The Directors have pleasure in presenting their 72nd Annual Report and Audited
Financial Statements for the year ended March 31, 2017.
|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 period carried to Balance
|Add: Balance brought forward from previous year
|Less: Dividend paid during the year
|(Including dividend distribution tax)
|Add: Gain/(loss) on remeasurement of the net defined benefit plans
|Balance available for disposal (which the Directors appropriate as follows)
|Debenture Redemption Reserve
|Balance to be carried forward
The Directors recommend payment of final dividend of Rs 21 per share of Rs 2/- each on
CAPITAL & FINANCE:
During the year under review, the Company allotted 14,86,958 equity shares of Rs 2/-
each upon exercise of stock options by the eligible employees under the Employee Stock
The Company reduced long-term borrowings during the year under review by way of
repayment of Non-Convertible Debentures (NCD) worth Rs 550 crore and External Commercial
Borrowings (ECB) worth US$126 million on scheduled due dates. The Company did not raise
any long-term borrowings during FY2016-17.
CRISIL Limited has assigned AAA (Stable) rating for L&T's long-term debt
facilities. In addition, ICRA Limited also has assigned AAA (Stable) rating for certain
borrowings of the Company.
HIVE-OFF OF COIMBATORE UNDERATKING:
Subsequent to the year under review, on April 20, 2017 the Company has received order
of National Company Law Tribunal for hive-off of its Coimbatore undertaking engaged in
valves manufacturing through a scheme of Arrangement between Larsen & Toubro Limited
and L&T Valves Limited, a wholly-owned subsidiary of the Company and their respective
shareholders and creditors under the provisions of section 230 to 232 of the Companies
Act, 2013. The appointed date of the scheme was April 1, 2016 and the effective date of
the scheme was April 22, 2017.
The Board of Directors of your Company at its Meeting held on May 29, 2017, has
recommended for approval of the shareholders issue of bonus shares to the holders of the
equity shares of the Company in the ratio of 1: 2 (i.e 1 (One) Bonus Equity Share of Rs
2/- for every 2 (Two) fully paid-up Equity Shares of Rs 2/- each held) by capitalisation
of its Reserves. The approval of the shareholders will be sought through Postal Ballot.
As at March 31, 2017 the gross property, plant and equipment, investment property and
other intangible assets including leased assets, stood at Rs 9820.17 crore and the net
property, plant and equipment, investment property and other intangible assets, including
leased assets, at Rs 7548.37 crore. Capital Expenditure during the year amounted to Rs
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 &
As the members are aware, the Company's shares are compulsorily tradable in electronic
form. As on March 31, 2017, 98% of the Company's total paid up capital representing
91,42,69,231 shares are in dematerialized form. In view of the numerous advantages offered
by the Depository system as well as to avoid frauds, members holding shares in physical
mode are advised to avail of the facility of dematerialization from either of the
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:
The Company sends letters to all shareholders, whose dividends are unclaimed so as to
ensure that they receive their rightful dues. Efforts are also made in co-ordination with
the Registrar to locate the shareholders who have not claimed their dues.
During the year, the Company has transferred a sum of
Rs 2,59,71,351 to Investor Education & Protection Fund (IEPF), the amount which was
due & payable and remained unclaimed and unpaid for a period of seven years as
provided in section 125 of the Companies Act, 2013 and the rules made thereunder. Despite
the reminder letters sent to each shareholder, this amount remained unclaimed and hence
was transferred. Cumulatively, the amount transferred to the said fund was Rs 17,16,31,755
as on March 31, 2017.
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 is required to transfer 12,13,804 equity shares of
Rs 2 each held by 11,057 shareholders to IEPF. The said shares correspond to the dividend
which has remained unclaimed for a period of seven consecutive years from the financial
year 2008-09. However, the equity shares wherein, disputes are pending and Court Order(s)
are available with the Company, shall be retained by the Company. All the remaining
shares, as mentioned above, shall be transferred to IEPF. Subsequent to the transfer, the
concerned shareholders can claim the said shares along with the dividend(s) from IEPF in
accordance with the prescribed procedure and on submission of such documents as prescribed
under the IEPF Rules.
The Company has already sent a specific communication to the concerned shareholders at
their address registered with the Company and also published notice in Financial Express
and Loksatta providing the details of the shares due for transfer and to enable
shareholders to take appropriate action. The Company is awaiting further directions on the
transfer formalities from the Ministry of Corporate Affairs in terms of the amendment to
the IEPF Rules dated 28th February, 2017. In the meantime, the concerned shareholders can
approach the Company or its Registrar & Transfer Agent with necessary documents
supporting their claims.
SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES:
During the year under review, the Company subscribed to / acquired equity / preference
shares in various subsidiary / associate / joint venture companies. These subsidiaries
include companies in general insurance, power, real estate and infrastructure sectors. The
details of investments/ divestments in subsidiary companies during the year are as under:
A) Shares acquired during the year:
|Name of the Company
||Type of Shares
||No. of shares
|L&T General Insurance Company Limited
|L&T Global Holdings Limited
|L&T Metro Rail (Hyderabad) Limited
|L&T Technology Services Limited
|Marine Infrastructure Developer Private Limited (Note 1)
|Seawoods Realty Private Limited
|Seawoods Retail Private Limited
|L&T Shipbuilding Limited (Note 1)
|L&T Uttaranchal Hydropower Limited
|L&T Electrical & Automation Limited (Note 5)
B) Equity shares sold/transferred during the year:
|Name of the Company
||No. of shares
|Larsen & Toubro Infotech Limited (Note 2)
|L&T Technology Services Limited (Note 3)
|L&T General Insurance Company Limited (Note 4)
|Larsen Toubro Arabia LLC
1. Pursuant to the Scheme of Demerger approved by National Company Law Tribunal (NCLT),
the existing share capital of Marine Infrastructure Developer Limited held by L&T
Shipbuilding Limited stands cancelled. The Company has now acquired 38,80,00,000 equity
shares of Marine Infrastructure Developer Limited for a consideration of Rs 388 crore from
L&T Shipbuilding Limited. The acquisition has been completed on 31st March, 2017.
Further, 38,80,00,000 equity shares of L&T Shipbuilding Limited held by the Company
have been extinguished and 38,80,00,000, 9% non-cumulative, optionally convertible and
redeemable preference shares of Rs 10 each have been issued to the Company in lieu of the
same on 29th March, 2017.
2. The Company has sold its 10.30% stake in Larsen & Toubro Infotech Limited (LTI),
a subsidiary, through an Initial Public offering of LTI equity shares. LTI got listed on
July 21, 2016.
3. The Company has sold its 10.23% stake in L&T Technology Services Limited (LTTS),
a subsidiary, through an Initial Public offering of LTTS equity shares. LTTS got listed on
23rd September, 2016.
4. The Company has sold its entire stake in L&T General Insurance Company Limited,
a wholly-owned subsidiary, to HDFC ERGO General Insurance Company Limited.
5. The scheme of arrangement between L&T Valves Limited and L&T Electrical
& Automation Limited was approved by National Company Law Tribunal on April 27, 2017
with appointed date as November 1, 2016. Pursuant to the scheme L&T Electrical &
Automation Limited issued 73,88,796 shares to Larsen & Toubro Limited as a
consideration towards transfer of certain assets by L&T Valves Limited. Accordingly
the value of investment in L&T Electrical and Automation Limited was increased by Rs
40.31 crore and reduced in L&T Valves Limited by Rs 40.31 crore during the year
The Company has formulated a policy on identification of material subsidiaries in line
with Regulation 16(c) of the SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015 and the same is placed on the website at
http://investors.larsentoubro.com/Listing-Compliance. aspx. The Company does not have any
C) Performance and Financial Position of each subsidiary/associate and joint venture
A statement containing the salient features of the financial statement of
subsidiary/associate/joint venture companies is provided on pages 471 to 480 of this
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY
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 and Regulation 34(3) and Schedule V of the SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015 in Note 37 and 38 forming part of the financial statements
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The Audit Committee and the Board of Directors have approved the Related Party
Transactions Policy and the same has been uploaded on the Company's website http://
investors.larsentoubro.com/Listing-Compliance.aspx. 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 all related party transactions for the FY 2016-17
and estimated transactions for FY 2017-18.
There were no materially significant related party transactions that may have conflict
with the interest of the Company.
STATE OF COMPANY AFFAIRS:
The total income for the financial year under review was Rs 68,273 crore as against Rs
66,154 crore for the previous financial year registering an increase of 3%. The profit
before tax from continuing operations including exceptional items was Rs 6,758 crore for
the financial year under review as against Rs 6,256 crore for the previous financial year,
registering a increase of 8%. The profit after tax from continuing operations including
exceptional items was Rs 5,454 crore for the financial year under review as against Rs
5,000 crore for the previous financial year, registering an increase of 9%.
AMOUNT TO BE CARRIED TO RESERVE:
The Company has not transferred any amount to the reserves during the current financial
The Directors recommend payment of dividend of Rs 21 (1050%) per equity share of Rs 2/-
each on the pre-bonus share capital which works out to Rs 14 per equity share post issue
of bonus shares.
The Board of Directors of the Company has approved the Dividend Distribution Policy on
22nd November, 2016 in line with regulation 43A of the SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015. The Policy is provided in Annexure
G forming part of this Board Report and also uploaded on the Company's website
at http:// investors.larsentoubro.com/Listing-Compliance.aspx.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY,
BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:
There are no material changes and commitments affecting the financial position of the
Company between the end of the financial year and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 is provided in Annexure A' forming part of this
RISK MANAGEMENT POLICY:
The Apex Risk Management Committee comprises of Mr. A. M. Naik, Mr. S. N. Subrahmanyan
and Mr. R. Shankar Raman. Mr. A. M. Naik is the Chairman of the Committee. The Company has
formulated a risk management policy and has in place a mechanism to inform the Board
Members about risk assessment and minimization procedures and periodical review to ensure
that executive management controls risk by means of a properly designed framework.
A detailed note on risk management is given under financial review section of the
Management Discussion and Analysis on pages 225 to 227 of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY:
The Corporate Social Responsibility Committee comprises of Mr. Vikram Singh Mehta, Mr.
R. Shankar Raman and Mr. D. K. Sen as the Members. Mr. Vikram Singh Mehta is the Chairman
of the Committee.
The details of the various projects and programs which can be undertaken by the Company
as a part of its CSR policy framework is available on its website http://investors.
larsentoubro.com/Listing-Compliance.aspx. The disclosures required to be given under
Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate
Social Responsibility Policy) Rules, 2014 are given in Annexure C' forming part of
this Board Report.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNED DURING THE YEAR:
Mr. Bahram Navroz Vakil resigned as Director of the Company on 1st August, 2016. The
Board places on record its appreciation of the contribution by Mr. Vakil as Director of
Mr. Subodh Bhargava was appointed as an Independent Director of the Company with effect
from April 1, 2014 to March 29, 2017. Pursuant to the recommendation of Nomination and
Remuneration Committee, the Board at its Meeting held on January 28, 2017 has approved the
re-appointment of Mr. Subodh Bhargava as an Independent Director for a further term of 5
years from March 30, 2017 to March 29, 2022, subject to the approval of the shareholders,
since the Board was of the opinion that his association would be of immense benefit to the
Company and it was desirable to avail services of Mr. Bhargava as an Independent Director.
The Board has appointed Mr. Arvind Gupta as an Additional Director representing
Administrator of the Specified Undertaking of the Unit Trust of India with effect from
July 1, 2017. Mr. Gupta will hold office till the . ensuing Annual General Meeting (AGM)
and is eligible for appointment.
The Board has appointed Mr. J. D. Patil as an Additional Director of the Company at its
Meeting dated 29th May, 2017 with effect from 1st July, 2017. Mr. Patil will hold office
till the ensuing AGM and is eligible for appointment. The Board has also appointed him as
the Whole-time Director of the Company with effect from 1st July, 2017, for a period of
five years subject to approval of the shareholders.
Mr. Sushobhan Sarker, Mr. R. Shankar Raman and Mr. Shailendra Roy retire by rotation at
the ensuing AGM and being eligible offer themselves for re-appointment. . The current term
of Mr. A. M. Naik as Group Executive Chairman ends on September 30, 2017. Your Board of
Directors had requested Mr. Naik to provide advice, guidance and mentorship to the
Company's executive management in the capacity of Non-Executive Chairman. Mr. Naik has
acceded to the Board's request and shall continue as Non-Executive Chairman with effect
from October 1, 2017 for a period of three years.
The Board has appointed Mr. S.N. Subrahmanyan as Chief Executive Officer and Managing
Director with effect from 1st July, 2017, for a period of five years subject to approval
of the shareholders.
The notice convening the AGM includes the proposal for appointment / re-appointment of
The terms and conditions of appointment of the Independent Directors are placed on the
website of the Company http://investors.larsentoubro.com/Listing-Compliance.aspx.
The Company has also disclosed on its website http://
investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs
formulated to educate the Directors regarding their roles, rights and 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 74 and 75 of this Annual
The Company has in place an Audit Committee in terms of the requirements of the
Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI
(Listing Obligations & Disclosure Requirements) Regulations, 2015. The details
relating to the same are given in Annexure B' - Report on Corporate Governance
forming part of the Board Report. Members are requested to refer to pages 77 to 79 of this
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 (Listing Obligations & Disclosure Requirements) Regulations, 2015. The
details relating to the same are given in Annexure B' - Report on Corporate
Governance forming part of the Board Report. Members are requested to refer to pages 79 to
81 of this Annual Report.
The Committee has formulated a policy on Director's appointment and remuneration
including recommendation of remuneration of the key managerial personnel and other
employees, board diversity, composition and the criteria for determining qualifications,
positive attributes and independence of a Director. The Committee has also formulated a
policy on Board Diversity.
DECLARATION OF INDEPENDENCE:
The Company has received Declarations of Independence as stipulated under Section
149(7) of the Companies Act, 2013 from Independent Directors confirming that he/she is not
disqualified from appointing/continuing as Independent Director. The same are also
displayed on the website of the Company http://investors.larsentoubro.com/
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 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 March 31, 2017, the Board is of
the opinion that the Company has sound IFC commensurate with the nature and size of its
business operations and operating effectively and no material weakness exists. The Company
has a process in place to continuously monitor the same and identify gaps, if any, and
implement new and/or improved controls wherever the effect of such gaps would have a
material effect on the Company's operations.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS:
The Nomination and Remuneration Committee and the Board have laid down the manner in
which formal annual evaluation of the performance of the Board, committees and individual
directors 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. The
questionnaire included inputs on composition, culture, functioning, information
availability, compliance and governance, effectiveness etc. Questionnaire also covered, in
the case of individual directors, qualitative assessment and in the case of Chairman
additional criteria like leadership qualities and other key aspects of his role. The
Individual Directors' responses to the questionnaire on the performance of the Board,
Committee(s), Directors and Chairman, were analyzed by an independent consultant, to
arrive at unbiased conclusions.
The inputs, including areas of improvement, given by all the directors were discussed
in the meeting of the Independent Directors held on April 6, 2017 and in the subsequent
Meetings of Nomination and Remuneration Committee and the Board. The Group Executive
Chairman had a discussion with all the Directors individually.
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
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 H' forming part of this
report. In terms of Section 136(1) of the Act and the rules made thereunder, the Report
and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any
Shareholder interested in obtaining a copy of the same may write to the Company Secretary.
None of the employees listed in the said Annexure is related to any Director of the
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS:
The Company has complied with Secretarial Standards issued by the Institute of Company
Secretaries of India on Board Meetings and Annual General Meetings.
PROTECTION OF WOMEN AT WORKPLACE:
The Company has formulated a policy on Protection of Women's Rights at Workplace'
as per the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013. This has been widely disseminated. There were no
cases of sexual harassment complaints received by the Company in the financial year
??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 Benefits)
Regulations, 2014 ("SBEB Regulations").
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 together with a
certificate obtained from the Statutory Auditors, confirming compliance, is provided on
the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx.
A certificate obtained from the Statutory Auditors, confirming compliance with the
Companies Act, 2013 and the SBEB Regulations is provided in Annexure B' forming part
of this Report.
??Corporate Governance: Pursuant to Regulation 34 of the SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate
Governance and a certificate obtained from the Statutory Auditors confirming compliance,
is provided in Annexure B' forming part of this Report.
??No disclosure is required under Section 67(3)(c) of the Companies Act, 2013, in
respect of voting rights not exercised directly by the employees of the Company as the
provisions of the said section are not applicable.
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 Act. The policy provides
for adequate safeguards against victimisation of persons who avail the same and provides
for direct access to the Chairperson of the Audit Committee. The Audit Committee of the
Company oversees the implementation of the Whistle-Blower Policy.
The 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.
BUSINESS RESPONSIBILITY REPORTING:
The Company has been one of the first engineering and construction companies in India
to publish its report on Corporate Sustainability.
As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, a separate section on Business Responsibility Reporting forms a part of
this Annual Report (refer pages 19 to 35).
The detailed Corporate Sustainability Report is also available on the Company's website
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
During the year under review, there were no material and significant orders passed by
the regulators or courts or tribunals impacting the going concern status and the Company's
operations in future.
CONSOLIDATED FINANCIAL STATEMENTS:
Your Directors have pleasure in attaching the Consolidated Financial Statements
pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI
(Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in
accordance with the applicable Accounting Standards prescribed by the Institute of
Chartered Accountants of India, in this regard.
The Auditors' report to the shareholders does not contain any qualification,
observation or adverse comment.
SECRETARIAL AUDIT REPORT:
The Secretarial Audit Report issued by S. N.
Ananthasubramanian & Co., Company Secretaries is attached as Annexure E' to
this Annual Report.
The Secretarial Auditor's report to the shareholders does not contain any
In accordance with provisions of Section 139 of the Companies Act, 2013 and the
Companies (Audit and Auditors) Rules, 2014, Sharp & Tannan (firm registration number
109982W) will complete their term as Statutory Auditors of the Company at the conclusion
of the forthcoming Annual General Meeting. The Board places on record its appreciation for
the services rendered by Sharp & Tannan as the Statutory Auditors of the Company.
In view of the mandatory rotation of auditor requirement and in accordance with the
provisions of Companies Act, 2013, 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. A
proposal for ratifying their appointment from the conclusion of the 72nd AGM till the
conclusion of the 73rd AGM has been included in the Notice of the ensuing AGM.
Deloitte Haskins & Sells LLP, have informed the Company that their appointment
would be within the limits prescribed under section 141 of the Companies Act, 2013.
The Auditors have confirmed that they have subjected themselves to the peer review
process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate
issued by the Peer Review Board of the ICAI.
The Audit Committee reviews the independence and objectivity of the Auditors and the
effectiveness of the Audit process.
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.
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.
Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the
Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the
recommendation of the Audit Committee, at its meeting held on May 29, 2017, has approved
the appointment of R. Nanabhoy & Co., Cost Accountants as the Cost Auditors for the
Company for the financial year ending March 31, 2018 at a remuneration of Rs 11.75 lakhs.
The Report of the Cost Auditors for the financial year ended March 31, 2017 is under
finalization and shall be filed with the MCA within the prescribed period.
A proposal for ratification of remuneration of the Cost Auditor for the financial year
2017-18 is placed before the shareholders.
DISCLOSURE ON SPECIFIED BANK NOTES:
The information is covered in Note 59 forming part of the Financial Statements forming
part of this Annual Report.
Your Directors take this opportunity to thank the customers, supply chain partners,
employees, Financial Institutions, Banks, Central and State Government authorities,
Regulatory authorities, Stock Exchanges and all the various stakeholders for their
continued co-operation and support to the Company. Your Directors also wish to record
their appreciation for the continued co-operation and support received from the Joint
Venture partners / Associates.
||For and on behalf of the Board
||A. M. Naik
||Group Executive Chairman
|Mumbai, May 29, 2017
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:
??Use of Induction lamps in place of mercury vapor lamps for bay lighting at
Kancheepuram factory??Replacement of electrical heating coil vaporizer used in the
galvanizing plant to vaporize the liquefied LPG from cylinders with heater less hot water
vaporizer at Puducherry factory??Conversion of DOL Starter to Variable Frequency Drives
(VFD) for Admin Building Chiller Primary pumps??Use of automatic switching off 50%
Streetlights during night ??Installation of L&T VFD for moulding
machine??Implementation of ISO 50001 across ESP MFG Plants??Energy audit and Energy
training provided at Ahmednagar Switchgear Works??Replacement of Natural gas heating with
electrical heating for heat treatment of jobs??Optimization of DG set capacity in Furnace
??Process cooling tower Fan operation converted from manual mode to Automatic mode
operation through low cost automation ??Upgradation of coolant system of Asquith machine
to eliminate 8 no's of motor along with VFD installation??Replacement of conventional MH
Lamps and fluorescent tube lights by LED lamps in working areas at projects as well as for
street lights ??Installation of HVLS Fan ??Use of Flood light LED and power efficient
Metal Halide lamps instead of Halogen in campuses??Retrofitting of LED fixtures in place
of CFL Fixtures??Cooling Tower Pump Energy Optimization??Conducted "Save
Electricity" campaign on campus
??Installation of motion sensors at floor areas to reduce the overall electricity
consumption??Installation of auto water level controller for domestic pumps??Use of Eco
Fuel, which is a direct substitute to High Speed Diesel in Hot Mix Plant??Optimization of
Air Compressor operation by connecting 200 CFM Air Compressor exclusively for Shot
Blasting Operation ??Replacing existing aged inefficient Split AC units with energy
efficient units??Utilization of Chiller for HVAC System Campus FMD initiated and
control the chiller running hour for HVAC need during holidays and extended working
hours??Clubbing of charges in furnace during rolling process to improve loading
factor??Replacement of rotor resistance controlled starter to Drive controller starter for
EOT cranes resulting smooth operation and energy saving??Introduction of VSD based
compressor ??Compressed air optimization ??Installation of diffusers and blowers in waste
water treatment plants instead of conventional surface aerators, which will lead to energy
savings by 12 - 15% ??Use of photo electric sensors for lighting control in Integrated
Urban Utility Projects / Industrial Township Projects??Use of Hybrid Lighting Masts ??Use
of Recycled water from STP for sanitation and gardening??Use of Motion sensors and RTC
timers fixed at paint booth blowers, HVAC, clock room, Rest Rooms, Garden lights and Food
courts??Introduced RTC timer for Domestic Water pump to avoid high pressure leakages in
the existing system??Dedicated team for monitoring the lighting system and staff trained
for preventing excessive usage of power??Use of VFDs with auto monitoring of pressure and
temperature for compressor and blower
??Implementation of Cold phosphating pre-treatment process (Oxsilan process) in the
paint shop??Usage of Variable Speed Drive for better efficiency ??Installation of PLC
controlled "Auto Mode" Plant and Office Lighting??Use of CNG for Bitumen Heating
as a substitute to High Speed Diesel in Hot Mix Plant at Delhi Agra Road Project??Usage of
EB power supply instead of DG for construction power supply??Installation of Digital
gateways at various P&M assets which enables us to monitor power consumption and
reduce maintenance cost ??Installation of Fuel sensors to monitor the fuel consumption and
optimize its usage??Annual energy Savings in Kansbhal Factory, Odisha is 8.19 Lacs KWH
??Replacement of Air Cooled Chiller with Water Cooled Chiller
(ii) Steps taken by the Company for utilizing alternate sources of energy:
??Shift towards usage of windmill power in the place of State Electricity Board at
Kancheepuram factory??Installing Solar panels on rooftop??Solar street at ESE campus ??Use
of solar energy and natural lights in cafeteria??Purchase of Green Power from third party
wind farm to reduce carbon footprint??Solar Panels installed at project sites??Power
generation through Solar Roof top PV installation at campus??Shift towards usage of power
generated through windmill power ??Use of high velocity burners in place of low velocity
burners??Implementation of hoods for the pre heating??Conversion of weld edge preparation
process from planning to milling operation
??Re-design impeller of industrial blower from backward curve to airfoil curve
??In-house development of remote operated scissor arm for shifting and aligning the hot
plate into rolling machine??Improvement is NUB design done to reduce weld deposition
(iii) Capital investment on energy conservation equipments:
??Energy conservation in Air handling units??Replacement of old welding machines with
new machines with inverter technology to reduce no load loss and overall consumption??Use
of 100 kVA UPS for furnace to reduce diesel consumption of DG set for uninterrupted power
supply??Replacement of existing 400W MH lamps with 137W LED lamps for highbay lighting in
HE East & West shops??Migrating from HPSV to LED light for BOT (Build Operate
Transfer) projects with ESCOs (Energy Saving Companies) for energy conservation in
Peripheral Lighting??PLC installation in heating process of LSR to have precise control
and saving in NG consumption??Purchase of green power (Hydropower) for HE East &
West??Use of grid supply for LSR to replace DG set hiring and running cost thereby saving
diesel consumption??Feasibility for infrared heating to be explored and implemented for
heating operation??IOT projects for ESSC, SAW and nozzle welding process to save energy
and reduce cycle time 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:
??Introduction of Digital Interfaces to monitor progress & cost of work through ERP
System ??Development M20 and M40 structural grades of concrete with Recycled concrete
aggregate (RCA) for residential, commercial and infrastructure construction
??Development of IoT techniques for embankment structures near sea coast for continuous
??Re-commissioning of State of art testing and analysis equipment for rebar, strands,
concrete, soil, rock and asphalt after Chennai floods
??In-house developed self-compacting concrete was used in pile foundations of HEP
Chitapur Solar power project in Karnataka
??Development of evaluation and qualification of physical and mechanical properties of
Embankment materials for SOU project
??Implementation of specially designed cement modified WMM mix in the internal roads of
Apollo Proton Therapy and Cancer Treatment Hospital Project site which shall help to move
heavy duty medical equipment into the hospital building
??Development of A2O process at the 318 MLD Waste Water Treatment Plant (WWTP) at
Coronation Pillar, New Delhi, wherein the Nitrogen & Phosphorus content in wastewater
is treated to desirable limits
??Installation of Biomethanation of sewage sludge in the 318 MLD WWTP at Coronation
Pillar, New Delhi which produces biogas used to generate electricity and run the WWTP
??Installation of Micro-filtration (MF) system at Raichur power Plant which is designed
to treat the river water without any conventional pre-treatment to give filtered water
??Implementation of Virtual reality (VR) / Mixed reality (MR) digital technologies for
projects which will enable the engineers from different disciplines to view their design
as its final product and visualise the structure in real time scale
??Implementation of HTC Vive technology in projects which creates a virtual reality
headset designed to utilize "room scale" technology to turn a room into 3D space
via sensors, with the virtual world allowing the user to navigate naturally
??Implementation of Microsoft HoloLens which embraces virtual reality and augmented
reality to create a mixed reality??In-house development of MIS Dashboard to monitor
project costs, departmental overheads, inventory and vendor payables ??Development of 3D
model of components of ship, in off shore patrol vessels, to have better clash free
interface between design and production??Adoption of Modular Construction Technology for
the erection of 6mm thick carbon steel liner panels for IC wall and top dome lining for
Kakrapar Nuclear Power Plant in Gujarat??Designed Bridge builder to erect precast segments
by cantilever construction method for straight spans and curved spans upto 128m radius of
curvature??Developed segmental bridge launching girder with hinge mechanism and adopted in
metro construction projects??Implementing BIM at EDRC Metros which aims at mapping
on a GIS platform, the various aspects and features of Metro Rail with their associated
information??Launched emergency response mobile surveillance control and command centre
vehicle in Mumbai, first of its kind in India which is capable of recording &
transmitting live feed to the police control room??Implemented BIM for road project on
pilot basis for a 5 Km stretch??Utilisation of Digital technology for topographic surveys
such as vehicle based LIDAR survey??Implemented the 2D Grade Control system on few motor
graders in Delhi Agra Road Project??Manufacturing latest technology products in material
handling equipment namely Tandem Tippler & Side Arm Charger, High Capacity Stacker cum
Reclaimer, Underslung Paddle Feeder, Drag Plough for Coke Oven, Bin Extractors??Introduced
New Product Intensity (NPI) index which measures the sales of products introduced in the
market in last five years to the total sales in the financial year
??Development of various new products in the power distribution and motor control
sector namely AU range of final distribution products, sub-main Distribution boards, new
ratings in Omega range of Air Circuit Breakers and Busbar Trunking systems??Launched
submersible pump controllers for agriculture market and DC contactors in telecom
applications??Launched comprehensive product portfolio to provide solution for Power
Quality Management??Development of new, cost-optimized meter platforms that offer better
features, development and integration of modules to facilitate remote communication of
meter data over Radio / GSM and development of Pre-Paid Meters, Smart Meters, Protective
Relays and Panel Meters??Developed Smart and Pre-paid meter where each and every instance
in power distribution will be recorded??Launch MV drives thus completing LV & MV drive
range??Development of new, cost-optimized meter platforms that offer better features,
development and integration of modules to facilitate remote communication of meter data
over Radio / GSM??Introduction of "SMART Comm" solution??Introduction of
67"Hydraulic Tire Curing Press, 750 T Bladder Press and Mixing mill??Introduction of
New state-of-the-art Loader for Off The Road (OTR) Tire Curing Presses and automatic Mold
Height Adjustment for OTR Presses??Development of newer variants of Power Packs &
Tipper Wet Kit??Development of Paver, Pneumatic Tired Roller & Skid Steer
Loaders??Introduction of 56.5" -2 position PCI for Domestic order??Introduction of
64" -2 Position PCI with safety fence??Indigenization of various components for
Rubber Processing Machinery by designing, developing specifications and adapting to
??Development of cement grouted bituminous macadam for high speed corridors,
expressways, aprons and ports??Development of NABL accredited testing facility for
geotextiles and geo-synthetics used in sub soil strengthening??Industrial scale production
of stockpile, all weather cold pot-hole mix for infra project sites??Development of low
cement and impermeable Plastic concrete for Dam structures ??Mechanical Studies on light
weight concrete for structural application and specially designed double blend structural
grade??Development of polymer modified repair mortar for multilevel carparks??Execution of
Technology Licensing & Assistance (TLA) Agreement with Chiyoda Corporation for Flue
Gas Desulphurization Technology??Development of Armored vehicle mobility simulation
capability, Laser based optics simulation capability, Intelligent Collaborative Robotics
System, Unmanned / Autonomous Platforms & Systems, Waterjet Propulsion Systems, Field
& Air Defence Gun Systems, Laser based Beam directing, tracking and pointing system,
Trisonic Wind Tunnel Systems and other technics in the HED Sector??Introduction of
portable flux recycler at welding point to avoid ovens??Development of EFNARC and RILEM
methodologies in energy absorption of shotcrete panels.
??Triple blend shotcrete mix M40 has been used in Special projects for tunnels
??Optimized concrete mix design solutions were implemented in PTDIC ??Development of
pre-packed concrete for remote site and inaccessible areas??Development of NABL accredited
testing facility for fineness by Blaine, Alkali Silica aggregates, Non Destructive Tests
on concrete??Development of NABL test facilities for evaluating sealents used in expansion
joints of structures??Mechanical studies on water barrier disc tie rods
??Development of test facilities for MIG and TIG welded specimens for Fatigue and
tensile strength on bronze alloy sculpture specimens??Creep studies on M65 grade
self-compacting concrete??Development of NABL testing facility for Bituminous Emulsions
used in flexible pavement construction??Development of High volume fly-ash concrete for
mass foundations??Development of lime and fly-ash stabilized mixes with recycled concrete
aggregates for base and sub-base layers for light, medium and heavy traffic pavements
??Development of high flexural strength PQC with alternate materials for durable rigid
pavements??Development of comprehensive online geotechnical databank as an effective tool
for designers and contract teams across ICs??Development of standard concrete mixes for
cold weather concreting at sub-zero temperature??Development of Surface Technologies like
Alodine, Chromic acid anodization and Electroless Nickel Plating to meet International
standards ??Establishment of Facility & Development of Painting process to meet
International Military standards with precise thickness and gloss requirements ??In-house
Development of Form Rolling process with combination of Metallic and Non-metallic
Rollers??Development of Manufacturing process of High precision Gears with our Business
partners??Development of precision mechanical & electronics integration, testing &
tuning of Fin Actuation Systems??Introduction of HIL (Hardware-in-the-loop) Simulation
& Equipment validation - Equipment's testing under various environmental & load
conditions??Development of High Wear resistance process of Hard anodizing with Teflon
impregnation for Aluminium Parts with business partners
??In-house Development of Resistance spot welding of Thin Stainless Steel Sheet metal
sections ??In-house Process development for manufacturing of Precision Thin Section Aero
Structural parts??Development of Low Hydrogen Embrittlement Cadmium Plating process of
Carbon Steels??Development of Hot Bending Process for Fabrication of Titanium Sections for
HSTDV program??Development of Micro-electronics assembly & testing for TGET
Fuses??Completed Airworthiness Qualification of Integrated Life Support System - On-board
Oxygen Generation System for fighter aircrafts??Completed development and qualification of
Oxygen System for Military Helicopters??L&T HE IC has entered into technology
transfer agreement with a leading Global technology provider for Titanium Clad
equipment??Buildup capability in static and dynamic stability of amphibious tracked
vehicle??Development of plasma welding of Maraging steel and Titanium??Launch of Automatic
Tube and Tubesheet welding for Urea applications??Development of weld overlay procedures
for super duplex stainless steels, alloys 825 and alloy C-276??Development of Ultra Narrow
gap GTAW process for closing seams of process plant equipment??Development of Flux-less
Arc Spot Welding with mixed gases for Nuclear export orders??Development of Auto-TIG
Overlay on Gasket Face and Split Ring for heat exchangers??Development of Robotic FCAW of
trunnions for Trans Nuclear projects ??Development of Automated High Sagita Nozzle Welding
System??Development of Trisonic Wind Tunnel Systems, Thermal Management system for high
pressure and high temperature flow environment
??Development of Underwater Weapon Launch Systems and Ka Band Feed using additive
manufacturing techniques ??Development of Driver Vision Enhancement for Armoured
Vehicles??Development of Railless Helo Traversing Systems??Environment Protection measures
introduced through Process change in bridging system Painting at Talegaon i.e BLT,
Sarvatra, SSBS and Modular Bridge were changed from Zinc Chromate primer to Zinc Phosphate
primer??Changed the design of pins using stainless steel material to reduce the
rework/rejection at site due to corrosion of pins in Bridging projects??Development of 3D
Printing for design and development of Micro wave guide component for Ka band telemetry
through Metal 3D printing ??Adoption of bend plates and negotiating with Mills for supply
of extended length of plates for reducing welding in the Tilt beam of TCT-5 production
order??Automated Welding process established for 7.5m long RT quality Aluminum Butt
joint??Development of Laser cutting process using Diode Laser machine for HSLA Steel &
Aluminum??Developed in-house SPM for Hinge boring of BLT??In-house development by
modification in IGM Robot, Gantry & Gulco trolley ??Development of Hydro-squeezing
fixture development in HDP for riveting operation.??Developed U & Z extrusion cutting,
slot milling & drilling fixtures for HDP
??Development of remote controlled motorized fixture for hot plate handling on rolling
machine ??Development of internal T-ring (Web to Flange) welding station using Auto GMAW
and laser based seam tracking system ??Process development for long seam welding and
overlay using mechanized system for Coke Drum repairs??Import substitution for hydrostatic
expansion process of tube to tube-sheet joints in Heat Exchangers and EO Reactors
??Indigenous development of twin head Auto GMAW station with TAB based wireless control
and seam tracking mechanism for welding of tube to ring joints in TWC project ??Indigenous
development of SCADA based system for Hydro Pressure Test Automation ??Development of
Military Communication Products namely network simulation and emulation for Tactical
applications, network Management System for TCS, user services fall back on TDM Network,
Desk Access Unit, Radio Relay Modules, manet based Wireless Node points, Radio Gateway for
CNR Radios, legacy system interface and NEWN system interface for VLF
??Development of India's first indigenous chemical agent monitoring system in
association with DRDE, Gwalior viz. Portable Chemical Agent Detector (PCAD) and Fixed
Chemical Agent Detector (FCAD) which can be used by the Army, Navy, Air Force, and NDMA,
Para-military forces, SPG and other security agencies??Development for Network simulation
and emulation for Battlefield Management System applications??Indigenously developed RF
modules like Up Converter, Down Converter, High Power Amplifier, Power Monitor and
Switched Filter Bank Modules ??Developed a complete rugged field deployable Network
Interface Unit (NIU) along with its Technology Partner used for Ethernet to Fiber Optic
Media conversion??Developed man-portable communication gateway unit for Indian Navy called
Interoperable Communication System FAK which can be used for joint operations with foreign
navy and humanitarian aid disaster relief activities??Developed Capabilities in
High-end Finite Element Analysis including advanced FEA, Explicit Dynamic Simulation and
Non-Linear Analysis??Developed capability for CFD simulation in areas such as two-phase
flow analysis for boiling applications??Development of Technology for Simulation of
Manufacturing processes such as, simulation of Welding process and it's application for
various projects such as fabrication of ITER Cryostat vessel and fabrication of various
Chemical Equipment??Development of improved High Temperature Heat Recovery (HTHR) for
Ethylene Production plants ??Development of improved design of Feed Water Heaters for
Supercritical Power Plants??Development of Shell & Tube type LNG Vaporizers for land
based LNG Regasification terminals??Development of end to end Sales & Procurement
cycles through Centralized ERP Server??Introduction of advanced features like Click to
Call, Click to Chat on Website, Portal for Customer interaction
(ii) Benefits derived like product improvement, cost reduction, product development or
??Introduction of new products like New 1-phase Meter with IrDA, 3-Phase Meter with
IrDA, 1-Phase Pre-Paid Meter (Taurus), 3-phase Pre-Paid Meter (Atria), 1-Phase Smart Meter
(Aurora), 3-Phase Smart Meter (Regor), 3-Phase Digital Panel Meter (Nova), New Trip
Supervision Relay (TCS01-nX) & Motor Protection Relay (MPR200)??Introduction of
L&T's Outdoor Compact substation- N-Qube following Franchisee model ??Introduction of
a new variant to the GIS (Gas insulated switchgear) family??Continuous product development
in the switchgear business at its various Department of Scientific & Industrial
Research, Ministry of Science & Technology accredited R&D facilities in India and
filing 101 Patent, 3 Trademark, 4 Design in India and 2 foreign patent applications and 18
foreign trade mark applications ??Expansion of switchgear product range and offerings to
the infrastructure sector ??Strategic alignment with IOmniscient (Australian company) for
its video analytics specialty??Use of Emulsion based cold mixes with Reclaimed Asphalt
Pavement materials as they are more environmental friendly over conventional bituminous
mixes??Use of alternate curing techniques to reduce / eliminate the usage of water for
??Use of Geo polymer concrete which ensures elimination of cement from construction
??Economical and cost effective piles in solar projects thus saving time
??The use of clean water for producing aggregates (fine and coarse) drops the price of
aggregates by 50% as compared to virgin aggregates use
??The recycling process can make the aggregate crushers self sufficient
??The high flexural strength PQC with alternate materials reduces the crust thicknesses
of rigid pavements and inturn reduces the overall construction cost of rigid pavements
??The enhancement in NABL accredited testing facility with geotextile, geosynthetic,
bitumen emulsion, sealants, ASR, fineness by Blaines and NDT tests will improve the
Company's brand image and give competitive advantage over its peers
??Development of pre-packed dry concrete is a ready solution for quick concreting in
remote project sites and it minimizes manual labour along with improvement in the speed of
??The special fatigue and tensile tests on bronze alloy specimens were the major
criteria for material qualification for prestigious SOU project
??The IoT based monitoring system developed for solar trackers, cooling tower remote
units, special coastal structures will automate critical data collection and its analysis
??Positioning for Futuristic Programs for Indian MoD under Make' and IDDM'
??10% reduction in welding in the Tilt beam of TCT-5 production order due to adopting
bend plates and extended length of plates pallet and lower costs due to in-house machining
??QRSAM first prototype on-time delivery by taking constraints under control in-house
??Increased self-reliance and savings in Foreign Exchange in process plant and power
plant equipment sector
??Improvement in manufacturing processes resulting in reduction in production cycle
time, cost and rework
(iii) Information regarding technology imported during the last 3 years:
||Year of Import
||Status of absorption & reasons for non- absorption, if any
||Flue Gas Desulphurization
||Absorption has been initiated in FY 2016-17. Its completion is linked with the
completion of the first project where L&T Power would install FGDs.
||UV disinfection system
||Absorbed successfully in the 2 MLD President estate STP.
||Implementing for the India's largest gravity channel UV disinfection system in 120 MLD
Varanasi STP. Implementation of Ultra Violet (UV) disinfection system for secondary
treated wastewater. This is preferred over the conventional chlorination system which has
harmful side effects due to the presence of carcinogens in residual chlorine.
||Vortex Grit Removal in Sewage Treatment Plant
||Absorbed successfully in the 2 MLD STP at President's Estate, New Delhi.
||Works for the 5 new pumping stations of Greater Colombo project is in progress. It is
the first of its kind to be installed in India for sewage application. It operates on
VORTEX Principle where the grit removal happens by tangential Centrifugal force. Grit
removal efficiency is about 95 %. The major advantage of this system is that they occupy
less area and thus leads to easy maintenance. This is preferred over the conventional grit
removal system for its high grit removal efficiency and compactness.
(iv) Expenditure incurred on Research & Development:
|Total R&D expenditure as a percentage of total turnover
[C] FOREIGN EXCHANGE EARNINGS AND OUTGO:
|Foreign Exchange earned
|Foreign Exchange saved / deemed exports
|Foreign Exchange used
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 2016-17, the percentage increase in
remuneration of each Director & Company Secretary during the financial year 2016-17:
|Name of the Director/KMP
||Ratio of remuneration of director to the median remuneration
||Percentage increase in Remuneration
|A. M. Naik
||Group Executive Chairman
|S. N. Subrahmanyan
||Deputy Managing Director & President
|R. Shankar Raman
||Whole-time Director & Chief Financial Officer
||Whole-time Director & Senior Executive Vice President (Power, Heavy Engineering
|D. K. Sen
||Whole-time Director & Senior Executive Vice President (Infrastructure)
|M. V. Satish
||Whole-time Director & Senior Executive Vice President (Buildings, Minerals &
|M. M. Chitale
|Vikram Singh Mehta
|Sushobhan Sarker ^
||Nominee of Life Insurance Corporation of India
||Nominee of Life Insurance Corporation of India
|Thomas Mathew T.
|Naina Lal Kidwai
$ 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 2016-17
^ Part of the remuneration has been paid to the financial institution he/she represents
@ Details not given as Mr. D. K. Sen, Mr. M. V. Satish, Mr. Thomas Mathew T., Mr. Ajay
Shankar and Ms. Naina Lal Kidwai were Directors for only part of the financial year
# Details not given as Mr. Bahram Vakil was a Director for only a part of the financial
year 2016-17 i.e. upto August 1, 2016
## Details not given as Mr. Swapan Dasgupta was a Director for only a part of the
financial year 2016-17 i.e. upto May 15, 2016
* Details not given as Mr. Narayanan Kumar was a director only from 27th May, 2016
** Details not given as Mr. Sanjeev Aga was a director only from 25th May, 2016
~ Includes encashment of accumulated past service leave Rs 32.21 crore and perquisite
value related to employee stock options exercised during the year in respect of stock
options granted over the past several years by a subsidiary company - Rs 19.01 crore.
B) Percentage increase in the median remuneration of all employees in the financial
The median remuneration of employees of the Company during the financial year was Rs
7.17 lakh. In the financial year, there was an increase of 8.85% in the median
remuneration of employees;
C) Number of permanent employees on the rolls of Company as on March 31, 2017:
There were 41,466 permanent employees on the rolls of Company as on March 31, 2017;
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 2016-17 was 4.54% whereas there is increase in the managerial
remuneration by 11.6% because a substantial portion of managerial remuneration is linked
to Company performance during the financial year 2016-17. The Profit after Tax for the
year 2016-17 increased by 9% directly impacting the variable component of managerial
remuneration. Further, the managerial remuneration for this purpose also includes
perquisite value of employee stock options exercised during the year and the encashment of
accumulated past service leave but excludes gratuity and leave encashment benefits payable
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.
Annexure E' to the Board Report
Larsen & Toubro Limited CIN L99999MH1946PLC004768 L&T House, Ballard Estate,
Mumbai 400 001.
Our Secretarial Audit Report for the Financial Year ended 31st March, 2017, of even
date is to be read along with this letter.
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.
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.
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.
S. N. ANANTHASUBRAMANIAN
C.P No: 1774
Date: May 18, 2017
Annexure G' to the Board Report
DIVIDEND DISTRIBUTION POLICY
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.
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.
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:
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.
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
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 DECLARATION:
The Dividend pay-out decision of any company, depends upon certain external and
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 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.
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.
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.