
L&T Sapura Offshore Private Limited
L&T Sapura Shipping Private Limited
L&T-Gulf Private Limited
Developmental Projects:
L&T Infrastructure Development Projects
–
0.47%
–
0.29
316.64
–
–
(0.12%)
(0.04%)
–
(11.63)
(3.68)
–
(2.67%)
–
–
27.54
–
–
0.19%
(0.04%)
–
15.91
(3.68)
Limited (Consolidated)
1.40%
931.81
(1.52%)
(144.85)
(2.77%)
28.56
(1.37%)
(116.29)
Others:
Raykal Aluminium Company Private
Limited
Foreign Joint Ventures
Hydrocarbon:
Indiran Engineering Projects & Systems,
Kish, (PJSC)
L&T Hydrocarbon Caspian LLC
Total Joint Ventures
CFS Adjustment and elimination
Total
NOTE [63]
–
–
–
(52.41%)
0.20
–
(0.03)
(0.27)
–
1629.75
(34972.64)
66723.22
–
–
(21.65%)
0.08
–
(122.45)
(2067.70)
9549.03
–
–
–
15.93%
–
–
(0.03)
0.05
–
55.11
(164.52)
(1032.83)
–
–
(26.21%)
0.13
–
(67.34)
(2232.22)
8516.20
There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2020.
NOTE [64]
Figures for the previous year have been regrouped/re-classified to conform to the figures of the current year.
593
salient features of the financial statements of subsidiaries/associate companies/joint ventures annuaL report 2019-20
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013]
3
Hi-Tech Rock
Products and
Aggregates
Limited
31-Mar-20
INR
1
Bhilai Power
Supply Company
Limited
2
L&T Electricals
and Automation
Limited
5
Kesun Iron and
Steel Company
Private Limited
4
L&T Seawoods
Limited
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
Particulars
Sr.
no.
Sr. No.
v crore
6
L&T Valves
Limited
31-Mar-20
INR
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
594
–
11-Jul-95*
–
12-Dec-07*
–
01-Jan-08*
–
13-Mar-08*
–
16-Jan-09*
–
23-Nov-61*
0.05
–
1.06
1.11
1.11
–
–
–
–
–
–
–
–
–
99.90
7.44
(7.14)
12.88
13.18
13.18
–
–
(1.73)
0.00
(1.73)
–
–
–
–
100.00
0.05
1654.55
(5.55)
446.57
441.06
441.06
299.78
412.18
(19.65)
–
(19.65)
–
–
–
–
100.00
1089.65
290.42
3034.62
3034.62
–
510.20
43.72
5.06
38.66
–
–
–
–
100.00
0.01
(0.01)
0.00
0.00
0.00
–
–
0.27
–
0.27
–
–
–
–
95.00
18.00
406.27
915.65
1339.93
1339.93
5.48
1028.43
39.85
36.51
3.34
–
–
–
–
100.00
7
Chennai Vision
Developers
Private Limited
31-Mar-20
INR
8
L&T Vision
Ventures Limited
9
L&T Power
Limited
10
L&T Cassidian
Limited
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
11
L&T Aviation
Services Private
Limited
31-Mar-20
INR
12
Larsen & Toubro
Infotech Limited
31-Mar-20
INR
–
14-Aug-08*
–
22-Dec-06*
–
09-Mar-06*
–
15-Apr-11*
–
06-Nov-09*
–
23-Dec-96*
0.01
(0.03)
0.03
0.00
0.00
0.00
–
(0.01)
–
(0.01)
–
–
–
–
100.00
0.05
(4.72)
10.91
6.24
6.24
–
–
(0.02)
–
(0.02)
–
–
–
–
68.00
0.05
5.49
0.15
5.69
5.69
5.67
–
0.38
0.10
0.28
–
–
–
–
99.99
0.05
(0.05)
–
–
–
–
–
–
–
–
–
–
–
–
100.00
45.60
(10.78)
8.15
42.97
42.97
–
19.65
1.27
0.33
0.94
–
–
–
–
100.00
17.41
5211.42
3087.87
8316.70
8316.70
2873.50
10184.20
2007.00
454.60
1552.40
(217.66)
–
(269.90)
–
74.53
17
L&T Investment
Management
Limited
31-Mar-20
INR
18
L&T Mutual Fund
Trustee Limited
31-Mar-20
INR
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
v crore
Sr. No.
Particulars
Sr.
no.
13
L&T Finance
Holdings Limited
14
L&T Housing
Finance Limited
15
L&T Finance
Limited
16
L&T Capital
Markets Limited
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
31-Mar-20
INR
–
01-May-08*
31-Mar-20
INR
–
09-Oct-12
31-Mar-20
INR
31-Mar-20
INR
–
31-Dec-12
–
07-Feb-13*
–
25-Apr-96*
–
30-Apr-96*
2004.83
165.37
1599.14
5840.02
3492.97
11337.82
11337.82
10069.68
475.44
283.74
16.93
266.81
–
–
–
–
63.72
1356.34
13546.10
15067.80
15067.80
131.04
1323.10
71.65
25.34
46.31
(37.21)
–
–
–
63.72
7294.45
43683.13
52576.72
52576.72
3077.45
8184.41
813.96
447.67
366.29
(183.90)
–
–
–
63.72
52.31
14.13
7.02
73.46
73.46
60.82
34.27
0.08
3.81
(3.73)
–
–
–
–
63.72
251.82
325.53
46.28
623.63
623.63
90.13
381.28
200.06
–
200.06
(123.39)
–
–
–
63.72
0.15
1.16
0.05
1.36
1.36
0.96
0.05
(0.12)
–
(0.12)
–
–
–
–
63.72
19
L&T
Infrastructure
Finance
Company Limited
31-Mar-20
INR
20
L&T Infra Debt
Fund Limited
31-Mar-20
INR
21
L&T Infra
Investment
Partners Advisory
Private Limited
31-Mar-20
INR
22
L&T Infra
Investment
Partners Trustee
Private Limited
31-Mar-20
INR
23
L&T Financial
Consultants
Limited
31-Mar-20
INR
–
18-Apr-06*
–
19-Mar-13*
–
30-May-11*
–
12-Aug-11*
–
16-Jun-11*
24
Mudit Cement
Private Limited
31-Mar-20
INR
–
27-Dec-13
1505.30
490.18
3705.09
26446.16
31656.55
31656.55
2325.96
3056.00
709.56
430.31
279.25
–
–
–
–
63.72
783.87
8594.18
9868.23
9868.23
635.31
901.82
212.98
–
212.98
–
–
–
–
63.72
5.00
9.63
0.30
14.93
14.93
12.47
6.14
4.78
1.36
3.42
–
–
–
–
63.72
0.10
(0.04)
0.01
0.07
0.07
(0.00)
0.03
0.01
0.00
0.01
–
–
–
–
63.72
18.75
63.41
370.69
452.85
452.85
4.26
89.31
74.30
21.55
52.75
–
–
–
–
63.72
2.10
(44.26)
67.96
25.80
25.80
–
–
(18.74)
(2.78)
(15.96)
–
–
–
–
63.72
595
salient features of the financial statements of subsidiaries/associate companies/joint ventures annuaL report 2019-20
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
25
L&T Capital
Company Limited
31-Mar-20
INR
26
L&T Power
Development
Limited
31-Mar-20
INR
27
L&T Uttaranchal
Hydropower
Limited
31-Mar-20
INR
28
L&T Arunachal
Hydropower
Limited
31-Mar-20
INR
29
L&T Himachal
Hydropower
Limited
31-Mar-20
INR
v crore
30
Nabha Power
Limited
31-Mar-20
INR
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
596
–
06-Apr-00*
–
12-Sep-07*
–
13-Nov-06*
–
24-Jun-10*
–
22-Jun-10*
–
09-Apr-07*
0.05
3112.70
161.05
40.39
200.55
2325.00
4.99
0.21
5.25
5.25
0.01
–
0.22
0.06
0.16
–
–
–
–
100.00
(258.48)
1.37
2855.59
2855.59
2850.32
5.33
(113.70)
0.03
(113.73)
–
–
–
–
100.00
1357.74
112.33
1631.12
1631.12
13.25
–
(5.74)
0.00
(5.74)
–
–
–
–
100.00
(40.57)
0.17
0.01
0.01
–
–
(0.07)
0.00
(0.07)
–
–
–
–
100.00
(202.84)
2.37
0.08
0.08
–
–
(1.29)
0.00
(1.29)
–
–
–
–
100.00
1178.85
7733.88
11237.73
11237.73
–
3766.66
249.42
6.38
243.04
–
–
–
–
100.00
31
L&T Metro Rail
(Hyderabad)
Limited
32
L&T Technology
Services Limited
33
L&T Construction
Equipment
Limited
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
34
L&T
Infrastructure
Engineering
Limited
31-Mar-20
INR
35
L&T Thales
Technology
Services Private
Limited
31-Mar-20
INR
36
Sahibganj
Ganges Bridge-
Company Private
Limited
31-Mar-20
INR
–
24-Aug-10*
–
14-Jun-12*
–
29-Jul-97*
–
09-Dec-98*
–
15-Feb-14
–
14-Jul-16*
2439.00
20.90
167.16
(596.29)
16220.29
18063.00
18063.00
–
1359.65
(382.21)
–
(382.21)
–
–
–
–
100.00
2599.13
1461.67
4081.70
4081.70
765.19
5181.27
1055.02
264.99
790.03
(78.20)
–
(141.09)
–
74.62
432.13
850.87
1450.16
1450.16
227.58
733.98
296.30
56.42
239.88
–
–
–
–
100.00
3.60
41.58
44.37
89.55
89.55
–
70.65
1.84
0.60
1.24
–
–
–
–
100.00
2.05
23.31
74.25
99.61
99.61
3.26
142.80
20.77
6.13
14.64
–
–
–
–
55.22
0.01
(0.01)
–
–
–
–
–
–
–
–
–
–
–
–
100.00
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
v crore
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
37
L&T Hydrocarbon
Engineering
Limited
38
L&T Infra
Contractors
Private Limited
31-Mar-20
INR
31-Mar-20
INR
39
Esencia
Technologies
India Private
Limited
31-Mar-20
INR
40
Syncordis
Software
Services India
Private Limited
31-Mar-20
INR
41
LTR SSM Private
Limited
42
L&T-Sargent &
Lundy Limited
31-Mar-20
INR
31-Mar-20
INR
–
02-Apr-09*
–
17-Mar-17*
–
31-May-17
–
11-Dec-17
–
24-Sep-18*
–
05-May-95*
1000.05
1720.24
11824.24
14544.53
14544.53
1694.43
14410.56
1329.86
388.15
941.71
(245.02)
(60.90)
(100.01)
(20.30)
100.00
0.01
(0.02)
0.01
0.00
0.00
–
–
(0.00)
–
(0.00)
–
–
–
–
100.00
0.01
0.60
0.01
0.62
0.62
–
–
(0.09)
–
(0.09)
–
–
–
–
74.62
0.45
2.22
5.62
8.29
8.29
–
10.25
1.19
0.27
0.92
–
–
–
–
74.53
0.10
(0.10)
–
–
–
–
–
(0.05)
–
(0.05)
–
–
–
–
99.00
5.57
76.59
39.42
121.58
121.58
54.57
111.94
26.27
3.69
22.58
–
–
–
–
50.00
43
L&T Gulf Private
Limited
44
L&T-MHPS
Boilers Private
Limited
31-Mar-20
INR
31-Mar-20
INR
45
L&T-MHPS
Turbine
Generators
Private Limited
31-Mar-20
INR
46
Raykal
Aluminium
Company Private
Limited
31-Mar-20
INR
47
L&T Special
Steels and Heavy
Forgings Private
Limited
31-Mar-20
INR
48
L&T Howden
Private Limited
31-Mar-20
INR
–
11-Jan-08*
–
09-Oct-06*
–
27-Dec-06*
–
23-Feb-99*
–
01-Jul-09*
–
17-Jun-10*
8.00
234.10
710.60
25.10
4.33
37.43
37.43
17.68
14.76
9.04
0.39
8.65
–
–
–
–
100.00
1498.84
2132.74
3865.68
3865.68
312.91
2035.62
429.80
117.60
312.20
–
–
–
–
51.00
(377.64)
2204.45
2537.41
2537.41
528.93
802.02
49.13
0.00
49.13
–
–
–
–
51.00
0.05
0.22
0.70
0.97
0.97
–
–
(0.03)
–
(0.03)
–
–
–
–
75.50
566.60
(1601.58)
2546.06
1511.08
1511.08
–
222.78
(222.12)
–
(222.12)
–
–
–
–
74.00
30.00
75.50
121.57
227.07
227.07
–
149.08
20.66
5.73
14.93
–
–
–
–
50.10
597
salient features of the financial statements of subsidiaries/associate companies/joint ventures annuaL report 2019-20
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
598
49
L&T Sapura
Offshore Private
Limited
50
L&T Sapura
Shipping Private
Limited
51
L&T MBDA
Missile Systems
Limited
31-Mar-20
INR
31-Mar-20
USD
31-Mar-20
INR
52
L&T
Infrastructure
Development
Projects Limited
31-Mar-20
INR
53
Panipat Elevated
Corridor Limited
v crore
54
Vadodara
Bharuch Tollway
Limited
31-Mar-20
INR
31-Mar-20
INR
–
02-Sep-10*
75.67
02-Sep-10*
–
05-Apr-17*
–
26-Feb-01*
–
21-Jul-05*
–
23-Dec-05*
0.01
0.48
5.98
6.47
6.47
–
–
0.00
0.00
0.00
–
–
–
–
60.00
158.85
368.94
313.81
841.60
841.60
–
95.57
(19.07)
0.31
(19.38)
–
–
–
–
60.00
1.00
629.52
30.05
(2.11)
117.81
116.70
116.70
–
21.18
(1.67)
0.33
(2.00)
–
–
–
–
51.00
2619.54
660.99
3910.05
3910.05
3094.16
152.73
9.23
34.11
(24.88)
–
–
–
–
51.00
(304.53)
445.93
171.45
171.45
0.31
79.20
13.23
–
13.23
–
–
–
–
51.00
43.50
(94.12)
728.22
677.60
677.60
26.69
358.45
119.36
21.04
98.32
–
–
–
–
51.00
55
L&T Interstate
Road Corridor
Limited
31-Mar-20
INR
56
L&T
Transportation
Infrastructure
Limited
31-Mar-20
INR
57
L&T Halol-
Shamlaji Tollway
Limited
58
Ahmedabad-
Maliya Tollway
Limited
59
L&T Samakhiali
Gandhidham
Tollway Limited
60
L&T Deccan
Tollways Limited
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
–
02-Feb-06*
–
24-Sep-97*
–
09-Sep-08*
–
09-Sep-08*
–
05-Feb-10*
–
20-Dec-11*
57.16
(12.36)
219.51
264.31
264.31
63.93
27.90
2.64
1.42
1.22
–
–
–
–
51.00
41.40
795.35
149.00
80.54
285.34
328.31
39.80
409.51
409.51
91.90
142.84
219.04
60.64
158.40
–
–
–
–
63.86
(441.30)
819.64
1173.69
1173.69
–
95.02
(30.86)
–
(30.86)
–
–
–
–
24.98
(65.68)
1228.32
1311.64
1311.64
34.38
190.28
(8.33)
–
(8.33)
–
–
–
–
51.00
(333.52)
1880.88
1627.90
1627.90
–
165.08
(129.37)
–
(129.37)
–
–
–
–
51.01
(510.46)
2278.09
2052.97
2052.97
14.97
141.91
(241.69)
0.07
(241.76)
–
–
–
–
52.89
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
v crore
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
61
Kudgi
Transmission
Limited
62
L&T Sambalpur-
Rourkela Tollway
Limited
63
PNG Tollway
Limited
64
L&T Rajkot-
Vadinar Tollway
Limited
65
L&T Chennai
- Tada Tollway
Limited
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
31-Mar-20
INR
66
Graphene
Semiconductor
Services Private
Limited
31-Mar-20
INR
–
30-Aug-13
–
18-Oct-13*
–
16-Feb-09*
–
08-Sep-08*
–
24-Mar-08*
–
15-Oct-18
192.60
290.03
169.10
110.00
219.97
1571.23
1983.80
1983.80
207.90
193.52
64.03
1.11
62.92
–
–
–
–
51.00
(113.32)
1077.28
1253.99
1253.99
25.63
158.83
(47.12)
0.08
(47.20)
–
–
–
–
51.00
(330.39)
174.30
13.01
13.01
1.12
–
(2.63)
0.08
(2.71)
–
–
–
–
37.74
(265.02)
983.29
828.27
828.27
9.81
104.76
(34.54)
–
(34.54)
–
–
–
–
51.00
42.00
(5.62)
351.13
387.51
387.51
–
–
(0.13)
–
(0.13)
–
–
–
–
51.00
1.43
26.72
6.14
34.29
34.29
–
46.30
9.01
2.07
6.94
–
–
18.04
–
74.62
67
Seastar Labs
Private Limited
31-Mar-20
INR
68
L&T Construction
Machinery
Limited
31-Mar-20
INR
69
Ruletronics
Systems Private
Limited
31-Mar-20
INR
70
71
Mindtree Limited Lymbyc Solutions
Private Limited
31-Mar-20
INR
31-Mar-20
INR
72
Powerup Cloud
Technologies
Private Limited
31-Mar-20
INR
–
15-Oct-18
–
18-Dec-18*
–
01-Feb-19
–
02-Jul-19
–
29-Aug-19
–
25-Oct-19
0.05
(0.34)
2.18
1.89
1.89
–
–
(0.00)
–
(0.00)
–
–
–
–
74.62
199.14
0.60
159.44
359.18
359.18
–
350.43
1.27
(0.70)
1.97
–
–
–
–
100.00
0.51
3.39
3.83
7.73
7.73
–
5.03
0.17
0.09
0.08
–
–
–
–
74.53
164.60
2992.00
1999.90
5156.50
5156.50
774.40
7764.03
828.70
197.90
630.80
(49.37)
–
(164.57)
–
61.08
1.15
2.65
4.78
8.58
8.58
0.56
6.33
1.35
0.29
1.06
–
–
–
–
74.53
0.02
7.69
21.02
28.73
28.73
–
16.10
(2.09)
(0.54)
(1.55)
–
–
–
–
74.53
599
salient features of the financial statements of subsidiaries/associate companies/joint ventures annuaL report 2019-20
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
Sr. No.
Particulars
Sr.
no.
73
Larsen & Toubro
LLC
74
Larsen & Toubro
Infotech GmbH
75
Larsen & Toubro
Infotech Canada
Limited
76
Larsen & Toubro
Infotech LLC
77
L&T Infotech
Financial
Services
Technologies Inc.
31-Mar-20
CAD
v crore
78
Larsen and
Toubro Infotech
South Africa
(Proprietary) LTD
31-Mar-20
ZAR
53.08
01-Jan-11
4.23
25-Jul-12
31-Mar-20
USD
31-Mar-20
EURO
75.67
02-Jan-01*
82.77
14-Jun-99*
31-Mar-20
CAD
53.08
25-Apr-00
31-Mar-20
USD
75.67
21-Jul-09*
0.40
2.48
2.06
4.94
4.94
–
3.68
0.06
0.02
0.04
–
–
–
–
98.79
1.03
365.75
160.84
527.62
527.62
–
88.15
2.05
0.17
1.88
(11.35)
–
–
–
74.53
0.00
24.54
17.99
42.53
42.53
–
214.36
15.75
4.21
11.54
–
–
–
–
74.53
–
3.99
0.59
4.58
4.58
–
6.66
0.32
–
0.32
–
–
–
–
74.53
199.06
52.27
21.23
272.56
272.56
–
304.75
97.32
26.61
70.71
(73.37)
–
–
–
74.53
0.19
3.94
10.16
14.29
14.29
–
21.67
1.73
0.49
1.24
–
–
–
–
55.83
79
L&T Information
Technology
Services
(Shanghai) Co.,
Ltd.
31-Dec-19
CNY
80
Larsen & Toubro
International FZE
81
Larsen & Toubro
Hydrocarbon
International
Limited LLC #
31-Mar-20
USD
31-Dec-19
SAR
10.25
28-Jun-13*
75.67
25-Sep-01*
19.03
17-Jun-13*
82
Thalest Limited
83
Servowatch
Systems Limited
84
L&T Modular
Fabrication Yard
LLC
31-Mar-20
GBP
93.50
04-Apr-12
31-Mar-20
GBP
93.50
04-Apr-12
31-Dec-19
OMR
185.42
05-Jul-06*
1.10
(2.60)
3.62
2.12
2.12
–
20.63
0.23
–
0.23
–
–
–
–
74.53
827.40
55.53
4.66
887.59
887.59
53.64
–
226.55
6.79
219.76
(177.39)
–
–
–
100.00
0.95
(3.78)
5.21
2.38
2.38
–
–
0.01
–
0.01
–
–
–
–
100.00
1.25
6.60
–
7.85
7.85
–
–
(0.17)
–
(0.17)
–
–
–
–
100.00
23.84
(43.62)
43.06
23.28
23.28
–
50.42
5.48
–
5.48
–
–
–
–
100.00
53.49
174.17
200.53
428.19
428.19
–
461.22
43.76
6.32
37.44
–
–
–
–
70.00
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
600
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
Sr. No.
Particulars
Sr.
no.
85
Larsen &
Toubro (East
Asia) Sdn. Bhd.
86
Larsen &
Toubro Qatar
LLC
87
L&T Overseas
Projects Nigeria
Limited
88
L&T Electricals
& Automation
Saudi Arabia
company
Limited LLC
v crore
90
Larsen &
Toubro Saudi
Arabia LLC
89
Larsen &
Toubro Kuwait
Construction
General
Contracting
company WLL
31-Dec-19
KWD
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
31-Mar-20
MYR
31-Dec-19
QAR
31-Dec-19
NGN
31-Mar-20
SAR
31-Dec-19
SAR
17.52
13-Jun-96*
19.60
31-Mar-04*
0.20
15-Jul-04*
20.15
22-Aug-06*
235.44
29-Nov-06*
19.03
22-Jun-99*
1.31
0.99
81.82
84.12
84.12
–
143.24
2.64
–
2.64
–
–
–
–
30.00
0.39
(1.26)
1.00
0.13
0.13
–
–
(0.32)
–
(0.32)
–
–
–
–
49.00
91
Larsen Toubro
Arabia LLC
92
L&T
Hydrocarbon
Saudi Company
31-Dec-19
SAR
19.03
01-Jul-12*
31-Dec-19
SAR
19.03
08-Jul-07*
19.03
1.90
(374.42)
950.89
595.50
595.50
–
478.83
7.61
0.68
6.93
–
–
–
–
75.00
(472.14)
985.12
514.88
514.88
–
1340.14
19.41
2.98
16.43
–
–
–
–
100.00
0.33
(0.35)
0.10
0.08
0.08
–
–
(0.06)
–
(0.06)
–
–
–
–
100.00
114.86
(43.77)
114.78
185.87
185.87
–
160.76
10.77
2.05
8.72
–
–
–
–
100.00
47.09
(42.96)
40.44
44.57
44.57
–
80.36
2.64
–
2.64
–
–
–
–
49.00
93
Tamco
Switchgear
(Malaysia) SDN
BHD
31-Mar-20
MYR
17.52
29-May-07
94
Henikwon
Corporation Sdn.
Bhd.
95
Tamco Electrical
Industries
Australia Pty Ltd.
31-Mar-20
MYR
17.52
03-Jul-12
31-Mar-20
AUD
46.08
23-Apr-08
175.15
310.95
304.16
790.26
790.26
–
549.56
38.17
9.20
28.97
(86.96)
–
–
–
100.00
27.06
(27.04)
18.25
18.27
18.27
–
33.92
(2.96)
(0.00)
(2.96)
–
–
–
–
100.00
75.90
(73.62)
13.47
15.75
15.75
–
23.41
(2.88)
–
(2.88)
–
–
–
–
100.00
27.35
496.09
1094.73
1618.17
1618.17
–
1079.16
131.22
26.21
105.01
(175.76)
–
–
–
100.00
96
PT. Tamco
Indonesia
31-Dec-19
IDR
0.01
23-Apr-08
57.13
(68.79)
85.71
74.05
74.05
–
39.94
(16.01)
(3.37)
(12.64)
–
–
–
–
100.00
Note: * Date of incorporation
601
salient features of the financial statements of subsidiaries/associate companies/joint ventures annuaL report 2019-20
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
602
97
Larsen &
Toubro Heavy
Engineering LLC
98
L&T Electrical &
Automation FZE
31-Dec-19
OMR
31-Mar-20
AED
99
Kana Controls
General Trading
and Contracting
company WLL
31-Mar-20
KWD
100
Larsen &
Toubro T&D SA
(Proprietary)
Limited
31-Mar-20
ZAR
101
L&T Technology
Services LLC
v crore
102
L&T Global
Holdings Limited
31-Mar-20
USD
31-Mar-20
USD
185.42
07-Apr-08*
20.60
04-Apr-08*
246.75
10-Sep-13
4.23
06-Sep-10*
75.67
26-Jun-14*
75.67
24-Feb-16*
2.06
130.13
258.12
390.31
390.31
15.89
287.21
(33.55)
5.90
(39.45)
–
–
–
–
100.00
2.47
4.28
23.11
29.86
29.86
–
26.16
3.33
–
3.33
–
–
–
–
49.00
3.17
(0.37)
0.23
3.03
3.03
–
–
0.20
–
0.20
–
–
–
–
72.50
113.57
70.95
160.48
345.00
345.00
137.36
316.04
22.45
(10.10)
32.55
–
–
–
–
74.62
104
Larsen & Toubro
(Oman) LLC
105
Esencia
Technologies Inc
106
Syncordis S.A.
107
Syncordis SARL
105.04
(107.42)
209.94
207.56
207.56
–
201.89
(22.46)
(0.65)
(21.81)
–
–
–
–
70.00
103
L&T Information
Technology
Spain SL
31-Mar-20
EURO
31-Dec-19
OMR
31-Mar-20
USD
82.77
01-Feb-16*
185.42
29-Jan-94*
75.67
31-May-17
31-Dec-19
EURO
80.10
15-Dec-17
31-Dec-19
EURO
80.10
15-Dec-17
0.41
(1.93)
12.97
11.45
11.45
–
27.78
(1.32)
(0.33)
(0.99)
–
–
–
–
74.53
27.02
427.20
2424.38
2878.60
2878.60
–
2018.97
26.33
(4.24)
30.57
–
–
–
–
65.00
0.01
28.17
12.14
40.32
40.32
–
88.64
18.99
5.20
13.79
–
–
–
–
74.62
0.28
19.09
56.95
76.32
76.32
–
123.02
(1.02)
0.01
(1.03)
–
–
–
–
74.53
0.12
(3.66)
10.67
7.13
7.13
–
19.95
5.26
0.75
4.51
–
–
–
–
74.53
60.53
546.09
692.77
1299.39
1299.39
1297.82
–
150.90
–
150.90
–
–
–
–
100.00
108
Syncordis
Limited
31-Mar-20
GBP
93.50
15-Dec-17
0.01
(13.50)
–
(13.49)
(13.49)
–
9.47
(13.16)
(2.46)
(10.70)
–
–
–
–
74.53
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
Sr. No.
Particulars
Sr.
no.
109
Syncordis PSF
S.A.
110
L&T Infotech S.
DE R.L. DE C.V.
111
Larsen & Toubro
Electromech LLC
31-Dec-19
EURO
31-Dec-19
MXN
80.10
15-Dec-17
3.77
01-Mar-17*
31-Dec-19
OMR
185.42
01-Jan-05
112
L&T Capital
Market (Middle
East) Ltd
31-Mar-20
USD
113
Larsen & Toubro
Infotech Norge
AS
31-Mar-20
NOK
v crore
114
Graphene
Solutions PTE
Ltd.
31-Mar-20
SGD
75.67
01-Jul-18*
7.22
20-Nov-18*
53.03
15-Oct-18
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
3.20
(0.20)
5.89
8.89
8.89
–
15.97
(1.04)
0.01
(1.05)
–
–
–
–
74.53
0.00
0.03
7.58
7.61
7.61
–
19.75
1.04
0.52
0.52
–
–
–
–
74.53
5.56
35.13
109.67
150.36
150.36
–
215.23
114.92
0.00
114.92
–
–
–
–
70.00
12.48
(2.03)
10.59
21.04
21.04
–
20.02
(0.31)
–
(0.31)
–
–
–
–
63.72
117
L&T
Hydrocarbon
International
FZE
31-Mar-20
AED
118
L&T Valves
Arabia
Manufacturing
LLC
31-Mar-20
SAR
31-Dec-19
TWD
0.02
0.44
15.81
16.27
16.27
–
13.28
0.61
0.14
0.47
–
–
–
–
74.53
0.32
0.65
0.39
1.36
1.36
–
3.89
(0.57)
–
(0.57)
–
–
–
–
74.62
119
L&T Valves USA
LLC
120
NIELSEN+PARTNER
Unternehmensberater
GmbH
31-Mar-20
USD
Sr. No.
Particulars
Sr.
no.
115
Graphene
Solutions
SDN.BHD.
116
Graphene
Solutions
Taiwan Limited
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
Note: * Date of incorporation
31-Mar-20
MYR
17.52
15-Oct-18
0.18
(0.02)
0.02
0.18
0.18
–
–
(0.02)
–
(0.02)
–
–
–
–
74.62
2.39
15-Oct-18
20.60
09-Sep-18*
20.15
30-May-19*
75.67
28-May-19*
1.19
(0.02)
0.45
1.62
1.62
–
1.33
0.25
0.16
0.09
–
–
–
–
74.62
0.31
(0.50)
0.82
0.63
0.63
–
–
(0.30)
–
(0.30)
–
–
–
–
100.00
2.02
(1.37)
11.67
12.32
12.32
–
5.22
(1.61)
(0.32)
(1.29)
–
–
–
–
100.00
3.78
(0.42)
7.03
10.39
10.39
–
0.90
(0.50)
(0.10)
(0.40)
–
–
–
–
100.00
31-Jan-20
EUR
78.79
01-Feb-19
1.62
10.52
6.67
18.81
18.81
–
36.47
(1.16)
(0.18)
(0.98)
–
–
–
–
74.53
603
salient features of the financial statements of subsidiaries/associate companies/joint ventures annuaL report 2019-20
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
122
NIELSEN+PARTNER
Pte Ltd
123
NIELSEN+PARTNER
S.A
124
NIELSEN&PARTNER
Company Limited
125
NIELSEN&PARTNER
Pty Ltd
v crore
126
Ruletronics Limited
Sr. No.
Particulars
Sr.
no.
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
121
NIELSEN+PARTNER
Unternehmensberater
AG
31-Dec-19
CHF
73.84
01-Feb-19
0.74
1.96
4.40
7.10
7.10
–
20.19
2.64
0.55
2.09
–
–
–
–
74.53
1
2
Financial year ending on
Currency
Exchange rate on the last day of
financial year
Date of Acquisition
Share capital (including share application
money pending allotment)
Other equity/Reserves and surplus (as
applicable)
Liabilities
Total equity and 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
3
4
5
6
7
8
9
10
11
12
13
14
15 % of share holding
31-Dec-19
USD
71.39
01-Feb-19
–
2.76
2.41
5.17
5.17
–
17.58
(0.29)
0.00
(0.29)
–
–
–
–
74.53
31-Dec-19
SGD
53.05
01-Feb-19
31-Dec-19
EUR
80.10
01-Feb-19
31-Dec-19
THB
2.40
01-Feb-19
31-Dec-19
AUD
50.05
01-Feb-19
29-Feb-20
GBP
92.97
01-Feb-19
0.53
15.98
10.13
26.64
26.64
–
43.52
8.21
1.27
6.94
–
–
–
–
74.53
0.40
8.33
2.64
11.37
11.37
0.00
23.30
6.20
1.51
4.69
–
–
–
–
74.53
0.24
(0.43)
5.24
5.05
5.05
–
5.65
0.01
–
0.01
–
–
–
–
74.53
0.00
(1.08)
7.60
6.52
6.52
–
7.25
(1.21)
(0.03)
(1.18)
–
–
–
–
74.53
0.00
7.61
–
7.61
7.61
–
23.14
1.22
0.23
0.99
–
–
–
–
74.53
129
L&T Technology
Services
(Shanghai) Co.
Ltd
31-Dec-19
CNY
130
Mindtree
Software
(Shanghai) Co.
Ltd
31-Mar-20
CNY
131
Bluefin
Solutions Sdn
Bhd
132
LT IDPL INDVIT
Services Limited
31-Mar-20
MYR
31-Mar-20
INR
31-Dec-19
USD
71.39
29-Aug-19
10.25
06-Aug-19*
10.63#
02-Jul-19
17.45#
02-Jul-19
–
20-May-99*
0.66
(1.06)
0.40
–
–
–
–
(0.04)
–
(0.04)
–
–
–
–
74.53
3.37
–
–
3.37
3.37
–
–
–
–
–
–
–
–
–
74.62
1.40
0.10
0.10
1.60
1.60
–
0.70
0.10
–
0.10
–
–
–
–
61.08
0.20
–
–
0.20
0.20
–
–
–
–
–
–
–
–
–
61.08
13.95
25.00
79.05
118.00
118.00
12.00
9.00
4.00
2.00
2.00
–
–
–
–
51.00
Sr. No.
Particulars
Sr.
no.
127
Ruletronics
Systems Inc
128
Lymbyc
Solutions Inc.
Note: * Date of incorporation
# Exchange rate considered by intimidate parent
604
statement containing salient features of the financial statements of
subsidiaries/associate companies/joint ventures
Part a: “subsidiaries” [as per section 2(87) of the companies act, 2013] (contd.)
notes:
a) names of subsidiaries which are yet to commence operations:
a)
b)
c)
d)
e)
f)
g)
h)
pt Larsen & toubro Hydrocarbon engineering indonesia
L&t Hydrocarbon caspian LLc
L&t infra contractors private Limited
Ltr ssm private Limited
L&t Hydrocarbon international FZe
L&t technology services (canada) Limited
raykal aluminium company private Limited
Kesun iron and steel company private Limited
B) names of subsidiaries which have been merged/sold/dissolved/struck-off.
(1) merged:
a)
L&t realty Limited (merged with L&t construction equipment Limited)
b)
L&t shipbuilding Limited (merged with Larsen & toubro Limited)
(2) sold:
a)
L&t Kobelco machinery private Limited
(3) liquidated/Dissolved/struck-off:
a)
b)
c)
d)
Larsen & toubro infotech austria GmbH
L&t realty FZe
bluefin solutions pte Ltd
bluefin solutions inc
605
salient features of the financial statements of subsidiaries/associate companies/joint ventures annuaL report 2019-20
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
Sr. No.
Name of associates/joint ventures
Latest audited balance sheet date
Date on which the associate or joint venture
was associated or acquired
Shares of associate/joint venture held by the
company at the year end
Number
Amount of investment in associate/joint
venture (R crore)
Total share capital (R crore)
Reserves closing
Total no. of shares
Extent of holding % (Effective)
Description of how there is significant influence
Reason why the associate/joint venture is not
consolidated
Net worth attributable to shareholding as per
latest audited Balance Sheet (R crore)
Profit/(Loss) for the year (R crore)
Considered in consolidation
Not considered in consolidation
1
L&T-Chiyoda
Limited
31-Mar-20
2
International
Seaport
(Haldia)
Private
Limited*
31-Mar-19
3
L&T Camp
Facilities LLC
31-Dec-19
4
Larsen &
Toubro
Qatar & HBK
Contracting
Co. WLL
31-Dec-19
5
Magtorq
Private
Limited
31-Mar-20
6
Magtorq
Engineering
Solutions
Private
Limited
7
Indiran
Engineering
Projects and
Systems Kish
PJSC
31-Mar-20 Refer Note 2
8
Gujarat
Leather
Industries
Limited
26-Oct-94
11-Feb-05
13-Sep-07
28-Jul-04
2-Aug-10
2-Aug-10
31-Oct-09
27-Jun-91
45,00,000
98,30,000
2,450
100
9,000
22,000
875
7,35,000
4.50
9.00
194.68
9.83
44.06
26.04
90,00,000 4,40,58,020
14.25%
50.00%
4.76
9.72
(0.41)
5,000
49.00%
0.18
0.39
(7.77)
200
50.00%
4.42
0.21
10.60
21,003
42.85%
0.22
0.24
0.87
24,000
39.28%
–
0.39
–
0.78
–
(1.33)
1,750 Refer Note 3
50.00%
50.00%
Refer Note 1
101.84
9.99
4.56
(3.69)
4.63
0.44
(0.27)
50.41
–
24.47
–
2.09
–
–
–
(0.29)
–
0.16
–
0.16
–
Refer Note 3
–
–
–
* The company is associate of a subsidiary company under Companies Act, 2013.
Notes:
1. Significant influence is demonstrated by holding 20% or more of the total voting power, or control of or participation in business decisions under an
agreement of the investee.
2. 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 consolidation.
3. The associate company is under liquidation process and investment is fully provided in the accounts.
s.n.subraHmanYan
chief executive officer & managing director
(din 02255382)
chennai
r.sHanKar raman
Whole-time director & chief Financial officer
(din00019798)
mumbai
m.m.cHitaLe
independent director
(din00101004)
mumbai
sivaram nair a
company secretary & compliance officer
m. no. Fcs3939
mumbai
june 5, 2020
606
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
Dear Shareholder,
Date: 5th June 2020
We are privileged to have you as our shareholder. It has been our constant endeavour to improve the services to our Investors
and in this pursuit, we are once again sending you this Feedback Form, which is a self addressed prepaid Inland letter. We
request you to kindly spare some time and retum the same to us duly completed. We look forward to your feedback/valuable
suggestions.
Thanking you,
Yours faithfully,
For Larsen & Toubro LimiTed
sivaram nair a
Company Secretary
M. No. F3939
Name and address of the shareholder
sHareHoLder’s FeedbaCK Form
Phone No: (with STD code)
E-maii ID:
Folio No./DP ID & Client ID
shareholders satisfaction survey Questionnaire
(please 3 the appropriate box)
A. Do you perceive the Company as creating shareholder value in the:
Short Term
Long Term or
(i)
(ii)
(iii) Both
Yes
Yes
Yes
No
No
No
B. Are you satisfied with the growth strategy of the Company?
Yes
No
Not aware
Excellent
Good
Poor*
Not
experienced
C.
D.
E.
F.
Please rate the contents and quality of Annual Report
Please rate the contents and quality of the website of the Company
Arrangements made at the last AGM
Quality and accuracy of response to your queries and complaints:
- by Company
- by Registrar
G.
Timeliness of response form
- the Company
- the Registrar
H.
Please rate the hospitality and efficiency of the persons attending to you when
you interact with
- Investors Relation Cell
- Office of Registrars
I.
Overall quality of service provided by
- the Company
- the Registrar
* Kindly let us know your experience in space provided overleaf
Do you have any grievance which has not been redressed
J.
Yes
No
Signature
Fold hereFold hereFold here
business rePLY LeTTer
Postage
will be
paid by
addresssee
No Postage
stamp
necessary
if posted in
India
b. r. PermiT no.: mbi GPo - 0049
mumbai G.P.o.
mumbai - 400 001.
Larsen & Toubro Limited
Secretarial Department
L&T House, Ballard Estate,
Mumbai - 400 001.
* In case your response to any question overleaf is “Poor”, kindly share your experience and let us know the reason/
instances to enable us to investigate the matter.
In case of any queries, kindly contact our Registrar:
KFin Technologies Private Limited
(previously known as Karvy Fintech Pvt. Ltd)
unit: Larsen & Toubro Limited
Karvy Selenium Tower B, Plot number 31 & 32, Financial District Gachibowli, Nanakramguda, Hyderabad, Telangana - 500 032
Tel : (040) 6716 2222 • Toll free number: 1-800-3454-001 • Email: einward.ris@kfintech.com
First FoldSecond FoldFold hereFold hereFold here 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, financial performance, growth and environmental protection.
For details of recent awards, please visit www.Larsentoubro.com